EXHIBIT 10.56
LEASE
CALWEST INDUSTRIAL HOLDINGS, LLC,
Landlord,
and
ROCKFORD CORPORATION,
Tenant
TABLE OF CONTENTS
Page
1. USE AND RESTRICTIONS ON USE ......................................... 1
2. TERM ................................................................ 2
3. RENT ................................................................ 3
4. RENT ADJUSTMENTS .................................................... 3
5. SECURITY DEPOSIT .................................................... 6
6. ALTERATIONS ......................................................... 6
7. REPAIR .............................................................. 7
8. LIENS ............................................................... 8
9. ASSIGNMENT AND SUBLETTING ........................................... 9
10. INDEMNIFICATION ..................................................... 11
11. INSURANCE ........................................................... 12
12. WAIVER OF SUBROGATION ............................................... 13
13. SERVICES AND UTILITIES .............................................. 13
14. HOLDING OVER ........................................................ 13
15. SUBORDINATION ....................................................... 13
16. RULES AND REGULATIONS ............................................... 14
17. REENTRY BY LANDLORD ................................................. 14
18. DEFAULT ............................................................. 14
19. REMEDIES ............................................................ 15
20. TENANT'S BANKRUPTCY OR INSOLVENCY ................................... 17
21. QUIET ENJOYMENT ..................................................... 18
22. CASUALTY ............................................................ 18
23. EMINENT DOMAIN ...................................................... 20
24. SALE BY LANDLORD .................................................... 20
25. ESTOPPEL CERTIFICATES ............................................... 20
26. SURRENDER OF PREMISES ............................................... 21
27. NOTICES ............................................................. 22
28. TAXES PAYABLE BY TENANT ............................................. 22
29. RELOCATION OF TENANT ................................................ 22
30. DEFINED TERMS AND HEADINGS .......................................... 22
31. TENANT'S AUTHORITY .................................................. 23
32. FINANCIAL STATEMENTS AND CREDIT REPORTS ............................. 23
33. COMMISSIONS ......................................................... 23
34. TIME AND APPLICABLE LAW ............................................. 23
35. SUCCESSORS AND ASSIGNS .............................................. 23
36. ENTIRE AGREEMENT .................................................... 23
37. EXAMINATION NOT OPTION .............................................. 24
38. RECORDATION ......................................................... 24
39. LIMITATION OF LANDLORD'S LIABILITY .................................. 24
EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISES
EXHIBIT A-l - SITE PLAN
EXHIBIT B - INITIAL ALTERATIONS
EXHIBIT C - COMMENCEMENT DATE MEMORANDUM
EXHIBIT D - RULES AND REGULATIONS
MULTI-TENANT INDUSTRIAL NET LEASE
REFERENCE PAGES
PROJECT: Banicia Commerce Center II,
6200-6550 Goodyear Road, Xxxxxxx,
Xxxxxxxxxx 00000
BUILDING: 0000 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx 00000
PREMISES: 0000 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx 00000
LANDLORD: CALWEST INDUSTRIAL HOLDINGS, LLC,
a Delaware limited liability company
LANDLORD'S ADDRESS CalWest Industrial Holdings, LLC
c/o The RREEF Funds
0000 Xxxxxx Xxxxx, Xxxxx X
Xxxxxxx, Xxxxxxxxxx 00000
WIRE INSTRUCTIONS AND/OR ADDRESS CALWEST INDUSTRIAL HOLDINGS, LLC,
FOR RENT PAYMENT: File #30015, X.X. Xxx 00000,
Xxx Xxxxxxxxx, XX 00000-0000
LEASE REFERENCE DATE: July 10, 2003
TENANT: ROCKFORD CORPORATION, an Arizona
corporation
TENANT'S NOTICE ADDRESS: 0000 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx 00000
PREMISES RENTABLE AREA: Approximately 18,406 sq. ft. (for
outline of Premises see Exhibit A)
USE: Purposes of general office,
warehousing and distribution of
audio equipment
COMMENCEMENT DATE: August 15, 2003
TERM OF LEASE: Approximately sixty-three (63)
months beginning on the Commencement
Date and ending on The Termination
Date (the period from the
Commencement Date to the last day of
the same month is the "Commencement
Month").
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TERMINATION DATE: The last day of the sixty-third
(63rd) full calendar month after (if
the Commencement Month is not a full
calendar month), or from and
including (if the Commencement Month
is a full calendar month), the
Commencement Month
ANNUAL RENT and MONTHLY INSTALLMENT OF RENT(Article 3):
Rentable Annual Rent Monthly Installment
Period Sq. Ft. Per Sq. Ft. Annual Rent of Rent
-------------------------------------------------------------------------------------------------------------------------------
8/1/03 - 10/31/03 18,406 $ 0.00 $ 0.00 $ 0.00
11/1/03 - 10/31/04 18,406 $7.680 $141,358.10 $11,779.80
11/1/04 - 10/31/05 18,406 $7.987 $147,008.72 $12,250.73
11/1/05 - 10/31/06 18,406 $8.307 $152,898.64 $12,741.55
11/1/06 - 10/31/07 18,406 $8,639 $159,009.43 $13,250.77
11/1/07 - 10/31/08 18,406 $8.985 $165,377.91 $13,781.49
INITIAL ESTIMATED MONTHLY $1,924.22
INSTALLMENT OF RENT ADJUSTMENTS
(Article 4)
TENANT'S PROPORTIONATE SHARE: 8.35% of the Project
SECURITY DEPOSIT: $14,540.00
ASSIGNMENT/SUBLETTING FEE $2,000.00
REAL ESTATE BROKER DUE RREEF Management Company
COMMISSION:
TENANT'S SIC CODE: 3651
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The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. This Lease includes Exhibit A through D, all
of which are made a part of this Lease.
LANDLORD: TENANT:
CALWEST INDUSTRIAL HOLDINGS, LLC, ROCKFORD CORPORATION, an Arizona
a Delaware limited liability company corporation
By:RREEF MANAGEMENT COMPANY, a
Delaware corporation, Its Property By: /s/ XXXXX X. XXXXXXX
Manager --------------------------------
Name: XXXXX X. XXXXXXX
By: /s/ XXXXXXX X. XXXXXX Title: CFO
------------------------------
Xxxxxxx X. Xxxxxx
District Manager By:_________________________________
Dated: 7/16/03 Name:_______________________________
Title:______________________________
Dated:
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LEASE
By this Lease, Landlord leases to Tenant and Tenant leases from
Landlord that portion of the Building which is located in the Project as set
forth and described on the Reference Pages (the "Premises"). The Premises are
depicted on the floor plan attached hereto as Exhibit A, and the Project
(including the Building) is depicted on the site plan attached hereto as Exhibit
A-1. The Reference Pages, including all terms defined thereon, are incorporated
as part of this Lease.
1. USE AND RESTRICTIONS ON USE.
1.1 The Premises are to be used solely for the purposes set forth
on the Reference Pages. Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Project or injure, annoy, or disturb them,
or allow the Premises to be used for any improper, immoral, unlawful, or
objectionable purpose, or commit any waste. Tenant shall not do, permit or
suffer in, on, or about the Premises the sale of any alcoholic liquor without
the written consent of Landlord first obtained. Tenant shall comply with all
governmental laws, ordinances and regulations applicable to the use of the
Premises and its occupancy and shall promptly comply with all governmental
orders and directions for the correction, prevention and abatement of any
violations in the Project, the Building or appurtenant land, caused or permitted
by, or resulting from the specific use by, Tenant, or in or upon, or in
connection with, the Premises, all at Tenant's sole expense. Tenant shall not do
or permit anything to be done on or about the Premises or bring or keep anything
into the Premises which will in any way increase the rate of, invalidate or
prevent the procuring of any insurance protecting against loss or damage to the
Project or the Building or any of its contents by fire or other casualty or
against liability for damage to property or injury to persons in or about the
Project or the Building or any part thereof.
1.2 Tenant shall not, and shall not direct, suffer or permit any
of its agents, contractors, employees, licensees or invitees (collectively, the
"Tenant Entities") to at any time handle, use, manufacture, store or dispose of
in or about the Premises or the Project any (collectively "Hazardous Materials")
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal,
state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively "Environmental Laws"), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Project and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Project and appurtenant land or the environment. Tenant shall
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protect, defend, indemnify and hold each and all of the Landlord Entities (as
defined in Article 30) harmless from and against any and all loss, claims,
liability or costs (including court costs and reasonable attorney's fees)
incurred by reason of any actual or asserted failure of Tenant to folly comply
with all applicable Environmental Laws, or the presence, handling, use or
disposition in or from the Premises of any Hazardous Materials by Tenant or any
Tenant Entity (even though permissible under all applicable Environmental Laws
or the provisions of this Lease), or by reason of any actual or asserted failure
of Tenant to keep, observe, or perform any provision of this Section 1.2.
1.3 Tenant and the Tenant Entities will be entitled to the
non-exclusive use of the common areas of the Project as they exist from time to
time during the Term, including the parking facilities, subject to Landlord's
rules and regulations regarding such use. However, in no event will Tenant or
the Tenant Entities park more vehicles in the parking facilities than Tenant's
Proportionate Share of the total parking spaces available for common use. The
foregoing shall not be deemed to provide Tenant with an exclusive right to any
parking spaces or any guaranty of the availability of any particular parking
spaces or any specific number of parking spaces.
2. TERM.
2.1 The Term of this Lease shall begin on the date ("Commencement
Date") which shall be the later of the Scheduled Commencement Date as shown on
the Reference Pages or the date that Landlord shall tender possession of the
Premises to Tenant, and shall terminate on the date as shown on the Reference
Pages ('Termination Date"), unless sooner terminated by the provisions of this
Lease. Landlord shall tender possession of the Premises with all the work, if
any, to be performed by Landlord pursuant to Exhibit B to this Lease
substantially completed. Tenant shall deliver a punch list of items not
completed within thirty (30) days after Landlord tenders possession of the
Premises and Landlord agrees to proceed with due diligence to perform its
obligations regarding such items. Tenant shall, at Landlord's request, execute
and deliver a memorandum agreement provided by Landlord in the form of Exhibit C
attached hereto, setting forth the actual Commencement Date, Termination Date
and, if necessary, a revised rent schedule. Should Tenant fail to do so within
thirty (30) days after Landlord's request, the information set forth in such
memorandum provided by Landlord shall be conclusively presumed to be agreed and
correct.
