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EXHIBIT 10.11
SUBLEASE AGREEMENT
THIS SUBLEASE ("SUBLEASE") is made as of the 28th day of June, 1999, by
and between PULSE ENGINEERING, INC., successor by merger to Valor Electronics,
Inc. ("SUBLESSOR"), and XXXXX.XXX, INC. ("SUBLESSEE").
BACKGROUND
A. Pursuant to that certain Lease for Business Grove Office Building
dated April 1, 1992 (the "LEASE"), as modified by that certain Agreement to
Extend Lease dated November 25, 1996 (the "AGREEMENT TO EXTEND LEASE") between
AmberJack Ltd. as General Partner for Business Xxxxx Xxxx, Limited Partnership,
successor-in-title to State Farm Life Insurance Company, ("PRIME LESSOR"), as
lessor, and Sublessor, as lessee (the Lease and Agreement to Extend Lease are
collectively referred to herein as the "PRIME LEASE"), Prime Lessor leased and
demised to Sublessor certain premises consisting of approximately 40,075
rentable square feet situate in the City of San Diego, County of San Diego,
State of California, commonly known as 0000 Xxxxxxxx Xxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, as more fully described on Exhibit A to the Prime Lease (the
"LEASED PREMISES," sometimes referred to herein as the "SUBLET PREMISES").
B. Sublessor wishes to sublease all of the Leased Premises to
Sublessee and Sublessee wishes to sublease all of the Leased Premises from
Sublessor under the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the foregoing Background and
the mutual covenants, promises, and agreements herein contained, the parties
hereto, intending to be legally bound hereby, covenant and agree as follows:
1. DEMISE AND PREMISES. Sublessor hereby grants and demises to
Sublessee, and Sublessee hereby accepts from Sublessor, subject to the terms and
conditions of this Sublease and the Prime Lease, for the period set forth in
Section 2 below, the Leased Premises, comprising approximately 40,075 square
feet of space, as more particularly described on Exhibit A to the Prime Lease
(hereinafter, the "SUBLET PREMISES"), together with the non-exclusive right to
use the parking and driveway areas available to Sublessor under the Prime Lease
and all common facilities, if any, available to Sublessor under the Prime Lease,
in common with Prime Lessor, and other tenants of Prime Lessor, and their
invitees, licensees, employees, officers, servants, contractors and visitors.
2. SUBLEASE TERM. The term of this Sublease (the "SUBLEASE TERM")
shall commence on the date Sublessor has received both the consent of the Prime
Lessor to this Sublease and the Letter of Credit (hereinafter defined) (the
"COMMENCEMENT DATE") and end on August 31, 2002 (the "SUBLEASE EXPIRATION
DATE"). If the Commencement Date has not occurred on or before July 1, 1999,
Sublessor or Sublessee may, in its sole discretion, terminate this Sublease
without liability; provided, however, that Sublessee may not terminate this
Sublease
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if the reason the Commencement Date has not occurred on or before July 1, 1999
is due to the fact that Sublessee has failed to deliver the Letter of Credit to
Sublessor. Notwithstanding the foregoing, if Prime Lessor fails to grant its
consent to this Sublease, this Sublease shall automatically become null and void
as of the date of Prime Lessor's refusal to consent to this Sublease, and
neither party hereto shall have any liability to the other thereafter.
Notwithstanding anything in this Sublease to the contrary, in the event the
Prime Lease is terminated for any reason, this Sublease Agreement shall also
terminate as of the date of termination of the Prime Lease. Sublessor shall have
no liability to Sublessee due to the termination of this Sublease Agreement as a
result of the termination of the Prime Lease, provided Sublessor is not in
default of its obligation to pay Rent (hereinafter defined) as provided in the
Prime Lease or does not otherwise cause a default which results in the
termination of the Prime Lease. Notwithstanding any contained in the Prime Lease
or this Sublease to the contrary, Sublessee shall have no right or option to
extend the term of this Sublease beyond the expiration or sooner termination of
the Sublease Term.
3. BASE RENT. Commencing on the Rent Commencement Date (hereinafter
defined), Sublessee shall pay to Sublessor the base monthly rent due under this
Sublease (the "FIXED RENT") as follows:
(a) $34,063.75 per month for the period from the Rent
Commencement Date through July 15, 2000.
(b) $35,255.98 per month for the period July 16, 2000 through
July 15, 2001.
