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LEASE
THIS LEASE dated May 19, 2000 for reference purposes only is made
between the Lessor and the Lessee named below, effective on the later of the
dates set forth under their respective signatures.
BASIC LEASE PROVISIONS
1. Premises: As depicted on Exhibit A.
Premises Address: 70 Santa Felicia
Goleta, CA 93117
Use of Premises: Lessee shall use the premises for general office,
manufacturing, research and development, shipping
and receiving. The use of the premises shall comply
with the Santa Barbara County zoning on the
property of MR-P.
2. Leased Area: As depicted on Exhibit A.
Square Feet: 11,880 square feet
3. Lessee's Percentages:
Building: 100%
Common Area: 100%
4. Initial Monthly Rent: $17,226 NNN ($1.45 per square foot per month)
Prepaid Rent: $17,226 (Representing the first month's rent to be
paid upon execution of the Lease)
Rent Adjustment: As provided in Section 3 of this Lease.
5. Term: Five (5) years and _ month.
6. Commencement
Date: May 15, 2000
{PAGE}
Rent Commencement
Date: June 1, 2000
Termination Date: May 31, 2005
7. Security Deposit: $17,226
8. Broker(s): Blair Hayes Commercial - Lessor
Pacifica Commercial Realty - Lessee
9. Parking Spaces Provided: All spaces provided on site
10. Tenant Improvement
Allowance: As provided in Section 18 of this Lease.
11. Conditions to
Obligations and
Guaranty: The obligations of the parties under this Lease are
subject to: the premises being vacated by Howden
Fluid Systems, the existing lessee, and Lessor's
receipt of a written guaranty of this Lease, duly
executed and delivered by Raymond M. Karam.
12. Submission of this instrument for examination or signature by the Lessee
does not constitute a reservation of or option for space and it is not
effective as a lease or otherwise until execution by both Lessee and
Lessor. This document will be deemed withdrawn by Lessor if not executed by
Lessee and delivered to Lessor by May 22, 2000.
{PAGE}
Daryush Agahi 507 $9.33 4/3/00
23351 Via Guadix
Mission Viejo, CA 92691
[Acquired from Karam (Rodgers shares)]
------ --------
33,730 $150,000
(aggregate)
{PAGE}
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Provisions, Articles 1 through 18 which
follow, and any attached Exhibits or Addendums, as of the date first above
written.
LESSOR:
Date: May ___, 2000 UNITED INSURANCE COMPANY OF AMERICA
By: __________________________________
Name:
Title:
Address:
c/o Bermant Development Company
5383 Hollister Avenue
Suite No. 150
Santa Barbara, CA 93111
LESSEE:
Date: May 19 , 2000 NANOMOTION, INC.,
a California corporation
By: /s/ Raymond M. Karam
--------------------------------
Name: Raymond M. Karma
Title: President
Address:
130 Robin Hill Rd. #110
Goleta, CA 93117
{PAGE}
TABLE OF CONTENTS
ARTICLE PAGE
Basic Lease Provisions ............................................I-III
Table of Contents .................................................i-iii
1. LEASE OF PREMISES .....................................................1
2. TERM ..................................................................1
2.1 Commencement of Term ..............................................1
2.2 Delay in Commencement .............................................2
3. RENT ..................................................................2
3.1 Initial Annual Rent ...............................................2
3.1.1 Prepaid Rent .............................................2
3.2 Additional Rent ...................................................2
3.3 No Reduction or Offset ............................................2
3.4 Definitions: ......................................................2
3.5 Rent Adjustment ...................................................4
3.6 Calculation and Payment ...........................................5
4. SECURITY DEPOSIT ......................................................5
5. USE ...................................................................5
5.1 Use ...............................................................5
5.2 Compliance with Law; Nuisance .....................................6
5.3 Insurance Cancellation ............................................6
5.4 Hazardous Substances ..............................................6
5.5 Environmental Laws ................................................8
(a) Compliance with Environmental Laws ......................8
(b) Hazardous Materials Handling ............................8
(c) Notices .................................................9
(d) Indemnification of Lessor ...............................9
(e) lndemnification of Lessee ..............................10
6. MAINTENANCE REPAIRS AND ALTERATIONS ..................................10
6.1 Lessor's Obligations .............................................10
6.2 Lessee's Obligations .............................................11
6.3 Alterations and Additions ........................................11
