SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K AMENDMENT NUMBER ONE
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended April 30, 1996 Commission File No. 0-13042
INFINITE GRAPHICS INCORPORATED
(Exact name of Company as specified in its Charter)
Minnesota 41-0956693
(State of Incorporation) (I.R.S. Employer Identification No.)
4611 East Lake Street
Minneapolis, Minnesota 55406
(Address of Principal Executive Offices)
(612) 721-6283
(Company's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
Indicate by check mark whether Company (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 twelve months (or for such shorter period as Company was required to
file such reports) and (2) has been subject to such filing requirements for the
past ninety days.
Yes __X__ No _____
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: September 9, 1996 By: /s/ Clifford F. Stritch, Jr.
---------------------------------
Clifford F. Stritch, Jr.
Chairman of the Board
Chief Executive Officer
Chief Financial Officer
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Financial Statements.
(1) The Financial Statements of the Company, including the Report
of the Independent Auditors, are set forth at Item 8 of this
Form l0-K.
(3) The following Exhibits required by Item 601 of Regulation S-K are filed
with this report or incorporated by reference as indicated herein.
3.1 Articles of Incorporation of Infinite Graphics Incorporated, filed as
Exhibit 3.1 to the Annual Report on Form 10-K for the year ended April
30, 1989, and incorporated herein by reference.
3.2 Bylaws of Infinite Graphics Incorporated, filed as Exhibit 3.2 to the
Annual Report on Form 10-K for the year ended April 30, 1989, and
incorporated herein by reference.
4 Form of Certificate for Common Stock of Infinite Graphics Incorporated,
filed as Exhibit 4 to the Annual Report on Form 10-K for the year ended
April 30, 1989, and incorporated herein by reference.
10.1 Incentive Stock Option Plan of Infinite Graphics Incorporated, filed as
Exhibit 10.1 to the Annual Report on Form 10-K for the year ended April
30, 1993, and incorporated herein by reference.*
10.2 Lease between the Company and Infinite Properties, dated October 31,
1983, for property at 4621 East Lake Street, Minneapolis, Minnesota,
filed as Exhibit 10.2 to the Annual Report on Form 10-K for the year
ended April 30, 1989, and incorporated herein by reference.
10.3 License agreement between the Company and Calos, Inc., dated December
21, 1984, filed as Exhibit 10.5 to the Annual Report on Form 10-K for
the year ended April 30, 1989, and incorporated herein by reference.
10.4 Lease between the Company and Harold J. Brooks, dated November 15,
1989, for the property at 8 Industrial Way, Salem, New Hampshire, filed
as Exhibit 10.13 to the Annual Report on Form 10-K for the year ended
April 30, 1990, and incorporated herein by reference.
10.5 Amendment to Revolving Credit and Term Loan Agreement between the
Company and National City Bank of Minneapolis, dated as of August 31,
1990, filed as Exhibit 10.14 to the Annual Report on Form 10-K for the
year ended April 30, 1991, and incorporated herein by reference.
10.6 Amended and Restated Security Agreement between the Company and
National City Bank of Minneapolis, dated as of August 31, 1990, filed
as Exhibit 10.15 to the Annual Report on Form 10-K for the year ended
April 30, 1991, and incorporated herein by reference.
10.7 Amendment and Restatement of Promissory Note, dated August 31, 1990
(Revolving Loan), filed as Exhibit 10.16 to the Annual Report on Form
10-K for the year ended April 30, 1991, and incorporated herein by
reference.
10.8 Amendment and Restatement of Promissory Note, dated August 31, 1990
(Term Loan), filed as Exhibit 10.17 to the Annual Report on Form 10-K
for the year ended April 30, 1991, and incorporated herein by
reference.
10.9 Lease between Company and Anchor Paper, dated December 20, 1990, for
3,000 square feet of space in the Plymouth building filed as Exhibit
10.21 to the Annual Report on Form 10-K for the year ended April 30,
1991, and incorporated herein by reference.
10.10 Settlement agreement between CIT and Company dated April 7, 1992, filed
as Exhibit 10.24 to the Annual Report on Form 10-K for the year ended
April 30, 1992, and incorporated herein by reference.
10.11 National City Bank financing agreements dated November 17, 1992, filed
as Exhibit 10.25 to the Annual Report on Form 10-K for the year ended
April 30, 1993, and incorporated herein by reference.
10.12 Robert J. Fink financing agreements dated November 17, 1992, filed as
Exhibit 10.26 to the Annual Report on Form 10-K for the year ended
April 30, 1993, and incorporated herein by reference.
10.13 Republic Acceptance Corporation financing agreements dated November 17,
1992, filed as Exhibit 10.27 to the Annual Report on Form 10-K for the
year ended April 30, 1993, and incorporated herein by reference.
10.14 Amended lease between the Company and Infinite Properties dated
November 30, 1993, filed as Exhibit 10.28 to the Annual Report on Form
10-K for the year ended April 30, 1994, and incorporated herein by
reference.
10.15 Amended lease between the Company and Anchor Paper Company dated
January 1, 1994, filed as Exhibit 10.29 to the Annual Report on Form
10-K for the year ended April 30, 1994, and incorporated herein by
reference.
10.16 Extended lease between the Company and Harold J. Brooks dated January
31, 1995, filed as Exhibit 10.30 to the Annual Report on Form 10-K for
the year ended April 30, 1995, and incorporated herein by reference.
10.17 Republic Acceptance Corporation first mortgage dated January 20, 1995,
filed as Exhibit 10.31 to the Annual Report on Form 10-K for the year
ended April 30, 1995, and incorporated herein by reference.
10.32 Amended lease between the Company and Anchor Paper Company dated
January 1, 1996, filed as Exhibit 10.32 to the Annual Report on Form
10-K for the year ended April 30, 1996.**
10.33 Lease between the Company and Superior Investment Company dated
September 1, 1995, filed as Exhibit 10.33 to the Annual Report on form
10-K for the year ended April 30, 1996.***
11 Computation of per share income (loss) can be determined from the
material contained in the financial data schedule.
27 Financial data schedule.
(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
* Indicates management contracts or compensatory plan or arrangement
required to be filed is an exhibit to form.
** Filed herewith.
*** Previously submitted to the SEC via form SE on August 12, 1996, and
filed via EDGAR on September 9, 1996.
EX-10.33
STANDARD FORM OFFICE LEASE
This Lease dated September 1, 1995 ("Lease"), is entered into by and between
SUPERIOR INVESTMENT COMPANY, L.P. a California limited partnership ("Landlord"),
and INFINITE GRAPHICS INCORPORATED, a Minnesota corporation ("Tenant").
ARTICLE I.
BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following terms, the application of which shall be governed by
the provisions in the remaining Articles of this Lease:
1. Address of Landlord: c/o Western States Technologies, Inc.
18101 Von Karman Avenue, Suite 350
Irvine, CA 92715
2. Premises Address: 17332 Von Karman Avenue, Suite 145
Irvine, CA 92714
3. Address of Tenant:
(a) Notices: 4621 East Lake Street
Minneapolis, MN 55406
(b) Billing: 4621 East Lake Street
Minneapolis, MN 55406
4. Tenant's Trade Name: Infinite Graphics
5. Tenant's Contact: Cliff Stritch Telephone: (612) 728-1323
6. Premises Square Footage: Approximately 3,418 Square Feet
Building Square Footage: Approximately 31,024 Square Feet
7. Commencement Date: September 1, 1995
8. Term: Thirty-Six (36) months
9. Initial Monthly Rent: $2,700.00/month
(subject to adjustment per EXHIBIT E)
10. Security Deposit: $2,700.00
11. Permitted Uses: Photographic, phototooling and computer design,
software development, sales and support, and related office uses, all
subject to and in strict compliance with Applicable Laws and
Restrictions (as hereafter defined) and pursuant to approvals, licenses
and permits to be obtained by Tenant from all relevant City, County and
other required governmental agencies and authorities.
12. Brokers: None
13. Landlord's Architect: LPA Associates
14. Guarantor: None
15. Vehicle Parking Spaces: Fourteen (14)
16. Additional Insureds: Western Fidelity Investment Corporation;
Western States Technologies,
Inc.
17. Tenant's Liability Insurance Limits: $1,000,000.00
Exhibits:
A Description of Premises G Rules and Regulations
B Project Site Plan H Environmental Questionnaire
C Limited Refurbishment of Premises I Landlord's Disclosures
D [INTENTIONALLY OMITTED] J Sign Criteria
E Adjustments to Monthly Rent K Insurance Certificate
F [INTENTIONALLY OMITTED]
ARTICLE II
DEFINITIONS
2.1. CERTAIN DEFINITIONS. The capitalized terms set forth below, unless
the context clearly requires otherwise, shall have the following meanings in
this Lease:
"ADDITIONAL RENT" means any and all sums (whether or not specifically
called "Additional Rent" in this Lease) other than Monthly Rent which Tenant is
or becomes obligated to pay to Landlord under this Lease. See also Rent.
"ALTERATIONS" means any alterations, decorations, modifications,
additions or improvements made in, on, about, under or contiguous to the
Building or the Premises after the Commencement Date, including, but not limited
to, lighting, HVAC and electrical fixtures, pipes and conduits, transfer,
storage and disposal facilities, partitions, drapery, wall coverings, shelves,
cabinetwork, carpeting and other floor coverings, ceiling tiles, fixtures and
carpentry installations.
"APPLICABLE LAWS" means the laws, rules, regulations, ordinances,
restrictions, and practices described in Section 5.2.
"APPLICABLE RATE" means the greater of ten percent (10%) per annum or
five percent (5%) in excess of the discount rate of the Federal Reserve Bank of
San Francisco in effect on the twenty-fifth (25th) day of the calendar month
immediately prior to the event giving rise to the Applicable Rate imposition;
provided, however, the Applicable Rate shall in no event exceed the maximum
interest rate permitted to be charged by applicable law.
"BROKER" means the person or entity identified in Item 12 of the Basic
Lease Provisions.
"BUILDING" means that certain building within which the Premises are
located.
"CASUALTY" is defined in Section 12.1.
"CITY" means the city in which the Premises are located.
"COMMENCEMENT DATE" means the commencement date of the Term, described
in Section 3.2.
"COMMON AREA" means all areas and facilities within the Project
exclusive of the Premises and other portions of the Project leased (or to be
leased) exclusively to other tenants. The Common Area includes, but is not
limited to, public corridors, parking areas, access and perimeter roads,
sidewalks, landscaped areas and similar areas and facilities. Tenant's use of
the Common Area, and its rights and obligations with respect thereto, are more
particularly described in Article X.
"COUNTY" means the county in which the Premises are located.
"EVENT OF DEFAULT" means the Tenant defaults described in Section 15.1.
"GUARANTOR" means the person(s) or entity identified in Item 14 of the
Basic Lease Provisions, if any.
"HVAC" means the heating, ventilating and air conditioning system
serving the Building.
"HAZARDOUS MATERIALS" is defined in Section 6.1.
"LANDLORD'S AGENTS" means Landlord's authorized agents,
representatives, property managers (whether as agents or independent
contractors), consultants, contractors, partners, subsidiaries, affiliates,
directors, officers and employees, including without limitation the Additional
Insureds named in Item 16 of the Basic Lease Provisions.
"LANDLORD'S ARCHITECT" means the architect or architectural firm from
time to time designated by Landlord to perform the function of Landlord's
Architect set forth in this Lease. Landlord's Architect initially shall be the
architect or architectural firm designated in Item 13 of the Basic Lease
Provisions.
"LEASE" means this instrument together with all exhibits, amendments,
addenda and riders attached hereto and made a part hereof.
"MONTHLY RENT" means the monthly rental which Tenant is to pay to
Landlord pursuant to Section 4.1, as the same may be adjusted from time to time
as set forth in this Lease. See also Rent.
"MORTGAGE" means any mortgage, deed of trust, or similar lien on or
covering the Project or any part thereof.
"MORTGAGEE" means any mortgagee of a mortgage, beneficiary of a deed of
trust or lender having a lien on or covering the Project or any part thereof.
"NOTICE" means each and every notice, communication, request, demand,
reply or advice, or duplicate thereof, in this Lease provided or permitted to be
given, made or accepted by either party to any other party, which shall be in
writing and given in accordance with the provisions of Section 21.6.
["OPERATING EXPENSES" means, collectively, Project Costs and Real
Property Taxes.] [DELETED]
["OPERATING EXPENSE BASE" means the allowance for Operating Expenses
that Landlord will credit to Tenant's Share of Operating Expenses under Article
VII, which allowance amount is set forth under Item 19 of the Basic Lease
Provisions.] [DELETED]
["PLANS" means the final working drawings for the construction of the
Tenant Improvements to be prepared and approved as set forth in the Work
Letter.] [DELETED]
"PREMISES" means the premises shown in EXHIBIT A, and all areas
appurtenant thereto, if any, for the exclusive use of Tenant, as shown in
EXHIBIT A. The Premises are located within and constitute a portion of the
Building at the address set forth in Item 2 of the Basic Lease Provisions.
"PREMISES SQUARE FOOTAGE" means (a) the entire area included within the
Premises, being the area bounded by the inside surface of any exterior glass
walls (or the inside surface of the permanent exterior wall where there is no
glass) of the Building bounding the Premises, the inside surface of the exterior
of all walls separating the Premises from any public corridors or such other
public areas on such floor, and the centerline of all walls separating the
Premises from other areas leased or to be leased to other tenants on such floor;
and (b) an amount equal to Tenant's Share of the lobby areas, stairwells,
corridors, mechanical rooms, janitorial rooms, electrical rooms and telephone
closets in the Building. The Premises Square Footage as of the execution of this
Lease is set forth in Item 6 of the Basic Lease Provisions.
"PROJECT" means that certain real property, and all improvements
thereon, including the Building and other buildings, if any, located within the
boundaries of such property, shown on the Project Site Plan.
["PROJECT COSTS" is defined in Section 7.3.] [DELETED]
"PROJECT SITE PLAN" means EXHIBIT B.
["REAL PROPERTY TAXES" is defined in Section 7.4.] [DELETED]
"RENT" means Monthly Rent and Additional Rent, collectively.
"RESTRICTIONS" means, collectively, all covenants, conditions,
restrictions and other private or public agreements affecting the Premises or
any portion thereof, now or in the future, and as the same may be amended from
time to time.
"RULES AND REGULATIONS" means the rules and regulations attached hereto
as EXHIBIT G and any modifications thereto promulgated by Landlord or Landlord's
Agents from time to time.
"SECURITY DEPOSIT" means the amount set forth in Item 10 of the Basic
Lease Provisions, which shall be paid to Landlord by Tenant pursuant to Section
4.6.
"SUBSTANTIAL COMPLETION" and "SUBSTANTIALLY COMPLETED" means the Tenant
Improvements, or repair of the Premises following a Casualty, have been fully
completed except for minor details of construction, mechanical adjustments or
decoration which do not materially interfere with Tenant's use and enjoyment of
the Premises (items normally referred to as "punch list" items).
"TENANT DELAYS" means (i) any and all delays arising out of the acts or
omissions of Tenant or Tenant's Agents, [including without limitation delays in
the construction of the Tenant Improvements due to the fault of the Tenant or
Tenant's Agents,] [DELETED] and (ii) Tenant's failure to deliver to Landlord
prior to the Commencement Date, executed copies of policies of insurance or
certificates thereof as required under Section 11.8.
["TENANT IMPROVEMENTS" means those certain improvements, if any, to be
constructed on the Premises as provided in Article XX and in the Work Letter.]
[DELETED]
"TENANT'S AGENTS" means Tenant's agents, representatives, consultants,
contractors, affiliates, subsidiaries, officers, directors, employees,
subtenants, guests and invitees.
"TENANT'S PERSONAL PROPERTY" means Tenant's removable trade fixtures,
furniture, equipment and other personal property located in or on the Premises,
[and shall specifically include film processor, humidity units, process sinks
(other than attached sinks suitable for domestic use), Liebert air conditioning
system (to the extent wholely within the Premises and not mounted outside or on
the roof of the Building), and circular doors (but not any other types of
doors).] [ADDED]
"TERM" means the term of this Lease, as provided in Section 3.2.
"UNAVOIDABLE DELAY" means any delays which are beyond a party's
reasonable control, including, but not limited to, delays due to inclement
weather, strikes, acts of God, inability to obtain labor or materials, inability
to secure governmental approvals or permits, governmental restrictions, civil
commotion, fire, earthquake, explosion, flood, hurricane, the elements, or the
public enemy, action or interference of governmental authorities or agents, war,
invasion, insurrection, rebellion, riots, lockouts or any other cause whether
similar or dissimilar to the foregoing which is beyond a party's reasonable
control; provided however, that in no event shall any of the foregoing ever
apply with respect to the payment of any monetary obligation.
["WORK LETTER" means the work letter between Landlord and Tenant
regarding the construction of the Tenant Improvements, if any, in the form of
EXHIBIT C.] [DELETED]
2.2. OTHER DEFINITIONS. Terms defined elsewhere in this Lease, unless
the context clearly requires otherwise, shall have the meaning as there given.
ARTICLE III
PREMISES AND TERM
3.1. LEASE OF PREMISES. Subject to and upon the terms and conditions
set forth herein, Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord.
3.2. TERM AND COMMENCEMENT. Unless sooner terminated as provided
herein, the Term of this Lease shall be for that period of years and months set
forth in Item 8 of the Basic Lease Provisions, as the same may be extended in
accordance with any option or options to extend the Term granted herein, and
shall commence on the Commencement Date set forth in item 7 of the Basic Lease
Provisions.
