SECOND SEQ CHAPTER \h \r 1COMMERCIAL LEASE AGREEMENT
Exhibit 10.2
SECOND SEQ CHAPTER \h \r 1COMMERCIAL LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into November 1, 2010, by and between The Xxxxxx Family Trust, whose address is 0000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, (hereinafter referred to as “Landlord”), and Orange 00 Xxxxx Xxxxxxx Inc., a California corporation (formerly known as “Spy Optic, Inc.”), whose address is 0000 Xxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, (hereinafter referred to as “Tenant”).
Section 1. Leased Premises. Landlord, in consideration of the rents to be paid and the covenants, conditions and agreements to be performed and observed by the Tenant, does hereby lease to the Tenant and the Tenant does hereby lease and take from the Landlord the property commonly known as 0000 Xxx Xxxxxx Xxxxx, which consists of approximately 32,551 square feet, located in the County of San Diego, City of Carlsbad and the State of California, together with, as part of the parcel, all improvements located thereon (the “Leased Premises”).
Section 2. Condition – As Is. Tenant currently occupies the Premises pursuant to a Commercial Lease Agreement dated May 2005 and extensions thereof and prior to that occupied the Premises pursuant to a Sublease Agreement dated September 6, 2002, by and between Landlord and Xxxxxx Corporation (“Xxxxxx”), subject to a Master Lease dated May 9, 1995 (“Master Lease”) covering, inter alia, the Leased Premises, by and between Xxxxxx and Landlord. Tenant hereby expressly acknowledges that it is familiar with the Premises, having occupied the Premises pursuant to the Master Lease and the Sublease for a period of more than eight years, and accepts the Leased Premises “AS IS”.
Section 2. Commencement Date. The “Commencement Date” shall mean November 1, 2010.
Section 3. Expiration Date. The “Expiration Date” shall mean December 31, 2013.
this Lease or any renewal or extension thereof without any agreement in writing between Landlord and Tenant with respect hereto, such occupancy shall not be deemed to extend or renew the term of the Lease, but such occupancy shall continue as a tenancy at will, from month to month, upon the covenants, provisions and conditions herein contained. During any such hold over period, the rental shall be one-hundred and twenty five percent (125%) the rental in effect during the term of this Lease as extended or renewed, prorated and payable for the period of such occupancy.
The Tenant agrees to pay the Landlord and the Landlord agrees to accept, during the term hereof, at such place as the Landlord shall from time to time direct by notice to the Tenant, rent at the following rates and times:
Reference to Base Rent hereunder shall not be implied or construed to the effect that the obligation to pay rent hereunder is for any term shorter than the Lease Term set forth hereunder, plus any extensions as may be agreed upon.
Section 1. The Tenant currently occupies the Premises pursuant to a Commercial Lease Agreement dated May 2005 and extensions thereof, under which Tenant made, and Landlord is
currently holding a security deposit of $25,000.
Section 2. All or any portion of the security deposit may be used, as reasonably necessary, to: (i) cure Tenant’s default in payment of Rent, late charges, non-sufficient funds (“NSF”) fees, or other sums due; (ii) repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant; (iii) broom clean the Premises, if necessary, upon termination of tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH’S RENT. If all or any portion of the security deposit is used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant. Within 30 days after Landlord receives possession of the Premises, Landlord shall: (i) furnish Tenant an itemized statement indicating the amount of any security deposit received and the basis for its disposition, and (ii) return any remaining portion of security deposit to Tenant.
Section 3. No interest will be paid on security deposit, unless required by local ordinance.
ARTICLE V - CONDITION OF THE LEASED PREMISES
Section 1. Condition – AS IS. Tenant hereby expressly acknowledges that it is familiar with the Premises, having occupied the Premises pursuant to the Commercial Lease Agreement, Master Lease and the Sublease for a period of more than eight years, and accepts the Premises “AS IS”. Tenant hereby acknowledges: (i) that it has occupied the Premises for more than eight years prior to the execution of this lease and has had the opportunity to satisfy itself with respect to the condition of the Premises, including, but not limited to, the utilities, the electrical, mechanical, and fire sprinkler systems, security, environmental aspects, compliance with applicable laws, codes and ordinances, and the current and future suitability of the Premises for Tenant’s intended use; (ii) that Tenant has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to Tenant’s occupancy of the Premises and/or the Term of the Lease; (iii) that neither Landlord nor any of Landlord’s agents have made any oral or written representations or warranties with respect to such matters other than as expressly set forth in this Lease; and (iv) that nothing herein, including the acceptance of the Premises in AS IS condition, shall be deemed or construed to constitute a waiver of Tenant’s obligations to maintain, repair and restore the Premises under the terms of the Sublease, the original Commercial Lease Agreement dated May 2005 and this Second Commercial Lease Agreement.
