Attached files
================================================================================
Exhibit 10.17
-------------
RECORDING OF THIS LEASE PROHIBITED
AIR COMMERCIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL
MULTI-TENANT LEASE - GROSS
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes only, July
8, 2009 is made by and between Fullerton Business Center, LLC ("Lessor") and
Allied Med, Inc., an Oregon corporation ("Lessee") (collectively the "Parties,"
or individually a "Party").
1.2(a) Premises: That certain portion of the Project (as defined below),
including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by the street address of 2500 E. Fender Avenue,
Unit "H" located In the City of Fullerton, County of Orange, State of
California, with zip code 92831, as outlined on Exhibit B attached hereto
("Premises") and generally described as (describe briefly the nature of the
Premises): Approximately 1,600 square feet of rentable space including overhang
as outlined in Exhibits "A" and "B" attached hereto and incorporated herein. In
addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to any utility raceways of the
building containing the Premises ("Building") and to the Common Areas (as
defined In Paragraph 2.7 below) but shall not have any rights to the roof,
exterior walls of the Building or to any other buildings in the Project. The
Premises, the Building, the Common Areas, the land upon which they are located,
along with all other buildings and improvements thereon, are herein collectively
referred to as the "Project." (Also see Paragraph 2)
1.2(b) Parking: TWO (2) unreserved vehicle parking spaces (Also see
Paragraph 2.6.)
1.3 Term: N/A years and Six ( 6) months ("Original Term") commencing
September 1, 2009 ("Commencement Date") and ending February 28, 2010*
("Expiration Date"). (Also see Paragraph 3)
1.4 Early Possession: N/A ("Early Possession Date"). (See also Paragraphs
3.2 and 3.3.)
1.5 Base Rent: $960.00 per month ("Base Rent"), payable on the First day
of each month commencing September 1, 2009. (Also see Paragraph 4) *see Option
to Renew attached
[ ] If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted.
1.6 Lessee's Share of Common Area Operating Expenses: ----------------
percent (0.0060864%) ("Lessee's Share"). Lessee's Share has been calculated by
dividing the approximate square footage of the Premises by the approximate
square footage of the Project. In the event that that size of the Premises
and/or the Project are modified during the term of this Lease, Lessor shall
recalculate Lessee's Share to reflect such modification
1.7 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent $960.00 for the period September 1, 2009-September
30, 2009.
(b) Common Area Operating Expenses: $96.00 for the period 9/01/09
- 9/30/09.
(c) Security Deposit: $1,920.00 ("Security Deposit"). (see also
Paragraph 5)
(d) Other: $N/A for N/A.
(e) Total Due Upon Execution of this Lease: $2,976.00
1.8 Agreed Use: Office/Warehouse used for storage. (See also Paragraph 6)
1.9 Insuring Party. Lessor is the "Insuring Party". (See also Paragraph 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (the "Brokers") and
brokerage relationships exist in this transaction (check applicable boxes):
[_] N/A represents Lessor exclusively ("Lessor's Broker");
[_] N/A represents Lessee exclusively ("Lessee's Broker'); or
[_] N/A represents both Lessor and Lessee ("Dual Agency").
(b) Payment to Brokers: Upon execution and delivery of this Lease by both
Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a
separate written agreement (or if there is no such agreement, the sum of -----
or N/A% of the total Base Rent for the brokerage services rendered by the
Brokers).
1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed byJack Amin ("Guarantor"). (See also Paragraph 37)
1.12 Attachments. Attached hereto are the following, all of which
constitute a part of this Lease:
[X] an Addendum consisting of Paragraphs1 through 4.
[_] a site plan depicting the Premises;
[X] a site plan depicting the Project;
[X] a current set of the Rules and Regulations and Parking Rules and
Regulations for the Project; Addendum II
[_] a current set of the Rules and Regulations adopted by the owners'
association;
Page 1 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
[_] a Work Letter;
[X] other (specify):
Move-In/Move-Out Rules: Exhibit "C"; Hazardous Materials Disclosure Form
("Lessee"): Exhibit "D"
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size Is more or less. NOTE: Lessee is advised to verify the
actual size prior to executing this Lease.
2.2 Condition. Lessor shall deliver that portion of the Premises contained
within the Building ("Unit") to Lessee broom clean and free of debris on the
Commencement Date or the Early Possession Date, whichever first occurs ("Start
Date"), and, so long as the required service contracts described in Paragraph
7.1(b) below are obtained by Lessee and in effect within thirty days following
the Start Date, warrants that the existing electrical, plumbing, fire-sprinkler,
lighting, heating, ventilating and air conditioning systems ("HVAC"), loading
doors, sump pumps, if any, and all other such elements in the Unit, other than
those constructed by Lessee, or acquired by Lessee from a prior tenant (see
Paragraph 7.3a), shall be in good operating condition on said date, that the
structural elements of the roof, bearing walls and foundation of the Unit shall
be free of material defects, and that the Unit does not contain hazardous levels
of any mold or fungi defined as toxic under applicable state or federal law,
that Landlord Is aware of. Lessor shall not unreasonably withhold its approval
for Lessee, at Lessee's cost, to test for those substances provided Lessee uses
a vendor from Lessor's approved vendor list. If a non-compliance with such
warranty exists as of the Start Date, or if one of such systems or elements
should malfunction or fail within the appropriate warranty period, Lessor shall,
as Lessor's sole obligation with respect to such matter, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance,
malfunction or failure, rectify same at Lessor's expense. The warranty periods
shall be as follows: (i) 30 days as to the HVAC systems, and (ii) 30 days as to
the remaining systems and other elements of the Unit. If Lessee does not give
Lessor the required notice within the appropriate warranty period, correction of
any such non-compliance, malfunction or failure shall be the obligation of
Lessee at Lessee's sole cost and expense (except for the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).
See Addendum I, Item 1, for additional Information.
2.3 Compliance. Lessor warrants that to the best of its knowledge the
improvements on the Premises and the Common Areas comply with the building codes
that were in effect at the time that each such improvement, or portion thereof,
was constructed. Said warranty does not apply to the use to which Lessee will
put the Premises, modifications which may be required by the Americans with
Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph
49), or to any Alterations or Utility Installations (as defined in Paragraph
7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for
determining whether or not the applicable laws, covenants or restrictions of
record, regulations and ordinances ("Applicable Requirements") and especially
the zoning are appropriate for Lessee's intended use, and acknowledges that past
uses of the Premises may no longer be allowed. Correction of any non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense. If the
Applicable Requirements are hereafter changed so as to require during the term
of this Lease the construction of an addition to or an alteration of the Unit,
Premises and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Unit, Premises and/or
Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of
such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are
required as a result of the specific and unique use of the Premises by Lessee as
compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof.
(b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay for
the portion of such costs reasonably attributable to the Premises pursuant to
the formula set out in Paragraph 7.1(d).
Page 2 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall
either. (i) immediately cease such changed use or intensity of use and/or take
such other steps as may be necessary to eliminate the requirement for such
Capital Expenditure, or (ii) complete such Capital Expenditure at its own
expense. Lessee shall not have any right to terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's intended use, (b) Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and (c) neither Lessor,
Lessor's agents, nor Brokers have made any oral or written representations or
warranties with respect to said matters other than as set forth in this Lease.
In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises or warranties concerning Lessee's ability to honor the Lease or
suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility
to investigate the financial capability and/or suitability of all proposed
tenants.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work. Prior Occupant shall be
defined as Lessee, Joint Lessee, Sublessee, a corporation or LLC, or any other
business entity, its successors or assigns, or as an officer and/or signator for
a corporation or LLC.
2.6 Vehicle Parking. Lessee shall be entitled to use the number of Parking
Spaces specified In Paragraph 1.2(b) on those portions of the Common Areas
designated from time to time by Lessor for parking. Lessee shall not use more
parking spaces than said number. Said parking spaces shall be used for parking
by vehicles no larger than full-size passenger automobiles or pick-up trucks,
herein called "Permitted Size Vehicles." Lessor may regulate the loading and
unloading of vehicles by adopting Rules and Regulations as provided in Paragraph
2.9. No vehicles other than Permitted Size Vehicles may be parked in the Common
Area without the prior written permission of Lessor. In addition:
(a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
(b) Lessee shall not service or store any vehicles in the Common Areas.
(c) If Lessee permits or allows any of the prohibited activities described
in this Paragraph 2.6, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may 'lave, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.7 Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project and interior utility raceways and installations within the Unit
that are provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's Rights. Lessor grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under ne circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.9 Common Areas - Rules and Regulations. Lessor or such other person(s)
as Lessor may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to establish, modify,
amend and enforce reasonable rules and regulations ("Rules and Regulations") for
the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their Invitees. Lessee agrees to abide by and conform to all such Rules and
Regulations, and shall use its best efforts to cause its employees, suppliers,
shippers, customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the non-compliance with said Rules and
Regulations by other tenants of the Project.
2.10 Common Areas - Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, Including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
Page 3 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
(c) To designate other land outside the boundaries of the Project to be a
part of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts and make such other changes in, to
or with respect to the Common Areas and Project as Lessor may, in the exercise
of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease
(Including but not limited to the obligations to pay Lessee's Share of Common
Area Operating Expenses, Real Property Taxes and insurance premiums and to
maintain the Premises) shall be in effect during such period. Any such early
possession shall not affect the Expiration Date.
3.3 Delay in Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease or change the Expiration
Date. Lessee shall not, however, be obligated to pay Rent or perform its other
obligations until Lessor delivers possession of the Premises and any period of
rent abatement that Lessee would otherwise have enjoyed shall run from the date
of the delivery of possession and continue for a period equal to what Lessee
would otherwise have enjoyed, but minus any days of delay caused by the acts or
omissions of Lessee. If possession is not delivered within 60 days after the
Commencement Date, Lessee may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Lessee by the Start Date and Lessee does not terminate this Lease,
as aforesaid, any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Lessee would otherwise have enjoyed under the terms hereof,
but minus any days of delay caused by the acts or omissions of Lessee. If
possession of the Premises is not delivered within 4 months after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing.
3.4 Lessee Compliance. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor's
election to withhold possession pending receipt of such evidence of Insurance.
Further, If Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.
4. Rent.
4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the
terms of this Lease, Including but not limited to, Base Rent, Lessee's share of
Operating Expenses, estimated CAM, parking charges, late charges, service fees
and ail other sums and charges of whatever nature, (except for the Security
Deposit) are deemed to be rent ("Rent").
4.2 Common Area Operating Expenses. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified In
Paragraph 1.6) of *all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and operation
of the Project, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, but not the replacement (see subparagraph (e)), of the
following:
(aa) The Common Areas and Common Area improvements, including
parking areas, loading and unloading areas, trash areas, roadways, parkways,
walkways, driveways, landscaped areas, bumpers, Irrigation systems, Common Area
lighting facilities, fences and gates, elevators, roofs, and roof drainage
systems.
(bb) Exterior signs and any tenant directories.
(cc) Any fire sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service
the Common Areas and any utilities not separately metered.
(iii) Trash disposal, pest control services, property management,
security services, owner's association dues and fees, the cost to repaint the
exterior of any structures and the cost of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common Areas
and Common Area equipment.
(v) Any increase above the Base Real Property Taxes (as defined in
Paragraph 10).
(vi) Any "Insurance Cost Increase" (as defined in Paragraph 8).
(vii) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(viii) Auditors', accountants' and attorneys' fees and costs related
to the operation, maintenance, repair and replacement of the Project.
(ix) The cost of any capital improvement to the Building or the
Project not covered under the provisions of Paragraph 2.3 provided; however,
that Lessor shall allocate the cost of any such capital Improvement over a 12
year period and Lessee shall not be required to pay more than Lessee's Share of
1/144th of the cost of such capital improvement in any given month.
Page 4 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
(x) Any other services to be provided by Lessor that are stated
elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that are
specifically attributable to the Unit, the Building or to any other building in
the Project or to the operation, repair and maintenance thereof, shall be
allocated entirely to such Unit, Building, or other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Project.
(c) The inclusion of the Improvements, facilities and services set forth
in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor
to either have said improvements or facilities or to provide those services
unless the Project already has the same, Lessor already provides the services,
or Lessor has agreed elsewhere in this Lease to provide the same or some of
them.