2.2 Tenant agrees that in the event of the inability of Landlord
to deliver possession of the Premises on the Scheduled Commencement Date for any
reason, Landlord shall not be liable for any damage resulting from such
inability, but Tenant shall not be liable for any rent until the time when
Landlord can, after notice to Tenant, deliver possession of the Premises to
Tenant. No such failure to give possession on the Scheduled Commencement Date
shall affect the other obligations of Tenant under this Lease, except that if
Landlord is unable to deliver possession of the Premises within one hundred
twenty (120) days after the Scheduled Commencement Date (other than as a result
of strikes, shortages of materials, holdover tenancies or similar matters beyond
the reasonable control of Landlord and Tenant is notified by Landlord in writing
as to such delay), Tenant shall have the option to terminate this Lease unless
said delay is as a result of: (a) Tenant's failure to agree to plans and
specifications and/or construction cost estimates or bids; (b) Tenant's request
for materials, finishes or installations
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other than Landlord's standard except those, if any, that Landlord shall have
expressly agreed to furnish without extension of time agreed by Landlord; (c)
Tenant's change in any plans or specifications; or, (d) performance or
completion by a party employed by Tenant (each of the foregoing, a "Tenant
Delay"). If any delay is the result of a Tenant Delay, the Commencement Date and
the payment of rent under this Lease shall be accelerated by the number of days
of such Tenant Delay.
2.3 In the event Landlord permits Tenant, or any agent, employee
or contractor of Tenant, to enter, use or occupy the Premises prior to the
Commencement Date, such entry, use or occupancy shall be subject to all the
provisions of this Lease other than the payment of rent, including, without
limitation, Tenant's compliance with the insurance requirements of Article 11.
Said early possession shall not advance the Termination Date.
3. RENT.
3.1 Tenant agrees to pay to Landlord the Annual Rent in effect
from time to time by paying the Monthly Installment of Rent then in effect on or
before the first day of each full calendar month during the Term, except that
the first full month's rent shall be paid upon the execution of this Lease. The
Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12)
of the Annual Rent in effect at such time. Rent for any period during the Term
which is less than a full month shall be a prorated portion of the Monthly
Installment of Rent based upon the number of days in such month. Said rent shall
be paid to Landlord, without deduction or offset and without notice or demand,
at the Rent Payment Address, as set forth on the Reference Pages, or to such
other person or at such other place as Landlord may from time to time designate
in writing. If an Event of Default occurs with respect to the payment of rent,
Landlord may require by notice to Tenant that all subsequent rent payments be
made by an automatic payment from Tenant's bank account to Landlord's account,
without cost to Landlord. Tenant must implement such automatic payment system
prior to the next scheduled rent payment or within ten (10) days after
Landlord's notice, whichever is later. Unless specified in this Lease to the
contrary, all amounts and sums payable by Tenant to Landlord pursuant to this
Lease shall be deemed additional rent.
3.2 Tenant recognizes that late payment of any rent or other sum
due under this Lease will result in administrative expense to Landlord, the
extent of which additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if rent or any other sum
is not paid when due and payable pursuant to this Lease, a late charge shall be
imposed in an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b)
six percent (6%) of the unpaid rent or other payment. The amount of the late
charge to be paid by Tenant shall be reassessed and added to Tenant's obligation
for each successive month until paid. The provisions of this Section 3.2 in no
way relieve Tenant of the obligation to pay rent or other payments on or before
the date on which they are due, nor do the terms of this Section 3.2 in any way
affect Landlord's remedies pursuant to Article 19 of this Lease in the event
said rent or other payment is unpaid after date due.
4. RENT ADJUSTMENTS.
4.1 For the purpose of this Article 4, the following terms are
defined as follows:
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4.1.1 Lease Year: Each fiscal year (as determined by
Landlord from time to time) falling partly or wholly within the Term.
4.1.2 Expenses: All costs of operation, maintenance,
repair, replacement and management of the Project (including the amount of any
credits which Landlord may grant to particular tenants of the Project in lieu of
providing any standard services or paying any standard costs described in this
Section 4.1.2 for similar tenants), as determined in accordance with generally
accepted accounting principles, including the following costs by way of
illustration, but not limitation: water and sewer charges; insurance charges of
or relating to all insurance policies and endorsements deemed by Landlord to be
reasonably necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Project or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas; waste
disposal; the cost of janitorial services; the cost of security and alarm
services (including any central station signaling system); costs of cleaning,
repairing, replacing and maintaining the common areas, including parking and
landscaping, window cleaning costs; labor costs; costs and expenses of managing
the Project including management and/or administrative fees; air conditioning
maintenance costs; elevator maintenance fees and supplies; material costs;
equipment costs including the cost of maintenance, repair and service agreements
and rental and leasing costs; purchase costs of equipment; current rental and
leasing costs of items which would be capital items if purchased; tool costs;
licenses, permits and inspection fees; wages and salaries (which, for employees
working for other properties in addition to the Project, shall be allocated
proportionately to reflect the time spent working in connection with the
Project); employee benefits and payroll taxes (which, for employees working for
other properties in addition to the Project, shall be allocated proportionately
to reflect the time spent working in connection with the Project); accounting
and legal fees; any sales, use or service taxes incurred in connection
therewith. In addition, Landlord shall be entitled to recover, as additional
rent (which, along with any other capital expenditures constituting Expenses,
Landlord may either include in Expenses or cause to be billed to Tenant along
with Expenses and Taxes but as a separate item), Tenant's Proportionate Share
of: (i) an allocable portion of the cost of capital improvement items which are
reasonably calculated to reduce operating expenses; (ii) the cost of fire
sprinklers and suppression systems and other life safety systems; and (iii)
other capital expenses which are required under any governmental laws,
Regulations or ordinances which were not applicable to the Project at the time
it was constructed; but the costs described in this sentence shall be amortized
over the reasonable life of such expenditures in accordance with such reasonable
life and amortization schedules as shall be determined by Landlord in accordance
with generally accepted accounting principles, with interest on the unamortized
amount at one percent (1%) in excess of the Wall Street Journal prime lending
rate announced from time to time. Expenses shall not include depreciation or
amortization of the buildings in the Project or equipment in the Project except
as provided herein, loan principal payments, costs of alterations of tenants'
premises, leasing commissions, interest expenses on long-term borrowings or
advertising costs.
4.1.3 Taxes: Real estate taxes and any other taxes, charges
and assessments which are levied with respect to the Project or the land
appurtenant to the Project, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Project and used in connection with the operation of the Project and said land,
any payments to any ground lessor in reimbursement of tax payments made by such
lessor; and all fees, expenses and costs incurred by Landlord in investigating,
protesting, contesting or in any
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way seeking to reduce or avoid increase in any assessments, levies or the tax
rate pertaining to any Taxes to be paid by Landlord in any Lease Year. Taxes
shall not include any corporate franchise, or estate, inheritance or net income
tax, or tax imposed upon any transfer by Landlord of its interest in this Lease
or the Project or any taxes to be paid by Tenant pursuant to Article 28.
4.2 Tenant shall pay as additional rent for each Lease Year
Tenant's Proportionate Share of Expenses and Taxes incurred for such Lease Year.
4.3 The annual determination of Expenses shall be made by Landlord
and shall be binding upon Landlord and Tenant, subject to the provisions of this
Section 4.3. During the Term, Tenant may review, at Tenant's sole cost and
expense, the books and records supporting such determination in an office of
Landlord, or Landlord's agent, during normal business hours, upon giving
Landlord five (5) days advance written notice within sixty (60) days after
receipt of such determination, but in no event more often than once in any one
(1) year period, subject to execution of a confidentiality agreement acceptable
to Landlord, and provided that if Tenant utilizes an independent accountant to
perform such review it shall be one of national standing which is reasonably
acceptable to Landlord, is not compensated on a contingency basis and is also
subject to such confidentiality agreement. If Tenant fails to object to
Landlord's determination of Expenses within ninety (90) days after receipt, or
if any such objection fails to state with specificity the reason for the
objection, Tenant shall be deemed to have approved such determination and shall
have no further right to object to or contest such determination. In the event
that during all or any portion of any Lease Year or Base Year, the Project is
not fully rented and occupied Landlord shall make an appropriate adjustment in
occupancy-related Expenses for such year for the purpose of avoiding distortion
of the amount of such Expenses to be attributed to Tenant by reason of variation
in total occupancy of the Project, by employing consistent and sound accounting
and management principles to determine Expenses that would have been paid or
incurred by Landlord had the Project been at least ninety-five percent (95%)
rented and occupied, and the amount so determined shall be deemed to have been
Expenses for such Lease Year.
4.4 Prior to the actual determination thereof for a Lease Year,
Landlord may from time to time estimate Tenant's liability for Expenses and/or
Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion
thereof. Landlord will give Tenant written notification of the amount of such
estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto. Landlord's initial estimate of the amounts payable by
Tenant pursuant to this Article 4 is set forth on the Reference Pages.
4.5 When the above mentioned actual determination of Tenant's
liability for Expenses and/or Taxes is made for any Lease Year and when Tenant
is so notified in writing, then:
4.5.1 If the total additional rent Tenant actually paid
pursuant to Section 4.2 on account of Expenses and/or Taxes for the Lease Year
is less than Tenant's liability for Expenses
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and/or Taxes, then Tenant shall pay such deficiency to Landlord as additional
rent in one lump sum within thirty (30) days of receipt of Landlord's xxxx
therefor; and
4.5.2 If the total additional rent Tenant actually paid
pursuant to Section 4.2 on account of Expenses and/or Taxes for the Lease Year
is more than Tenant's liability for Expenses and/or Taxes, then Landlord shall
credit the difference against the then next due payments to be made by Tenant
under this Article 4, or, if the Lease has terminated, refund the difference in
cash within one hundred eighty (180) days of the termination date,
4.6 If the Commencement Date is other than January 1 or if the
Termination Date is other than December 31, Tenant's liability for Expenses and
Taxes for the Lease Year in which said Date occurs shall be prorated based upon
a three hundred sixty-five (365) day year.