6.4 Surrender ........................................................11
6.5 Lessor's Rights ..................................................12
7. INSURANCE ............................................................12
7.1 Lessee's Liability Insurance .....................................12
7.2 Lessee's Worker's Compensation Insurance .........................12
7.3 Lessee's Fire and Extended Coverage Insurance ....................12
7.4 Policy Requirements .............................................12
7.5 Lessor's Rights ..................................................13
i
{PAGE}
7.6 Lessor's Insurance ...............................................13
7.7 Indemnification ..................................................13
7.8 Exemption of Lessor from Liability ...............................14
8. DAMAGE OR DESTRUCTION ................................................14
8.1 Partial Damage ...................................................14
8.2 Damage Near End of Term ..........................................15
8.3 Abatement of Rent; Lessee's Remedies .............................15
8.4 Insurance Proceeds Upon Termination ..............................15
8.5 Restoration ......................................................15
9. PERSONAL PROPERTY TAXES ..............................................16
10. UTILITIES ............................................................16
11. ASSIGNMENT AND SUBLETTING ............................................16
12. DEFAULTS; REMEDIES ...................................................18
12.1 Default by Lessee ...............................................19
12.2 Remedies for Default by Lessee ..................................19
12.3 Default by Lessor ...............................................20
12.4 Late Charges ....................................................21
13. CONDEMNATION OR RESTRICTION ON USE ...................................21
13.1 Eminent Domain .................................................21
13.2 Abatement of Rent ...............................................22
13.3 Temporaiy Taking ................................................22
13.4 Voluntary Sale as Taking ........................................22
14. BROKERS ..............................................................22
15. LESSOR'S LIABILITY ...................................................22
16. PARKING ..............................................................23
17. GENERAL PROVISIONS ...................................................24
17.1 Estoppel Certificate ............................................24
17.2 Severability ....................................................24
17.3 Time of Essence .................................................24
17.4 Captions ........................................................24
17.5 Notices .........................................................24
17.6 Waivers .........................................................25
17.7 Holding Over ....................................................25
17.8 Cumulative Remedies .............................................25
17.9 Inurement .......................................................25
17.10 Choice of Law ..................................................25
17.11 Subordination ..................................................25
17.12 Attorneys' Fees ................................................26
17.13 Lessor's Access ................................................26
17.14 Corporate Authority ............................................26
17.15 Surrender or Cancellation ......................................26
17.16 Entire Agreement ...............................................26
17.17 Signs ..........................................................27
ii
{PAGE}
17.18 Interest on Past Due Obligations ..............................27
17.19 Gender; Number ...............................................27
17.20 Recording of Lease ............................................27
17.21 Waiver of Subrogation ........................................28
17.22 Confidentiality of Lease ......................................28
17.23 Quiet Enjoyment ...............................................28
17.24 Window Coverage ...............................................28
17.25 Materials Storage Restrictions ...............................28
17.26 No Agency .....................................................29
17.27 Force Majeure .................................................29
17.28 Accord and Satisfaction .......................................29
17.29 Financial Statements ..........................................29
17.30 Supersedes Proposal to Lease ..................................29
17.31 Construction ..................................................30
17.32 Non-Disturbance Agreement .....................................30
18. TENANT IMPROVEMENTS ..................................................30