(c) $36,489.94 per month for the period from July 16, 2001
through July 15, 2002.
(d) $37,767.09 per month for the period from July 16, 2002
through August 31, 2002.
Fixed Rent shall be payable in monthly installments in advance during the
Sublease Term on the first day of each month, commencing on the Rent
Commencement Date. In the event the Rent Commencement Date is a day other than
the first day of a calendar month, Sublessee shall pay to Sublessor, on or
before the Rent Commencement Date, a pro rata portion of the monthly installment
of Fixed Rent, such pro rata portion to be based on the number of days remaining
in such partial month after the Rent Commencement Date. As used herein, the term
"RENT COMMENCEMENT DATE" shall mean that date occurring three (3) weeks after
the Commencement Date.
4. ADDITIONAL RENT. Sublessee shall pay as Rent in addition to the
Fixed Rent (the "ADDITIONAL RENT") any other sums payable by Sublessor to Prime
Lessor under the Prime Lease. Additional Rent shall be payable to Sublessor in
accordance with the terms of the Prime Lease. As used herein, the term "Rent"
shall mean and include Fixed Rent, Additional Rent and any other sums due
hereunder or pursuant to the Prime Lease. All Rent shall be due and payable
without prior notice, demand, deduction or offset. Notwithstanding the foregoing
or any
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other provision of this Sublease including, without limitation, Section 8,
Sublessee shall, in no circumstances, be required to pay for and/or perform any
of the following: (a) maintaining, repairing and/or replacing all or any
portion of the roof, foundation, footings and structural elements/supports of
the Sublet Premises or any sewer or utility lines, unless caused by Sublessor's
negligence or willful misconduct; or (b) more than $5,800.00 for each 12 months
of the Sublease Term (which such amount shall be prorated to the extent that
the Sublease Term contains any partial years) for any maintenance, repair or
replacement of the HVAC system servicing the Sublet Premises including
Sublessor's obligations under any HVAC maintenance and/or repair contracts
concerning the Sublet Premises. Sublessor shall, at its sole cost and expense,
pay for such items not paid by Sublessee to the extent Sublessor agreed to pay
for such items under the Prime Lease. On or before the Rent Commencement Date,
Sublessor shall pay for the roof maintenance/repair specified in the estimate
dated April 27, 1999 prepared by Goldstar Roofing and for the HVAC
maintenance/repairs specified in the system evaluation prepared by Xxxxxxx and
Blanc dated May 20, 1999; provided, however, that such HVAC and roof
maintenance/repairs may be performed by any qualified person or company of
Sublessor's choosing. In addition, Sublessor agrees to complete any repairs
reasonably required for the parking lot, including, a slurry coat to the
parking lot of the Sublet Premises, and to restrip the same on or before the
Rent Commencement Date. Thereafter, Sublessee shall be responsible for
maintaining and repairing the parking lot of the Sublet Premises at its own
cost and expense. All rent shall be due and payable without prior notice,
demand, deduction or offset.
5. INTEREST ON OVERDUE PAYMENTS. In the event that Sublessee shall
fail to pay any installment of Fixed Rent or Additional Rent or any other sum
due hereunder or pursuant to the Prime Lease within five (5) days of the date
when due, Sublessee shall pay Sublessor interest at a variable rate equal to
the Bank of America's prime commercial rate as adopted from time to time plus
two percent (2%) (but in no event greater that the maximum interest rate
allowed under applicable law). The parties agree that the payment of such
interest represents the liability that Sublessor will incur to Prime Lessor by
reason of the late payment by Sublessee, and is therefore not a penalty.
6. USE. Sublessee shall use and occupy the Sublet Premises for the
uses permitted under the Prime Lease, and for no other purpose.
7. ACCESS TO SUBLET PREMISES. During the period of time from the date
hereof until the Commencement Date, Sublessee shall be granted access to the
Sublet Premises to inspect and measure the Sublet Premises. Notwithstanding the
foregoing, the Sublet Premises shall not be deemed delivered to Sublessee, and
Sublessee shall not be deemed in possession of the Sublet Premises until the
Commencement Date.