Section 1. Personal Property Taxes. The Tenant shall pay prior to delinquency all taxes levied against any leasehold interest of the Tenant, Tenant owned improvements, Trade Fixtures, furnishings, equipment and all personal property of Tenant owned or placed by the Tenant in the Leased Premises. When possible, Tenant shall cause its Trade Fixtures, furnishings, equipment and all personal property of Tenant to be assessed separately from the real property of Landlord. If any of Tenant’s said persona property shall be assessed with landlord’s real property, Tenant shall pay Landlord the Taxes attributable to Tenant within ten (10) days after the written statement setting forth the taxes applicable to Tenant’s property, unless previously paid by
Tenant pursuant to the terms of this Article.
Section 2. Real Estate Taxes. During the continuance of this Lease Landlord shall deliver to Tenant a copy of any real estate taxes and assessments against the Leased Property. From and after the Commencement Date, the Tenant shall pay all Real Property Taxes applicable to the Lease premises during the Term of this Lease. All such payments shall be made not less than ten (10) days prior to the delinquency date of the applicable installment. Tenant shall furnish Landlord with satisfactory evidence that such taxes have been paid. If any such taxes paid by Tenant shall cover any period of time prior to the Commencement date or after the Expiration Date or earlier termination hereof, Tenant’s share of such taxes shall be equitably prorated to cover only the period of time within the tax fiscal year that this Lease is in effect, and Landlord shall reimburse Tenant for any overpayment after such proration. If Tenant fails to pay and Real Property Taxes required by this Lease to be paid by Tenant, Landlord shall have the right to pay the same, and Tenant shall reimburse Landlord therefor on demand, together with any interest and penalties lawfully imposed thereon as a result of Tenant’s failure to make the timely payment thereof, which shall be levied upon the Leased Premises during the term of this Lease.
Section 3. Advance Payment of Real Property Taxes. In order to insure payment when due and before delinquency of any Real Property Taxes, Landlord reserves the right, at Landlord’s option, to estimate current Real Property Taxes applicable to the Leased Premises, and to require such current year’s Real Property Taxes to be paid in advance to Landlord by Tenant, either (I) in a lump sum payment equal to the installment due at least twenty (20) days prior to the applicable delinquency date; or (ii) monthly in advance with the payment of the Base Rent. If Landlord elects to require payment monthly in advance, the monthly payment shall be that equal monthly amount which, over the number of months remaining before the month in which the applicable tax installment would become delinquent (and without interest thereon), would provide a fund large enough to fully discharge before delinquency the estimated installment of taxes to be paid. When the actual amount of the applicable tax xxxx is known, the amount of such equal monthly payment shall be adjusted as required to provide the fund needed to pay the applicable taxes before delinquency. If the amounts paid to Landlord by Tenant under the provisions of this paragraph are insufficient to discharge the obligations of Tenant to pay such Real Property Taxes as such become due, Tenant shall pay Landlord, upon Landlord’s demand, such additional sums as are necessary to pay such obligations. All money paid to Landlord under this paragraph may be mingled with other money of Landlord and shall not bear interest. In the event of a breach by Tenant in the performance of any obligations of Tenant under this Lease, then any balance of funds paid to Landlord under the provisions of this paragraph may at the option of Landlord, be treated as an additional Security Deposit.
Section 4. Definition of Real Property Taxes. As used herein, the term “Real Property Taxes” shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed upon the Leased Premises by any authority having the direct or indirect to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, levied against any legal or equitable of Landlord in the Leased Premises or in the real property of which the Leased Premises are a part, Landlord’s right to rent or other income
therefrom and/or Landlord’s business of leasing the Leased Premises. The term “Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring, or changes in applicable law taking effect, during the Term of this Lease, including, but not limited to, a change in the ownership of the Leased Premises or in the improvements thereon, the execution of this Lease, or any modification, amendment or transfer thereof, and whether or not contemplated by the parties.
Section 5. Contest of Taxes. The Tenant, at its own cost and expense, may, if it shall in good faith so desire, contest by appropriate proceedings the amount of any personal or real property tax. The Tenant may, if it shall so desire, endeavor at any time or times, by appropriate proceedings, to obtain a reduction in the assessed valuation of the Leased Premises for tax purposes. In any such event, if the Landlord agrees, at the request of the Tenant, to join with the Tenant at Tenant’s expense in said proceedings and the Landlord agrees to sign and deliver such papers and instruments as may be necessary to prosecute such proceedings. Notwithstanding the foregoing, Tenant shall be required to pay all Real Property Taxes and personal property taxes, as set forth herein, no less than twenty (20) days prior to the applicable delinquency date.