3.3. [EARLY ENTRY. Tenant and its authorized agents, contractors,
subcontractors and employees shall be granted a license by Landlord to enter
upon the Premises, at Tenant's sole risk and expense, during ordinary business
hours prior to the Commencement Date, for the sole purpose of installing
Tenant's trade fixtures and equipment in the Premises; provided, however, that
(i) the provisions of this Lease, other than with respect to the payment of
Monthly Rent, shall apply during such early entry, including, but not limited
to, the provisions of Article XI relating to Tenant's indemnification of
Landlord, (ii) prior to any such entry, Tenant shall pay for and provide
evidence of the insurance to be provided by Tenant pursuant to the provisions of
Article XI, (iii) Tenant shall pay all utility, service and maintenance charges
for the Premises attributable to Tenant's early entry and use of the Premises as
reasonably determined by Landlord, (iv) Tenant shall not unreasonably interfere,
delay or hinder Landlord, its agents, contractors or subcontractors in the
construction of the Tenant Improvements in accordance with the provisions of
this Lease, and (v) Tenant shall not use the Premises for the storage of
inventory or otherwise commence the operation of business during the period of
such early entry. Upon Tenant's breach of any of the foregoing conditions,
Landlord may, in addition to exercising any of its other rights and remedies set
forth herein, revoke such license upon notice to Tenant.] [DELETED]
3.4. [DELAY IN POSSESSION. If for any reason Landlord cannot deliver
possession of the Premises to Tenant on or before the Commencement Date,
Landlord shall not be subject to any liability therefor, and such failure shall
not affect the validity of this Lease or the obligations of Tenant hereunder,
but in such case, Tenant shall not be obligated to pay Monthly Rent or
Additional Rent other than as provided in Section 3.3 and Section 3.5 until the
Commencement Date has occurred. If the Commencement Date has not occurred within
one hundred twenty (120) days from the date scheduled in Item 7 of the Basic
Lease Provisions plus periods attributable to Tenant Delays or Unavoidable
Delay, Tenant may, at its option, by Notice to Landlord within ten (10) days
thereafter, terminate this Lease, in which event the parties shall be discharged
from all further obligations hereunder; provided, however, if Tenant fails to
give such notice to Landlord within such ten-day period, Tenant shall no longer
have the right to terminate this Lease under this Section 3.4. Tenant
understands that, notwithstanding anything to the contrary contained herein,
Landlord shall have no obligation to deliver possession of the Premises to
Tenant for so long as Tenant fails to deliver to Landlord executed copies of
policies of insurance or certificates thereof as required under Section 11.8.]
[DELETED] [Possession. Tenant acknowledges that Tenant has purchased the assets
of the prior tenant of the Premises, which are currently located in the
Premises. Landlord has no liability, obligation or responsibility for said
assets. Landlord shall deliver possession of the Premises to Tenant upon
Tenant's execution and delivery of this Lease and deposit with Landlord of the
documents and funds required under Sections 4.1, 4.6, 6.3 and 11.8 of this
Lease. [ADDED]
3.5. TENANT DELAYS. The Commencement Date shall not be delayed or
postponed due to Tenant Delays, and the Term, Tenant's obligations to pay Rent
and all of Tenant's other obligations under this Lease shall commence upon the
date which would have been the Commencement Date but for Tenant Delays.
3.6. CONDITION OF PREMISES. [Landlord's sole construction obligations,
if any, regarding Tenant Improvements for the Premises are set forth in Article
XX and the Work Letter.] [DELETED] Other than Landlord's obligations with
respect to [limited refurbishment set forth in Exhibit C] [ADDED] [the tenant
improvements] [DELETED] Tenant acknowledges that Tenant is taking and accepting
the Premises "as is", with all defects. The taking of possession or use of the
Premises by Tenant [for any purpose other than as provided in Section 3.3]
[DELETED] shall conclusively establish that Tenant has inspected the Premises
and accepts them as being in good and sanitary order, condition and repair
[(other than uncompleted Tenant Improvements in accordance with the Work
Letter); provided, however, Tenant shall have a period of thirty (30) days after
Landlord has substantially completed the Tenant Improvements in which to notify
Landlord in writing of any construction deficiencies or defects in the Tenant
Improvements only and of any uncompleted punch list items in the Tenant
Improvements only, and, except as hereafter provided, Landlord will repair,
replace or complete at its expense all items referenced in such notice within
thirty (30) days after receipt of such notice, subject to Unavoidable Delay, or
as soon thereafter as Landlord, acting in good faith, can repair, replace or
complete the same. If Landlord reasonably contends that a particular item in
such notice is not justified, the parties will refer the issue to Landlord's
Architect for resolution. Landlord's Architect's determination shall be final
and binding upon the parties. Nothing in this Section 3.6 shall limit or expand
Landlord's maintenance and repair obligations set forth in Article IX.]
[DELETED]
3.7. NO REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
any of Landlord's Agents has made any representations or warranties as to the
suitability or fitness of the Premises for the conduct of Tenant's business,
including, but not limited to, any representations or warranties regarding
zoning or other land use matters, or for any other purpose, and that neither
Landlord nor any of Landlord's Agents has agreed to undertake any alterations or
additions or construct any improvements to the Premises except as expressly
provided in this Lease.
ARTICLE IV
RENT AND ADJUSTMENTS
4.1. MONTHLY RENT. From and after the Commencement Date, Tenant shall
pay to the Landlord, for each calendar month of the Term, the Monthly Rent set
forth in Item 9 of the Basic Lease Provisions, as the same may be adjusted from
time to time as provided in Section 4.2. Monthly Rent shall be due and payable
to Landlord in lawful money of the United States, in advance, on the first (1st)
day of each calendar month of the Term, without abatement, deduction, claim or
offset, and without prior notice, invoice or demand, at Landlord's address set
forth in Item 1 of the Basic Lease Provisions or at such place as Landlord may
from time to time designate. Tenant's payment of Monthly Rent for the first
(1st) month of the Term shall be delivered to Landlord concurrently with
Tenant's execution of this Lease.
4.2. ADJUSTMENTS. Monthly Rent shall be adjusted from time to time as
provided in EXHIBIT E.
4.3. ADDITIONAL RENT. All Additional Rent shall be due and payable to
Landlord in lawful money of the United States, at Landlord's address set forth
in Item 1 of the Basic Lease Provisions or at such other place as Landlord may
from time to time designate, without abatement, deduction, claim or offset,
within ten (10) days of receipt of Landlord's invoice or statement for same, or,
if this Lease provides another time for the payment of certain items of
Additional Rent, then at such other time.
4.4. PRORATIONS. If the Commencement Date is not the first (1st) day of
a month, or if the expiration of the Term of this Lease is not the last day of a
month, a prorated installment of Monthly Rent based on a thirty (30) day month
shall be paid for the fractional month during which the Term commences or
terminates.
4.5. LATE PAYMENT CHARGES. Tenant acknowledges that late payment by
Tenant to Landlord of Rent under this Lease will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which is extremely difficult
or impracticable to determine. Such costs include, but are not limited to,
processing and accounting charges, late charges that may be imposed on Landlord
by the terms of any Mortgage, and late charges and penalties that may be imposed
due to late payment of Real Property Taxes. Therefore, if any installment of
Monthly Rent or any payment of Additional Rent due from Tenant is not received
by Landlord in good funds by the [fifth (5th) ] [DELETED] [tenth (10th)] [ADDED]
calendar day from the applicable due date, Tenant shall pay to Landlord an
additional sum equal to ten percent (10%) of the amount overdue as a late charge
for every month or portion thereof that such amount remains unpaid. The parties
acknowledge that this late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of the late payment by Tenant.
Acceptance of any late Rent and late charge therefor shall not prevent Landlord
from exercising any of the other rights and remedies available to Landlord for
any other Event of Default under this Lease. Notwithstanding the foregoing (i)
should any payment of Rent by personal check be rejected for insufficient funds,
Landlord shall have the right, upon notice to Tenant, to require that all future
payments by Tenant under this Lease be by cashier's check acceptable to
Landlord, and (ii) upon the third (3rd) occurrence during the Term of Tenant's
failure to timely pay Rent when due, Landlord may, upon notice to Tenant,
require that Monthly Rent for the balance of the Term be made in quarterly
installments, in advance, in an amount equal to the sum of the Monthly Rent
amounts payable during such three (3) month period.
4.6. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum set
forth in Item 10 of the Basic Lease Provisions as a Security Deposit for the
full and faithful performance of every provision of this Lease to be performed
by Tenant. Landlord may apply, in its sole discretion at any time during the
Term of this Lease, all or any part of the Security Deposit to the payment of
all prepaid expenses by Landlord for which Tenant would be required to reimburse
Landlord under this Lease, including without limitation for [Tenant Improvements
and] [DELETED] Broker commissions. Such application of the Security Deposit is
not and shall never be dependent upon an Event of Default. Upon an Event of
Default, and whether or not Landlord is informed of or has knowledge of the
Event of Default, the Security Deposit (if not already applied as hereinabove
provided) shall be deemed to be automatically applied, without waiver of any
rights Landlord may have under this Lease or at law or in equity as a result of
an Event of Default, to the payment of any Rent not paid when due, the repair of
damage to the Premises or the payment of any other amount which Landlord may
spend or become obligated to spend by reason of an Event of Default, or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of an Event of Default, to the full extent permitted by law. If any
portion of the Security Deposit is so applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount. Landlord
shall not be required to keep the Security Deposit separate from its general
funds. The unused portion of the Security Deposit, if any, shall be returned to
Tenant within thirty (30) days of the expiration of this Lease or any
termination of this Lease not resulting from an Event of Default, so long as
Tenant has vacated the Premises in the manner required by this Lease and paid
all sums required to be paid under this Lease, provided however that Landlord
may retain the Security Deposit until such time as any amounts of Additional
Rent due from Tenant have been determined and paid in full. Tenant hereby waives
the provisions of Section 1950.7(c) of the California Civil Code and any present
or future laws otherwise governing the return of the Security Deposit to Tenant
to the extent of reasonably anticipated Additional Rent retained by Landlord
pursuant to the previous sentence.
ARTICLE V
USE
5.1. TENANT'S USE. Tenant shall use the Premises solely for the
purposes set forth in Item 11 of the Basic Lease Provisions and shall use the
Premises for no other purpose. Tenant's use of the Premises shall be subject to
all of the terms and conditions of this Lease, including, but not limited to,
all the provisions of this Article V. Tenant, at Tenant's sole cost and expense,
shall procure, maintain and make available for Landlord's inspection throughout
the Term, all governmental approvals, licenses and permits required for the
proper and lawful conduct of Tenant's permitted use of the Premises. At
Landlord's request, Tenant shall deliver copies of all such approvals, licenses
and permits to Landlord.
5.2. COMPLIANCE WITH APPLICABLE LAWS. Throughout the Term, Tenant, at
Tenant's sole cost and expense, shall comply with, and shall not use the
Premises, Building or Common Area, or suffer or permit anything to be done in or
about the same which will in any way conflict with, (i) any and all present and
future laws, statutes, zoning restrictions, ordinances, orders, regulations,
directions, rules and requirements of all governmental or private authorities
having jurisdiction over all or any part of the Premises (including, but not
limited to, state, municipal, county and federal governments and their
departments, bureaus, boards and officials) pertaining to the use or occupancy
of, or applicable to, the Premises or privileges appurtenant to or in connection
with the enjoyment of the Premises, (ii) any and all applicable federal, state
and local laws, regulations or ordinances pertaining to air and water quality,
Hazardous Materials (as defined in Section 6.1), waste disposal, air emissions
and other environmental or health and safety matters, zoning, land use and
utility availability, which impose any duty upon Landlord or Tenant directly or
with respect to the use or occupation of the Project or any portion thereof,
(iii) the requirements of the Board of Fire Underwriters or other similar body
now or hereafter constituted relating to or affecting the condition, use or
occupancy of the Project or any portion thereof, (iv) any covenants, conditions,
easements or restrictions, including but not limited to the Restrictions, now or
hereafter affecting or encumbering the Project or any portion thereof,
regardless of when they become effective, (v) the Rules and Regulations, and
(vi) good business practices (collectively, (i) through (vi) above are
hereinafter referred to as "Applicable Laws"). Tenant shall not commit any waste
of the Premises, Building or Project, or any public or private nuisance or any
other act or thing which might or would disturb the quiet enjoyment of any other
tenant of Landlord or any occupant of nearby property. Tenant shall not place or
permit to be placed any loads upon the floors, walls or ceilings in excess of
the maximum designed load specified by Landlord or which might damage the
Premises or the Building, or place or permit to be placed any harmful liquids in
the drainage systems, and Tenant shall not dump or store, or permit to be dumped
or stored, any inventory, waste materials, refuse or other materials or allow
any such materials to remain outside the Building proper, except in designated
enclosed trash areas. Tenant shall not conduct or permit any auctions, sheriff's
sales or other like activities at the Project or any portion thereof.
5.3. RESTRICTIONS. Tenant agrees that this Lease is subject and
subordinate to the Restrictions, as the same may now or hereafter exist, and
that it will execute and deliver to Landlord within fifteen (15) days of
Landlord's request therefor, any further documentation or instruments which
Landlord deems necessary or desirable to evidence or effect such subordination.
Without limiting the provisions of Section 5.2, Tenant shall throughout the Term
timely comply with all of the terms, provisions, conditions and restrictions of
the Restrictions which pertain to, restrict or affect the Premises or Tenant's
use thereof, or Tenant's use of any other area of the Project permitted
hereunder, including the payment by Tenant of any periodic or special dues or
assessments charged against the Premises or Tenant which may be allocated to the
Premises or Tenant in accordance with the provisions of the Restrictions. Tenant
shall hold Landlord, Landlord's Agents and the Premises harmless and shall
indemnify, protect and defend Landlord and Landlord's Agents from and against
any loss, expense, damage, attorneys' fees and costs or liability arising out of
or in connection with the failure of Tenant to so perform or comply with the
Restrictions. Tenant agrees that it will subordinate this Lease to any other
covenants, conditions and restrictions and any reciprocal easement agreements or
any similar agreements which Landlord may hereafter record against the Premises
and to any amendment or modification to any of the existing Restrictions,
provided that such subordination does not unreasonably interfere with Tenant's
use and employment of the Premises.
5.4. LANDLORD'S RIGHT OF ENTRY. Landlord and Landlord's Agents shall
have the right to enter the Premises at all reasonable times upon reasonable
notice to Tenant, except for emergencies in which case no notice shall be
required, to inspect the Premises, to take samples and conduct environmental
investigations, to post notices of nonresponsibility and similar notices and
signs indicating the availability of the Premises for sale, to show the Premises
to interested parties such as prospective lenders and purchasers, to make
necessary Alterations or maintenance and repairs, to perform Tenant's
obligations as permitted herein when Tenant has failed to do so and, at any
reasonable time after one hundred eighty (180) days prior to the expiration of
the Term, to place upon the Premises reasonable signs indicating the
availability of the Premises for lease and to show the Premises to prospective
tenants, all without being deemed to have caused an eviction of Tenant and
without any liability to Tenant or abatement of Rent. The above rights are
subject to reasonable security regulations of Tenant, and in exercising its
rights set forth herein, Landlord shall endeavor to cause the least possible
interference with Tenant's business. Landlord shall at all times have the right
to retain a key which unlocks all of the doors in the Premises, excluding
Tenant's vaults and safes, and Landlord and Landlord's Agents shall have the
right to use any and all means which Landlord may deem proper to open the doors
in an emergency to obtain entry to the Premises, and any entry to the Premises
so obtained by Landlord or Landlord's Agents shall not under any circumstances
be deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from the Premises.
ARTICLE VI
HAZARDOUS MATERIALS
6.1. DEFINITION OF HAZARDOUS MATERIALS. For purposes of this Lease, the
term "Hazardous Materials" includes (i) any "hazardous materials" as defined in
Section 25501(k) of the California Health and Safety Code unless Tenant
establishes, to the satisfaction of Landlord, that because of the quantity,
concentration, or physical or chemical characteristics, such substance or matter
does not pose a present or potential hazard to human health and safety or to the
environment, (ii) any other substance or matter which results in liability to
any person or entity from exposure to such substance or matter under any
statutory or common law theory, and (iii) any substance or matter which is in
excess of relevant and appropriate levels set forth in any applicable federal,
state or local law or regulation pertaining to any hazardous or toxic substance,
material or waste, or for which any applicable federal, state or local agency
orders or otherwise requires removal, treatment or remediation.
6.2. USE OF HAZARDOUS MATERIALS. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, stored, used, generated, released into
the environment or disposed of on, under, from or about the Premises (which for
purposes of this Article VI shall include, but is not limited to, subsurface
soil and ground water) by Tenant or Tenant's Agents without the prior written
consent of Landlord. Landlord may, in its sole discretion, place such conditions
as Landlord deems appropriate with respect to such Hazardous Materials, and may
further require that Tenant demonstrates to Landlord that such Hazardous
Materials are necessary or useful to Tenant's business and will be generated,
stored, used and disposed of in a manner that complies with all Applicable Laws
regulating such Hazardous Materials and with good business practices. Without
limiting any other rights or remedies of Landlord under this Lease, Tenant shall
pay the cost of any cleanup work performed on, under or about the Premises, the
Building and the Project as required by this Lease or any Applicable Laws in
connection with the removal, disposal, neutralization or other treatment of such
Hazardous Materials caused or permitted by Tenant or Tenant's Agents. [INSERT
ATTACHED] [ADDED]
6.3. DISCLOSURES. Tenant shall promptly notify Landlord of, and shall
promptly provide Landlord with true, correct, complete and legible copies of,
all of the following environmental items relating to the Premises: reports filed
pursuant to any self-reporting requirements; reports filed pursuant to any
Applicable Laws or this Lease; all permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices, and all
other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, underground storage tanks or Hazardous Materials;
all orders, reports, notices, listings and correspondence (even those which may
be considered confidential) of or concerning the release, investigation,
compliance, clean up, remedial and corrective actions, and abatement of
Hazardous Materials whether or not required by Applicable Laws; and all
complaints, pleadings and other legal documents filed against Tenant related to
Tenant's use, handling, storage or disposal of Hazardous Materials.
