Exhibit 10.1
NET INDUSTRIAL LEASE
THIS LEASE IS BETWEEN SQUARE ONE PARTNERS,
A CALIFORNIA GENERAL PARTNERSHIP ("LANDLORD"),
AND
LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
A WASHINGTON CORPORATION ("TENANT"),
EXECUTED AS OF JUNE 30, 2002
TABLE OF CONTENTS
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1. LEASE OF PREMISES.......................................................3
2. EXHIBITS AND ADDENDA....................................................3
3. DEFINITIONS.............................................................3
4. DELIVERY OF POSSESSION..................................................8
5. ACCEPTANCE..............................................................9
6. USE, LIMITATIONS........................................................9
7. RENT...................................................................15
8. LATE CHARGES...........................................................16
9. SECURITY DEPOSIT.......................................................16
10. RENTAL ABATEMENT.......................................................17
11. OPERATING EXPENSES.....................................................17
12. TAXES; ASSESSMENTS.....................................................19
13. MAINTENANCE............................................................21
14. UTILITIES AND SERVICES.................................................23
15. INDEMNITY AND EXCULPATION..............................................25
16. INSURANCE..............................................................26
17. ALTERATIONS............................................................29
18. MECHANICS' LIENS.......................................................30
19. DESTRUCTION............................................................30
20. CONDEMNATION...........................................................33
21. ASSIGNMENT.............................................................35
22. DEFAULT................................................................39
23. ADVERTISING............................................................44
24. NO PUBLIC DISCLOSURES..................................................44
25. LANDLORD'S ENTRY ON PREMISES...........................................45
26. OFFSET STATEMENT, ATTORNMENT, SUBORDINATION............................46
27. NOTICE.................................................................47
28. WAIVER.................................................................48
29. SALE OR TRANSFER OF PREMISES...........................................48
30. HOLDING OVER...........................................................49
31. SURRENDER OF PREMISES..................................................49
32. ABANDONMENT............................................................50
33. ATTORNEYS' FEES........................................................50
34. ACCESS; CHANGES IN BUILDING FACILITIES; NAME...........................50
35. QUIET ENJOYMENT........................................................51
36. FORCE MAJEUR...........................................................51
37. RELATIONSHIP OF PARTIES................................................51
38. GENERAL PROVISIONS.....................................................51
39. RULES AND REGULATIONS..................................................
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NET INDUSTRIAL LEASE
This Lease between SQUARE ONE PARTNERS, a California general
partnership ("Landlord"), and LA JOLLA FRESH SQUEEZED COFFEE CO., INC., a
Washington corporation ("Tenant"), executed as of June 30, 2002.
1. LEASE OF PREMISES.
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1.1. In consideration of the Rent (as defined in the Article titled "Rent")
and the provisions of this Lease, Landlord leases to Tenant and Tenant
leases from Landlord the Premises described in the Article titled
"Definitions." The Premises are located within the Building described
in the Article titled "Definitions." Tenant shall have the
non-exclusive right (unless otherwise provided herein) in common with
Landlord, other tenants, subtenants and invitees, to use of the Project
Enhancement Areas And Unit Shared Use Areas (as defined in the Article
titled "Definitions").
1.2. Tenant has examined the Premises and is fully informed of their
condition.
1.3. This Lease confers no rights either with regard to the subsurface of
the land below the ground level of the Premises or with regard to
airspace above the top of the roof of the building that is a part of
the Premises.
2. EXHIBITS AND ADDENDA.
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The exhibits and addenda listed below (unless lined out) are
incorporated by reference in this Lease:
2.1. Exhibit "A" - Site Plan designating the Premises, Building, Unit and
Project Enhancement Areas.
2.2. Exhibit "B" - Rules and Regulations.
2.3. Exhibit "C" - Floor Plan and Tenant Improvements to the Premises.
3. DEFINITIONS
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As used in this Lease, the following terms shall have the following
meanings:
3.1. BASE RENT: $ 20,242.00 per month.
3.2. BUILDING: The building in the Project containing the Premises.
3.3. COMMENCEMENT DATE: October 1, 2002.
3.4. EXPIRATION DATE: November 30, 2009, unless otherwise sooner terminated
in accordance with the provisions of this Lease.
3.5. LANDLORD'S MAILING ADDRESS: SQUARE ONE PARTNERS
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000,
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
3.6. TENANT'S MAILING ADDRESS: LA JOLLA FRESH SQUEEZED COFFEE CO., INC.
0000 Xxxxxxxxx Xxxxx, Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, CFO
3.7. OPERATING EXPENSES: All direct costs of operation and maintenance, as
determined by standard accounting practices, including, but not limited
to, Common Area expenses, real property taxes, insurance, maintenance,
repairs, utilities, management fees, pest control, services and
reserves. Operating Expenses are more fully defined in the Article
titled "Operating Expenses." Landlord estimates that the Operating
Expenses will be approximately $4,542.00 per month during the first
year of the Lease. The actual Operating Expenses will be determined as
provided in the Article titled "Operating Expenses," and may be more or
less than the estimated Operating Expenses.
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3.8. PARKING: Tenant shall be permitted to park Seventy-Five (75) cars on a
non-exclusive basis in the area(s) designated by Landlord for parking.
3.9. PREMISES: That portion of the Project located at 0000 Xxxxxxxxx Xxxxx,
Xxxxx, Xxxxxxxxxx, containing approximately 37,850 square feet of
Rentable Area, shown by diagonal lines on Exhibit "C." Landlord does
not purport to represent this figure as an accurate measurement.
Measurements are to the drip-line of the exterior walls and include a
pro-rata share of the electric meter room.
3.10. PROJECT: A multi-tenant industrial/office/commercial real property
development of Landlord and Landlord's affiliates located in Vista,
California. The Project includes the land, the buildings and all other
improvements located thereon, including the Project Enhancement Areas
And The Unit Shared Use Areas. The Project is known as the Rancho Vista
Business Park
3.11. PROJECT ENHANCEMENT AREAS: Specific areas of one or more lots within
the Project which have been designated to be used for the enhancement
of the Project. Project Enhancement Areas may include, but are not
limited to, landscaped areas containing lighted monument signs for the
Project.
3.12. PROJECT ENHANCEMENT AREA EXPENSES: All direct costs of operation and
maintenance of the Project Enhancement Areas, as determined by standard
accounting practices, including, but not limited to, electrical
lighting for Project monument signs, water for landscaping, landscape
maintenance and repair and reserves.
3.13. RENT: All costs and expenses that Tenant assumes or agrees to pay to
Landlord under this Lease shall be deemed additional rent. The sum
total of such costs and expenses plus the Base Rent is at times
referred to herein as the "Rent").
3.14. RENTABLE AREA: As to the Premises, the measurements of floor area as
may, from time to time, be subject to lease by Tenant. As to the
Building, the measurements of floor area as may, from time to time, be
subject to lease by all tenants of the Building respectively, as
determined by Landlord and applied on a consistent basis throughout the
Building.
3.15. SECURITY DEPOSIT (SEE THE ARTICLE TITLED "SECURITY DEPOSIT"):
$20,242.00. The portion of the Security Deposit which shall be
designated as a Cleaning Deposit shall be $2,024.00.
3.16. TENANT'S FIRST ADJUSTMENT DATE (SEE THE ARTICLE TITLED "RENT"): The
first day of the calendar month following the Commencement Date plus
twelve (12) months.
3.17. TENANT'S PRO RATA SHARE OF THE BUILDING: Tenant's Pro Rata Share of the
Building is a fraction, the numerator of which is the Rentable Area of
the Premises (as determined by Landlord), and the denominator of which
is the total Rentable Area of all tenants in the Building (as
determined by Landlord). If Rentable Area is added to or removed from
the Building, Landlord shall recalculate the fractions described in
this Section for purposes of this Lease.
3.18. TENANT'S PRO RATA SHARE OF THE PROJECT: Such share is calculated as
follows: Tenant's Pro Rata Share of the Building times a fraction, the
numerator of which is the gross square footage of the lot on which the
Premises is located (as determined by Landlord), and the denominator of
which is 2,617,630 (the total gross square footage of the Project). If
land is added to or removed from the Project, Landlord shall
recalculate the total gross square footage of the Project for purposes
of this Lease.
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3.19. TENANT'S PRO RATA SHARE OF THE UNIT: Such share is calculated as
follows: Tenant's Pro Rata Share of the Building times a fraction, the
numerator of which is the gross square footage of the lot on which the
Premises is located, and the denominator of which is the total gross
square footage of all the lots in the Unit, as determined by Landlord
from time to time. If land is added to or removed from the any of the
lots in the Unit, Landlord shall recalculate the total gross square
footages of the lots and the corresponding fractions for purposes of
this Lease.
3.20. TENANT'S USE CLAUSE (SEE THE ARTICLE TITLED "USE, LIMITATIONS"):
General office, coffee research and development, production,
distribution, other related uses and any other legally permitted use.
3.21. TERM: The period commencing on the Commencement Date and expiring at
midnight on the Expiration Date.
3.22. TRADE NAME: JAVO BEVERAGE COMPANY AND LA JOLLA FRESH SQUEEZED COFFEE.
3.23. UNIT: A portion of the Project consisting of one or more lots and one
or more Buildings, one of which contains the Premises, as designated on
the Site Plan attached hereto as Exhibit "A".
3.24. UNIT SHARED USE AREA: All areas of a lot within the Unit except for
Buildings and Exclusive Use Areas, if any.
3.25. UNIT SHARED USE AREA EXPENSES: All direct costs of operation and
maintenance of the Unit Shared Use Areas of the Unit, as determined by
standard accounting practices, including, but not limited to, exterior
lighting, exterior water, landscape maintenance and repair, xxxxxx,
parking lot maintenance and repair, trash collection services and
reserves.
3.26. MISCELLANEOUS DEFINITIONS:
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ALTERATION: any addition or change to, or modification of, the Premises made by
Tenant after the fixturing period, including, without limitation,
fixtures, but excluding trade fixtures, and Tenant Improvements.
AUTHORIZED REPRESENTATIVE: any officer, agent, employee, or independent
contractor retained or employed by either Party, acting within
authority given him by that Party.
CLAIMS:all claims, actions, demands, liabilities, damages, costs, penalties,
forfeitures, losses or expenses, including, without limitation,
reasonable attorneys' fees and the costs and expenses of enforcing any
indemnification, defense or hold harmless obligation under the Lease.
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COMMENCEMENT DATE MEMORANDUM: the form of memorandum attached to the Lease.
DAMAGE: injury, deterioration, or loss to a person or property caused by
another person's acts or omissions. Damage includes death.
DAMAGES: a monetary compensation or indemnity that can be recovered in the
courts by any person who has suffered damage to his person, property,
or rights through another's act or omission.
DESTRUCTION: any damage to or disfigurement of the Premises.
DOMESTIC WATER: metered water service to the interior of the Building.
ENCUMBRANCE: any deed of trust, mortgage, or other written security device or
agreement affecting the Premises, and the note or other obligation
secured by it, that constitutes security for the payment of a debt or
performance of an obligation.
EXPIRATION: the coming to an end of a time period specified in the Lease,
including, without limitation, any extension of the term resulting from
the exercise of an option to extend.
GOOD CONDITION: the good physical condition of the Premises and each portion
of the Premises, including, without limitation, signs, windows, show
windows, appurtenances, and Tenant's personal property. "In good
condition" means first-class, neat, clean, and broom-clean, and is
equivalent to similar phrases referring to physical adequacy in
appearance and for use.
HOLD HARMLESS: to defend and indemnify from all liability, losses, penalties,
damages, costs, expenses (including, without limitation, attorneys'
fees), causes of action, claims, or judgments arising out of or related
to any damage, as defined hereinabove, to any person or property.
LANDLORD PARTIES: Landlord and Property Manager and their respective officers,
directors, partners, shareholders, members and employees.
LAW: any law, judicial decision, statute, constitution, ordinance,
resolution, regulation, rule, administrative order, direction, or other
requirement of any municipal, county, state, federal, or other
government agency or authority having jurisdiction over the Parties,
Project, Building, or the Premises in effect either at the time of
execution of the Lease or at any time during the term, including,
without limitation, any regulation or order of a quasi-official entity
or body (e.g., board of fire examiners or public utilities). The
reference in this Lease to any legislation or any portion thereof shall
be read as though the words "or any statutory modifications or
re-enactment thereof or any statutory provisions substituted thereof"
were added to such reference.
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LENDER: the beneficiary, mortgagee, secured Party, or other holder of an
encumbrance, as defined hereinabove.
LIEN: a charge imposed on the Premises by someone other than Landlord, by
which the Premises are made security for the performance of an act.
Most of the liens referred to in this Lease are mechanics' liens.
MAINTENANCE: repairs, replacement, repainting, and cleaning.
MORTGAGE: any mortgage, deed of trust, security interest or other security
document of like nature that at any time may encumber all or any part
of the Project and any replacements, renewals, amendments,
modifications, extensions or refinancings thereof, and each advance
(including future advances) made under any such instrument.
PARTY: shall mean Landlord or Tenant; and if more than one person or entity is
Landlord or Tenant, the obligations imposed on that Party shall be
joint and several.
PERSON: one or more human beings, or legal entities or other artificial
persons, including, without limitation, partnerships, corporations,
trusts, estates, associations, and any combination of human beings and
legal entities.
PROPERTY MANAGER: An agent Landlord may appoint from time to time to manage the
Project. Property Manager is authorized to manage the Project. Landlord
appointed Property Manager to act as Landlord's agent for leasing,
managing, and operating the Project. The Property Manager then serving
is authorized to accept service of process and to receive and give
notices and demands on Landlord's behalf.
PROVISION: any term, agreement, covenant, condition, clause, qualification,
restriction, reservation, or other stipulation in the Lease that
defines or otherwise controls, establishes, or limits the performance
required or permitted by either Party.
RESTORATION: the reconstruction, rebuilding, rehabilitation, and repairs that
are necessary to return destroyed portions of the Premises and other
property to substantially the same physical condition in which they
were immediately before the destruction.
SUCCESSOR: assignee, transferee, personal representative, heir, or other person
or entity succeeding lawfully, and pursuant to the provisions of this
Lease, to the rights or obligations of either Party.
TENANT: a person or entity (or their successor in interest) who has signed a
valid existing lease for a space in the Project.
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TENANT IMPROVEMENTS: any addition to or modification of the Premises made by
or for Tenant before, at, or near the commencement of the term,
including, without limitation, fixtures (not including Tenant's trade
fixtures).
TENANT'S PERSONAL PROPERTY: Tenant's equipment, furniture, merchandise, and
movable property placed in the Premises by Tenant, including Tenant's
trade fixtures.
TENANT'S TAXES: Any and all taxes, assessments, levies, fees, and other
governmental charges of every kind or nature levied or assessed by
municipal, county, state, federal, or other taxing or assessing
authorities with respect to: all furniture, fixtures, equipment, and
any other personal property of any kind owned by Tenant and placed,
installed, or located within, upon, or about the Premises to the extent
that the property tax on such property is assessed directly to
Landlord; all alterations of whatsoever kind or nature, if any, made by
or for Tenant to the Premises after the execution of this Lease; and
the leasehold interest of Tenant. Tenant's Taxes shall also include
taxes irrespective of whether any of the items are assessed as real or
personal property and irrespective of whether any of such items or
taxes are assessed to or against Landlord or Tenant.
TENANT'S TRADE FIXTURES: any property installed in or on the Premises by Tenant
for purposes of trade, manufacture, ornament, or related use.
TERMINATION: the ending of the term before expiration for any reason.
4. DELIVERY OF POSSESSION.
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4.1. If for any reason Landlord does not deliver possession of the Premises
to Tenant on the Commencement Date, Landlord shall not be subject to
any liability for such failure, the Expiration Date shall not change,
the validity of this Lease shall not be impaired, this Lease shall be
neither void nor voidable, but Rent shall be abated until delivery of
possession.
4.2. If Landlord permits Tenant to enter into possession of the Premises
before the Commencement Date, such possession shall be subject to the
provisions of this Lease, including, without limitation, the payment of
Rent.
4.3. If the delay in delivery of the Premises is the result of Tenant's
delay, the Commencement Date shall not be delayed by the number of
days of such Tenant delay and, for purposes of Tenant's obligation to
pay rent, the Commencement Date shall be deemed to have occurred on
the date that the Premises would have been ready for occupancy but
for the Tenant delay. In the event Tenant requests not to initially
improve certain areas of the Premises, the Commencement Date for
those areas will be the same as the improved Premises.
4.4. On the Commencement Date, the roof, plumbing, fire sprinkler system,
lighting, heating ventilation and air conditioning systems and
electrical systems in the Premises will be in good operating
condition. Landlord will rectify any non-compliance with such
warranty at Landlord's sole expense and not as an Operating Expense.
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4.5. This Lease shall not commence until the Tenant Improvements have been
substantially completed and an occupancy permit has been issued.
4.6. Except as otherwise set forth in this Lease, Tenant's occupancy of the
Premises conclusively establishes that Landlord completed improvements,
if any, in a manner satisfactory to Tenant and constitutes Tenant's
waiver and release of any and all rights, benefits, claims or
warranties available to Tenant under this Lease, at law or in equity in
connection with such improvements.
5. ACCEPTANCE.
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5.1. By taking possession, Tenant acknowledges that Premises are in good
condition.
5.2. The taking of possession or use of the Premises by Tenant for any
purpose other than construction shall conclusively establish that the
Premises and the Project were, at such time, in satisfactory condition
(except for latent defects) and in conformity with the provisions of
this Lease in all respects, excepting only items of which Tenant shall
give Landlord written notice in reasonable detail within fifteen (15)
days after Tenant takes such possession or commences such use of the
Premises or the term of this Lease otherwise commences.
5.3. Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Premises or the
Project or with respect to their suitability or fitness for the conduct
of Tenant's business or for any other purpose.
6. USE, LIMITATIONS.
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6.1. Tenant shall use the Premises solely for the purposes set forth in the
Tenant's Use Clause and for no other use without Landlord's prior
written consent. Landlord may grant or withhold consent at its sole
discretion.
6.2. Tenant shall conduct its business at the Premises under the trade name
set forth in the Tenant's Trade Name Clause and under no other trade
name unless first obtaining the written consent of Landlord. Landlord
shall not unreasonably withhold consent.
6.3. Tenant shall not do, bring, or keep anything in or about the Premises
that will cause a cancellation of any insurance covering the Premises
or its contents. If the rate of any insurance carried by Landlord is
increased as a result of Tenant's use, Tenant shall pay to Landlord
within ten (10) days before the date Landlord is obligated to pay a
premium on the insurance, or within ten (10) days after Landlord
delivers to Tenant a certified statement from Landlord's insurance
carrier stating that the rate increase was caused by an activity of
Tenant on the Premises, as permitted in this Lease, whichever date is
later, a sum equal to the difference between the original premium and
the increased premium.
6.4. Tenant shall comply with any master Covenants, Conditions and
Restrictions and/or any Declaration of Restrictions that may encumber
the real property on which the Premises are located.
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6.5. Tenant shall comply with all Laws concerning the Premises or Tenant's
use of the Premises, including, without limitation, the obligation at
Tenant's cost to alter, maintain, change, or restore the Premises in
compliance and conformity with all Laws relating to the condition, use,
or occupancy of the Premises during the term. Tenant will also comply
with the requirements of any fire insurance underwriters or other
similar body now or hereafter constituted relating to or affecting the
conditions, use, or occupancy of the Premises. Tenant agrees to install
at its sole cost and expense any improvements, changes, or alterations
authorized in writing by Landlord and required by any governmental
authority as a result of Tenant's use of the Premises or its manner of
operation or any alterations made by Tenant. If Tenant contests the
validity or application of any Law or other requirement of any
governmental authority, Tenant shall furnish a bond as required by
Landlord and shall protect, defend, hold harmless, and indemnify
Landlord and the Project to the satisfaction of Landlord from and
against all claims, losses, damages, costs, expenses, and liabilities
arising from any such contest, including attorneys' fees incurred by
Landlord in monitoring Tenant's compliance.