19. ONE TIME OPTION TO EXTEND ............................................30
20. APPRAISAL PROVISIONS .................................................31
iii
{PAGE}
EXHIBIT A - PREMISES
EXHIBIT B - RULES AND REGULATIONS
EXHIBIT C - GUARANTY OF LEASE
iv
{PAGE}
1. LEASE OF PREMISES
The Lessor hereby leases to the Lessee and the Lessee leases from the
Lessor for the term, at the rental, and upon all of the conditions set forth in
this Lease, the Premises identified in Item 1 of the Basic Lease Provisions,
together with the non-exclusive use, in common, with the Lessor and other
tenants of the Building and their respective invitees, of common areas in or
about the Building and the parking garage (if any) or parking areas adjoining
the Building. The Lessee and the Lessor have agreed on the square footage set
forth in Item 2 of the Basic Lease Provisions and each party will be bound by
Item 2 through the term of this Lease or any extension thereof. The
configuration of the Project and the location of the Building, Premises and
associated common and parking areas is indicated on Exhibit B. The size,
location and function of the buildings and related structures depicted here are
approximate. The configuration of the development, the design, size, function
and location of all other improvements, and the identity and location of other
tenants to the extent depicted are subject to change without notice for any
reason deemed sufficient by the owner. The Lessor reserves the right to alter
the configuration of the Project to construct additional improvements thereon,
to withdraw areas therefrom from time to time and alter the configuration of the
associated common and parking areas, provided that the number of parking spaces
intended for the Lesse's use, and the Lessee's general use and enjoyment of the
Premises shall not thereby be materially diminished. The Lessee shall be
allocated the number of parking spaces set forth in Item 9 of the Basic Lease
Provisions and the Lessee acknowledges that the Lessor shall have no
responsibility to supervise or police the usage of the parking lot by the
tenants of the Building. Nothing in this Lease shall cause the Lessor in any way
to be construed as an employer, employee, fiduciary, a partner, a joint venturer
or otherwise associated in any way with the Lessee in the operation of the
Premises, or to subject the Lessor to any obligation, loss, charge or expense
connection with or arising from the Lessee's operation or use of the Premises.
Pursuant to Section 1652 of the California Civil Code, it is understood
and agreed that the general intent and purpose of this Lease is that this Lease
shall be an absolute triple net lease with respect to the Lessor. The Lessee
shall pay its pro rata share of all insurance, utilities, all operating costs
for the Premises, the common areas of the Building, the Building and the land on
which it is situated. It is intended that the rental return to the Lessor shall
not be reduced, offset or diminished directly or indirectly by any cost, charge,
or expense due from the Lessee and others in connection with the Premises,
Building or land upon which it is situated, nor subject to suspension or
termination for any reason. It is acknowledged and agreed that all provisions of
this Lease shall be interpreted in a manner consistent with and subordinate to
such general intent and purpose.
2. TERM
2.1 Commencement of Term
(a) The term of the Lease shall be as shown in Item 5 of the
Basic Lease Provisions, commencing on the Commencement Date, which the Lessor
and the Lessee expect to be
{PAGE}
the Commencement Date as shown in Item 6 of the Basic Lease Provisions, but
which may be such other date as herein provided, and ending on the Termination
Date, unless sooner terminated pursuant to any provision hereof.
(b) Payment of rent shall commence on the Rent Commencement
Date.
(c) If delivery of possession occurs prior to the
CommencementDate, the term of this Lease shall commence on such date of delivery
of possession, but the Termination Date shall not be advanced.
2.2 Delay in Commencement. Notwithstanding the Commencement Date, if
for any reason the Lessor cannot deliver possession of the Premises to the
Lessee on or before said date, the Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of the Lessee hereunder. The Lessee shall not be obligated to pay
rent until delivery of possession of the Premises has occurred.
3. RENT
3.1 Initial Monthly Rent. The Lessee shall pay to the Lessor as rent
for the Premises an Initial Monthly Rent in the amount specified in Item 4 of
the Basic Lease Provisions in advance on the first day of each month, commencing
on the Rent Commencement Date specified in Item 6 of the Basic Lease Provisions.
3.1.1 Prepaid Rent. Upon Lease execution, the Lessee shall
deposit with the Lessor an amount representing the first (lst) month's rent as
provided in Item 4 of the Basic Lease Provisions.