6.4. INSPECTION; COMPLIANCE. Landlord and Landlord's Agents shall have
the right, but not the obligation, to inspect, investigate, sample and/or
monitor the Premises, including any air, soil, water, groundwater or other
sampling, and any other testing, digging, drilling or analyses, at any time to
determine whether Tenant is complying with the terms of this Article VI, and in
connection therewith, Tenant shall provide Landlord with full access to all
relevant facilities, records and personnel. If Tenant is not in compliance with
any of the provisions of this Article VI, or in the event of a release of any
Hazardous Material on, under, from or about the Premises, Landlord and
Landlord's Agents shall have the right, but not the obligation, without
limitation on any of Landlord's other rights and remedies under this Lease, to
immediately enter upon the Premises and to discharge Tenant's obligations under
this Article VI at Tenant's expense, including without limitation the taking of
emergency or long-term remedial action. Landlord and Landlord's Agents shall
endeavor to minimize interference with Tenant's business but shall not be liable
for any such interference. All sums reasonably disbursed, deposited or incurred
by Landlord in connection herewith, including, but not limited to, all costs,
expenses and actual attorneys fees, shall be due and payable by Tenant to
Landlord, as an item of Additional Rent, on demand by Landlord, together with
interest thereon at the Applicable Rate from the date of such demand until paid
by Tenant.
6.5. INDEMNIFICATION. To the fullest extent permitted by law, Tenant
hereby agrees to indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and Landlord's Agents, and any successors to
all or any portion of Landlord's interest in the Premises, the Building and the
Project and their directors, officers, partners, employees, authorized agents,
affiliates, representatives and Mortgagees, from and against any and all
liabilities, losses, damages (including, but not limited to, damages for the
loss or restriction on use of rentable or usable space or any amenity of the
Premises, the Building and the Project or damages arising from any adverse
impact on marketing of space in the Premises, the Building and the Project),
diminution in the value of the Premises, the Building and the Project,
judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses
(including, but not limited to, reasonable attorneys' fees, disbursements and
court costs and all other professional or consultant's expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the
presence, use, generation, storage, treatment, on or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and the Project by Tenant or Tenant's Agents, and
specifically including the cost of any required or necessary repair,
restoration, clean-up (including, but not limited to, the costs of investigation
and removal of Hazardous Materials) or detoxification of the Premises, the
Building and the Project and the preparation of any closure or other required
plans, whether or not such action is require or necessary during the Term or
after the expiration of this Lease.
6.6. LANDLORD'S DISCLOSURES. Landlord hereby discloses to Tenant, and
Tenant hereby acknowledges, certain facts relating to Hazardous Materials at the
Project known by Landlord to exist as of the date of this Lease, as more
particularly described in EXHIBIT I attached hereto. Tenant shall have no
liability or responsibility with respect to the Hazardous Materials facts
described in EXHIBIT I.
ARTICLE VII
[OPERATING EXPENSES; TAXES;] [DELETED] UTILITIES
[7.1. TENANT TO BEAR TENANT'S SHARE OF OPERATING EXPENSES. Tenant shall
pay to Landlord Tenant's Share (as defined in Section 7.2) of Operating Expenses
in excess of the Operating Expense Base as follows: Prior to the Commencement
Date and thereafter prior to the commencement of each of Landlord's fiscal years
during the Term, Landlord shall give Tenant a written estimate of Tenant's Share
of Operating Expenses in excess of the Operating Expense Base for the ensuing
fiscal year or partial fiscal year, as the case may be. Tenant shall pay, as an
item of Additional Rent, such estimated amount in equal monthly installments, in
advance, on or before the first (1st) day of each calendar month concurrent with
its payment of Monthly Rent. If Landlord has not furnished its written estimate
by the time set forth above, Tenant shall pay monthly installments of Operating
Expenses in excess of the Operating Expense Base at the rate established for the
prior fiscal year, if any; provided that when the new estimate is delivered to
Tenant, Tenant shall at the next monthly payment date pay Landlord any accrued
deficiency based on the new estimate, or Landlord shall credit any accrued
overpayment based on such estimate toward Tenant's next installment payment
hereunder. Within a reasonable period of time after the end of each fiscal year
(in no event less than one hundred (120) days after the end of each fiscal year
unless sooner completed by Landlord) Landlord shall furnish Tenant a statement
showing in reasonable detail Tenant's Share of the actual Operating Expenses in
excess of the Operating Expense Base incurred for the period in question. If
Tenant's estimated payments are less than Tenant's Share of actual Operating
Expenses in excess of the Operating Expense Base as shown by the applicable
statement, Tenant shall pay the difference to Landlord within thirty (30) days
thereafter. If Tenant shall have overpaid Landlord, Landlord shall credit such
overpayment toward Tenant's next installment payment hereunder. When the final
determination is made of Tenant's Share of the actual Operating Expenses in
excess of the Operating Expense Base for the fiscal year in which this Lease
terminates, Tenant shall, even if this Lease has terminated, pay to Landlord
within fifteen (15) days after notice the excess of Tenant's Share of such
actual Operating Expenses in excess of the Operating Expense Base over the
estimate of Tenant's Share of such Operating Expenses paid. Conversely, any
overpayment shall be rebated by Landlord to Tenant. If Landlord shall determine
at any time that the estimate of Tenant's Share of Operating Expenses in excess
of the Operating Expense Base for the current fiscal year is or will become
inadequate to meet Tenant's Share of all such Operating Expenses for any reason,
Landlord shall immediately determine the approximate amount of such inadequacy
and issue a supplemental estimate as to Tenant's Share of such Operating
Expenses and Tenant shall pay any increase as reflected by such supplemental
estimate. Landlord shall keep or cause to be kept separate and complete books of
accounting covering all Operating Expenses and showing the method of calculating
Tenant's Share of Operating Expenses in excess of the Operating Expense Base,
and shall preserve for at least twelve (12) months after the close of each
fiscal year all material documents evidencing said Operating Expenses for that
fiscal year. Tenant, at its sole cost and expense, through any certified public
accountant designated by it, shall have the right, during reasonable business
hours and not more frequently than once during any fiscal year, to examine
and/or audit the books and documents mentioned above evidencing such costs and
expenses for the previous fiscal year. Any delay or failure by Landlord in
delivering any estimate or statement pursuant to this Section 7.1 shall not
constitute a waiver of its right to require Tenant to pay Tenant's Share of
Operating Expenses in excess of the Operating Expense Base pursuant hereto.]
[DELETED]
[7.2. DEFINITION OF TENANT'S SHARE. The term "Tenant's Share" means
that portion of an Operating Expense determined by multiplying the cost of such
item by a fraction, the numerator of which is the Premises Square Footage and
the denominator of which is the total square footage of the floor area, as of
the date on which the computation is made, to be charged with such Operating
Expense. A determination of Tenant's Share of all Operating Expenses for the
Project as of the date of this Lease is set forth in Item 18 of the Basic Lease
Provisions.] [DELETED]
[7.3. DEFINITION OF PROJECT COSTS. The term "Project Costs" means all
costs and expenses incurred by Landlord or Landlord's Agents in connection with
the operation of the Project, including, but not limited to, the following:
repair and maintenance of the roof, foundation and exterior walls of the
buildings in the Project, periodic painting of the buildings in the Project,
periodic cleaning of the exterior windows of the buildings in the Project,
landscaping services, outside pest control, normal maintenance and repair of the
HVAC through maintenance contracts or otherwise, sweeping, maintenance services,
repairs to and replacement of asphalt paving, bumpers, striping, light bulbs,
light standards, monument and directional signs and lighting systems, perimeter
walls, retaining walls, sidewalks, planters, landscaping and sprinkler system in
planting area, any and all assessments levied against the Project pursuant to
the Restrictions, water, electrical and other utility services not supplied
directly to a tenant, removal of trash, rubbish and other refuse from the
Project, cleaning of and replacement of signs of the Project, including
relamping and repairs made as required; repair, operation and maintenance of the
Common Area, including, but not limited to, removal of any obstructions not
reasonably required for the Common Area uses, prohibition and removal of the
sale or display of merchandise or the storing of materials and/or equipment in
the Common Area, and payment of all electrical, water and other utility charges
or fees for services furnished to the Common Area; obtaining and maintaining
public liability, property damage and other forms of insurance which Landlord
may or is required to maintain in connection with the Project (including the
payment of any deductibles thereunder); costs incurred in connection with
compliance of any laws or changes in laws applicable to the Project, including
without limitation any laws or changes in laws regarding Hazardous Materials;
establishment of reasonable reserves for replacements and/or repair of Common
Area improvements, equipment and supplies; costs associated with procurement and
maintenance of an intrabuilding network cable service agreement for any
intrabuilding network cable telecommunications lines within the Project, and any
other installation, maintenance, repair and replacement costs associated with
such lines; employment of such personnel as Landlord may deem reasonably
necessary, if any, to direct parking and police the Common Area and facilities;
the cost of any capital improvements (other than tenant improvements for
specific tenants) made by or on behalf of Landlord to the Project or Common Area
to the extent of the amortized amount thereof over the useful life of such
capital improvements calculated at a market cost of funds, all as determined by
Landlord, for each such year of useful life during the Term; depreciation of
machinery and equipment used in connection with the maintenance and operation of
the Common Area for which a reasonable reserve has not been established as
herein provided; employment of personnel used in connection with any of the
foregoing, including, but not limited to, payment or provision for unemployment
insurance, worker's compensation insurance and other employee costs; the cost of
bookkeeping, accounting and auditing and legal services provided in connection
with any of the foregoing; the cost of any environmental consultant or other
services used in connection with Landlord's monitoring of the Project with
respect to Hazardous Materials; the cost of any tax, insurance or other
consultant utilized in connection with the Project; and any other items
reasonably necessary from time to time to properly repair, replace, maintain and
operate the Project. Project Costs shall also include a management fee to cover
Landlord's management, overhead and administrative expenses; provided, however,
if Landlord elects to delegate its duties hereunder to a professional property
manager, then Project Costs shall not include any management fee to Landlord
(except for any costs and/or administrative and overhead expenses reasonably
incurred by Landlord in monitoring and auditing the performance delegated to the
professional property manager), but under such circumstances any reasonable
amounts paid to the professional property manager shall be added to and deemed a
part of Project Costs. If Landlord elects to perform any maintenance or repair
herein described in conjunction with properties other than the Project, and if a
common maintenance contractor is contracted with for such purpose, the contract
amount allocable to the Project, as reasonably determined by Landlord, shall be
added to and deemed a part of Project Costs hereunder. Increases in Project
Costs by reason of a disproportionate impact by Tenant thereon (for example, and
not by way of limitation, increases in costs of trash collection because of
Tenant's excessive generation of trash or increases in costs of Common Area
maintenance because of Tenant's unpermitted storage of inventory or materials in
the Common Area), in Landlord's reasonable judgment, may be billed by Landlord,
as an item of Additional Rent, directly to Tenant.] [DELETED]
[7.4. DEFINITION OF REAL PROPERTY TAXES. The term "Real Property Taxes"
means any form of tax, assessment, charge, license, fee, rent tax, levy, penalty
(if a result of Tenant's delinquency), real property or other tax (other than
Landlord's net income, estate, succession, inheritance, or franchise taxes), now
or hereafter imposed with respect to the Project or any part thereof (including
any Alterations), this Lease or any Rent payable under this Lease by any
authority having the direct or indirect power to tax, or by any city, county,
state or federal government or any improvement district or other district or
division thereof, whether such tax or any portion thereof (i) is determined by
the area of the Project or any part thereof or the Rent payable under this Lease
by Tenant including, but not limited to, any gross income or excise tax levied
by any of the foregoing authorities with respect to receipt of the Rent due
under this Lease, (ii) is levied or assessed in lieu of, in substitution for, or
in addition to, existing or additional taxes with respect to the Project or any
part thereof whether or not now customary or within the contemplation of
Landlord or Tenant, or (iii) is based upon any legal or equitable interest of
Landlord in the Project or any part thereof.] [DELETED]
[7.5. APPORTIONMENT OF TAXES. If the Project is assessed as part of a
larger parcel, then Landlord shall equitably apportion the Real Property Taxes
assessed against the real property which includes the Project and reasonably
determine the amount of Real Property Taxes attributable to the Project. If
other buildings exist on the assessed parcel, the Real Property Taxes
apportioned to the Project shall be based upon the ratio of the square footage
of all buildings within the Project to the square footage of all buildings on
the assessed parcel, and the amount of Real Property Taxes so apportioned to the
Project shall be included as part of Operating Expenses. Landlord's reasonable
determination of such apportionment shall be conclusive.] [DELETED]
7.6. TAX ON IMPROVEMENTS; PERMITTED CONTESTS. Tenant shall, at
Landlord's election, be directly responsible for and shall pay the full amount
of any increase in Real Property Taxes attributable to any and all [Tenant
Improvements and any other] [DELETED] improvements of any kind whatsoever placed
in, on or about the Premises for the benefit of, at the request of, or by
Tenant, to the extent such improvements cause the value of all improvements in
the Premises to exceed (i) the Tenant Improvement Allowance, if any, specified
in EXHIBIT C to this Lease, or (ii) in the case where no Tenant Improvement
Allowance is specified, the value of the improvements existing in the Premises
as of the Commencement Date of this Lease. Tenant may contest the amount or
validity of any Real Property Taxes by appropriate proceedings, provided that
Tenant gives Landlord prior Notice of any such contest and keeps Landlord
advised as to all proceedings, and provided further that Tenant shall continue
to reimburse Landlord for Landlord's payment of such Real Property Taxes unless
such proceedings shall operate to prevent or stay such payment and the
collection of the tax so contested. Landlord shall join in any such proceedings
if any Applicable Laws shall so require, provided that Tenant shall hold
harmless, indemnify, protect and defend Landlord from and against any liability,
claim, demand, cost or expense in connection therewith, including, but not
limited to, actual attorneys' fees and costs reasonably incurred.
7.7. UTILITIES AND SERVICES. Tenant shall be responsible for and shall
pay promptly, directly to the appropriate supplier, all charges for water,
electricity, heat, light, power, telephone, refuse pickup, janitorial service,
interior landscape maintenance, and all other utilities, materials and services
furnished directly to Tenant for the Premises or used by Tenant in, on or about
the Premises during the Term, together with any taxes thereon. Tenant
acknowledges that natural gas heating is centrally supplied to the Building and
that Landlord shall charge each tenant of the Building, including Tenant, a flat
monthly fee (to be paid by Tenant as Additional Rent concurrently with Tenant's
payments of Monthly Rent hereunder) to reimburse Landlord for the cost of such
natural gas used at the Building. Landlord shall not be liable in damages or
otherwise for any failure or interruption of any utility or other service
furnished to the Premises. No such failure or interruption shall be deemed an
eviction or entitle Tenant to terminate this Lease or withhold or abate any Rent
due hereunder. Tenant shall cooperate with any present or future government
conservation requirements and with any conservation practices established by
Landlord. Landlord shall at all times have free access to all mechanical
installations of the Building and Premises, including but not limited to air
conditioning equipment and vents, fans, ventilating and machine rooms and
electrical closets.
ARTICLE VIII
ALTERATIONS
8.1. PERMITTED ALTERATIONS. After the Commencement Date, Tenant shall
not make or permit any Alterations in, on or about the Premises without the
prior written consent of Landlord. Notwithstanding the foregoing, in no event
shall any Alterations (i) affect the exterior of the Building or the outside
areas (or be visible from adjoining sites), (ii) affect or penetrate any of the
structural portions of the Building, including, but not limited to, the roof,
(iii) require any change to the basic floor plan of the Premises, any change to
the structural or mechanical components of the Premises, or any governmental
approval or permit as a prerequisite to the construction thereof, (iv) interfere
in any manner with the proper functioning of or Landlord's access to any
mechanical, electrical, plumbing or HVAC systems, facilities or equipment
located in or serving the Building, or (v) diminish the value of the Premises.
All Alterations shall be constructed pursuant to plans and specifications
previously provided to and, when applicable, approved in writing by Landlord,
shall be installed by a licensed contractor at Tenant's sole expense in
compliance with all Applicable Laws, and shall be accomplished in a good and
workmanlike manner conforming in quality and design with the Premises existing
as of the Commencement Date. No Hazardous Materials, including, but not limited
to, asbestos or asbestos-containing materials, shall be used by Tenant or
Tenant's Agents in the construction of any Alterations permitted hereunder. If
any Alterations desired by Tenant require handicapped access accommodations to
be made within the Premises or any other portion of the Project, Tenant shall be
solely responsible for the full cost thereof. All Alterations made by Tenant
shall be and become the property of Landlord upon the installation thereof and
shall not be deemed Tenant's Personal Property; provided, however, that Landlord
may, at its option, require that Tenant, upon the termination of this Lease, at
Tenant's expense, remove any or all non-structural Alterations installed by or
on behalf of Tenant and return the Premises to its condition as of the
Commencement Date of this Lease, normal wear and tear excepted. Notwithstanding
any other provisions of this Lease, Tenant shall be solely responsible for the
maintenance, repair and replacement of any and all Alterations made by or on
behalf of Tenant (including without limitation by Landlord on behalf of Tenant)
to the Premises.
8.2. TRADE FIXTURES. Tenant shall, at its own expense, provide, install
and maintain in good condition all of Tenant's Personal Property required in the
conduct of its business in the Premises.