Section 1. Utilities. Tenant shall pay for all water, sanitation, sewer, electricity, light, heat, gas, power, fuel, janitorial, and other services incident to Tenant’s use of the Leased Premises together with any taxes thereon, whether or not the cost thereof be a charge or imposition against the Leased Premises. If any such services are not separately metered to Tenant, Tenant shall pay a reasonable proportion, to be determined by Landlord, of all charges jointly metered with other premises.
ARTICLE IX - INSURANCE; INDEMINTY
Section 1. Payment for Insurance. Tenant shall secure Liability Insurance, Property Insurance and Tenant’s Property Insurance as section in Sections 2 through 4, following. In the event that Tenant either fails to secure such insurance or fails to provide Landlord with satisfactory written evidence that all such insurance is in force, Landlord shall become the insuring party and shall be entitled to secure such Liability Insurance, Property Insurance and Tenant’s Property Insurance. Regardless of whether the Landlord or the Tenant is the insuring party, Tenant shall pay for all insurance required under the terms of this Lease except to the extent of the cost attributable to liability insurance carried by Landlord in excess of $1,000,000 per occurrence. In the event that Landlord is the insuring party, premiums for policy periods commencing prior to or extending beyond the Lease Term shall be prorated to correspond to the Lease Term. Also in the event that Landlord is the insuring party, Payment shall be made by Tenant to Landlord within ten (10) days following receipt of an invoice for any amount due and shall constitute Additional Rent.
Section 2. Liability Insurance.
Policy of Insurance protecting Tenant and Landlord (as an additional named insured) against claims for bodily injury, personal injury, and property damage based upon, involving, or arising out of the ownership, use, occupancy or maintenance of the Leased Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing for single limit coverage in an amount not less than $1,000,000 per occurrence with an Additional Insured - Managers or Lessors of Premises Endorsement. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an insured contract for the performance of Tenant’s indemnity obligations under this Lease. The terms of said insurance required by this Lease or as carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All insurance carried by Tenant shall be primary to and not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only. Tenant shall provide Landlord with written evidence that such insurance is in force.
Section 3. Property Insurance – Building, Improvements and Rental Value
(A) Building and Improvements. Tenant shall obtain and keep in full force and effect during the Term of this Lease a policy or policies in the name of Landlord, with the loss payable to Landlord and to the holders of any mortgage, deeds of trusts or ground leases on the Leased Premises (“Lenders”), insuring loss or damage to the Leased Premises. The amount of such insurance shall be equal to the full replacement cost of the Leased Premises, as the same shall exist from time to time, or the amount required by the Lenders, but in no event more than the commercially reasonable and available insurable value thereof if, by reason of the unique nature or age of the improvements involved, such later amount is less than full replacement cost. If Landlord is the Insuring Party, however, Tenant owned improvements shall be insured by Tenant under Section 4 following rather than by Landlord. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by Lenders), including any additional costs resulting from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged sections of the Leased Premises required to be demolished or removed by enforcement of any building, zoning, safety or land use laws as a result of the covered loss. Said policy or policies shall include an agreed valuation clause in lieu of any coinsurance, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for San Diego, California. If such insurance coverage has a deductible clause, the deductible shall not exceed $5,000 per occurrence, and Tenant shall be liable for any deductible amount in the event of an insured loss. Tenant shall provide Landlord with written evidence that such insurance is in force.
(B) Rental Value. Tenant shall, in addition, obtain and keep in full force and effect during the Term of this Lease a policy or policies in the name of the Landlord, with loss payable to Landlord and Lenders, insuring the loss of the full rental and other charges payable by Tenant to Landlord under this Lease for one (1) year (including all real estate taxes, insurance costs, and any scheduled rent increases). Said insurance shall provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity for such coverage shall be extended beyond the date of the completion of repairs or replacement of the Leased Premises, to provide for one (1) full year’s loss of rental revenues from the date of any such loss. Said insurance shall contain an agreed valuation clause in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected rental income, property taxes, insurance premium costs and other expenses, if any, otherwise payable to Landlord, for the next twelve (12) month period. Tenant shall be liable for any deductible amount in the event of an insured loss. Tenant shall provide Landlord with written evidence that such insurance is in force.