8. APPLICATION OF PRIME LEASE. Except as otherwise provided in this
Sublease, or except to the extent inconsistent herewith, Sublessee shall
faithfully perform with respect to the Sublet Premises all of the covenants,
conditions and agreements undertaken by or required of the lessee under the
Prime Lease, and Sublessor shall have with respect to such covenants,
conditions and agreements the rights of the lessor under the Prime Lease
(except for the rights set forth in Section 21.2 of the Prime Lease which such
rights shall be held by Prime Lessor only), both as fully as if those
provisions were set forth herein in their entirety. All
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provisions of the Prime Lease shall apply to this Sublease unless specifically
excluded or modified by this Agreement. Sublessor represents that it has
delivered to Sublessee a true and complete copy of the Prime Lease to
Sublessee, and Sublessee acknowledges receipt of a copy of the Prime Lease from
Sublessor, which such copy is attached hereto as Exhibit A. Notwithstanding the
foregoing, the parties hereto acknowledge as follows:
(a) the following sections of the Prime Lease shall not be
incorporated within this Sublease: Sections 1.3 (first sentence only), 2.1,
2.2, 4.2, 4.3, 22, 24.20 and 24.21;
(b) the following exhibits to the Prime Lease shall not be
incorporated into this Sublease: Exhibits C, G and H; and
(c) the following sections from the Agreement to Extend Lease
shall not be incorporated into this Sublease: 3 and 6.
9. INDEMNIFICATION OF SUBLESSOR. To the extent permitted by law,
Sublessee shall and does hereby indemnify Sublessor as a result of or arising
out of Sublessee's breach of this Sublease or the Prime Lease and agrees to
save Sublessor harmless and, at Sublessor's option, defend Sublessor from and
against any and all claims, actions, damages, liabilities and expenses
(including reasonable attorneys' and consultants' fees) judgments, settlement
payments, and fines paid, incurred or suffered by Sublessor as a result of or
arising out of Sublessee's breach of this Sublease or the Prime Lease,
violations of any law or in connection with loss of life, personal injury
and/or damage to the property or environment suffered by third parties arising
from or out of the occupancy or use by Sublessee of the Sublet Premises or any
part thereof occasioned wholly or in part by any act or omission of Sublessee,
its officers, agents, contractors, employees or invitees (each a "SUBLESSEE
PARTY" and collectively, the "SUBLESSEE PARTIES"), or arising directly or
indirectly, wholly or in part, from any conduct, activity, act, omission or
operation by any Sublessee Party involving the use, handling, generation,
treatment, storage, disposal, other management or Release (hereinafter defined)
of any substance or material defined or designated as hazardous or toxic, or
other similar term, by any present or future local, state or federal
environmental statute, regulation or ordinance, in, from or to the Sublet
Premises, whether or not Sublessee may have acted negligently with respect to
such substance or material. Sublessee's obligations pursuant to this Section
shall survive any termination of this Sublease with respect to any act,
omission, or occurrence which took place prior to such termination. As used in
this Section, the term "RELEASE" shall have the meaning ascribed to such term
in the Federal Comprehensive Environmental Response, Compensation and Liability
Act, (42 U.S.C. Section 6901 et seq. ("CERCLA").
10. SERVICE. Sublessee has reviewed the provisions of the Prime Lease
concerning the obligation of the Prime Lessor to supply building services to
the Sublet Premises. Except as otherwise set forth in this Sublease (e.g., in
Section 4), Sublessee agrees that Sublessor shall have no obligation to render
or supply any services or repairs to Sublessee or the Sublet Premises
(including, without limitation, (i) the furnishing of electrical energy, heat,
ventilation, water, air conditioning, elevator service (other than Sublessor's
obligation to deliver the Sublet Premises to Sublessee on the Commencement Date
with all building systems in good working order and condition), cleaning,
window washing, or rubbish removal services, (ii) making any
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alterations, repairs or restorations, (iii) complying with any laws or
requirements of any governmental authorities (except to extent necessitated by
a breach of Sublessor's representation and warranty set forth in Sections 1.3
and 3.4 of the Prime Lease), or (iv) taking any action that Prime Lessor has
agreed to provide, make, comply with, take or cause to be provided, made,
complied with or taken under the Prime Lease.