6.6. Tenant shall not do or permit anything to be done in or about the
Premises that will, in any way, unreasonably obstruct or interfere with
the rights of other tenants or occupants of the Project or materially
injure them. Tenant shall not use the Premises in any manner that will
cause, maintain, permit, or constitute waste, nuisance, or an
unreasonable annoyance to the quiet enjoyment of the tenants of the
Building (including, without limitation, the use of loudspeakers or
sound or light apparatus that can be heard or seen outside the
Premises). Tenant shall not allow the Premises to be used for any
unlawful purpose.
6.7. Subject to the uses permitted under Tenant's use clause, Tenant shall
not use the Premises for sleeping, washing clothes, cooking, or the
preparation, manufacture, or mixing of anything that might emit any
odor or objectionable noises or lights.
6.8. Tenant shall not do or permit anything on the Premises that will cause
damage to the Premises. Any overloading of electrical circuits shall be
the responsibility of Tenant. No machinery, apparatus, or other
appliance shall be used or operated in or on the Premises that will in
any manner injure, vibrate, or shake the Premises. Landlord reserves
the right to prescribe the weight and position of all files, safes, and
heavy equipment that Tenant desires to place in the Premises so as to
properly distribute weight. Tenant's business machines and mechanical
equipment that cause vibration or noise that may be transmitted to the
Building structure or to any other space in the Building or Project
shall be so installed, maintained, and used by Tenant as to eliminate
such vibration or noise. Tenant shall be responsible for all structural
engineering required to determine structural load.
6.9. Tenant shall not display or sell merchandise or allow carts, portable
signs, devices or other objects to be stored or remain outside the
defined exterior and permanent doorways of the Premises.
6.10. Tenant shall not conduct or permit any sale by auction on the Premises.
6.11. Tenant shall have for its use and benefit the non-exclusive right in
common with Landlord and future owners, other tenants and their agents,
employees, customers, licensees, subtenants, invitees, and all others
to whom Landlord has granted or may grant such rights, to use the Unit
Shared Use Areas during the entire term of this Lease, or any extension
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thereof, for ingress and egress, roadway, automobile parking and
sidewalks. However, Landlord shall, at all times, have the right and
privilege of determining the nature and extent of the Unit Shared Use
Areas and of making such changes which in its opinion are deemed to be
desirable. Such changes may include, but shall not be limited to the
following: Converting Unit Shared Use Areas into leasable areas; adding
additional buildings and improvements on the land or on adjacent land,
which may share access, Project Enhancement Areas And Unit Shared Use
Areas, and parking facilities; constructing additional parking
facilities in the Unit Shared Use Areas; increasing or decreasing Unit
Shared Use Area land and/or facilities; changing the location, number,
size, and shape of driveways, entrances, exits, lobbies, automobile
parking spaces, parking areas, loading and unloading areas, ingress,
egress, landscaped areas, walkways, the direction and flow of traffic,
(provided such changes shall not unreasonably restrict or prevent
Tenant from having proper access to the Premises for loading, parking
or other normal day to day operations); installation of prohibited
areas, landscaped areas, and all other facilities thereof. Tenant
acknowledges that such activities may result in occasional
inconvenience to Tenant. Landlord reserves the right from time to time
to close temporarily any of the Unit Shared Use Areas for maintenance
purposes so long as reasonable access to the Premises is available.
Nothing contained herein shall be deemed to create any liability upon
Landlord as a result of said changes or for any damage to motor
vehicles of customers or employees or for loss of property from within
such motor vehicles, unless caused by the negligence of Landlord, its
agents, servants or employees. Any changes in the Unit Shared Use Area
land and/or facilities shall not entitle Tenant to any compensation or
diminution or abatement of rent, nor shall any diminution of such areas
be deemed constructive or actual eviction. All Unit Shared Use Areas
and facilities not located within the Premises, which Tenant may be
permitted to use and occupy, pursuant to this Lease, are to be used and
occupied under a revocable license.
6.12. Landlord reserves the right from time to time to install, use,
maintain, repair and replace pipes, ducts, conduits, wires and
appurtenant meters and equipment for service to other parts of the
Project above the ceiling surfaces, below the floor surfaces, within
the walls and in central core areas, and to relocate any pipes, ducts,
conduits, wires and appurtenant meters and equipment included in the
Premises that are located in the Premises or located elsewhere outside
the Premises, and to expand the Project.
6.13. Landlord shall, at all times during the term of this Lease, have the
sole and exclusive control of the Unit Shared Use Areas, and may, at
any time during the term hereof, exclude and restrain any person from
use or occupancy thereof, excepting, however, bona fide customers,
patrons and service-suppliers of Tenant, and other tenants of Landlord
who make use of such areas in accordance with the rules and regulations
established by Landlord from time to time with respect thereto. The
rights of Tenant hereunder, in and to the Unit Shared Use Areas, shall,
at all times, be subject to the rights of Landlord, other tenants of
the Building and all others to whom Landlord has granted such rights,
to use the same in common with Tenant. Tenant shall not, at any time,
interfere with the rights of Landlord, other tenants, or any other
person entitled to use the Unit Shared Use Areas. It shall be the duty
of Tenant to keep all Unit Shared Use Areas free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operation and to permit the use of any of the parking and roadway
access areas only for normal parking and ingress and egress by the such
customers, patrons and service-suppliers to and from the Building.
6.14. If, in the opinion of Landlord, unauthorized persons are using any Unit
Shared Use Areas by reason of the presence of Tenant in the Premises,
Tenant, upon demand of Landlord, shall enforce Landlord's rights
against all such unauthorized persons by appropriate proceedings.
Nothing herein shall affect the rights of Landlord, at any time, to
remove any such unauthorized persons from the Unit Shared Use Areas or
to restrain the use of any of the Unit Shared Use Areas by unauthorized
persons.
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6.15. Tenant agrees to comply with such reasonable rules and regulations (the
"Rules and Regulations") in the use of the Premises and the Unit Shared
Use Areas as Landlord may adopt from time to time for the orderly and
proper operation of the Project, provided any such future Rules and
Regulations shall have no material adverse effect on Tenant's use of
the Premises and requires no material expenditure on the part of
Tenant. Tenant shall use its best efforts to cause others who use the
Unit Shared Use Areas with Tenant's express or implied permission to
abide by Landlord's Rules and Regulations. Landlord shall not be
responsible to Tenant for the non-performance by any other tenant or
occupant of the Project of any of such Rules and Regulations. Such
Rules and Regulations may include, but are not limited to, the
following:
6.15.1. Normal business hours;
6.15.2. Hours during which the Common Areas shall be open for use;
6.15.3. The restricting of employee parking to a limited, designated
area or areas and the imposition of fines for violations of
such restrictions or designations; and
6.15.4. The regulation of removal, storage, and disposal of Tenant's
refuse and other rubbish.
6.16. Landlord shall not do any of the following without Tenant's consent,
which shall not be unreasonably withheld: (i) materially impair the
visibility of Tenant's exterior signage; (ii) materially impair access
to and from the Premises to the parking areas; or (iii) reduce the
number of Tenant's parking spaces.
6.17. Tenant shall make a reasonable inspection as to the existence of any
Hazardous Substances on the Premises prior to the commencement of the
Lease as necessary to satisfy itself as to the condition of the
Premises.
6.18. Tenant, at its sole cost and expense, will comply with all Hazardous
Substances Laws (including, but not limited to any federal, state or
local statutes, laws, ordinances or regulations in effect either at the
time of execution of the Lease or at any time during the term, that
control, classify, regulate, list or define Hazardous Substances) and
prudent industry storage practice relating to the presence, treatment,
storage, transportation, disposal, release or management of Hazardous
Substances in, on, under or about the Project. Tenant shall not enter
into any settlement agreement, consent decree or other compromise with
respect to any Claims relating to or in any way connected with
Hazardous Substances in, on, under or about the Project, without first
notifying Landlord of Tenant's intention to do so and affording
Landlord reasonable opportunity to investigate, appear, intervene and
otherwise assert and protect Landlord's interest in the Project.
6.19. Tenant shall not cause or permit any Hazardous Substance to be used,
stored, generated, or disposed of on or in the Premises by Tenant,
Tenant's agents, employees, contractors, or invitees without first
obtaining Landlord's written consent. If Hazardous Substances are used,
stored, generated, or disposed of on or in the Premises except as
permitted above, or if the Premises become contaminated in any manner
for which Tenant is legally liable, Tenant shall indemnify, defend and
hold harmless the Landlord from any and all claims, damages, fines,
judgments, penalties, costs, liabilities, or losses (including, without
limitation, a decrease in value of the Premises, damages caused by loss
or restriction of rentable or usable space, or any damages caused by
adverse impact on marketing of the space, and any and all sums paid for
settlement of claims, litigation expenses, attorneys' fees, consultant,
and expert fees) of whatever kind or nature, known or unknown,
contingent or otherwise, arising during or after the Lease term and
arising as a result of that contamination by Tenant. This
indemnification includes, without limitation, any and all costs
incurred because of any investigation of the site or any cleanup,
removal, or restoration mandated by a federal, state, or local agency
or political subdivision. Without limitation of the foregoing, if
Tenant causes or permits the presence of any Hazardous Substance on the
Premises and that results in contamination, Tenant shall promptly, at
its sole expense, take any and all necessary actions to return the
Premises to the condition existing prior to the presence of any such
Hazardous Substance on the Premises. Tenant shall first obtain
12
Landlord's approval for any such remedial action. The provisions of
this Section shall be in addition to any other obligations and
liabilities Tenant may have to Landlord at law or equity and shall
survive the transactions contemplated herein and shall survive the
termination of this Lease. Notwithstanding the foregoing, Tenant may
use nominal amounts of Hazardous Substances as are normal and customary
for general office use, provided that Tenant complies with all
applicable Laws relating thereto.
6.19.1. As used herein, "Hazardous Substance" means any substance that
is toxic, ignitable, reactive, or corrosive and that is now or
hereafter regulated by any local or State government with
jurisdiction over the Premises or Tenant, or the United States
Government. "Hazardous Substance" includes, but is not limited
to, any and all material or substances that are defined as
"hazardous waste," "extremely hazardous waste," or a
"hazardous substance" pursuant to Law. "Hazardous Substance"
includes, but is not limited to, petroleum based products,
paints and solvents, lead, cyanide, DDT, printing inks, acids,
asbestos, PCB's, contaminants, toxic wastes, toxic pollutants,
dredged soil, solid waste, pesticides, herbicides, fertilizers
and other agricultural chemicals or wastes, incinerator
residue, sewage, garbage, sewage sludge, munitions, chemical
products and wastes, and any other liquid, solid or gaseous
pollutants or hazardous substances or wastes which are or may
become subject to regulation under any State or Federal
environmental protection law or regulation.
6.19.2. Any Hazardous Substance permitted on the Premises as provided
above, and all containers therefore, shall be used, kept,
stored, and disposed of in a manner that complies with all
Laws applicable to this Hazardous Substance.
6.19.3. Tenant shall not discharge, leak, or emit, or permit to be
discharged, leaked, or emitted, any material into the
atmosphere, ground, sewer system, or any body of water, if
that material (as is reasonably determined by the Landlord, or
any governmental authority) does or may pollute or contaminate
the same, or may adversely affect (a) the health, welfare, or
safety of persons, whether located on the Premises or
elsewhere, or (b) the condition, use or enjoyment of the
building or any other real or personal property. Tenant shall
immediately notify Landlord of any release of any Hazardous
Substance on or near the Premises whether or not such release
is in a quantity that would otherwise be reportable to a
public agency and shall also comply with the notification
requirements of California Health & Safety Code section
25359.7.
6.19.4. At the commencement of each Lease Year, Tenant shall disclose
to Landlord the names and approximate amounts of each and
every Hazardous Substance that Tenant intends to store, use,
or dispose of on the Premises in the coming Lease Year. In
addition, at the commencement of each Lease Year, beginning
with the second Lease Year, Tenant shall disclose to Landlord
the names and amounts of all Hazardous Substances that were
actually used, stored, or disposed of on the Premises if those
materials were not previously identified to Landlord at the
commencement of the previous Lease Year.
6.20. Tenant shall notify Landlord of any of the following actions affecting
Landlord, Tenant, or the Project that result from or in any way relate
to Tenant's use of the Project immediately after receiving notice of
the same: (a) any enforcement, clean-up, removal or other governmental
or regulatory action instituted, completed or threatened under any
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Hazardous Substances Law; (b) any Claim made or threatened by any
person relating to damage, contribution, liability, cost recovery,
compensation, loss or injury resulting from or claimed to result from
any Hazardous Substance; and (c) any reports made by any person,
including Tenant, to any environmental agency relating to any Hazardous
Substance, including any complaints, notices, warnings or asserted
violations. Tenant will also deliver to Landlord, as promptly as
possible and in any event within five business days after Tenant first
receives or sends the same, copies of all Claims, reports, complaints,
notices, warnings or asserted violations relating in any way to the
Premises or Tenant's use of the Premises. Upon Landlord's written
request, Tenant will promptly deliver to Landlord documentation
acceptable to Landlord reflecting the legal and proper disposal of all
Hazardous Substances removed or to be removed from the Premises. All
such documentation will list Tenant or its agent as a responsible party
and will not attribute responsibility for any such Hazardous Substances
to Landlord or Property Manager.
6.21. Tenant acknowledges and agrees that all reporting and warning
obligations required under Hazardous Substances Laws resulting from or
in any way relating to Tenant's use of the Premises or Project are
Tenant's sole responsibility, regardless whether the Hazardous
Substances Laws permit or require Landlord to report or warn.
6.22. Tenant shall obtain proper permits from the City of Vista, the Fire
Department, and any other government agencies necessary to operate its
business at this location. In the event any of these agencies require
building modifications to adapt the building to Tenant's current or
future use, Tenant shall make such modifications at Tenant's sole
expense.
6.23. Landlord shall, at an interval determined at Landlord's discretion,
monitor Tenant's program and efforts to manage and control Hazardous
Substances and conduct inspections that it deems proper to determine
whether any contamination has taken place. If contamination caused by
Tenant is discovered through such monitoring and inspection, the
following program shall be instituted at Tenant's expense:
6.24. A low-level geotechnical reconnaissance shall be conducted to determine
soil classification, depth of ground water, nearest drinking water
aquifer, direction of ground water flow.
6.25. Based on the result of this inspection, three (3) to (6) ground water
monitor xxxxx shall be placed at strategic points on the Premises or
other appropriate locations in the Project. These are xxxxx shall use
specially prepared PVC and stainless steel pipes and fittings as
recommended by the testing engineers or technicians.
6.26. A "background analysis" of the site shall then be conducted for
"priority pollutants." This analysis establishes the pollutants present
in the soil and ground water at the beginning of the monitoring period.
Landlord and Tenant should maintain this analysis on file for future
reference and comparison.
6.27. Every three (3) years, or such other interval as may be recommended by
the testing engineers or technicians, an analysis shall be made of the
ground water drawn from the monitoring xxxxx to determine if new or
increased pollutants are present in the ground water. An industrial
environmental laboratory using a spectrometer and other appropriate
analytical processes shall conduct analysis.
6.28. If, on the basis of this testing procedure it is determined that there
is continued pollution of the Premises, Tenant shall immediately take
steps as required, at Tenant's sole expense, to contain, clean up, and
discontinue the contamination of the soil and/or groundwater.
14
6.29. Regular monitoring of the ground water shall then continue for the
duration of the lease period.
6.30. The discovery of Hazardous Substances on the Premises shall not
constitute grounds for rescission or termination of the Lease by the
Tenant, nor for offset against, or abatement of, any rents due under
the terms of the Lease. Landlord represents to Tenant that Landlord has
no actual knowledge of the presence of any Hazardous Materials within
the Premises. Landlord indemnifies Tenant from all liability arising
from the presence of any Hazardous Materials that were present within
the Premises before the commencement of Tenants occupancy of the
Premises.
7. RENT.
-----
7.1. Tenant shall pay the Rent to Landlord in lawful money of the United
States of America, without deduction, setoff, prior notice, or demand.
Rent is due on or before the first day of each month, commencing on the
Commencement Date and continuing during the Term. Base Rent for the
first month or portion of it shall be paid upon execution of this
Lease. Base Rent for any partial month shall be prorated at the rate of
1/30th of the Base Rent per day. Thereafter, Rent shall be payable in
accordance with the terms of this Section. The total consideration for
the term of this Lease shall be increased by the amount of any such
prorated installment hereby required. All Rent shall be paid to
Landlord at the address provided in this Lease or at such other place
as Landlord may from time to time designate in writing.
7.2. Landlord shall have the right to accept all Rent and other payments,
whether full or partial, and to negotiate checks and payments thereof,
without any waiver of rights, irrespective of any conditions to the
contrary that Tenant seeks to impose. No security or guaranty that may
now or later be furnished to Landlord for the payment of Rent herein
reserved or for performance by Tenant of the other covenants or
conditions of this Lease shall in any way be a bar or defense to any
action in unlawful detainer, or for the recovery of the Premises or to
any action that Landlord may at any time commence for a breach of any
of the covenants or conditions of this Lease.
7.2.1. The amount of Base Rent (and the corresponding Monthly
Installments of Base Rent) payable hereunder shall be adjusted
annually (the "Adjustment Date"), commencing on Tenant's First
Adjustment Date. Adjustments shall be based upon the
following:
7.2.2. Commencing on October 1, 2003, the Base Rent shall be
$20,849.00;
7.2.3. Commencing on October 1, 2004, the Base Rent shall be
$21,475.00;
7.2.4. Commencing on October 1, 2005, the Base Rent shall be
$22,119.00;
7.2.5. Commencing on October 1, 2006, the Base Rent shall be
$22,783.00;
7.2.6. Commencing on October 1, 2007, the Base Rent shall be
$23,466.00;
7.2.7. Commencing on October 1, 2008, the Base Rent shall be
$24,170.00;
7.2.8. Commencing on October 1, 2009, the Base Rent shall be
$24,895.00.
7.2.9. Rent or any other sum not paid to Landlord when due shall bear
interest at the rate of 10% per annum from the date due until
fully paid. Paying such interest shall not excuse or cure any
default by Tenant under this Lease.
15
7.3. If this Lease terminates before the expiration date for reasons other
than Tenant's default, Base Rent shall be prorated to the date of
termination, and Landlord shall immediately repay to Tenant all Base
Rent then prepaid and unearned.
8. LATE CHARGES.
-------------
8.1. In the event any payment of Rent or any other sum required hereby shall
not be paid within (5) days after the same shall be due and payable, a
late charge by way of damages shall be immediately due and payable in
addition to the interest provided above. However, as an accommodation
to Tenant, only upon the first occurrence, in any calendar year, of
Tenant's failure to pay rent when due, Landlord shall give Tenant
written notice of Tenant's failure to make such payment. If Landlord
does not receive such payment within five days after sending Tenant
notice, the late charge shall be due and payable. Tenant recognizes and
acknowledges that default in making, when due, payments of Rent
required hereby will result in Landlord incurring additional costs and
expenses. Such costs and expenses include, but are not limited to,
processing and accounting charges, legal costs, late charges that may
be imposed on Landlord by the terms of any encumbrance and note secured
by any encumbrance covering the Premises, loss to Landlord of the use
of the money due, and late charges that may be imposed on Landlord by
the terms of any mortgage or trust deed covering the Premises. Tenant
hereby agrees that, in the event of any such late payment, Landlord
will be damaged and will be entitled to compensation for these damages,
but such damages are, and will continue to be extremely difficult and
impractical to ascertain for the following reasons: (i) the damages to
which Landlord will be entitled in a court of law will be based on the
difference between the actual value of Rent on the Premises at the time
such payment is due and the Rent for the Premises as set forth in this
Lease which difference must be based on opinions of rental value of the
Premises which can vary in significant amounts; and (ii) it is
impossible to predict as of the date on which this Lease is entered
into whether the rental value of the Premises will increase or decrease
as of the date of any future payments, and Tenant desires to limit the
amount of damages for which Tenant might be liable should Tenant fail
to make any payment of Rent required hereby. Tenant therefore agrees
(i) that a late charge equal to percent (5%) of each payment of Rent
that becomes delinquent is a reasonable estimate of said damages to
Landlord and (ii) to pay said sum on demand.