(d) Lessee's Share of Common Area Operating Expenses is payable monthly on
the same day as the Base Rent is due hereunder. The amount of such payments
shall be based on Lessor's estimate of the annual Common Area Operating
Expenses. Within 60 days after written request (but not more than once each
year) Lessor shall deliver to Lessee a reasonably detailed statement showing
Lessee's Share of the actual Common Area Operating Expenses incurred during the
preceding year. If Lessee's payments during such year exceed Lessee's Share,
Lessor shall credit the amount of such over-payment against Lessee's future
payments. If Lessee's payments during such year were less than Lessee's Share,
Lessee shall pay to Lessor the amount of the deficiency within 10 days after
delivery by Lessor to Lessee of the statement.
(e) Except as provided in paragraph 4.2(a)(viii), Common Area Operating
Expenses shall not include the cost of replacing equipment or capital components
such as the roof, foundations, exterior walls or Common Area capital
improvements, such as the parking lot paving, elevators, fences that have a
useful life for accounting purposes of 5 years or more.
(f) Common Area Operating Expenses shall not include any expenses paid by
any tenant directly to third parties, or as to which Lessor is otherwise
reimbursed by any third party, other tenant, or insurance proceeds.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
All monetary amounts shall be rounded to the nearest whole dollar. In the event
that any statement or invoice prepared by Lessor is inaccurate such inaccuracy
shall not constitute a waiver and Lessee shall be obligated to pay the amount
set forth in this Lease. Rent for any period during the term hereof which is for
less than one full calendar month shall be prorated based upon the actual number
of days of said month. Payment of Rent shall be made to Lessor at its address
stated herein or to such other persons or place as Lessor may from time to time
designate in writing. Acceptance of a payment which is less than the amount then
due shall not be a waiver of Lessor's rights to the balance of such Rent,
regardless of Lessor's endorsement of any check so stating. In the event that
any check, draft, or other instrument of payment given by Lessee to Lessor is
dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future
Rent be paid by cashier's check. Payments will be applied first to Base Rent,
and Common Area Operating Expenses, accrued Late Charges, attorney's fees,
accrued Interest, and any remaining amount to any other outstanding charges or
costs.
OBLIGATION OF FURNISHER OF CREDIT INFORMATION. Pursuant to Civil code,
Section 1785.26, the Lessee is hereby notified that a negative credit report
reflecting on Lessee's credit report may be submitted In the future to a credit
reporting agency if Lessee falls to fulfill the terms of the rental/credit
obligations or if Lessee defaults in those obligations in any way.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. 'If Lessee fails to pay Rent, or otherwise
Defaults under this Lease; Lessor may use, apply or retain all or any portion of
said Security Deposit for the payment of any amount due Lessor or to reimburse
or compensate Lessor for any liability, expense, loss or damage which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any portion
of the Security Deposit, Lessee shall within 10 days after written request
therefor deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the
term of this Lease, Lessee shall, upon written request from Lessor, deposit
additional monies with Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the Increased Base Rent as the
Initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor's reasonable judgment, to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change In control of Lessee occurs during this Lease and following
such change the financial condition of Lessee is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall deposit such additional monies
with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No part of the Security Deposit shall be
considered to be held in trust, to bear interest or to be prepayment for any
monies to be paid by Lessee under this Lease.
Page 5 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Notwithstanding the restrictions contained within California Civil Code
Section 1950.7, Lessor may utilize the security deposit for any and all debt
owed by Lessee to Lessor, including, (but not limited to) future rental or worth
at the time of the awarded damages as codified in Civil Code Section 1951.2 , or
rent as it accrues pursuant to Civil Code Section 1951.4. To the extent that
this right is Inconsistent with California Civil Code Section 1950.7, Lessee
waives the protections of Civil Code Section 1950.7. Lessee waives any rights
under California Civil Code Section 3275 and California Civil Code Section 1174
(c) and 1179 and any and all current or future laws which give Lessee a right to
redeem, reinstate, or restore this lease after It is terminated as a result of
the Lessee's breach.
6. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use
and for no other purpose. Lessee shall not use or permit the use of the Premises
In a manner that is unlawful, creates damage, waste or a nuisance, or that
disturbs occupants of or causes damage to neighboring premises or properties.
Other than service animals for the disabled; Lessee shall not keep or allow in
the Premises any pets, animals, birds, fish, or reptiles. Lessor may withhold or
delay its consent to any written request for a modification of the Agreed Use in
Lessor's sole and absolute discretion. If Lessor elects to withhold consent,
Lessor shall within 7 days after such request, give written notification of
same.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, or waste whose presence,
use, manufacture, disposal, transportation, or release, either by Itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "Reportable Use" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning
materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, Injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor, and provide Lessor
with a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.
(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's expense, comply with all Applicable Requirements and take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by Lessee, or
pertaining to or involving any Hazardous Substance brought onto the Premises
during the term of this Lease, by or for Lessee, or any third party.
(d) Lessee Indemnification. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground Lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or Involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project not caused or contributed
to by Lessee). Lessee's obligations shall include, but not be limited to, the
effects of any contamination or Injury to person, property or the environment
created or suffered by Lessee, and the cost of Investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.
(e) Lessor Indemnification.
Page 6 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
(f) Investigations and Remediations. If remediation measures are required
as a result of Lessee's use (including "Alterations", as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for
such payment. Lessee shall cooperate fully in any such activities at the request
of Lessor, including allowing Lessor and Lessor's agents to have reasonable
access to the Premises during business hours in order to carry out Lessor's
investigative and remedial responsibilities. Although notice is not required,
Lessor will attempt to provide verbal notice of Intent to enter.
(g) Lessor Termination Option. If a Hazardous Substance Condition (see
Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
Investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) If the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessor's desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.
6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise
provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in' a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to such Requirements, without regard to whether said
Requirements are now in effect or become effective after the Start Date. Lessee
shall, within 10 days after receipt of Lessor's written request, provide Lessor
with copies of all permits and other documents, and other information evidencing
Lessee's compliance with any Applicable Requirements specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the failure of Lessee or
the Premises to comply with any Applicable Requirements. Likewise, Lessee shall
immediately give written notice to Lessor of: (i) any water damage to the
Premises and any suspected seepage, pooling, dampness or other condition
conducive to the production of mold; or (ii) any mustiness or other odors that
might indicate the presence of mold in the Premises.
6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times after
reasonable notice, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless a violation of Applicable
Requirements, or a Hazardous Substance condition (see Paragraph 9.1) Is found to
exist or be imminent, or the Inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination. In addition, Lessee shall provide
copies of all relevant material safety data sheets (MSDS) to Lessor within 10
days of the receipt of written request therefor.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a) In General. Subject to the provisions of Paragraph 2.2 (Condition),
2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole expense, keep the Premises, Utility Installations
(intended for Lessee's exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels. fixtures, interior walls, Interior surfaces of exterior walls,
ceilings, floors, windows, doors, plate glass, and skylights but excluding any
items which are the responsibility of Lessor pursuant to Paragraph 7.2. Lessee,
in keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices, specifically including the procurement and
maintenance of the service contracts required by Paragraph 7.1(b) below.
Lessee's obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in
good order, condition and state of repair.
Acquisition of Existing Trade Fixtures, Utility Installations, and
Alterations: Pursuant to Paragraph 2.2 of the Lease Agreement, Condition, Lessor
makes no representations or warranties as to the condition of existing Trade
Fixtures, Utility Installations and/or Alterations. Prior to the commencement
date under this Lease, Lessee shall satisfy itself as to the condition, safety
and operability of
Page 7 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
any and all Trade Fixtures, Utility Installations, and/or Alterations left by or
purchased or acquired from prior occupant. Lessor shall accept no responsibility
for said trade fixtures/utility installations/Alterations and Lessee agrees to
perform maintenance and service of said trade fixtures/utility installations
and/or Alterations In accordance with Item 7.1 of the Lease Agreement, "Lessees
Obligations", at Lessee's sole cost and expense. If any damage to Lessee's unit
or Lessor's building should result from Lessee's failure to maintain or repair
said trade fixtures/utility installations or Alterations, the cost of any and
all repairs resulting from this damage shall be at the sole cost and expense of
Lessee. Unless stated otherwise herein, any Trade Fixtures, Utility
Installations and/or Alterations acquired from prior occupant shall be
considered Lessee Owned (See Paragraph 7.5(a) "Definitions", as well as those
Installed by Lessee, and are subject to all conditions outlined in Paragraph
7.4.
(b) Service Contracts. At Lessor's option, Lessee shall, at Lessee's sole
expense, procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and improvements, if any, if and when
installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure vessels,
(iii) clarifiers, and (iv) any other equipment, if reasonably required by
Lessor. However, Lessor reserves the right, upon notice to Lessee, to procure
and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure to Perform. If Lessee fails to perform Lessee's obligations
under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days'
prior written notice to Lessee (except in the case of an emergency, in which
case no notice shall be required), perform such obligations on Lessee's behalf,
and put the Premises in good order, condition and repair, and Lessee shall
promptly pay to Lessor a sum equal to 445% 125% of the cost thereof.
(d) Replacement. Subject to Lessee's indemnification of Lessor as set
forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if an item described in Paragraph 7.1(b) cannot be repaired other
than at a cost which is in excess of 50% of the cost of replacing such Item,
then such item shall be replaced by Lessor, and the cost thereof shall be
prorated between the Parties and Lessee shall only be obligated to pay, each
month during the remainder of the term of this Lease, on the date on which Base
Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of
which is 144 (i.e. 1/144th of the cost per month). Lessee shall pay interest on
the unamortized balance but may prepay its obligation at any time.
7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility
systems serving the Common Areas and all parts thereof, as well as providing the
services for which there Is a Common Area Operating Expense pursuant to
Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior
surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or
replace windows, doors or plate glass of the Premises. Lessee expressly waives
the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions. The term "Utility Installations" refers to all floor and
window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).
(b) Consent. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the
electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month's
Base Rent In the aggregate or a sum equal to one month's Base Rent In any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner,
(iv) provide Lessor with additional security deposit that shall be determined by
Lessor in Its sole and absolute discretion and to charge the deposit for the
actual cost of Lessor's vendor to monitor, Inspect or repair any work clone by
Lessee's vendor. If Lessor's actual costs exceed the amount held In Security
Deposit, Lessee shall reimburse Lessor for actual cost(s) upon demand. If all or
any portion of the Security Deposit is used, Lessee shall replenish said deposit
which shall be held by Lessor until Lessee's tenancy has ended and/or equipment
has been removed. Any Alterations or Utility Installations shall be performed in
a workmanlike manner with good and sufficient materials. Lessee shall promptly
upon completion furnish Lessor with as-built plans
Page 8 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
and specifications. For work which costs an amount in excess of one month's Base
Rent, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to 150% of the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an additional
Security Deposit with Lessor.
(c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Lessor and be surrendered by Lessee with the
Premises.
(b) Removal. By delivery to Lessee of written notice from Lessor not
earlier than 90 and not later than 30 days prior to the end of the term of this
Lease, Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.
(c) Surrender; Restoration. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if
this Lease is for 12 months or less, then Lessee shall surrender the Premises in
the same condition as delivered to Lessee on the Start Date with NO allowance
for ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Lessee. Lessee shall also completely
remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Premises)
even if such removal would require Lessee to perform or pay for work that
exceeds statutory requirements. Trade Fixtures shall remain the property of
Lessee and shall be removed by Lessee. Any personal property of Lessee valued as
$300 or less, not removed on or before the Expiration Date or any earlier
termination date shall be deemed to have been abandoned by Lessee and may be
disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to
timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express
written consent of Lessor shall constitute a holdover under the provisions of
Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Payment of Premium Increases.