3.2 Additional Rent. The Lessee shall reimburse the Lessor, as
additional rent, in the manner and at the times provided, for the Lessee's
proportionate share of all Building Operating Expenses and Common Area Operating
Expenses (as hereinafter defined) incurred by the Lessor. The Lessee's
proportionate share of such Building Operating Expenses and Common Area
Operating Expenses shall be based upon the Lessee's Building Percentage in the
case of Building operating Expenses, and upon the Lessee's Common Area
Percentage in the case of Common Area Operating Expenses, all as defined herein.
3.3 No Reduction or Offset. All Rent due under this Lease shall be
payable without deduction, abatement or offset.
3.4 Definitions: For purposes of this Article 3:
(a) The Lessee's Building Percentage is a percentage
calculated by dividing the Leased Area of the Premises, as shown in Item 2 of
the Basic Lease Provisions, by the leasable area of the Building, as is
stipulated to be as shown in Item 3 of the Basic Lease Provisions.
2
{PAGE}
(b) Building Operating Expenses shall mean the sum of all
expenses incurred by the Lessor in connection with the operation, repair and
maintenance of the Building, including, but not limited to, heating and air
conditioning; all Real Property Taxes (as hereinafter defined) imposed upon or
with respect to the Building and related improvements (exclusive of the land
underlying all such improvements); all fire and extended coverage, earthquake,
loss of rents, vandalism, malicious mischief and other insurance covering the
Building and losses suffered which fall below the insurance deductible;
utilities; materials and supplies; salaries, wages and other expenses incurred
with respect to the operation, repair and maintenance of the Building, the cost
of repainting, wall covering or recarpeting Common Areas of the Building;
security and fire protection; amortization of capital investments for
improvements which are designed to reduce operating costs, improve operations or
comply with governmental conservation or safety programs over such reasonable
period as the Lessor shall determine (together with interest at three (3)
percentage points above the discount rate of the Federal Reserve Bank of San
Francisco on the unamortized amount); and an amount equal to three percent (3%)
of the combined total of the gross receipts of the Rent, Building Operating
Expenses and Common Area Operating Expenses to cover the Lessor's administrative
and overhead expenses. Building Operating Expenses attributable to the utilities
and services furnished pursuant to Article 10 shall be apportioned among the
tenants of the Building receiving such services (excluding those tenants
furnishing or paying for their own utilities and janitorial services) based on
the respective leased areas occupied by such tenants.
(c) Lessee's Common Area Percentage is a percentage figure
calculated by the project architect by dividing the Leased Area of the Premises
by the total leasable area in all improvements, including the Building and other
buildings, shown on Exhibit B, during such year as is initially stipulated to be
as shown in Item 3 of the Basic Lease Provisions. Should the Building and/or
landscape area become a separate legal lot, or should additional improvements or
common area be added to or deleted from Exhibit B, the Lessor may, at its
option, calculate the Lessee's Common Area Percentage by comparing the common
area attributable to the Premises with the common area on such legal lot or
otherwise within Exhibit B as so revised.
(d) Common Area Operating Expenses shall mean the sum of all
expenses incurred by the Lessor in connection with the operation and maintenance
of driveways, landscaping, walkways, plazas, parking facilities, and perimeter
property including, but not limited to: all items described in Section 6.1
hereof; all Real Property Taxes (as hereinafter defined) imposed upon or with
respect to the land included within Exhibit B all public liability insurance
covering Exhibit B; and losses suffered which fall below the insurance
deductible; security and fire protection; salaries, wages and other expenses
incurred with respect to maintenance of the common areas, gardening,
landscaping, repaving, repainting and trash removal (excluding the cost of an on
site manager or officer manager); depreciation of equipment used in such
maintenance; amortization of capital investments for improvements which comply
with governmental conservation or safety programs over such reasonable period as
the Lessor shall determine (together with interest at three (3) percentage
points above the discount rate of the Federal Reserve Bank of San Francisco on
the unamortized amount). General overhead and depreciation of improvements shall
not be included in
3
{PAGE}
the expenses except as specifically set forth in the foregoing. Any governmental
surcharge, fee or assessment imposed with respect to the parking facilities
within Exhibit B shall, to the extent paid by the Lessor and not passed on to
the users of said parking facilities, be included in Common Area Operating
Expenses.