8.2. Acceptance of any late charge, or any part thereof, shall not
constitute a waiver of Tenant's default with respect to the overdue
amount, or prevent Landlord from exercising any of the other rights and
remedies available to Landlord. Any late charge shall be deemed
additional rent and collection thereof shall be in addition to all of
Landlord's other rights and remedies hereunder or at law or in equity
and shall be construed as liquidated damages or as limiting Landlord's
remedies in any manner. If Rent is not received by the due date,
Landlord shall notify Tenant and Tenant shall, on demand of Landlord,
immediately cure the default by presentment of Rent and late charge to
Landlord.
8.3. Any payments of any kind returned for insufficient funds will be
subject to an additional handling charge of twenty-five dollars
($25.00).
8.4. Tax Allocation: For purposes of the Internal Revenue Code, Landlord and
Tenant hereby agree to allocate the stated rents provided herein to the
periods that correspond to the actual Rent payments as provided under
the terms and conditions of this Lease.
9. SECURITY DEPOSIT.
-----------------
9.1. On execution of this Lease, Tenant shall deposit with Landlord the
Security Deposit for the full and faithful performance by Tenant of the
provisions of this Lease. If Tenant is in default, Landlord can use,
apply, or retain the Security Deposit, or any portion of it, to cure
the default, for the payment of any other amount that Landlord may
16
spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any loss or damage sustained by Landlord
resulting from Tenant's default. Tenant shall immediately upon demand
pay to Landlord a sum equal to the portion of the Security Deposit
expended or applied by Landlord as provided in this Section so as to
maintain the Security Deposit in the sum initially deposited with
Landlord. It is expressly agreed that the Security Deposit is not an
advance rental deposit or a measure of Landlord's damages in the case
of Tenant's default. A portion of the Security Deposit has been
designated herein as a Cleaning Deposit. Said Cleaning Deposit shall be
non-refundable, and shall be used for cleaning the Premises following
the termination or expiration of this Lease. Tenant shall remain liable
for the cost of cleaning the Premises if such cost exceeds the Cleaning
Deposit. If Tenant is not in default at the expiration or termination
of this Lease, Landlord shall return the Security Deposit, less the
amount of the Cleaning Deposit, if any remains, to Tenant, less any
amounts required to restore the Premises to good condition and repair,
including damage resulting from the removal by Tenant of its trade
fixtures or equipment. Landlord's obligations with respect to the
Security Deposit are those of a debtor and not a trustee. Landlord can
maintain the Security Deposit separate and apart from Landlord's
general funds or can commingle the Security Deposit with Landlord's
general and other funds. Landlord shall not be required to pay Tenant
interest on the Security Deposit. In addition, Landlord may, at
Landlord's sole option, require Tenant to, immediately upon demand,
increase the amount of the Security Deposit to an amount not to exceed
the sum of (i) the then current Base Rent, plus (ii) the equivalent of
Tenant's Pro Rata Share of one month's estimated Operating Expenses.
10. RENTAL ABATEMENT.
-----------------
10.1. During the months of November 2002, December 2002, January 2003 and
February 2003, one-half (1/2) of the Base Rent shall be abated; and
Tenant shall only have the privilege to occupy the Premises with
payment of one-half (1/2) of the Base Rent abated, subject to the
following special condition subsequent:
If Tenant defaults on any Rent payment or breaches any other provision
of the Lease (which breach was not cured within any applicable cure
period under this Lease), Tenant shall automatically forfeit the
privilege to such Rent abatement. In that event, any such abated rental
amount shall become immediately due and payable, and Tenant shall have
no further right to occupy the Premises at a reduced rate.
10.2. Tenant shall continue to be responsible for additional rent, including,
but not limited to, Operating Expenses and any other charges due
pursuant to the provisions of this Lease (with the exception of the
one-half (1/2) Base Rent) during the rental abatement period.
11. OPERATING EXPENSES.
-------------------
11.1. For purposes of this Lease, Operating Expenses shall mean all direct
costs paid or incurred in connection with the operation, management,
repair, and maintenance, as determined by standard accounting
practices, including, but not limited to: Common Area expenses; real
property taxes and assessments and any taxes or assessments hereafter
imposed in lieu thereof; rent taxes, gross receipt taxes (whether
assessed against Landlord or assessed against Tenant and paid by
Landlord, or both); water and sewer charges; accounting, audit,
verification, legal and other consulting fees (but excluding legal fees
in connection with a dispute between Landlord and any tenant); the net
cost and expense of insurance for which Landlord is responsible
hereunder or which Landlord or any first mortgagee with a lien
affecting the Building reasonably deems necessary in connection with
the Building; maintenance; repairs; utilities and utilities surcharge;
management fees; pest control, janitorial, and security services;
17
reserves, any and all assessments Landlord must pay for the Building
pursuant to any covenants, conditions or restrictions and agreements
affecting the Building or the Project; any costs levied, assessed or
imposed by, or at the direction of, regional, municipal, or local
government authority in connection with the use or occupancy of the
Building or the Premises or the parking facilities serving the Building
or the Premises, including required traffic management and fire safety
programs and the Americans With Disabilities Act; the cost (amortized
over such reasonable period as Landlord shall determine together with
interest at the rate of Landlord's financing of such improvements or at
a rate allowed by Law on the unamortized balance) of any capital
improvements made to the Project or the Common Areas by the Landlord or
replacement of any building equipment (a) needed to operate the
Building or the Common Areas as required by any federal, state,
regional, municipal, or local governmental authority, (b) installed as
a labor-saving device or to effect other economies in the operation or
maintenance of the Building, or (c) needed periodically to maintain the
appearance of the Building and its quality; costs incurred in the
management of the Building including supplies, wages, salaries, payroll
expenses, taxes and similar governmental charges with respect thereto
of employees used in the management, repair, operation, and maintenance
of the Building; Project or Building management office rental; a market
rate management fee; air conditioning, waste disposal, utility systems,
mechanical systems, heating, ventilating, and elevator maintenance
costs; supplies, materials, equipment, and tools; costs of maintaining
the plumbing, heating, ventilating, air conditioning, and electrical
systems installed or furnished by Landlord; depreciation of the cost of
acquiring or the rental value of personal property used in maintenance,
and all other upkeep of Common Areas; costs and expenses of gardening,
landscaping, and interior plant service; maintenance of signs (other
than Tenant's signs); personal property taxes levied on or attributable
to personal property used in connection with the Building, including
the Common Areas; costs and expenses of resurfacing, repairing,
maintenance, painting, lighting, cleaning, refuse removal, security,
and similar items, including appropriate reserves for the parking
garage; and, appropriate reserves to provide for maintenance, repair
and replacement of improvements in the Building as determined by
Landlord based on annual projections of such costs. The following items
shall be excluded from Operating Expenses: (i) costs related to
Hazardous Materials existing on the Premises prior to the Commencement
Date; (ii) increases in real property taxes that are attributed to the
months before September 1, 2006, and arises solely as a result of a
change in ownership of the Building; and (iii) any other expenses which
would not be considered to be normal maintenance and operating expenses
of some aspect of the Building or Project.
11.2. Tenant shall pay to Landlord, as additional rent, Tenant's Pro Rata
Share of such Operating Expenses in the following manner:
11.2.1. Tenant shall pay to Landlord, as additional rent, on the first
day of each calendar month of the term of this Lease, an
amount equal to Landlord's best estimate (based on Landlord's
budgeted figures) of Tenant's monthly Pro Rata Share of the
Operating Expenses.
11.2.2. Within ninety (90) days following the end of each calendar
year, Landlord shall furnish Tenant with a statement covering
the calendar year just expired (certified as correct by an
authorized representative of Landlord, or if requested by a
majority of the tenants in the Building by a certified public
accountant) showing (i) the total Operating Expenses; (ii) the
amount of Tenant's Pro Rata Share of such Operating Expenses
for such calendar year; and (iii) the payments made by Tenant
with respect to such period as set forth in this Article. If
Tenant's payments exceed Tenant's Pro Rata Share of such
Operating Expenses, Tenant shall be entitled to offset the
excess against the next payments due Landlord as set forth in
this Article. However, if Tenant's Pro Rata Share of such
Operating Expenses exceeds Tenant's payments, Tenant shall pay
Landlord the deficiency within ten (10) days after receipt of
such statement. In addition, Tenant's Pro Rata Share of the
total Operating Expenses for the previous calendar year shall
be used as an estimate for the current year and paid to
Landlord pursuant to the provisions of this Article.
18
11.2.3. Landlord may, at its option, by service of written notice on
Tenant, choose to alter any payment periods provided for by
this Lease under the Articles titled "Rent," "Operating
Expenses," "Taxes; Assessments," "Maintenance," "Indemnity and
Exculpation" and "Insurance."
11.3. If at any time during the term of this Lease, it shall be determined by
rule, regulation or competent authority of any governmental or
quasi-governmental entity having jurisdiction over the Premises or the
Project, that any material, substance, service equipment, or system
must be installed in or removed from the Premises or the Building in
order to protect or maintain the health or safety of Tenant or those
entering upon or working within the Premises, Landlord shall make such
installation or removal and the cost of such installation or removal
shall be included in Operating Expenses, provided that the requirement
of the installation or removal of any such material, substance, service
or equipment is not occasioned by the fault of Tenant in which event
such cost shall be borne by Tenant.
12. TAXES; ASSESSMENTS.
-------------------
12.1. Tenant shall pay, before delinquency, all taxes that are levied and
assessed against Tenant's personal property installed or located in or
on the Premises, and that become payable during the term. On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of
these payments. "Taxes" shall include assessments, license fees,
license taxes, business license fees, commercial rental taxes, levies,
charges, penalties, taxes or similar impositions, imposed by any
authority having the direct power to tax, including any city, county,
state, or federal government, or any school, agricultural, lighting,
drainage, or other improvement or special assessment district thereof,
as against any legal or equitable interest of Landlord in the Project,
including but not limited to, the following:
12.1.1. any tax on Landlord's right to other income from the Premises
or as against Landlord's business of leasing the Premises;
12.1.2. any assessment, tax, fee, levy, or charge in substitution,
partially or totally, of any assessment, tax, fee, levy, or
charge previously included within the definition of real
estate tax, including but not limited to, any assessments,
taxes, fees, levies, and charges that may be imposed by
governmental agencies for such services as fire protection,
street, sidewalk and road maintenance, refuse removal and for
other governmental services formerly provided without charge
to property owners or occupants. It is the intention of Tenant
and Landlord that all such new and increased assessments,
taxes, fees, levies, and charges be included in Real Property
Taxes for the purposes of this Lease;
12.1.3. any assessment, tax, fee, levy, or charge allocable to or
measured by the area of the Premises or the rent payable
hereunder, including, without limitation, any gross income tax
or excise tax levied by the State, city, or federal
government, or any political subdivision thereof, with respect
to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof, and
12.1.4. any assessment, tax, fee, levy, or charge upon this
transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the
Premises.
12.2. Whenever possible, Tenant shall cause said trade fixtures, furnishings,
equipment and personal property to be separately assessed. If, however,
any taxes on Tenant's personal property are levied against Landlord or
Landlord's property, or if the assessed value of the Premises is
increased by the inclusion of a value placed on Tenant's personal
property, and if Landlord pays the taxes on any of these items or the
taxes based on the increased assessment of these items, Tenant, on
demand, shall immediately reimburse Landlord for the sum of the taxes
levied against Landlord, or the proportion of the taxes resulting from
the increase in Landlord's assessment. Landlord shall have the right to
pay these taxes regardless of the validity of the levy.
19
12.3. Tenant shall pay to Landlord, in the manner provided in the Article
titled "Operating Expenses," Tenant's Pro Rata Share, of all real
property taxes and general and special assessments ("real property
taxes") levied and assessed against the land, building, and other
improvements of which the Premises are a part.
12.4. If any general or special assessment is levied and assessed against the
Premises which under the Laws then in force may be evidenced by
improvement or other bonds and may be paid in annual installments, only
the amount of such annual installment, with appropriate proration for
any partial year, and interest thereon, shall be included within a
computation of taxes and assessments levied against the Premises.
12.5. Tenant shall pay to Landlord any and all excise, privileges and other
taxes (other than net income and estate taxes) levied or assessed by
any federal, state or local authority ("taxing authority") upon the
rent received by Landlord hereunder. Tenant shall also pay to Landlord
any business tax imposed upon Landlord by any taxing authority whether
or not such tax is based or measured, in whole or in part, by amounts
charged to Tenant or received by Landlord from Tenant under this Lease.
12.6. If at any time during the term of this Lease, any taxing authority
shall alter the methods and/or standards of taxation and/or assessment
("tax plan"), in whole or in part, so as to impose a tax plan in lieu
of or in addition to the tax plan in existence as of the date of this
Lease, such taxes or assessments based upon such altered tax plan
including: (i) any tax, assessment, excise, surcharge, fee, penalty,
bond or similar imposition ("impositions") whether or not in lieu,
partially or totally, of any impositions assessed against the land,
building, and other improvements of which the Premises are a part prior
to any alterations in the tax plan; (ii) any impositions on Landlord's
right to rent or other income from the Premises or against Landlord's
business of leasing the Premises; (iii) any impositions allocable to or
measured by the area of the Premises or the rent payable hereunder,
including without limitation any impositions levied by any taxing
authority with respect to such rental or with respect to the
possession, leasing, operation, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises or any portion
thereof; (iv) any impositions upon this Lease transaction or any
document to which Tenant is a party which creates or transfers any
interest or estate in or to the Premises; and (v) any special,
unforeseen or extraordinary impositions however described, shall also
be considered taxes for the purposes of this Lease.
12.7. Tenant's liability to pay real property taxes shall be prorated on the
basis of a 365-day year to account for any fractional portion of a
fiscal year included in the term at its commencement and expiration.
12.8. If at any time during the term of this Lease any of Tenant's Taxes are
levied against Landlord or Landlord's property, or if the assessed
value of the Project is increased by the inclusion therein of a value
placed upon such personal property or fixtures of Tenant or upon such
improvements made to the Premises, Landlord shall not be obligated to
pay such Tenant's Taxes. If Landlord pays such Tenant's Taxes so levied
or so based upon such increased assessment, which Landlord shall have
the right to do regardless of the validity thereof, but only under
protest if requested by Tenant in writing, then Tenant shall, within
ten (10) days after receipt of Landlord's written demand for payment
thereof, repay to Landlord such Tenant's Taxes so paid by Landlord, or
the portion of such Tenant's Taxes resulting from such increase in the
assessment. However, in any such event, Tenant shall have the right, in
the name of the Landlord and with Landlord's full cooperation, but
without any cost to Landlord, to bring suit in any court of competent
jurisdiction to recover the amount of any such Tenant's Taxes so paid,
any amount so recovered to belong to Tenant. The portion of any such
Tenant's Taxes to be paid by Tenant pursuant to this Section shall be
determined by Landlord from the respective values assigned in the
assessor's worksheets or from such other best information as may be
reasonably available to Landlord.
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13. MAINTENANCE.
------------
13.1. Except as otherwise provided in this Lease, including, but not limited
to, this Article and the Articles titled "Destruction" and
"Condemnation," Tenant shall, at its sole expense, maintain the entire
Premises (including, but not limited to, any and all appurtenances
thereto wherever located, including the interior surfaces of the
exterior walls, the exterior and interior portions of all doors, door
frames, door checks, other entrances, interior portions of windows,
window frames, plate glass, suite fronts, signs, all plumbing and
sewage fixtures and equipment, within the Premises, fixtures, walls,
floors, ceiling, carpets, drapes, painted surfaces, wall coverings,
cabinets, shelves, whether any such work or repair, replacement,
renewal, or restoration is interior or exterior to the Premises, is
foreseen or unforeseen, or is ordinary or extraordinary) in good
tenantable condition and repair as reasonably determined by Landlord,
including without limitation all additions and improvements made by or
for the Tenant as well as all items of maintenance, alteration, or
reconstruction that may be required by a governmental agency having
jurisdiction thereof.
13.2. If Tenant fails, refuses, or neglects to commence and complete repairs
promptly and adequately, to remove any liens, to pay any cost or
expense, to reimburse Landlord, or otherwise to perform any act or
fulfill any obligation required of Tenant, Landlord may make or
complete any such repairs, remove such lien, pay any such cost or
expense, perform the same without prior notice to, but at the sole
expense of, Tenant. Tenant shall promptly reimburse Landlord for all
expenses of Landlord for all expenses of Landlord thereby incurred,
including any administrative fee of fifteen percent (15%), within ten
(10) days after receipt by Tenant from Landlord of a statement setting
forth the amount of such expenses. Landlord's rights and remedies
pursuant to this Section shall be in addition to any and all rights and
remedies provided under this Lease or at law and shall not affect a
waiver of Tenant's obligations.
13.3. Landlord shall not have any responsibility to maintain the Premises.
Tenant, as a material part of the consideration rendered to Landlord,
in entering into this Lease, hereby waives the provisions of the
California Civil Code with respect to Landlord's obligation for
tenantability of the Premises and Tenant's right to make repairs and
deduct the expenses of such repairs from rent.
13.4. Except as otherwise set forth in this Lease, Tenant shall, at its sole
cost, keep and maintain all window and door glass, utilities, fixtures
and mechanical equipment used by Tenant in good order, condition and
repair.
13.5. Landlord shall, at Tenant's sole expense, arrange for the maintenance
of any heating and/or air conditioning units servicing the Premises
with a reputable maintenance service person or entity. Tenant shall pay
the costs of said maintenance as additional Rent. In the event that any
heating and/or air conditioning unit services more than one Tenant,
Tenant shall pay a reasonable proportion of the cost of the maintenance
(including labor and parts), which proportion shall be determined by
Landlord based upon Tenant's proportionate share of the square footage
of the area serviced by any such unit.
13.6. Landlord shall keep in good condition and repair the roof and
structural components of the Premises except when such maintenance and
repair is necessitated by reason of Tenant's negligence, alteration of
or addition to the Premises, or breach of any term or condition of this
Lease. All costs of Landlord's maintenance and repairs shall be borne
by Tenant and prorated in the manner set forth in the Article titled
"Operating Expenses." Landlord shall have no obligation to make any
such repairs until Landlord has received written notice from Tenant
with respect to the need for such repairs, and Landlord shall not be
deemed to be in default with respect to its obligation to repair unless
and until Landlord has (i) received said written notice and (ii) failed
to make such repairs within a reasonable period following the receipt
of said notice. Landlord shall, after receiving written notice,
exercise due diligence in making such repairs. Tenant hereby waives any
provisions of any and all Laws permitting Tenant to make repairs at
Landlord's expense. Landlord shall enforce any express construction
warranties for the benefit of Tenant to the extent that they are
available. There shall be no abatement of rent and no liability of
Landlord under any circumstances by reason of any loss of or any injury
to property, lost profits, or for injury to or interference with
Tenant's business arising from the making of or Landlord's failure to
make any repairs, alterations, or improvements.
21
13.7. Landlord shall, as part of the Operating Expenses, repair and maintain
the Project Enhancement Areas And Unit Shared Use Areas in a neat,
clean and orderly condition and repair, properly lighted and
landscaped, and shall operate the Project, in Landlord's sole
discretion, as a first class industrial/office/commercial real property
development. All expenses in connection with the Project Enhancement
Areas And Unit Shared Use Areas shall be charged and prorated in the
manner set forth in the Article titled "Operating Expenses." It is
understood and agreed that the phrase "expenses in connection with said
Project Enhancement Areas And Unit Shared Use Areas" shall include, but
shall not be limited to, all sums expended in connection with said
Project Enhancement Areas And Unit Shared Use Areas for all general
maintenance and repairs, resurfacing, painting, restriping, cleaning,
sweeping and janitorial services; maintenance and repair of sidewalks,
curbs, and Building signs (other than Tenant's sign), sprinkler
systems, planting and landscaping; lighting and other utilities;
painting of all exterior surfaces of the Building or buildings in the
Project; directional signs and other markers and bumpers; maintenance
and repair of any fire protection systems, automatic sprinkler systems,
lighting systems, storm drainage systems and any other utility systems;
personnel to implement such service, including, if Landlord deems
necessary, the cost of security guards and/or all costs and expenses
pertaining to a security alarm system for the tenants; police and fire
protection services; personal property taxes levied on or attributable
to personal property owned by Landlord which is consumed in the
operation or maintenance of the Project Enhancement Areas And Unit
Shared Use Areas; depreciation and maintenance on operating machinery
and equipment (if owned) and rental paid for such machinery and
equipment (if rented); any parking charges, surcharges or any other
costs levied or assessed by local, state or federal governmental
agencies in connection with the use of parking facilities; fees for
required licenses and permits; adequate public liability and property
damage insurance on the Project Enhancement Areas And Unit Shared Use
Areas; reserves for exterior painting and other appropriate reserves;
and a reasonable allowance to Landlord for Landlord's supervision of
the said Project Enhancement Areas And Unit Shared Use Areas, which
cost shall not exceed three percent (3%) of the total of the
aforementioned expenses for said calendar year. Landlord may, however,
cause any or all of said services to be provided by an independent
contractor or contractors.