(a) As used herein, the term "Insurance Cost Increase" Is defined as any
Increase in the actual cost of the insurance applicable to the Building and/or
the Project and required to be carried by Lessor, pursuant to Paragraphs 8.2(b),
8.3(a) and 8.3(b), ("Required Insurance"), over and above the Base Premium, as
hereinafter defined, calculated on an annual basis. Insurance Cost Increase
shall include, but not be limited to, requirements of the holder of a mortgage
or deed of trust covering the Premises, Building and/or Project, Increased
valuation of the Premises, Building and/or Project, and/or a general premium
rate increase. The term Insurance Cost Increase shall not, however, include any
premium increases resulting from the nature of the occupancy of any other tenant
of the Building. If the parties insert a dollar amount in Paragraph 1.9, such
amount shall be considered the "Base Premium." The Base Premium shall be the
annual premium applicable to the 12 month period immediately preceding the Start
Date. if, however, the Project was not Insured for the entirety of such 12 month
period, then the Base Premium shall be the lowest annual premium reasonably
obtainable for the Required Insurance as of the Start Date, assuming the most
nominal use possible of the Building. In no event, however, shall Lessee be
responsible for any portion of the premium cost attributable to liability
insurance coverage In excess of $2,000,000 procured under Paragraph 8.2(b).
(b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to
Paragraph 4.2. Premiums for policy periods commencing prior to, or extending
beyond, the term of this Lease shall be prorated to coincide with the
corresponding Start Data or Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial
General Liability policy of insurance protecting Lessee and Lessor as an
additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000. Lessee shall add Lessor and Mid Valley Management as an additional
insureds by means of an endorsement at least as broad as the Insurance Service
Organization's "Additional Insured-Managers or
Page 9 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Lessors of Premises" Endorsement and coverage shall also be extended to include
damage caused by heat, smoke or fumes from a hostile fire. The policy shall not
contain any intra-insured exclusions as between Insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's Indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall
provide an endorsement on its liability policy(ies) which provides that its
insurance shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.
8.3 Property Insurance - Building, Improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep in force a
policy or policies of insurance in the name of Lessor, with loss payable to
Lessor, any ground-lessor, and to any Lender insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full insurable
replacement cost of the Premises, as the same shall exist from time to time, or
the amount required by any Lender, but in no event more than the commercially
reasonable and available Insurable value thereof. Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee's personal property shall be
insured by Lessee under Paragraph 8.4. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for debris removal and the
enforcement of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence.
(b) Rental Value. Lessor shall also obtain and keep in force a policy or
policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days ("Rental Value insurance"). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period.
(c) Adjacent Premises. Lessee shall pay for any increase in the premiums
for the property insurance of the Building and for the Common Areas or other
buildings in the Project if said increase is caused by Lessee's acts, omissions,
use or occupancy of the Premises.
(d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor
shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 Lessee's Property; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain insurance coverage
on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.
(b) Business Interruption. Lessee shall obtain and maintain loss of income
and extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to all perils commonly insured against by
prudent lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of insurance specified herein are adequate
to cover Lessee's property, business operations or obligations under this Lease.
8.5 Insurance Policies. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least A-, VI, as set forth in the most current issue of "Best's
Insurance Guide" or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 10 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such Insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or the length of
the remaining term of this Lease, whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
Page 10 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.
8.8 Exemption of Lessor and Its Agents from Liability. Notwithstanding the
negligence or breach of this Lease by Lessor or its age nts, neither Lessor nor
its agents shall be liable under any circumstances for: (I) injury or damage to
the person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, Invitees, customers, or any other person in or about the
Premises, whether such damage or Injury is caused by or results from fire,
steam, electricity, gas, water or rain, indoor air quality, the presence of mold
or from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the Building, or from other sources
or places, (11) any damages arising from any act or neglect of any other tenant
of Lessor or from the failure of Lessor or its agents to enforce the provisions
of any other lease in the Project, or (iii) injury to Lessee's business or for
any loss of income or profit therefrom. Instead, it is intended that Lessee's
sole recourse in the event of such damages or injury be to file a claim on the
insurance policy(ies) that Lessee is required to maintain pursuant to the
provisions of paragraph 8. Lessor's non liability will apply irrespective of the
active or passive negligence of Lessor, Its agents, partners, or Lenders.
8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on
its part to obtain or maintain the insurance required herein will expose Lessor
to risks and potentially cause Lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required Insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any requirement for notice to Lessee,
by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by
reason of Lessee's failure to maintain the required Insurance. Such Increase in
Base Rent shall In no event constitute a waiver of Lessee's Default or Breach
with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of
its obligation to maintain the insurance specified in this Lease.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage
shall not include damage to windows, doors, and/or other similar Items which
Lessee has the responsibility to repair or replace pursuant to the provisions of
Paragraph 7.1.
(b) "Premises Total Destruction" shall mean damage or destruction to the
Improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in 3
months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or discovery
of a condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises which
requires repair, remediation, or restoration.
9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within 10 days following receipt of written notice of such shortage and request
therefor. If
Page 11 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Lessor receives said funds or adequate assurance thereof within said 10 day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
30 days after receipt by Lessor of knowledge of the occurrence of such damage.
Such termination shall be effective 60 days following the date of such notice.
In the event Lessor elects to terminate this Lease, Lessee shall have the right
within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective
60 days following the data of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage In insurance proceeds (or adequate assurance thereof) needed to
make the repairs on or before the earlier of (i) the date which is 10 days after
Lessee's receipt of Lessor's written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's commercially reasonable expense, repair such damage as soon
as reasonably possible and this Lease shall continue In full force and effect.
If Lessee falls to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee's option shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement In the event of Premises Partial Damage or Premises Total
Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises Is impaired, but
not to exceed the proceeds received from the Rental Value Insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(b) Remedies. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice of
Lessee's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor.
9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 Definitions.
(a) "Real Property Taxes." As used herein, the term "Real Property Taxes"
shall Include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate taxes);
Page 12 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
improvement bond; and/or license fee imposed upon or levied against any legal or
equitable interest of Lessor in the Project, Lessor's right to other income
therefrom, and/or Lessor's business of leasing, by any authority having the
direct or indirect power to tax and where the funds are generated with reference
to the Project address and where the proceeds so generated are to be applied by
the city, county or other local taxing authority of a jurisdiction within which
the Project is located. The term "Real Property Taxes" shall also include any
tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by
reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Project, (ii) a change in the
improvements thereon, and/or (iii) levied or assessed on machinery or equipment
provided by Lessor to Lessee pursuant to this Lease.
(b) "Base Real Property Taxes." As used herein, the term "Base Real
Property Taxes" shall be the amount of Real Property Taxes, which are assessed
against the Premises, Building, Project or Common Areas in the calendar year
during which the Lease is executed. In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year based
upon the number of days which such calendar year and tax year have in common.
10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3,
Lessor shall pay the Real Property Taxes applicable to the Project, and said
payments shall be Included in the calculation of Common Area Operating Expenses
in accordance with the provisions of Paragraph 4.2.
10.3 Additional Improvements. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Project by
other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at
the time Common Area Operating Expenses are payable under Paragraph 4.2, the
entirety of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the Premises by
Lessee or at Lessee's request or by reason of any alterations or improvements to
the Premises made by Lessor subsequent to the execution of this Lease by the
Parties.
10.4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises. When possible, Lessee shall cause Its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor. If any of Lessee's said property shall be
assessed with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee's property.
11. Utilities and Services. Lessee shall pay for all water, gas, heat,
light, power, telephone, trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon. Notwithstanding the
provisions of Paragraph 4.2, if at any time in Lessor's sole judgment, Lessor
determines that Lessee is using a disproportionate amount of water, electricity
or other commonly metered utilities, or that Lessee is generating such a large
volume of trash as to require an increase in the size of the trash receptacle
and/or an increase in the number of times per month that it is emptied, then
Lessor may increase Lessee's Base Rent by an amount equal to such increased
costs. There shall be no abatement of Rent and Lessor shall not be liable in any
respect whatsoever for the inadequacy, stoppage, interruption or discontinuance
of any utility or service due to riot, strike, labor dispute, breakdown,
accident, repair or other cause beyond Lessor's reasonable control or in
cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or any
part of Lessee's interest in this Lease or in the Premises without Lessor's
prior written consent.
(b) Unless Lessee is a corporation and its stock is publicly traded on a
national stock exchange, a change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute a change in control for
this purpose.
(c) The involvement of Lessee or its assets in any transaction, or series
of transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or transactions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. "Net Worth of
Lessee" shall mean the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles.
(d) An assignment or subletting without consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (i) terminate this Lease, or (ii) upon 30 days written notice, Increase
the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (I) the purchase price of any option
to purchase the Premises held by Lessee shall be subject to similar adjustment
to 110% of the price previously in effect, and (II) all fixed and non-fixed
rental adjustments scheduled during the remainder of the Lease term shall be
increased to 110% of the scheduled adjusted rent.
Page 13 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be
limited to compensatory damages and/or injunctive relief.
(f) Lessor may reasonably withhold consent to a proposed assignment or
subletting if Lessee Is in Default at the time consent is requested.
(g) Notwithstanding the foregoing, allowing a diminimus portion of the
Premises, i.e. 20 square feet or less, to be used by a third party vendor in
connection with the Installation of a vending machine or payphone shall not
constitute a subletting.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall :
(i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any
person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessors consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may proceed
directly against Lessee, any Guarantors or anyone else responsible for the
performance of Lessee's obligations under this Lease, including any assignee or
sublessee, without first exhausting Lessor's remedies against any other person
or entity responsible therefore to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $500 as
consideration for Lessors considering and processing said request. Lessee agrees
to provide Lessor with such other or additional information and/or documentation
as may be reasonably requested. (See also Paragraph 36)
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and
agreed to conform and comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor has
specifically consented to In writing.
(g) Lessors consent to any assignment or subletting shall not transfer to
the assignee or sublessee any Option granted to the original Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing.
(See Paragraph 39.2)
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all Rent payable on any sublease, and Lessor may collect such Rent and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a Breach shall occur in the performance of Lessee's obligations, Lessee may
collect said Rent. Any Lessee payment or other sums received by Lessee or any
other person in connection with this Lease shall be conclusively presumed to
have been paid by Lessee or on Lessees behalf. If, as a result of any proposed
Assignment or Sublease, Lessee receives rent or other consideration, either
Initially or over the term of the Assignment or Sublease, in excess of the rent
called for hereunder, or in the case of the Sublease of a portion of the
Premises, in excess of the rent allocable to such portion, Lessee shall pay to
Lessor as additional rent hereunder, all of the excess gross proceeds of each
such payment of rent or other consideration received by Lessee promptly after
its receipt. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee. Lessee hereby irrevocably authorizes and directs
any such sublessee, upon receipt of a written notice from Lessor stating that a
Breach exists in the performance of Lessee's obligations under this Lease, to
pay to Lessor all Rent due and to become due under the sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents to Lessor without
any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option, require
sublessee to adorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.
(c) Any matter requiring the consent of the sublessor under a sublease
shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to
comply with or perform any of the terms,
Page 14 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
covenants, conditions or Rules and Regulations under this Lease. A "Breach" is
defined as the occurrence of one or more of the following Defaults, and the
failure of Lessee to cure such Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property Insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any Security
Deposit required to be made by Lessee hereunder, whether to Lessor or to a third
party, when due, to provide reasonable evidence of Insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Lessee.
(c) The commission of waste, act or acts constituting public or private
nuisance, and/or an Illegal activity on the Premises by Lessee, where such
actions continue for a period of 3 business days following written notice to
Lessee.
(e) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41,
(viii) material data safety sheets (MSDS), or (ix) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of 10 days following
written notice to Lessee.
(f) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,
other than those described In subparagraphs 13.1(a), (b), (c) or (d), above,
where such Default continues for a period of 30 days after written notice;
provided, however, that if the nature of Lessee's Default is such that more than
30 days are reasonably required for its cure, then it shall not be deemed to be
a Breach if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.
(g) The occurrence of any of the following events: (i) the making of any
general arrangement or assignment for the benefit of creditors; (ii) becoming a
"debtor" as defined in 11 U.S.C. ss. 101 or any successor statute thereto
(unless, in the case of a petition filed against Lessee, the same is dismissed
within 60 days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located at the Premises or of
Lessee's Interest in this Lease, where possession Is not restored to Lessee
within 30 days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
Interest in this Lease, where such seizure is not discharged within 30 days;
provided, however, in the event that any provision of this subparagraph is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.