8.3. MECHANICS' LIENS. Tenant shall give Landlord Notice of Tenant's
intention to perform any work on the Premises which might result in any claim of
lien at least twenty (20) days prior to the commencement of such work to enable
Landlord to post and record a notice of nonresponsibility or other notice
Landlord deems proper prior to the commencement of any such work. Tenant shall
not permit any mechanic's, materialmen's or other liens to be filed against the
property of which the Premises are a part or against Tenant's leasehold interest
in the Premises. If Tenant fails to cause the release of record of any lien(s)
filed against the Premises or its leasehold estate therein by payment or posting
of a proper bond within ten (10) days from the date of the lien filing(s), then
Landlord may, at Tenant's expense, cause such lien(s) to be released by any
means Landlord deems proper, including, but not limited to, payment of or
defense against the claim giving rise to the lien(s). All sums reasonably
disbursed, deposited or incurred by Landlord in connection with the release of
the lien(s), including, but not limited to, all costs, expenses and actual
attorneys' fees, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
8.4 ALTERATIONS BY LANDLORD. Landlord reserves the right at any time
and from time to time without the same constituting an actual or constructive
eviction and without incurring any liability to Tenant therefor or otherwise
affecting Tenant's obligations under this Lease, to make such changes,
alterations, additions, improvements, repairs or replacements in or to the
Building (including the Premises required to do so by any Applicable Laws) and
the fixtures and equipment thereof, as well as in or to the street entrances,
walls, passages, and stairways thereof, or to change the name by which the
Building is commonly known, as Landlord may deem necessary or desirable. Nothing
contained herein shall be deemed to relieve Tenant of any duty, obligation or
liability of Tenant with respect to making any repair, replacement or
improvement or complying with any Applicable Laws in connection with the
Premises, and nothing contained herein shall be deemed or construed to impose
upon Landlord any obligation, responsibility or liability whatsoever for the
care, supervision or repair of the Building or any part thereof other than as
otherwise especially provided in this Lease. [Landlord shall provide Tenant with
prior Notice of any such action, and if such action involves construction will
endeavor to minimize interference with Tenant's business (but will not be liable
for any such interference), and will use best efforts to provide Tenant with as
much prior notice as reasonably possible (except in an emergency) but in no
event less than 48 hours prior notice.] [ADDED]
ARTICLE IX
MAINTENANCE AND REPAIR
9.1. LANDLORD'S MAINTENANCE AND REPAIR OBLIGATIONS. Landlord shall,
subject to [receiving Tenant's Share of Operating Expenses in excess of the
Operating Expense Base, and subject to] [DELETED] Section 9.2, Article XII and
Article XIII, maintain in good condition and repair the roof (excluding any
skylights, but including as needed any replacement thereof), exterior walls and
foundation of the Building, and paint the exterior of the Building and clean the
exterior windows of the Building as and when such painting or window cleaning,
as the case may be, becomes necessary in Landlord's sole discretion. Landlord
shall not be required to make any repairs to the roof, exterior walls or
foundation unless and until Tenant has notified Landlord in writing of the need
for such repair and Landlord shall have a reasonable period of time thereafter
to commence and complete said repair, if warranted. The cost of any maintenance
and repairs on the part of Landlord provided for in this Section 9.1 shall be
[paid by Landlord,] [ADDED} [considered part of Project Costs,] [DELETED] except
that repairs which Landlord deems arise out of any act or omission of Tenant or
Tenant's Agents shall be made at the expense of Tenant. Landlord's obligation to
so repair and maintain the Premises shall be limited to the cost of effecting
such repair and maintenance and in no event shall Landlord be liable for any
costs or expenses in excess of said amounts, including, but not limited to, any
consequential damages, opportunity costs or lost profits incurred or suffered by
Tenant.
9.2. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS. Tenant shall at all
times during the Term of this Lease, at Tenant's sole cost and expense, clean,
keep, maintain, repair and make necessary improvements to, the Premises and
every portion thereof and all improvements therein or thereto, in good and
sanitary order and condition to the reasonable satisfaction of Landlord and in
compliance with all Applicable Laws, usual wear and tear excepted. Any damage or
deterioration of the Premises shall not be deemed usual wear and tear if the
same could have been prevented by good maintenance practices by Tenant. Tenant's
repair and maintenance obligations herein shall include, but are not limited to,
all janitorial services to the Premises, all necessary maintenance and repairs
to all portions of the Premises, and all exterior entrances, all glass, windows,
window casements, show window moldings, partitions, doors (including the roll-up
truck door), doorjambs, door closures, hardware, fixtures, HVAC (including,
without limitation, maintaining a preventive maintenance contract in connection
therewith with such coverage and which such reputable service provider as
Landlord may approve), electrical, plumbing, and mechanical systems serving the
Premises, electrical lighting and outlets, light bulbs, plumbing fixtures,
sewage facilities, interior walls, floors, ceilings, skylights, fans and exhaust
equipment, fire extinguisher equipment and systems, and any specialized heating,
ventilating and air conditioning installed by, on behalf of, or at the request
of Tenant. As part of its maintenance obligations hereunder, Tenant shall, at
Landlord's request, provide Landlord with copies of all maintenance schedules,
reports and notices prepared by, for, or on behalf of Tenant. Landlord may
impose reasonable restrictions and requirements with respect to repairs by
Tenant, which repairs shall be at least equal in quality to the original work,
and the provisions of Section 8.3 shall apply to all such repairs. Tenant's
obligation to repair includes the obligation to replace, as necessary,
regardless of whether the benefit of such replacement extends beyond the Term.
Notwithstanding the foregoing, Landlord shall have the right, upon notice to
Tenant, to undertake the responsibility for maintenance and repair of automatic
fire extinguisher equipment, such as sprinkler systems and alarms, and other
obligations of Tenant hereunder which Landlord deems appropriate to undertake
that affect the Building as a whole. [in which event the cost thereof shall be
included as part of Project Costs and paid by Tenant in the manner set forth in
Section 7.1.] [DELETED] Tenant shall not permit or authorize any person to go
onto the roof of the Building without the prior written consent of Landlord.
9.3. WAIVER. Tenant hereby waives all rights provided for by the
provisions of Sections 1941 and 1942 of the California Civil Code and any
present or future laws regarding Tenant's right to make repairs at the expense
of Landlord or to terminate this Lease because of the condition of the Premises.
9.4. SELF-HELP. If Tenant refuses or fails to repair and maintain the
Premises as required hereunder within ten (10) days from the date on which
Landlord makes a written demand on Tenant to effect such repair and maintenance,
Landlord may enter upon the Premises and make such repairs or perform such
maintenance without liability to Tenant for any loss or damage that may accrue
to Tenant or its merchandise, fixtures or other property or to Tenant's business
by reason thereof. All sums reasonably disbursed, deposited or incurred by
Landlord in connection with such repairs or maintenance, plus ten percent (10%)
for overhead, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest at the Applicable
Rate on such aggregate amount from the date of such demand until paid by Tenant.
ARTICLE X
COMMON AREA AND PARKING
10.1. GRANT OF NONEXCLUSIVE COMMON AREA LICENSE AND RIGHT. Landlord
hereby grants to Tenant and its permitted subtenants, in common with Landlord
and all persons, firms and corporations conducting business in the Project and
their respective customers, guests, licensees, invitees, subtenants, employees
and agents, to use the Common Area within the Project for vehicular parking, for
pedestrian and vehicular ingress, egress and travel, and for such other purposes
and for doing such other things as may be provided for, authorized and/or
permitted by the Restrictions, such nonexclusive license and right to be
appurtenant to Tenant's leasehold estate created by this Lease. The nonexclusive
license and rights granted pursuant to the provisions of this Article X shall be
subject to the provisions of the Restrictions, which pertain in any way to the
Common Area covered by such Restrictions, and the provisions of this Lease.
10.2. USE OF COMMON AREA. Notwithstanding anything to the contrary
herein, Tenant and its successors, assigns, employees, agents and invitees shall
use the Common Area only for the purposes permitted hereby and by the
Restrictions and the Rules and Regulations. All uses permitted within the Common
Area shall be undertaken with reason and judgment so as not to interfere with
the primary use of the Common Area which is to provide parking and vehicular and
pedestrian access throughout the Common Area within the Project and to adjacent
public streets for the Landlord, Landlord's Agents, its tenants, subtenants and
all persons, firms and corporations conducting business within the Project and
their respective customers, guests and licensees. In no event shall Tenant
erect, install, or place, or cause to be erected, installed, or placed any
structure, building, trailer, fence, wall, signs or other obstructions on the
Common Area except as otherwise permitted herein and in the Restrictions, and
Tenant shall not store or sell any merchandise, equipment or materials on the
Common Area.
10.3. CONTROL OF COMMON AREA. Subject to provisions of the
Restrictions, all Common Area and all improvements located from time to time
within the Common Area shall at all times be subject to the exclusive control
and management of the Landlord. Landlord shall have the right to construct,
maintain and operate lighting facilities within the Common Area; to police the
Common Area from time to time; to change the area, level, location and
arrangement of the parking areas and other improvements within the Common Area;
to restrict parking by tenants, their officers, agents and employees to employee
parking areas; to enforce parking charges (by operation of meters or otherwise);
to close all or any portion of the Common Area or improvements therein to such
extent as may, in the opinion of counsel for Landlord, be legally sufficient to
prevent a dedication thereof or the accrual of any rights to any person or to
the public therein; to close temporarily all or any portion of the Common Area
and/or the improvements thereon; to discourage noncustomer parking; and to do
and perform such other acts in and to said Common Area and improvements thereon
as, in the use of good business judgment, Landlord shall determine to be
advisable.
10.4. MAINTENANCE OF COMMON AREA. Subject to the provisions of the
Restrictions, Landlord shall operate and maintain (or cause to be operated and
maintained) the Common Area in a first-class condition, in such manner as
Landlord in its sole discretion shall determine from time to time. Without
limiting the scope of such discretion, Landlord shall have the full right and
authority to employ or cause to be employed all personnel and to make or cause
to be made all rules and regulations pertaining to or necessary for the proper
operation and maintenance of the Common Area and the improvements located
thereon. [The cost of such maintenance of the Common Area shall be included as
part of Project Costs.] [DELETED] No part of the Common Area may be used for the
storage of any items, including without limitation, vehicles, materials,
inventory and equipment. All trash and other refuse shall be placed in
designated receptacles. No work of any kind, including, but not limited to,
painting, drying, cleaning, repairing, manufacturing, assembling, cutting,
merchandising or displaying shall be permitted upon the Common Area.
10.5. REVOCATION OF LICENSE. All Common Area and improvements located
thereon which Tenant is permitted to use and occupy pursuant to the provisions
of this Lease are to be used and occupied under a revocable license and right,
and if any such license be revoked, or if the amount of such areas be
diminished, Landlord shall not be subject to any liability nor shall Tenant be
entitled to compensation or diminution or abatement of Rent, and such revocation
or diminution of such areas shall not be deemed constructive or actual eviction.
It is understood and agreed that the condemnation or other taking or
appropriation by any public or quasi-public authority, or sale in lieu of
condemnation, of all or any portion of the Common Area shall not constitute a
violation of Landlord's agreements hereunder, and Tenant shall not be entitled
to participate in or make any claim for any award or other condemnation proceeds
arising from any such taking or appropriation of the Common Area.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing, Landlord shall provide to Tenant the number of vehicle parking
spaces set forth in Item 15 of the Basic Lease Provisions throughout the Term
(subject to the rights of Landlord under this Article X).
10.6. LANDLORD'S RESERVED RIGHTS. Landlord reserves the right to
install, use, maintain, repair, relocate and replace pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises or outside
the Premises, change the boundary lines of the Project and install, use,
maintain, repair, alter or relocate, expand and replace any Common Area;
provided, however, Landlord shall not unreasonably interfere with Tenant's use
of the Premises. Such rights of Landlord shall include, but are not limited to,
designating from time to time certain portions of the Common Area as exclusively
for the benefit of certain tenants in the Project.
10.7. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 15 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Area
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking by vehicles
no larger than full size passenger automobiles or pick-up trucks. Tenant shall
not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant's employees, suppliers, shippers, customers, or invitees to be loaded,
unloaded, or parked in areas other than those designated by Landlord for such
activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord. Parking within the Common Area
shall be limited to striped parking stalls, and no parking shall be permitted in
any driveways, accessways or in any area which would prohibit or impede the free
flow of traffic within the Common Area. There shall be no overnight parking of
any vehicles of any kind, and vehicles which have been abandoned or parking in
violation of the terms hereof may be towed away at the owner's expense.
ARTICLE XI
INDEMNITY AND INSURANCE
11.1. INDEMNIFICATION. To the fullest extent permitted by law, Tenant
hereby agrees to defend (with attorneys acceptable to Landlord), indemnify,
protect and hold harmless Landlord and Landlord's Agents and any successors to
all or any portion of Landlord's interest in the Premises and their directors,
officers, partners, employees, authorized agents, representatives, affiliates
and Mortgagees, from and against any and all damage, loss, claim, liability and
expense including, but not limited to, actual attorneys' fees and legal costs,
incurred directly or indirectly by reason of any claim, suit or judgment brought
by or on behalf of (i) any person or persons for damage, loss or expense due to,
but not limited to, bodily injury or property damage sustained by such person or
persons which arise out of, are occasioned by, or are in any way attributable to
the use or occupancy of the Premises or the acts or omissions of the Tenant or
Tenant's Agents in or about the Premises or the Project (including but not
limited to any Event of Default hereunder), or (ii) Tenant or Tenant's Agents
for damage, loss or expense due to, but not limited to, bodily injury or
property damage which arise out of, are occasioned by, or are in any way
attributable to the use of any of the Common Area, except to the extent caused
by the sole active negligence or willful misconduct of Landlord.
11.2. PROPERTY INSURANCE. Landlord shall obtain and keep in force
during the Term of this Lease a policy or policies of insurance, with
deductibles at the sole discretion of Landlord, covering loss or damage to the
Premises and the Building, the Tenant Improvements and objects owned by Landlord
and normally covered under a "Boiler and Machinery" policy (as such term is used
in the insurance industry) at least in the amount of the full replacement cost
thereof, and in no event less than the total amount required by Mortgagees,
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended perils ("all risk" or
"special causes of action," as such terms are used in the insurance industry,
including, at Landlord's option, collapse, earthquake and flood) and other
perils as required by the Mortgagees or deemed necessary by Landlord. A
stipulated value or agreed amount endorsement deleting any co-insurance
provision of said policy or policies shall be procured with said insurance. [The
cost of such insurance policies shall be included in the definition of Project
Costs, and shall be paid by Tenant in the manner set forth in Section 7.1.]
[DELETED] Such insurance policies shall provide for payment of loss thereunder
to Landlord or, at Landlord's election, to the Mortgagees. If the Premises are
part of a larger building, or if the Premises are part of a group of buildings
owned by Landlord which are adjacent to the Premises, then Tenant shall pay for
any increase in the property insurance of the Building or such other building or
buildings within the Project if such increase is caused by Tenant's acts,
omissions, use or occupancy of the Premises. Tenant shall obtain and keep in
force during the Term, at its sole cost and expense, (i) an "all risk" or
"special causes of action" property policy in the amount of the full replacement
cost covering Tenant's Personal Property and any Alterations made by or at the
request of Tenant, with Landlord insured as its interest may appear, and (ii) an
"all risk" or "special causes of action" policy of business interruption and/or
loss of income insurance (including a contingent business interruption
indorsement) covering a period of two (2) years, plus such additional period of
time, if any, as will permit Tenant to be in a position to have the same
revenues as were in effect the day before a loss giving rise to a claim under
such insurance occurs, with loss payable to Landlord to the extent of Monthly
Rent and Additional Rent only.
11.3. LIABILITY/MISCELLANEOUS INSURANCE. Tenant shall maintain in full
force and effect at all times during the Term (plus such earlier and later
periods as Tenant may be in occupancy of the Premises), at its sole cost and
expense, for the protection of Tenant, Landlord and Landlord's Agents and
Mortgagees, policies of insurance issued by a carrier or carriers acceptable to
Landlord and the Mortgagees which afford the following coverages: (i) statutory
workers' compensation, (ii) employer's liability with minimum limits of Five
Hundred Thousand Dollars ($500,000), (iii) comprehensive/commercial general
liability insurance including, but not limited to, blanket contractual liability
(including the indemnity set forth in Section 11.1), fire and water legal
liability, broad form property damage, personal injury, completed operations,
products liability, independent contractors, warehouser's legal liability and,
if alcoholic beverages are served, manufactured, distributed or sold in the
Premises, comprehensive liquor liability, and owned, non-owned and hired
vehicles, of not less than the limits set forth in Item 17 of the Basic Lease
Provisions (or current limit carried, whichever is greater), naming Landlord,
the Mortgagees, and the Additional Insureds named in Item 16 of the Basic Lease
Provisions as additional insureds, and including a cross-liability or
severability of interests indorsement, and (iv) such other insurance in such
form and amounts as may be required by Landlord or the Mortgagees from time to
time. Landlord or Landlord's Agents on behalf of Landlord may, at Landlord's
election, obtain liability insurance in such amounts and on such terms as
Landlord shall determine. [and the cost thereof shall be included in Project
Costs and paid by Tenant in the manner described in Section 7.1.] [DELETED]
11.4. DEDUCTIBLES. Any policy of insurance required pursuant to this
Lease containing a deductible exceeding Five Thousand Dollars ($5,000.00) per
occurrence must be approved in writing by Landlord prior to the issuance of such
policy. Tenant shall be solely responsible for the payment of any deductible.
11.5 BLANKET COVERAGE. Any insurance required of Tenant pursuant to
this Lease may be provided by means of a so-called "blanket policy", so long as
(i) the Premises are specifically covered (by rider, endorsement or otherwise),
(ii) the limits of the policy are applicable on a "per location" basis to the
Premises and provide for restoration of the aggregate limits, and (iii) the
policy otherwise complies with the provisions of this Lease.
11.6. INCREASED COVERAGE. Upon demand, Tenant shall provide Landlord,
at Tenant's expense, with such increased amount of existing insurance, and such
other insurance as Landlord or the Mortgagees may reasonably require.