(C) Tenant’s Improvements. If the Landlord is the Insuring Party, the Landlord shall not be required to insure Tenant owned improvements, property or fixtures, unless the item in question has become the property of and owned by the Landlord under the terms of this Lease. If the Tenant is the Insuring Party, the policy carried by Tenant shall insure all such property.
Section 5. Insurance Policies. Insurance required hereunder shall be in companies duly licensed to transact business in California and such companies shall be acceptable to the Landlord and Lenders. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Article. If Tenant is the Insuring Party, Tenant shall cause to be delivered to Landlord certified copies of policies of such insurance or certificates evidencing the existence and amounts of such insurance with the insureds and loss payable clauses as required by this Lease. No such policy shall be cancelable or subject to modification except after thirty (30) days prior written notice to Landlord. Tenant shall, at least thirty (30) days prior to the expiration of such policies, furnish Landlord with evidence of renewals or insurance binders evidencing renewals thereof, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand. If the Insuring Party shall fail to procure and maintain the insurance required to be carried under the terms of this Lease, the other party may, but shall not be required to, procure and maintain the same, but at Tenant’s expense.
Party’s property arising out of or incident to the perils required to be insured against under this Article. The effect of such releases and waivers of the right to recover damages shall not be limited by the amount of insurance carried or required or by any deductible applicable thereto.
ARTICLE X - OBLIGATIONS FOR REPAIRS
(A) Subject to the provisions of Article XII (relating to destruction of the Leased Premises) and Article XIII (relating to condemnation), Tenant at Tenant’s sole cost and expense and at all times shall keep the Leased Premises and every part thereof in good order, condition and repair, structural and non-structural (whether or not such portion of the Leased Premises requiring repairs, or the means of repairing the same, are reasonably and readily accessible to Tenant, and whether or not the need for such repairs occurs as a result of Tenant’s use, any prior use, the elements or the age of such portion of the Leased Premises), including without limiting the generality of the foregoing, all equipment or facilities servicing the Leased Premises, such as plumbing, heating, air conditioning, ventilating, electrical, lighting systems, boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and hose or other automatic fire extinguishing systems, including fire alarm and/or smoke detection systems and equipment, fire hydrants, fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs sidewalks, and parkways located in, on, under or about the Leased Premises. Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Leased Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Tenant’s expense, take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of contamination of, and for the maintenance, security and/or monitoring of the Leased Premises, the elements surrounding the same, or neighboring properties, that was caused, permitted or materially contributed to by Tenant, or pertaining to or involving any Hazardous Substance and/or storage tank brought onto
the Leased Premises by or for Tenant or under its control. Tenant in keeping the Premises in good order, condition and repair shall exercise and perform good maintenance practices. Tenant’s obligations shall include restorations, replacements or renewals when necessary to keep the Leased Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
(B) Tenant shall, at Tenant’s sole cost and expense, procure and maintain contracts, with copies to Landlord, in customary form and substance for, and with contractors specializing and experienced in, the inspection, maintenance and service of the following equipment and improvements, if any, located on the Leased Premises: (i) heating, air conditioning and ventilation systems; (ii) boiler, fired or unfired pressure systems; (iii) fire sprinkler and/or standpipe and hose or other automatic fire extinguishing systems, including fire alarm and/or smoke detection systems and equipment; (iv) landscaping and irrigation systems; (v) roof covering and drain maintenance; and (vi) asphalt and parking lot maintenance.
Section 3. Requirements of the Law. Tenant has occupied the Leased Premises for more than eight years prior to the execution of this lease and has had the opportunity to satisfy itself with respect to the condition of the Premises, including, but not limited to, the utilities, the electrical, mechanical, and fire sprinkler systems, security, environmental aspects, compliance with applicable laws, codes and ordinances, and the current and future suitability of the Leased Premises for Tenant’s intended use and that Tenant has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to Tenant’s occupancy of the Leased Premises and/or the Term of the Lease.
Section 4. Tenant’s Alterations.
(A) Definitions. The term “Utility Installations” is used in this Lease to refer to all carpeting, window coverings, air lines, power panels, electrical distribution, security, fire protection systems, communication systems, lighting fixtures, heating ventilating and air conditioning equipment, plumbing and fencing in, on or about the Leased Premises. The term “Trade Fixture” shall mean Tenant’s machinery and equipment that can be removed without doing material damage to the Leased Premises. The term “Alteration” shall mean any modification of the improvements of the Leased Premises from that which is provided by Landlord under the terms of this Lease, other than Utility Installations or Trade Fixtures, whether
by addition or deletion.