11. INSURANCE.
(a) Sublessee, at Sublessee's sole expense, shall maintain for
the benefit of Sublessor and Prime Lessor such policies of insurance (and in
such form) with respect to the Sublet Premises as are required by the Prime
Lease, which policies shall be reasonably satisfactory to Sublessor as to
coverage and insurer, shall be maintained as a primary policies, and shall
extend to and cover the acts and omission of Sublessee, and anyone acting by,
through or under Sublessee notwithstanding anything contained in the Prime
Lease to the contrary. Each policy of insurance required under this paragraph
shall name Sublessor and Prime Lessor each as an additional insured. Sublessee
shall provide Sublessor with certificates of insurance evidencing such policies
and that Sublessor has been named as an additional insured as promptly as
reasonably practical, but in no event later than thirty (30) days after the
execution of this Sublease, and copies of such policies upon Sublessor's
request therefor. All insurance policies shall contain a provision and the
certificate of insurance shall expressly state that the insurer will give to
Prime Lessor and Sublessor and such other parties in interest at least thirty
(30) days notice in writing in advance of any material change, cancellation,
termination or lapse, or the effective date of any reduction in the amounts of
insurance below the amounts specified herein.
(b) The parties hereto, by reason of its consent hereto,
release each other and their respective agents, employees, successors and
assigns from all liability for damage to any property that is caused by or
results from a risk which is actually insured against or which would normally be
covered by the standard form of "all risk" property insurance, without regard to
the negligence or willful misconduct of the entity so released. Each party shall
use its reasonable efforts to cause each insurance policy it obtains to provide
that the insurer thereunder waives all right of recovery by way of subrogation
as required herein in connection with any damage covered by the policy.
12. SUBLESSEE DEFAULTS. The occurrence of any of the following shall
be a default under this Sublease:
(a) Sublessee shall fail to pay in full when due any and all
installments of Rent or any other charge agreed to be paid by Sublessee, and
such non-payment continues for a period of seven (7) days after the date such
payment is due; or
(b) Sublessee violates or fails to perform any term, covenant,
condition or agreement herein contained or provided for in the Prime Lease or
this Sublease and such failure continues for a period of fifteen (15) days
after written notice thereof is given to Sublessee. If the default is of such a
nature that it cannot be completely remedied within the fifteen (15) day
period, this provision shall be complied with if Sublessee begins correction of
the default within the fifteen
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(15) day period and thereafter proceeds with reasonable diligence and in good
faith to effect the remedy as soon as practicable and to prosecute the same to
completion; or
(c) Sublessee becomes insolvent or makes an assignment for the
benefit of creditors, or if a petition in bankruptcy is filed by or against
Sublessee, or a xxxx in equity or other proceeding for the appointment of a
receiver for Sublessee is filed, or if proceedings for reorganization or for
composition with creditors under any state or federal law be instituted by or
against Sublessee, or if the subleasehold interest is levied on under
execution; or
(d) The vacating or abandonment of the Sublet Premises by
Sublessee, whether or not the Rent is paid.
13. SUBLESSOR REMEDIES. In the event of a default by Sublessee, and
without any other action by Sublessor, and at Sublessor's option, Sublessor may
exercise any and all remedies of the Prime Lessor under the Prime Lease. In
addition to the foregoing, Sublessor may exercise any and all other rights or
remedies, granted or allowed landlords by any existing or future statute or
other law applicable in cases where a landlord seeks to enforce rights arising
under a lease agreement against a tenant who has defaulted or otherwise
breached the terms of such lease agreement; subject, however, to all of the
rights granted or created by any such statute or other applicable law existing
protection and benefit of tenants.
14. REMEDIES CUMULATIVE. All of the remedies hereinbefore given to
Sublessor and all rights and remedies given to it by law and equity shall be
cumulative and concurrent. Except as expressly provided herein and in the Prime
Lease, no termination of this Sublease or the taking or recovering of the
Sublet Premises shall deprive Sublessor of any of its remedies or actions
against Sublessee for Rent due or other breach hereof at the time or which,
under the terms hereof, would in the future become due as if there has been no
termination, or for any and all sums due at the time or which, under the terms
hereof, would in the future become due as if there had been no termination, nor
shall the bringing of any action for rent or breach of any covenant, or the
resort to any other remedy herein provided for the recovery of Rent or other
breach be construed as a waiver of the right to obtain possession of the Sublet
Premises.