11.7. SUFFICIENCY OF COVERAGE. Neither Landlord nor any of Landlord's
Agents makes any representation that the types of insurance and limits specified
to be carried by Tenant under this Lease are adequate to protect Tenant. If
Tenant believes that any such insurance coverage is insufficient, Tenant shall
provide, at its own expense, such additional insurance as Tenant deems adequate.
Nothing contained herein shall limit Tenant's liability under this Lease, and
Tenant's liability under any provision of this Lease, including without
limitation under any indemnity provisions, shall not be limited to the amount of
any insurance obtained.
11.8. INSURANCE REQUIREMENTS. Tenant's insurance (i) shall be in a form
satisfactory to Landlord and the Mortgagees and shall be carried with companies
that have a general policyholder's rating of not less than "A" and that are
determined by Landlord, in its sole discretion, as financially sound on a
current basis, (ii) shall provide that such policies shall not be subject to
material alteration or cancellation except after at least thirty (30) days prior
written notice to Landlord, and (iii) shall be primary, and any insurance
carried by Landlord or Landlord's Agents shall be noncontributing. Tenant's
policy or policies, or duly executed certificates for them in the form and
content of EXHIBIT K attached hereto, shall be deposited with Landlord prior to
the Commencement Date, and prior to renewal of such policies. If Tenant fails to
procure and maintain the insurance required to be procured by Tenant under this
Lease, Landlord may, but shall not be required to, order such insurance at
Tenant's expense. All sums reasonably disbursed, deposited or incurred by
Landlord in connection therewith, including, but not limited to, all costs,
expenses and actual attorneys' fees, shall be due and payable by Tenant to
Landlord, as an item of Additional Rent, on demand by Landlord, together with
interest thereon at the Applicable Rate from the date of such demand until paid
by Tenant.
11.9. IMPOUND FUNDS. If requested by any Mortgagees to whom Landlord
has granted a security interest in the Premises, or if any Event of Default
occurs under this Lease, Tenant shall, at Landlord's election, pay Landlord,
concurrently with each payment of Monthly Rent, a sum equal to one-twelfth
(1/12) of the annual insurance premiums payable by Tenant for all insurance
which Tenant is required to obtain pursuant to this Article XI. Such sums (the
"Impound Funds") shall be held by Landlord and applied to the payment of such
insurance premiums when due; provided, however, Landlord shall not be required
to keep the Impound Funds separate from other funds, Tenant shall not be
entitled to interest on the Impound Funds and no trust relationship shall be
created with respect to the Impound Funds. The amount of the Impound Funds when
unknown shall be reasonably estimated by Landlord. If the Impound Funds paid to
Landlord by Tenant under this Section 11.9 are insufficient to discharge the
obligations of Tenant to pay such insurance premiums as the same become due,
Tenant shall pay to Landlord, within ten (10) days after Landlord's written
request therefor, such additional sums necessary to pay such obligations. If an
Event of Default has occurred, any balance remaining from the Impound Funds may,
at the option of Landlord, be applied to any obligation then due under this
Lease in lieu of being applied to the payment of insurance premiums. The unused
portion of the Impound Funds, if any, shall be returned to Tenant within thirty
(30) days of the expiration of this Lease or any termination of this Lease not
resulting from an Event of Default, provided that Tenant has vacated the
Premises in the manner required by this Lease.
11.10. LANDLORD'S DISCLAIMER. Notwithstanding any other provisions of
this Lease, and to the fullest extent permitted by law, Landlord and Landlord's
Agents shall not be liable for any loss or damage to persons or property
resulting from theft, vandalism, fire, explosion, falling materials, glass, tile
or sheetrock, steam, gas, electricity, water or rain which may leak from any
part of the Premises, or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or whatsoever, unless caused by or due to
the sole active negligence or willful misconduct of Landlord. Landlord and
Landlord's Agents shall not be liable for interference with light or air, or for
any latent defect in the Premises except as otherwise expressly provided in this
Lease. Tenant shall give prompt Notice to Landlord in case of a casualty,
accident or repair needed to the Premises.
11.11. WAIVER OF SUBROGATION. Landlord, except to the extent Tenant's
insurance covers loss to Landlord plus Tenant's obligations with respect to
maintenance and repair and payment of insurance deductibles hereunder, and
Tenant each hereby waives all rights of recovery against the other and the
other's agents on account of loss and damage occasioned to such waiving party to
the extent only that such loss or damage is insured against under any insurance
policies required by this Article XI (and to the extent such insurance is
inadequate to cover such loss, this waiver shall not apply to amounts of loss
above such coverage). Tenant and Landlord shall, upon obtaining policies of
insurance required hereunder, give notice to the insurance carriers that the
foregoing waiver of subrogation is contained in this Lease. Notwithstanding the
foregoing, it is agreed that in the event that any loss is due to the act,
omission or negligence or willful misconduct of Tenant or Tenant's Agents,
Tenant's liability insurance shall be primary and shall cover all losses and
damages prior to any other insurance hereunder.
ARTICLE XII
DAMAGE OR DESTRUCTION
12.1. LANDLORD'S OBLIGATION TO REBUILD. If the Premises are damaged or
destroyed by fire or other casualty (a "Casualty"), Tenant shall promptly give
notice thereof to Landlord, and Landlord shall thereafter repair the Premises as
set forth in Sections 12.4 and 12.5 unless Landlord has the right to terminate
this Lease as provided in Section 12.2 and Landlord elects to so terminate or
Tenant has the right to terminate this Lease as provided in Section 12.3 and
Tenant elects to so terminate.
12.2. LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the right to
terminate this Lease following a Casualty if any of the following occurs: (i)
insurance proceeds (together with any additional amounts Tenant elects, at its
option, to contribute) are not available to Landlord to pay one hundred percent
(100%) of the cost to fully repair the Premises, excluding the deductible (for
which Tenant shall pay Tenant's Share of such deductible); (ii) Landlord's
Architect determines that the Premises cannot, with reasonable diligence, be
fully repaired by Landlord (or cannot be safely repaired because of the presence
of hazardous factors, including, but not limited to, Hazardous Materials,
earthquake faults, radiation, chemical waste and other similar dangers) within
one hundred eighty (180) days after the date of such Casualty; (iii) the
Premises are destroyed or damaged during the last twelve (12) months of the
Term; or (iv) an Event of Default has occurred and is continuing at the time of
such Casualty. If Landlord elects to terminate this Lease following a Casualty
pursuant to this Section 12.2, Landlord shall give Tenant Notice of its election
to terminate within thirty (30) days after Landlord has knowledge of such
Casualty, and this Lease shall terminate fifteen (15) days after the date of
such Notice.
12.3. TENANT'S RIGHT TO TERMINATE. Subject to the later terms hereof,
Tenant shall have the right to terminate this Lease following the destruction of
the Premises (or damage to the Premises so extensive as to reasonably prevent
Tenant's substantial use and enjoyment of the Premises) if any of the following
occurs: (i) the Premises cannot, with reasonable diligence, be fully repaired by
Landlord within one hundred eighty (180) days after the date of the damage or
destruction, as determined by Landlord's Architect; (ii) the Premises cannot
safely be repaired because of the presence of hazardous factors, including
Hazardous Materials, earthquake faults, radiation, chemical waste and other
similar dangers; or (iii) the damage or destruction occurs during the last
twelve (12) months of the Term and cannot, with reasonable diligence, be fully
repaired by Landlord within ninety (90) days after the date of the destruction
or damage, as determined by Landlord's Architect. Notwithstanding the foregoing,
Tenant shall not have the right to terminate under this Section 12.3 if (a) an
Event of Default has occurred and is continuing at the time of such damage or
destruction or at the time of exercising the right to terminate, or (b) the
damage or destruction was caused, in whole or in part, by the act or omission of
Tenant or Tenant's Agents. If Tenant elects to terminate this Lease pursuant to
this Section 12.3, Tenant shall give Landlord Notice of its election to
terminate within ten (10) days after the date of such damage or destruction, and
this Lease shall terminate thirty (30) days after the date of such Notice.
12.4. EFFECT OF TERMINATION. If this Lease is terminated following a
Casualty pursuant to Section 12.2 or Section 12.3, Landlord shall, subject to
the rights of the Mortgagees, be entitled to receive and retain all the
insurance proceeds resulting from or attributable to such Casualty, except for
those proceeds payable under policies obtained by Tenant which specifically
insure Tenant's Personal Property. If neither party exercises any such right to
terminate this Lease, this Lease will continue in full force and effect, and
Landlord shall, promptly following the tenth (10th) day after the date of such
Casualty and receipt of the amounts set forth in clause (i) of Section 12.2,
commence the process of obtaining necessary permits and approvals for the repair
of the Premises, and shall commence such repair and prosecute the same
diligently to completion as soon thereafter as is practicable. Tenant shall
fully cooperate with Landlord in removing Tenant's Personal Property and any
debris from the Premises to facilitate the making of such repairs.
12.5. LIMITED OBLIGATION TO REPAIR. Landlord's obligation, should it
elect or be obligated to repair the Premises following a Casualty, shall be
limited to the basic Building [and Tenant Improvements] [DELETED] and Tenant
shall, at its expense, replace or fully repair all Tenant's Personal Property
and any Alterations installed by Tenant existing at the time of such Casualty.
[If the Premises are to be repaired in accordance with the foregoing, Tenant
shall make available to Landlord any portion of insurance proceeds it receives
which are allocable to the Tenant Improvements.] [DELETED]
12.6. ABATEMENT OF MONTHLY RENT. During any period when Landlord or
Landlord's Architect reasonably determines that there is substantial
interference with Tenant's use of the Premises by reason of a Casualty, Monthly
Rent shall be temporarily abated in proportion to the degree of such substantial
interference, but only to the extent of any business interruption or loss of
income insurance proceeds received by Landlord from Tenant's insurance described
in Section 11.2. Such abatement shall commence upon the date Tenant notifies
Landlord of such Casualty and shall end upon the Substantial Completion of the
repair of the Premises which Landlord undertakes or is obligated to undertake
hereunder. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the Premises, Tenant's Personal Property or
other damage or any inconvenience occasioned by a Casualty or by the repair or
restoration of the Premises thereafter, including, but not limited to, any
consequential damages, opportunity costs or lost profits incurred or suffered by
Tenant. Tenant hereby waives the provisions of Section 1932(2) and Section
1933(4) of the California Civil Code, and the provisions of any similar or
successor statutes.
12.7. LANDLORD'S DETERMINATION. The determination in good faith by
Landlord's Architect of or relating to the estimated cost of repair of any
damage, replacement cost, the time period required for repair or the
interference with or suitability of the Premises for Tenant's use or occupancy
shall be conclusive for purposes of this Article XII and Article XIII.
ARTICLE XIII
CONDEMNATION
13.1. TOTAL TAKING--TERMINATION. If title to the Premises or so much
thereof is taken for any public or quasi-public use under any statute or by
right of eminent domain so that reconstruction of the Premises will not result
in the Premises being reasonably suitable for Tenant's continued occupancy for
the uses and purposes permitted by this Lease, this Lease shall terminate as of
the date possession of the Premises or part thereof is so taken.
13.2. PARTIAL TAKING. If any part of the Premises is taken for any
public or quasi-public use under any statute or by right of eminent domain and
the remaining part is reasonably suitable for Tenant's continued occupancy for
the uses permitted by this Lease, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part of the Premises is taken
and the Monthly Rent shall be reduced in the same proportion that the floor area
of the portion of the Premises so taken (less any addition thereto by reason of
any reconstruction) bears to the original floor area of the Premises, as
reasonably determined by Landlord or Landlord's Architect. Landlord shall, at
its own cost and expense, make all necessary repairs or alterations to the
Premises so as to make the portion of the Premises not taken a complete
architectural unit. Such work shall not, however, exceed the scope of the work
done by Landlord in originally constructing the Premises. If severance damages
from the condemning authority are not available to Landlord in sufficient
amounts to permit such restoration, Landlord may terminate this Lease upon
Notice to Tenant. Monthly Rent due and payable hereunder shall be temporarily
abated during such restoration period in proportion to the degree to which there
is substantial interference with Tenant's use of the Premises, as reasonably
determined by Landlord or Landlord's Architect. Each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure and any
present or future law allowing either party to petition the Superior Court to
terminate this Lease in the event of a partial taking of the Building or
Premises.
13.3. NO APPORTIONMENT OF AWARD. No award for any partial or total
taking shall be apportioned, it being agreed and understood that Landlord shall
be entitled to the entire award for any partial or entire taking. Tenant assigns
to Landlord its interest in any award which may be made in such taking or
condemnation, together with any and all rights of Tenant arising in or to the
same or any part thereof. Nothing contained herein shall be deemed to give
Landlord any interest in or require Tenant to assign to Landlord any separate
award made to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business or its moving costs, or for the loss of its
goodwill.
13.4. TEMPORARY TAKING. No temporary taking of the Premises (which for
purposes hereof shall mean a taking of all or any part of the Premises for one
hundred eighty (180) days or less) shall terminate this Lease or give Tenant any
right to any abatement of Rent. Any award made to Tenant by reason of such
temporary taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein. Each party agrees to execute and deliver to the other
all instruments that may be required to effectuate the provisions of this
Section 13.4.
13.5. SALE UNDER THREAT OF CONDEMNATION. A sale made in good faith to
any authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for all purposes of this Article XIII.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
14.1. PROHIBITION. Tenant shall not directly or indirectly, voluntarily
or by operation of law, assign (which term shall include any transfer,
assignment, pledge, mortgage or hypothecation) this Lease, or any right or
interest hereunder, or sublet the Premises or any part thereof, or allow any
other person or entity to occupy or use all or any part of the Premises without
first obtaining the written consent of Landlord in each instance, which consent
shall not be unreasonably withheld. No assignment, encumbrance, subletting, or
other transfer in violation of the terms of this Article XIV, whether voluntary
or involuntary, by operation of law, under legal process or proceedings, by
receivership, in bankruptcy, or otherwise shall be valid or effective and, at
the option of Landlord, shall constitute an Event of Default under this Lease.
To the extent not prohibited by provisions of the Bankruptcy Code of 1978, 11
U.S.C. Section 101 et seq. (the "Bankruptcy Code"), Tenant on behalf of itself,
creditors, administrators and assigns waives the applicability of Sections
541(c) and 365(e) of the Bankruptcy Code unless the proposed assignee of the
trustee for the estate of the bankrupt meets Landlord's standards for consent as
set forth below. Landlord has entered into this Lease with Tenant in order to
obtain for the benefit of the Project the unique attraction of Tenant's name and
business; the foregoing prohibition on assignment or subletting is expressly
agreed to by Tenant in consideration of such fact. If this Lease is assigned to
any person or entity pursuant to the provisions of the Bankruptcy Code, any and
all monies or other considerations payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Landlord, shall be
and remain the exclusive property of Landlord and shall not constitute property
of Tenant or the estate of Tenant within the meaning of the Bankruptcy Code. Any
and all monies or other considerations constituting Landlord's property under
the preceding sentence not paid or delivered to Landlord shall be held in trust
for the benefit of Landlord and be promptly paid or delivered to Landlord. Any
person or entity to which this Lease is assigned pursuant to the provisions of
the Bankruptcy Code shall be deemed without further act or deed to have assumed
all of the obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to Landlord
an instrument confirming such assumption.
14.2. LANDLORD'S CONSENT. In the event Landlord consents to any
assignment or subletting, such consent shall not constitute a waiver of any of
the restrictions of this Article XIV and the same shall apply to each successive
assignment or subletting hereunder, if any. In no event shall Landlord's consent
to an assignment or subletting affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), or
relieve Tenant of any of its obligations hereunder without an express written
release being given by Landlord. In the event that Landlord shall consent to an
assignment or subletting under this Article XIV, such assignment or subletting
shall not be effective until the assignee or sublessee shall assume all of the
obligations of this Lease on the part of Tenant to be performed or observed and
whereby the assignee or sublessee shall agree that the provisions contained in
this Lease shall, notwithstanding such assignment or subletting, continue to be
binding upon it with respect to all future assignments and sublettings. Such
assignment or sublease agreement shall be duly executed and a fully executed
copy thereof shall be delivered to Landlord, and Landlord may collect Monthly
Rent and Additional Rent due hereunder directly from the assignee or sublessee.
Collection of Monthly Rent and Additional Rent directly from an assignee or
sublessee shall not constitute a consent or a waiver of the necessity of consent
to such assignment or subletting, nor shall such collection constitute a
recognition of such assignee or sublessee as the Tenant hereunder or a release
of Tenant from the performance of all of its obligations hereunder.
14.3. INFORMATION. Regardless of whether Landlord's consent is required
under this Article XIV, Tenant shall notify Landlord in writing of Tenant's
intent to assign this Lease or any right or interest hereunder, or to sublease
the Premises or any part thereof, and of the name of the proposed assignee or
sublessee, the nature of the proposed assignee's or sublessee's business to be
conducted on the Premises, the terms and provisions of the proposed assignment
or sublease, a copy of the proposed assignment or sublease form, and such other
information as Landlord may reasonably request concerning the proposed assignee
or sublessee, including, but not limited to, net worth, income statements and
other financial statements for a two-year period preceding Tenant's request for
consent, evidence of insurance complying with the requirements of Article XI,
and the fee described in Section 14.7.
14.4. STANDARD FOR CONSENT. Landlord shall, within thirty (30) days of
receipt of such Notice and all information requested by Landlord concerning the
proposed assignee or sublessee, elect to take one of the following actions:
(a) consent to such proposed assignment or sublease;
(b) refuse to consent to such proposed assignment or sublease,
which refusal shall be on reasonable grounds; or
(c) if Tenant proposes to sublease all or part of the Premises
for the entire remaining Term, Landlord may, at its option exercised by
thirty (30) days Notice to Tenant, elect to recapture such portion of
the Premises as Tenant proposes to sublease and as of the thirtieth
(30th) day after Landlord so notifies Tenant of its election to
recapture, this Lease shall terminate as to the portion of the Premises
recaptured and the Monthly Rent payable under this Lease shall be
reduced in the same proportion that the floor area of that portion of
the Premises so recaptured bears to the floor area of the Premises
prior to such recapture.
