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EXHIBIT 10.3
LEASE AGREEMENT
THIS LEASE, made this 6TH day of APRIL, 1999, between NORTH PASTORIA
PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP, hereinafter called LANDLORD, and
ALLIANCE FIBER OPTIC PRODUCTS, A CALIFORNIA CORPORATION (A.K.A. "AFOP"),
hereinafter called TENANT.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "A",
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:
ALL OF THAT CERTAIN 11,716+/- SQUARE FOOT BUILDING LOCATED AT 000-000
XXXXX XXXXXXXX XXXXXX, XXXXXXXXX, XXXXXXXXXX. SAID PREMISES ARE LEASED
ON AN "AS-IS" BASIS AND INCLUDE THE EXTERIOR AND THOSE PARKING SPACES
SHOWN IN EXHIBIT "A" AND THE INTERIOR IMPROVEMENTS SHOWN IN EXHIBIT "B"
AND FURTHER DETAILED IN PARAGRAPH 41, ATTACHED HERETO AND MADE A PART
HEREOF.
The word "Premises" as used throughout this Lease is hereby defined to
include the nonexclusive use of sidewalks and driveways. The leased area of the
Premises shall be measured from outside of exterior walls to outside of exterior
walls, and shall include any atriums, covered entrances or egresses and covered
loading areas. Said letting and hiring is upon and subject to the terms,
covenants and conditions and restrictions hereinafter set forth and Tenant
covenants as a material part of the consideration for this Lease to perform and
observe each and all of said terms, covenants and conditions. This Lease is made
upon the conditions of such performance or observance.
1. USE: Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances and only for the purpose
of: FIBER OPTIC PRODUCT SALES, MARKETING, GENERAL OFFICE OPERATION, LIGHT
MANUFACTURING, DISTRIBUTION AND FOR THE DIRECTLY RELATED LEGAL USES THEREOF AND
FOR NO OTHER PURPOSE. Tenant shall not do or permit to be done in or about the
Premises nor bring or keep or permit to be brought or kept in or about the
Premises anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Premises or neighboring premises or injure
or annoy them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. No sale by auction shall be
permitted on the Premises. Tenant shall not place any loads upon the floors,
walls, or ceiling which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated by Landlord. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the
Premises. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall that may appear unsightly from
outside the Premises. No loudspeaker or other device, system or apparatus which
can be heard outside the Premises shall be used in or at the Premises without
the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and
hold Landlord harmless against any loss, expense, damage, reasonable attorneys'
fees, or liability arising out of failure to comply with any applicable law.
Tenant shall comply with any term, covenant, condition, or restriction
("TCC&R's") affecting the Premises. The provisions of this paragraph are for the
benefit of Landlord only and shall not be construed to be for the benefit of any
tenant or occupant of the Premises.
2. TERM:
A. The term of this Lease shall be for a period of FIVE (5) YEARS
(unless sooner terminated as hereinafter provided) and, subject to Paragraphs 2B
and 3, shall commence on the 1ST day of JUNE, 1999 and end on the 31ST day of
MAY, 2004.
B. Possession of the Premises shall be deemed tendered and the term of
the Lease shall commence when the first of the following occurs:
(a) One day after a Certificate of Occupancy is granted by the
proper governmental agency, or if the governmental agency having jurisdiction
over the area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed;
or,
(b) Upon the occupancy of the Premises by any of Tenant's
operating personnel.
3. POSSESSION: If Landlord, for any reason whatsoever, cannot deliver possession
of said Premises to Tenant at the commencement of said term, as hereinbefore
specified, the Lease shall not be void or voidable; no obligation of Tenant
shall be affected thereby; nor shall Landlord or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom; but in that event the
commencement and termination dates of the Lease, and all other dates affected
thereby shall be revised to conform to the date of Landlord's delivery of
possession, as specified in Paragraph 2B, above. The above is, however, subject
to the provision that the period of delay and delivery of the Premises shall not
exceed thirty (30) days from the commencement date herein (except those delays
caused by Acts of God, strikes, war, utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease.
4. RENT:
A. BASIC RENT. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand, and
Landlord agrees to accept as Basic Rent for the leased Premises the
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total sum of ONE MILLION THREE HUNDRED THOUSAND FOUR HUNDRED SEVENTY-SIX AND
00/100 DOLLARS ($1,300,476.00) in lawful money of the United States of America,
payable as follows:
UPON EXECUTION OF THIS LEASE AGREEMENT, THE SECURITY DEPOSIT IN THE
AMOUNT OF FORTY-FIVE THOUSAND AND 00/100 DOLLARS ($45,000.00) SHALL BE
DUE IN ADDITION TO THE MONTHLY RENT FOR JUNE, 1999, IN THE AMOUNT OF
NINETEEN THOUSAND THREE HUNDRED THIRTY-ONE AND 40/100 DOLLARS
($19,331.40) FOR A TOTAL DUE OF SIXTY-FOUR THOUSAND THREE HUNDRED
THIRTY-ONE AND 40/100 DOLLARS ($64,331.40). PLEASE SEE PARAGRAPH 4(F).
THE SUM OF NINETEEN THOUSAND THREE HUNDRED THIRTY-ONE AND 40/100 DOLLARS
($19,331.40) SHALL BE DUE ON OR BEFORE THE FIRST DAY OF JUNE, 1999 AND A
LIKE SUM DUE ON OR BEFORE THE FIRST OF EACH AND EVERY MONTH THEREAFTER
THROUGH AND INCLUDING MAY, 2000.
THE SUM OF TWENTY THOUSAND FIVE HUNDRED THREE AND 00/100 DOLLARS
($20,503.00) SHALL BE DUE ON OR BEFORE THE FIRST DAY OF JUNE, 2000 AND A
LIKE SUM DUE ON OR BEFORE THE FIRST OF EACH AND EVERY MONTH THEREAFTER
THROUGH AND INCLUDING MAY, 2001.
THE SUM OF TWENTY-ONE THOUSAND SIX HUNDRED SEVENTY-FOUR AND 60/100
DOLLARS ($21,674.60) SHALL BE DUE ON OR BEFORE THE FIRST DAY OF JUNE,
2001 AND A LIKE SUM DUE ON OR BEFORE THE FIRST OF EACH AND EVERY MONTH
THEREAFTER THROUGH AND INCLUDING MAY, 2002.