13.8. Landlord's exercise of any right or obligation to maintain or repair
the Premises, Project Enhancement Areas And Unit Shared Use Areas
and/or other areas of the Project shall not entitle Tenant to any
abatement of rent, compensation or damages for injury, loss or
inconvenience occasioned thereby.
13.9. Tenant waives the right to make repairs at Landlord's expense under any
Law, including, but not limited to, Sections 1932, 1933, 1941, and 1942
of the California Civil Code.
13.10. Tenant, at its own expense, shall make all repairs to the Project that
are made necessary by any breach of this Lease or any misuse or neglect
by:
13.10.1. Tenant or any of its officers, agents, employees, contractors,
licensees, or subtenants; or
13.10.2. Any visitors, patrons, guests, or invitees of Tenant or its
subtenant.
22
13.11. All such repairs shall be at lest equal in quality to the original
work, shall be made only by a licensed, bonded contractor approved in
advance by Landlord, and shall be made only at such time or times as
shall be approved by Landlord. Landlord may impose reasonable
restrictions and requirements with respect to such repairs. At the time
of the expiration of the tenancy created herein, Tenant shall surrender
the Premises in good order, condition, and repair, ordinary wear and
tear excepted. Tenant shall not commit or suffer to be committed any
waste in or upon the Premises.
13.12. Tenant shall, at its own expense, keep and maintain the Premises in a
clean, sanitary, and safe condition in accordance with all Laws.
13.13. Tenant shall, at its own expense, install and maintain such fire
extinguishers and other fire protection devices (other than sprinkler
systems) as may be required in the Premises from time to time by any
agency having jurisdiction and/or by the insurance underwriters
insuring the Building
14. UTILITIES AND SERVICES.
-----------------------
14.1. Except as otherwise provided in this Article, Tenant shall make all
arrangements for and pay for all utilities and services furnished to or
used by it, including, without limitation, gas, electricity, water,
telephone service, and trash collection, and for all connection
charges. If Tenant requires or utilizes more water or electrical power
than Landlord considers reasonable or normal for general office use,
light manufacturing, or warehousing, Landlord may at its option (a)
require Tenant to pay, as additional rent, the cost, as fairly
determined by Landlord, incurred by such extraordinary usage and (b)
install separate meter(s) or monitors for the Premises, at Tenant's
sole expense.
14.2. In the event that Landlord furnishes any utilities (referred to herein
as the "Jointly Metered Utilities"), Landlord shall only be required to
provide heating, air conditioning, and ventilation during normal
business hours. Normal business hours shall be defined from time to
time by Landlord in the rules and regulations.
14.3. Tenant shall pay to Landlord, as additional rent, the cost of all
Jointly Metered Utilities in the following manner:
14.3.1. Tenant shall pay to Landlord, as additional rent, on the first
day of each calendar month of the term of this Lease, an
amount equal to Landlord's best estimate (based on Landlord's
budgeted figures) of all Jointly Metered Utilities based upon
Tenant's proportionate share of the occupied square footage of
the building or buildings serviced by such meter and any
extraordinary uses which may be made by Tenant;
14.3.2. Within sixty (60) days following the end of each calendar
year, Landlord shall furnish Tenant with a statement covering
the calendar year just expired (certified as correct by an
authorized representative of Landlord, or if requested by a
majority of the tenants in the Building by a certified public
accountant) showing (i) the total cost of Jointly Metered
Utilities; (ii) the amount of Tenant's proportionate share of
23
the Jointly Metered Utilities for the calendar year; and (iii)
the payments made by Tenant with respect to such period as set
forth in this Article. If Tenant's payments exceed Tenant's
proportionate share of such costs, Tenant shall be entitled to
offset the excess against the next payments due Landlord as
set forth in this Article. However, if Tenant's proportionate
share of the Jointly Metered Utilities exceeds Tenant's
payments, Tenant shall pay Landlord the deficiency within ten
(10) days after receipt of such statement. In addition,
Tenant's proportionate share of the total Jointly Metered
Utilities for the previous calendar year shall be used as an
estimate for the current year and paid to Landlord pursuant to
the provisions of this Article.
14.4. Landlord shall not be liable for, and Tenant shall not be entitled to,
any reduction of rental by reason of Landlord's failure to furnish any
utilities when such failure is caused by accident, breakage, repairs,
strikes, lockouts or other labor disturbances or labor disputes of any
character, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. No such failure or interruption shall
entitle Tenant to terminate this Lease. Landlord shall not be liable,
under any circumstances for a loss of or injury to property, however
occurring, through or in connection with or incidental to failure to
furnish any of the foregoing. Wherever heat generating machines or
equipment are used in the Premises which affect the temperature
otherwise maintained by the air conditioning system, Landlord reserves
the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation, and
the cost of operation and maintenance thereof shall be paid by Tenant
to Landlord upon demand by Landlord.
14.5. Tenant may, at its sole expense, elect to install its own meter for any
utilities which are jointly metered by written notice delivered to
Landlord one (1) month prior to the initiation by Tenant of any work to
effectuate such change.
14.6. Landlord shall, during all normal business hours, maintain and keep
lighted the common stairs, common entries, and toilet rooms if any, in
the building of which the Premises are a part.
14.7. Landlord shall not be liable for, and Tenant shall not be entitled to,
any abatement or reduction of rent by reason of Landlord's failure to
furnish any utilities when such failure is caused by accident; act of
God; breakage: repairs; strikes; lockouts or other labor disturbances
or labor disputes of any character; any Law, moratorium, or other
action of any federal, state, county, or municipal authority; inability
despite the exercise of reasonable diligence by Landlord to obtain
electricity, water, or fuel; or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord. No such failure
or interruption shall entitle Tenant to terminate this Lease. Also, no
eviction of Tenant shall result from such failure and Tenant shall not
be relieved from the performance of any covenant or agreement in this
Lease because of such failure. Landlord shall not be liable, under any
circumstances for a loss of or injury to property, however occurring,
through or in connection with or incidental to failure to furnish any
of the foregoing. Wherever heat generating machines or equipment are
used in the Premises which affect the temperature otherwise maintained
by the air conditioning system, Landlord reserves the right to install
supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation, and the cost of operation
and maintenance thereof shall be paid by Tenant to Landlord upon demand
by Landlord.
14.8. Landlord reserves the right to stop providing plumbing, ventilation,
air conditioning, electric, water, or any other service provided by
Landlord under this Lease, when necessary by reason of accident or
emergency or for repairs, alterations or improvements, which in the
reasonable judgment of Landlord are desirable or necessary to be made,
until said repairs, alterations, or improvements shall have been
completed.
24
15. INDEMNITY AND EXCULPATION.
--------------------------
15.1. Tenant is liable for, and shall indemnify, protect, defend, and hold
Landlord harmless from and against, any and all loss, claims, actions,
suits, liabilities, judgments, costs, and expenses (including
attorneys' fees) by reason of the following:
15.1.1. injury to any person or property, from whatever cause, all or
in part connected with the condition or use of the Premises or
the improvements or personal property located therein,
including, but not limited to, any liability for injury to the
person or property of Tenant, its agents, officers, employees,
invitees, or trespassers;
15.1.2. any activity, work or thing done, permitted or suffered by
Tenant in or about the Premises, the Project or the Common
Area; and
15.1.3. any breach or default in the performance of any obligation to
be performed by Tenant under the terms of this Lease; and
15.1.4. any act, neglect, fault or omission of Tenant or of its agents
or employees, except to the extent caused by or resulting from
the negligence or willful misconduct of Landlord or its
employees in the operation or maintenance of the Premises, the
Building, or the Project.
15.2. Tenant shall, at Tenant's expense, resist and defend any such action,
suit, or proceeding or cause the same to be resisted or defended by
counsel designated by Tenant and approved by Landlord in writing.
Tenant's obligation hereunder shall survive the termination of this
Lease, if the incident requiring such defense occurred during the Lease
term.
15.3. Neither Landlord nor any manager, member, partner, director, officer,
agent or employee of Landlord shall be liable to Tenant or its
partners, directors, officers, contractors, agents, employees,
invitees, sublessees, licensees for any loss, injury or damage to or
death of Tenant or to any other person, or to its or their property,
goods, wares, and merchandise in, upon, and about the Premises
irrespective of the cause of such injury, damage or loss, except to the
extent caused by or resulting from the negligence or willful misconduct
of Landlord or its employees in the operation or maintenance of the
Premises, the Building, or the Project. Further, neither Landlord nor
any manager, member, partner, director, officer, agent or employee of
Landlord shall be liable (i) for any such damage caused by other
tenants or persons in or about the Project, or caused by quasi-public
work; or (ii) for consequential damages arising out of any loss of the
use of the Premises of any equipment or facilities therein by Tenant or
any person claiming through or under Tenant. Tenant, as a material part
of the consideration to Landlord, hereby assumes all risk of all such
damage to property or injury or death to person in, upon or about the
Premises from any cause whatsoever. Except as provided in this Section,
Tenant hereby waives all its claims in respect thereof against
Landlord.
15.4. All of Tenant's releases and indemnification, defense, and hold
harmless obligations under this Lease survive the expiration or other
termination of this Lease, without limitation.
15.5. Any diminution or shutting off of light, air or view by any structure
which may be erected on lands adjacent to the Project shall in no way
affect this Lease or impose any liability on Landlord.
25
16. INSURANCE.
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16.1. Landlord shall maintain, at Tenant's expense, a policy or policies of
insurance, as Landlord reasonably deems necessary from time to time or
is required by Landlord's lenders, protecting against the following:
16.1.1. Fire and other perils normally included in the extended
coverage insurance with special form, to the extent of at
least one hundred percent (100%) of the insurable value of the
Building and other improvements on the Premises exclusive of
trade fixtures, equipment, goods and materials belonging to
Tenant;
16.1.2. Rent loss insurance to the extent of at least one hundred
percent (100%) of the annual gross rentals from the Project of
which the Premises constitutes a part; and
16.1.3. Public liability and property damage insurance and products
liability insurance with respect to Project Enhancement Areas
And Unit Shared Use Areas for the joint benefit of Landlord
and Tenant: (i) in amounts not less than $1,000,000 for bodily
injury or death to any one person, and in an amount not less
than $2,000,000 per occurrence; and (ii) for property damage
in an amount of not less than $1,000,000 per occurrence. Said
amounts shall be subject to adjustment every Three (3) years
to the then prevailing limits normally required for operations
of the type conducted by Tenant on the Premises.
16.2. Tenant shall pay to Landlord, as additional rent, and in the manner
provided in the Article titled "Operating Expenses," Tenant's Pro Rata
Share of the cost of insurance required in Sections 1 and 6 of this
Article.
16.3. Tenant shall maintain in force and effect at all times during the term
of this Lease, and at all times during any early entry whereby Tenant
desires to perform any work or store any property in the Premises, a
policy or policies of fire, extended coverage, and special extended
coverage ("all risk") insurance with respect to Tenant's fixtures,
furniture, personal property, equipment, goods and materials located in
the Premises, sprinkler leakage, energy systems coverage, coverage for
water damage to contents, and earthquake sprinkler leakage, with
vandalism and malicious mischief endorsements to the extent of at least
one hundred percent (100%) of their insurable value, including all
leasehold improvements and betterments to the Premises installed by or
paid for by Tenant. Coverage shall also include all personal property
of third parties to the extent any such fixtures and personal property
are used or located in the Premises. During the term of this Lease, the
proceeds of any such policy or policies of fire insurance shall be used
solely for the repair or replacement of the fixtures or equipment so
insured. Landlord shall have no claim or interest in said insurance and
shall sign all documents necessary to effectuate the settlement of any
claim or loss by Tenant.
16.4. Tenant shall maintain in force and effect at all times during the term
of this Lease, with an insurance company acceptable to Landlord, a
comprehensive general liability insurance policy with respect to the
Premises, for the joint benefit of Landlord and Tenant for personal
injury in amounts of not less than $1,000,000 for bodily injury or
death to any one person, in an amount not less than $3,000,000 per
occurrence, for property damage in an amount of not less than
26
$1,000,000 per occurrence, and in an amount not less than $3,000,000
general aggregate on a per location basis. Such insurance shall also
include blanket contractual coverage covering Tenant's indemnity
obligations hereunder, public liability, broad form property damage,
products liability, completed operations, legal liability in excess of
recovery obtained by Landlord under any insurance maintained by
Landlord, liquor liability or host liquor liability, if Tenant serves
liquor in the Premises, and owned and non-owned automobile coverages.
The amounts of such public liability insurance shall be increased from
time to time as Landlord may reasonably determine or as required by any
lender with an interest in the Project. Such insurance must include:
(a) specific coverage provisions or endorsements naming Landlord and
Property Manager as additional insureds by an "Additional Insured -
Managers or Lessors of Premises" endorsement (or equivalent coverage or
endorsement); and (b) provisions stating that the insurer has a duty to
defend all insureds under the policy (including additional insureds),
and that defense costs are paid in addition to, and do not deplete, the
policy limits. Tenant shall furnish Landlord with a certificate of
insurance with respect to such policy or policies prior to entry of the
Premises.
16.5. Tenant shall maintain in force and effect at all times during the term
of this Lease with an insurance company acceptable to Landlord,
workers' compensation insurance, including employer's liability
coverage, as required by any and all Laws.
16.6. Tenant shall not keep, use, sell or offer for sale in or upon the
Premises any article that may be prohibited by any insurance policy
periodically in force covering the Project. If Tenant's occupancy or
business in, or on, the Premises, whether or not Landlord has consented
to the same, results in any increase in premiums for the insurance
periodically carried by Landlord with respect to the Project or any
portion thereof, Tenant shall pay any such increase in premiums as
additional rent within ten (10) days after being billed therefore by
Landlord. In determining whether increased premiums are a result of
Tenant's use of the Premises, a schedule issued by the organization
computing the insurance rate on the Project or the Tenant Improvements
showing the various components of such rate, shall be conclusive
evidence of the several items and charges which make up such rate.
Tenant shall promptly comply with all reasonable requirements of the
insurance authority or any present or future insurer relating to the
Premises.
16.7. Landlord and Tenant hereby mutually release each other from liability
and waive all right to recover against each other (and against the
members, officers, employees, and agents of the other party) from any
loss or damage from perils insured against under their respective fire
insurance policies, including any extended coverage and endorsements to
said policies. However, this Section shall be inapplicable if it would
have the effect, but only to the extent that it would have the effect,
of invalidating any insurance coverage of Landlord or Tenant. The
Parties shall, in obtaining the policies of insurance that they are
required to maintain under this Lease, give notice to their respective
insurance carriers that the foregoing mutual waiver of subrogation is
contained in this Lease, and each shall obtain, if available, from
their respective insurance companies, a waiver of any right of
subrogation which said insurance company may have against the Landlord
or the Tenant, as the case may be. In the event that the insurance
company of Tenant does not waive the right of subrogation against
Landlord and its insurance company, Tenant shall (i) maintain during
the term of this Lease fire legal liability coverage with respect to
the Premises and (ii) shall pay to Landlord upon demand, Landlord's
cost incurred in securing fire legal liability protecting Landlord in
the event of the destruction of Tenant's property.
27
16.8. Landlord may maintain, at the Tenant's expense (pro rated in the manner
described in the Article titled "Operating Expenses"), boiler and
machinery insurance on all boilers, heating equipment, air conditioning
equipment, and other pressure vessels and systems that may be located
in, on, or about the Premises. Tenant shall reimburse Landlord for the
insurance provided by Landlord under this Section in accordance with
the terms set forth in Section 2 of this Article.
16.9. All the insurance required under this Lease shall:
16.9.1. Be issued by insurance companies authorized and licensed to do
business in the State of California, with a General
Policyholders Rating of "A", and a financial rating of at
least superior status as rated in the most recent edition of
Best's Insurance Reports;
16.9.2. Be issued as a primary policy;
16.9.3. Contain an endorsement requiring one (1) month written notice
from the insurance company to both Landlord and Landlord's
lender before cancellation or change in the coverage, scope,
or amount of any policy.
16.9.4. Be issued by a responsible carrier reasonably acceptable to
Landlord.
16.10. Tenant may elect to have (i) reasonable deductibles not to exceed
$2,000 in connection with the policies of insurance required to be
maintained by Tenant under this Section and (ii) the insurance coverage
required to be maintained under this Lease by Tenant provided under
"umbrella" policies of insurance provided that Tenant obtains a "per
project, per location endorsement".
16.11. Tenant shall deliver to Landlord at least ten (10) days prior to the
time such insurance is first required to be carried by Tenant, and
thereafter at least thirty (30) days prior to expiration of each such
policy, certificates of insurance evidencing the above coverages with
limits not less than those specified above and certified copies of all
required endorsements. With the exception of Workers Compensation, such
certificates and the policies they refer to, shall (i) be endorsed to
name Landlord and each of its , affiliates, lenders and agents so
designated by Landlord from time-to-time as additional insureds, (ii)
expressly provide that the interests of such persons therein shall not
be affected by any breach by Tenant of any policy provision for which
such certificates or endorsements evidence coverage, (iii) be on an
occurrence basis and (iv) contain a cross-liability endorsement or
severability of interest clause acceptable to Landlord. A copy of the
additional insured endorsement for policies currently in effect shall
be attached to the certificates as required above. Further, each such
certificate and endorsement shall expressly provide that no less than
thirty (30) days' prior written notice shall be given Landlord in the
event of material alteration or cancellation of the coverage evidenced
by such certificate or endorsement. The words "Carrier agrees to
provide such notice" shall be used on Certificates of Insurance
provided to Landlord. Certificates of insurance containing such phrases
as "Carrier shall endeavor to notify Certificate Holder"..." shall not
be considered acceptable for the purposes of this provision. The
insurance which Tenant is required to maintain in force and effect
under this Agreement shall be the primary insurance as respects
Landlord (and any other additional insureds designated by Landlord) and
not contributory with any other available insurance. The certificates
of insurance evidencing the liability insurance coverage shall contain
an endorsement to such effect.
28
16.12. If on account of a failure of Tenant to comply with the provisions of
the above Section, Landlord is adjudged a co-insurer by its insurance
carrier, then any loss or damage Landlord shall sustain by reason
thereof shall be borne by Tenant and shall be immediately paid by
Tenant as additional rent upon receipt of a xxxx therefore and evidence
of such loss or damage.
16.13. In no event shall the limits of any coverage maintained by Tenant
pursuant to this Article be considered as limiting Tenant's liability
under this Lease.
16.14. If Tenant fails to maintain any insurance required hereunder, Landlord
may procure such policies for Tenant's account, and the cost thereof,
plus an administrative fee of fifteen percent (15%), shall be
immediately due and payable by Tenant as additional rent.