(e) Real Property Taxes shall mean all real and personal
property taxes and assessments incurred during any calendar year, including, but
not limited to: special and extraordinary assessments, meter and sewer rates and
charges, occupancy taxes or similar taxes imposed on or with respect to the real
or personal property, whether or not imposed on or measured by the rent payable
by the Lessee, and other governmental levies and charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind and
nature whatsoever relating to the real or personal property, and any gross
rental, license or business tax measured by or levied on rent payable or space
occupied. If, by law, any property taxes are payable, or may at the option of
the taxpayer be paid, in installments (whether or not interest shall accrue on
the unpaid balance of such property taxes), the Lessor may, at the Lessor's
option, pay the same and, in such event, any accrued interest on the unpaid
balance of such property taxes shall be deemed to be Real Property Taxes as
defined herein. Real Property Taxes shall also include all expenses reasonably
incurred by the Lessor in seeking a reduction by the taxing authorities of Real
Property Taxes applicable to the Project. Real Property Taxes shall not include
any capital levy, franchise, estate, inheritance, succession, gift or transfer
tax of the Lessor, or any income, profits or excess profits tax, assessment,
charge or levy upon the income of the Lessor; provided, however, that if at any
time during the term of this Lease under the laws of the United States or the
State of California, or any political subdivision of either, a tax or excise on
rents, space or other aspects of real property, is levied or assessed against
the Lessor, the same shall be deemed to be Real Property Taxes. If any such
property taxes upon the income of the Lessor shall be imposed on a graduated
scale, based upon the Lessor's aggregate rental income, Real Property Taxes
shall include only such portion of such property taxes as would be payable if
the rent payable with respect to the Building and Common Areas were the only
rental income of the Lessor subject thereto.
3.5 Rent Adjustment. As specified in Item 4 of the Basic Lease
Provisions, the amount of the monthly rental installment shall be increased, as
of each June 1 of the Lease term (commencing June 1, 2001), by an amount equal
to Four Percent (4%) of the monthly rent for the prior year. Therefore, the
amount of such monthly rental installments shall be as follows:
Calendar Year Adjustment Date Monthly Rental Installment
2001 June 1,2001 $17,915.04
2002 June 1,2002 $18,631.64
2003 June 1,2003 $19,376.91
2004 June 1,2004 $20,151.98
4
{PAGE}
3.6 Calculation and Payment. Annual rent shall be payable to the Lessor
without deduction or offset, in lawful money of the United States at the
Lessor's address herein or to such other persons or at such other places as the
Lessor designates in writing. Rent payable for any period for less than one (1)
month shall be prorated based upon a thirty (30) day month.
Prior to the commencement of the lease term and of each December
thereafter, the Lessor shall give the Lessee a written estimate of the Lessee's
share of Building and Common Area Operating Expenses for the ensuing year or
portion thereof. The Lessee shall pay such estimated amount to the Lessor in
equal monthly installments, in advance. Within ninety (90) days after the end of
each calendar year, the Lessor shall furnish to the Lessee a statement showing
in reasonable detail the actual Building and Common Area Operating Expenses
incurred by the Lessor during such period, and the parties shall within thirty
(30) days make any payment or allowance necessary to adjust the Lessee's
estimated payment to the Lessee's actual proportionate share as shown by such
annual statement. Any amount due the Lessee shall be credited against
installments next coming due under this paragraph.