(B) Consent Required. Tenant shall not make any Alterations or Utility Installments in, on, under or about the Leased Premises without Landlord’s prior written consent. The Tenant, however, shall have the right, at its sole expense, from time to time, and to make such non-structural Utility Installations in such parts thereof as the Tenant shall deem expedient or necessary for its purposes; provided, however, that no such Utility Installations shall be made to the roof and all other such Utility Installations shall not be visible from the outside, shall not involve puncturing, relocating, or removing the roof or any of the existing walls, and shall neither impair the structural soundness nor diminish the value of the Leased Premises and the cumulative cost thereof during the term of the Lease as extended does not exceed $25,000.
Section 7. Ownership; Removal; Surrender; and Restoration.
(B) Removal. Unless otherwise agreed in writing, Landlord may require that any or all Alterations or Utility Installations made by Tenant, whether during the term of the Sublease, the original Commercial Lease Agreement and extensions thereof or this Second Commercial Lease Agreement, be removed by the Expiration Date or earlier termination of this Lease, notwithstanding their installation may have been consented to by Landlord. Landlord may require the removal at any time of all or part of any Alterations or Utility Installations made without the required consent of the Landlord.
(C) Existing Non-Permitted Alterations. Tenant expressly acknowledges that during the term of the Master Lease, Sublease, and/or the original Commercial Lease Agreement and extensions thereof certain Utility Installations, Alterations, Trade Fixture installations and/or repairs have been performed for which permits were required, but no such permits were obtained and no prior consent was obtained from Landlord. Tenant previously expressly and separately agreed with respect to such modifications performed without first obtaining the necessary permits and consent, to take all steps necessary to obtain the permits for such Utility Installations, Alterations, Trade Fixture installations and/or repairs, or to restore the Leased Premises to its original condition prior to the inception of the Master Lease. Tenant agrees that this is a continuing covenant under this Second Commercial Lease Agreement.
Section 9. Tenant specifically acknowledges that Tenant has a continuing duty of repair under the terms of the Sublease, the original Commercial Lease Agreement and extensions thereof, and this Second Commercial Lease Agreement. Nothing in this Lease or the execution thereof shall be deemed or construed to constitute a waiver by Landlord of this continuing duty of repair, any prior breaches thereof, or the duty to restore the Premises by the last day of the Term of the Lease or any earlier termination date.
ARTICLE XI - USE OF PROPERTY BY TENANT
Section 1. Use. The Leased Premises may be occupied and used by Tenant exclusively for manufacturing, warehousing, general office and sales activities of the business known as Orange 00 Xxxxx Xxxxxxx Inc., or Orange 21 Inc. Nothing herein shall give Tenant the right to use the property for any other purpose or to sublease, assign, or license the use of the property to any sublessee, assignee, or licensee, which or who shall use the property for any other use.
Section 2. Hazardous Substances.
ARTICLE XII - DAMAGE OR DESTRUCTION
(A) “Premises Partial Damage” shall mean damage or destruction to the improvements on the Leased Premises, other than Tenant owned improvements, the repair cost of which is less than 50% or more of the then Replacement Cost of the Leased Premises immediately prior to such damage or destruction, excluding from such calculation the value of the land and Tenant owned improvements.
(B) “Premises Total Destruction” shall mean damage or destruction to the improvements on the Leased Premises, other than Tenant owned improvements, the repair cost of which is 50% or more of the then Replacement Cost of the Leased Premises immediately prior to such damage or destruction, excluding from such calculation the value of the land and Tenant owned improvements.
(C) “Insured Loss” shall mean damage or destruction to improvements on the Leased Premises other than Tenant owned improvements, which was caused by an event required to be covered by the insurance policies described herein, irrespective of any deductible amounts or coverage limits involved.
(D) “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by Landlord as the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of applicable building codes, ordinances or laws, and without deduction for depreciation.
Section 5. Abatement or Adjustment of Rent – Tenant’s Remedies.
(A) In the event of a Premises Partial Destruction caused by an Insured Loss, whether or not repaired by Landlord or Tenant, the Base Rent, Additional Rent, Real Property Taxes,
insurance premiums and other charges, if any, payable to Landlord hereunder for the period of such damage, its repair or restoration continues, but not to exceed the period for which rental value insurance is required pursuant to the terms of this Lease, shall be abated in proportion to the degree to which Tenant’s use of the leased Premises is impaired. Except for abatement of the Base Rent, Additional Rent, Real Property Taxes, insurance premiums and other charges, if any, all other obligations of Tenant hereunder shall be performed by Tenant, and Tenant shall have no claim against Landlord for any damage suffered by reason of such repair or restoration.