5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with
Landlord upon the execution of this Lease. Said sum shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord's damage in case of Tenant's
default. If Tenant defaults with respect to any provision of this Lease,
Landlord may use any part of the Security Deposit for the payment of any rent or
any other sum in default, or for the payment of any amount which Landlord may
spend or become obligated to 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 is so used, Tenant shall within five
(5) days after written demand therefor, deposit with Landlord an amount
sufficient to restore the Security Deposit to its original amount and Tenant's
failure to do so shall be a material breach of this Lease. Except to such
extent, if any, as shall be required by law, Landlord shall not be required to
keep the Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit or any balance thereof shall be returned to Tenant at such time after
termination of this Lease when Landlord shall have determined that all of
Tenant's obligations under this Lease have been fulfilled, but in no event later
than ninety (90) days after the termination date. Notwithstanding anything to
the contrary contained herein or in Article 23 hereof, Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, or any similar or
successor regulations or other laws now or hereinafter in effect.
6. ALTERATIONS.
6.1 Except for those, if any, specifically provided for in Exhibit
B to this Lease, Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord. When applying for such consent, Tenant shall, if requested
by Landlord, furnish complete plans and specifications for such alterations,
additions and improvements. Landlord's consent shall not be unreasonably
withheld or delayed with respect to alterations which (i) are not structural in
nature, (ii) are not visible from the exterior of the Building, (iii) do not
affect or require modification of the Building's electrical, mechanical,
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plumbing, HVAC or other systems, and (iv) in aggregate do not cost more than
$5.00 per rentable square foot of that portion of the Premises affected by the
alterations in question.
6.2 In the event Landlord consents to the making of any such
alteration, addition or improvement by Tenant, the same shall be made by using
either Landlord's contractor or a contractor reasonably approved by Landlord, in
either event at Tenant's sole cost and expense. If Tenant shall employ any
contractor other than Landlord's contractor and such other contractor or any
subcontractor of such other contractor shall employ any non-union labor or
supplier, Tenant shall be responsible for and hold Landlord harmless from any
and all delays, damages and extra costs suffered by Landlord as a result of any
dispute with any labor unions concerning the wage, hours, terms or conditions of
the employment of any such labor. In any event Landlord may charge Tenant any
third-party costs actually incurred by Landlord in connection with the proposed
work and the design thereof, with all such amounts being due five (5) days after
Landlord's demand.
6.3 All alterations, additions or improvements proposed by Tenant
shall be constructed in accordance with all government laws, ordinances, rules
and regulations, using Building standard materials where applicable, and Tenant
shall, prior to construction, provide the additional insurance required under
Article 11 in such case, and also all such assurances to Landlord as Landlord
shall reasonably require to assure payment of the costs thereof, including but
not limited to, notices of non-responsibility, waivers of lien, surety company
performance bonds and funded construction escrows and to protect Landlord and
the Building and appurtenant land against any loss from any mechanic's,
materialmen's or other liens. Tenant shall pay in addition to any sums due
pursuant to Article 4, any increase in real estate taxes attributable to any
such alteration, addition or improvement for so long, during the Term, as such
increase is ascertainable; at Landlord's election said sums shall be paid in the
same way as sums due under Article 4. Landlord may, as a condition to its
consent to any particular alterations or improvements, require Tenant to deposit
with Landlord the amount reasonably estimated by Landlord as sufficient to cover
the cost of removing such alterations or improvements and restoring the
Premises, to the extent required under Section 26.2
7. REPAIR.
7.1 Landlord shall have no obligation to alter, remodel, improve,
repair, decorate or paint the Premises, except as specified in Exhibit B if
attached to this Lease and except that Landlord shall repair and maintain the
structural portions of the roof, foundation and walls of the Building. By taking
possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them, except as set forth in the punch list to be delivered pursuant to
Section 2.1. It is hereby understood and agreed that no representations
respecting the condition of the Premises, the Building or the Project have been
made by Landlord to Tenant, except as specifically set forth in this Lease.
Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant.
7.2 Tenant shall at its own cost and expense keep and maintain all
parts of the Premises and such portion of the Building and improvements as are
within the exclusive control
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of Tenant in good condition, promptly making all necessary repairs and
replacements, whether ordinary or extraordinary, with materials and workmanship
of the same character, kind and quality as the original (including, but not
limited to, repair and replacement of all fixtures installed by Tenant, water
heaters serving the Premises, windows, glass and plate glass, doors, exterior
stairs, skylights, any special office entries, interior walls and finish work,
floors and floor coverings, heating and air conditioning systems serving the
Premises, electrical systems and fixtures, sprinkler systems, dock boards, truck
doors, dock bumpers, plumbing work and fixtures, and performance of regular
removal of trash and debris). Tenant as part of its obligations hereunder shall
keep the Premises in a clean and sanitary condition. Tenant will, as far as
possible keep all such parts of the Premises from deterioration due to ordinary
wear and from falling temporarily out of repair, and upon termination of this
Lease in any way Tenant will yield up the Premises to Landlord in good condition
and repair, loss by fire or other casualty excepted (but not excepting any
damage to glass). Tenant shall, at its own cost and expense, repair any damage
to the Premises, the Building or the Project resulting from and/or caused in
whole or in part by the negligence or misconduct of Tenant, its agents,
employees, contractors, invitees, or any other person entering upon the Premises
as a result of Tenant's business activities or caused by Tenant's default
hereunder.
7.3 Except as provided in Article 22, there shall be no abatement
of rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Project, the Building or the Premises
or to fixtures, appurtenances and equipment in the Building. Tenant hereby
waives any and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code or any similar or successor
regulations or other laws now or hereinafter in effect.
7.4 Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a maintenance
contractor reasonably approved by Landlord for servicing all heating and air
conditioning systems and equipment serving the Premises (and a copy thereof
shall be furnished to Landlord). The service contract must include all services
suggested by the equipment! manufacturer in the operation/maintenance manual and
must become effective within thirty (30) days of the date Tenant takes
possession of the Premises. Should Tenant fail to do so, Landlord may, upon
notice to Tenant, enter into such a maintenance/ service contract on behalf of
Tenant or perform the work and in either case, charge Tenant the cost thereof
along with a reasonable amount for Landlord's overhead.
7.5 Landlord shall coordinate any repairs and other maintenance of
any railroad tracks serving the Project and, if Tenant uses such rail tracks,
Tenant shall reimburse Landlord or the railroad company from time to time upon
demand, as additional rent, for its share of the costs of such repair and
maintenance and for any other sums specified in any agreement to which Landlord
or Tenant is a party respecting such tracks, such costs to be borne
proportionately by all tenants in the Project using such rail tracks, based upon
the actual number of rail cars shipped and received by such tenant during each
calendar year during the Term.
8. LIENS. Tenant shall keep the Premises, the Building, the Project and
appurtenant land and Tenant's leasehold interest in the Premises free from any
liens arising out of any services, work or materials performed, furnished, or
contracted for by Tenant, or obligations incurred by
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Tenant. In the event that Tenant fails, within ten (10) days following the
imposition of any such lien, to either cause the same to be released of record
or provide Landlord with insurance against the same issued by a major title
insurance company or such other protection against the same as Landlord shall
reasonably accept (such failure to constitute an Event of Default), Landlord
shall have the right to cause the same to be released by such means as it shall
reasonably deem proper, including payment of the claim giving rise to such lien.
All such sums paid by Landlord and all expenses incurred by it in connection
therewith shall be payable to it by Tenant within five (5) days of Landlord's
demand.
9. ASSIGNMENT AND SUBLETTING.
9.1 Tenant shall not have the right to assign or pledge this Lease
or to sublet the whole or any part of the Premises whether voluntarily or by
operation of law, or permit the use or occupancy of the Premises by anyone other
than Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy without the prior written consent of Landlord, such consent not to be
unreasonably withheld or delayed, and said restrictions shall be binding upon
any and all assignees of the Lease and subtenants of the Premises. In the event
Tenant desires to sublet, or permit such occupancy of, the Premises, or any
portion thereof, or assign this Lease, Tenant shall give written notice thereof
to Landlord at least sixty (60) days but no more than one hundred twenty (120)
days prior to the proposed commencement date of such subletting or assignment,
which notice shall set forth the name of the proposed subtenant or assignee, the
relevant terms of any sublease or assignment and copies of financial reports and
other relevant financial information of the proposed subtenant or assignee.
9.2 Notwithstanding any assignment or subletting, permitted or
otherwise, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of the rent specified in this Lease and
for compliance with all of its other obligations under the terms, provisions and
covenants of this Lease. Upon the occurrence of an Event of Default, if the
Premises or any part of them are then assigned or sublet, Landlord, in addition
to any other remedies provided in this Lease or provided by law, may, at its
option, collect directly from such assignee or subtenant all rents due and
becoming due to Tenant under such assignment or sublease and apply such rent
against any sums due to Landlord from Tenant under this Lease, and no such
collection shall be construed to constitute a novation or release of Tenant from
the further performance of Tenant's obligations under this Lease.