15. NOTICES. All notices required hereunder shall be deemed to be
given when hand delivered or one day after deposit with express overnight
courier delivery, or three days after mailing by certified U.S. mail, return
receipt requested, postage prepaid. Any notices to Sublessor shall be addressed
as follows:
If to Sublessor:
Pulse Engineering, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx, Director of Facilities
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with a copy to:
Xxx Xxxxx Xxxxx, Esquire
Stradley, Ronon, Xxxxxxx & Xxxxx, LLP
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Sublessee:
XXXXX.XXX, INC.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx
16. ASSIGNMENT AND SUBLETTING. Sublessee may not voluntarily or by
operation of law or otherwise, assign, transfer, mortgage, encumber or sublet or
all or any portion of the Sublet Premises to any individual or entity without
the prior written consent of Sublessor and Prime Lessor. Any attempted
assignment, transfer, mortgage, encumbrance or subletting by Sublessee without
such consent shall be void and shall constitute a breach of and default under
this Sublease. Notwithstanding the foregoing, nothing in this Section shall
impose upon Sublessor any obligation to obtain, beyond its reasonable efforts to
do so, the consent of Prime Lessor or any other third party.
17. SUBLEASE CONTAINS ALL AGREEMENTS. It is expressly understood and
agreed by and between the parties hereto that this Sublease (together with the
Prime Lease) sets forth all the terms, conditions and agreements between
Sublessor and Sublessee relative to the Sublet Premises, and that there are no
promises, agreements, conditions or understandings, either oral or written,
between them other than as are herein set forth. It is further understood and
agreed that, except as herein otherwise provided, no subsequent alteration,
amendment, change or addition to this Sublease shall be binding upon Sublessor
or Sublessee unless reduced to a writing and signed by them.
18. SUCCESSORS AND ASSIGNEES. All rights and liabilities herein given to,
or imposed upon, the respective parties hereto shall extend to and bind the
several and respective successors and permitted assigns of said parties.
19. SECURITY DEPOSIT. Sublessee shall have no right, title or interest in
or with respect to the security deposit, or any portion thereof, that is held by
Prime Lessor.
20. LETTER OF CREDIT. Within ten (10) days of the date hereof, Sublessee
shall provide Sublessor with an irrevocable standby letter of credit in the
amount of $102,191.25 (the "Letter of Credit"), in form and substance reasonably
acceptable to Sublessor, and which shall not expire until or shall be renewed
beyond the later to occur of (i) sixty (60) days after the expiration or sooner
termination of this Sublease or (ii) sixty (60) days after Sublessee shall have
fully vacated the Sublet Premises, which Sublessor will hold as security for the
faithful performance by Sublessee of all its covenants and agreements under this
Sublease. Sublessor shall have the right,
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but not the obligation, to apply the Letter of Credit against any Rents or other
charges in arrears, or to repair damage to the Sublet Premises caused by
Sublessee or Sublessee's employees, contractors, invitees or licensees, or on
account of any other damages suffered by Sublessor as a result of Sublessee's
default hereunder or to satisfy Sublessee's indemnification obligations
hereunder. Sublessor's right to possession of the Sublet Premises or other
remedies available on account of Sublessee's default or any other reason shall
not be affected by the fact that Sublessor holds such Letter of Credit. If
Sublessee shall fail to deliver the Letter of Credit as aforesaid, Sublessor
shall have the right to terminate this Sublease immediately.
Sublessee may, from time to time, replace any existing Letter of Credit
with a new Letter of Credit if the new Letter of Credit (a) becomes effective at
least thirty (30) days before the termination or expiration of the Letter of
Credit that it replaces; (b) is in the required amount; (c) is on the same terms
and conditions as the Letter of Credit it replaces; (d) is issued by a bank
having the same or better credit rating as the bank that issued the Letter of
Credit it replaces and that is otherwise reasonably acceptable to Sublessor);
(e) otherwise complies with the requirements of this Section 19; and (f)
provided that Sublessee first obtains the prior written consent of Sublessor,
which consent may be withheld in Sublessor's sole discretion.