17. ALTERATIONS.
------------
17.1. Tenant shall not make any alterations, additions or improvements
(collectively, "alterations") to the Premises except as provided
herein. Any alterations, additions or improvements desired by Tenant
shall be made, at Tenant's expense only after Tenant submits detailed
final plans and drawings to Landlord and obtains Landlord's consent to
alterations and approval of such plans Work shall be performed only by
contractors or mechanics approved by Landlord, which approval shall not
be unreasonably withheld. Tenant shall construct such Alterations in
accordance with the plans and specifications approved by Landlord, and
shall not amend or modify such plans and specifications without
Landlord's prior written consent. If the proposed change requires the
consent or approval of the holder of a mortgage encumbering the
Project, such consent or approval must be secured prior to the
construction of such Alteration. Tenant agrees that there shall be no
construction of partitions or other obstructions which might interfere
with Landlord's free access to mechanical installations or service
facilities of the Building or interfere with the moving of Landlord's
equipment to or from the enclosures containing said installations or
facilities. All such work shall be done at such times and in such
manner as Landlord may from time to time reasonably designate. Any such
alterations, additions or improvements shall be in conformity with all
Laws and in full compliance with the requirements of any mortgages
encumbering the Project and any insurance policies relating to the
Project and excepting movable furniture, trade fixtures, machinery and
other trade equipment shall become part of the realty and belong to
Landlord. However, Landlord can elect, within one (1) month before
expiration of the term, or within one (1) month after expiration or
termination of the term, to require Tenant to remove any alterations,
additions or improvements Tenant has made to the Premises. If Landlord
so elects, Tenant at its sole cost shall restore the Premises to the
condition designated by Landlord in its election, before the last day
of the term, or within thirty (30) days of Landlord's election,
whichever is later.
17.2. Before commencing any work, whether or not Landlord's consent is
required, Tenant shall give Landlord at least ten (10) days' written
notice of the proposed commencement of such work to allow Landlord to
post and record, at Tenant's expense, notices of non-responsibility.
Tenant shall, if required by Landlord, secure at Tenant's own cost and
expense, appropriate insurance and, if the cost of the work exceeds
$10,000, a completion and lien indemnity bond satisfactory to Landlord
for any said work. Tenant further covenants and agrees that any
mechanic's lien or other lien filed against the Premises or against the
Building for work claimed to have been done for, or materials claimed
to have been furnished to, Tenant will be discharged by Tenant as
provided in the Article titled "Mechanics Liens" below. Upon completion
of any work, Tenant shall record a notice of completion sufficient
under applicable mechanic's' lien Laws.
17.3. Tenant may install trade fixtures, machinery, or other trade equipment
in conformance with all Laws and in full compliance with the
requirements of any mortgages encumbering the Project and any insurance
policies relating to the Project. Tenant may remove any of such trade
fixtures or machinery upon the expiration or termination of this Lease
if Tenant is not in default under the terms and conditions of this
Lease. If Tenant shall fail to remove all of its effects from the
Premises upon termination of this Lease for any cause whatsoever, the
provisions under the Article titled "Surrender of Premises" of this
Lease shall apply.
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17.4. In the event that Tenant installs trade fixtures, machinery or other
trade equipment, Tenant shall return the Premises on expiration or
termination of this Lease to the same condition as existed at the date
of entry, reasonable wear and tear excepted. In any event, Tenant shall
repair any damage resulting from the removal of trade fixtures,
machinery or other trade equipment of Tenant.
17.5. Any electrical wiring, conduit, junction boxes and outlets installed by
Tenant shall comply with all building codes and shall become the
property of Landlord upon termination of this Lease.
17.6. If Tenant fails to promptly commence and diligently pursue completion
of removal and restoration of alterations, additions, or improvements,
Tenant shall pay to Landlord the cost thereof, including a reasonable
charge for Landlord's overhead, upon Landlord's demand. If Tenant has
not removed such items and completed restoration of the Premises upon
the expiration or earlier termination of this Lease, Tenant shall
continue to pay rent for the portion of the Premises not completely
vacated.
18. MECHANICS' LIENS.
-----------------
18.1. Tenant shall pay, when due, all costs for construction done by it or
caused to be done by it on the Premises as permitted by this Lease.
Tenant shall keep the building, other improvements, and land free and
clear of all mechanics' liens resulting from construction or other work
done by or for Tenant. Tenant hereby indemnifies and holds Landlord
harmless against loss, damage, attorney's fees and all other expenses
on account of claims of lien of laborers or materialmen or others for
work performed or materials or supplies furnished for Tenant or persons
claiming under it. If Tenant shall not, within fifteen (15) days
following the imposition of any such liens, cause such lien to be
released of record by payment or posting of a proper bond satisfactory
to Landlord, then Landlord shall have, in addition to all other
remedies provided herein or by law, the right to cause such lien to be
released by such reasonable means as Landlord shall deem proper,
including payment and/or defense against the claim giving rise to such
lien. All sums paid by Landlord and all expenses incurred by it in
connection therewith, together with an administrative fee of fifteen
percent (15%), shall create automatically an obligation of Tenant to
pay an equivalent amount to Landlord as Rent, which rent shall be so
payable by Tenant on Landlord's demand therefore with a late charge (as
defined under the article titled "Late Charges") and interest accruing
from the date paid or incurred by Landlord until reimbursed to Landlord
by Tenant.
18.2. Tenant shall have the right to contest the correctness or the validity
of any such lien if, immediately on demand by Landlord, Tenant procures
and records a lien release bond issued by a corporation authorized to
issue surety bonds in California in an amount equal to one and one-half
times the amount of the claim of lien. The bond shall meet the
requirements of the California Civil Code and shall provide for the
payment of any sum that the claimant may recover on the claim (together
with costs of suit, if it recovers in the action).
19. DESTRUCTION.
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19.1. In the event of total or partial destruction of the Building and/or the
Premises, Landlord may elect, as soon as reasonably possible
thereafter, to commence repair, reconstruction and restoration of the
Building and/or the Premises, which repair shall be completed as soon
as reasonably possible. In that event, this Lease shall remain in full
force and effect. However, within sixty (60) days after the date of
such damage or destruction, Landlord, in Landlord's sole and absolute
discretion, and regardless of the availability of insurance proceeds,
may elect not to so repair, reconstruct or restore the Building and/or
the Premises. In that event, this Lease shall terminate as of the date
of such damage or destruction.
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19.2. In the event of a partial damage to or destruction of the Building
and/or the Premises, to an extent not exceeding twenty-five percent
(25%) of the full insurable value thereof, Landlord shall commence and
proceed with reasonable diligence with the work of repair,
reconstruction and restoration if: (i) the damage thereto is such that
the Building and/or Premises may be repaired, reconstructed or restored
within a period of ninety (90) days from the date of the happening of
such casualty; and (ii) if Landlord receives insurance proceeds
sufficient to cover the cost of such repairs. In that event, this Lease
shall continue in full force and effect. Otherwise, Landlord, in
Landlord's sole and absolute discretion, may either: (i) elect to so
repair, reconstruct or restore, in which case the Lease shall continue
in full force and effect; or (ii) Landlord may elect not to repair,
reconstruct or restore, in which case the Lease shall terminate as of
the date of such partial damage or destruction. Under any of the
conditions of this Section, Landlord shall give written notice to
Tenant of its intention within said ninety (90) day period.
19.3. If any partial damage or destruction is due to any cause other than
fire or other peril covered by extended coverage insurance, Landlord
may, by written notice to Tenant within sixty (60) days after the date
of such damage or destruction, elect to terminate this Lease as of the
date of such damage or destruction.
19.4. If Landlord determines in Landlord's reasonable opinion that Tenant
cannot be provided with reasonable use of and access to the repaired
Premises or the Building within nine (9) months (or three (3) months
during the last year of the Lease term) after the date of any damage or
destruction thereto, Tenant shall have the right to terminate this
Lease by written notice delivered to Landlord within fifteen (15) days
after the date of Landlord's determination, provided that the damage or
destruction was not due to the negligence or willful misconduct of
Tenant or its agents, employees or invitees.
19.5. Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when the damage or destruction
resulting from any casualty occurs during the last twelve (12) months
of the term of this Lease. Landlord may elect to terminate this Lease
as of the date the damage occurred, regardless of the sufficiency of
any insurance proceeds. However, if Tenant has any unexpired options to
extend the term of this Lease, if Tenant delivers written notice to
Landlord exercising such option within five (5) days after such
termination by Landlord, this Lease shall remain in effect subject to
the remaining terms of this Article.
19.6. Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in
this Article. Landlord shall not be liable for any failure to make any
such repairs if such failure is caused by any Unavoidable Delays (as
defined below). However, if such failure shall persist for more than
one hundred eighty (180) days, either party may, by written notice to
the other, terminate this Lease as of the date of the occurrence of
such damage.
19.7. Upon any termination of this Lease under any of the provisions of this
Article, the parties shall be released without further obligation to
the other arising after the date possession of the Premises is
surrendered to Landlord.
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19.8. If Landlord is required or elects to restore the Premises as provided
in this Article, Landlord shall prosecute the same with reasonable
diligence to completion. However, Landlord shall not be required to
restore alterations or improvements made by Tenant, Tenant
Improvements, Tenant's Trade Fixtures, or Tenant's Personal Property.
Such excluded items are the sole responsibility of Tenant to restore.
Without interfering with Landlord's repair and restoration process,
Tenant shall commence and diligently prosecute to completion the repair
and restoration of such alterations and improvements and shall replace
all Tenant Improvements, Tenant's Trade Fixtures, or Tenant's Personal
Property promptly upon delivery of the Premises to Tenant.
19.9. If Landlord elects to repair the damage, and, if the damage was due to
the negligence or willful misconduct of Tenant, Tenant shall pay
Landlord an amount equal to the difference between the actual cost of
repair and any insurance proceeds received by Landlord. If the
Premises, the Building or the Project is damaged, and such damage is of
the type insured against under the fire and special form property
damage insurance maintained by Landlord hereunder, the cost of
repairing said damage, up to the amount of the deductible under said
insurance policy, shall be included as a part of Operating Expenses.
19.10. Landlord and Tenant hereby waive the provisions of any statutes or
court decisions that relate to the abatement of rent or termination of
leases when leased property is damaged or destroyed and agree that such
event shall be exclusively governed by the terms of this Lease.
19.11. If the existing laws do not permit the restoration as described in this
Article, either Party may terminate this Lease immediately by giving
notice to the other Party.
19.12. If Landlord is required or elects to restore the Premises as provided
in this Article, Tenant shall continue the operation of its business on
the Premises, during the restoration period, to the extent reasonably
practicable from the standpoint of prudent business management and to
the extent that it will not interfere with the repair and restoration
process.
19.13. Except for abatement of rent as provided in this Article, Tenant shall
have no claim against Landlord for any damage suffered by reason of any
damage, destruction, repair or restoration of the Premises. Tenant
shall not be entitled to any compensation or damages from Landlord as a
result of any partial or total destruction of the Premises or for any
inconvenience, loss, or damage that Tenant may incur as a result of the
restoration process.
19.14. In the event that either Party elects to terminate this Lease under the
enabling provisions of this Article, Tenant shall surrender to the
Landlord all proceeds from the insurance policies described in the
Article titled "Insurance," excluding proceeds for the Tenant's trade
fixtures and equipment.
19.15. In the case of damage or destruction caused from a risk covered by
insurance provided in the Article titled "Insurance," there shall be no
abatement or reduction of rent. However, Tenant shall receive a credit
against its Rent obligations to the extent that Landlord receives
insurance proceeds attributable to Tenant's Rent lost during the period
that the destruction interferes with Tenant's use of the Premises. In
the case of damage or destruction caused from a risk not covered by the
insurance provided in the Article titled "Insurance," there shall be an
abatement or reduction of rent between the date of destruction and the
date of completion of restoration, based on the extent to which the
destruction interferes with Tenant's use of the Premises.
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19.16. In the case of damage or destruction caused from a risk not covered by
the insurance provided in the Article titled "Insurance," if such
damage or destruction is caused by or arises out of Tenant's acts or
omissions, or the acts or omissions of Tenant's agents, employees,
contractors, and/or invitees, Landlord shall not have any obligation to
repair or restore under this Article, and there shall be no abatement
of rent under this Lease. Nothing in this Article shall relieve or
limit any liability of Tenant on account of such acts or omissions.
20. CONDEMNATION.
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20.1. "Condemnation" means (i) the exercise of any governmental power,
whether by legal proceedings or otherwise, by a condemnor and (ii) a
voluntary sale or transfer by Landlord to any condemnor, either under
threat of condemnation or while legal proceedings for condemnation are
pending.
20.2. "Date of taking" means the date the condemnor has the right to
possession of the property being condemned.
20.3. "Award" means all compensation, sums, or anything of value awarded,
paid, or received on a total or partial condemnation.
20.4. "Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
20.5. If, during the term or during the period of time between the execution
of this Lease and the date the term commences, there is any taking by
condemnation of all or any part of the land, building, or other
improvements, of which are a part of the Premises, or any interest in
this Lease, the rights and obligations of the Parties shall be
determined pursuant to this Article.
20.6. If the Premises are totally taken by condemnation, this Lease shall
terminate on the date of taking.
20.7. If any portion of the Premises is taken by condemnation, this Lease
shall remain in effect, except that Tenant, in Tenant's reasonable
discretion, can elect to terminate this Lease if the remaining portion
of the Premises is rendered unsuitable for Tenant's continued use of
the Premises. If Tenant elects to terminate this Lease, Tenant must
exercise its right to terminate pursuant to this Section by giving
notice to Landlord within one (1) month after the nature and the extent
of the taking have been finally determined. If Tenant elects to
terminate this Lease as provided in this Section, Tenant also shall
notify Landlord of the date of termination, which date shall not be
earlier than one (1) month nor later than three (3) months after Tenant
has notified Landlord of its election to terminate. However, this Lease
shall terminate on the date of taking if the date of taking falls on a
date before the date of termination as designated by Tenant. If Tenant
does not terminate this Lease within the one (1) month period, this
Lease shall continue in full force and effect.
20.8. If any portion of the Premises is taken by condemnation and this Lease
remains in full force and effect, on the date of taking the Base Rent
shall be reduced by an amount that is in the same ratio to Base Rent as
the value of the area of the portion of the Premises taken bears to the
total value of the Premises immediately before the date of taking.
20.9. If the parking area of the Premises is taken by condemnation, this
Lease shall remain in full force and effect. However, if fifty percent
(50%) or more of the parking area is taken by condemnation, or if such
taking materially impairs Tenant's ability to conduct its business,
either Party shall have the election to terminate this Lease pursuant
to this Section by giving written notice to the other.
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20.10. If, within one (1) month after the date that the nature and extent of
the taking are finally determined, Landlord notifies Tenant that
Landlord at its cost shall add on to the remaining Premises' parking
area so that the area and the approximate layout of the Premises and
parking area will be substantially the same after the date of taking as
they were before the date of taking, and Landlord commences the
restoration immediately and completes the restoration within three (3)
months after Landlord notifies Tenant, this Lease shall continue in
full force and effect without any reduction in Base Rent, except the
abatement or reduction made pursuant to Section 12 of this Article.
20.11. Each Party waives the provisions of the California Code of Civil
Procedure allowing either Party to petition the superior court to
terminate this Lease in the event of a partial taking of the Premises.
20.12. If there is a partial taking of the Premises and this Lease remains in
full force and effect pursuant to Section 7 of this Article, Landlord
at its cost shall accomplish all necessary restoration.
20.13. Rent shall be abated or reduced during the period from the date of
taking until the completion of restoration, but all other obligations
of Tenant under this Lease shall remain in full force and effect. The
abatement or reduction of rent shall be based on the extent to which
the restoration interferes with Tenant's use of the Premises.
20.14. The award shall belong to and be paid to Landlord, except that Tenant
shall receive from the award the following:
20.14.1. A sum attributable to Tenant's improvements or alterations
made to the Premises by Tenant in accordance with this Lease,
which Tenant's improvements or alterations Tenant has the
right to remove from the Premises pursuant to the provisions
of this Lease but elects not to remove; or, if Tenant elects
to remove any such Tenant's improvements or alterations, a sum
for reasonable removal and relocation costs not to exceed the
market value of such improvements or alterations.
20.14.2. A sum attributable to any excess of the market value of the
Premises (exclusive of Tenant's improvements or alterations
for which Tenant is compensated under this Section) for the
remainder of the term, over the present value at the date of
taking of the Base Rent payable for the remainder of the term.
20.14.3. A sum attributable to that portion of the award constituting
severance damages for the restoration of the Premises.
20.15. The taking of the Premises or any part of the Premises by military or
other public authority shall constitute a taking of the Premises by
condemnation only when the use and occupancy by the taking authority
has continued for longer than six (6) consecutive months. During the
six (6) month period, all the provisions of this Lease shall remain in
full force and effect. However, rent shall be abated or reduced during
such period of taking based on the extent to which the taking
interferes with Tenant's use of the Premises. Landlord shall be
entitled to whatever award may be paid for the use and occupation of
the Premises for the period involved.
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21. ASSIGNMENT.
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21.1. Tenant shall not voluntarily assign or encumber its rights or interest
in this Lease or in the Premises, or sublease all or any part of the
Premises, or allow any other person or entity (except Tenant's
authorized representatives) to occupy or use all or any part of the
Premises, without first obtaining Landlord's written consent through
strict accordance with the following procedure:
21.1.1. Tenant must first give to Landlord a written notice of intent
to sublease or assign (referred to herein as "Tenant's
Notice") at least one (1) month prior to the effective date of
any proposed subletting or assignment. Tenant's Notice must
contain the following: (i) whether Tenant proposes to assign
or sublet; (ii) the identity and trade of the proposed
assignee or sublessee (each of which is referred to herein as
the "Transferee") with accompanying financial statements and
background information for both the individual Transferee and
its business entities; (iii) the nature of the proposed
subtenant's or assignee's business to be carried on in the
Premises; (iv) a signed statement from both the Tenant and the
proposed Transferee stating all the terms and conditions of
all their transactions concerning the Premises; and (v) in the
case of a subletting, a copy of the proposed sublease.
21.1.2. Tenant must at all times promptly notify Landlord of any
change and/or alteration of the items required to be in
Tenant's Notice. Tenant's failure to do so, or any
misrepresentation or untruth contained in Tenant's Notice, by
either the Tenant or the proposed Transferee, shall constitute
a default by Tenant, and Landlord shall have the right to
elect to terminate this Lease Agreement.
21.1.3. After receipt of Tenant's Notice, Landlord may, at any time
within one (1) month of said receipt, elect to recapture the
Premises, or any part thereof, and cancel this Lease as to the
amount of the Premises recaptured, by mailing a written
cancellation notice to Tenant. Such cancellation shall become
effective one (1) month after receipt of said notice by
Tenant. If only a portion of the Premises is recaptured, this
Lease shall terminate only as to such portion and rent payable
under this Lease shall be proportionately reduced.
Notwithstanding the foregoing, Tenant may avoid such
termination by withdrawing its proposed assignment or sublease
by written notice delivered to Landlord within five (5) days
after Landlord's termination notice, and, in such event, this
Lease shall continue in full force and effect.
21.1.4. If Landlord fails to exercise its right to cancel this Lease
within the before-mentioned one (1) month period, said
cancellation right on the part of the Landlord shall be deemed
waived, but only with respect to the assignment or subletting
specified in Tenant's Notice. Tenant may thereafter assign
this Lease or sublet the Premises in accordance with the terms
of Tenant's Notice and the restrictions of this Article.
Tenant understands and acknowledges that Landlord's right, as
provided in this Article, to terminate this Lease rather than
approve the assignment thereof or the subletting of all or any
portion of the Premises is a material inducement for
Landlord's agreeing to lease the Premises to Tenant upon the
terms and conditions herein set forth.
21.2. Tenant agrees to pay Landlord's reasonable costs and expenses
(including attorneys' fees) incurred in connection with the processing
and documentation of any requested assignment, subletting, transfer,
change of ownership, or hypothecation of this Lease or Tenant's
interest in and to the Premises, which is submitted to Landlord for
Landlord's consent.
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21.3. Any mortgage, pledge or assignment of this Lease, or if Tenant is a
corporation, any transfer of this Lease from Tenant by merger,
consolidation, reorganization or liquidation shall constitute an
assignment for the purposes of this Article. If Tenant is a corporation
(other than a corporation publicly traded stock on a nationally
recognized stock exchange), an unincorporated association, a limited
liability company or a partnership, then the transfer (including a
transfer by means of a merger), assignment or hypothecation of any
stock or interest in such corporation, association, a limited liability
company or partnership in the aggregate in excess of fifty percent
(50%) during any consecutive twelve (12) month period shall be deemed
an assignment within the meaning and provisions of this Article.