THE SUM OF TWENTY-TWO THOUSAND EIGHT HUNDRED FORTY-SIX AND 20/100 AND
DOLLARS ($22,846.20) SHALL BE DUE ON OR BEFORE THE FIRST DAY OF JUNE,
2002 AND A LIKE SUM DUE ON OR BEFORE THE FIRST OF EACH AND EVERY MONTH
THEREAFTER THROUGH AND INCLUDING MAY, 2003.
THE SUM OF TWENTY-FOUR THOUSAND SEVENTEEN AND 80/100 DOLLARS
($24,017.80) SHALL BE DUE ON OR BEFORE THE FIRST DAY OF JUNE, 2003 AND A
LIKE SUM DUE ON OR BEFORE THE FIRST OF EACH AND EVERY MONTH THEREAFTER
THROUGH AND INCLUDING MAY, 2004.
B. TIME FOR PAYMENT. Full monthly rent is due in advance on the first
day of each calendar month. In the event that the term of this Lease commences
on a date other than the first day of a calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord as rent for the
period from such date of commencement to the first day of the next succeeding
calendar month that proportion of the monthly rent hereunder which the number of
days between such date of commencement and the first day of the next succeeding
calendar month bears to THIRTY (30). In the event that the term of this Lease
for any reason ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month
to and including the last day of the term hereof that proportion of the monthly
rent hereunder which the number of days between said first day of said last
calendar month and the last day of the term hereof bears to THIRTY (30).
C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default TEN (10)
DAYS. Said late charge shall equal TEN PERCENT (10%) of each rental payment so
in default.
D. ADDITIONAL RENT: Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in Paragraph 9, and
(b) All insurance premiums relating to the Premises, as set forth in
Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
rent.
The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within FIVE (5) DAYS after presentation of invoice from
Landlord or Landlord's agent setting forth such Additional Rent and/or (ii) at
the option of Landlord, Tenant shall pay to Landlord monthly, in advance,
Tenant's prorata share of an amount estimated by Landlord to be Landlord's
approximate average monthly expenditure for such Additional Rent items, which
estimated amount shall be reconciled at the end of each calendar year as
compared to Landlord's actual expenditure for said Additional Rent items, with
Tenant paying to Landlord, upon demand, any amount of actual expenses expended
by Landlord in excess of said estimated amount, or Landlord refunding to Tenant
(providing Tenant is not in default in the performance of any of the terms,
covenants and conditions of this Lease) any amount of estimated payments made by
Tenant in excess of Landlord's actual expenditures for said Additional Rent
items.
The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of Additional Rent for such
calendar year and shall be prorated in the proportion which the number of days
in such calendar year preceding such expiration or termination bears to 365.
E. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at:
NORTH PASTORIA PARTNERS, 0000 XXXXXX XXXXXX, XXXX XXXX, XX 00000-0000
TELEPHONE: (000) 000-0000 FACSIMILE: (000) 000-0000
or to such other person or to such other place as Landlord may from time to time
designate in writing.
F. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of FORTY-FIVE THOUSAND AND 001/00
DOLLARS ($45,000.00). IN ADDITION TO THE SECURITY DEPOSIT, THE MONTHLY RENT FOR
JUNE, 1999, IN THE AMOUNT OF NINETEEN THOUSAND THREE HUNDRED THIRTY-ONE AND
40/100 DOLLARS ($19,331.40) SHALL BE DUE AND PAYABLE FOR A TOTAL SUM OF
SIXTY-FOUR THOUSAND THREE HUNDRED THIRTY-ONE AND 40/100 DOLLARS ($64,331.40).
Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all the terms, covenants and conditions of this Lease
to be kept and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to, the
provisions relating to the payment of rent and any of the monetary sums due
herewith, Landlord may (but shall not be required to) use, apply or retain all
or any part of this Security Deposit for
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the payment of any other amount which Landlord may spend by reason of Tenant's
default or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant's default. If any portion of said Deposit is so
used or applied, Tenant shall, within TEN (10) DAYS after written demand
therefor, deposit cash with Landlord in the amount sufficient to restore the
Security Deposit to it's original amount. Tenant's failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep this
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Deposit. If Tenant fully and faithfully performs
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or at Landlord's option, to the
last assignee of Tenant's interest hereunder) at the expiration of the Lease
term and after Tenant has vacated the Premises. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said Deposit to
Landlord's successor in interest whereupon Tenant agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor.
5. ACCEPTANCE AND SURRENDER OF THE PREMISES: By entry hereunder, Tenant accepts
the Premises as being in good and sanitary order, condition and repair and
accepts the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls painted, or cleaned so that they
appear freshly painted, and repaired and replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed; all broken, marred or
nonconforming ceiling tiles replaced; all windows washed; the air conditioning
and heating systems serviced by a reputable and licensed service firm and in
good operating condition and repair; the plumbing and electrical systems and
lighting in good order and repair, including replacement of any burned out or
broken light bulbs or ballasts; the lawn and shrubs in good condition including
the replacement of any dead or damaged plantings; the sidewalk, driveways and
parking areas in good order, condition and repair; together with all
alterations, additions and improvements which may have been made in, to or on
the Premises (except moveable trade fixtures installed at the expense of Tenant)
except that Tenant shall ascertain from Landlord within THIRTY (30) DAYS before
the end of the term of this Lease whether Landlord desires to have the Premises
or any part or parts thereof restored to their condition and configuration as
when the Premises were delivered to Tenant and if Landlord shall so desire, then
Tenant shall restore said Premises or such part or parts thereof before the end
of this Lease at Tenant's sole cost and expense. Tenant, on or before the end of
the term or sooner termination of this Lease, shall remove all of the Tenant's
personal property and trade fixtures from the Premises, and all property not so
removed on or before the end of the term or sooner termination of this Lease
shall be deemed abandoned by Tenant and title to same shall thereupon pass to
Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant, at
Tenant's sole cost, and repair any damage caused by such removal at Tenant's
sole cost. If the Premises are not surrendered at the end of the term or sooner
termination of this Lease, Tenant shall indemnify Landlord against loss or
liability resulting from the delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay. Nothing contained herein shall be construed as an extension of
the term hereof or as a consent of Landlord to any holding over by Tenant. The
voluntary or other surrender of this Lease or the Premises by Tenant or a mutual
cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies
or operate as an assignment to Landlord of all or any such subleases or
subtenancies.
6. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant (such consent not to be
unreasonably withheld). but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part of the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Tenant to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, air conditioning, partitioning, drapery, carpeting, and floor
installations made by Tenant, together with all property that has become an
integral part of the Premises, shall not be deemed trade fixtures. Tenant agrees
that it will not proceed to make such alterations or additions, without having
obtained consent from Landlord to do so, and until FIVE (5) DAYS from the
receipt of such consent, in order that Landlord may post appropriate notices to
avoid any liability to contractors or material suppliers for payment for
Tenant's improvements. Tenant will at all times permit such notices to be posted
and to remain posted until the completion of work. Tenant shall, if required by
Landlord, secure at Tenant's own cost and expense, a completion and lien
indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within TEN (10)
DAYS after the filing thereof, at the cost and expense of Tenant. Any exceptions
to the foregoing must be made in writing and executed by both Landlord and
Tenant.
7. TENANT MAINTENANCE: Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, or replacement, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, janitorization, all windows (interior and
exterior), window frames, plate glass and glazing (destroyed by accident or act
of third parties), truck doors, plumbing systems (such as water and drain lines,
sinks, toilets, faucets, drains showers and water fountains), electrical systems
(such as panels, conduits, outlets, lighting fixtures, lamps, bulbs, tubes and
ballasts), heating and air conditioning systems (such as compressors, fans, air
handlers, ducts, mixing boxes, thermostats, time clocks, boilers, heaters,
supply and return grills), structural elements and exterior surfaces of the
building, store fronts, roofs, downspouts, all interior improvements within the
premises including but not limited to wall coverings, window coverings, carpet,
floor coverings, partitioning, ceilings, doors (both interior and exterior),
including closing mechanisms, latches, locks, skylights (if any), automatic fire
extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to
landscaping, sidewalks, driveways, parking lots including striping and sealing,
sprinkler systems, lighting, ponds, fountains, waterways, and drains. Tenant
agrees to provide carpet xxxxxxx under all rolling chairs or to otherwise be
responsible for wear and tear of the carpet caused by such rolling chairs if
such wear and tear exceeds that caused by normal foot traffic in surrounding
areas. Areas of excessive wear and tear shall be replaced at Tenant's sole
expense upon Lease termination. Tenant hereby waives all rights under, and
benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of the
California Civil Code and under any similar law, statute or ordinance now or
hereafter in effect. In the event any of the above maintenance responsibilities
apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such maintenance responsibilities and charges shall be allocated to
the leased Premises by square footage or other equitable basis as calculated and
determined by Landlord.
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8. UTILITIES: Tenant shall pay promptly, as the same become due, all charges for
water, gas, electricity, telephone, telex and other electronic communication
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. In the event the above charges may apply to any other tenant(s) of
Landlord where there is common usage with other tenant(s), such charges shall be
allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.
Tenant shall indemnify Landlord for any payment for any utilities, which
Landlord pays on Tenant's behalf.
9. TAXES:
A. As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord, or if Landlord so directs, directly to the Tax
Collector, all Real Property Taxes relating to the Premises. In the event the
Premises leased hereunder consist of only a portion of the entire tax parcel,
Tenant shall pay to Landlord Tenant's proportionate share of such real estate
taxes allocated to the leased Premises by square footage or other reasonable
basis as is calculated and determined by Landlord. If the tax billing pertains
100% to the leased Premises, and Landlord chooses to have Tenant pay said real
estate taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior
to delinquency, the applicable real property taxes and assessments pertaining to
the leased Premises, and failure to receive a xxxx for taxes and/or assessments
shall not provide a basis for cancellation of or non-responsibility for payment
of penalties for nonpayment or late payment by Tenant. The term "Real Property
Taxes", as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Premises)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied against, or with respect to the value, occupancy or use of, all
or any portion of the Premises (as now constructed or as may at any time
hereafter be constructed, altered, or otherwise changed) or Landlord's interest
therein; any improvements located within the Premises (regardless of ownership);
the fixtures, equipment and other property of Landlord, real or personal, that
are an integral part of and located in the Premises; or parking areas, public
utilities, or energy within the Premises; (ii) all charges, levies or fees
imposed by reason of environmental regulation or other governmental control of
the Premises; and (iii) all costs and fees (including reasonable attorneys'
fees) incurred by Landlord in reasonably contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax. If at any time
during the term of this Lease the taxation or assessment of the Premises
prevailing as of the commencement date of this Lease shall be altered so that in
lieu of or in addition to any Real Property Tax described above there shall be
levied, assessed or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause) an
alternate or additional tax or charge (i) on the value, use or occupancy of the
Premises or Landlord's interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Premises, on Landlord's business of leasing
the Premises, or computed in any manner with respect to the operation of the
Premises, then any such tax or charge, however designated, shall be included
within the meaning of the term "Real Property Taxes" for purposes of this Lease.
If any Real Property Tax is based upon property or rents unrelated to the
Premises, then only that part of such Real Property tax that is fairly allocable
to the Premises shall be included within the meaning of the term "Real Property
Taxes". Notwithstanding the foregoing, the term "Real Property Taxes" shall not
include estate, inheritance, gift or franchise taxes of Landlord or the federal
or state net income tax imposed on Landlord's income from all sources.
B. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for and shall pay
TEN (10) DAYS before delinquency, taxes levied against any personal property or
trade fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant, Tenant shall upon demand, as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right, in the name of Landlord and with Landlord's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
10. LIABILITY INSURANCE: Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of comprehensive general liability
insurance for bodily injury and property damage occurring in, or about the
Premises, including parking and landscaped areas, in the amount of TWO MILLION
DOLLARS ($2,000,000.00) combined single limit. Such insurance shall be primary
and noncontributory as respects any insurance carried by Landlord. The policy or
policies effecting such insurance shall name Landlord as additional insureds,
and shall insure any liability of Landlord, contingent or otherwise, as respects
acts or omissions of Tenant, its agents, employees or invitees or otherwise by
any conduct or transactions of any of said persons in or about or concerning the
Premises, including any failure of Tenant to observe or perform any of its
obligations hereunder; shall be issued by an insurance company admitted to
transact business in the State of California; and shall provide that the
insurance effected thereby shall not be canceled, except upon THIRTY (30) DAYS'
prior written notice to Landlord. A copy of said policy should be delivered to
Landlord. If, during the term of this Lease, in the considered opinion of
Landlord's Lender, insurance advisor, or counsel, the amount of insurance
described in this Paragraph 10 is not adequate, Tenant agrees to increase said
coverage to such reasonable amount as Landlord's Lender, insurance advisor, or
counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKERS' COMPENSATION INSURANCE:
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures, and leasehold improvements within the
leased Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured.