(B) Notwithstanding the foregoing, if Landlord does not commence repair or restoration of the Premises within ninety (90) days of the date of the occurrence of a Partial Premises Damage, then Tenant may at any time thereafter cancel and terminate this Lease by sending ninety (90) days written notice thereof to Landlord and Lenders, and if Landlord and/or Lenders fail to commence repairs within thirty (30) days of the receipt of such notice, Tenant may give written notice to Landlord and any Lenders of which Tenant has actual knowledge of Tenant’s election to terminate this lease on a date not less than thirty (30) days following the delivery of such notice to Landlord and Lenders and this Lease shall terminate as of the date specified in such notice. “Commence” as used in this Section shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Leased Premises, whichever occurs first.
Section 1 of this Article, this Lease and the term hereof shall cease and terminate as of the date when possession shall be taken by the appropriate authority of that portion of the Entire Property that results in one of the above takings, and any unearned rent or other charges, if any, paid in advance by Tenant shall be refunded to Tenant.
ARTICLE XIV - ASSIGNMENTS AND SUBLETTING
Section 1. Landlord’s Consent Required. Tenant shall not voluntarily or by operation of law assign, transfer mortgage or encumber (collectively “assignment”) or sublet all or any part of Tenant’s interest in this Lease, or any renewals or extensions thereof, or the Leased Premises sublet without the prior written consent of Landlord subject to the terms of Article XVIII, Section 11 hereof.
Section 2. Terms and Conditions to Assignment or Subletting.
(A) Regardless of Landlord’s consent, any assignment or subletting shall not: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Tenant under this Lease; (ii) release Tenant from any obligations hereunder; or (iii) alter the primary liability of Tenant for the payment of all sums due hereunder or for the performance of
any other obligations to be performed by Tenant under this lease.
(B) Landlord may accept rent or performance of Tenant’s obligations from any person other than Tenant pending approval or disapproval of an assignment. Neither a delay in approval or disapproval of such an assignment nor the acceptance of rent or performance shall constitute a waiver or estoppel of Landlord’s right to exercise its remedies for Default of Breach by Tenant of any terms, covenants or conditions of this Lease.
(C) The consent of Landlord to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. Landlord may, however, consent to subsequent subletting or any amendments or modifications thereto without notifying Tenant or anyone else liable on the Lease, and without obtaining their consent, and such action shall not relieve such persons of their liability under this lease or any sublease.
(D) In the event of a Default of Breach of Tenant’s obligations under this Lease, Landlord may proceed directly against Tenant or anyone else responsible for the performance of Tenant’s obligations under this Lease, including sublessee, without first exhausting Landlord’s remedies against any other person or entity responsible therefor to Landlord, or any security held by Landlord or Tenant.
(E) Each request for consent to an assignment or subletting should be accompanied by information relevant to Landlord’s determination of financial and operational responsibility of the proposed assignee or sublessee, together with a non-refundable deposit equal to 10% of the Base Rent then due under the Lease as reasonable consideration for Landlord’s considering and processing the request. Tenant agrees to provide Landlord with such other or additional information and/or documentation as may be reasonably requested by Landlord.
(F) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment or sublease, be deemed for the benefit of Landlord, to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be performed by Tenant.
(G) Landlord, as a condition to giving consent to any assignment or subletting, may require (i) an increase in the security deposit; and/or (ii) an adjustment to the Base Rent to what is the then market value of rent for property similar to the Leased Premises.
(A) Tenant hereby assigns and transfers to Landlord all of Tenant’s interest in any rentals and income arising from any sublease of all or a portion of the Leased Premises heretofore or hereafter made by Tenant and Landlord may collect such rent and income and apply same to Tenant’s obligations under this Lease.
(B) In the event of Default or Breach by Tenant in the performance of its obligations under this Lease, Landlord, at its option and without any obligation to do so, may require any sublessee to attorn to Landlord, in which event Landlord shall undertake the obligations of sublessor under such sublease from the time of the exercise of said option to the expiration of the sublease, provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any other prior Defaults or Breaches of such sublessor under such sublease.
(C) Any matter or thing requiring the consent of the sublessor shall also require the consent of The Landlord.
(D) No sublessee shall further assign or sublet all or any part of the Leased Premises without the prior written consent of Landlord.
(E) Landlord shall deliver a copy of any notice of Default or Breach by Tenant to the sublessee, who shall have the right to cure the Default of Tenant within the grace period, if any, specified in such notice. The sublessee shall have the right of reimbursement and offset from and against Tenant for any such Defaults cured by sublessee.
ARTICLE XV - DEFAULT; BREACH; REMEDIES
(A) The vacating of the Leased Premises without the intention to reoccupy same, or the abandonment of the Leased Premises.