(h) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
(i) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (Iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (Iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Lessee's failure, within 60 days following written notice of any such event, to
provide written alternative assurance or security, which, when coupled with the
then existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the Guarantors that existed at the time of execution of
this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee's behalf, Including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 1-46-% 125% of the
costs and expenses incurred by Lessor in such performance upon receipt of an
invoice therefor. In the event of a Breach, Lessor may, with or without further
notice or demand, and without limiting Lessor in the exercise of any right or
remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to
recover from Lessee: (i) the unpaid 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 rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent. Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by
Page 15 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Paragraph 13.1. In such case, the applicable grace period required by Paragraph
13.1 and the unlawful detainer statute shall run concurrently, and the failure
of Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the
Rent as it becomes due, in which event Lessee may sublet or assign, subject only
to reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee's right to
possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "Inducement Provisions",
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, If any Rent
shall not be received by Lessor within '6 '10 days after such amount shall be
due, then, without any requirement for notice to Lessee, Lessee shall
immediately pay to Lessor a one-time late charge equal to 10% of each such
overdue amount or $100, whichever is greater. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of such late payment. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or Breach with respect
to such overdue amount, nor prevent the exercise of any of the other rights and
remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for 3 consecutive installments of Base
Rent, then notwithstanding any provision of this Lease to the contrary, Base
Rent shall, at Lessor's option, become due and payable quarterly In advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for non-scheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to non-scheduled payments. The interest
("Interest") charged shall be computed at the rate of 10% per annum but shall
not exceed the maximum rate allowed by law. Interest is payable in addition to
the potential late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph, a reasonable time
shall in no event be less than 30 days after receipt by Lessor,
and-any-L-coder-whew-nameandaddress-shall-have-been-furnished-Lessee-In-writing-
for-such-purposer of written notice specifying wherein such obligation of Lessor
has not been performed; provided, however, that if the nature of Lessor's
obligation is such that more than 30 days are reasonably required for its
performance, then Lessor shelf not be In breach if performance Is commenced
within such 30 day period and thereafter diligently pursued to completion. , (b)
Performance by Lessee on Behalf of Lessor. In the event that neither Lesser nor
Lender cures said breach within 30 days after receipt of said notice or if
having commenced said cure they do not diligently pursue it to completion
then-Lessee may elect to cure said breash at Lessee's expense and offset from
Rent the actual and reasonable cost to perform such cure provided however that
such offset shall not exceed an amount equal to the greater of one month's Base
Rent or the Security Deposit, reserving Lessee's right to reimbursement from
Lessor for any such expense in excess of such offset. Lessee shall document the
cost of said cure and supply said documentation to Lessor,
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the floor area of the Unit, or more than 25%
of Lessee's Reserved Parking Spaces, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within 10 days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to any compensation for Lessee's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the Premises
by Lessee, for purposes of Condemnation only, shall be considered the property
of the
Page 16 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Lessee and Lessee shall be entitled to any and all compensation which is payable
therefor. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.
15. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed pursuant to
Paragraph 1.10 above.
15.3 Representations and Indemnities of Broker Relationships. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
14. Estoppel Certificates.
(a) Lessee (as "Responding Party") shall within 10 clays after written
notice from the other-Party Lessor. (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Estoppel Certificate" form published by the
AIR Commercial Real Estate Association, or any other estoppel form requested by
Lessor, plus such additional information, confirmation and/or statements as may
be reasonably requested by the Requesting Party.
(b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting-Party may execute an
Estoppel Certificate stating that (I) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.
(c) If Lessor desires to finance, refinance, or sell the Premises, or any
part thereof, Lessee and all Guarantors shall deliver to any potential lender or
purchaser designated by Lessor such financial statements as maybe reasonably
required by such lender or purchaser, Including but not limited to Lessee's
financial statements for the past 3 years. Lessor reserves the right during the
Lease term to re-verify credit data of any two previously provided by Lessee or
have Lessee provide updated credit data to Leeesor upon writen request. All such
financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's Interest in the prior lease. In the event of a
transfer of Lessor's title or Interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (In cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.
18. Severability. The Invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Days. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
20. Limitation on Liability. The obligations of Lessor under this Lease shall
not constitute personal obligations of Lessor, or its partners, members,
directors, officers or shareholders, and Lessee shall look to the Premises, and
to no other assets of Lessor, for the satisfaction of any liability of Lessor
with respect to this Lease, and shall not seek recourse against Lessor's
partners, members, directors, officers or shareholders, or any of their personal
assets for such satisfaction.
21. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease,
Page 17 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the use, nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this Lease
or applicable law shall be in writing and may be delivered in person (by hand or
by courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's Lessee's signature on
this Lease shall be that Party's Lessee's address for delivery or mailing of
notices. The addresses listed in Paragraph 4 of the Addendum I will be the
Lessor's address for delivery or mailing of notices to Lessor. Either Party may
by written notice to the other specify a different address for notice, except
that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.
23.2 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mall the notice shall be deemed given 72 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mall or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of monies or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
(a)When entering into a discussion with a real estate agent regarding a
real estate transaction, a Lessor or Lessee should from the outset understand
what type of agency relationship or representation it has with the agent or
agents in the transaction. Lessor and Lessee acknowledge being advised by the
Brokers in this transaction, as follows:
(i) Lessor's Agent. A Lessor's agent under a listing agreement with
the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent
has the following affirmative obligations: To the Lessor: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the
Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to
reveal to either Party any confidential Information obtained from the other
Party which does not involve the affirmative duties set forth above.
(ii) Lessee's Agent. An agent can agree to act as agent for the
Lessee only. In these situations, the agent is not the Lessor's agent, even if
by agreement the agent may receive compensation for services rendered, either in
full or in part from the Lessor. An agent acting only for a Lessee has the
following affirmative obligations. To the Lessee: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee
and the Lessor a. Diligent exercise of reasonable skills and care in performance
of the agent's duties. b. A duly of honest and fair dealing and good faith. c. A
duty to disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent Is not obligated to reveal
to either Party any confidential information obtained from the other Party which
does not involve the affirmative duties set forth above.
(iii) Agent Representing Both Lessor and Lessee. A real estate
agent, either acting directly or through one or more associate licenses, can
legally be the agent of both the Lessor and the Lessee in a transaction, but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the agent has the following affirmative obligations to both
the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity,
honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other
duties to the Lessor and the Lessee as stated above in subparagraphs (i) or
(ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that indicated in the listing or
that the Lessee is willing to pay a higher rent than that offered. The
Page 18 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
above duties of the agent In a real estate transaction do not relieve a Lessor
or Lessee from the responsibility to protect their own interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately
express their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advice is desired,
consult a competent professional.
(b) Brokers have no responsibility with respect to any default or breach
hereof by either Party. The Parties agree that no lawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this
Lease may be brought against Broker more than one year after the Start Date and
that the liability (Including court costs and attorneys' fees), of any Broker
with respect to any such lawsuit and/or legal proceeding shall not exceed the
fee received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker's liability shall not be applicable to any
gross negligence or willful misconduct of such Broker.
(c) Buyer and Seller agree to identify to Brokers as "Confidential" any
communication or information given Brokers that is considered by such Party to
be confidential.
26. No Right. To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.
In the event that Lessee holds over In violation of the above paragraph,
then In addition to the Increase of Base Rent and all Additional Rent, Lessee
shall be liable to Lessor for all costs, losses, claims or liabilities
(including attorney's fees) which Lessor may Incur as a result of Lessee's
failure to surrender possession of the Premises to Lessor upon the expiration or
earlier termination of this Lease.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions; Construction of Agreement. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "Lender") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of Its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
30.2 Attornment. In the event that Lessor transfers title to the Premises,
or the Premises are acquired by another upon the foreclosure or termination of a
Security Devise to which this Lease is subordinated (i) Lessee shall, subject to
the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of the new owner, this Lease will automatically become a new lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved
of any further obligations hereunder and such new owner shall assume all of
Lessor's obligations, except that such new owner shall not: (a) be liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) be subject to any offsets or defenses
which Lessee might have against any prior lessor, (c) be bound by prepayment of
more than one month's rent, or (d) be liable for the return of any security
deposit paid to any prior lessor.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not In Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, than Lessee may, at Lessee's
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or proceeding
involving the Premises whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or
Page 19 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall Include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement, Judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys' fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be
entitled to attorneys' fees, costs and expenses incurred In the preparation and
service of notices of Default and consultations in connection therewith, whether
or not a legal action is subsequently commenced in connection with such Default
or resulting Breach ($500 is a reasonable minimum per occurrence for such
services and consultation).
32. Lessor's Access; Showing Premises; Repairs. Showing Premises; Repairs.
Lessor and Lessor's agents shall have the right to enter the Premises at any
time, In the case of an emergency, and otherwise at reasonable times after
reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no
material adverse effect on Lessee's use of the Premises. All such activities
shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction.
34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any
time and ordinary "For Lease" signs during the last 6 months of the term hereof.
Lessee shall not place any sign upon the Project without Lessor's prior written
consent. All signs must comply with all Applicable Requirements. See Item 13. of
Rules & Regulations
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
Interest, shall constitute Lessor's election to have such event constitute the
termination of such interest.
36. Consents. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (Including but not limited to architects', attorneys', engineers'
and other consultants' fees) Incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated In writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and In reasonable detail
within 10 business days following such request.
37. Guarantor.
37.1 Execution. The Guarantors, if any, shall each execute a guaranty in
the form similar to the most recently published by the AIR Commercial Real
Estate Association,.
37.2 Default, It shall constitute a Default of the Lessee if any Guarantor
falls or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate Guarantor, and In the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still In effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.
39. Options. If Lessee Is granted an option, as defined below, then the
following provisions shall apply.
39.1 Definition. "Option" shall mean: (a) the right to extend the term of
or renew this Lease.
39.2 Options Personal To Original Lessee. Any Option granted to Lessee in
this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if requested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.
39.3 Multiple Options. In the event that Lessee has any multiple Options
to extend or renew this Lease, a later Option cannot be exercised unless the
prior Options have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent Is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been
Page 20 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
given 3 or more notices of separate Default, whether or not the Defaults are
cured, during the 12 month period immediately preceding the exercise of the
Option.
(b) The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the
purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) If
Lessee commits a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties. The
Project Is not a full security property and Lessor does not guarantee or warrant
the personal security or safety of Lessee or its Invitees. Lessor does utilize
the services of a Courtesy Patrol Service, the cost of which is Included as a
Common Area Maintenance expense borne by Lessee. However, any cautionary
measures that Lessor takes (whether a Courtesy Patrol Service, gate, or
otherwise) which may presently exist or later be installed on the Property are
neither a guarantee nor warranty against criminal acts of others on the Project
or otherwise.
41. Reservations. Lessor reserves the right: (i) to grant, without the consent
or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, (ii) to cause the recordation of parcel maps and restrictions, and
(iii) to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate such rights.
(iv) Lessor reserves the right to move Lessee to other, reasonably similar space
in the building or Project. Lessor must provide at least sixty (60) clays prior
written notice to Lessee, In connection therewith, the costs of preparing such
other premises for Lessee's use, together with Lessee's reasonable costs of
moving, shall be borne by Lessor, but In no event shall Lessor be required to
pay an amount In excess of two months Base Rent.
(v) Lessor reserves the right, exercisable with sixty (60) clays notice
and without liability to Lessee, to change the name and address of the Premises.
Said sixty (60) clays notice shall conclusively be deemed reasonable notice to
Lessee.
(vi) Lessor reserves the right to re-run Lessee's credit at a later date
clue to collection and/or screening purposes.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay. A Party who does not initiate
suit for the recovery of sums paid "under protest" within 6 months shall be
deemed to have waived its right to protest such payment.
43. Authority.; Multiple Parties; Execution.
(a) If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each Individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each Party shall, within 30
days after request, deliver to the other Party satisfactory evidence of such
authority.
(b) If this Lease is executed by more than one person or entity as
"Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall be empowered to
execute any amendment to this Lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the
named Lessees had executed such document.
(c) This Lease may be executed by the Parties in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same Instrument.
44. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
45. Offer. Preparation of this Lease by either party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.
46. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
47. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY to the extent provided by law, IN ANY ACTION OR PROCEEDING
INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.
48. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease Q Is [X] is not attached to this Lease. Americans with
Disabilities Act. Since compliance with the Americans with Disabilities Act
(ADA) is dependent upon
Page 21 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Lessee's specific use of the Premises, Lessor makes no warranty or
representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee's use of the Premises requires
modifications or additions to the Premises in order to be in ADA compliance,
Lessee agrees to make any such necessary modifications and/or additions at
Lessee's expense.
49. NONDISCRIMINATION AND NONSEGREGATION COVENANT. Lessee herein covenants by
and for himself or herself, his or her heirs, executors, administrators,
assigns, and for all persons claiming under or through him or her. This Lease Is
made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, marital
status, national origin or ancestry, In the Leasing, Subleasing, transferring,
use, occupancy, tenure and enjoyment of the Premises herein Leased: nor shall
Lessee himself, or any person claiming under or through him or her, establish or
permit any such practice or practices of discrimination and/or segregation with
reference to the selection, location, number, use and occupancy of Lessees,
Tenants, Sub lessees, Subtenants, Assignees and/or Vendees In the Premises
herein Leased.
50. PROPOSITION 65 WARNING: The State of California requires that we warn you
that the property contains chemicals known to the State of California to cause
cancer, birth defects, and other reproductive harm. These chemicals may be
contained in emissions and fumes from building materials, products and materials
used to maintain the property, and emissions, fumes, and smoke from lessee and
Invitees activities, including but not limited to the use of motor vehicles, and
tobacco products. These chemicals may include, but are not limited to carbon
monoxide, formaldehyde, tobacco smoke, unleaded gasoline, soots, tars, and
mineral oils.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL
REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Fullerton Business Center Executed:
On: On:
By LESSOR: By LESSEE:
Fullerton Business Center, LLC Allied Med, Inc., an Oregon
a Delaware limited liability company Corporation
by the Ezralow Company, LLC, a
Delaware limited liability company dba /s/ Jack Amin
Mid Valley Management, its Managing Name Printed: Jack Amin
Agent Title: President
By: /s/ Terri Rhoades
Name Printed: Terri Rhoades
Title: Authorized Agent By: /s/ Jack Amin
Name Printed: Jack Amin
Title: Vice President
Page 22 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
Name Printed: Address:
Title:________________________________________
--------------------------------------------------------------------------------
Address:
Telephone:(--)_____________________
Facsimile:(_)______________________
Federal ID No._____________________
Telephone:( )
Facsimile:(_)________________________________
Federal ID No._______________________________
BROKER:______________________________________BROKER;
--------------------------------------------------------------------------------
Att:__________________________________________ Att:_____________________________
fide:_________________________________________ *illc:-
________________________________________________________________________________
Address:______________________________________-Address:_________________________
--------------------------------------------------------------------------------
Telephone:(_}________________________________- T-elephene:______________________
Faesimilc:(__________________________________) - Faesimilc:(____________________
FederaHD-No__________________________________ Federal-
NOTICE: These forms are often modified to meet changing requirements of law and
Industry needs. Always write or call to make sure you are utilizing the most
current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite
800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
687-8616.
(c)Copyright 1998 By AIR Commercial Real Estate Association.
All rights reserved.
No part of these works may be reproduced In any form without
permission in writing.
Page 23 of 23
/s/ /s/
INITIALS INITIALS
(c)1998 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG-4-5/50E
ADDENDUM I for STANDARD INDUSTRIALICOMMERCIAL
MULTI-TENANT LEASE GROSS
THIS ADDENDUM is attached to and integrated as a part of that certain
Lease dated July 8, 2009, by and between Fullerton Business Center, LLC,
"Lessor", and Allied Med, Inc., an Oregon Corporation,, "Lessee", and
constitutes additional Covenants, Conditions and Agreements contained herein,
which Addendum shall prevail in the event of any conflict between the Covenants,
Conditions and Agreements contained herein and those in said Lease.
CONDITION OF PREMISES and COMPLIANCE WITH LAWS SEE ITEMS 2.2 AND 2.3 OF LEASE
AGREEMENT
1. Lessee shall complete and return the "Unit Inspection Checklist" within 30
days of the lease commencement. A blank "Unit Inspection Checklist" is an
attachment to this Lease, included with your cover letter or is available from
Lessor. Unless otherwise specified in the Lease, Lessor will have no obligation
to make repairs; the Unit Inspection Checklist will be a benchmark documenting
the condition of the Premises when Lessee took possession. If Lessee fails to
complete and return the Unit Inspection Checklist, the Unit will be deemed to be
in good condition and repair at the time that Lessee took possession.
Lessee accepts the Premises in its "as is" condition without any representation
or warranty by Lessor concerning the condition of the Premises. In addition,
Lessor makes no representation or warranty to Lessee that the Premises complies
with Applicable Laws or Requirements.
HAZARDOUS SUBSTANCES DISCLOSURE STATEMENT -- EXHIBIT "D"
2. Prior to executing this Lease, Lessee has delivered to Lessor Lessee's
executed Initial Hazardous Substances Disclosure Certificate (the "Initial
HazMat Certificate"). Lessee covenants, represents and warrants to Lessor that
the information contained in the Initial HazMat Certificate is true and correct
and accurately describes in all respects the use(s) of Hazardous Substances
which will be made and/or used on the Premises by Lessee. Notwithstanding
anything to the contrary contained in the Lease, Lessee shall not have the right
to use any Hazardous Substances at the Premises that are not described on the
Initial HazMat Certificate or to increase the quantity of any Hazardous Material
used at the Premises beyond the quantity described on the Initial HazMat
Certificate. Upon the prior written request of Lessor, Lessee shall deliver to
Lessor a new Hazardous Substances Disclosure Certificate (the "HazMat
Certificate") executed by Lessee and describing Lessee's then-present use of
Hazardous Substances on the Premises. The HazMat Certificates required hereunder
shall be in the form attached hereto as Exhibit "D".
ADDRESS FOR RENT PAYMENTS AND NOTICES SEE ITEMS 4.3 AND 23.1 OF LEASE
4. Lessee's payments of rent and other amounts due, shall be considered to have
been received by Lessor only when received by mail.
Rent VIA U.S. MAIL: Rent VIA EXPRESS MAIL: LESSOR ADDRESS FOR NOTICES:
--------------------------------------------------------------------------------
Fullerton Business Center,
LLC
Fullerton Business Fullerton Business Center, c/o Mid Valley Management
Center, LLC LLC 2478 E. Fender Ave., #A
Dept. LA 23439 23622 Calabasas Road, Fullerton, CA 92831
Pasadena, CA 91185-3439 Suite 200
Calabasas, CA 91302
Or at such address as Lessor may from time to time hereafter designate by notice
to Lessee. Rental payments will not be accepted by any of Lessor's Leasinq
Offices.
Document Reference Date: Dated this 8th Day of July, 2009
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
"LESSOR" "LESSEE"
Fullerton Business Center, LLC Allied Med, Inc., an Oregon Corporation
By The Ezralow Company, LLC, a
Delaware limited liability company dba /s/ Jack Amin
Mid Valley Management, its Managing Name Printed: Jack Amin
Agent Title: President
By: /s/ Terri Rhoades
Name Printed: Terri Rhoades
Title: Authorized Agent By: /s/ Jack Amin
Name Printed: Jack Amin
Title: Vice President
Lmu Addend 1 2005Ind Ls 2 28 06.Doc
Page 1
INITIALS:/s/
Updated 7/8/2009
EXHIBIT "A"
Tenant/Applicant: Any parts of this Form that do not apply to you may be crossed
out and referenced N/A
Term of Lease (if prior tenant in existing space, include in length of term::Six
(6) Months Major products manufactured and/or activities conducted on the
property: Storage
Type of Business Activity(ies): Hazardous Materials Activities:
(check all that apply) (check all that apply)
[_] machine shop [_] degreasing
[_] light assembly [_] chemical/etching/milling
[_] research and development [_] wastewater treatment
[_] product service or repair [_] painting
[_] photo processing [_] striping
[_] automotive service and repair [_] cleaning
[_] manufacturing [_] printing
[_] warehouse [_] analytical lab
[_] integrated/printed circuit [_] plating
[_] chemical/pharmaceutical product [_] chemical/missing/synthesis
[_] silkscreen
[_] lathe/mill machining
[_] deionizer water product
[_] photo masking
[_] wave solder
[_] metal finishing
[_] Type of Hazardous Materials and/or Waste
[_] acid
[_] phenol
[_] caustic/alkaline cleaner
[_] cyanide
[_] photo resist stripper
[_] paint
[_] flammable solvent
[_] gasoline/diesel/fuel
[_] nonflammable/chlorinated solvent
[_] oil/cutting fluid
1
HAZARDOUS MATERIALS/WASTE HANDLING AND STORAGE
A. Are hazardous materials handled on any of your shipping and receiving
docks in container quantities greater than one gallon? Yes No
B. If hazardous materials or waste are stored on the premises, please
check off the nature of the storage and type(s) of materials below: Types of
Storage Container Stored (list above-ground storage only) Q1 gallon or 3 liter
bottles/cans
[_] 5 to 30 gallon carboys
[_] 55 gallon drums
[_] tanks
C. Do you accumulate hazardous waste onsite? Yes______ No
If yes, how is it being handled?
[_] on-site treatment or recovery
[_] discharged to sewer
[_] hauled offsite If hauled offsite, by whom:
[_] incineration
D. Indicate your hazardous waste storage status with Department of Health
Services:
[_] generator
[_] interim status facility
[_] permitted TSDF
[_] none of the above
WASTEWATER TREATMENT/DISCHARGE
A. Do you discharge industrial waste water to:
[_] sewer
[_] storm drain
[_] surface water
[_] no industrial discharge
LMU Exhibit D HazMat 7 06.doc Updated: 6/3/07
EXHIBIT "D"
EXHIBIT "C"
MAINTENANCE AND TENANT IMPROVEMENT PROCEDURES
TENANT IMPROVEMENTS - HOW TO AVOID UNNECESSARY EXPENSE:
o Do not paint the floor of your warehouse. Paint will have to be
sandblasted off at your expense. A clear seal is acceptable if you require
a finished surface.
o Wallpaper will have to be removed when you vacate the unit. The wall must
be returned to us paint ready. If not, you will be charged for any
expenses we incur to get the walls to this condition.
o Do not glue signs to the internal wood doors. We have to remove them when
you leave and if the glue removes the finish and we cannot repair it, you
will be charged to replace the door.
o Electrical installations done to code become the property of the landlord.
If they are not done to code you will be charged for their removal. If you
have any questions you should contact the leasing office before doing any
removal.
o Do not attach anything to the marlite in the restroom. Any installations
should be made above the marlite level. This is an expensive replacement
and you will be charged for it.
o Do not make holes in the bronze moldings around the windows and doors to
your unit, inside or outside. Alarm companies will frequently do this. The
holes cannot be patched and therefore the bronze molding has to be
replaced. This can cost upwards of $300.00. It is possible to do these
installations without penetrating the bronze moldings.
o Glued down file or carpet on the warehouse floor has to be removed. The
glue must also be removed. If you do not do this before vacating then we
will do it and charge you. Sometimes the glue has to be sandblasted and
this gets expensive.
o If you remove any of the handicap door handles in order to install door
knobs with locking mechanisms, be sure to save the handicap hardware to
reinstall when you leave. Otherwise, you will be charged for the purchase
and reinstallation (NOT APPLICABLE TO FULLERTON BUSINESS CENTER).
The Fullerton Fire Department requires storeroom doorknobs (always
unlocked from the inside) to be installed on the mandoor. If this doorknob
is removed during your occupancy and replaced with a deadbolt or other
type hardware, you should save the storeroom doorknob. Please be advised,
however, that you will not only be violating the fire code, but will be
charged for the purchase and reinstallation of the storeroom doorknob upon
vacating the premises, if the original storeroom doorknob is not
reinstalled by you.
o Please note that you can be charged rent for the amount of time it takes
to repair the damage to your unit when that damage is over and above
normal wear and tear.
INSTRUCTIONS FOR PROPER OPERATION OF YOUR AIR CONDITIONER:
START UP: If your unit does not operate when your power has been turned
on, do the following: o Check all switches on the thermostat to see if
they are in the correct position.
o Make certain that your circuit breakers have not been turned off.