9.3 In addition to Landlord's right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting of the entire Premises or assignment, to terminate
this Lease, or in the case of a proposed subletting of less than the entire
Premises, to recapture the portion of the Premises to be sublet, as of the date
the subletting or assignment is to be effective. The option shall be exercised,
if at all, by Landlord giving Tenant written notice given by Landlord to Tenant
within thirty (30) days following Landlord's receipt of Tenant's written notice
as required above. However, if Tenant notifies Landlord, within five (5) days
after receipt of Landlord's termination notice, that Tenant is rescinding its
proposed assignment or sublease, the termination notice shall be void and the
Lease shall continue in full force and effect. If this Lease shall be terminated
with respect to the entire Premises pursuant to this Section, the Term of this
Lease shall end on the date stated in Tenant's notice as the effective date of
the sublease or assignment as if that date had been
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originally fixed in this Lease for the expiration of the Term. If Landlord
recaptures under this Section only a portion of the Premises, the rent to be
paid from time to time during the unexpired Term shall xxxxx proportionately
based on the proportion by which the approximate square footage of the remaining
portion of the Premises shall be less than that of the Premises as of the date
immediately prior to such recapture. Tenant shall, at Tenant's own cost and
expense, discharge in full any outstanding commission obligation which may be
due and owing as a result of any proposed assignment or subletting, whether or
not the Premises are recaptured pursuant to this Section 9.3 and rented by
Landlord to the proposed tenant or any other tenant.
9.4 In the event that Tenant sells, sublets, assigns or transfers
this Lease, Tenant shall pay to Landlord as additional rent an amount equal to
one hundred percent (100%) of any Increased Rent (as defined below), less the
Costs Component (as defined below), when and as such Increased Rent is received
by Tenant. As used in this Section, "Increased Rent" shall mean the excess of
(i) all rent and other consideration which Tenant is entitled to receive by
reason of any sale, sublease, assignment or other transfer of this Lease, over
(ii) the rent otherwise payable by Tenant under this Lease at such time. For
purposes of the foregoing, any consideration received by Tenant in form other
than cash shall be valued at its fair market value as determined by Landlord in
good faith. The "Costs Component" is that amount which, if paid monthly, would
fully amortize on a straight-line basis, over the entire period for which Tenant
is to receive Increased Rent, the reasonable costs incurred by Tenant for
leasing commissions and tenant improvements in connection with such sublease,
assignment or other transfer.
9.5 Notwithstanding any other provision hereof, it shall be
considered reasonable for Landlord to withhold its consent to any assignment of
this Lease or sublease of any portion of the Premises if at the time of either
Tenant's notice of the proposed assignment or sublease or the proposed
commencement date thereof, there shall exist any uncured default of Tenant or
matter which will become a default of Tenant with passage of time unless cured,
or if the proposed assignee or sublessee is an entity: (a) with which Landlord
is already in negotiation; (b) is already an occupant of the Project unless
Landlord is unable to provide the amount of space required by such occupant; (c)
is a governmental agency; (d) is incompatible with the character of occupancy of
the Project; (e) with which the payment for the sublease or assignment is
determined in whole or in part based upon its net income or profits; or (f)
would subject the Premises to a use which would: (i) involve increased personnel
or wear upon the Building or the Project; (ii) violate any exclusive right
granted to another tenant of the Project; (iii) require any addition to or
modification of the Premises, the Building or the Project in order to comply
with building code or other governmental requirements; or, (iv) involve a
violation of Section 1.2. Tenant expressly agrees that for the purposes of any
statutory or other requirement of reasonableness on the part of Landlord,
Landlord's refusal to consent to any assignment or sublease for any of the
reasons described in this Section 9.5, shall be conclusively deemed to be
reasonable.
9.6 Upon any request to assign or sublet, Tenant will pay to
Landlord the Assignment/Subletting Fee plus, on demand, a sum equal to all of
Landlord's costs, including reasonable attorney's fees, incurred in
investigating and considering any proposed or purported assignment or pledge of
this Lease or sublease of any of the Premises, regardless of whether Landlord
shall consent to, refuse consent, or determine that Landlord's consent is not
required
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for, such assignment, pledge or sublease. Any purported sale, assignment,
mortgage, transfer of this Lease or subletting which does not comply with the
provisions of this Article 9 shall be void.
9.7 If Tenant is a corporation, limited liability company,
partnership or trust, any transfer or transfers of or change or changes within
any twelve (12) month period in the number of the outstanding voting shares of
the corporation or limited liability company, the general partnership interests
in the partnership or the identity of the persons or entities controlling the
activities of such partnership or trust resulting in the persons or entities
owning or controlling a majority of such shares, partnership interests or
activities of such partnership or trust at the beginning of such period no
longer having such ownership or control shall be regarded as equivalent to an
assignment of this Lease to the persons or entities acquiring such ownership or
control and shall be subject to all the provisions of this Article 9 to the same
extent and for all intents and purposes as though such an assignment.
Notwithstanding the provisions of this Article 9, Tenant may assign this Lease
or sublease the Premises or any portion thereof, without Landlord's consent and
without releasing Tenant from any obligation or liability under this Lease, to
any corporation or other entity which controls, is controlled by or is under
common control with Tenant, or to any corporation or other entity resulting from
a merger with Tenant, or to any corporation or other entity that acquires all
the assets of Tenant as a going concern, or to an entity acquiring or succeeding
to substantially all of the business, or substantially all of a business unit,
of Tenant, by merger, spin-off, reorganization, consolidation, acquisition (of
assets or equity) or otherwise; provided that the Tenant's (or the surviving
entity in the case of a merger) net worth as of the date immediately after the
assignment or subletting is not less than Tenant's net worth as of the date of
this Lease or as of the date immediately prior to the assignment or subletting
(or the series of transactions of which such assignment or subletting is a
part), whichever is greater. For the purpose of this section 9.7, "control"
means the direct or indirect ownership of fifty percent (50%) or more of the
capital, profits and voting rights of the corporation or other entity in
question. Tenant must provide Landlord ten (10) days prior written notice of any
of assignment of this Lease not requiring Landlord's consent pursuant to the
terms of this Section 9.8. Tenant agrees that the instrument by which any such
assignment or sublease to which Landlord's consent is not required shall
expressly provide that the assignee or subtenant will perform all of the
covenants to be performed by Tenant under this Lease (in the case of a sublease,
only insofar as such covenants relate to the portion of the Premises subject to
such sublease) as and when performance is due after the effective date of the
assignment or sublease and that Landlord will have the right to enforce such
covenants directly against such assignee or subtenant. Any purported assignment
or sublease without an instrument containing the foregoing provisions shall be
void. Tenant shall in all cases remain liable for the performance by any
assignee or subtenant of all such covenants.
10. INDEMNIFICATION. None of the Landlord Entities shall be liable and
Tenant hereby waives all claims against them for any damage to any property or
any injury to any person in or about the Premises or the Project by or from any
cause whatsoever (including without limiting the foregoing, rain or water
leakage of any character from the roof, windows, walls, basement, pipes,
plumbing works or appliances, the Project or the Building not being in good
condition or repair, gas, fire, oil, electricity or theft), except to the extent
caused by or arising from the gross negligence or willful misconduct of Landlord
or its agents, employees or contractors. Tenant shall protect, indemnify and
hold the Landlord Entities harmless from and against any and all loss, claims,
liability or costs (including court costs and reasonable attorney's fees)
incurred by
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reason of (a) any damage to any property (including but not limited to property
of any Landlord Entity) or any injury (including but not limited to death) to
any person occurring in, on or about the Premises or the Project to the extent
that such injury or damage shall be caused by or arise from any actual or
alleged act, neglect, fault, or omission by or of Tenant or any Tenant Entity to
meet any standards imposed by any duty with respect to the injury or damage; (b)
the conduct or management of any work or thing whatsoever done by the Tenant in
or about the Premises or from transactions of the Tenant concerning the
Premises; (c) Tenant's failure to comply with any and all governmental laws,
ordinances and regulations applicable to the condition or use of the Premises or
its occupancy; or (d) any breach or default on the part of Tenant in the
performance of any covenant or agreement on the part of the Tenant to be
performed pursuant to this Lease. The provisions of this Article shall survive
the termination of this Lease with respect to any claims or liability accruing
prior to such termination.
11. INSURANCE.
11.1 Tenant shall keep in force throughout the Term: (a) a
Commercial General Liability insurance policy or policies to protect the
Landlord Entities against any liability to the public or to any invitee of
Tenant or a Landlord Entity incidental to the use of or resulting from any
accident occurring in or upon the Premises with a limit of not less than
$1,000,000 per occurrence and not less than $2,000,000 in the annual aggregate,
or such larger amount as Landlord may prudently require from time to time,
covering bodily injury and property damage liability and $1,000,000
products/completed operations aggregate; (b) Business Auto Liability covering
owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per
accident; (c) insurance protecting against liability under Worker's Compensation
Laws with limits at least as required by statute; (d) Employers Liability with
limits of $1,000,000 each accident, $1,000,000 disease policy limit, $1,000,000
disease each employee; (e) All Risk or Special Form coverage protecting Tenant
against loss of or damage to Tenant's alterations, additions, improvements,
carpeting, floor coverings, panelings, decorations, fixtures, inventory and
other business personal property situated in or about the Premises to the full
replacement value of the property so insured, (f) Business Interruption
Insurance for 100% of the 12 months actual loss sustained, and (g) Excess
Liability in the amount of $5,000,000.
11.2 The aforesaid policies shall (a) be provided at Tenant's
expense; (b) name the Landlord Entities as additional insureds (General
Liability) and loss payee (Property--Special Form); (c) be issued by an
insurance company with a minimum Best's rating of "A: VII" during the Term; and
(d) provide that said insurance shall not be canceled unless thirty (30) days
prior written notice (ten days for non-payment of premium) shall have been given
to Landlord. A certificate of Liability insurance on XXXXX Form 25 and a
certificate of Property insurance on XXXXX Form 27 shall be delivered to
Landlord by Tenant on or before the Commencement Date and at least thirty (30)
days prior to each renewal of said insurance.
11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises ("Work") the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall reasonably require; and the policies of or certificates evidencing such
insurance must be delivered to Landlord prior to the commencement of any such
Work.
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12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the respective
party but only to the extent of the net insurance proceeds payable under such
policies. Each party shall obtain any special endorsements required by their
insurer to evidence compliance with the aforementioned waiver.