Tenant shall also maintain a policy or policies of workers' compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.
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12. PROPERTY INSURANCE: Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord Tenant's proportionate share (allocated to the leased Premises
by square footage or other equitable basis as calculated and determined by
Landlord) of the cost of, policy or policies of insurance covering loss or
damage to the Premises (excluding routine maintenance and repairs and incidental
damage or destruction caused by accidents or vandalism for which Tenant is
responsible under Paragraph 7) in the amount of the full replacement value
thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of ONE
HUNDRED PERCENT (100%) PERCENT of TWELVE (12) MONTHS' Basic Rent, plus sums paid
as Additional Rent. If such insurance cost is increased due to Tenant's use of
the Premises, Tenant agrees to pay Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.
Landlord and Tenant do each hereby respectively release the other, to
the extent of insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause
of such fire or casualty; provided, however, that if the insurance policy of
either releasing party prohibits such waiver, then this waiver shall not take
effect until consent to such waiver is obtained. If such waiver is so
prohibited, the insured party affected shall promptly notify the other party
thereof.
13. INDEMNIFICATION: Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the roof, walls, basement or other portion of the
Premises but excluding, however, the negligence of Landlord, its agents,
servants, employees, invitees, or contractors of which negligence Landlord has
knowledge and reasonable time to correct. Except as to injury to persons or
damage to property the principal cause of which is the negligence of Landlord,
Tenant shall hold Landlord harmless from and defend Landlord against any and all
expenses, including reasonable attorneys' fees, in connection therewith, arising
out of any injury to or death of any person or damage to or destruction of
property occurring in, on or about the Premises, or any part thereof, from any
cause whatsoever.
14. COMPLIANCE: Tenant at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
office; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether by Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its own
cost and expense, comply with any and all requirements pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering
requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises. Tenant will be responsible for complying with
any and all applicable laws governing its use and operation on the Premises.
15. LIENS: Tenant shall keep the Premises free from any liens arising out of
work performed, materials furnished or obligation incurred by Tenant. In the
event that Tenant shall not, within TEN (10) DAYS following the imposition of
such lien, cause the same to be released of record, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.
16. ASSIGNMENT AND SUBLETTING: Tenant shall not assign, transfer, or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. As a condition for
granting this consent to any assignment, transfer, or subletting, Landlord may
require that Tenant agrees to pay Landlord, as additional rent, all rents or
additional consideration received by Tenant from its assignees, transferees, or
subtenants in excess of the rent payable by Tenant to Landlord hereunder. Tenant
shall, BY NINETY (90) DAYS' written notice, advise Landlord of its intent to
assign or transfer Tenant's interest in the Lease or sublet the Premises or any
portion thereof for any part of the term hereof. Within THIRTY (30) DAYS after
receipt of said written notice, Landlord may, in its sole discretion, elect to
terminate this Lease as to the portion of the Premises described in Tenant's
notice on the date specified in Tenant's notice by giving written notice of such
election to terminate. If no such notice to terminate is given to Tenant within
said THIRTY (30) DAY period, Tenant may proceed to locate an acceptable
sublessee, assignee, or other transferee for presentment to Landlord for
Landlord's approval, all in accordance with the terms, covenants, and conditions
of this Paragraph 16. If Tenant intends to sublet the entire Premises and
Landlord elects to terminate this Lease, this Lease shall be terminated on the
date specified in Tenant's notice. If, however, this Lease shall terminate
pursuant to the foregoing with respect to less than all the Premises, the rent,
as defined and reserved hereinabove shall be adjusted on a pro rata basis to the
number of square feet retained by Tenant, and this Lease as so amended shall
continue in full force and effect. In the event Tenant is allowed to assign,
transfer or sublet the whole or any part of the Premises, with the prior written
consent of Landlord, no assignee, transferee or subtenant shall assign or
transfer this Lease, either in whole or in part, or sublet the whole or any part
of the Premises, without also having obtained the prior written consent of
Landlord. A consent of Landlord to one assignment, transfer, hypothecation,
subletting, occupation or use by any other person shall not release Tenant from
any of Tenant's obligations hereunder and be deemed to be a transfer,
hypothecation, subletting, occupation or use without such consent shall be void
and shall constitute a breach of this Lease by Tenant and shall, at the option
of Landlord exercised by written notice to Tenant, terminate this Lease. The
leasehold estate under this Lease shall not, nor shall any interest therein, be
assignable for any purpose by operation of law without the written consent of
Landlord. As a condition to its consent, Landlord may require Tenant to pay all
expenses in connection with the assignment, and Landlord may require Tenant's
assignee or transferee (or other assignees or transferees) to assume in writing
all of the obligations under this Lease and for Tenant to remain liable to
Landlord under this Lease.
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17. SUBORDINATION AND MORTGAGES: In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Tenant hereby irrevocably appoints Landlord the attorney in fact of
Tenant to execute, deliver and record any such instrument or instruments for and
in the name and on behalf of Tenant. Notwithstanding any such subordination,
Tenant's possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of
the provisions set forth in this Lease.
18. ENTRY BY LANDLORD: Landlord reserves, and shall at all reasonable times
have, the right to enter the Premises to inspect them; to perform any services
to be provided by Landlord hereunder; to make repairs or provide any services to
a contiguous tenant(s); to submit the Premises to prospective purchasers,
mortgagors or tenants; to post notices of non-responsibility; and to alter,
improve or repair the Premises or other parts of the building, all without
abatement of rent, and may erect scaffolding and other necessary structures in
or through the Premises where reasonably required by the character of the work
to be performed; provided, however, that the business of Tenant shall be
interfered with to the least extent that is reasonably practical. Any entry to
the Premises by Landlord for the purposes provided for herein shall not be
construed or deeded to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or
any portion thereof.