RULES FOR OPERATION:
o When your unit shuts off, do not start it up again for five (5) minutes.
This jiggling of the thermostat can cause a breaker inside the unit to
shut off and it can damage the compressor.
o When the heat is in the on position never increase the thermostat more
than two (2) degree increments. Changing the thermostat will not effect
the temperature of the air that is coming out.
o Always control your system from the thermostat. Do not turn it on and off
from the breaker box. This could damage the system.
o On very hot or very cold days do not set the temperature so that the unit
will never shut off. Typical settings are 78 degrees for cooling and G8
degrees for heating. If the unit is set at an extreme temperature and is
not shutting off, it will freeze up and require repair.
REGULAR MAINTENACE PROCEDURES:
o The roll-up or tilt-up doors need to be serviced on a regular basis. The
recommended maintenance interval is every six (6) months.
o Both the glass and the metal man doors need periodic servicing. Doors get
out of alignment with repeated use and the locks collect dirt and become
hard to use.
o Tenants are responsible for cleaning their windows. If they are not
cleaned on a regular basis they will buildup calcium deposit which will
require acid washing to remove. This is an expensive procedure so please
make arrangements to clean your windows regularly during your tenancy.
LESSEE RECEIVED ON: 7-28-09 BY: /s/ Jack Amin
Jack Amin, President
BY: /s/ Jack Amin
Jack Amin, Vice President
PLEASE READ CAREFULLY
C. Is your industrial wastewater treated before discharge? Yes____ No ____
If yes, what type of treatment is being conducted?
[_] Neutralization
[_] Metal hydroxide formation
[_] Closed-loop treatment
[_] Cyanide destruct
[_] HF treatment
[_] other
SUBSURFACE CONTAINMENT OF HAZARDOUS MATERIALS/WASTES
A. Are buried tanks/sumps being used for any of the following:
[_] hazardous waste storage
[_] chemical storage
[_] gasoline/diesel fuel storage
[_] waste treatment
[_] wastewater neutralization
[_] industrial wastewater treatment
[_] none of the above
B. If buried tanks are located onsite, indicate their construction
[_] steel Q fiberglass Q concrete Q inside open vault Q double walled
C. Are hazardous materials or untreated industrial wastewater transported via
buried piping to tanks, process areas or treatment areas? Yes____ No ____
D. Do you have wet floors in your process areas? Yes____ No ____
If yes, name processes:
E. Are abandoned underground tanks or sumps located on the property? Yes____ No
____
HAZARDOUS MATERIALS SPILLS
A. Have hazardous materials ever spilled to:
[_] the sewer
[_] the storm drain
[_] onto the property
[_] no spills have occurred
B. Have you experienced any leaking underground tanks or sumps? Yes____ No ____
C. If spills have occurred, were they reported? Yes____ No ____
Check which of the government agencies that you contacted regarding the spill(s)
[_] Department of Health Services
[_] Department of Fish and Game
[_] Environmental Protection Agency
[_] Regional Water Quality Control Board
[_] Fire Department
D. Have you been contacted by a government agency regarding soil or groundwater
contamination on your site? Yes____ No ____
Do you have any exploratory wells onsite? Yes____ No ____
If yes, indicate the following:
Number of wells ____ Approximate depth of wells: ____ Well diameters: ________
PLEASE ATTACH ENVIRONMENTAL REGULATORY PERMITS, AGENCY REPORTS THAT APPLY TO
YOUR OPERATION AND HAZARDOUS WASTE MANIFESTS.
Check off those enclosed:
[_] Hazardous Materials Inventory Statement, HMIS
[_] Hazardous Materials Management Plan, HMMP
[_] Department of Health Services, Generatory Inspection Report
[_] Underground Tank Registrations
[_] Industrial Wastewater Discharge Permit
[_] Hazardous Waste Manifest
Signature: /s/ Jack Amin
Name Written: Jack Amin INITIALS
Title: President & Vice President____________________ Phone: /s/
Date: 7/28/09
LMU Exhibit D HazMat 7 06.doc Updated: 6/3/07 2
EXHIBIT "D"
OPTION TO RENEW
Lessor grants to Lessee the option to extend the term of this Lease for
one (1) seven (7) month term commencing when the prior term expires (herein
called "option term") provided written notice is delivered to Lessor at least
two (2) months prior to the date that the option period would commence, time
being of the essence. (or, as to any successive options, written notice to
Lessor at least two (2), months prior to the expiration of the immediately
preceding term). If proper notification of the exercise of the option is not
given and/or received, such option shall automatically expire. The terms and
conditions of this Lease shall remain in full force and effect during the option
term, except that:
1. There shall be one (1) month free rent and CAM on the seventh (7th) month of
the option period (September 1-30, 2010).
2. Commencing March 1, 2010 the monthly rent for the first seven (7) months of
the option term shall be Eight Hundred Ninety-Six Dollars ($896.00
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Initials ___ ___ /s/
3. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. Initials /s/ /s/ /s/
4. Lessee shall accept the Premises "as is" and "with all faults" and Lessor has
no obligation to improve same in any way.
5. In the event that Lessee has more than one option, it may only be exercised
consecutively. This option to extend is personal to the original Lessee and is
not transferable or assignable in any manner whatsoever.
6. Lessee shall have no other right to extend the term beyond the option term.
7. That in the event Lessor has prepared a new or revised Lease Agreement
covering the subject business or industrial complex, then, in that event, Lessee
shall execute a new Lease Agreement for the extended term and said new Lease
Agreement shall be applicable and operative during the option term.
8. If Lessee is in default on the date of giving the option notice or at any
time prior to the commencement of the renewal term, the option notice shall be
totally ineffective and this Lease shall expire at the end of the initial term.
The parties hereto have executed this Option to Renew on the date of signing set
forth below:
Document Reference Date: July 8, 2009 (For reference purposes only)
LESSOR: LESSEE:
Fullerton Business Center, LLC, Allied Med, Inc., an Oregon Corporation
A Delaware limited liability company
By The Ezralow Company, LLC, a
Delaware limited liability company dba /s/ Jack Amin
Mid Valley Management, its Managing BY: Jack Amin, President
Agent DATE OF SIGNING:7-28-09Title: President
By: /s/ Terri Rhoades
Name Printed: Terri Rhoades
Title: Authorized Agent BY: Jack Amin, President
DATE OF SIGNING:7-28-09Title: President
Option to renew - fixed.doc
Updated /14/06
FORM REQUEST FOR
CERTIFICATE OF INSURANCE
TENANT: FAX TO YOUR INSURANCE CARRIER
Dear Tenant,
Prior to the commencement date, early possession date, or renewal of this
lease we will need the following from your insurance carrier: (All insurance
coverage shall be written through insurance companies licensed or admitted to do
business in the State of California and must have a "BEST" Rating of at least A-
VI):
o A certified copy of the insurance binder (countersigned by the insurer);
Or, Certificate of Insurance from your insurance carrier for each policy you are
required to carry in compliance with the obligations under this Lease.
[X] GENERAL LIABILITY: (Commercial General Liability Policy) on Insurance
Services Office Form CG2010 or equivalent.
Limits of Liability: $1,000,000 per occurrence, with an annual aggregate
of not less than $2,000,000 Coverage shall be extended to include damage
caused by heat, smoke or fumes from a hostile fire.
[X] PROPERTY DAMAGE: (i.e., Fire, Flood, Vandalism, Fixtures, Tenant
Improvements)
Full replacement cost coverage (Lessor requires written evidence insurance is in
force)
[X] BUSINESS INTERRUPTION INSURANCE: Loss of income and extra expense insurance
attributable to all perils
Q ENVIRONMENTAL INSURANCE: Limits of Liability: A minimum of $1,000,000 per
occurrence, with an annual aggregate of not less than $2,000,000
Q LIQUOR LEGAL LIABILITY COVERAGE: Coverage of not less than $1,000,000. Must
remain current at all times as long as alcoholic beverages are served on the
Premises.
Name of Lessee (Named Insured Jack Amin dba Allied Med, Inc.,
and DBA): An Oregon Corporation
Name Of Business Park: Fullerton Business Center, LLC
Address of insured Property Location: 2500 E. Fender Avenue, Unit "H"
City, State Zip: Fullerton, CA 92831
The Certificate of Insurance, with an ADDITIONAL INSURED ENDORSEMENT, must have
the following information: *THE ADDITIONAL INSURED ENDORSEMENT MUST NAME BOTH
THE LESSOR AND MID VALLEY MANAGEMENT.
Fullerton Business Center, LLC, a Delaware limited liability company 2478 E.
Fender Ave., #A, Fullerton, CA 92831
Please have your carrier fax the Certificate of Insurance to (714) 447-9362,
with a hard copy to:
Attention: Margo Clark-Lewis, Property Manager
Fullerton Business Center, LLC,
2478 E. Fender Ave., #A
Fullerton, CA 92831
Phone: (714) 447-0747
Thank you. Your expedience in this matter is appreciated.
Fullerton Business Center
Mid Valley Management
Your signature below indicates receipt of this Insurance Request and that you
have read and understand the insurance requirements in your lease
/s/ Jack Amin /s/ Jack Amin
LESSEE: Jack Amin, President Jack Amin, Vice President
LMU INS CERT REQUEST 5 24 06.doc
FORM
Revised. 7/23/08
GENERAL RULES & REGULATIONS FOR INDUSTRIAL LEASE
KEYS
1. Lessee shall return all keys, including mailbox keys, at the termination of
its tenancy and shall be responsible for the cost of replacing any keys that are
lost and for the cost to replace or re-key any locks that are altered.
TENANT ALTERATIONS AND LESSEE'S CONTRACTORS SEE ITEM 7.3 (B) OF THE LEASE
AGREEMENT
2. Lessee shall not employ any service or contractor for services or work to be
performed in the Premises except as approved by Lessor. Prior to the
commencement of any work, Lessee's contractor must provide Lessor with a copy of
their valid contractor's license and a *Certificate of Insurance which, at
Lessor's election, may require an additional insured endorsement naming Lessor
and Mid Valley Management as Additional Insureds. The Limits of Liability on
both General Liability and Worker's Compensation must be a minimum of
$1,000,000.00 each. FOR INSURANCE COMPANY REQUIREMENTS SEE ITEM 8.5 OF THE LEASE
AGREEMENT.
HEATING AND AIR-CONDITIONING
3. Lessee shall not use any method of heating or air-conditioning other than
that supplied or approved by Lessor.
HEAVY OBJECTS AND NOISE
4. Lessee shall not place anything in or around the Premises, Building or
Business Complex that causes excessive vibration or floor loading. Business
machines and/or mechanical equipment belonging to Lessee which cause noise or
vibration that may be transmitted to the structure of the Building in which the
Premises are located, or to any space therein, to such a degree as to be
objectionable, to Lessor or to any Tenants in the Building, shall be placed and
maintained by Lessee, at Lessee's expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration.
ROOF ACCESS SEE 7.3B OF THE LEASE AGREEMENT
5. In addition to the information contained in Paragraph 7.3b of the Lease
Agreement, Lessee agrees to the following:
5.1 If the Lessee, Lessee's Agents, Contractors, Employees or
invitees shall enter upon the roof of said Premises , whether with or without
the consent of Lessor, then the Lessee specifically indemnifies and agrees to
hold Lessor harmless from any and all claims, actions or causes of action
resulting from injuries incurred to any of said individuals or any other Person
or Property, caused by or as a result of their entering upon the roof of said
Premises.
5.2 In the event that Lessor grants written permission to the Lessee
or any of the persons set-forth above to have roof access, said consent shall be
expressly on the condition that each time said Lessee or those persons
designated by Lessee to enter upon the roof that they first execute a written
Letter of Agreement provided by Lessor (a) expressly indemnifying and holding
Lessor free and harmless from any and all damages caused by said individuals to
the Leasehold Premises, (b) indemnifying Lessor from any personal injury damages
caused in connection therewith,
5.3 Lessee's Contractor shall provide Lessor with Certificates of
Insurance with an,additional insured endorsement and in accordance with
Paragraph 2., above.