Tenant agrees, by way of example and without limitation, that it shall
not be unreasonable for Landlord to withhold its consent to a proposed
assignment or subletting if any of the following situations exist or may exist:
(i) Landlord determines that the proposed assignee's or
sublessee's use of the Premises conflicts with Article V or Article VI,
presents an unacceptable risk, as determined by Landlord, under Article
VI, or conflicts with any other provision under this Lease;
(ii) Landlord determines that the proposed assignee or
sublessee is not as financially responsible as Tenant as of the date of
Tenant's request for consent or as of the effective date of such
assignment or subletting;
(iii) Landlord determines that the proposed assignee or
sublessee lacks sufficient business reputation or experience to conduct
on the Premises a business of a type and quality equal to that
conducted by Tenant;
(iv) Landlord determines that the proposed assignment or
subletting would breach a covenant, condition or restriction in some
other lease, financing agreement or other agreement relating to the
Project, the Building, the Premises or this Lease; or
(v) An Event of Default has occurred and is continuing at the
time of Tenant's request for Landlord's consent, or as of the effective
date of such assignment or subletting.
Tenant acknowledges that if Tenant has any exterior sign rights under
this Lease, such rights are personal to Tenant and may not be assigned or
transferred to any assignee of this Lease or sublessee of the Premises without
Landlord's prior written consent, which consent may be withheld in Landlord's
sole and absolute discretion.
14.5. BONUS VALUE. Tenant agrees that fifty percent (50%) of any
amounts paid by the assignee or sublessee, however described, in excess of (i)
the Monthly Rent payable by Tenant hereunder (or, in the case of sublease of a
portion of the Premises, in excess of the Monthly Rent reasonably allocable to
such portion), plus (ii) Tenant's direct out-of-pocket costs which Tenant
certifies to Landlord have been paid to provide occupancy related services to
such assignee or sublessee of a nature commonly provided by landlords of similar
space, shall be the property of Landlord and such amounts shall be payable
directly to Landlord by the assignee or sublessee. At Landlord's request, a
written agreement shall be entered into by and among Tenant, Landlord and the
proposed assignee or sublessee confirming the requirements of this Section 14.5.
14.6. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business), or,
if Tenant is a corporation, an unincorporated association, or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association or partnership in the aggregate in excess of
twenty-five percent (25%) (except for publicly traded shares of stock
constituting a transfer of twenty-five percent (25%) or more in the aggregate,
so long as no change in the controlling interests of Tenant occurs as a result
thereof) shall be deemed an assignment within the meaning and provisions of this
Article XIV.
14.7. LANDLORD'S FEE AND EXPENSES. If Tenant requests Landlord's
consent to an assignment or subletting by Tenant under this Lease or any
financing waiver, consent or similar document, or any other consent or approval
not expressly provided for in this Lease, Tenant shall pay to Landlord a fee of
Five Hundred Dollars ($500) and all of Landlord's out-of-pocket expenses,
including, but not limited to, attorneys' fees reasonably incurred related to
such matter, whether or not the assignment or subletting is approved or consent
is given.
14.8. TRANSFER OF THE PREMISES BY LANDLORD. Upon any conveyance of the
Premises and assignment by Landlord of this Lease, Landlord shall and is hereby
entirely released from all liability under any and all of its covenants and
obligations contained in or derived from this Lease occurring after the date of
such conveyance and assignment, and Tenant agrees to attorn to any entity
purchasing or otherwise acquiring the Premises.
ARTICLE XV
DEFAULTS AND REMEDIES
15.1. TENANT'S DEFAULT. At the option of Landlord, a default under this
Lease by Tenant shall exist if any of the following events shall occur (each is
called an "Event of Default"):
(a) Tenant fails to pay the Rent payable hereunder, as and
when due, for a period of three (3) days after Notice by Landlord; provided,
however, the Notice given hereunder shall be in lieu of, and not in addition to,
any notice required under Section 1161, et seq., of the California Code of Civil
Procedure;
(b) Tenant attempts to make or suffers to be made any
transfer, assignment or subletting, except as provided in Article XIV hereof;
(c) Any of Tenant's rights under this Lease are sold or
otherwise transferred by or under court order or legal process or otherwise or
if any of the actions described in Section 15.2 are taken by or against Tenant
or any Guarantor;
(d) The Premises are used for any purpose other than as
permitted pursuant to Article V;
(e) Tenant vacates or abandons the Premises or fails to
continuously and uninterruptedly conduct its business in the Premises;
(f) Any representation or warranty given by Tenant under or in
connection with this Lease proves to be materially false or misleading;
(g) Tenant fails to timely comply with the provisions of
Article VI ("Hazardous Materials"), Article XIV ("Assignment and Subletting"),
Article XVI ("Subordination; Estoppel Certificate; Financials"), Section 21.5
("Modifications for Mortgagees") or Section 21.19 ("Authority"); or
(h) Tenant fails to observe, keep, perform or cure within
fifteen (15) days after Notice by Landlord any of the other terms, covenants,
agreements or conditions contained in this Lease or those set forth in any other
agreements or rules or regulations which Tenant is obligated to observe or
perform. In the event such default reasonably could not be cured or corrected
within such fifteen-day period, but is reasonably susceptible to cure or
correction, then Tenant shall not be in default hereunder if Tenant commences
the cure or correction of such default within such fifteen-day period and
diligently prosecutes the same to completion after commencing such cure or
correction. The Notice required by this subparagraph 15.1(h) shall be in lieu
of, and not in addition to, any notice required under Section 1161, et seq., of
the California Code of Civil Procedure.
Notices given under this Section 15.1 shall specify the alleged default and
shall demand that Tenant perform the provisions of this Lease or pay the Rent
that is in arrears, as the case may be, within the applicable period of time, or
quit the Premises. No such Notice shall be deemed a forfeiture or a termination
of this Lease unless Landlord so elects in the Notice.
15.2. BANKRUPTCY OR INSOLVENCY. In no event shall this Lease be
assigned or assignable by operation of law and in no event shall this Lease be
an asset of Tenant in any receivership, bankruptcy, insolvency or reorganization
proceeding. In the event:
(a) A court makes or enters any decree or order adjudging
Tenant to be insolvent, or approving as properly filed by or against Tenant a
petition seeking reorganization or other arrangement of Tenant under any
provisions of the Bankruptcy Code or any applicable state law, or directing the
winding up or liquidation of Tenant and such decree or order shall have
continued for a period of thirty (30) days;
(b) Tenant makes or suffers any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provisions of the
Bankruptcy Code or any applicable state law;
(c) Tenant assigns its assets for the benefit of its
creditors; or
(d) The material part of the property of Tenant or any
property essential to Tenant's business or of Tenant's interest in this Lease is
sequestered, attached or executed upon, and Tenant fails to secure a return or
release of such property within ten (10) days thereafter, or prior to sale
pursuant to such sequestration, attachment or levy, whichever is earlier;
then this Lease shall, at Landlord's election, immediately terminate and be of
no further force or effect whatsoever, without the necessity for any further
action by Landlord, except that Tenant shall not be relieved of obligations
which have accrued prior to the date of such termination. Upon such termination,
the provisions herein relating to the expiration or earlier termination of this
Lease shall control and Tenant shall immediately surrender the Premises in the
condition required by the provisions of this Lease. Additionally, Landlord shall
be entitled to all relief, including recovery of damages from Tenant, which may
from time to time be permitted, or recoverable, under the Bankruptcy Code or any
other applicable state laws.
15.3. LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default,
then, in addition to and without waiving any other rights and remedies available
to Landlord at law or in equity or otherwise provided in this Lease, Landlord
may, at its option, cumulatively or in the alternative, exercise the following
remedies:
(a) Landlord may terminate Tenant's right to possession of the
Premises, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. No act by Landlord other than
giving Notice to Tenant of Landlord's election to terminate Tenant's right to
possession shall terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession. Termination shall terminate Tenant's right to
possession of the Premises but shall not relieve Tenant of any obligation under
this Lease which has accrued prior to the date of such termination. Upon such
termination, Landlord shall have the right to re-enter the Premises, and remove
all persons and property, and Landlord shall also be entitled to recover from
Tenant:
(i) The worth at the time of award of the unpaid Monthly Rent
and Additional Rent which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent 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) The worth at the time of award of the amount by which
the unpaid Monthly Rent and Additional Rent for the balance of the Term
after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided;
(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 from Tenant's default, including, but not
limited to, the cost of recovering possession of the Premises,
commissions and other expenses of reletting, including necessary
repair, demolition and renovation of the Premises to the condition
existing immediately prior to Tenant's occupancy, the unamortized
portion of any Tenant Improvements and brokerage commissions funded by
Landlord in connection with this Lease, the cost of rectifying any
damage to the Premises occasioned by the act or omission of Tenant,
reasonable attorneys' fees, and any other reasonable costs; and
(v) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law.
As used in subsections (i) and (ii) above, the "worth at the time of
award" shall be computed by allowing interest at the maximum legal rate
permitted by law. As used in subsection (iii) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(b) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event this Lease will continue in full
force and effect as long as Landlord does not terminate Tenant's right to
possession, and Landlord may continue to enforce all of its rights and remedies
under this Lease, including the right to collect all Rent as it becomes due. In
the event that Landlord elects to avail itself of the remedy provided by this
subparagraph 15.3(b), Landlord shall not unreasonably withhold its consent to an
assignment or subletting of the Premises subject to the reasonable standards for
Landlord's consent as are contained in this Lease. In addition, in the event
Tenant has entered into a sublease which is valid under the terms of this Lease,
Landlord may also, at its option, cause Tenant to assign to Landlord the
interest of Tenant under said sublease, including, but not limited to, Tenant's
right to payment of Rent as it becomes due. Landlord may elect to enter the
Premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, but not limited to, broker's
commissions, expenses of cleaning and remodeling the Premises required by the
reletting, attorneys' fees and like costs. Reletting can be for a period shorter
or longer than the remaining Term of this Lease and for the entire Premises or
any portion thereof. Tenant shall pay to Landlord the Monthly Rent and
Additional Rent due under this Lease on the dates the Monthly Rent and such
Additional Rent are due, less the Rent Landlord actually collects from any
reletting. Except as provided in the preceding sentence, if Landlord relets the
Premises or any portion thereof, such reletting shall not relieve Tenant of any
obligation hereunder. Notwithstanding the above, no act by Landlord allowed by
this subparagraph 15.3(b) shall terminate this Lease unless Landlord notifies
Tenant in writing that Landlord elects to terminate this Lease.
15.4. NO SURRENDER. Tenant waives any right of redemption or relief
from forfeiture under California Code of Civil Procedure Sections 1174 and 1179,
or under any other present or future law in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of an Event of Default. 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
a surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord's Agents shall have any power to accept the keys to
the Premises prior to the termination of this Lease, and the delivery of the
keys to any employee shall not operate as a termination of this Lease or a
surrender of the Premises.
15.5. INTEREST ON LATE PAYMENTS. Any Rent due under this Lease that is
not paid to Landlord within three (3) days of the date when due shall commence
to bear interest at the Applicable Rate until fully paid. Neither the accrual
nor the payment of interest shall cure any default by Tenant under this Lease.
15.6. ATTORNEYS' AND OTHER FEES. All sums reasonably incurred by
Landlord in connection with an Event of Default or holding over of possession by
Tenant after the expiration or termination of this Lease, including, but not
limited to, all costs, expenses and actual accountants', appraisers', attorneys'
and other professional fees, and any collection agency or other collection
charges, shall be due and payable by Tenant to Landlord on demand, and shall
bear interest at the Applicable Rate from the date of such demand until paid by
Tenant. In addition, in the event that any action shall be instituted by either
of the parties hereto for the enforcement of any of its rights in and under this
Lease, the party in whose favor judgment shall be rendered shall be entitled to
recover from the other party all expenses reasonably incurred by the prevailing
party in such action, including actual costs and reasonable attorneys' fees.
15.7. LANDLORD'S DEFAULT. 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 receipt of Notice by Tenant to Landlord (and the Mortgagees who have
provided Tenant with notice) specifying the nature of such default; 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 diligently prosecutes the same to completion.
15.8. LIMITATION OF LANDLORD'S LIABILITY. The obligations of Landlord
do not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners. If
Landlord shall fail to perform any covenant, term, or condition of this Lease
upon Landlord's part to be performed, Tenant shall be required to deliver to
Landlord Notice of the same. If, as a consequence of such default, Tenant shall
recover a money judgment against Landlord, such judgment shall be satisfied only
out of the proceeds of sale received upon execution of such judgment and levied
thereon against the right, title and interest of Landlord in the Building and
out of rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or
any part of Landlord's right, title or interest in the Building, and no action
for any deficiency may be sought or obtained by Tenant.
15.9. MORTGAGEE PROTECTION. Upon any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any Mortgagee who has
provided Tenant with notice of its interest together with an address for
receiving notice, and shall offer such Mortgagee a reasonable opportunity to
cure the default (which in no event shall be less than sixty (60) days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary, to effect a cure. Tenant
agrees that each of the Mortgagees to whom this Lease has been assigned by
Landlord is an express third party beneficiary hereof. Tenant shall not make any
prepayment of Monthly Rent more than one (1) month in advance without the prior
written consent of such Mortgagee. Tenant waives any right under California
Civil Code Section 1950.5 or any other present or future law to the collection
of any deposit from such Mortgagee or any purchaser at a foreclosure sale of
such Mortgagee's interest unless such Mortgagee or such purchaser shall have
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the Mortgagee with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such Mortgagee. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such Mortgagee's loan to Landlord.
15.10. LANDLORD'S RIGHT TO PERFORM. If Tenant shall at any time fail to
make any payment or perform any other act on its part to be made or performed
under this Lease, Landlord may (but shall not be obligated to), at Tenant's
expense, and without waiving or releasing Tenant from any obligation of Tenant
under this Lease, make such payment or perform such other act to the extent
Landlord may deem desirable, and in connection therewith, pay expenses and
employ counsel. All sums paid by Landlord and all penalties, interest and costs,
including, but not limited to, collection costs and attorneys' fees reasonably
incurred in connection therewith, shall be due and payable by Tenant to
Landlord, as an item of Additional Rent, on demand by Landlord, together with
interest thereon at the Applicable Rate from the date of such demand until paid
by Tenant.
15.11. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand or
right of any kind by Tenant which is based upon or arises in connection with
this Lease shall be barred unless Tenant commences an action thereon within six
(6) months after the date that the act, omission, event or default upon which
the claim, demand or right arises, has occurred.
15.12. WAIVER OF JURY TRIAL. To the full extent permitted by law,
Tenant hereby waives the right to trial by jury in any action, proceeding or
counterclaim brought by Tenant 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 and/or any claim of injury or damage.
ARTICLE XVI
SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
16.1. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE. Without the
necessity of any additional document being executed by Tenant for the purpose of
effecting a subordination, and at the election of Landlord or any Mortgagee or
any ground lessor with respect to the land of which the Premises are a part,
this Lease shall be subject and subordinate at all times to (i) all ground
leases or underlying leases which may now exist or hereafter be executed
affecting the Building, and (ii) the lien of any Mortgage which may now exist or
hereafter be executed in any amount for which the Project, the Building, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Landlord or any such Mortgagee or ground lessor
shall have the right, at its election, to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. No subordination shall permit material interference with Tenant's
rights hereunder, and any ground lessor or Mortgagee shall recognize Tenant and
its permitted successors and assigns as the tenant of the Premises and shall not
disturb Tenant's right to quiet possession of the Premises during the Term so
long as no Event of Default has occurred and is continuing under this Lease. If
Landlord's interest in the Premises is acquired by any ground lessor or
Mortgagee, or in the event proceedings are brought for the foreclosure of, or in
the event of exercise of the power of sale under, any Mortgage made by Landlord
covering the Premises or any part thereof, or in the event a conveyance in lieu
of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor in interest to Landlord,
attorn to and become the Tenant of the successor in interest to Landlord and
recognize such successor in interest as the Landlord under this Lease. Although
this Section 16.1 is self-executing, Tenant covenants and agrees to execute and
deliver, upon demand by Landlord and in the form requested by Landlord, or any
Mortgagee or ground lessor, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such Mortgage, or evidencing the attornment of Tenant
to any successor in interest to Landlord as herein provided. Tenant's failure to
timely execute and deliver such additional documents shall, at Landlord's
option, constitute an Event of Default hereunder.
16.2. ESTOPPEL CERTIFICATE. Tenant shall within ten (10) days following
written request by Landlord, execute and deliver to Landlord any documents,
including estoppel certificates, in a form required by Landlord (i) certifying
that this Lease is unmodified and in full force and effect or, if modified,
attaching a copy of such modification and certifying that this Lease, as so
modified, is in full force and effect and the date to which the Rent and other
charges are paid in advance, if any, (ii) acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of the Landlord or stating
the nature of any uncured defaults, (iii) evidencing the status of this Lease as
may be required by a Mortgagee or a purchaser of the Premises, (iv) certifying
the current Monthly Rent amount and the amount and form of Security Deposit on
deposit with Landlord, and (v) certifying to such other information as Landlord,
Landlord's Agents, Mortgagees and prospective purchasers may reasonably request,
including, but not limited to, any requested information regarding Hazardous
Materials. Tenant's failure to deliver an estoppel certificate within ten (10)
days after delivery of Landlord's written request therefor shall constitute an
Event of Default hereunder.