19. BANKRUPTCY AND DEFAULT: The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within THIRTY (30)
DAYS after an order for relief in a liquidation action or within THIRTY (30)
DAYS after the commencement of any action.
Within THIRTY (30) DAYS after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.
Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any rights or privileges hereunder be an asset
of Tenant under any bankruptcy, insolvency or reorganization proceedings.
The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a default hereunder by
Tenant upon expiration of the appropriate grace period hereinafter provided.
Tenant shall have a period of FIVE (5) DAYS from the date of written notice from
Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of TEN (10) DAYS from the date of written
notice from Landlord within which to cure any other default under this Lease.
Upon an uncured default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the net 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 rental loss for the same period
that Tenant proves could be reasonably avoided, as computed pursuant to
subsection (b) of said section 1951.2. Any proof by Tenant under subparagraphs
(2) and (3) of Section 1951.2 of the California Civil Code of the amount of
rental loss that could be reasonably avoided shall be made in the following
manner: Landlord and Tenant shall each select a licensed real estate broker in
the business of renting property of the same type and use as the Premises and in
the same geographic vicinity. Such two real estate brokers shall select a third
licensed real estate broker, and the three licensed real estate brokers so
selected shall determine the amount of the rental loss that could be reasonably
avoided from the balance of the term of this Lease after the time of award. The
decision of the majority of said licensed real estate brokers shall be final and
binding upon the parties hereto.
(b) The rights and remedies provided by California Civil Code
Section 1951.4 which allows Landlord to continue the Lease in effect and to
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, for so long as Landlord does not terminate
Tenant's right to possession. Acts of maintenance or preservation, efforts to
re-let the Premises, or the appointment of a receiver upon Landlord's initiative
to protect its interest under this Lease shall not constitute a termination of
Tenant's right to possession.
(c) The right to terminate this Lease by giving notice to Tenant
in accordance with applicable law.
(d) The right and power, as attorney-in-fact for Tenant, to enter
the Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the account
of Tenant, and to sell such property and apply such proceeds therefrom pursuant
to applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its reasonable sole discretion may deem advisable, with the
right to make alterations and repairs to the Premises. Upon each subletting, (i)
Tenant shall be immediately liable to pay Landlord, in addition to indebtedness
other than the rent due hereunder, the reasonable cost of such subletting,
including, but not limited to, reasonable attorneys' fees, and any real estate
commissions actually paid, and the cost of such reasonable alterations and
repairs incurred by Landlord and the amount, if any, by which the rent hereunder
for the period of such subletting (to the extent such period does not exceed the
term hereof) exceeds the amount to be paid as rent for the Premises for such
period or (ii) at the option of Landlord, rents received from such subletting
shall be applied in payment of future rent as the same becomes due hereunder. If
Tenant has been credited with any rent to be received by such subletting under
option (i) and such rent shall not be promptly paid to Landlord by the
subtenant(s), or if such rentals received from such subletting under option (ii)
during any month be less that to be paid during that month by Tenant hereunder,
Tenant shall pay any such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. For all purposes set forth in this subparagraph
(d), Landlord is hereby irrevocably appointed attorney-in-fact for Tenant, with
power of substitution. No taking possession of the Premises by Landlord, as
attorney-in-fact for Tenant, shall be construed as an election on its part to
terminate this Lease
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unless a written notice of such intention be given to Tenant. Notwithstanding
any such subletting without termination, Landlord may at any time hereafter
elect to terminate this Lease for such previous breach.
(e) The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted by Landlord as attorney-in-fact for Tenant pursuant to subparagraph (d),
above.
20. ABANDONMENT: Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate or surrender
the Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.
21. DESTRUCTION: In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental damage
and destruction caused from vandalism and accidents for which Tenant is
responsible under Xxxxxxxxx 0, Xxxxxxxx may, at its option:
(a) Rebuild or restore the Premises to their condition prior to
the damage or destruction, or
(b) Terminate this Lease.
If Landlord does not give Tenant notice in writing within THIRTY (30)
DAYS from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within ONE HUNDRED
EIGHTY (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
FIFTEEN (15) DAYS' prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixture, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of
the California Civil Code.
In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33-1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. In the event Tenant causes the destruction of the Premises,
Tenant shall pay the deductible portion of Landlord's insurance proceeds.
22. CONDEMNATION:
22.1 DEFINITION OF "CONDEMNATION." As used in this Lease, the term
"Condemnation" means a permanent taking through (a) exercise of any government
power (by legal proceedings or otherwise) by any public or quasi-public
authority or by any other party having the right to eminent domain (Condemnor)
or (b) a voluntary or transfer by Landlord to any Condemnor, either under threat
or exercise of eminent domain by a Condemnor or while legal proceedings for
Condemnation are pending.
22.2 EFFECT ON RIGHTS AND OBLIGATIONS. If, during the Lease Term
(including renewal thereof or holdover thereunder) there is any Condemnation of
all or part of the Premises, building, or real property on which the Premises
and buildings are constructed, the rights and obligations of the parties shall
be determined under this Section 22, and Rent shall not be affected or abated
except as expressly provided in this Section. Landlord shall notify Tenant in
writing of any Condemnation within THIRTY (30) DAYS after the later of (a) the
filing of a complaint by Condemnor or (b) the final agreement and determination
by Landlord and Condemnor of the extent of the taking (Condemnation Notice). For
purposes of notice(s) under Section 22, notice begins to run from the date of
actual delivery of notice in person or by overnight courier.
22.3 TERMINATION OF LEASE.
22.3.1 DEFINITION OF "TERMINATION DATE." The "Termination Date"
shall be the earliest of:
(a) The date on which Condemnor takes possession of the
property that is subject to the Condemnation;
(b) The date on which title to the property subject to the
Condemnation is vested in Condemnation is vested in
Condemnor; or,
(c) If Landlord has elected to terminate, the date on which
Landlord requires possession of the property in
connection with the Condemnation, as specified in
written notice delivered to Tenant no less than THIRTY
(30) DAYS before that date.