RIGHT TO CONTROL AND PREVENT ACCESS
6. Neither the Lessee, its Agents, employees, invitees or guests shall obstruct
any sidewalks, passages, exits, entrances or stairways of the Premises. The
passages, exits, entrances and stairways are not for the benefit of the general
public other than for access and egress; and Lessor shall in all cases retain
the right to control and prevent access thereto of all persons whose presence in
the judgment of Lessor would be prejudicial to or interfere with the general
welfare safety, character, reputation and interest of the Project and its
Tenants, provided that nothing contained herein 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 acts adverse to the
Project and its Tenants, and/or illegal activities).
DELIVERIES
7. Furniture, significant freight and equipment shall be moved into or out of
the building only with Lessor's knowledge and consent and subject to such
reasonable limitations, techniques and timing, as may be designated by Lessor.
Lessee shall be responsible for any damage to the Office Building Project
arising from any such activity.
WORK AREAS
8. All work must be confined within the Leased Premises.
PROTECTION OF PREMISES
9. Lessee assumes any and all responsibility for protecting its Premises from
theft, robbery, vandalism and pilferage, which includes keeping doors locked and
other means of entry to the Premises closed. Lessor strongly suggests that
Lessee re-key the suite upon taking possession, which cost is at Lessee's sole
cost and expense
LESSEE'S ALARM SYSTEM
10. If Lessee desires to install an alarm system, all equipment must be
installed inside Lessee's unit so as not to be visible and shall otherwise
comply to the standards set by Lessor for all alarm systems contained in the
Business Complex. Lessor must approve all alarm systems. When equipment is
removed, Lessee must restore the Premises to its original condition. Only one
alarm sticker per unit placed on Lessee's door is permitted.
RUBBISH REMOVAL
11. No rubbish, containers or debris are to be left outside of Lessee's unit.
Lessee shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash receptacles if such material
is of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash in the vicinity of the Project without
violation of any law or ordinance governing such disposal. If Lessor shall
determine that the trash generated by or at
Updated 7/9/2009
General Rules and Regulations
Parking Rules and Regulations
Industrial Lease
LMU Rules Regs Ind 4.06.doc INITIALS /s/
Page 1 of 3
Lessee agrees to comply with all laws or ordinances regarding disposal of items
considered hazardous waste (Title 22, the Premises, in Lessor's reasonable
estimation, shall be excessive, Lessee shall pay to Lessor, upon demand, such
additional charges as Lessor shall equitably impose for such excess trash
removal.
In addition to any other rights and remedies available to Lessor, any Lessee,
their employees, vendors, or invitees, who are division 4.5 chapter 11., section
66261.50) which includes, but is not limited to Fluorescent tubes, compact
fluorescents and High Intensity Discharge Lamps (See "Fluorescent Lights
disposal 02.22.06"). known to be improperly disposing of any materials, are
subject to a violation fee, in addition to any fine imposed upon Lessor for
Lessee's actions in regards to improper disposal.
EXTERIOR DAMAGE BY LESSEE
12. During the Lease Term, and at expiration (or early termination) of this
Lease, if Lessee dirties, soils or damages the exterior of Lessor's Business
Complex, Lessee will be responsible for the repair of this damage.
SIGNAGE
13. Lessee shall not place or permit to be placed any projecting sign, marquee,
decoration or awning on said Premises without the written consent of Lessor. All
signs which are permitted shall be conforming to the signage criteria
established from time to time by Lessor for the Premises, Building and the
Business Complex, as applicable, and shall be maintained by Lessee at its sole
expense, including, but not limited to sign fabrication, maintenance, operation
(including any required utilities), repair and removal. Lessee, upon the request
of Lessor, shall immediately remove any sign or decoration which Lessee has
placed, or permitted to be placed in, on or about the Premises of which, in the
sole option and discretion of Lessor, is objectionable or offensive; and if
Lessee fails to do so, Lessor may enter upon said Premises and remove said item
and charge the cost thereof to Lessee. Lessee shall not place or permit to be
placed upon any side wall, rear wall, window or roof; any sign, advertisement or
notice without the written consent of Lessor, which consent shall only be given
where the proposed sign, advertisement or notice complies with the
specifications of size, shape, design, color or material established by Lessor
and which are applicable to all Tenants of Lessor's Business Complex and
contained in Tenant's Information packet.
DIRECTORY
14. Any directory of the Project will be provided exclusively for the display of
the names and locations of Tenants only. Lessor reserves the right to exclude
any other names on said directory. Directory signage is the sole cost of Lessee.
WINDOWS, WINDOW COVERINGS and WINDOW TINTING
15. Lessee shall not place upon the Leased Premises any window coverings (e.g.
curtains, draperies, blinds, etc.), nor tint windows, without Lessor's written
consent.
CANVASSING AND SOLICITATION
16. Canvassing, soliciting and distribution of handbills or other written
material and peddling in the Project is prohibited; each Tenant shall cooperate
to prevent same.
FOUL, NOXIOUS GAS OR SUBSTANCE
17. Lessee shall not use, keep, or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises; or permit or allow the Premises
to be occupied or used in a manner which by reason of any odor is offensive or
objectionable to Lessor, in its sole and exclusive judgment, or to other tenants
or occupants of the Building.
ANIMALS
18. Lessee shall not bring into or keep in or about the Premises any birds or
animals (except service animals for the disabled).
UNDER THE INFLUENCE
19. Lessor reserves the right to exclude or expel from the Premises any person
who, in Lessor's judgment, is intoxicated or under the influence of liquor,
drugs or other abusive substances, or who is otherwise in violation of any Rules
and Regulations of the Project.
CHANGES IN RULES AND REGULATIONS
20. Lessor reserves the right by written notice to Lessee to rescind, alter or
waive any Rule or Regulation prescribed for Lessor's Business Complex at any
time when, in Lessor's judgment, it is necessary, desirable, proper and in the
best interest of Lessor's Business Complex and its Tenants. Lessee agrees to be
bound by any changes, revisions or modifications.
WAIVER OF RULES AND REGULATIONS:
21. Lessor, in its sole discretion reserves the right to waive any one of these
rules or regulations, and/or as to any particular Lessee, and any such waiver
shall not constitute a waiver of any other rule or regulation or any subsequent
application thereof to such Lessee. Lessor will have no liability if other
Complex tenants or guests fail to comply with rules or regulations, applicable
law, or that party's lease.
ALTERNATIVE TELEPHONE OR TELECOMMUNICATIONS PROVIDER:
22. A. Lessor Consent Required. In the event that Lessee wishes to utilize the
services of a telephone or telecommunications provider whose equipment is not
servicing the Building as of the date of Lessee's execution of this Lease
("Provider"), no such Provider shall be permitted to install its lines or other
equipment within the Building without first securing the prior written consent
of Lessor, which consent shall not be unreasonably withheld. At Lessor's
discretion, Lessee may be presented with a Letter of Agreement outlining the
Conditions of Consent prior to work being done and any additional requirements
of Lessor.
B. Defacement of Premises: Lessor shall have the right to approve where
and how telephone wires are to be introd uced to the Premises. No boring or
cutting for wires shall be allowed without the consent of Lessor. The location
of telephone call boxes and other office equipment affixed to the Premises shall
be subject to the approval of Lessor. Lessee shall not mark, drive nails or
screws, or drill into the partitions, woodwork or plaster contained in the
Premises or in any way deface the Premises or any part thereof without Lessor's
prior written consent Lessee shall not install any radio or television antenna,
satellite dish, loudspeaker or other device on the roof or exterior walls of the
Project. Lessee shall not interfere with broadcasting or reception from or in
the Project or elsewhere.
Updated 7/9/2009
General Rules and Regulations
Parking Rules and Regulations
Industrial Lease
LMU Rules Regs Ind 4.06.doc INITIALS /s/
Page 2 of 3
C. The replacement or repair to Lessor's Business Complex, including but
not limited to, ceiling tiles, damaged T-bar or existing wiring during Lessee's
installation of phone or computer cabling ,shall be borne by Lessee.
UTILITIES AND SERVICES
23. No cooking shall be done or permitted on the Premises. Notwithstanding the
foregoing, Underwriter's Laboratory approved equipment and microwave ovens may
be used in the Premises for heating food and brewing coffee, tea and similar
beverages for employees and visitors of Lessee, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations; and provided further that such cooking does not result in
odors escaping from the Premises.
SMOKING -(degree)
24. Lessee shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
VENDING MACHINES
25. Lessee shall not install, maintain or operate any vending machines upon the
Premises without Lessor's written consent.
SAFETY and COMPLIANCE
26. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
PARKING RULES and REGULATIONS
PERMITTED AND PROHIBITED PARKING
1. Parking is permitted in designated striped areas only. All other Vehicles not
parked in such areas are subject to being towed away at Lessee's sole cost and
expense (22658 CVC). Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles
(c) where "No Parking" signs are posted;
(d) where "Handicap" signs are posted, unless Handicap I.D. is posted in
or on vehicle;
(e) on ramps;
(f) in areas outside warehouse doors which are restricted to loading and
unloading only. This is a fire lane, which must not be blocked.
(g) in specifically assigned and reserved spaces to others than Lessee;
(h) inside the Premises; and,
(i) in such other areas as may be designated by Lessor, its Agents, Lessee
or Licensee.
OVERNIGHT STORAGE OF VEHICLES OR TRAILERS
2. There will be no overnight storage of Vehicles or Trailers in the parking
lot. Vehicles used and moved on a daily basis are exempt. There will be no
storage of wrecked or damaged Vehicles at any time.
DIRECTIONAL SIGNS AND ARROWS
3. All directional signs and arrows must be observed.
SPEED LIMIT
4. The speed limit will be a reasonable speed.
RESPONSIBILITY FOR LOCKED VEHICLES AND DAMAGES
5. Unless otherwise instructed, every person is requested to park and lock
his/her own Vehicle. All responsibility for damage to Vehicles to be repaired is
assumed by Authorized Users. Lessee shall repair or cause to be repaired at its
sole cost and expense any and all damage to the Project Parking Facility or any
part thereof caused by Lessee, its Authorized Users, Invitees or Guests, or
resulting from Vehicles of each of them. Lessee specifically waives any claims
against Lessor arising out of damage to said Vehicles.
COMMON AREA PARKING
6. Lessee acknowledges that the parking spaces as specified on Page 1.,
Paragraph 1.2(b) of the Lease will not necessarily be located in close proximity
to Lessee's Premises or each other, if more than one space is involved. Lessee
agrees not to overburden the parking facilities and agrees to cooperate with
Lessor and other Tenants in the use of parking facilities. At no time may
Lessee's number of parking spaces exceed the number referenced in Paragraph
1.2(b) of the Lease Agreement. Lessor reserves the right in its absolute
discretion to determine whether parking facilities are becoming crowded, and in
such an event, to allocate parking spaces among Lessee and other Tenants. In the
event allocation is deemed necessary by Lessor, Lessee shall be entitled to the
use of up to two (2) parking spaces per 1,000 square feet leased. Lessee hereby
agrees not to occupy or permit its Employees, Customers or Invitees to occupy
more than the number of spaces specified above; nor to park anywhere other than
in parking stalls assigned and designated as such by painted signs, parking
lines and parking bumpers.
PROHIBITED USE
7. The maintenance, washing, waxing or cleaning of vehicles in the Common Areas
is prohibited. Parking a vehicle that is leaking fluids (i.e., motor oil;
coolant, etc.) onto the asphalt is prohibited. Owner of vehicle will be required
to remove said vehicle from the lot until the problem is repaired. Lessee shall
be responsible for the cost to repair any damages to Lessor's parking lot caused
by said vehicle.
CHANGES TO RULES and REGULATIONS
8. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary
for the proper operation of the parking area.
Updated 7/9/2009
General Rules and Regulations
Parking Rules and Regulations
Industrial Lease
LMU Rules Regs Ind 4.06.doc INITIALS /s/
Page 3 of 3
MID VALLEY MANAGEMENT
UNIT INSPECTION CHECK LIST
PROPERTY: FULLERTON BUSINESS CENTER MOVE IN DATE: 9/01/09
TENANT: Allied Med, Inc., an Oregon Corporation
ADDRESS: 2500 E. Fender Ave., Fullerton, CA 92831 UNIT NUMBERS: "H"
LESSEE INSPECTION DATE: __________
Please indicate the condition of your unit for the categories listed below, then
sign and return this form within thirty (30) days of your Lease commencement
date, or occupancy, whichever occurs first. Unless otherwise specified in your
Lease, Lessor will have no obligation to make repairs; this checklist will be a
benchmark documenting the status of the Premises when you took possession. If
you fail to complete and return this Unit Inspection Checklist, the Unit will be
deemed in good condition and repair.