4. SECURITY DEPOSIT
Concurrently with the Lessee's sexecution of this Lease, the Lessee
shall deposit with the Lessor the sum specified in Item 7 of the Basic Lease
Provisions as security for the faithful performance by the Lessee of all
covenants and conditions of this Lease. If the Lessee shall breach or default in
the performance of any covenants or conditions of this Lease, including the
payment of rent, the Lessor may use, apply or retain the whole or any part of
such security deposit for the payment of any rent in default or for any other
sum which the Lessor may spend or be required to spend by reason of the Lessee's
default. If the Lessor so uses or applies all or any portion of said deposit,
the Lessee shall, within ten (10) days after written demand therefor, deposit
cash with the Lessor in an amount sufficient to restore said deposit to the full
amount herein above stated and the Lessee's failure to do so shall be a material
breach of this Lease. Should the Lessee comply with all covenants and conditions
of this Lease, the security deposit or any balance thereof shall be returned to
the Lessee (or at the option of the Lessor, to the last assignee of the Lessee's
interest in this Lease) at the expiration of the term. The Lessee shall not be
entitled to interest on the security deposit and the Lessor shall have the right
to commingle said security deposit with other funds of the Lessor. Should the
Lessor sell its interest in the Premises, the Lessor may transfer to the
purchaser thereof the then unexpended or unappropriated deposit and thereupon
the Lessor shall be discharged from any liability for such funds.
5. USE
5.1 Use. The Premises shall be used and occupied for the purposes
described in Item 1 of the Basic Lease Provisions, permitted under applicable
ordinances and other Governmental requirements, the covenants, conditions and
restrictions affecting the Project, as the same may be amended from time to
time, and the Rules and Regulations as the Lessor may from time to time
5
{PAGE}
reasonably adopt for the safety, care and cleanliness of the Building and the
Project or the preservation of good order. The Rules and Regulations presently
in effect are attached hereto as Exhibit C. The Lessor shall not be responsible
to the Lessee for the non-performance of any of said Rules and Regulations, or
non-compliance with said covenants, conditions and restrictions, by any other
tenant of the Building.
5.2 Compliance with Law; Nuisance. The Lessee, at the Lessee's sole
cost and expense, shall comply promptly and at all times with all laws,
requirements, ordinances, statutes, and regulations of all municipal, state or
federal authorities, or any board of fire insurance underwriters, or other
similar bodies, now in force or which may hereafter be in force, pertaining to
the Building and the Premises and the occupancy thereof, including any law that
requires alteration, maintenance or restoration of the Premises as the result of
the Lessee's use thereof. The judgment of any court of competent jurisdiction,
or the admission of the Lessee in any action or proceeding against the Lessee,
whether the Lessor is a party thereto or not, that the Lessee violated any such
ordinances or statutes in the use of the Premises shall be conclusive of that
fact as between the Lessor and the Lessee. The Lessee, at its sole expense,
shall also comply with all requirements for fire extinguishers or fire
extinguisher systems required in the Premises.
The Lessee shall not commit, or suffer to be committed, any waste of
the Premises, or any nuisance, annoyance or other unreasonable annoyance which
may disturb the quiet enjoyment of adjoining premises or of the Building by the
owners or occupants thereof.
5.3 Insurance Cancellation. Notwithstanding the provisions of Paragraph
5.1 above, the Lessee shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein, including all uses permitted under
Section 5.1 above, which will in any way increase the existing rate of or affect
any fire or other insurance upon the Building, or any other part thereof, or any
of its contents, and if the Lessee's use of the Premises causes an increase in
said insurance rates, the Lessee shall pay as additional rent the amount of such
increase. The Lessee shall be in default under this Lease should the Lessee
cause the cancellation of fire or other insurance upon the Building or Property
or should the Lessee fail to pay any increased insurance rate attributable to
the Lessee's use of the Premises. In determining whether increased premiums are
a result of the Lessee's use or occupancy of the Premises or Building, a
schedule issued by the Lessor's insurer computing the insurance rate on the
Premises or Building, or the leasehold improvements showing the various
components of such rate, shall be conclusive evidence of the several items and
charges which make up such rate. The Lessee shall promptly comply with all
reasonable requirements of the insurance authority or of any insurer now or
hereafter in effect relating to the Premises.