22.3.2 AUTOMATIC TERMIOATION. If the Premises are totally taken
by Condemnation, this Lease shall terminate as of the Termination Date,
and the Condemnation Award shall be allocated between Landlord and
Tenant in accordance with subsection 19.4.
22.3.3 LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the
option to terminate this Lease if:
(a) TWENTY PERCENT (20%) or more of the Net Rentable Area,
or of the Premises is taken through Condemnation;
(b) Any other areas within APN 000-00-000 providing access to
the Premises are taken through Condemnation.
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To elect to terminate the Lease under this subsection 22.3.3,
Landlord shall provided written notice of its election (Landlord's
Taking Termination Notice) to Tenant within THIRTY (30) DAYS after the
later of (a) the filing of a complaint by Condemnor or (b) the final
agreement and determination by Landlord and Condemnor of the extent of
the taking. In that event, this Lease shall be terminated on the
Termination Date, and all Rent shall be prorated to that date.
22.3.4 TENANT'S RIGHT TO TERMINATE. In the event of a partial
condemnation of part of the Premises, if the portion of the Premises
taken through Condemnation is so substantial that the Tenant can no
longer reasonably conduct its business, Tenant shall have the privilege
of terminating this Lease within the sixty (60) days immediately after
the date of such taking or conveyance). Upon Tenant's timely providing
written notice to Landlord of its intentions so to terminate this Lease
shall terminate on the last day of the calendar month next following the
month in which such notice is given, upon payment by Tenant of their
rent from the date of such taking or conveyance to the date of
termination.
22.3.5 PRORATION OF RENT. If this Lease is terminated under this
Section 22, the termination shall be effective on the Termination Date,
and Landlord shall prorate Rent to that date. Tenant shall be obligated
to pay Rent for the period up to, but not including, the Termination
Date as prorated by Landlord. Landlord shall return to Tenant prepaid
Rent (if any) allocable to any period on or after the Termination Date.
22.4 ALLOCATION OF AWARD.
22.4.1 LANDLORD'S RIGHT TO AWARD. In connection with or arising
out of any Condemnation and/or a related relocation:
(a) Landlord shall be entitled to receive all compensation
and anything of value awarded, paid, or received in
settlement or otherwise (Award); and
(b) Tenant irrevocably assigns and transfers to Landlord all
rights to and interests in the Award and fully releases
and relinquishes any and all claims to, right to make a
claim on, or interest in the Award, including but not
limited to any amount attributable to any excess of the
market value of the Premises for the remainder of the
Lease Term over the present value as of the Termination
date of the Rent payable for the remainder of the Term
(commonly referred to as the "bonus value" of the
Lease).
22.4.2 TENANT'S RIGHT TO COMPENSATION. Subsection 22.4.1
notwithstanding, Tenant shall have the right to make a separate claim in
the Condemnation proceeding for:
(a) Reasonable removal and relocation costs for any
leasehold furniture, fixtures, and equipment that Tenant
has the right to remove under the Lease (which does not
include theater screens) and elects to remove;
(b) Loss of goodwill, as long as any recovery by Tenant for
loss of goodwill does not include any amount for any
loss due to below market rents at the condemned premises
(whether considered "bonus value" or otherwise); and
(c) Relocation costs under Government Code section 7262, the
claim for which Tenant may pursue by separate action
independent of this Lease.
Tenant shall have the right to negotiate directly with Condemnor
for the recovery of the portion of the Award to which Tenant is entitled
under this subsection 22.4.2.
22.5 TEMPORARY TAKING. If a temporary taking of part of the Premises
occurs through (a) the exercise of any government power (by legal proceedings or
otherwise) by Condemnor or (b) a voluntary sale or transfer by Landlord to any
Condemnor, either under threat of exercise of eminent domain by a Condemnor or
while legal proceedings for condemnation are pending, the entire Award relating
to the temporary taking shall be and remain the property or Landlord.
23. SALE OR CONVEYANCE BY LANDLORD: In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such transfer
is concerned, Tenant agrees to look solely to the responsibility of the
successor in interest of such transferor in and to the Premises and this Lease.
This Lease shall not be affected by any such sale or conveyance, and Tenant
agrees to attorn to the successor in interest of such transferor.
24. ATTORNMENT TO LENDER OR THIRD PARTY: In the event the interest of Landlord
in the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to attorn to the
purchaser at any such foreclosure sale and to recognize such purchaser as the
Landlord under this Lease. In the event the lien of the deed of trust securing
the loan from a Lender to Landlord is prior and paramount to the Lease, this
Lease shall nonetheless continue in full force and effect for the remainder of
the unexpired term hereof, at the same rental herein reserved and upon all the
other terms, conditions and covenants herein contained.
25. HOLDING OVER: Any holding over by Tenant after expiration or other
termination of this Lease with the written consent of Landlord delivered to
Tenant shall not constitute a renewal or extension of the Lease or give Tenant
any rights in or to the leased premises except as expressly provided in this
Lease. Any holding over after the expiration or other termination of the term of
this Lease, with consent of Landlord, shall be construed to be a tenancy from
month-to-month, on the same terms and conditions herein specified insofar as
applicable except that the monthly rent shall be increased to an amount equal to
ONE HUNDRED FIFTY PERCENT (150%) of the monthly rent required during the last
month of the Lease term.
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26. CERTIFICATE OF ESTOPPEL: Tenant shall at any time upon not less than TEN
(10) DAYS' prior written notice to Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.
27. CONSTRUCTION CHANGES: It is understood that the description of the Premises
and the location of ductwork, plumbing and other facilities therein are subject
to such minor changes as Landlord or Landlord's architect determines to be
desirable in the course of construction of the Premises, and no such changes
shall affect this Lease or entitle Tenant to any reduction of rent hereunder or
result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of
such drawings rests with Tenant.
28. RIGHT OF LANDLORD TO PERFORM: All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fall to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue FOR FIVE (5) DAYS
after written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obliged
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment on performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.
29. ATTORNEYS' FEES:
A. In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgment.
B. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including
reasonable attorneys' fees.