21. TENANT IMPROVEMENT ALLOWANCE. Pursuant to Paragraph 4 to the
Agreement to Extend Lease, Prime Lessor agreed to provide Sublessor with an
allowance of up to $200,375.00 toward improvements to be made to the Premises at
any time during the period from November 1, 1997 through April 30, 2001 (the
"TENANT IMPROVEMENT ALLOWANCE"). Sublessor represents and warrants that it has
(a) not used or expended any of the Tenant Improvement Allowance as of the date
hereof and (b) no reason to believe that Prime Lessor will not provide the
Tenant Improvement Allowance for the "tenant improvements" as defined in the
Agreement to Extend Lease. Sublessor covenants that it will cooperate with
Sublessee at Sublessee's sole cost and expense to ensure Prime Lessor's prompt
release of the Tenant Improvement Allowance. Sublessee shall be entitled to the
Tenant Improvement Allowance to the same extent as Sublessor under the Prime
Lease and in the manner set forth in the Prime Lease, and Sublessor agrees to
pay the Tenant Improvement Allowance to Sublessee in the amount and in the
manner set forth in the Agreement to Extend Lease within five (5) business days
of Sublessor's receipt of such funds from the Prime Lessor. Notwithstanding the
foregoing, Sublessee agrees and acknowledges that Sublessor shall be permitted
throughout the Sublease Term to use all or any part of the Tenant Improvement
Allowance in the amount and in the manner set forth in the Agreement to Extend
Lease. If Sublessee during the Sublease Term desires to make tenant
improvements to the Sublet Premises and the cost of such improvements exceeds
the remaining unused portion of the Tenant Improvement Allowance, Sublessor will
pay to Sublessee an amount equal to the portion of the Tenant Improvement
Allowance used by Sublessor upon the receipt of invoices for the tenant
improvements, provided such tenant improvements constitute "tenant improvements"
as defined in the Agreement to Extend Lease, Sublessee has furnished to
Sublessor the same documents that are required under the Prime Lease in
connection with any tenant improvements, and has obtained any and all necessary
permits and/or approvals required under the Prime Lease. It is anticipated that
Sublessee shall install or cause the following improvements to be made to the
Sublet Premises: (a) recarpet the Sublet Premises, (b) repaint interior walls,
(c) remove any interior non-
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structural walls and repair ceiling tiles damaged due to wall removal, (d)
reallocate air conditioning ducts and light fixtures due to the removal walls
and (e) add to or modify the electrical and telecom systems (collectively, the
"Tenant Improvements"). Notwithstanding the foregoing, Sublessee hereby agrees
and acknowledges that Sublessor makes no representation or warranty that the
Tenant Improvements constitute "tenant improvements" as defined in the
Agreement to Extend Lease. Sublessee understands that all tenant improvements
to the Sublet Premises must be approved by Prime Lessor prior to being made as
provided in the Prime Lease.
22. EXPIRATION OF SUBLEASE TERM. In the event Sublessee desires to lease
the Leased Premises after the expiration of the Sublease Term, Sublessor agrees
that it shall, in good faith, and at Sublessee's expense, assist Sublessee in
its negotiations with Prime Lessor and execution of a new lease with Prime
Lessor. Notwithstanding the foregoing, nothing in this Section shall impose
upon Sublessor any obligation to extend the Sublease Term.
23. CONDITION OF THE SUBLET PREMISES. Sublessee hereby acknowledges that
Sublessee has examined the Sublet Premises and that they are in good and
tenantable condition. Sublessor has let the Sublet Premises in their present
condition, as hereinabove provided, and without any further improvements or
alterations and without any representations on the part of the Sublessor, its
officers, further, servants and/or agents.
24. SUBLESSOR'S DUTIES.
(a) The obligations of Prime Lessor under the Prime Lease
shall remain the obligations of Prime Lessor, and shall not be considered the
obligations or responsibility of Sublessor (except for the representations and
obligations attendant thereto under Sections 1.3 and 3.4 of the Prime Lease).
Sublessor shall fully perform all of its obligations under the Prime Lease to
the extent Sublessee has not expressly agreed to perform such obligations under
this Sublease. In the event, however, that Sublessor defaults in the
performance or observance of any of Sublessor's remaining obligations under
the Prime Lease as Tenant or fails to perform Sublessor s stated obligations
under this Sublease (provided such failure to perform Sublessor's stated
obligations under this Sublease is not the result of or caused by Prime
Lessor's failure to perform Prime Lessor's stated obligations under the Prime
Lease or due to Prime Lessor's default under the Prime Lease) or to enforce,
for Sublessee's benefit, Prime Lessor's obligations under the Prime Lease, then
Sublessee shall be entitled, following fifteen (15) days prior written notice
of any such failure or default and the expiration of the thirty (30) day cure
period, to cure such default and promptly collect from Sublessor, Sublessee's
reasonable expenses in so doing (including, without limitation, reasonable
attorneys' fees and costs). Sublessee shall not be required, however, to wait
the entire applicable cure period if earlier action is required of Sublessee to
comply with the Prime Lease or with any applicable law, regulation or
governmental order.