13. SERVICES AND UTILITIES. Tenant shall pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler system charges and other utilities and
services used on or from the Premises, together with any taxes, penalties, and
surcharges or the like pertaining thereto and any maintenance charges for
utilities. Tenant shall furnish all electric light bulbs, tubes and ballasts,
battery packs for emergency lighting and fire extinguishers. If any such
services are not separately metered to Tenant, Tenant shall pay such proportion
of all charges jointly metered with other premises as determined by Landlord, in
its sole discretion, to be reasonable. Any such charges paid by Landlord and
assessed against Tenant shall be immediately payable to Landlord on demand and
shall be additional rent hereunder. Tenant will not, without the written consent
of Landlord, contract with a utility provider to service the Premises with any
utility, including, but not limited to, telecommunications, electricity, water,
sewer or gas, which is not previously providing such service to other tenants in
the Project. Landlord shall in no event be liable for any interruption or
failure of utility services on or to the Premises.
14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate ("Holdover Rate") which shall be One
Hundred Fifty Percent (150%) of the greater of (a) the amount of the Annual Rent
for the last period prior to the date of such termination plus all Rent
Adjustments under Article 4; and (b) the then market rental value of the
Premises as determined by Landlord assuming a new lease of the Premises of the
then usual duration and other terms, in either case, prorated on a daily basis,
and also pay all damages sustained by Landlord by reason of such retention. If
Landlord gives notice to Tenant of Landlord's election to such effect, such
holding over shall constitute renewal of this Lease for a period from month to
month at the Holdover Rate, but if the Landlord does not so elect, no such
renewal shall result notwithstanding acceptance by Landlord of any sums due
hereunder after such termination; and instead, a tenancy at sufferance at the
Holdover Rate shall be deemed to have been created. In any event, no provision
of this Article 14 shall be deemed to waive Landlord's right of reentry or any
other right under this Lease or at law.
15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord's interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant's interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver within ten
(10) days of Landlord's request such further instruments evidencing such
subordination or superiority of this Lease as may be required by Landlord.
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16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
all the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Project of
any such rules and regulations.
17. REENTRY BY LANDLORD.
17.1 Landlord reserves and shall at all times have the right and,
except in the case of emergency, upon reasonable prior notice during regular
business hours, to re-enter the Premises to inspect the same, to show said
Premises to prospective purchasers, mortgagees or tenants, and to alter, improve
or repair the Premises and any portion of the Project or the Building, without
abatement of rent, and may for that purpose erect, use and maintain scaffolding,
pipes, conduits and other necessary structures and open any wall, ceiling or
floor in and through the Building and Premises where reasonably required by the
character of the work to be performed, provided entrance to the Premises shall
not be blocked thereby, and further provided that the business of Tenant shall
not be interfered with unreasonably. Landlord shall have the right at any time
to change the arrangement and/or locations of public parts of the Building and
the Project (including, but not limited to, entrances, or passageways, doors and
doorways, and corridors, windows, elevators, stairs and toilets) and to change
the name, number or designation by which the Building or the Project is commonly
known. In the event that Landlord damages any portion of any wall or wall
covering, ceiling, or floor or floor covering within the Premises, Landlord
shall repair or replace the damaged portion to match the original as nearly as
commercially reasonable but shall not be required to repair or replace more than
the portion actually damaged. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned by
any action of Landlord authorized by this Article 17.
17.2 For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in the
Premises, excluding Tenant's vaults and safes or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means which Landlord may deem proper to open said doors in an emergency to
obtain entry to any portion of the Premises. As to any portion to which access
cannot be had by means of a key or keys in Landlord's possession, Landlord is
authorized to gain access by such means as Landlord shall elect and the cost of
repairing any damage occurring in doing so shall be borne by Tenant and paid to
Landlord within five(5) days of Landlord's demand.
18. DEFAULT.
18.1 Except as otherwise provided in Article 20, the following
events shall be deemed to be Events of Default under this Lease:
18.1.1 Tenant shall fail to pay when due any sum of money
becoming due to be paid to Landlord under this Lease, whether such sum be any
installment of the rent reserved by this Lease, any other amount treated as
additional rent under this Lease, or any other payment or reimbursement to
Landlord required by this Lease, whether or not treated as additional rent under
this Lease, and such failure shall continue for a period of five (5) days after
written notice
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that such payment was not made when due, but if any such notice shall be given,
for the twelve (12) month period commencing with the date of such notice, the
failure to pay within five (5) days after due any additional sum of money
becoming due to be paid to Landlord under this Lease during such period shall be
an Event of Default, without notice. The notice required pursuant to this
Section 18.1.1 shall replace rather than supplement any statutory notice
required under California Code of Civil Procedure Section 1161 or any similar or
successor statute.
18.1.2 Tenant shall fail to comply with any term, provision
or covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant provided, however, that such failure shall not be an event of default
if such failure could not reasonably be cured during such twenty (20) day
period, Tenant has commenced the cure within such twenty (20) day period and
thereafter is diligently pursuing such cure to completion, but the total
aggregate cure period shall not exceed ninety (90) days.
18.1.3 Tenant shall fail to vacate the Premises immediately
upon termination of this Lease, by lapse of time or otherwise, or upon
termination of Tenant's right to possession only.
18.1.4 Tenant shall become insolvent, admit in writing its
inability to pay its debts generally as they become due, file a petition in
bankruptcy or a petition to take advantage of any insolvency statute, make an
assignment for the benefit of creditors, make a transfer in fraud of creditors,
apply for or consent to the appointment of a receiver of itself or of the whole
or any substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.
18.1.5 A court of competent jurisdiction shall enter an
order, judgment or decree adjudicating Tenant bankrupt, or appointing a receiver
of Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or decree shall not be vacated or set aside or stayed within
sixty (60) days from the date of entry thereof.
19. REMEDIES.
19.1 Upon the occurrence of any Event or Events of Default under
this Lease, whether enumerated in Article 18 or not, Landlord shall have the
option to pursue any one or more of the following remedies without any notice
(except as expressly prescribed herein) or demand whatsoever (and without
limiting the generality of the foregoing, Tenant hereby specifically waives
notice and demand for payment of rent or other obligations and waives any and
all other notices or demand requirements imposed by applicable law):
19.1.1 Terminate this Lease and Tenant's right to possession
of the Premises and recover from Tenant an award of damages equal to the sum of
the following:
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19.1.1.1 The Worth at the Time of Award of the unpaid
rent which had been earned at the time of termination;
19.1.1.2 The Worth at the Time of Award of the amount
by which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rent loss that Tenant affirmatively
proves could have been reasonably avoided;
19.1.1.3 The Worth at the Time of Award of the
amount by which the unpaid rent for the balance of the Term after the time of
award exceeds the amount of such rent loss that Tenant affirmatively proves
could be reasonably avoided;
19.1.1.4 Any other amount necessary to compensate
Landlord for all the detriment either proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom; and
19.1.1.5 All such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time under applicable
law.
The "Worth at the Time of Award" of the amounts referred to in parts 19.1.1.1
and 19.1.1.2 above, shall be computed by allowing interest at the lesser of a
per annum rate equal to: (i) the greatest per annum rate of interest permitted
from time to time under applicable law, or (ii) the Prime Rate plus 5%. For
purposes hereof, the "Prime Rate" shall be the per annum interest rate publicly
announced as its prime or base rate by a federally insured bank selected by
Landlord in the State of California. The "Worth at the Time of Award" of the
amount referred to in part 19.1.1.3, above, shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus 1%;
19.1.2 Employ the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable limitations); or
19.1.3 Notwithstanding Landlord's exercise of the remedy
described in California Civil Code Section 1951.4 in respect of an Event or
Events of Default, at such time thereafter as Landlord may elect in writing, to
terminate this Lease and Tenant's right to possession of the Premises and
recover an award of damages as provided above in Section 19.1.1.
19.2 The subsequent acceptance of rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No waiver by Landlord
of any breach hereof shall be effective unless such waiver is in writing and
signed by Landlord.
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19.3 TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION
3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174(c) AND 1179 OF THE
CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER REGULATIONS AND
RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE TERM PROVIDING THAT TENANT
SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS
TERMINATION BY REASON OF TENANT'S BREACH. TENANT ALSO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION
ARISING OUT OF OR RELATING TO THIS LEASE.
19.4 No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any other right or
remedy given hereunder or now or hereafter existing by agreement, applicable law
or in equity. In addition to other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by applicable law, to injunctive
relief, or to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any other remedy
allowed to Landlord at law or in equity. Forbearance by Landlord to enforce one
or more of the remedies herein provided upon an Event of Default shall not be
deemed or construed to constitute a waiver of such Default.
19.5 This Article 19 shall be enforceable to the maximum extent
such enforcement is not prohibited by applicable law, and the unenforceability
of any portion thereof shall not thereby render unenforceable any other
portion..
19.6 If more than one (1) Event of Default occurs during the Term
or any renewal thereof, Tenant's renewal options, expansion options, purchase
options and rights of first offer and/or refusal, if any are provided for in
this Lease, shall be null and void.
20. TENANT'S BANKRUPTCY OR INSOLVENCY.
20.1 If at any time and for so long as Tenant shall be subjected to
the provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a "Debtor's Law"):
20.1.1 Tenant, Tenant as debtor-in-possession, and any
trustee or receiver of Tenant's assets (each a "Tenant's Representative") shall
have no greater right to assume or assign this Lease or any interest in this
Lease, or to sublease any of the Premises than accorded to Tenant in Article 9,
except to the extent Landlord shall be required to permit such assumption,
assignment or sublease by the provisions of such Debtor's Law. Without
limitation of the generality of the foregoing, any right of any Tenant's
Representative to assume or assign this Lease or to sublease any of the Premises
shall be subject to the conditions that:
20.1.1.1 Such Debtor's Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's Representative
shall have timely exercised and Tenant's Representative shall have fully cured
any default of Tenant under this Lease.