16.3. FINANCIAL INFORMATION. Tenant shall deliver to Landlord, prior to
the execution of this Lease, and within ten (10) days following written request
therefor by Landlord at any time during the Term, Tenant's current financial
statements, and Tenant's financial statements for the two (2) years prior to the
current fiscal financial statement's year, certified to be true, accurate and
complete by the chief financial officer of Tenant, including a balance sheet and
profit and loss statement for the most recent prior year (collectively, the
"Statements"), which Statements shall accurately and completely reflect the
financial condition of Tenant. Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser of the Premises, the Project or any portion thereof, and
to the Mortgagees of Landlord or such purchaser. Tenant acknowledges that
Landlord is relying on the Statements in its determination to enter into this
Lease, and Tenant represents to Landlord, which representation shall be deemed
made on the date of this Lease and again on the Commencement Date, that no
material change in the financial condition of Tenant, as reflected in the
Statements, has occurred since the date Tenant delivered the Statements to
Landlord. If any material change in Tenant's financial condition, as reflected
in the Statements, occurs prior to the date of this Lease or prior to the
Commencement Date, as the case may be, or if Tenant fails to inform Landlord of
any such material change, Landlord shall have the right, in addition to any
other rights and remedies of Landlord, to terminate this Lease by notice to
Tenant given within thirty (30) days after Landlord learns of such material
change.
ARTICLE XVII
SIGNS AND GRAPHICS
Landlord shall designate the location on the Premises, if any, for one
(1) or more identification signs for Tenant. Tenant shall have no right to
maintain identification signs in any other location in, on or about the Premises
and shall not display or erect any other signs, displays or other advertising
materials that are visible from the exterior of the Building. The size, design,
color and other physical aspects of permitted signs shall be subject to
Landlord's written approval prior to installation, which approval may be
withheld in Landlord's discretion, any Restrictions and any applicable municipal
or other governmental permits and approvals. All such signs and graphics shall
conform to the Sign Criteria set forth in EXHIBIT J. The cost of all signs and
graphics, including the installation, maintenance and removal thereof, shall be
at Tenant's sole cost and expense. If Tenant fails to maintain its signs, or if
Tenant fails to remove same upon termination of this Lease and repair any damage
caused by such removal (including, but not limited to, repainting the affected
area, if required by Landlord), Landlord may do so at Tenant's expense. All sums
reasonably disbursed, deposited or incurred by Landlord in connection with such
removal, including, but not limited to, all costs, expenses and actual
attorneys' fees, shall be due and payable by Tenant to Landlord on demand by
Landlord, together with interest thereon at the Applicable Rate from the date of
such demand until paid by Tenant.
ARTICLE XVIII
QUIET ENJOYMENT
Landlord covenants that Tenant, upon performing the terms, conditions
and covenants of this Lease, shall have quiet and peaceful possession of the
Premises as against any person claiming the same by, through or under Landlord.
ARTICLE XIX
SURRENDER; HOLDING OVER
19.1. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, Tenant shall surrender the Premises to Landlord in
its condition existing as of the Commencement Date, normal wear and tear and
acts of God excepted, with all interior walls in good repair, all carpets
shampooed and cleaned, the HVAC equipment, plumbing, electrical and other
mechanical installations in good operating order and all floors cleaned and
waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from
the Premises all of Tenant's Alterations which Landlord requires Tenant to
remove pursuant to Section 8.1 and all Tenant's Personal Property, [(including
without limitation, to the extent required by Landlord, all plumbing lines,
ductwork and hardware in connection therewith)] [ADDED] and shall repair any
damage and perform any restoration work caused by such removal. If Tenant fails
to remove such Alterations and Tenant's Personal Property which Tenant is
authorized and obligated to remove pursuant to the above, and such failure
continues after the termination of this Lease, Landlord may retain such property
and all rights of Tenant with respect to it shall cease, or Landlord may place
all or any portion of such property in public storage for Tenant's account.
Tenant shall pay to Landlord, upon demand, the costs of removal of any such
Alterations and Tenant's Personal Property and storage and transportation costs
of same, and the cost of repairing and restoring the Premises, together with
attorneys' fees and interest on said amounts at the Applicable Rate from the
date of expenditure by Landlord. If the Premises are not so surrendered at the
termination of this Lease, Tenant hereby agrees to indemnify Landlord and
Landlord's Agents against all loss or liability resulting from any delay by
Tenant in so surrendering the Premises, including, but not limited to, any
claims made by any succeeding tenant, losses to Landlord due to lost
opportunities to lease to succeeding tenants, and actual attorneys' fees and
costs.
19.2. HOLDING OVER. If Tenant remains in possession of all or any part
of the Premises after the expiration of the Term with the prior written consent
of Landlord, such possession shall constitute a month-to-month tenancy only and
shall not constitute a renewal or extension for any further term. If Tenant
remains in possession of all or any part of the Premises after the expiration of
the Term without the prior written consent of Landlord, such possession shall
constitute a tenancy at sufferance. In either of such events, Monthly Rent shall
be increased to an amount equal to one hundred fifty percent (150%) of the
Monthly Rent payable during the last month of the Term, and any other sums due
hereunder shall be payable in the amounts and at the times specified in this
Lease. Any such tenancy shall be subject to every other term, condition, and
covenant contained in this Lease.
ARTICLE XX
[CONSTRUCTION OF TENANT IMPROVEMENTS
The obligations of Landlord and Tenant, if any, with respect to the
Tenant Improvements, are set forth in the Work Letter attached as EXHIBIT C. It
is acknowledged and agreed that all Tenant Improvements under this Lease are and
shall be the property of Landlord from and after their installation.] [DELETED]
ARTICLE XXI
MISCELLANEOUS AND INTERPRETIVE PROVISIONS
21.1. BROKER. Landlord and Tenant each warrant and represent to the
other that neither has had any dealings with any real estate broker, agent or
finder in connection with the negotiation of this Lease or the introduction of
the parties to this transaction, except for the Broker (whose commission shall
be paid by Landlord), and that it knows of no other real estate broker, agent or
finder who is or might be entitled to a commission or fee in connection with
this Lease. In the event of any additional claims for brokers' or finders' fees
with respect to this Lease, Tenant shall indemnify, hold harmless, protect and
defend Landlord from and against such claims if they shall be based upon any
statement or representation or agreement made by Tenant (including without
limitation any claims by or on behalf of J. Michael Lanni or Western Financial
Group), and Landlord shall indemnify, hold harmless, protect and defend Tenant
from and against such claims if they shall be based upon any statement,
representation or agreement made by Landlord (including without limitation any
claims by or on behalf of Michael Clayton or JD Commercial Brokerage
Incorporated).
21.2. EXAMINATION OF LEASE. Submission of this Lease for examination or
signature by Tenant does not create a reservation of or option to lease. This
Lease shall become effective and binding only upon full execution of this Lease
by both Landlord and Tenant.
21.3. NO RECORDING. Tenant shall not record this Lease or any
memorandum of this Lease without Landlord's prior written consent, but if
Landlord so requests, Tenant agrees to execute, have acknowledged and deliver a
memorandum of this Lease in recordable form which Landlord thereafter may file
for record.
21.4. QUITCLAIM. Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in and to the Premises by reason of this Lease or
otherwise.
21.5. MODIFICATIONS FOR MORTGAGEES. If in connection with obtaining
financing for the Premises or any portion thereof, Landlord's Mortgagees shall
request reasonable modifications to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not adversely affect Tenant's rights hereunder.
Tenant's failure to so consent shall constitute an Event of Default under this
Lease.
21.6. NOTICE. Any Notice required or desired to be given under this
Lease shall be in writing and shall be addressed to the address of the party to
be served. The addresses of Landlord and Tenant are as set forth in Items 1 and
3, respectively, of the Basic Lease Provisions, except that (a) prior to the
Commencement Date, the address for Notices to Tenant shall be as set forth
opposite Tenant's signature on this Lease, and (b) from and after the
Commencement Date, notwithstanding the addresses for Tenant set forth in Item 3
of the Basic Lease Provisions, all Notices regarding the operation and
maintenance of the Project shall be delivered to Tenant at the Premises. Each
such Notice shall be deemed effective and given (i) upon receipt, if personally
delivered (which shall include delivery by courier or overnight delivery
service), (ii) upon being telephonically confirmed as transmitted, if sent by
telegram, telex or telecopy, (iii) two (2) business days after deposit in the
United States mail in Orange County or in the county in which the Premises are
located, certified and postage prepaid, properly addressed to the party to be
served, or (iv) upon receipt if sent in any other way. Any party hereto may from
time to time, by Notice to the other in accordance with this Section 21.6,
designate a different address than that set forth above for the purposes of
Notice.
21.7. CAPTIONS. The captions and headings used in this Lease are for
the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.
21.8. EXECUTED COPY. Any fully executed copy of this Lease shall be
deemed an original for all purposes.
21.9. TIME. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
21.10. SEVERABILITY. If any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
21.11. SURVIVAL. All covenants and indemnities set forth herein which
contemplate the payment of sums, or the performance by Tenant after the Term or
following an Event of Default, including specifically, but not limited to, the
covenants and indemnities set forth in Section 5.3, Article VI, Article VII,
Section 8.1, Section 9.2, Section 11.1, Section 11.10, Article XV, and Article
XIX, and all representations and warranties of Tenant, shall survive the
expiration or sooner termination of this Lease.
21.12. CHOICE OF LAW. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against either Landlord or Tenant.
21.13. GENDER; SINGULAR, PLURAL. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, the singular includes the plural and the plural
includes the singular.
21.14. NON-AGENCY. It is not the intention of Landlord or Tenant to
create hereby a relationship of master-servant or principal-agent, and under no
circumstance shall Tenant herein be considered the agent of Landlord, it being
the sole purpose and intent of the parties hereto to create a relationship of
landlord and tenant.
21.15. SUCCESSORS. The terms, covenants, conditions and agreements
contained in this Lease shall, subject to the provisions as to assignment,
subletting, and bankruptcy contained herein and any other provisions restricting
successors or assigns, apply to and bind the heirs, successors, legal
representatives and assigns of the parties hereto.
21.16. WAIVER; REMEDIES CUMULATIVE. The waiver by either party of any
term, covenant, agreement or condition herein contained shall not be deemed to
be a waiver of any subsequent breach of the same or any other term, covenant,
agreement or condition herein contained, nor shall any custom or practice which
may grow up between the parties in the administration of this Lease be construed
to waive or to lessen the right of Landlord to insist upon the performance by
Tenant in strict accordance with all of the provisions of this Lease. The
subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any provisions, covenant, agreement
or condition of this Lease, other than the failure of Tenant to pay the
particular Rent payment so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent payment. Landlord's
acceptance of any check, letter or payment shall in no event be deemed an accord
and satisfaction, and Landlord shall accept the check, letter or payment without
prejudice to Landlord's right to recover the balance of the Rent or pursue any
other remedy available to it. The rights and remedies of either party under this
Lease shall be cumulative and in addition to any and all other rights and
remedies which either party has or may have.
21.17. UNAVOIDABLE DELAY. Except for the monetary obligations of Tenant
under this Lease, neither party shall be chargeable with, liable for, or
responsible to the other for anything or in any amount for any Unavoidable Delay
and any Unavoidable Delay shall not be deemed a breach of or default in the
performance of this Lease, it being specifically agreed that any time limit
provision contained in this Lease (other than the scheduled expiration of the
Term) shall be extended for the same period of time lost by Unavoidable Delay.
21.18. ENTIRE AGREEMENT. This Lease is the entire agreement between the
parties, and supersedes any prior agreements, representations, negotiations or
correspondence between the parties except as expressed herein. Except as
otherwise provided herein, no subsequent change or addition to this Lease shall
be binding unless in writing and signed by the parties hereto.
21.19. AUTHORITY. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of the corporation or partnership, as
the case may be, represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said entity in accordance with its corporate
bylaws, statement of partnership or certificate of limited partnership, as the
case may be, and that this Lease is binding upon said entity in accordance with
its terms. If Tenant is a corporation, Tenant shall, if requested by Landlord,
within thirty (30) days after execution of this Lease and prior to entering into
possession of the Premises, deliver to Landlord a certified copy of a resolution
of the Board of Directors of the corporation or certificate of the Secretary of
the corporation, authorizing, ratifying or confirming the execution of this
Lease. If Tenant is a partnership, Tenant shall, if requested by Landlord,
within thirty (30) days after the execution of this Lease and prior to entering
into possession of the Premises, deliver to Landlord a certified copy of its
partnership agreement authorizing such execution.
21.20. GUARANTY. As a condition to the execution of this Lease by
Landlord, the obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor listed in Item 14 of
the Basic Lease Provisions, if any, on a form of guarantee provided by Landlord.
21.21. EXHIBITS; REFERENCES. All exhibits, amendments, riders and
addenda attached to this Lease are hereby incorporated into and made a part of
this Lease. In the event of variation or discrepancy, the duplicate original
hereof (including exhibits, amendments, riders and addenda, if any, specified
above) held by Landlord shall control. All references in this Lease to Articles,
Sections, Exhibits, Riders and clauses are made, respectively, to Articles,
Sections, Exhibits, Riders and clauses of this Lease, unless otherwise
specified.
21.22. BASIC LEASE PROVISIONS. The Basic Lease Provisions at the
beginning of this Lease are intended to provide general information only. In the
event of any inconsistency between the Basic Lease Provisions and the specific
provisions of this Lease, the specific provisions of this Lease shall prevail.
21.23. NO MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall
not work a merger, and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all such subtenancies.
21.24. JOINT AND SEVERAL OBLIGATIONS. If more than one person or entity
is Tenant, the obligations imposed on each such person or entity shall be joint
and several.
21.25. NO LIGHT OR AIR EASEMENT. Any diminution or shutting off of
light or air by any structure which may be erected on lands adjacent to the
Building shall in no way affect this Lease, abate Rent or otherwise impose any
liability on Landlord. This Lease does not confer any right with regard to the
subsurface below the ground level of the Building.
21.26. SECURITY MEASURES. Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, Tenant's Agents and the property of
Tenant and of Tenant's Agents from acts of third parties. Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from providing
security protection for the Project or any part thereof, in which event the cost
thereof shall be included within the definition of Project Costs and paid by
Tenant in the manner set forth in Section 7.1.
THIS LEASE is effective as of the date the last signatory necessary to
execute this Lease shall have executed this Lease.
"LANDLORD"
SUPERIOR INVESTMENT COMPANY, L.P., a California
limited partnership
By: Western Fidelity Investment Corporation, a
California corporation, General Partner
By: /s/ Grant R. Marcus
Grant R. Marcus, President
ADDRESS FOR NOTICES PRIOR TO COMMENCEMENT DATE:
"TENANT"
INFINITE GRAPHICS INCORPORATED,
a Minnesota corporation
4621 East Lake Street
Minneapolis, MN 55406
By: /s/ Clifford Stritch, CEO
Name: Clifford Stritch
---------------------------------------
Title: CEO
---------------------------------------
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
[INSERT
If Tenant desires to store or use any Hazardous Materials in
connection with its Permitted Use of the Premises, then prior to the execution
of this Lease, Tenant shall complete, execute and deliver to Landlord an
Environmental Questionnaire and Disclosure Statement (the "Environmental
Questionnaire") in the form of EXHIBIT H, and Tenant shall certify to Landlord
all information contained in the Environmental Questionnaire as true and correct
to the best of Tenant's knowledge and belief. The completed Environmental
Questionnaire shall be deemed incorporated into this Lease for all purposes, and
Landlord shall be entitled to rely fully on the information contained therein.
On each anniversary of the Commencement Date (each such date is hereinafter
referred to as a "Disclosure Date"), until and including the first Disclosure
Date occurring after the expiration or sooner termination of this Lease, Tenant
shall disclose to Landlord in writing the names and amounts of all Hazardous
Materials, or any combination thereof, which were stored, generated, used or
disposed of on, under or about the Premises for the twelve-month period prior to
each Disclosure Date, and which Tenant intends to store, generate, use or
dispose of on, under or about the Premises through the next Disclosure Date. To
the extent Landlord consents to any use or storage of Hazardous Materials by
Tenant, the same shall be subject to all of the terms, conditions, requirements
and indemnities contained in this Lease.
If the presence of any Hazardous Materials on, under or about
the Premises or the Project caused or permitted by Tenant or Tenant's Agents
results in (i) injury to any person, (ii) injury to or contamination of the
Premises or the Project, or (iii) injury to or contamination of any real or
personal property wherever situated, Tenant, at its sole cost and expense, shall
promptly take all actions necessary to return the Premises and the Project to
the condition existing prior to the introduction of such Hazardous Materials to
the Premises and the Project and to remedy or repair any such injury or
contamination. Without limiting any other rights or remedies of Landlord under
this Lease, Tenant shall pay the cost of any cleanup work performed on, under or
about the Premises, the Building and the Project as required by this Lease or
any Applicable Laws in connection with the removal, disposal, neutralization or
other treatment of such Hazardous Materials caused or permitted by Tenant or
Tenant's Agents. If Landlord has reason to believe that Tenant or Tenant's
Agents may have caused or permitted the release of a Hazardous Material on,
under, from or about the Premises, then Landlord may require Tenant, at Tenant's
sole cost and expense, to conduct monitoring activities on or about the Premises
satisfactory to Landlord, in its sole and absolute judgment, concerning such
release of Hazardous Materials on, under, from or about the Premises.
Notwithstanding anything in the foregoing, Tenant shall not, without Landlord's
prior written consent, take any remedial action in response to the presence of
any Hazardous Materials on, under or about the Premises, or enter into any
settlement agreement, consent decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided, however,
Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises (i) poses an
immediate threat to the health, safety or welfare of any individual or (ii) is
of such a nature that an immediate remedial response is necessary and it is not
possible to obtain Landlord's consent before taking such action.
Promptly upon the expiration or sooner termination of this
Lease, Tenant shall represent to Landlord in writing that (i) Tenant has made a
diligent effort to determine whether any Hazardous Materials are on, under or
about the Premises as a result of any acts or omissions of Tenant or Tenant's
Agents and (ii) no such Hazardous Materials exist on, under or about the
Premises other than as specifically identified to Landlord by Tenant in writing.