(b) With respect to the obligations of Prime Lessor under the
Prime Lease, Sublessor's only obligation shall be to use diligent, good faith
efforts to cause Prime Lessor to perform such obligations for the benefit of
Sublessee. Such diligent, good faith efforts shall include, without limitation:
(i) upon Sublessee's written request, immediately notify Prime Lessor of its
nonperformance under the Prime Lease and request that Prime Lessor perform its
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obligations under the Prime Lease and (b) permitting Sublessee to commence a
legal action in Sublessor's name to obtain the performance required from Prime
Lessor under the Prime Lease; provided, however, that Sublessee shall pay all
costs and expenses and any other liability incurred in connection therewith and
Sublessee shall indemnify and hold Sublessor harmless against all reasonable
costs and expenses incurred by Sublessor in connection therewith.
25. SUBORDINATION. This Sublease is subordinate and subject to any
mortgages, ground leases and/or other encumbrances to the same extent, and on
the same terms, as the Primer Lease is so subordinate and subject under the
terms thereof. Sublessee agrees to execute such instruments and, upon the
failure to do so, hereby appoints the Prime Lessor and/or Sublessor its
attorney-in-fact to execute such instruments, on such terms as are described in
paragraph 18 of the Prime Lease.
26. ALTERATIONS AND IMPROVEMENTS. Sublessee shall obtain Prime Lessor's
prior written consent to any alterations or improvements to the Sublet Premises
desired by Sublessee and all such alterations and improvements shall be done in
strict accordance with Section 8 of the Prime Lease. Sublessee shall not permit
any contractor, subcontractor or supplier performing any work on or supplying
any materials to the Sublet Premises to file a mechanic's or materiaman's lien
against the Sublet Premises; provided, however, that if any mechanic's or
materiaman's lien is file against the Sublet Premises, Sublessee shall have
sixty (60) days to remove any such lien, or such longer period as is reasonably
necessary (provided that Sublessee contests such lien diligently and in good
faith and such contest does not materially impair the value or utility of the
Sublet Premises or the lien does not extend beyond the expiration or sooner
termination of this Sublease). If Sublessee fails to remove any such lien from
the Sublet Premises within the aforesaid period, the same shall constitute a
default of this Sublease. Sublessee represents and warrants that it will obtain
all required permits and approvals by all governmental and quasi-governmental
authorities having jurisdiction over the Sublet Premises for alterations and
improvements to the Sublet Premises. Sublessee shall require each contractor
of Sublessee performing work on the Sublet Premises to carry and maintain, at
no expense to Sublessor, insurance in a commercially reasonable form and amount
for the work being done by such contractor.
27. SURRENDER OF THE SUBLET PREMISES. Upon the expiration or sooner
termination of the Sublease, Sublessee shall adhere to the terms and conditions
set forth in the Prime Lease concerning the condition of the Sublet Premises
upon surrender. Sublessee shall not, however, be required to repair or restore
the Sublet Premises to a condition better than the condition in which the
Sublet Premises existed as of the Commencement Date, reasonable wear and tear
excepted. In addition, Sublessee shall not be required to remove any
alterations or improvements made by or for the account of Sublessor. If the
Prime Lessor requires the removal of any alterations or improvements made by or
for Sublessor, Sublessor shall, at its sole cost and expense, remove such
alterations and improvements.
28. NON-DISTURBANCE AGREEMENT. Promptly after the execution of this
Sublease, Sublessor will request that Prime Lessor obtain from all lessors
under all ground leases, from all beneficiaries under all deeds of trust and
all mortgagees under all mortgages affecting the Sublet Premises, at Sublessee's
sole cost and expense, notarized non-disturbance agreements in
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writing, in form and content reasonably acceptable to Sublessee, stating that so
long as Tenant is not in default under any of the terms, covenants, conditions,
or agreements of this Sublease, this Sublease and all of the terms, provisions,
and conditions of this Lease, shall remain in full force and effect, and neither
this Sublease, nor Sublessee's rights nor Sublessee's possession of the Sublet
Premises will be disturbed during the Sublease Term or any extension thereof.