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20.1.1.2 Tenant's Representative or the
proposed assignee, as the case shall be, shall have deposited with Landlord as
security for the timely payment of rent an amount equal to the larger of: (a)
three (3) months' rent and other monetary charges accruing under this Lease; and
(b) any sum specified in Article 5; and shall have provided Landlord with
adequate other assurance of the future performance of the obligations of the
Tenant under this Lease. Without limitation, such assurances shall include, at
least, in the case of assumption of this Lease, demonstration to the
satisfaction of the Landlord that Tenant's Representative has and will continue
to have sufficient unencumbered assets after the payment of all secured
obligations and administrative expenses to assure Landlord that Tenant's
Representative will have sufficient funds to fulfill the obligations of Tenant
under this Lease; and, in the case of assignment, submission of current
financial statements of the proposed assignee, audited by an independent
certified public accountant reasonably acceptable to Landlord and showing a net
worth and working capital in amounts determined by Landlord to be sufficient to
assure the future performance by such assignee of all of the Tenant's
obligations under this Lease.
20.1.1.3 The assumption or any contemplated
assignment of this Lease or subleasing any part of the Premises, as shall be the
case, will not breach any provision in any other lease, mortgage, financing
agreement or other agreement by which Landlord is bound.
20.1.1.4 Landlord shall have, or would have
had absent the Debtor's Law, no right under Article 9 to refuse consent to the
proposed assignment or sublease by reason of the identity or nature of the
proposed assignee or sublessee or the proposed use of the Premises concerned.
21. QUIET ENJOYMENT. Landlord represents and warrants that it has full
right and authority to enter into this Lease and that Tenant, while paying the
rental and performing its other covenants and agreements contained in this
Lease, shall peaceably and quietly have, hold and enjoy the Premises for the
Term without hindrance or molestation from Landlord subject to the terms and
provisions of this Lease. Landlord shall not be liable for any interference or
disturbance by other tenants or third persons, nor shall Tenant be released from
any of the obligations of this Lease because of such interference or
disturbance.
22. CASUALTY.
22.1 In the event the Premises or the Building are damaged by fire
or other cause and in Landlord's reasonable estimation such damage can be
materially restored within one hundred eighty (180) days, Landlord shall
forthwith repair the same and this Lease shall remain in full force and effect,
except that Tenant shall be entitled to a proportionate abatement in rent from
the date of such damage. Such abatement of rent shall be made pro rata in
accordance with the extent to which the damage and the making of such repairs
shall interfere with the use and occupancy by Tenant of the Premises from time
to time. Within forty-five (45) days from the date of such damage, Landlord
shall notify Tenant, in writing, of Landlord's reasonable estimation of the
length of time within which material restoration can be made, and Landlord's
determination shall be binding on Tenant. For purposes of this Lease, the
Building or Premises shall be deemed "materially restored" if they are in such
condition as would not prevent or
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materially interfere with Tenant's use of the Premises for the purpose for which
it was being used immediately before such damage.
22.2 If such repairs cannot, in Landlord's reasonable estimation,
be made within one hundred eighty (180) days. Landlord and Tenant shall each
have the option of giving the other, at any time within ninety (90) days after
such damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 22.1.
22.3 Landlord shall not be required to repair or replace any damage
or loss by or from fire or other cause to any panelings, decorations,
partitions, additions, railings, ceilings, floor coverings, office fixtures or
any other property or improvements installed on the Premises by, or belonging
to, Tenant. Any insurance which may be carried by Landlord or Tenant against
loss or damage to the Project, the Building or the Premises shall be for the
sole benefit of the party carrying such insurance and under its sole control.
22.4 In the event that Landlord should fail to complete such
repairs and material restoration within sixty (60) days after the date estimated
by Landlord therefor as extended by this Section 22.4, Tenant may at its option
and as its sole remedy terminate this Lease by delivering written notice to
Landlord, within fifteen (15) days after the expiration of said period of time,
whereupon the Lease shall end on the date of such notice or such later date
fixed in such notice as if the date of such notice was the date originally fixed
in this Lease for the expiration of the Term; provided, however, that if
construction is delayed because of changes, deletions or additions in
construction requested by Tenant, strikes, lockouts, casualties, Acts of God,
war, material or labor shortages, government regulation or control or other
causes beyond the reasonable control of Landlord, the period for restoration,
repair or rebuilding shall be extended for the amount of time Landlord is so
delayed.
22.5 Notwithstanding anything to the contrary contained in this
Article: (a) Landlord shall not have any obligation whatsoever to repair,
reconstruct, or restore the Premises when the damages resulting from any
casualty covered by the provisions of this Article 22 occur during the last
twelve (12) months of the Term or any extension thereof, but if Landlord
determines not to repair such damages Landlord shall notify Tenant and if such
damages shall render any material portion of the Premises untenantable Tenant
shall have the right to terminate this Lease by notice to Landlord within
fifteen (15) days after receipt of Landlord's notice; and (b) in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises or Building requires that any insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon this Lease shall
end on the date of such damage as if the date of such damage were the date
originally fixed in this Lease for the expiration of the Term.
- 19 -
22.6 In the event of any damage or destruction to the Building or
the Premises by any peril covered by the provisions of this Article 22, it shall
be Tenant's responsibility to properly secure the Premises and upon notice from
Landlord to remove forthwith, at its sole cost and expense, such portion of all
of the property belonging to Tenant or its licensees from such portion or all of
the Building or Premises as Landlord shall request.
22.7 Tenant hereby waives any and all rights under and benefits of
Sections 1932(2) and 1933(4) of the California Civil Code, or any similar or
successor regulations or other laws now or hereinafter in effect.
23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant's use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building or the Project shall be taken or appropriated by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, and regardless of whether the Premises or any part thereof are so taken
or appropriated, Landlord shall have the right, at its sole option, to terminate
this Lease. Landlord shall be entitled to any and all income, rent, award, or
any interest whatsoever in or upon any such sum, which may be paid or made in
connection with any such public or quasi-public use or purpose, and Tenant
hereby assigns to Landlord any interest it may have in or claim to all or any
part of such sums, other than any separate award which may be made with respect
to Tenant's trade fixtures and moving expenses; Tenant shall make no claim for
the value of any unexpired Term. Tenant hereby waives any and all rights under
and benefits of Section 1265.130 of the California Code of Civil Procedure, or
any similar or successor regulations or other laws now or hereinafter in effect.
24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord's successor in interest or return the same to Tenant, and
thereupon Landlord shall be discharged from any further liability with regard to
said security.
25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written
request which Landlord may make from time to time, Tenant shall execute and
deliver to Landlord or mortgagee or prospective mortgagee a sworn statement
certifying: (a) the date of commencement of this Lease; (b) the fact that this
Lease is unmodified and in full force and effect (or, if there have been
modifications to this Lease, that this Lease is in full force and
- 20 -
effect, as modified, and stating the date and nature of such modifications); (c)
the date to which the rent and other sums payable under this Lease have been
paid; (d) the fact that there are no current defaults under this Lease by either
Landlord or Tenant except as specified in Tenant's statement; and (e) such other
matters as may be requested by Landlord. Landlord and Tenant intend that any
statement delivered pursuant to this Article 25 may be relied upon by any
mortgagee, beneficiary or purchaser, and Tenant shall be liable for all loss,
cost or expense resulting from the failure of any sale or funding of any loan
caused by any material misstatement contained in such estoppel certificate.
Tenant irrevocably agrees that if Tenant fails to execute and deliver such
certificate within such ten (10) day period Landlord or Landlord's beneficiary
or agent may execute and deliver such certificate on Tenant's behalf, and that
such certificate shall be fully binding on Tenant.
26. SURRENDER OF PREMISES.
26.1 Tenant shall arrange to meet Landlord for two (2) joint
inspections of the Premises, the first to occur at least thirty (30) days (but
no more than sixty (60) days) before the last day of the Term, and the second to
occur not later than forty-eight (48) hours after Tenant has vacated the
Premises. In the event of Tenant's failure to arrange such joint inspections
and/or participate in either such inspection, Landlord's inspection at or after
Tenant's vacating the Premises shall be conclusively deemed correct for purposes
of determining Tenant's responsibility for repairs and restoration
26.2 All alterations, additions, and improvements in, on, or to the
Premises made or installed by or for Tenant, including carpeting (collectively,
"Alterations"), shall be and remain the property of Tenant during the Term. Upon
the expiration or sooner termination of the Term, all Alterations shall become a
part of the realty and shall belong to Landlord without compensation, and title
shall pass to Landlord under this Lease as by a xxxx of sale. At the end of the
Term or any renewal of the Term or other sooner termination of this Lease,
Tenant will peaceably deliver up to Landlord possession of the Premises,
together with all Alterations by whomsoever made, in the same conditions
received or first installed, broom clean and free of all debris, excepting only
ordinary wear and tear and damage by fire or other casualty. Notwithstanding the
foregoing, if Landlord elects by notice given to Tenant at least ten (10) days
prior to expiration of the Term, Tenant shall, at Tenant's sole cost, remove any
Alterations, including carpeting, so designated by Landlord's notice, and repair
any damage caused by such removal. Tenant must, at Tenant's sole cost, remove
upon termination of this Lease, any and all of Tenant's furniture, furnishings,
movable partitions of less than full height from floor to ceiling and other
trade fixtures and personal property (collectively, "Personalty"). Personalty
not so removed shall be deemed abandoned by the Tenant and title to the same
shall thereupon pass to Landlord under this Lease as by a xxxx of sale, but
Tenant shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In lieu of requiring
Tenant to remove Alterations and Personalty and repair the Premises as
aforesaid, Landlord may, by written notice to Tenant delivered at least thirty
(30) days before the Termination Date, require Tenant to pay to Landlord, as
additional rent hereunder, the cost of such removal and repair in an amount
reasonably estimated by Landlord.
26.3 All obligations of Tenant under this Lease not fully performed
as of the expiration or earlier termination of the Term shall survive the
expiration or earlier termination of the Term.