Please provide the phone number for your new unit:
O.K. NEEDS WORK COMMENTS
HVAC
DOORS/WINDOWS:
ELECTRICAL:
FLOOR COVERING:
LIGHTS:
MINI-BLINDS:
PLUMBING:
WALLS:
PREMISES CLEAN:
OTHER COMMENTS:
Accepted as indicated above:
LESSEE: Allied Med,
Inc., an Oregon Corporation
By: /s/ Jack Amin, President Date: 7/28/09
By: /s/ Jack Amin, Vice President Date: 7/28/09
LESSEE: IF TAKING UNIT AS IS, INITIAL HERE
LMU Unit Inspection Check List.doc.5.1.06
Updated 7/27/2009
INSTRUCTIONS TO NEW TENANTS
WELCOME: TO THE FULLERTON BUSINESS CENTER!
Below is some information that will help you in getting set up.
1. Utility Turn-On: Southern California Gas Company (800) 427-2200
Southern California Edison Company (800) 65504555
2. Telephone: Pacific Bell (800) 491-8889
3. City Hall 303 W. Commonwealth, Fullerton, CA (714) 738-6300
4. Proof of Coverage must be furnished to Lessor naming Fullerton
Insurance: Business Center, LLC and Mid Valley Management as
Additional insured before keys for the unit will be
released to Lessee.
5. Signage: There is a sign placard provided outside your unit. The
lettering must be in BROWN. There is to be no color
used on the sign. If you like, you may contact Mr. Kim
Dedic @ (714) 525-1869 to have your sign painted.
Paper signage is prohibited.
6. Air Conditioning Check to make certain that they are operating properly.
& Heating System In If we are not notified within one week after you obtain
Office: occupancy that the systems are not working properly,
we will not be responsible repairs. The gas must be turned
on for the heater in the office to work.
7. Warehouse Warehouse comes equipped with 6 (8 ft.) drop light
Lighting: fixtures.
8. Tenant Prior to any alterations, we must receive a signed set of
Alterations: building plans from the City of Fullerton. If the
alterations do not require City permits, then the tenant
must get our approval before they are made.
9. We strongly recommend that you re-key your unit. We do not require a copy of
the key(s) or maintain one for your unit.
10. Absolutely no rubbish, containers or debris are to be left outside of
Lessee's unit. Any debris is subject to immediate removal by Lessor. You will be
charged for removal, plus 25% overhead. After the third removal of debris by
Lessor, Lessee will be considered in violation of his lease and subject to
termination of his lease.
11. Fire Extinguishers: All units must contain a minimum of one (1) NFPA 10
portable fire extinguisher for their occupancy and operations, as well as
hazard(s). Said extinguisher(s) shall be at Lessee's cost.
All extinguishers should be readily accessible (i.e., no obstructions), and the
travel distance to the nearest extinguisher should not exceed 75 feet or 2,500
square feet.
It is a Lessee responsibility to have fire extinguishers serviced on an annual
basis by a licensed fire extinguisher company.
12. Safety and Compliance: Lessee shall comply with all safety, fire protection
and evacuation regulations established by Lessor or any applicable governmental
agency.
13. Please provide the leasing office with your new phone, fax and e-mail
address. Thank-you very much for your cooperation.
Thank-you very much for your cooperation.
CONNELLY ACT NOTICE
(Revised 3/12/90)
The Connelly Act (California Health & Safety Code section 25915 at seq.)
(the "Act") requires that certain information pertaining to asbestos be made
available to employees, contractors, tenants, and others. We are providing you
with this notice regarding the Fullerton Business Center, Fullerton, California
(the "Center") in compliance with this law.
Reports By Diagnostic Engineering, Inc. A limited asbestos survey report
(revision) ("Report") dated January 12, 1990, was prepared by Diagnostic
Engineering, Inc. ("DEI"). This Report contains the results of a limited
asbestos survey for asbestos-containing construction materials ("ACM"). The
survey included visual observation of all office spaces at the Center for.
spray-applied acoustic material, sampling of suspect acoustic ceiling materials,
and laboratory analysis of the 25 bulk samples taken.
The contents of the report include a statement of conclusions, a warning
regarding ACM, a list of the friable materials encountered in sample locations,
a list of unsampled suspect materials and their general locations, a statement
of sampling and laboratory procedures, and a work item inventory regarding
future removal of the ceiling material.
Laboratory results of the bulk sampling indicated that one of the bulk
samples, taken from 2478-K, did not contain asbestos. The other 24 samples of
the spray-applied acoustic material collected were found to contain asbestos.
These 24 samples were taken from the following office ceiling locations:
2434-A, 2434-B, 2444-J, 2444-F, 2478-A, 2478-C, 2488-K,
2488-I, 2500-B, 2500-D, 2512-A, 2512-D, 2524-C, 2524-G, 2536-I,
2536-L, 2548-J, 2560-F, 2572-A, 2584-H, 2444-L, and 2560-C.
Analysis of the bulk samples for asbestos content was performed by
polarized light microscopy (PLM), according to EPA protocols.
All of the positive bulk samples indicated that the spray-applied acoustic
material is friable. Damage ranged from none to minor, air movement was found to
be moderate, and access to all of the positive sampled material was found to be
high.
The Report concludes that friable ACM is present in the following ceiling
locations:
. 2434-A-I, 2444-A-L, 2478-A-K, 2488-A-K, 2500-A-L,
2512-A-L, 2524-A-L, 2536-A-L, 2548-A-J, 2560-A-J, 2572-A-1, and 2584-A-H.
The report also noted that other building materials which may contain
asbestos were not sampled or could not be representatively sampled as part of
the survey. These include roofing materials, resilient sheet flooring and
mastic, resilient floor tile and mastic, baseboard and mastic, joint compound,
and wallboard. These materials and others which may be discovered should be
assumed to contain asbestos until confirmed otherwise.
Previously, DEI performed. cohesion/adhesion testing of bulk samples of
spray-applied acoustic ceiling material from 2488-K, 2512-L, 2584-E, and 2478-E.
The cohesion/adhesion testing results indicated that the spray-applied acoustic
material sampled is well-secured to the underlying substrate.
Air samples were taken by DEI in the following twelve locations:
2478-A, 2488-K 2434-H, 2444-D, 2500-A, 2512-J,
2560-A, 2548-J, 2527-J 2584-H, 2536-K 2524-A,
The air samples were analyzed by phase contrast mico-scopy (PCM), using
EPA protocols. This technology measures all fibers, not just asbestos fibers.
The fiber content of the air in each instance of sampling was below the OSHA
"action level" of 0.1 f/cc.
The cohesion/adhesion testing results and air sampling results are
contained in a prior DEI report, dated October 31, 1989. This report also
contains an executive summary, findings and recommendations, a statement of
limitations, an air sample log, a bulk sample log and a cohesion/adhesion test
log.
DEI also issued a Limited Site Review report, dated February 28, 1990,
which contains observations and recommendations by DEI regarding spray-applied
acoustic ceiling materials in locations 2478-I, 2478-K, 2444-L, 2560-F, 2488-I,
and 2548-J. This report states that varying amounts of damage to the material
was observed in 2478-I, 2444-L, 2560-F, 2488-I, and 2548-J. No observation was
made by DEI of 2488-K, but there appears to be damage to the material in that
unit. The material in 2478-K was observed to be in good condition.
DEI has recommended removal of the ceiling material in 2560-F, 2488-K and
2548-J. For 2478-I and 2478-K, DEI has recommended reinspection of the material
as part of an operations & maintenance ("O&M") program. For 2444-L and 2488-I,
DEI has recommended removal of the material if the source of water damage to the
material cannot be repaired; if it can be repaired, DEI has recommended
reinspection of this material as part of an O&M program. Material which is
removed will be replaced with a non-ACM product. Until this removal and
replacement work is completed, great care must be taken to prevent any
disturbance of the material which could result in airborne fiber release and
contamination of the occupied space. Center management is working with its
consultant to determine the best means of performing this work.
DEI has reviewed the report by M.R. Chasse' Company, dated August 7, 1989,
which recommended abatement (by removal or encapsulation) of all of the
spray-applied acoustical ceiling material. The Chasse' Report is discussed
below. Based upon its observation of the material in place and the results of
the testing concluded to date, DEI does not believe that encapsulation of the
spray-applied acoustical material is an appropriate strategy and does not
believe that removal of the material is necessary at this time, except as noted
above. Accordingly, DEI has recommended an operations and maintenance ("O&M")
plan for management for the remaining ceiling materials, with a long term goal
of removal.
Report By M.R. Chasse' Company. A property inspection report ("Chasse'
Report"), dated August 7, 1989, was prepared by M. R. Chasse' Company. The
Chasse' Report contains the results of an inspection to survey the buildings at
the Center for the presence of ACM. The contents of the report include a general
statement of the scope of services performed, findings regarding ACM in the
Center, and a laboratory report regarding analysis of the bulk samples taken in
the Center.
Bulk samples of sprayed-on acoustic ceiling material were analyzed from
material taken from 2584-E (south and north offices); 2584 (south and north
offices); 2560 (Units D and J and south office); 2536 (Unit B); 2524-C (south
and north offices), 2524-H; 2512-G (south and north offices); 2512-I; and
2444-H. Roof covering material was analyzed from samples taken from 2584, 2572,
2560, 2478, 2500, 2488, 2512, 2524, 2536, 2434, 2444 and 2548 East Fender.
Asbestos was not detected in any of these samples. However, the analytical
detection limit for the tests by Chasse' was 1% asbestos (which is consistent
with generally approved bulk sample testing methods under EPA proto- cols),
whereas the Connelly Act defines ACM to mean material with greater than 1/10 of
1% asbestos by weight. Although asbestos at, a level of 1% or more was not
detected in these samples, it is possible that the sampled roof materials may
contain asbestos at a level greater than 1/10 of 1% but less than 1%. A flooring
sample from 2584-G also was analyzed and found to contain greater than 1%
asbestos.
The sampled acoustic ceiling material was found to be friable and contains
asbestos in a concentration sufficient to be considered a hazard to health if
disturbed. However, the material was found to be in good condition. The sampled
vinyl asbestos flooring was characterized by Chasse' as non-friable, as was the
transite pipe; generally, these- materials do not present a hazard unless they
are disturbed.
The mere presence of undisturbed and non-friable ACM in a building does
not generally present a health hazard. However, exposure to airborne asbestos
fibers can cause asbestosis and other asbestos-related diseases. Asbestos is
listed under Proposition 65 as a chemical known to the State of California to
cause cancer. There are uncertainties about the level of exposure which can
cause disease. The owners have no special knowledge of the potential health
impacts resulting from exposure to asbestos. If you wish to obtain further
information regarding potential health risks or impacts of asbestos, you are
encouraged to contact your local or state public health agencies.
Asbestos is a hazardous material. When it is contained in ceiling
material, roofing material, floor coverings or piping insulation, it can release
fibers, if disturbed. Certain general procedures and handling restrictions are
necessary when dealing with ACM or potential ACM, as a result. It is important
that these materials not be touched, moved, painted, scraped, cut, drilled,
ordered, sanded, cored, broken or otherwise disturbed in order to prevent and
minimize potential release of asbestos fibers. The material should not be
penetrated for hangers, cabling, wiring and the like. Such activities may
-4-
present a health risk and should not be attempted by any person who is not
trained in the proper handling and disposal of ACM. Any damage to, or
disturbance of, these materials should be reported immediately to the on-site
manager.
The reports referred to in this Notice are available for your review and
photocopying in the on-site management office at 2478 East Fender, Suite A,
Fullerton, California 92631. Please call Stephanie Burke at (714) 447-0747 if
you wish to arrange access to this information. Center management will keep you
informed of progress in the on-going planning with regard to the ACM.
-5-
--------------------------------------------------------------------------------