However, a transfer or assignment of any such stock or interest by a
shareholder or member to his spouse, children or grandchildren is
excepted from the foregoing provision. Tenant further acknowledges and
understands that Landlord's consent is required to any change in entity
form by Tenant, including, but not limited to, Tenant's change from a
general partnership to a limited liability partnership or a limited
liability company and that a condition to Landlord's consent to any
such change shall be Tenant's acknowledgment in writing that Tenant and
its constituent partners or owners remain fully liable and responsible
under the Lease subsequent to the date of the change in entity form.
21.4. Should any transfer, assignment (whether voluntary or involuntary, by
operation of law, under legal process or proceedings, by mortgage, by
security assignment, by receivership, in bankruptcy, or otherwise),
encumbrance, or sublease be made, or any of Tenant's right under this
Lease be sold or otherwise transferred by or under court order or legal
process or otherwise, without obtaining Landlord's written consent,
according to the procedure described above, such transfer, assignment,
encumbrance, or sublease shall be voidable and ineffective and, at
Landlord's election, shall constitute a default. Landlord's consent to
any assignment, encumbrance, or sublease shall not constitute a further
waiver of the provisions of this Section, including without limitation,
Landlord's recapture right. The same shall apply to each successive
transfer, assignment, or subletting, if any. Landlord shall not
unreasonably withhold consent. It shall not be unreasonable for
Landlord to withhold such consent because it wishes to exercise its
right to recapture all or part of the Premises or because the proposed
transferee is any governmental agency, federal, state, local or foreign
government, inconsistent with other tenants in the Project, or for
Landlord to condition such consent upon Landlord's determination that
(i) Tenant is not in default in the performance of any of its
obligations (monetary or non-monetary) under this Lease; (ii) the
proposed assignee or subtenant is as financially stable as Tenant and
meets reasonable standards of credit-worthiness then used by Landlord
to assess a prospective tenant's ability to fulfill the obligations of
the Lease; and (iii) the proposed assignee or subtenant is likely to
conduct on the Premises a business of a character and quality
substantially equal to that conducted by Tenant and the entire Project
in general. Tenant agrees to pay Landlord's reasonable costs and
expenses (including attorneys' fees) incurred in connection with the
processing and documentation of any requested assignment, subletting,
transfer, change of ownership, or hypothecation of this Lease or
Tenant's interest in and to the Premises, which is submitted to
Landlord for Landlord's consent. Consent by Landlord to an assignment
or a subletting shall neither release Tenant from its primary liability
under this Lease nor from its obligations as stated in this Article.
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21.5. One half (1/2) of any consideration received by Tenant for either
assigning this Lease or from entering into a sublease contract, as well
as one half (1/2) of any continuing rent paid to Tenant from a
Transferee in excess of the rent Tenant was obligated to pay to
Landlord at the time of the assignment or sublease, shall be paid to
the Landlord, within ten (10) days of receipt, in consideration for
Landlord's consent to any assignment or subletting. Tenant's failure to
pay to Landlord said required consideration shall constitute a default
by Tenant and Landlord shall have the right to immediately terminate
this Lease Agreement in addition to all other remedies.
21.6. Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this Lease, all rent from any subletting of
all or a part of the Premises as permitted by this Lease, and Landlord,
as assignee and as attorney-in-fact for Tenant, or a receiver for
Tenant appointed on Landlord's application, may collect such rent and
apply it toward Tenant's obligations under this Lease. However, until
the occurrence of default by Tenant, Tenant shall have the right to
collect such rent. Notwithstanding any assignment, sublease, or other
transfer, Tenant shall remain fully and primarily liable under this
Lease and shall not be released from performing any of the terms,
covenants and conditions of this Lease. In the event of a default
hereunder, Landlord may proceed directly against Tenant without
pursuing any assignee or subtenant. Landlord may modify this Lease
without releasing Tenant from its obligations under this Lease,
provided that Tenant shall not be responsible for any new obligations
created by any such modification.
21.7. No interest of Tenant in this Lease shall be assignable by operation of
law (including, without limitation, the transfer of this Lease by
testacy or intestacy). Each of the following acts shall be considered
an involuntary assignment:
21.7.1. If Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a
proceeding under the Bankruptcy Act in which Tenant is the
bankrupt; or, if Tenant is a partnership or consists of more
than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent,
or makes an assignment for the benefit of creditors;
21.7.2. If a writ of attachment or execution is levied on this Lease;
21.7.3. If, in any proceeding or action to which Tenant is a Party, a
receiver is appointed with authority to take possession of the
Premises.
21.8. An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease; in
which case, this Lease shall not be treated as an asset of Tenant.
21.9. If a writ of attachment or execution is levied on this Lease, Tenant
shall have 10 days in which to initiate removal of the attachment or
execution and six (6) months to remove the same. If any involuntary
proceeding in bankruptcy is brought against Tenant, or if a receiver is
appointed, Tenant shall have two (2) months in which to have the
involuntary proceeding dismissed or the receiver removed. Landlord
shall have the option to extend said time limitations.
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21.10. Regardless of Landlord's consent, no subletting, assignment,
hypothecation, license or concession shall release Tenant of Tenant's
obligations or alter the primary liability of Tenant to pay the rent
and perform all other obligations to be performed by Tenant hereunder.
The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to
one assignment, subletting, hypothecation, license or concession
agreement shall not be deemed consent to any subsequent assignment,
subletting, hypothecation, license or concession agreement. In the
event of default by any assignee of Tenant or any successor of Tenant
in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies
against such assignee or successor. Landlord may consent to subsequent
assignments, subletting, hypothecations, licenses or concession
agreements and to amendments or modifications to this lease, with
assignees or other successors of Tenant without notifying Tenant or any
successor of Tenant, and without obtaining its or their consent thereto
and such action shall not relieve Tenant of liability under this Lease.
21.11. If Landlord does not elect to recapture pursuant to this Article,
Tenant may enter into a valid assignment or sublease provided that
Landlord consents thereto pursuant to this Article, and provided that
(i) such assignment or sublease is executed within ninety (90) days
after Landlord has given its consent to same, (ii) Tenant pays (or
causes to be paid) Landlord's reasonable costs and expenses (including
attorneys' fees) incurred in connection with the processing and
documentation of any requested assignment, subletting, transfer, change
of ownership, or hypothecation of this Lease or Tenant's interest in
and to the Premises, (iii) Tenant is not in default under this Lease as
of the effective date of the assignment or sublease, (iv) there have
been no material changes (since the date on which Landlord's consent
was given) with respect to the financial condition or background of the
proposed subtenant or assignee or the business which said party plans
to conduct on the Premises, and (v) a fully executed original of such
assignment or sublease (either of which shall state that the assignee
or subtenant agrees, for the express benefit of Landlord, to be bound
by all of the terms, covenants, and conditions of this Lease) is
delivered to Landlord prior to the date the assignee or subtenant takes
possession of any portion of the Premises.
21.12. Indemnity For Commissions. Tenant agrees to protect, defend and
indemnify and hold Landlord harmless with respect to any and all costs
and expenses (including attorneys' fees) and liability for compensation
claimed by any broker or agent in connection with any assignment,
subletting or other transfer of Tenant's interest under this Lease.
21.13. Notwithstanding any other provision of this Lease, Tenant shall not,
without Landlord's prior written consent, assign this Lease or sublet
all or any part of the Premises for any purpose which would violate any
negative covenant as to use contained in any then outstanding lease
affecting the Building, in any declaration of restrictions affecting
the Building, or in any mortgage or deed of trust affecting the
Building. Landlord shall from time to time advise Tenant of any such
negative covenants, upon Tenant's making written request to Landlord
for such information. Moreover, Tenant shall not assign or sublet to
any party for a use which is not in compliance with the permitted uses
as specified in the Article titled "Use, Limitations" above.
21.14. If Tenant is a partnership, any new general partner added to the
partnership after the execution of this Lease shall be liable for the
obligations of Tenant. Any general partner who ceases to be a general
partner in Tenant after the execution of this Lease shall not be
relieved of his liability for the obligations of Tenant.
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21.15. In addition, Tenant expressly warrants that the rental rate for such
sublet Premises shall not be included in any printed advertising or
mailings that Tenant or its agents shall utilize in seeking to sublet
the Premises.
21.16. Notwithstanding the foregoing, no consent of Landlord shall be required
for any assignment, subletting or transfer to a parent corporation,
subsidiary corporation, sister corporation or other entity related to
Tenant, or any such transfers occurring as a result of a merger or
corporate reorganization of Tenant, or any purchaser of all or
substantially all of the assets of Tenant.
22. DEFAULT.
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22.1. The occurrence of any of the following shall constitute a material
default and breach of this Lease by Tenant:
22.1.1. The failure of Tenant to pay or cause to be paid when due any
rent, monies, or charges required by this Lease to be paid by
Tenant;
22.1.2. Tenant causing or permitting, without prior written consent of
Landlord, any act when this Lease requires Landlord's prior
written consent or prohibits such act;
22.1.3. The making by Tenant of any general assignment for the benefit
of creditors or any similar action for the protection or
benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged a Chapter 7 debtor or to have
debts discharged or of a petition for reorganization or
arrangement under any Law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is
dismissed within sixty (60) days of the appointment of a
trustee or receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to
Tenant within sixty (60) days); the attachment, execution, or
other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within sixty (60) days;
or Tenant's convening of a meeting of its creditors or any
class thereof for the purpose of effecting a moratorium or
composition of its debts;
22.1.4. If Tenant shall file a voluntary petition in bankruptcy or
shall be adjudicated bankrupt or insolvent, or shall file any
petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief for itself under any present or future applicable Law
relative to bankruptcy, insolvency, or other relief for
debtors, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver, conservator or
liquidator of Tenant or of all or any substantial part of its
properties or its interest in the Premises (the term
"acquiesce" as used in this Section, includes, but is not
limited to, the failure to file a petition or motion to
vacate, appeal or discharge any order, judgment or decree
within ten (10) days after entry of such order, judgment or
decree);
22.1.5. If a court of competent jurisdiction shall enter an order,
judgment or decree approving a petition filed against Tenant
seeking any reorganization, arrangement, composition,
readjustment, liquidation dissolution or similar relief under
any present or future Federal bankruptcy act, or any other
present or future applicable Law relating to bankruptcy,
insolvency, or other relief for debtors, and Tenant shall
acquiesce in the entry of such order, judgment or decree if
such order, judgment or decree shall remain unvacated and
unstayed for an aggregate of sixty (60) days (whether or not
consecutive) from the date of entry thereof, or any trustee,
receiver, conservator or liquidator of Tenant or of all or any
substantial part of its property or its interest in the
Premises shall be appointed without the consent or
acquiescence of Tenant and such appointment shall remain
unvacated and unstayed for an aggregate of sixty (60) days
(whether or not consecutive);
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22.1.6. If Tenant shall admit in writing its inability to pay its
debts as they mature;
22.1.7. If Tenant shall give notice to any governmental body of
insolvency or pending insolvency, or suspension or pending
suspension of operations; or
22.1.8. The existence of any material misrepresentation or omission in
any financial statements, correspondence or other information
provided to Landlord by or on behalf of Tenant or any
guarantor in connection with (a) Tenant's negotiation or
execution of this Lease; (b) Landlord's evaluation of Tenant
as a prospective tenant at the Project; (c) any proposed or
attempted transfer; or (d) any consent or approval Tenant
requests under this Lease.
22.1.9. Failure to perform any other provision of this Lease, unless
such failure shall reasonably require more than thirty (30)
days to cure. In that latter case, Tenant shall not be in
default upon the condition that Tenant immediately commences
and diligently prosecutes the cure to completion.
22.2. Any such notice provided to Tenant under this Section shall be in lieu
of, and not in addition to, any notice required under Section 1161, et
seq., of the California Code of Civil Procedure. Notices given under
this Section shall specify the alleged default and the applicable Lease
provisions, and shall demand that Tenant perform the provisions of this
Lease or pay the rent that is in arrears, as the case may be, within
the applicable period of time, or quit the Premises. No such notice
shall be deemed a forfeiture or a termination of this Lease unless
Landlord so elects in the notice.
22.3. Landlord shall have the following remedies if Tenant commits a default.
These remedies are not all inclusive; they are cumulative in addition
to any remedies now or later allowed by law or other provisions of this
Lease. No waiver by Landlord of a breach of any of the terms, covenants
or conditions of this Lease by Tenant shall be construed or held to be
a waiver of any succeeding or preceding breach of the same or any other
term, covenant or condition therein contained. No waiver of any default
of Tenant hereunder shall be implied from any omission by Landlord to
take any action on account of such default if such default persists or
is repeated and no express waiver shall affect default other than as
specified in said waiver. The consent or approval by Landlord to or of
any act by Tenant requiring Landlord's consent or approval shall not be
deemed to waive or render unnecessary Landlord's consent to or approval
of any subsequent similar acts by Tenant. No statement on a payment
check from Tenant or in a letter accompanying a payment check is
binding on Landlord. Landlord may, with or without notice to Tenant,
negotiate such check without being bound to the conditions of any such
statement. If Tenant pays any amount other than the actual amount due
Landlord, receipt or collection of such partial payment does not
constitute an accord and satisfaction. Landlord may retain any such
partial payment, whether restrictively endorsed or otherwise, without
prejudice to Landlord's right to collect the balance properly due. If
all or any portion of any payment is dishonored for any reason, payment
will not be deemed made until the entire amount due is actually
collected by Landlord. The foregoing provisions apply in kind to the
receipt or collection of any amount by a lock box agent or other person
on Landlord's behalf.
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22.3.1. Landlord can continue this Lease in full force and effect and
shall have the right to collect rent when due. During the
period Tenant is in default, Landlord may relet the Premises,
or any part thereof, to third parties for Tenant's account.
Landlord shall have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons
and property from the Premises. Such property may be removed
and stored in a public warehouse or elsewhere at the cost of
and for the account of Tenant. Tenant waives and releases all
Claims Tenant may have resulting from Landlord's re-entry and
taking possession of the Premises by any lawful means and
removing and storing Tenant's property as permitted under this
Lease, regardless whether this Lease is terminated and, to the
fullest extent allowable under the Laws, Tenant releases and
will indemnify, defend (with counsel reasonably acceptable to
Landlord), protect and hold harmless the Landlord Parties from
and against any and all Claims occasioned thereby. No re-entry
or taking possession of the Premises by Landlord shall be
construed as an election to terminate this Lease unless a
written notice of such intention is given to Tenant. If
Landlord shall elect to re-enter the Premises under the
provision of this Section, Landlord shall not be liable for
damages by reason of such re-entry. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in
reletting the Premises, including, without limitation,
brokers' commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be
for a period shorter or longer than the remaining term of this
Lease. Tenant shall pay to Landlord the rent due under this
Lease on the dates the rent is due, less the rent Landlord
receives from any reletting. After Tenant's default, and for
as long as Landlord does not terminate Tenant's right to
possession of the Premises, if Tenant obtains Landlord's
consent, Tenant shall have the right to assign or sublet its
interest in this Lease pursuant to the Article titled
"Assignment." Tenant acknowledges that Landlord shall have 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 sublease or assign, subject only to
reasonable limitations). In the event that Landlord should
elect to relet the Premises or any part thereof on terms and
conditions as Landlord in its sole discretion may deem
advisable with the right to make alterations and repairs to
the Premises, it may execute any new lease in its own name.
Tenant hereunder shall have no right or authority whatsoever
to collect any rent from such tenant. The proceeds of any such
reletting shall be applied as follows:
22.3.1.1. First, to the payment of any indebtedness other than
rent due hereunder from Tenant to Landlord, including
but not limited to storage charges;
22.3.1.2. Second, to the payment of the costs and expenses of
reletting the Premises, including brokerage
commissions, alterations and repairs which Landlord,
in its sole discretion, deems reasonably necessary
and advisable and reasonable attorneys' fees incurred
by Landlord in connection with the retaking of the
said Premises and such reletting;
22.3.1.3. Third, to the payment of rent and other charges due
and unpaid hereunder; and
22.3.1.4. Fourth, to the prorated value of the concessions
granted to Tenant upon signing the Lease; and
22.3.1.5. Fifth, to the payment of future rent and other
damages payable by Tenant under this Lease.
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22.3.2. Landlord can terminate Tenant's right to possession of the
Premises at any time. Unless Landlord shall have notified
Tenant in writing that it has elected to terminate this Lease,
Landlord shall not be deemed to have terminated this Lease,
Tenant's right to possession of the Leasehold, the liability
of Tenant to pay rent thereafter, or Tenant's liability for
damages under any of the provisions hereof. Tenant agrees that
the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State of California and Tenant's
surrender of possession pursuant to such notice shall not be
deemed to be a termination of this Lease or of Tenant's right
to possession thereof (unless Landlord elects to the contrary
at the time of, or at any time subsequent to the service of,
such notice, and such election be evidenced by a written
notice to Tenant). Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Landlord's
initiative to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to
possession. On termination, Landlord has the right to recover
from Tenant:
22.3.2.1. The worth, at the time of the award ("The worth, at
the time of the award," as used in this Subsection is
to be computed by allowing interest at the rate of
10% per annum or the maximum amount allowed by law if
that rate is higher than 10%) of the unpaid rent that
had been earned at the time of termination of this
Lease; plus
22.3.2.2. The worth, at the time of the award, of the amount
by which the unpaid rent that would have been earned
after the date of termination of this Lease until the
time of award exceeds the amount of the loss of rent
that Tenant proves could have been reasonably
avoided; plus
22.3.2.3. The worth, at the time of the award, of the amount
by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the
loss of rent that Tenant proves could have been
reasonably avoided; plus
22.3.2.4. Any other amount, and court costs, necessary to
compensate Landlord for all detriment proximately
caused by Tenant's default.
22.3.3. If Tenant is in default of this Lease, Landlord shall have the
right to have a receiver appointed to collect rent and conduct
Tenant's business. Neither the filing of a petition for the
appointment of a receiver nor the appointment itself shall
constitute an election by Landlord to terminate this Lease.
22.3.4. Landlord, at any time after Tenant commits a default, can cure
the default at Tenant's costs. If at any time, by reason of
Tenant's default, Landlord pays any sum or does any act that
requires the payment of any sum, the sum paid by Landlord
shall be due immediately from Tenant to Landlord at the time
the sum is paid, and if Tenant pays such sum at a later date,
it shall bear interest at the rate of 10% per annum from the
date the sum is paid by Landlord until Landlord is reimbursed
by Tenant. The sum, together with accrued interest, shall be
additional rent.
22.4. In the event of a material and undisputed default of Tenant hereunder,
Landlord shall have the right, at its option, to suspend or discontinue
all or any one or more of the services specified in the Article titled
"Utilities and Services" during continuance of any such default; and no
such suspension or discontinuance shall be deemed or construed to be an
eviction or ejection of Tenant.
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22.5. Landlord shall be in default of this Lease if it fails or refuses to
perform any provision of this Lease that it is obligated to perform if
the failure to perform is not cured within one (1) month after written
notice of the default has been given by Tenant to Landlord. If the
default cannot reasonably be cured within one (1) month, Landlord shall
not be in default of this Lease if Landlord commences to cure the
default within the one (1) month period and diligently and in good
faith continues to cure the default.
22.6. In no event is Landlord liable to Tenant or any other person for
consequential, special or punitive damages, including, without
limitation, lost profits. If Landlord is in default of this Lease, and
as a consequence Tenant recovers a money judgment against Landlord, the
judgment shall be satisfied only out of the proceeds of sale received
on execution of the judgment and levy against the right, title, and
interest of Landlord in the Premises, and out of rent or other income
from such real property receivable by Landlord or out of the
consideration received by Landlord from the sale or other disposition
of all or any part of Landlord's right, title, and interest in the
Premises. The obligations of Landlord under this Lease do not
constitute personal obligations of Landlord or the individual partners,
shareholders, directors, officers, employees or agents of Landlord.
Tenant shall look solely to Landlord's interest in the Leased Premises,
and to no other assets of Landlord, for satisfaction of any liability
in respect of this Lease, and shall not seek recourse against the
individual partners, shareholders, directors, officers, employees, or
agents of Landlord or any of their personal assets for such
satisfaction.