- 21 -
Upon the expiration or earlier termination of the Term, Tenant shall pay to
Landlord the amount, as estimated by Landlord, necessary to repair and restore
the Premises as provided in this Lease and/or to discharge Tenant's obligation
for unpaid amounts due or to become due to Landlord. All such amounts shall be
used and held by Landlord for payment of such obligations of Tenant, with Tenant
being liable for any additional costs upon demand by Landlord, or with any
excess to be returned to Tenant after all such obligations have been determined
and satisfied. Any otherwise unused Security Deposit shall be credited against
the amount payable by Tenant under this Lease.
27. NOTICES. Any notice or document required or permitted to be delivered
under this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, whether or not actually accepted
or received by the addressee. Any such notice or document may also be personally
delivered if a receipt is signed by and received from, the individual, if any,
named in Tenant's Notice Address.
28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be
paid by Tenant under this Lease, Tenant shall reimburse to Landlord, upon
demand, any and all taxes payable by Landlord (other than net income taxes)
whether or not now customary or within the contemplation of the parties to this
Lease: (a) upon, allocable to, or measured by or on the gross or net rent
payable under this Lease, including without limitation any gross income tax or
excise tax levied by the State, any political subdivision thereof, or the
Federal Government with respect to the receipt of such rent; (b) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Premises or any portion thereof,
including any sales, use or service tax imposed as a result thereof; (c) upon or
measured by the Tenant's gross receipts or payroll or the value of Tenant's
equipment, furniture, fixtures and other personal property of Tenant or
leasehold improvements, alterations or additions located in the Premises; or (d)
upon this transaction or any document to which Tenant is a party creating or
transferring any interest of Tenant in this Lease or the Premises. In addition
to the foregoing, Tenant agrees to pay, before delinquency, any and all taxes
levied or assessed against Tenant and which become payable during the term
hereof upon Tenant's equipment, furniture, fixtures and other personal property
of Tenant located in the Premises.
29. INTENTIONALLY DELETED.
30. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease
are for convenience of reference and shall in no way define, increase, limit or
describe the scope or intent of any provision of this Lease. Any indemnification
or insurance of Landlord shall apply to and inure to the benefit of all the
following "Landlord Entities", being Landlord, Landlord's investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord's trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms "Tenant" and "Landlord"
- 22 -
or any pronoun used in place thereof shall indicate and include the masculine or
feminine, the singular or plural number, individuals, firms or corporations, and
their and each of their respective successors, executors, administrators and
permitted assigns, according to the context hereof. The term "rentable area"
shall mean the rentable area of the Premises or the Project, as appropriate, as
calculated by the Landlord on the basis of the plans and specifications of the
Project including a proportionate share of any common areas. Tenant hereby
accepts and agrees to be bound by the figures for the rentable square footage of
the Premises and Tenant's Proportionate Share shown on the Reference Pages;
however, Landlord may adjust either or both figures if there is manifest error,
addition or subtraction to the Project (or any of the buildings, including the
Building, or other structures appurtenant thereto), remeasurement or other
circumstance reasonably justifying adjustment. The term "Project" refers to the
business park in which the Premises are located and the buildings and other
structures (including the Building) and the common areas (parking lots,
sidewalks, landscaping, etc.) appurtenant thereto.
31. TENANT'S AUTHORITY. If Tenant signs as a corporation, partnership,
trust or other legal entity each of the persons executing this Lease on behalf
of Tenant represents and warrants that Tenant has been and is qualified to do
business in the state in which the Building is located, that the entity has full
right and authority to enter into this Lease, and that all persons signing on
behalf of the entity were authorized to do so by appropriate actions. Tenant
agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a
corporate resolution, proof of due authorization by partners, opinion of counsel
or other appropriate documentation reasonably acceptable to Landlord evidencing
the due authorization of Tenant to enter into this Lease.
32. FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord's request, Tenant
shall deliver to Landlord a copy, certified by an officer of Tenant as being a
true and correct copy, of Tenant's most recent audited financial statement, or,
if unaudited, certified by Tenant's chief financial officer as being true,
complete and correct in all material respects. Tenant hereby authorizes Landlord
to obtain one or more credit reports on Tenant at any time, and shall execute
such further authorizations as Landlord may reasonably require in order to
obtain a credit report.
33. COMMISSIONS. Each of the parties represents and warrants to the other
that it has not dealt with any broker or finder in connection with this Lease,
except as described on the Reference Pages.
34. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all
of its provisions. This Lease shall in all respects be governed by the laws of
the state in which the Project is located.
35. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the
terms, covenants and conditions contained in this Lease shall be binding upon
and inure to the benefit of the heirs, successors, executors, administrators and
assigns of the parties to this Lease.
36. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.
- 23 -
37. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to
be a reservation of the Premises Landlord shall not be bound by this Lease until
it has received a copy of this Lease duly executed by Tenant and has delivered
to Tenant a copy of this Lease duly executed by Landlord, and until such
delivery Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month's rent as set forth in Article 3 and any
sum owed pursuant to this Lease.
38. RECORDATION. tenant shall not record or register this Lease or a short
form memorandum hereof without the prior written consent of Landlord, and
then shall pay all charges and taxes incident: such recording or
registration.
39. LIMITATION OF LANDLORD'S LIABILITY, Redress for any claim against
Landlord under this Lease shall be limited to and enforceable only against and
to the extent of Landlord's interest in the Project. The obligations of Landlord
under this Lease are not intended to be and shall not be personally binding
on, nor shall any resort be had to the private properties of, any of
its or its investment manager's trustees, directors, officers, partners,
beneficiaries, members, stockholders, employees, or agents, and in no case
shall Landlord be liable to Tenant hereunder for any lost profits, damage to
business, or any form of special, indirect or consequential damages.
LANDLORD: TENANT:
CALWEST INDUSTRIAL HOLDINGS, LLC, ROCKFORD CORPORATION, an Arizona
a Delaware limited liability company corporation
By: RREEF MANAGEMENT COMPANY, a
Delaware corporation, I Property By: /s/ Xxxxx X. Xxxxxxx
Manager --------------------------------
NAME: XXXXX X. XXXXXXX
Title: CFO
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
District Manager By: ________________________________
Dated: 7/16/03 Name: ______________________________
Title: _____________________________
Dated:
- 24 -
EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISES
attached to and made a part of the Lease bearing the Lease Reference Date of
June 27, 2003 between CALWEST INDUSTRIAL HOLDINGS, LLC, a Delaware limited
liability company, as Landlord, and ROCKFORD CORPORATION, an Arizona
corporation, as Tenant, for the Premises.
Exhibits A and A-1 are intended only to show the general layout of the Premises
as of the beginning of the Term of this Lease. They do not in any way supersede
any of Landlord's rights set forth in Article 17 with respect to arrangements
and/or locations of public parts of the Project and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.
[FLOOR PLAN]
A-1
EXHIBIT A-1 - SITE PLAN
attached to and made a part of the Lease bearing the Lease Reference Date of
June 27, 2003 between CALWEST INDUSTRIAL HOLDINGS, LLC, a Delaware limited
liability company, as Landlord, and ROCKFORD CORPORATION, an Arizona
corporation, as Tenant, for the Premises.
[SITE PLAN]
A-1-1
EXHIBIT B - INITIAL ALTERATIONS
attached to and made a part of the Lease bearing the Lease Reference Date of
June 27, 2003 between CALWEST INDUSTRIAL HOLDINGS, LLC, a Delaware limited
liability company, as Landlord, and ROCKFORD CORPORATION, an Arizona
corporation, as Tenant, for the Premises.
1. Premises "As Is". Tenant acknowledges that the Premises, the
Building and the Project are suitable for Tenant's purposes and the condition of
the Premises, the Building and the Project is acceptable to Tenant. Landlord
shall have no obligation to construct, install or, except as set forth in
Section 3 below, pay for any improvements in the Premises, the Building and the
Project or to remodel, renovate, recondition, alter or improve the Premises, the
Building and the Project in any manner, and Tenant shall accept the Premises "as
is" on the Commencement Date. Landlord and Tenant expressly agree that there are
and shall be no implied warranties of merchantability, habitability, fitness for
a particular purpose, or any other kind arising out of this Lease and there are
and shall be no warranties that extend beyond the warranties, if any, expressly
set forth in this Lease.
2. Initial Alterations. Tenant intends to make certain
Alterations in the Premises following the Commencement Date (the "Initial
Alterations"). The Initial Alterations shall be subject to Landlord's prior
approval and shall be constructed in accordance with and subject to the terms of
this Lease, including, but not limited to, Article 6 of this Lease.
3. Landlord's Contribution. As Landlord's contribution for the
cost of the Initial Alterations, Landlord shall give Tenant an allowance in the
amount of seventy-three thousand six hundred twenty-four dollars ($73,624.00)
("Landlord's Contribution"). Landlord shall disburse Landlord's Contribution
directly to the contractor performing the work ("Contractor"), and/or to the
applicable subcontractors, and/or to Tenant, as Landlord shall determine, within
thirty (30) days after Landlord's receipt of (A) invoices of Contractor
furnished to Landlord by Tenant covering work actually performed, construction
in place and materials delivered to the site (as may be applicable) describing
in reasonable detail such work, construction and/or materials, (B) Landlord's
receipt of a waiver of lien rights from Contractor or the subcontractors or
suppliers whose invoices are applicable to the respective disbursement for,
and/or on account of, the work or materials covered by such invoice, such waiver
to be in such form as Landlord shall reasonably require. No payment will be made
for materials or supplies not incorporated into the construction, regardless of
whether the materials or supplies are located on the Premises. Landlord may
withhold the amount of any and all retentions provided for in original contracts
or subcontracts until expiration of the applicable lien periods or Landlord's
receipt of final lien waivers in such form as Landlord shall reasonably require
from Contractor and all subcontractors and suppliers. Notwithstanding anything
to the contrary contained herein, Tenant shall not be entitled to receive (and
Landlord shall have no obligation to disburse) all or any portion of Landlord's
Contribution in the event Tenant is in default under this Lease at the time
Tenant requests such disbursement or at the time such disbursement is to be
made. Notwithstanding anything to the contrary in this Section 3, Landlord's
Contribution shall be available for disbursement pursuant to the terms hereof no
later than December 31, 2003. Accordingly, if any portion of Landlord's
Allowance is not utilized prior to December 31, 2003, such unused portion shall
be forfeited by Tenant.