If Tenant discloses the existence of Hazardous Materials on, under or about the
Premises, or if Landlord at any time discovers that Tenant or Tenant's Agents
caused or permitted the release of a Hazardous Material on, under, from or about
the Premises, Tenant shall, at Landlord's request, immediately prepare and
submit to Landlord within thirty (30) days after such request a comprehensive
plan, subject to Landlord's approval, specifying the actions to be taken by
Tenant to return the Premises to the condition existing prior to the
introduction of such Hazardous Materials. Upon Landlord's approval of such clean
up plan, Tenant shall, at Tenant's sole cost and expense, without limitation on
any rights and remedies of Landlord under this Lease or at law or in equity,
immediately implement such plan and proceed to clean up such Hazardous Materials
in accordance with all Applicable Laws and as required by such plan and this
Lease.] [ADDED]
EXHIBIT A
DESCRIPTION OF PREMISES
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California.
[Floor plan included in original lease. Unable to duplicate without using
drawing tools. Total square footage of building is 31,024 of which Suite 145
occupies 3,418 square feet, and is one of eleven suites on the floor.] [ADDED]
EXHIBIT B
PROJECT SITE PLAN
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California.
[Floor plan included in original lease. Unable to duplicate without using
drawing tools. Total square footage of building is 31,024 of which Suite 145
occupies 3,418 square feet, and is one of eleven suites on the floor.] [ADDED]
EXHIBIT C
LIMITED REFURBISHMENT OF PREMISES
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California.
The capitalized terms used and not otherwise defined herein shall have
the same definitions as set forth in the Lease. The provisions of this Exhibit
shall supersede any inconsistent or conflicting provisions of the Lease.
Prior to October 30, 1995, Landlord shall, at Landlord's sole cost and
expense, separate the Premises from adjacent Suite 125 in such manner as
Landlord deems prudent, utilizing Landlord's Project-standard materials, colors
and design. Landlord shall have no other obligations to install any improvements
to the Premises, and Tenant acknowledges and agrees that Tenant is accepting the
Premises "as-is", other than as expressly set forth above.
EXHIBIT E
ADJUSTMENTS TO MONTHLY RENT
(Fixed Adjustment)
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California.
The capitalized terms used and not otherwise defined in this Exhibit
shall have the same definitions as set forth in the Lease. The provisions of
this Exhibit shall supersede any inconsistent or conflicting provisions of the
Lease.
The Monthly Rent shall be adjusted, as of the commencement of the dates
set forth below, in accordance with the following schedule:
Months During Term Monthly Rent
------------------ ------------
1 - 12 $2,700.00
13 - 24 $2,808.00
25 - 36 $2,920.00
Exhibit G
RULES AND REGULATIONS S
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside or inside
of the Building or Project without the prior written consent of Landlord,
which consent Landlord may withhold n its sole and absolute discretion.
Landlord shall have the right to remove, at Tenant's expense and without
notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by
Landlord.
2. If Landlord objects in writing to any curtains, blinds, shades, screens, or
hanging plants or other similar objects attached to or used in connection
with any window or door of the Premises, or placed on any windowsill, which
is visible from the exterior of the Premises, Tenant shall immediately
discontinue such use. Tenant shall not place anything against or near glass
partitions or doors or windows which may appear unsightly from outside the
Premises.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
stairways, elevators or escalators (if any) of the Project. The halls,
passages, exits, entrances, shopping malls, elevators, escalators and
stairways are not open to the general public, but are open subject to
reasonable regulations, to Tenant's business invitees. Landlord shall in
all cases retain the right to control and prevent access thereto of all
persons whose presence in the judgment of Landlord would be prejudicial to
the safety, character, reputation and interest of the Project and its
tenants; provided that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
or unlawful activities. No tenant and no employee or invitee of any tenant
shall go upon the road(s) of the Project.
4. The directory of the Building or Project will be provided exclusively for
the display of the name and location of tenants only and Landlord reserves
the right to exclude any other names therefrom.
[5. All cleaning and janitorial services for the Project and the Premises shall
be provided exclusively through Landlord, and except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be employed by Tenant or permitted to enter the Project for
the purpose of cleaning the same. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of
the Premises. ] [DELETED]
6. Landlord will furnish Tenant, free of charge, with two keys to each door
lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and
Tenant shall not alter existing locks or install any new additional locks
or bolts on any door of the Premises. Tenant, upon the termination of its
tenancy, shall deliver to Landlord the keys to all doors which have been
furnished to Tenant, and in the event of any loss of any keys so furnished,
shall pay Landlord therefor.
7. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions
in their installation.
8. Freight elevator(s), if any, shall be available for use by all tenants in
the Building, subject to such reasonable scheduling as Landlord, in its
discretion, shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in the
Building or carried in the elevators except between such hours and in such
elevators as may be designated by Landlord. Tenant's initial move in and
subsequent deliveries of bulky items, such as furniture, safes and similar
items shall, unless otherwise agreed in writing by Landlord, be made during
the house of 6:00 p.m. to 6:00 a.m. or on Saturday or Sunday. Deliveries
during normal office hours shall be limited to normal office supplies and
other small items. No deliveries shall be made which impede or interfere
with other tenants or the operation of the Building.
9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowable by law. Landlord shall have the right to prescribe the weight,
size and position of all equipment, materials, furniture or other property
brought into the Building. Heavy objects shall, if considered necessary by
Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight, which platforms shall be provided at
Tenant's expense. Business machines and mechanical equipment belonging to
Tenant, which cause noise or vibration that may be transmitted to the
structure of the building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devises sufficient to eliminate noise or vibration.
The persons employed to move such equipment in or out of the Building must
be acceptable to Landlord. Landlord will not be responsible for loss of, or
damage to, any such equipment or other property from any cause, and all
damage done to the Building by maintaining or moving such equipment or
other property shall be repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office equipment.
Tenant shall not use or permit to be used in the Premises any foul or
noxious gas or substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants
of the Building by reason of noise, odors or vibrations, nor shall Tenant
bring into or keep in or about the Premises any birds or animals.
11. Tenant shall not use any method or heating or air conditioning other than
that supplied by Landlord.
12. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice,
and shall retain from attempting to adjust controls. Tenant shall keep
corridor doors closed, and shall close window coverings at the end of each
business day.
13. Landlord reserves the night, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
14. Landlord reserves the right to exclude from the Building between the hours
of [6 p.m.] [DELETED] [8 p.m.] [ADDED] and 7 a.m. the following day, or
such other hours as may be established from time to time by Landlord, and
on Sundays and legal holidays, any person unless that person is known to
the person or employee in charge of the Building or has a pass or is
properly identified. Tenant shall be responsible for all persons for whom
it request passes and shall be liable to Landlord for all acts of such
persons. Landlord shall not be liable for damages for any error with regard
to the admission to or exclusion from the Building of any person. Landlord
reserves the right to prevent access to the Building in case of invasion,
riots, riot, public excitement or other commotion by closing the doors or
by other appropriate action.
15. Tenant shall close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus and electricity, gas or air
outlets before Tenant and its employees leave the Premises. Tenant shall be
responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.
16. Tenant shall not obtain for use on the Premises ice, drinking water, food,
beverage, towel or other similar services or accept barbering or
bootblacking service upon the Premises, except at such hours and under such
regulations as may be fixed by Landlord.
17. The toilet rooms, toilets, urinals, wash bowels and other apparatus shall
not be used for any purpose other than that for which they were constructed
and no foreign substances of any kind whatsoever shall be thrown therein.
The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees
or invitees, shall have caused it.
18. Tenant shall not sell, or permit the sale at retail of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise
to the general public in or on the Premises. Tenant shall not make any
room-to-room solicitation of business from other tenants in the Project.
Tenant shall not use the Premises for any business or activity other than
that specifically provided for in this Lease.
19. Tenant shall not install any radio or television antenna, loudspeaker or
other devices on the roof(s) or exterior walls of the Building or Project.
Tenant shall not interfere with radio or television broadcasting or
reception from or in the Project or elsewhere.
20. Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork or plaster or in any way deface the Premises or any part thereof,
except in accordance with the provisions of the Lease pertaining to
alterations. Landlord reserves the right to direct electricians as to where
and how telephone and telegraph wires are to be introduced to the Premises.
Tenant shall not cut or bore holes for wires. Tenant shall not affix any
floor covering to the floor of the Premises in any manner except as
approved by Landlord. Tenant shall repair any damage resulting from
noncompliance with this rule.
21. Tenant shall not install, maintain or operate upon the Premises any vending
machines without the written consent of Landlord.
22. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Project are prohibited, and Tenant shall
cooperate to prevent such activities.
23. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations
of the Building.
24. Tenant shall store all its trash and garbage within its Premises or in
other facilities provided by Landlord. Tenant shall not place in any trash
box or receptacle any material which cannot be disposed of in the ordinary
and customary manner of trash and garbage disposal. All garbage and refuse
disposal shall be made in accordance with directions issued from time to
time by Landlord.
25. The Premises shall not be used for the storage of merchandise held for sale
to the general public, or for lodging or for manufacturing of any kind, nor
shall the Premises by used for any improper, immoral or objectional
purposes. No cooking shall be done or permitted on the Premises without
Landlord's consent, except the use of Tenant of Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar
beverages shall be permitted, and the use of a microwave oven for employees
use shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.
26. Tenant shall not use in any space or in the public halls of the Project any
hand truck except those equipped with rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building or Project.
27. Without the written consent to Landlord, Tenant shall not use the name of
the Building or Project in connection with or in promoting or advertising
the business of Tenant except as Tenant's address.
28. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
29. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
30. To the extent Landlord reasonably deems it necessary to exercise exclusive
control over any portions of the Common Areas for the mutual benefit of the
tenants in the Project, Landlord may do so subject to non-discriminatory
additional Rules and Regulations.
31. Tenants requirements will be attended to only upon appropriate application
to the Project management office by an authorized individual. Employee or
Landlord shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord, and no employee of
Landlord will admit any person (Tenant or otherwise) to any office without
specific instructions from Landlord.
32. Landlord may wave any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be constructed as a waiver of such Rules and Regulations in favor of Tenant
or any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the Tenants of the
Project.
33. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease.
34. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Project and for the
preservation of good order thereon. Tenant agrees to abide by all such
Rules and Regulations herein above stated and any additional rules and
regulations which are adopted.
35. Tenant shall be reasonable for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees and guests.
EXHIBIT H
ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT
The purpose of this form is to obtain information regarding the use of
hazardous substances on the premises. Prospective tenants should answer the
questions in light of their proposed operations on the premises. Existing
tenants should answer the questions as they relate to on-going operations on the
premises and should update any information previously submitted. If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.
Your cooperation in this matter is appreciated. Any questions should be
directed to and when completed, the form should be mailed to:
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
Attn:
---------------------------------------------
Phone: ( )
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1. GENERAL INFORMATION
Name of Responding Company: Infinite Graphics Incorporated
Check the Applicable Status:
Prospective Tenant Existing Tenant X
Mailing Address: 4611 E. Lake Street, Minneapolis, MN 55406
Contact Person and Title: Clifford F. Stritch, CEO
Telephone Number: (612) 728-1323
Address of Leased Premises: 17332 Von Karman, Irvine, CA
Length of Lease Term:
----------------------------------
Describe the proposed operations to take place on the property, including
principal products manufactured or services to be conducted. Existing
tenants should describe any proposed changes to on-going operations.
---------------------------------------------------
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2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes X No
Chemical Products Yes X No
2.2 Attach the list of any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the location and
method of storage (e.g.., 55 gallon drums on concrete pad).
3. STORAGE TANKS & SLUMPS
3.1 Is any above or below ground storage of gasoline, diesel, or other
hazardous substances in tanks on sumps proposed or currently conducted
on the premises?
Yes X No
If yes, describe the materials to be stored, and the type, size and
construction of the sump or tank. Attach copes of any permits obtained
for the storage of such substances.
----------------------------------------------------------------------
----------------------------------------------------------------------
3.2 Have any of the tanks or sumps been inspected or tested for leakage?
Yes No X
3.3 Have any spills or leaks occurred from such tanks or sumps?
Yes No X not since 9/15/95
If so, describe.
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----------------------------------------------------------------------
3.4 Were any regulatory agencies notified of the spill or leak?
Yes No
If so, attach copies of any spill reports filed, any clearance letters
or other correspondence from regulatory agencies relating to the spill
or leak.
3.5 Have any underground storage tanks or sumps been taken out of service
or removed?
Yes No X
If yes, attach copies of any closure permits and clearance obtained
from regulatory agencies relating to closure and removal of such tanks.
4. SPILLS
4.1 During the past year, have any spills occurred on the premises?
Yes No Unknown; not since 9/15/96
If so, please describe the spill and attach the results of any leasing
conducted to determine the extent of such spills.
----------------------------------------------------------------------
4.2 Were any agencies notified in connection with such spills?
Yes No
If so, attach copies of any spill reports or other correspondence with
regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the spills?
Yes No
If so, briefly describe the actions taken. Attach copies of any
clearance letters obtained from any regulatory agencies involved and
the results of any final soil or groundwater sampling done upon
completion of the clean-up work.
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----------------------------------------------------------------------
5. WASTE MANAGEMENT
5.1 Has your company been issued an EPA Hazardous Waste Generator ID
Number?
Yes No X
5.2 Has your company filed a biennial report as a hazardous waste
generator?
Yes No X
5.3 Attach the list of the hazardous waste, if any, generated or to be
generated at the premises, its hazard class and the quantity generated
on a monthly basis.
5.4 Describe the method(s) of disposal for each waste. Indicate where and
how often disposal will take place.
Disposal subcontracted to Inter Met (714/283-2040)
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5.5 Indicate the name of the person(s) responsible for maintaining copies
of hazardous waste manifests completed for off-site shipments of
hazardous waste.
Inter Met
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5.6 Is any treatment or processing of hazardous wastes currently conducted
or proposed to be conducted at the premises:
Yes X No
If yes, please describe any existing or proposed treatment methods.
----------------------------------------------------------------------
Plotting out of silver and capture by Kodak filters.
----------------------------------------------------------------------
5.7 Attach copies of any hazardous waste permits or licenses issued to your
company with respect to its operations on the premises.
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to:
storm drain? X sewer?
--------- ---------
surface water? no industrial discharge?
--------- ---------
6.2 Is your wastewater treated before discharge?
Yes No X
6.3 Attach copies of any wastewater discharge permits issued to your
company with respect to its operations on the premises.
7. AIR DISCHARGES
7.1 Do you have any air filtration systems or stacks that discharge into
the air?
Yes No
7.2 Do you operate any of the following types of equipment, or any other
equipment requiring an air emissions permit?
Spray booth
--------
Dip tank
--------
Drying oven
--------
Incinerator
--------
Other (Please Describe)
--------
X No Equipment Requiring Air Permits
--------
7.3 Are air emissions from your operations monitored?
Yes No X
If so, indicate the frequency of monitoring and a description of the
monitoring results.
----------------------------------------------------------------------
7.4 Attach copies of any air emissions permits pertaining to your
operations on the premises.
8. HAZARDOUS MATERIALS DISCLOSURES
8.1 Does your company handle hazardous materials in a quantity equal to or
exceeding an aggregate of 500 pounds, 55 galls, or 200 cubic feet?
Yes No X
8.2 Has your company prepared a hazardous materials management plan
("business plan") pursuant to Orange County Fire Department
requirements?
Yes No X
If so, attach a copy of the business plan.
8.3 Are any of the chemicals used in your operations regulated under
Proposition 65?
Yes ? No
If so, describe the actions taken, or proposed actions to be taken, to
comply with Proposition 65 requirements.
----------------------------------------------------------------------
8.4 Describe the procedures followed to comply with OSHA Hazard
Communication Standard requirements.
OSHA training and annual review
---------------------------------------
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9. ENFORCEMENT ACTIONS, COMPLAINTS
9.1 Has your company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees?
Yes No X
If so, describe the actions and any continuing compliance obligations
imposed as a result of these actions.
----------------------------------------------------------------------
9.2 Has your company ever received requests for information, notice or
demand letters, or any other inquiries regarding its operations?
Yes No X
9.3 Have there ever been, or are there not pending, any lawsuits against
the company regarding any environmental or health and safety concerns?
Yes No X
9.4 Has an environmental audit ever been conducted at your company's
current facility?
Yes No X
If so, discuss the results of the audit.
----------------------------------------------------------------------
9.5 Have there been any problems or complaints from neighbors at the
company's current facility?
Yes No X
Infinite Graphics Incorporated
---------------------------------------
Company
By: /s/ Clifford F. Stritch
-----------------------------------
Title: CEO
-------------------------------
Date: 10/26/95
--------------------------------
Environmental Questionnaire and Disclosure Statement
Attachment
2.2 Hazardous Material
Photographic Fixer Various sizes of manufacturer supplied
containers; maximum volume 50 gallons
Misc Photographic Developer Various sizes of manufacturer supplied
containers; maximum volume 50 gallons
EXHIBIT I
LANDLORD'S DISCLOSURES
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California.
The capitalized terms used and not otherwise defined herein shall have
the same definitions as set forth in the Lease. The provisions of this Exhibit
shall supersede any inconsistent or conflicting provisions of this Lease.
1. None, to the current actual knowledge of Landlord at
this time.
EXHIBIT J
SIGN CRITERIA
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated September 1, 1995, by and between SUPERIOR INVESTMENT COMPANY,
L.P., a California limited partnership, as "Landlord", and INFINITE GRAPHICS
INCORPORATED, a Minnesota corporation, as "Tenant", for the Premises known as
17332 Von Karman Avenue, Suite 145, Irvine, California. The capitalized terms
used and not otherwise defined herein shall have the same definitions as set
forth in the Lease. The provisions of this Exhibit shall supersede any
inconsistent or conflicting provisions of this Lease.
SEE ATTACHED