30. WAIVER: The waiver by either party of the other party's failure to perform
or observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
31. NOTICES: All notices, demands, requests, advices or designations which may
be or are required to be given by either party to the other hereunder shall be
in writing. All notices, demands, requests, advices or designations by Landlord
to Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at:
NORTH PASTORIA PARTNERS, 0000 XXXXXX XXXXXX, XXXX XXXX, XX 00000-0000
TELEPHONE: (000) 000-0000 FACSIMILE: (000) 000-0000
Each notice, request, demand, advice or designation referred to in this
paragraph shall be deemed received on the date of the personal service or
mailing thereof in the manner herein provided, as the case may be.
32. EXAMINATION OF LEASE: Submission of the instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than THIRTY (30) DAYS after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than THIRTY (30) DAYS are required for performance, then Landlord shall not
be in default if Landlord commences performance within such THIRTY (30) DAY
period and thereafter diligently prosecutes the same to completion.
34. CORPORATE AUTHORITY: If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the
by-laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
THIRTY (30) DAYS after
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execution of this Lease, deliver to Landlord a certified copy of the resolution
of the Board of Directors of said corporation authorizing or ratifying the
execution of this Lease.
35. LIMITATION OF LIABILITY: In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:
(a) the sole and exclusive remedy shall be against Landlord and
Landlord's assets;
(b) no partner of Landlord shall be sued or named as a party in
any suit or action (except as may be necessary to secure jurisdiction of the
partnership);
(c) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the partnership);
(d) no partner of Landlord shall be required to answer or
otherwise plead to any service of process;
(e) no judgment will be taken against any partner of Landlord;
(f) any judgment taken against any partner of Landlord may be
vacated and set aside at any time without hearing;
(g) no writ of execution will ever be levied against the assets
of any partner of Landlord;
(h) these covenants and agreements are enforceable by both
Landlord and also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements shall
be applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or at common law.
36. SIGNS: No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice to
and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on, or about the Premises, upon expiration or sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall, which may appear unsightly from
outside the Premises.
37. HAZARDOUS MATERIALS/USE OF PREMISES:
A. As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property, including all of those materials and substances designated
as hazardous or toxic by the city in which the Premises are located, the U.S.
Environmental Protection Agency, the Consumer Product Safety Commission, the
Food and Drug Administration, the California Water Resources Control Board, the
Regional Water Quality Control Board, San Francisco Bay Region, the California
Air Resources Board, CAL/OSHA Standards Board, California Department of Food and
Agriculture, the California Department of Health Services, and any federal
agencies that have overlapping jurisdiction with such California agencies, or
any other governmental agency now or hereafter authorized to regulate materials
and substances in the environment. Without limiting the generality of the
foregoing, the term "Hazardous Material" shall include all of those materials
and substances defined as "Toxic Materials" in Sections 66680 through 66685 of
Title 22 of the California Administrative Code, Division 5, Chapter 30, as the
same shall be amended from time to time, or any other materials requiring
remediation under federal, state or local statutes, ordinances, regulations or
policies.
B. Tenant agrees not to introduce any Hazardous Material in, on or
adjacent to the Premises without complying with all applicable federal, state
and local laws, rules, regulations, policies and authorities relating to the
storage, use or disposal, and cleanup of Hazardous Materials, including, but not
limited to, the obtaining of proper permits.
C. Tenant shall immediately notify Landlord of any inquiry, test,
investigation, or enforcement proceeding by or against Landlord or the Premises
concerning a Hazardous Material. Tenant acknowledges that Landlord, as the owner
of the Premises, shall have the right, at its election, in its own name or as a
Tenant's agent, to negotiate, defend, approve, and appeal, at Tenant's expense,
any action taken or order issued with regard to a Hazardous Material by an
applicable governmental authority.
D. If Tenant's storage, use or disposal of any Hazardous Material in, on
or adjacent to the Premises results in any contamination of the Premises, the
soil or surface or groundwater requiring remediation under federal, state or
local statutes, ordinances regulations or policies, Tenant agrees to cleanup the
contamination. Tenant further agrees to indemnify, defend and hold Landlord
harmless from and against any claims, suits, causes of action, costs, fees,
including attorneys' fees and costs, arising out of or in connection with any
cleanup work, inquiry or enforcement proceeding in connection therewith, and any
Hazardous Materials currently or hereafter used, stored or disposed of by Tenant
or its agents, employees, contractors or invitees on or about the Premises.
E. Notwithstanding any other right or entry granted to Landlord under
this Lease, Landlord shall have the right to enter the Premises or to have
consultants enter the Premises throughout the term of this Lease for the purpose
of determining: (1) whether the Premises are in conformity with federal, state
and local statutes, regulations, ordinances and policies including those
pertaining to the environmental condition of the Premises, (2) whether Tenant
has complied with this Paragraph (37) and the Lease, and (3) the corrective
measures, if any, required of Tenant to ensure the safe use, storage and
disposal of Hazardous Materials, or to remove Hazardous Materials in accordance
with applicable laws. Tenant agrees to provide access and reasonable assistance
for such inspections. Such inspections may include, but are not limited to,
entering the Premises or adjacent property with drill rigs or other machinery
for the purpose of obtaining laboratory samples. Landlord shall not be limited
in the number of such inspections during the term of this Lease. If such
consultants determine that Tenant has contaminated the Premises with Hazardous
Materials used, stored or caused to be used or stored by Tenant, Tenant shall
reimburse Landlord for the cost of such inspections within TEN (10) DAYS of
receipt of a written statement thereof. Tenant shall, in a timely manner, at its
expense, remove such Hazardous Materials or otherwise comply with the
recommendations of such consultants to the reasonable satisfaction of Landlord
and any applicable governmental agencies. The right granted to Landlord herein
to inspect the Premises shall not create a duty on Landlord's part to inspect
the Premises, or liability of Landlord for Tenant's use, storage or disposal of
Hazardous Materials, it being understood that Tenant shall be solely responsible
for all liability in connection therewith.
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F. Tenant shall surrender the Premises to Landlord upon the expiration
or earlier termination of this Lease free of Hazardous Materials used, stored or
caused to be used or stored by Tenant on the Premises, and in a condition which
complies with all governmental statutes, ordinances, regulations and policies,
recommendations of consultants hired by Landlord, and such other reasonable
requirements as may be imposed by Landlord with respect to those Hazardous
Materials used, stored or caused to be used or stored by Tenant.