B-1
EXHIBIT C - COMMENCEMENT DATE MEMORANDUM
attached to and made a part of the Lease bearing the Lease Reference Date of
June 27, 2003 between CALWEST INDUSTRIAL HOLDINGS, LLC, a Delaware limited
liability company, as Landlord, and ROCKFORD CORPORATION, an Arizona
corporation, as Tenant, for the Premises.
COMMENCEMENT DATE MEMORANDUM
THIS MEMORANDUM, made as of ______,20 ________, by and between CALWEST
INDUSTRIAL HOLDINGS, LLC, a Delaware limited liability company ("Landlord"), and
ROCKFORD CORPORATION, an Arizona corporation ("Tenant").
Recitals:
A. Landlord and Tenant are parties to that certain Lease, dated
for reference June 27, 2003 (the "Lease") for certain premises
(the "Premises") consisting of approximately 18,406 square
feet at the building commonly known as 0000 Xxxxxxxx Xxxx,
Xxxxxxx, XX.
B. Tenant is in possession of the Premises and the Term of the
Lease has commenced.
C. Landlord and Tenant desire to enter into this Memorandum
confirming the Commencement Date, the Termination Date and
other matters under the Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. The actual Commencement Date is ________.
2. The actual Termination Date is _________.
3. The schedule of the Annual Rent and the Monthly Installment of
Rent set forth on the Reference Pages is deleted in its entirety, and the
following is substituted therefor:
[insert rent schedule]
4. Capitalized terms not defined herein shall have the same
meaning as set forth in the Lease.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
LANDLORD: TENANT:
CALWEST INDUSTRIAL HOLDINGS, LLC, ROCKFORD CORPORATION, an Arizona
a Delaware limited liability company corporation
By: RREEF MANAGEMENT COMPANY, a
Delaware corporation, Its Property By: /s/ XXXXX X. XXXXXXX
Manager --------------------------------
Name: XXXXX X. XXXXXXX
Title: CFO
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------- Dated: July 14, 2003
Xxxxxxx X. Xxxxxx
District Manager
Dated: 7/16/03
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EXHIBIT D - RULES AND REGULATIONS
attached to and made a part of the Lease bearing the Lease Reference Date of
June 27, 2003 between CALWEST INDUSTRIAL HOLDINGS, LLC, a Delaware limited
liability company, as Landlord, and ROCKFORD CORPORATION, an Arizona
corporation, as Tenant, for the Premises.
1. No sign, placard, picture, advertisement, name or notice (collectively
referred to as "Signs") shall be installed or displayed on any part of the
outside of the Building without the prior written consent of the Landlord which
consent shall be in Landlord's sole discretion. All approved Signs shall be
printed, painted, affixed or inscribed at Tenant's expense by a person or vendor
approved by Landlord and shall be removed by Tenant at Tenant's expense upon
vacating the Premises. Landlord shall have the right to remove any Sign
installed or displayed in violation of this rule at Tenant's expense and without
notice.
2. If Landlord objects in writing to any curtains, blinds, shades or
screens attached to or hung in or used in connection with any window or door of
the Premises or Building, Tenant shall immediately discontinue such use. No
awning shall be permitted on any part of the Premises. Tenant shall not place
anything or allow anything to be placed against or near any glass partitions or
doors or windows which may appear unsightly, in the opinion of Landlord, from
outside the Premises.
3. Tenant shall not alter any lock or other access device or install a new
or additional lock or access device or bolt on any door of its Premises without
the prior written consent of Landlord. Tenant, upon the termination of its
tenancy, shall deliver to Landlord the keys or other means of access to all
doors.
4. If Tenant requires telephone, data, burglar alarm or similar service,
the cost of purchasing, installing and maintaining such service shall be borne
solely by Tenant. No boring or cutting for wires will be allowed without the
prior written consent of Landlord. Landlord shall direct electricians as to
where and how telephone, data, and electrical wires are to be introduced or
installed. The location of burglar alarms, telephones, call boxes or other
office equipment affixed to the Premises shall be subject to the prior written
approval of Landlord.
5. Tenant shall not place a load upon any floor of its Premises, including
mezzanine area, if any, which exceeds the load per square foot that such floor
was designed to carry and that is allowed by law. Heavy objects shall stand on
such platforms as determined by Landlord to be necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any such
equipment or other property from any cause, and all damage done to the Building
or the Project by maintaining or moving such equipment or other property shall
be repaired at the expense of Tenant.
6. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or other device on the roof or exterior walls of the Building
without Landlord's prior written consent which consent shall be in Landlord's
sole discretion.
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7. Tenant shall not xxxx, drive nails, screw or drill into the partitions,
woodwork, plaster or drywall (except for pictures and general office uses) or in
any way deface the Premises or any part thereof. Tenant shall not affix any
floor covering to the floor of the Premises or paint or seal any floors in any
manner except as approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.
8. No cooking shall be done or permitted on the Premises, except that
Underwriters' Laboratory approved microwave ovens or equipment for brewing
coffee, tea, hot chocolate and similar beverages shall be permitted, provided
that such equipment and use is in accordance with all applicable federal, state
and city laws, codes, ordinances, rules and regulations.
9. Tenant shall not use any hand trucks except those equipped with the
rubber tires and side guards, and may use such other material-handling equipment
as Landlord may approve. Tenant shall not bring any other vehicles of any kind
into the Building. Forklifts which operate on asphalt areas shall only use tires
that do not damage the asphalt.
10. Tenant shall not use the name of the Building or the Project or any
photograph or other likeness of the Building or the Project in connection with
or in promoting or advertising Tenant's business except that Tenant may include
the Building or the Project name in Tenant's address. Landlord shall have the
right, exercisable without notice and without liability to any tenant, to change
the name and address of the Building and/or the Project.
11. All trash and refuse shall be contained in suitable receptacles at
locations approved by Landlord. Tenant shall not place in the trash receptacles
any personal trash or material that cannot be disposed of in the ordinary and
customary manner of removing such trash without violation of any law or
ordinance governing such disposal.
12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governing authority.
13. Tenant assumes all responsibility for securing and protecting its
Premises and its contents including keeping doors locked and other means of
entry to the Premises closed.
14. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without Landlord's prior written consent.
15. No person shall go on the roof without Landlord's permission.
16. Tenant shall not permit any animals, other than seeing-eye dogs, to be
brought or kept in or about the Premises or any common area of the property.
17. Tenant shall not permit any motor vehicles to be washed or mechanical
work or maintenance of motor vehicles to be performed on any portion of the
Premises or the Project.
18. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project. Landlord may waive any one or more of these Rules and
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Regulations for the benefit of any tenant or tenants, and any such waiver by
Landlord shall not be construed as a waiver of such Rules and Regulations for
any or all tenants.
19. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Project and for the preservation of
good order in and about the Project. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and guests.
20. Any toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown into
them. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose employees or
invitees, shall have caused it.
21. Tenant shall not permit smoking or carrying of lighted cigarettes or
cigars in areas reasonably designated by Landlord or any applicable governmental
agencies as non-smoking areas.
22. Any directory of the Building of the Project, if provided, will be
exclusively for the display of the name and location of tenants only and
Landlord reserves the right to charge for the use thereof and to exclude any
other names.
23. Canvassing, soliciting, distribution of handbills or any other written
material in the Building or the Project is prohibited and each tenant shall
cooperate to prevent the same. No tenant shall solicit business from other
tenants or permit the sale of any goods or merchandise in the Building or the
Project without the written consent of Landlord.
24. Any equipment belonging to Tenant which causes noise or vibration that
may be transmitted to the structure of the Building or to any space therein to
such a degree as to be objectionable to Landlord or to any tenants in the
Building shall be placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or other devices sufficient to eliminate the noise or
vibration.
25. Driveways, sidewalks, halls, passages, exits, entrances and stairways
("Access Areas") shall not be obstructed by tenants or used by tenants for any
purpose other than for ingress to and egress from their respective premises.
Access areas are not for the use of the general public and Landlord shall in all
cases retain the right to control and prevent access thereto by all persons
whose presence, in the judgment of Landlord, shall be prejudicial to the safety,
character, reputation and interests of the Project or its tenants.
26. Landlord reserves the right to designate the use of parking areas and
spaces. Tenant shall not park in visitor, reserved, or unauthorized parking
areas. Tenant and Tenant's guests shall park between designated parking lines
only and shall not park motor vehicles in those areas designated by Landlord for
loading and unloading. Vehicles in violation of the above shall be subject to
being towed at the vehicle owner's expense. Vehicles parked overnight without
prior written consent of the Landlord shall be deemed abandoned and shall be
subject to being towed
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at vehicle owner's expense. Tenant will from time to time, upon the request of
Landlord, supply Landlord with a list of license plate numbers of vehicles owned
or operated by its employees or agents.
27. No trucks, tractors or similar vehicles can be parked anywhere other
than in Tenant's own truck dock area. Tractor-trailers which must be unhooked or
parked with dolly wheels beyond the concrete loading areas must use steel plates
or wood blocks under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in the
parking areas or on streets adjacent thereto.
28. During periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow and loading and unloading areas of other tenants.
All products, materials or goods must be stored within the Tenant's Premises and
not in any exterior areas, including, but not limited to, exterior dock
platforms, against the exterior of the Building, parking areas and driveway
areas. Tenant agrees to keep the exterior of the Premises clean and free of
nails, wood, pallets, packing materials, barrels and any other debris produced
from their operation
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