5.4 Hazardous Substances. Any corrosive, flammable, hazardous or other
special waste or materials shall be handled or disposed of as directed by
applicable state, Federal, County and City regulations. The Lessee shall handle,
store or dispose of such materials in a careful and prudent manner. At the
termination of the Lease, or any option period thereof, the Lessee shall fully
clean the Premises in such a manner that no residue of such materials or waste
shall remain on the Premises. The Lessee shall notify the appropriate
governmental authority of the presence and
6
{PAGE}
amount of any such material or waste, and shall comply with all conditions
imposed by such authority. The Lessee shall contact the appropriate governmental
authority prior to occupancy to determine the existence of any records for the
Building and/or Premises. To the extent required by law, specifically thirty
(30) days prior to occupancy, the Lessee shall submit a Hazardous Materials
Management Plan (HMMP) and a Hazardous Materials Floor Plan (HMF) to the Lessor
and the appropriate governmental authority for approval. These plans shall be
attached in full to this Lease.
The HMMP shall include the following:
(a) The company name, address and contact person.
(b) General facility description with map showing location of
all buildings and structures.
(c) Facility hazardous material storage map showing the
location of each proposed hazardous material storage area and access to such
facilities. The map shall be updated annually by the occupant and submitted by
January 1 each year.
(d) A floor plan showing the location of each hazardous
material storage area, storage area access, and the location of emergency
equipment.
The HMF shall include the following:
(a) Hazardous Materials Handling Report describing the safe
handling of hazardous materials to prevent accidents.
(b) Separation or Hazardous Material Report outlining the
methods to be utilized to insure separation and protection of hazardous
materials from such factors that could cause fire, explosion, spills, etc.
(c) Inspection and Record Keeping Plan indicating the
procedures for inspecting each storage facility. An authorized record of
inspection shall be maintained by the Lessee.
(d) Employee Training Program to insure that employees know
how to safety handle hazardous materials.
(e) Hazardous Materials Contingency Plan that clearly
describes appropriate response procedures and measures in case of an accident.
(f) A floor plan identifying the location and quantity of each
hazardous material, including the chemical name and quantity limit for each
class.
7
{PAGE}
The Lessee shall pay inspection fees, based on the hourly inspection
rate, for an environmental audit to be conducted by the appropriate governmental
authority, or the Lessor at the termination of the Lease and prior to
reoccupation of the Building and/or the Premises, if hazardous materials were in
use on the Building and/or Premises. The appropriate governmental authority
shall perform or the Lessee shall arrange for such an audit in a timely manner
to prevent economic hardship to the Lessor and shall certify that the Premises
are available for reoccupation, or shall specify clean-up measures that will
render the Premisis safe for reoccupation. The Lessee shall be responsible for
any clean-up that may be required as a result of the audit, if such items are
attributable to the Lessee's use of the Premises.
Should the Lessee fail to comply with any duty set forth in this
Section 5.4, the Lessor may, in addition to all other remedies now or hereafter
provided by this Lease, or by law, perform such duty or make good such default,
and any amounts which the Lessor shall advance pursuant thereto shall be repaid
by the Lessee to the Lessor on demand.
5.5 Environmental Laws.
(a) Compliance with Environmental Laws. The Lessee, in its
conduct of business on or in any activity, work, thing done, permitted or
suffered by the Lessee, its agents, contractors, employees or invitees on the
Premises, shall at all times and in all respects comply with all federal, state
and county laws, ordinances and regulations (the "Hazardous Materials Laws")
relating to industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, disposal or transportation of any oil,
flammable explosives, asbestos, radioactive materials or waste, or other
hazardous, toxic, contaminated or polluting materials, substances, or wastes,
including, without limitation, any "hazardous substances," "hazardous wastes,"
"hazardous materials," or "toxic substances" under any such laws, ordinances or
regulations (collectively, the "Hazardous Materials"). Such laws, ordinances or
regulations shall include, but not be limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq; the Resource Conservation and Recovery Act of
1976,42 U.S.C. Section 6901 et seq; the Clean Water Act, 33 U.S.C. Section 466,
et seq; the Safe Drinking Water Act, 14 U.S.C. Section 1401, et seq; the
Superfund Amendment and Reauthorization Act of 1986; Public Law 99-499, 100
Stat. 1613; the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq, as
amended; those substances defined as "hazardous waste", "extremely hazardous
waste", "restricted hazardous waste" or "hazardous substance" in the Hazardous
Waste Control Act, Section 25100 et seq of the California Health & Safety Code;
and those materials and substances similarly described in the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136, et seq., as
amended, the Atomic Energy Act of 1954,42 U.S.C. Section 2011, et seq., as
amended; the Porter Cologne Water Quality Control Act, Section 1300 et seq. of
the Califomia Health & Safety Code; and any regulations adopted and publications
promulgated pursuant to said Laws.