G. Tenant's obligations herein shall survive termination of this Lease.
H. Tenant agrees to provide Landlord with a Hazardous Material audit or
list as to any Hazardous Materials Tenant used, stored, disposed of or caused to
be on the Premises during the term or earlier occupancy of this Lease, within
FIVE (5) DAYS of the written request by Landlord for said audit.
38. "ZERO-TOLERANCE" DRUG CLAUSE:
Tenant covenants and agrees, as an express condition of continued
occupancy of the demised Premises, not to cause, permit or allow the use of any
controlled or illegal substances on the Premises, including, without implied
limitation, those substances defined by virtue of Health & Safety Code of the
State of California Section 11007.
Tenant covenants and agrees that any such activity on more than one
occasion shall constitute a nuisance and Landlord will be entitled, but not
limited, 4o all remedies provided for under California Code of Civil Procedure,
Section 1164(4). Tenant acknowledges that such prohibited activity will, at the
sole discretion of Landlord, result in termination of Tenant's lease and subject
Tenant to eviction upon service of a THREE (3) DAY notice to quit. Further
Tenant agrees that breach of this covenant may not be cured by subsequent acts
of the Tenant.
Tenant agrees to defend, indemnify and hold Landlord harmless from and
against any and all acts, which Landlord may perform in, attempted or actual
enforcement of this provision or in any acts or omissions with respect to its
policy of keeping the Premises "drug free". Tenant hereby adopts a "drug free"
policy for the Premises, and covenants to advise law enforcement officers and
Landlord when there is any actual, possible or suspected use or sale of
controlled substances on or near the subject Premises and to take all reasonable
steps to xxxxx the same. In so doing Tenant shall not place Tenant, nor any of
Tenant's employees, guests or agents in any risk of physical danger but shall
defer to law enforcement officers.
39. MISCELLANEOUS AND GENERAL PROVISIONS:
A. USE OF BUILDING NAME. Tenant shall not, without the written consent
of Landlord, use the name of the building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
B. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
C. DEFINITION OF TERMS. "Premises" includes the space leased hereby and
any improvements now or hereafter installed therein or attached thereto. The
term "Landlord" or any pronoun used in place thereof includes the plural as well
as the singular and the successors and assigns of Landlord. The term "Tenant" or
any pronoun used in place thereof includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and
permitted assigns, according to the context hereof.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations.
D. QUITCLAIM. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within TEN (10) DAYS
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in the
State of California, to remove the cloud or encumbrance created by this Lease
from the real property of which Tenant's Premises are a part.
E. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this Agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.
F. RECORDING. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.
G. AMENDMENTS FOR FINANCING. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenant's rights hereunder are not substantially affected.
H. ADDITIONAL PARAGRAPHS. Paragraphs 40 THROUGH 42 are added hereto and
are included as a part of this Lease.
I. CLAUSES, PLATS AND RIDERS. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.
J. DIMINUTION OF LIGHT, AIR OR VIEW. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect this
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
K. SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and inure to
the benefit of the heirs executors, administrators, successors and assigns (as
permitted pursuant to the provisions of this Lease) of the parties hereto.
L. GENDER. All references to gender shall be deemed to include all
others, as the context may require.
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M. HEADINGS. The captions contained herein are for convenience only and
shall be disregarded in the construction of this Lease.
N. TIME OF ESSENCE. Time is of the essence of this Lease and of each and
all of its provisions.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
LANDLORD: TENANT:
NORTH PASTORIA PARTNERS, ALLIANCE FIBER OPTIC PRODUCTS, INC.
A CALIFORNIA LIMITED PARTNERSHIP (A.K.A. "AFOP"), A CALIFORNIA CORPORATION
/s/ Xxxxxxx Xxxx /s/ Xxxxx X. Xxxxx
-------------------------------- ------------------------------------------
Xxxxxxx Xxxx Xxxxx X. Xxxxx
Managing Partner President
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ADDITIONAL PARAGRAPHS
40. GENERAL WARRANTY: Landlord warranties that the building's HVAC, plumbing,
electrical and roof systems will be in good operating condition at the
commencement of this Lease. Landlord further warranties these building systems
for a period of SIXTY (60) DAYS from the date of occupancy. As per this Lease
Agreement, it is Tenant's responsibility to keep and maintain these systems in
good working condition throughout the term of this Lease and to surrender these
systems in good working condition at the termination of this Lease as specified
hereinabove.
41. LANDLORD IMPROVEMENTS: In consideration of this Lease Agreement, Landlord
will provide the following changes, modifications, and/or additions to the
Premises, prior to Tenant's occupancy. (See Exhibit "B" attached hereto and made
part hereby for the area associated with each designated item.)
1. Replace current building entry-door system with a center-opening
two-door system.
2. Remove front lobby separating wall and texture all walls to be
similar.
3. Remove rear building separating wall.
4. Paint, add new light fixtures and generally clean up bathroom areas.
5. Add one (1) door in rear area of building demising wall.
6. Remove two (2) walls and double-door system
7. Remove double doors and replace with solid wall.
8. Relocate double doors slightly to right.
9. Install four (4) offices as shown on Exhibit "B". - office doors
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10. Install two (2) offices as shown on Exhibit "B". - office doors with
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11. Carpet all front office areas and rear right area as indicated.
12. Clean and/or replace dirty HVAC register outlets as needed. (Not
shown on Exhibit "B".)
13. Repair and/or replace all dirty and/or damaged ceiling tiles to
achieve uniform ceiling grid (Not shown on Exhibit "B".)
14. Remove two doors and fill in wall at those locations. Create one
cased opening on right side to match existing left side opening.
42. AMERICANS WITH DISABILITY ACT (ADA): Tenant will not be responsible for ADA
(Americans with Disabilities Act) upgrades to the premises unless said upgrades
are triggered by Tenant's construction, alterations and/or additions to the
Premises. Tenant will be 100% responsible for any and all ADA upgrades and or
compliance with any and all governmental or regulatory agencies, triggered by
Tenants use of, or actions on the premises as stated herein above.
(THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.)
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EXHIBIT A TO LEASE AGREEMENT
[FLOOR PLAN DIAGRAM]
15
EXHIBIT B TO LEASE AGREEMENT
[FLOOR PLAN DIAGRAM]