(B) Except as otherwise expressly provided in this Lease, the failure by Tenant to pay Base Rent or any other monetary payment required to be made by Tenant hereunder, the failure to provide Landlord with Reasonable evidence of insurance, or the failure of Tenant to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of three (3) days following written notice thereof by or on behalf of Landlord to Tenant.
(C) Except as otherwise expressly provided in this Lease, the failure by Tenant to provide Landlord with reasonable written evidence, in duly executed original form, if applicable, of any documentation or information which Landlord may reasonably require of Tenant under the terms of this Lease, including, but not limited to inspection, maintenance and service
contracts, Tenant Statement, subornation or non-subornation of this Lease, certification of compliance with applicable laws, and the rescission of an unauthorized assignment or sublease, where such failure continues for a period of ten (10) days following written notice by or on behalf of Landlord.
(D) A Default by Tenant as to the terms, covenants, conditions or provisions of this Lease, that are to be observed, complied with or performed by Tenant, other than those described in paragraphs A, B and C, preceding, where such Default continues for a period of thirty (30) days after written notice thereof by or on behalf of Landlord.
(E) The occurrence of any of the following events: (I) the making by Tenant of any general arrangement or assignment for the benefit of creditors; (ii) Tenants becoming a “debtor” in any bankruptcy proceeding (unless, in the case of a proceeding filed against Tenant, the same is dismissed within sixty (60) days); (iii) The appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Leased Premises or of Tenant’s interest in the Lease, where possession is not restored in thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Leased Premises or of Tenant’s interest in the Lease, where such seizure is not discharged in thirty (30) days, provided, however, in the event that any provision of this paragraph E is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions of this Lease.
(F) The discovery by Landlord that any financial statement given to Landlord by Tenant was materially false.
(G) Tenant has caused a lien to be filed against the Leased Premises or other of Landlord’s property and said lien is not removed within thirty (30) days of recordation thereof.
Then Landlord shall be entitled to its election (unless Tenant shall cure such default prior to such election, to the satisfaction of Landlord), to exercise concurrently or successively, any one or more of the following rights:
(A) Terminate this Lease by giving Tenant notice of termination, in which event this
Lease shall expire and terminate on the date specified in such notice of termination, with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of the term of this Lease, and all rights of Tenant under this Lease and in and to the Leased Premises shall expire and terminate, and Tenant shall remain liable for all obligations under this Lease arising up to the date of such termination, and Tenant shall surrender the Leased Premises to Landlord on the date specified in such notice.
(B) Terminate this Lease as provided herein and recover from Tenant all damages Landlord may incur by reason of Tenant’s default, including, without limitation, a sum which, at the date of such termination, represents the then value of the excess, if any, of (a) the Base Rent, Real Property Taxes, insurance premiums and all other sums which would have been payable hereunder by Tenant for the period commencing with the day following the date of such termination and ending with the date herein before set for the expiration of the full term hereby granted, over (b) the aggregate reasonable rental value of the Leased Premises for the same period, all of which excess sum shall be deemed immediately due and payable.
(C) Without terminating this Lease, declare immediately due and payable all Base Rent, Real Property Taxes, insurance premiums and other rents and amounts due and coming due under this Lease for the entire remaining Term hereof, together with all other amounts previously due, at once; provided, however, that such payment shall not be deemed a penalty or liquidated damages but shall merely constitute payment in advance of rent for the remainder of said term. Upon making such payment, Tenant shall be entitled to receive from Landlord all rents received by Landlord from other assignees, Tenants, and subtenants on account of said Premises during the term of this Lease, provided that the monies to which Tenant shall so become entitled shall in no event exceed the entire amount actually paid by Tenant to Landlord pursuant to the preceding sentence less all costs, expenses and attorney’s fees of Landlord incurred in connection with the reletting of the Premises.