22.7. If a court of competent jurisdiction determines that any act described
in this Article does not constitute a default, and the court appoints a
trustee to take possession of the Premises (or if Tenant remains a
debtor in possession of the Premises) and such trustee or Tenant
transfers Tenant's interest hereunder, then Landlord is entitled to
receive, as Additional Rent, the amount by which the Rent (or any other
consideration) paid in connection with the Transfer exceeds the Rent
otherwise payable by Tenant under this Lease.
22.8. Tenant will reimburse and compensate Landlord on demand and as
Additional Rent for any actual loss Landlord incurs in connection with,
resulting from or related to any breach or default of Tenant under this
Lease, regardless of whether suit is commenced or judgment is entered.
Such loss includes all reasonable legal fees, costs and expenses
(including paralegal fees and other professional fees and expenses)
Landlord incurs investigating, negotiating, settling or enforcing any
of Landlord's rights or remedies or otherwise protecting Landlord's
interests under this Lease. Tenant will also indemnify, defend (with
counsel reasonably acceptable to Landlord), protect and hold harmless
the Landlord Parties from and against all Claims Landlord or any of the
other Landlord Parties incurs if Landlord or any of the other Landlord
Parties becomes or is made a party to any claim or action: (a)
instituted by Tenant or by or against any person holding any interest
in the Premises by, under or through Tenant; (b) for foreclosure of any
lien for labor or material furnished to or for Tenant or such other
person; or (c) otherwise arising out of or resulting from any act or
omission of Tenant or such other person. In addition to the foregoing,
Landlord is entitled to reimbursement of all of Landlord's fees,
expenses and damages, including, but not limited to, reasonable
attorneys' fees and paralegal and other professional fees and expenses,
Landlord incurs in connection with protecting its interests in any
bankruptcy or insolvency proceeding involving Tenant, including,
without limitation, any proceeding under any chapter of the Bankruptcy
Code; by exercising and advocating rights under Section 365 of the
Bankruptcy Code; by proposing a plan of reorganization and objecting to
competing plans; and by filing motions for relief from stay. Such fees
and expenses are payable on demand, or, in any event, upon assumption
or rejection of this Lease in bankruptcy.
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23. ADVERTISING.
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23.1. Tenant shall not affix any signs, banners, advertising placards, names,
insignias, trademarks (collectively referred to in this Article as
"Signs or "Signs") or other descriptive materials on any window or upon
the exterior of the Building, unless Tenant has received the prior
written approval of Landlord as to size, type, color, location, copy,
nature and display qualities of any such proposed materials. Any Sign
that is affixed or displayed without Landlord's written approval shall
be subject to a sign removal fee of One Hundred Dollars ($100.00) per
occurrence. All Signs must conform to the other signs used throughout
the Building. Any Sign must meet the requirements of any Declaration of
Restrictions encumbering the Project and the requirements of the City
of Vista. Tenant shall not display, store or sell any merchandise
outside the defined exterior walls and permanent doorways of the
Premises. Tenant shall not install any exterior lighting, amplifiers or
similar devices, or use in or about the Premises any advertising media
which may be heard or seen outside the Premises, such as flashing
lights, search lights, loudspeakers, phonographs or radio broadcasts.
23.2. Tenant shall pay for the creation and installation of the appropriate
tenant identification signs at the Project.
23.3. Landlord shall have the right to prohibit any advertising by any tenant
which, in Landlord's reasonable opinion, tends to impair the reputation
of the Building or the Project or their desirability; and upon written
notice from Landlord, any tenant shall refrain from or discontinue such
advertising.
24. NO PUBLIC DISCLOSURES.
----------------------
24.1. The terms and conditions of this Lease constitute proprietary
information of Landlord that Tenant will keep confidential. Tenant's
disclosure of the terms and conditions of this Lease could adversely
affect Landlord's ability to negotiate other leases and impair
Landlord's relationship with other tenants. Accordingly, Tenant will
not, without Landlord's consent (which consent Landlord may grant or
withhold in its sole and absolute discretion), directly or indirectly
disclose the terms and conditions of this Lease to any other tenant or
prospective tenant of the Building or to any other person or entity
other than Tenant's employees and agents who have a legitimate need to
know such information (and who will also keep the same in confidence)
or to the extent Tenant is required to disclose such terms and
conditions by federal or state law.
24.2. Tenant expressly warrants that the rental rate for such sublet Premises
shall not be included in any printed advertising or mailings that
Tenant or its agents or advisors shall utilize in seeking to sublet the
Premises.
24.3. Tenant will not record this Lease or a Memorandum of this Lease without
Landlord's prior written consent, which consent Landlord may grant or
withhold in its sole and absolute discretion.
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25. LANDLORD'S ENTRY ON PREMISES.
-----------------------------
25.1. Upon giving Tenant twenty-four (24) hours notice, Landlord and its
authorized representatives and agents shall have the right to enter or
pass through the Premises during all reasonable hours, including normal
business hours for any of the following purposes:
25.1.1. To determine whether the Premises are in good condition and
whether Tenant is complying with its obligations under this
Lease;
25.1.2. To protect the interest therein of Landlord; to make
alterations, additions and to do any necessary maintenance and
repairs; to make any restoration to the Premises, or the
building and other improvements in which the Premises are
located, that Landlord has the right or obligation to perform;
to provide any services in accordance with this Agreement; to
perform any obligations of Tenant that Tenant fails to
perform; and to take all required materials and equipment into
the Premises and perform all required work therein, including
the erection of scaffolding, props, or other mechanical
devices.
25.1.3. To serve, post, or keep posted any notices required or allowed
under the provisions of this Lease;
25.1.4. To post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last three (3)
months of the term, or during any period while Tenant is in
default;
25.1.5. To show the Premises to prospective brokers, agents, buyers,
Tenants, persons interested in an exchange, holders of
encumbrances on the interest of Landlord under the Lease, and
prospective, mortgagees or tenants of the Building at any time
during the term; or
25.1.6. To shore the foundations, footings, and walls of the Premises
and to erect scaffolding and protective barricades around and
about the Premises, but not so as to prevent entry to the
Premises, and to do any other act or thing necessary for the
safety or preservation of the Premises if there is any
excavation on any adjacent property or nearby street. With
Landlord's consent, Landlord's right under this Subsection
extends to the owner of the adjacent property on which
excavation or construction is to take place and the adjacent
property owner's authorized representatives.
25.2. Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance, loss of quiet enjoyment, or
other damage arising out of Landlord's or Landlord's authorized
representative's or agent's entry on the Premises as provided in this
Article except damage resulting from the acts or omissions of Landlord
or its authorized representatives.
25.3. If during the last month of the term of this Lease Tenant shall have
removed substantially all of Tenant's property and personnel from the
Premises, Landlord may enter the Premises and repair, alter, and
redecorate the same, without abatement of rent and without liability to
Tenant and such acts shall have no effect on Tenant's obligations under
this Lease.
25.4. For each of the purposes described in this Article, Landlord shall at
all times have and retain a key with which to unlock all the doors in,
upon, or about the Premises, excluding Tenant's vaults and safes.
Landlord shall have the right to use any and all means which Landlord
may deem proper to open such doors during the continuance of an
emergency in order to obtain entry to the Premises, and any entry to
the Premises obtained by Landlord by any of such means shall not under
any circumstances be construed or deemed to be a forcible or unlawful
entry into, or detainer of, the Premises, or to be an eviction of
Tenant from the Premises or any portion thereof. All locks and locking
devices shall be a part of the building's master-keying system. Neither
Tenant nor any other person, other than Landlord or its agents, shall
change any locks.
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25.5. Tenant shall be entitled to an abatement or reduction of rent, if
Landlord exercises any rights reserved in this Article to the extent
that Landlord's entry and activities interfere with Tenant's business
on the Premises. However, if Landlord's entry and activities on the
Premises result from Tenant's default, Tenant shall not be entitled
to any abatement or reduction of rent.
25.6. Landlord shall conduct its activities on the Premises, as allowed in
this Article, in a manner that will cause the least possible
inconvenience, annoyance, or disturbance to Tenant.
25.7. Nothing in this Article shall prohibit Landlord from entering the
Premises without first giving notice to Tenant, as allowed by law, in
response to an emergency situation.
26. OFFSET STATEMENT, ATTORNMENT, SUBORDINATION.
--------------------------------------------
26.1. After request therefore by Landlord, or in the event that upon any
sale, assignment or hypothecation of the Premises by Landlord, an
offset statement and/or estoppel certificate shall be required from
Tenant, Tenant agrees to deliver a certificate, in recordable form, to
any proposed lender or purchaser, or to Landlord, certifying: (1) The
date of commencement of this Lease; (2) the fact that this Lease is
unmodified and in full force and effect (or, if there have been
modifications hereto, that this Lease is in full force and effect, and
stating the date and nature of such modifications); (3) the date to
which the rental and other sums payable under this Lease have been
paid; (4) that there are no defenses or offsets thereto, or stating
those claimed by Tenant (5) that there are no current defaults under
this Lease by either Landlord or Tenant except as specified in Tenant's
statement; and (6) such other matters requested by Landlord, or any
proposed lender and/or purchaser. Landlord and Tenant intend that any
mortgagee, beneficiary, purchaser or prospective purchaser of the
Building, Project or any interest therein, may rely upon any statement
delivered pursuant to this Article. Tenant shall deliver the
certificate, in the form proposed by the requesting entity, within ten
(10) days after the request is made. Tenant's failure to deliver such
statements within such time shall be conclusive upon the Tenant that
this Lease is in full force and effect, except as and to the extent any
modification has been represented by Landlord, and that there are no
uncured defaults in Landlord's performance and that not more than one
month's rent has been paid in advance. Such failure also constitutes a
default of this Lease. In such event, Tenant is estopped from denying
the truth of such facts.
26.2. Tenant will, within 10 days after Landlord's request at any time during
the Term, deliver to Landlord complete, accurate and up-to-date
financial statements with respect to Tenant and any Guarantor(s) or
other parties obligated upon this Lease, which financial statements
must be (a) prepared according to generally accepted accounting
principles consistently applied, and (b) certified by an independent
certified public accountant or by Tenant's (or Guarantor's, as the case
may be) chief financial officer that the same are a true, complete and
correct statement of Tenant's (or Guarantor's) financial condition as
of the date of such financial statements. Landlord agrees to keep such
financial statements confidential.
26.3. In the event of termination of any underlying lease, or in the event of
foreclosure or exercise of any power of sale under any mortgage or deed
of trust superior to this Lease or to which this Lease is subject or
subordinate, Tenant, upon demand, shall attorn to the lessor under said
underlying lease or to the purchaser at any foreclosure sale or sale
pursuant to the exercise of any power of sale under any mortgage or
deed of trust, in which event this Lease shall not terminate, Tenant's
quiet enjoyment of the Premises shall not be disturbed, and Tenant
shall automatically be and become the tenant of the lessor under said
underlying lease or to the purchase, whichever shall make demand
therefore. Tenant waives the protection of any statute or rule of law
that gives or purports to give Tenant any right to terminate this Lease
or surrender possession of the Premises upon the transfer of Landlord's
interest. No landlord or purchaser at any foreclosure sale pursuant to
the exercise of any power of sale or any successor thereto shall be
liable for any act or omission of any prior landlord (including
Landlord), or subject to any offsets or defenses which Tenant might
have against any prior landlord (including Landlord), or be bound by
any rent or additional rent which Tenant might have paid in advance to
any prior landlord (including Landlord) for a period in excess of one
month, or by any security deposit, cleaning deposit or other prepaid
charge which Tenant might have paid in advance to any prior landlord
(including Landlord), or bound by any agreement or modification of this
Lease made without the prior written consent of such party.
46
26.4. Upon the request of Landlord, Tenant shall subordinate its rights
hereunder to the lien of any deed(s) of trust or the lien resulting
from any other method of financing or refinancing, now or hereafter in
force against the Premises, Building, or Project or any part thereof,
or upon any buildings hereafter placed upon the Premises, and to all
advances made or hereafter to be made upon the security thereof. This
Section shall be self-operative if no further instrument of
subordination is required by any lender, provided that Tenant's right
to possession of the Premises shall not be disturbed so long as Tenant
is not in default hereunder.
26.5. Upon the request of Landlord or any other Party in interest, Tenant
shall promptly execute such documents, instruments or certificates that
may be necessary to carry out the intent of this Article. Any
subordination instrument for Tenant's signature shall contain
reasonable nondisturbance provisions for Tenant's benefit. Tenant's
failure to execute or deliver any certificate, or other document or
instrument required by this Article, in a timely manner, shall be a
material breach of this Lease. Landlord shall be entitled to receive
all monetary damages caused by any such breach. Tenant hereby
irrevocably appoints Landlord as attorney-in-fact for Tenant with full
power and authority to execute and deliver, in the name of Tenant, any
such instruments or certificates. If Tenant shall not have executed the
same within fifteen (15) days after the date of a request by Landlord
to execute such instruments, Landlord may, at its option, cancel this
Lease without incurring any liability on account thereof. The term of
this Lease is expressly limited accordingly.
26.6. If, in connection, with obtaining construction, interim, or permanent
financing for the Project the lender shall request reasonable
modifications in this Lease as a condition to such financing, Tenant
shall not withhold, delay or defer its consent thereto, provided that
such modifications do not increase the monetary obligations of Tenant
hereunder or materially and adversely affect the leasehold interest
hereby created or Tenant's rights hereunder.
26.7. At any time during the term of this Lease, Tenant shall upon ten (10)
days' prior written notice from Landlord, provide Landlord with a
current financial statement and financial statements of the two (2)
years prior to the current financial statement year. Such statement
shall be prepared in accordance with generally accepted accounting
principles and shall be audited by an independent certified public
accountant.
26.8. Tenant will give the holder of any Mortgage, by registered mail, a copy
of any notice of default Tenant serves on Landlord, provided that
Landlord or the holder of the Mortgage previously notified Tenant (by
way of notice of assignment of rents and leases or otherwise) of the
address of such holder. Tenant further agrees that if Landlord fails to
cure such default within the time provided for in this Lease, then
Tenant will provide written notice of such failure to such holder and
such holder will have an additional 30 days within which to cure the
default. If the default cannot be cured within the additional 30 day
period, then the holder will have such additional time as may be
necessary to effect the cure if, within the 30 day period, the holder
has commenced and is diligently pursuing the cure (including without
limitation commencing foreclosure proceedings if necessary to effect
the cure).
27. NOTICE.
-------
27.1. Except as otherwise specifically provided herein, any notice, demand,
request, consent approval, or communication that either Party desires
or is required to give the other Party or any other person, shall be in
writing and shall be deemed to have been duly delivered upon personal
delivery, upon delivery by electronic facsimile transmission (verified
by the sending machine), the following day after sending by overnight
courier, or as of the second business day after mailing by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed to the other Party at the address designated at the
beginning of this Lease. Either Party may change its address by
notifying the other Party of the change of address.
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28. WAIVER.
-------
28.1. A delay or omission in the exercise of any right or remedy of Landlord
on any default by Tenant shall neither impair such right or remedy nor
be construed as a waiver, nor shall any custom or practice which may
grow up between the parties in the administration of the terms hereof
be deemed a waiver of or in any way affect the right of Landlord to
insist upon the performance by Tenant in strict accordance with said
terms.
28.2. The receipt and acceptance by Landlord of delinquent rent shall not
constitute a waiver of any other default; it shall constitute only a
waiver of timely payments for the particular rent payment involved. No
payment by Tenant, or receipt by Landlord, of a lesser amount than the
rent payment herein stipulated shall be deemed to be other than on
account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent by deemed
an accord and satisfaction, (unless Landlord expressly agrees to an
accord and satisfaction in a separate writing duly executed by
Landlord). Landlord may accept any such check or payment without
prejudice to Landlord's right to recover the balance of such rent,
including any interest and late charges, or pursue any other remedy
provided in this Lease.
28.3. No act or conduct of Landlord, including, without limitation, the
acceptance of the keys to the Premises, shall constitute an acceptance
of the surrender of the Premises by Tenant before the expiration of the
term. Only a notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Premises and accomplish a termination of the
Lease.
28.4. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by
Tenant.
28.5. Any waiver by Landlord of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other
provisions of the Lease.
28.6. Any claim Tenant may have against Landlord for default in performance
of any of Landlord's obligations under this Lease is deemed waived
unless Tenant notifies Landlord of the default within 30 days after
Tenant knew or should have known of the default.
29. SALE OR TRANSFER OF PREMISES.
-----------------------------
29.1. Upon consummation of a sale, exchange, assignment or other transfer of
all or any portion of the Premises, Landlord shall be released from any
liability and all obligations thereafter accruing under this Lease.
Landlord's covenants and obligations in this Lease bind each successive
Landlord only during and with respect to its respective period of
ownership. However, notwithstanding any such Transfer, the transferor
remains entitled to the benefits of Tenant's releases and indemnity and
insurance obligations (and similar obligations) under this Lease with
respect to matters arising or accruing during the transferor's period
of ownership.
29.2. If Tenant has paid any Security Deposit or prepaid rent, Landlord shall
transfer the Security Deposit or prepaid rent to Landlord's successor.
Upon such transfer, Landlord shall be discharged from any further
liability in reference to the Security Deposit or prepaid rent.
48
30. HOLDING OVER.
-------------
30.1. If Tenant, with Landlord's consent, remains in possession of the
Premises after expiration or termination of the Lease, or after the
date in any notice given by Landlord to Tenant terminating this Lease,
such possession by Tenant shall be deemed to be a month-to-month
tenancy terminable on one (1) months' notice given at any time by
either Party, and neither a renewal hereof nor an extension for any
further term. During such month-to-month tenancy, Tenant shall pay all
rent required by this Lease. All provisions of this Lease except those
pertaining to term shall apply to the month-to-month tenancy.
Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a holding over hereunder
or result in a renewal of this Lease. The provisions of this Article
are in addition to and do not affect Landlord's right of re-entry or
any other rights of Landlord under this Lease or as otherwise provided
by law.
31. SURRENDER OF PREMISES.
----------------------
31.1. Upon expiration of the term or within ten (10) days after termination
of the Lease, Tenant shall quit and surrender to Landlord the Premises
and all Tenant's improvements and alterations in good condition, order,
and repair, except for: (i) ordinary wear and tear occurring after the
last necessary maintenance made by Tenant; (ii) destruction to the
Premises covered by the Article titled "Destruction;" or (iii)
alterations that Tenant has the right to remove or is obligated to
remove under the provisions of the Article titled "Alterations." Tenant
shall remove all debris, rubbish, furniture, equipment, business and
trade fixtures, free standing cabinet work, shelving, movable
partitions, and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and
perform all restoration made necessary by such removal, prior to
surrendering the Premises to Landlord. Failing such, Landlord may so
repair the Premises and charge Tenant for same, or withhold such sums
from any balance of the Security Deposit that may at the time remain.
Tenant shall surrender all keys to the Premises to Property Manager or
to Landlord at the place then fixed for Tenant's payment of Basic Rent
or as Landlord or Property Manager otherwise direct. Tenant will also
inform Landlord of all combinations on locks, safes and vaults, if any,
in the Premises or on the Project.
31.2. Landlord can elect to retain or dispose of (in any manner) any
alterations or Tenant's personal property that Tenant does not remove
from the Premises on expiration or termination of the Lease by giving
at least ten (10) days' notice to Tenant. Title to any such alterations
or Tenants' personal property that Landlord elects to retain or dispose
of after expiration of the ten (10) day period shall vest in Landlord.