Notwithstanding the foregoing, Sublessor shall have no obligation, beyond its
reasonable efforts to do so, to obtain such non-disturbance agreement on
Sublessee's behalf.
29. INDEMNIFICATION OF SUBLESSEE. Sublessor agrees to comply with all of
the obligations of the Tenant under the Prime Lease to the extent such
obligations are not assumed by Sublessee, if any, and to hold Sublessee harmless
from all claims, costs, liabilities and damages arising out of Sublessor's or
Sublessor's agents', employees' or contractors' (a) failure to comply with or
perform such obligations, (b) breach of any provision of this Sublease, (c)
gross negligence or willful misconduct or (d) violation of law.
30. DAMAGE TO CABLES AND PIPES. Sublessor shall not be responsible or
liable to Sublessee, or to those claiming by, through or under Sublessee, for
any loss or damage resulting to Sublessee, or to those claiming by, through or
under Sublessee, or its or their property, from the breaking, bursting, stoppage
or leakage of electrical cable wires, gas, sewer, water or steam pipes unless
such loss or damage is caused by the willful misconduct of Sublessor or
Sublessor's agents, employees or contractors or unless Sublessor is made aware
of any condition which results in any of the aforementioned loss or damage which
it willfully neglects to repair or replace (to the extent it is obligated to do
so). To the maximum extent permitted by law, Sublessee agrees to use and occupy
the Sublet Premises at Sublessee's own risk.
31. HVAC MAINTENANCE. Sublessor shall keep the HVAC system under an
annual maintenance contract with a qualified person or company of its choosing
throughout the Sublease Term. Sublessee hereby agrees that it shall be
responsible for one half of the cost of such annual maintenance contract, and
agrees that it shall pay, as Additional Rent, its share of any cost associated
with such annual maintenance contract within five (5) days of the presentation
of an invoice therefor.
32. PRIME LESSOR'S APPROVAL. This Sublease and Sublessor's liability
hereunder are subject to Prime Lessor's consent hereto, as required under
paragraph 14 of the Prime Lease, and this Sublease shall be null and void, and
Sublessor shall have no liability to Sublessee whatsoever, should Prime Lessor
fail to give such consent to this Sublease.
33. SURVIVAL. Should any portion of this Sublease be found to be
unenforceable, this Sublease shall continue in full force and effect, without
giving regard to such unenforceable provision.
34. COUNTERPARTS. This Sublease may be signed by the parties in two or
more counterparts, each of which shall be deemed to be an original, and all of
which taken together shall constitute one and the same document. Receipt by
telecopier of a signed copy of this Sublease shall be deemed receipt of the
original document.
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35. SIGNAGE. Sublessee shall be permitted to place a sign on the front
door of the Sublet Premises subject to the approval of the City of San Diego,
all applicable rules, regulations and ordinances, and the terms and conditions
of the Prime Lease.
36 WARRANTIES. Sublessor shall, at Sublessee's expense, cooperate with
Sublessee to enforce, for the benefit of Sublessee, all (a) warranties given and
indemnities made by Prime Lessor to Sublessor under the Prime Lease which would
reduce Sublessee's obligations hereunder and (b) warranties given by any
contractors concerning any improvements made to the Sublet Premises.
37. BROKERS. Each of the parties represents and warrants to the other
that all of its dealings in regard to the Sublet Premises have been solely with
the CB Xxxxxxx Xxxxx, Inc. and the other, and that no other real estate broker,
agent, or intermediary has shown the Sublet Premises to Sublessee or referred
the Sublessee to Sublessor or the Sublessor to Sublessee, or otherwise
involved or procured Sublessee with respect to the Sublease. Each of the parties
agrees to indemnify and hold the other harmless against any claims for
brokerage or other commission arising by reason of a breach by such party of the
aforesaid representations and warranties.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease
Agreement as of the day and year first above written.
Sublessor:
PULSE ENGINEERING, INC.
Attest: /s/ By: /s/ XXXXXXX XXXXXXXXX
------------------------- -------------------------------
Name: XXXXXXX XXXXXXXXX
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Title: VP FINANCE
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Sublessee:
XXXXX.XXX, INC.
Witness/Attest: /s/ By: /s/ XXXXXX X. XXXXXXX
------------------ -------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------
Title: Vice President Operations
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