(D) Without terminating this Lease, and with or without notice to Tenant, Landlord may in its own name but as agent for Tenant enter into and upon and take possession of the Leased Premises or any part thereof, and, at Landlord’s option, remove persons and property therefrom, and such property, if any, may be removed and stored in a warehouse or elsewhere at the cost of, and for the account of Tenant, all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby, and Landlord may rent the Leased Premises or any portion thereof as the agent of Tenant with or without advertisement, and by private negotiations and for any term upon such terms and conditions as Landlord may deem necessary or desirable in order to relet the Premises. Landlord shall in no way be responsible or liable for any rental concessions or any failure to rent the Premises or any part thereof, or for any failure to collect any rent due upon such reletting. Upon such reletting, all rentals received by Landlord from such reletting shall be applied: first, to the payment of any indebtedness (other than any rent due hereunder) from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including, without limitation, brokerage fees and attorney’s fees and costs of alterations and repairs; third, to the payment of rent and other charges then due and unpaid hereunder; and the residue, if any shall be held by Landlord to the extent of and for application in payment of future rent as the same may become due and payable hereunder. In reletting the Leased Premises as aforesaid, Landlord may grant rent concessions and Tenant shall
not be credited therefor. If such rentals received from such reletting shall at any time or from time to time be less than sufficient to pay to Landlord the entire sums then due from Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall, at Landlord’s option, be calculated and paid monthly. No such reletting shall be construed as an election by Landlord to terminate this Lease unless a written notice of such election has been given to Tenant by Landlord. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for any such previous default provided same has not been cured.
(E) Continue the Lease and Tenant’s right to possession in effect as provided by law after Tenant’s Breach and abandonment and recover rent from Tenant as it comes due, provided however that Tenant shall retain the right to assign or sublet the Leased Premises, subject to the requirements set forth in Article XIV, hereof. Acts of maintenance or preservation, efforts to relet the Leased Premises, or the appointment of a receiver to protect Landlord’s interest under the Lease, shall not constitute a termination of Tenant’s right to possession.
(F) Pursue such other remedies as are available at law or equity.
Section 2. Landlord’s pursuit of any remedy of remedies, including without limitation, any one or more of the remedies stated herein shall not (1) constitute an election of remedies or preclude pursuit of any other remedy or remedies provided in this Lease or any other remedy or remedies provided by law or in equity, separately or concurrently or in any combination, or (2) sever as the basis for any claim of constructive eviction, or allow Tenant to withhold any payments under this Lease.
Section 3. The expiration or termination of the Lease and/or the Tenant’s right to possession shall not relieve Tenant from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the Term hereof or by reason of Tenant’s occupancy of the Leased Premises.
ARTICLE XVI - SUBORDINATION; TENANCY STATEMENT; TITLE
The party requesting recordation shall be responsible for payment of any fees, expense, charges or taxes applicable thereto.
ARTICLE XVII - WAIVERS/DISPUTES
proceedings is pursued to decision or judgment. The attorneys’ fees shall not be computed according to any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. Landlord shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not legal action is subsequently commenced in connection with such Default of Breach.
Section 5. Brokerage. Landlord and Tenant each represent and warrant to the other that it has
not had any dealings with any person, firm, broker or finder in connection with this Lease and that no real estate broker is entitled to any commissions upon the execution or of this Lease.
Section 7. Governing Law. All matters pertaining to this agreement (including its interpretation, application, validity, performance and breach) in whatever jurisdiction action may be brought, shall be governed by, construed and enforced in accordance with the laws of the State of California. The parties herein agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in San Diego County, State of California. In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party’s reasonable attorney’s fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. In such event, no action shall be entertained by said court or any court of competent jurisdiction if filed more than one year subsequent to the date the cause(s) of action actually accrued regardless of whether damages were otherwise as of said time calculable.
(A) Wherever in the Lease the consent of a party is required to an act by the other party, such consent shall not be unreasonably withheld or delayed. Landlord’s actual; reasonable costs
and expenses (including, but not limited to architects’, attorneys’, engineers’ or other consultants’ fees) incurred in the consideration of, or response to, a request by Tenant for any Landlord consent pertaining to this Lease or the Leased Premises shall be paid by Tenant to Landlord upon receipt of an invoice and supporting documentation therefor. Landlord may, as a condition to considering any such request by Tenant, require the Tenant deposit with Landlord an amount of money reasonably calculated by Landlord to represent the cost Landlord will incur in considering and responding to Tenant’s request.
(B) All conditions to Landlord’s consent authorized by this Lease are acknowledged by Tenant as being reasonable. The failure to specify herein any particular condition to Landlord’s consent shall not preclude the imposition by Landlord at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.
Signed, sealed and delivered in the presence of: |
![]() |
For The Xxxxxx Family Trust (“Landlord”) |
Name and Title: |
Date: |
For Orange 00 Xxxxx Xxxxxxx Inc. (“Tenant”) |
![]() |
Name and Title:
![]() |
Date: 10/21/10 |
EXHIBIT A
SCHEDULE OF BASE RENT
11/01/10 through 10/31/11 |
$28,319.00 per month | |
11/01/11 through 10/31/12 |
$29,168.57 per month | |
11/01/12 through 10/31/13 |
$30,043.63 per month | |
11/01/13 through 12/31/13 |
$30,944.94 per month |