(b) Hazardous Materials Handling. The Lessee shall, at its own
expense, procure, maintain in effect and comply with all conditions of any and
all permits, licenses and other
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governmental and regulatory approvals required for the Lessee's use of the
Premises, including, without limitation, discharge of (appropriately treated)
materials or wastes into or through any sanitary sewer serving the Premises.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, the Lessee shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes. The Lessee shall in all respects handle, treat,
deal with and manage any and all Hazardous Materials in, on, under or about the
Premises in total conformity with all applicable Hazardous Materials Laws and
prudent industry practices regarding management of such Hazardous Materials.
Upon expiration or earlier termination of the term of the Lease, the Lessee
shall cause all Hazardous Materials to be removed from the Premises and
transported for use, storage or disposal in accordance and compliance with all
applicable Hazardous Materials Laws. The Lessee shall not take any remedial
action in response to the presence of any Hazardous Materials in or about the
Premises or the Building, nor enter into any settlement agreement, consent,
decree or other compromise in respect to any claims relating to any Hazardous
Materials in any way connected with the Premises or the Building, without first
notifying the Lessor of the Lessee's intention to do so and affording the Lessor
ample opportunity to appear, intervene or otherwise appropriately assert and
protect the Lessor's interest with respect thereto.
(c) Notices. The Lessee shall immediately notify the Lessor in
writing of any of the following activities relating to the Lessee's operations
on the Premises: (i) any enforcement, clean-up, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any Hazardous
Materials Laws; (ii) any claim made or threatened by any person against the
Lessee, the Premises or the Building relating to damage, contribution, cost
recovery compensation, loss or injury resulting from or claimed to result from
any Hazardous Materials in, on or removed from the Premises or the Building; and
(iii) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in or removed from the Premises or the
Building, including any complaints, notices, warnings or asserted violations in
connection therewith. The Lessee shall also supply to the Lessor as promptly as
possible, and in any event within five (5) business days after the Lessee first
receives or sends the same, with copies of all claims, reports, complaints,
notices, warnings or asserted violations relating in any way to the Premises,
the Building or the Lessee's use thereof. The Lessee shall promptly deliver to
the Lessor copies of hazardous waste manifests reflecting the legal and proper
disposal of all Hazardous Materials removed from the Premises.
(d) Indemnification of Lessor. The Lessee shall indemnify,
defend, protect, and hold the Lessor, and each of the Lessor's partners,
employees, agents, attorneys, successors and assigns, free and harmless from and
against any and all claims, liabilities, penalties, forfeitures, losses or
expenses (including attorneys' fees) for death of or injury to any person or
damage to any property whatsoever arising from or caused in whole or in part,
directly or indirectly, by (A) the presence in, on, under or about the Premises
or the Building, or discharge in or from the Premises or the Building of any
Hazardous Materials or the Lessee's use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous
Materials
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to, in, on, under, about or from the Premises or the Building, but only to the
extent such Hazardous Materials are present as a result of actions of the
Lessee, its officers, employees, invitees, assignees, contractors, or agents, or
(B) the Lessee's failure to comply with any Hazardous Materials Law. The
Lessee's obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary repair,
clean-up or detoxification or decontamination of the Premises or the Building,
and the preparation and implementation of any closure, remedial action or other
required plans in connection therewith, and shall survive the expiration or
earlier termination of the term of the Lease. For purposes of the release and
indemnity provisions hereof, any acts or omissions of the Lessee, or by
officers, invitees, employees, agents, assignees, contractors or subcontractors
of the Lessee or others acting for or on behalf of the Lessee (to the extent any
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