Tenant waives all claims against Landlord for any damage to Tenant
resulting from Landlord's retention or disposition of any such
alterations or Tenant's personal property. Tenant shall be liable to
Landlord for Landlord's costs for storing, removing, and disposing of
any alterations or Tenant's personal property. Landlord may store
Tenant's personal property in a public warehouse or elsewhere for the
account and at the expense and risk of Tenant. If Tenant shall fail to
pay the cost of storing any such property after it has been stored for
a period of thirty (30) days or more, Landlord may sell any or all of
such property at public or private sale, in such manner and at such
times and places as Landlord, in its sole discretion, may deem proper,
without notice to or demand upon Tenant. Landlord shall apply the
proceeds of such sale as follows:
31.2.1. First, to the costs and expenses of such sale, including
Landlord's attorneys' fees;
31.2.2. Second, to the payment of the expense of or charges for
removal and storing any such property;
31.2.3. Third, to the payment of any other sum of money which may then
or thereafter be due to Landlord from Tenant under any of the
terms of this Lease; and
31.2.4. Fourth, the balance, if any, to Tenant.
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31.3. If Tenant fails to surrender the Premises to Landlord upon expiration
or ten (10) days after termination of the Lease as required by this
Article, Tenant shall hold Landlord harmless from all damages resulting
therefrom, including, without limitation, claims made by a succeeding
Tenant resulting from Tenant's failure to surrender the Premises.
31.4. The voluntary or other surrender by Tenant or a mutual cancellation of
this Lease shall not work a merger, and shall, at the election of
Landlord, either terminate all or any existing subleases or
subtenancies or may operate as an assignment to it of any or all of
such subleases or subtenancies. Landlord shall exercise its election
within one (1) month of the event so requiring.
32. ABANDONMENT.
------------
32.1. Tenant shall not vacate nor abandon the Premises at any time during the
term of this Lease, nor permit the Premises to remain unoccupied for a
period of longer than ten (10) consecutive days during the term of this
Lease. If Tenant shall abandon the Premises, any personal property
belonging to Tenant and left on the Premises shall be dealt with or
disposed of as provided in the Article titled "Surrender of Premises."
33. ATTORNEYS' FEES.
----------------
33.1. In the event Landlord or Tenant retains an attorney to enforce any
provision of this Lease against the other, the Party which establishes
a breach of this Lease shall be entitled to recover from the other
Party all expenses incidental to such enforcement incurred in any legal
proceeding whatsoever (including but not limited to insolvency,
bankruptcy, arbitration, declaratory relief, unlawful detainer or other
litigation), regardless of whether or not suit is brought. Such
expenses include, but are not limited to, attorneys' fees, appraisers'
fees, accountants' fees, service of process, filing fees, court and
court reporter costs, investigative costs, expert witness fees, and the
cost of any bonds, whether taxable or not. Such reimbursement shall be
included in any judgment or final order issued in any proceeding. If,
following an event of default by Tenant, Landlord employs a collection
agency and/or an attorney to recover delinquent charges or to otherwise
enforce this Lease after Tenant's notice and grace period, if any,
expires, Tenant agrees to pay all collection agency fees and attorneys'
fees (whether or not litigation is commenced or pursued to final
judgment) charged to Landlord in addition to rent, late charges,
interest and other sums payable under this Lease. In addition, Tenant
shall pay a charge of Two Hundred Dollars ($200) to Landlord for
preparation of a demand for delinquent rent or other notice of default.
Any expenses to which Landlord is entitled shall be considered as rent
and are payable within ten (10) days of notice to Tenant of the amount
due.
33.2. If Landlord is named as a defendant in any suit brought against Tenant
in connection with or arising out of Tenant's occupancy hereunder,
Tenant shall pay to Landlord its costs and expenses incurred in such
suit, including without limitation, its actual professional fees
including, but not limited to, the fees of appraisers, accountants,
expert witnesses, and attorneys fees.
34. ACCESS; CHANGES IN BUILDING FACILITIES; NAME.
---------------------------------------------
34.1. Landlord reserves, for the purpose of operation, maintenance,
decoration, and repair, access to:
34.1.1. All walls, windows, and doors bounding the Premises, except
the inside surfaces thereof (including exterior building
walls, core corridor walls and doors, and any core corridor
entrance); and
50
34.1.2. All space in or adjacent to the Premises used for shafts,
stacks, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks, or other Building facilities, and the use
thereof, as well as access thereto through the Premises.
Landlord may install, use and maintain pipes, ducts, and
conduits within the demising walls, bearing columns and
ceilings of the Premises.
34.2. Landlord may, at any time before or after completion of the Project,
without incurring any liability to Tenant therefore, make such changes
in or to the Project and the fixtures and equipment thereof or any
other portion of the Project, as well as in or to the street entrances,
halls, passages, stairways, and other improvements thereof, as Landlord
may deem necessary or desirable, as long as such changes have no
material adverse effect on Tenant's use of the Premises.
34.3. Landlord may, at any time before or after completion of the Project,
without incurring any liability to Tenant therefore, adopt or change
any name or address or identity for the Project (or any part thereof)
including roof signs, entrances, signage, and other Project
identification.
35. QUIET ENJOYMENT.
----------------
35.1. Notwithstanding any subordination as provided in the Article titled
"Offset Statement, Attornment, Subordination," if Tenant is not in
breach under the covenants made in this Lease, Landlord covenants that
Tenant shall have peaceful and quiet enjoyment of the Premises without
hindrance on the part of Landlord, and Landlord shall defend Tenant in
the peaceful and quiet enjoyment of the Premises against claims of all
persons claiming through or under the Landlord.
36. FORCE MAJEUR.
-------------
36.1. Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefore, governmental restrictions,
regulations, or controls, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes; or, any failure or
defect in the supply, quantity or character of gas, electricity or
water furnished to the Premises, by reason of any requirement, act or
omission of the public utility or others furnishing the Project with
gas, electricity or water, or for any other reason, whether similar or
dissimilar to the above beyond the reasonable control of the Party
obligated to perform, shall excuse the performance by such Party for a
period equal to that resulting from such prevention, delay or stoppage,
except those obligations of Tenant to make payment for rental and other
charges pursuant to the terms of this Lease.
37. RELATIONSHIP OF PARTIES.
------------------------
37.1. The relationship of the Parties hereto is that of Landlord and Tenant,
and it is expressly understood and agreed that Landlord is not in any
way or for any purpose a partner of Tenant, or a joint venturer with
Tenant in the conduct of Tenant's business or otherwise.
38. GENERAL PROVISIONS.
-------------------
38.1. Unless the context otherwise indicates, whenever used in this Agreement
the word "party" or "parties" means Landlord and/or Tenant, as the
context may require.
38.2. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of
the person, persons, entity or entities may require.
38.3. Titles and captions in this Agreement are inserted for convenience of
reference only and do not define, describe, amplify or limit the scope
of the intent of this Agreement or any of the terms hereof.
51
38.4. References in this Agreement to Articles, Sections, Subsections, and
Exhibits are to Articles, Sections, Subsections and Exhibits herein and
hereto unless otherwise indicated.
38.5. Any exhibits, schedules or descriptions referred to in this Agreement
are expressly incorporated herein by reference as if set forth in full,
whether or not attached hereto.
38.6. The representations, warranties, covenants, agreements and indemnities
set forth in or made pursuant to this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall remain
operative, shall be deemed made upon execution of this Agreement and
shall not be merged therein.
38.7. This Agreement contains the entire agreement between the parties
relating the transactions contemplated hereby. All prior or
contemporaneous agreements, understandings, representations and
statements, oral or written, are merged herein. Except as expressly
provided herein, there are no representations or warranties between the
parties.
38.8. Each party has relied upon its own examination of the entire Agreement,
and the warranties, representations, and covenants expressly contained
in the Agreement itself. The failure or refusal of either party to
inspect the Agreement or other documents, or to obtain legal advice
relevant to this transaction, constitutes a waiver of any objection,
contention, or claim that might have been based upon such reading,
inspection or advice. The submission of this Lease by Landlord, its
agent, or its representative for examination or execution by Tenant
does not constitute an option or offer to lease the Premises or a
reservation of the Premises in favor of Tenant, it being intended that
this Lease shall only become effective upon Landlord's execution and
delivery of a fully executed counterpart thereof to Tenant.
38.9. The parties acknowledge that this Agreement, in its final form, is the
result of the combined efforts of the parties hereto and any counsel
who may have advised the parties, neither of which has acted under any
duress or compulsion, whether legal, economic, or otherwise. Should any
provision of this Agreement be found to be ambiguous in any way, such
ambiguity shall not be resolved by construing this Agreement in favor
of or against any party herein, but rather by construing the terms of
this Agreement fairly and reasonably in accordance with their generally
accepted meaning and the purposes for which this Agreement is made.
Landlord's submission of this instrument to Tenant for examination or
signature by Tenant does not constitute a reservation of or an option
to lease and is not effective as a lease or otherwise until Landlord
and Tenant both execute and deliver this Lease. The parties agree that,
regardless of which party provided the initial form of this Lease,
drafted or modified one or more provisions of this Lease, or compiled,
printed or copied this Lease, this Lease is to be construed solely as
an offer from Tenant to lease the Premises, executed by Tenant and
provided to Landlord for acceptance on the terms set forth in this
Lease, which acceptance and the existence of a binding agreement
between Tenant and Landlord may then be evidenced only by Landlord's
execution of this Lease.
52
38.10. No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by
the party, or their successor in interest, against which the
enforcement of such modification, waiver, amendment, discharge or
change is or may be sought.
38.11. In the event any term, covenant, condition, provision or agreement
herein contained is held to be invalid or void by any court of
competent jurisdiction, the invalidity of any such term, covenant,
condition, provision or agreement shall in no way affect any other
term, covenant, condition, provision or agreement herein contained.
38.12. Each of the Parties shall fully cooperate with the other in connection
with the requirements imposed by this Agreement and each agree to take
such further actions and to execute and deliver such further documents,
with acknowledgment or affidavit, if required, as may be reasonably
necessary to carry out the purposes of this Agreement and to facilitate
the satisfaction of any conditions set forth herein.
38.13. This Agreement, and any dispute arising hereunder, shall be construed
and enforced in accordance with, and be governed by, California Laws.
The parties hereto agree that proper jurisdiction and venue for any
suit brought to interpret or enforce any term or provision of this
Agreement shall be in San Diego County, California. The reference in
this Lease to any legislation or any portion thereof shall be read as
though the words "or any statutory modifications or re-enactment
thereof or any statutory provisions substituted thereof" were added to
such reference.
38.14. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
38.15. Whenever consent or approval of either Party is required, that Party
shall not unreasonably withhold such consent or approval.
38.16. If Tenant is a corporation, partnership, a limited liability company,
or other entity, execution of this Lease by Tenant constitutes a
representation by Tenant and the officers, partners, members, managers,
or other agents of Tenant executing this Lease that this Lease has been
duly authorized by Tenant, corporation, partnership, or other entity.
Tenant shall provide to Landlord a certified copy of a duly adopted
resolution of its partners or the Board of Directors of Tenant (or
other appropriate evidence of authority) authorizing the execution and
delivery of this Lease and naming the officers that are authorized to
execute this Lease on behalf of the corporation.
38.17. If Tenant is an entity, Tenant will, within 10 days after Landlord's
written request, deliver to Landlord: (a) Certificate(s) of Good
Standing from the state of formation of Tenant and, if different, the
State, confirming that Tenant is in good standing under the laws
governing formation and qualification to transact business in such
state(s); and (b) a copy of Tenant's organizational documents and any
amendments or modifications thereof, certified as true and correct by
an appropriate official of Tenant. Tenant and each individual signing
this Lease on behalf of Tenant represents and warrants that they are
duly authorized to sign on behalf of and to bind Tenant and that this
Lease is a duly authorized, binding and enforceable obligation of
Tenant.
53
38.18. All parties signing this Lease as Tenant and any Guarantor(s) of this
Lease: (1) is jointly and severally liable for the keeping, observing
and performing of all of the terms, covenants, conditions, provisions
and agreements of this Lease to be kept, observed and performed by
Tenant; and (2) the term "Tenant" as used in this Lease shall mean and
include each of them jointly and severally. The act of, or notice from,
or notice or refund to, or the signature of any one or more of them,
with respect to the tenancy of this Lease, including, but not limited
to any renewal, extension, expiration, termination or modification of
this Lease, shall be binding upon each and all of the persons executing
this Lease as tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or
so signed.
38.19. This Lease shall be binding on and inure to the benefit of the Parties
and their heirs, personal representatives, successors, and assigns.,
except as provided in the Articles titled "Assignment" and "Sale or
Transfer of the Premises," and all of the Parties hereto shall be
jointly and severally liable for the covenants contained herein.
Notwithstanding the immediately preceding sentence or any other
provision of this Lease, this Lease shall not be assigned or assignable
by operation of law. In no event shall this Lease be an asset of Tenant
in any receivership, bankruptcy, insolvency, or reorganization
proceeding.
38.20. All provisions, whether covenants or conditions, on the part of Tenant
shall be deemed to be both covenants and conditions.
38.21. The definitions contained in this Lease shall be used to interpret this
Lease.
38.22. Rent and all other sums payable under this Lease shall be paid in
lawful money of the United States of America.
38.23. Except as may otherwise be expressly stated, each payment required to
be made by Tenant shall be in addition to and not in substitution for
other payments to be made by Tenant.
38.24. Tenant's execution of this Lease is conditioned upon Landlord's
execution on or before the thirtieth (30th) day following the date of
this Lease.
38.25. Tenant recognizes that the General Partner of Landlord (i) is licensed
as an attorney in the State of California; (ii) is acting entirely on
behalf of Landlord in this Lease; and (iii) has no fiduciary
relationship with Tenant.
38.26. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
38.27. All of Tenant's obligations under this Lease (together with interest on
payment obligations at the rate of 10% per annum or the maximum amount
allowed by law if that rate is higher than 10%) accruing prior to
expiration or other termination of this Lease survive the expiration or
other termination of this Lease. Further, all of either Party's
releases and indemnification defense and hold harmless obligations to
the other Party under this Lease, survive the expiration or other
termination of this Lease, without limitation.
38.28. With the exception of the real estate brokerage commission, if any,
payable to the party identified in the Definitions section, pursuant to
separate written agreement with Landlord, and which commission Landlord
hereby agrees to pay, each of the parties represents to the other party
that it has not incurred, and agrees to protect, defend, indemnify and
hold harmless the other party from and against, any real estate
commission, finder's fee or other compensation arising out of or in
connection with this Lease or the transaction of which this Lease is a
part.
54
EXECUTED as of the day and year first above written, at San Diego
County, California.
LANDLORD TENANT
SQUARE ONE PARTNERS, LA JOLLA FRESH SQUEEZED COFFEE CO., INC.,
a California general partnership a Washington corporation
By:_____________________________ By:_____________________________
Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxxx,
General Partner CFO
55
EXHIBIT "A"
SITE PLAN
EXHIBIT "B"
RANCHO VISTA BUSINESS PARK
RULES AND REGULATIONS
These Rules and Regulations (referred to herein as the "Rules") are
adopted by Landlord pursuant to the terms of the lease (referred to herein as
the "Lease") executed by Landlord and Tenant for the Premises located within the
Rancho Vista Business Park (referred to herein as the "Project"). Subject to any
restrictions set forth in the Lease, Landlord may, in Landlord's sole
discretion, enact, rescind, alter or waive any rule or regulation at any time
prescribed for the Project when, in Landlord's judgment, it is necessary,
desirable or proper for the best interest of the Project or its Tenants. Any
such amendment shall be effective immediately upon written notice to Tenant.
Tenant's use of the Premises shall be in accordance with all of the
following:
1. GENERAL RULES.
--------------
1.1. Tenant shall comply with all laws concerning the Premises or
Tenant's use of the Premises, including, without limitation, the obligation at
Tenant's cost to alter, maintain, or restore the Premises in compliance and
conformity with all laws relating to the condition, use, or occupancy of the
Premises during the term.
1.2. Tenant shall not use the Premises in any manner that will
constitute waste, nuisance, or an unreasonable annoyance to the quiet enjoyment
of the tenants of the Building (including, without limitation, the use of
loudspeakers or sound or light apparatus that can be heard or seen outside the
Premises).
1.3. Tenant shall not use the Premises for sleeping, washing clothes,
cooking, or the preparation, manufacture, or mixing of anything that might emit
any odor or objectionable noises or lights.
1.4. Tenant shall not do or permit anything on the Premises that will
cause damage to the Premises. Any overloading of electrical circuits shall be
the responsibility of Tenant.
1.5. After opening for business, Tenant shall continuously remain open
for business at least those days and hours as is customary for a business of a
like character in the city in which the Premises are situated.
1.6. Tenant shall not conduct or permit any sale by auction on the
Premises.
1.7. Without the written consent of Landlord, Tenant shall not use the
name of the Project in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
1.8. Tenant shall not sell, or permit the sale at retail, of
newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises. However, the preceding
limitation shall not apply to the retail sale of goods and merchandise
manufactured or assembled by Tenant at the Premises as required by the Lease.
Tenant shall not make any door-to-door solicitations of business from other
Tenants in the Project. Tenant shall not use the Premises for any business or
activity other than those specifically provided for in Tenant's Lease.
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1.9. Tenant, its employees, and or its business customers shall not
disturb, solicit, or canvas any occupant of the Project and shall cooperate to
prevent same.
1.10. No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside (if visible from the
exterior) of any building without the prior written consent of Landlord.
Landlord shall have the right to remove any item installed or displayed in
violation of this Rule without notice to and at the expense of Tenant. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant and in a configuration and style
approved by Landlord, in its sole discretion.
1.11. Tenant shall not place anything against or near glass partitions,
doors or windows that may appear unsightly from outside the Premises. If
Landlord objects in writing to any curtains, blinds, shades, screens or hanging
plants or other similar objects attached to or used in connection with any
window or door of the Premises, or placed on any window sill, which is visible
from the exterior of the Premises, Tenant shall immediately remove and/or
discontinue such use.
1.12. Tenant shall not place a load upon any floor of the Premises that
exceeds the load per square foot that such floor was designed to carry and which
is allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all equipment, materials, furniture or other property brought
into the Project. Heavy objects shall, if considered necessary by Landlord,
stand on such platforms as determined by Landlord to be necessary to properly
distribute the weight. All such platforms shall be provided at Tenant's expense.
In the event any of Tenant's business machines or mechanical equipment cause
noise or vibration that may be transmitted to any part of any structure of the
Project to such a degree as to be objectionable to Landlord or to any other
Tenants in the Project, Tenant, at Tenant's sole expense, shall place and
maintain any such equipment on vibration eliminators or other devices sufficient
to eliminate noise or damage to any equipment or other property. All damage done
to the Project by maintaining or moving such equipment or other property shall
be repaired at the expense of Tenant.
1.13. No material, equipment, supplies, or products shall be stored or
permitted to remain in the Project outside a permanent structure unless prior
approval is obtained from Landlord. Approval of outside storage will be granted
only where storage is visually screened from all approaches and where it is
allowed by applicable zoning codes.
1.14. All Tenant's installations, improvements and alterations shall be
carried out in a manner and method designed to minimize removal of such items.
Tenant shall repair any damage resulting from Tenant's installations,
improvements and alterations and the removal thereof upon termination of the
Lease. No Tenant shall lay linoleum, tile, carpet or other similar floor
coverings so that the same shall be affixed to the floor of the Premises in any
manner except as approved by the Landlord. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by the Tenant by whom, or by whose contractors, employees or invitees,
the floor covering shall have been laid.
1.15. Tenant shall not install any radio antenna, television antenna,
or satellite dishes, loudspeaker or other devices on the roof or exterior walls
of any building without the prior written consent of Landlord. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Project or elsewhere.
1.16. Tenant shall not use any method of heating or air-conditioning
other than that supplied by Landlord, except with the written consent of
Landlord.
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1.17. The 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
therein. 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.
1.18. Tenant shall not waste water or other utilities that are commonly
metered to the Project.
1.19. Concurrently with Tenant's occupancy of the Premises, Landlord
shall furnish Tenant, free of charge, one set of keys to each door lock on the
Premises. Tenant may have additional keys made at Tenant's expense. Tenant shall
not alter any lock or install any new additional locks or bolts on any door of
the Premises without the written consent of Landlord. Tenant, upon the
termination of its Lease, shall deliver to Landlord all of the existing keys to
all doors of the Premises.
1.20. Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed. Landlord shall have no duty to
provide security protection for the Premises at any time or to monitor access
thereto.
1.21. Tenant shall see that the doors of the Premises are closed and
securely locked before leaving the Premises and that all water faucets, water
apparatus and electricity are entirely shut off before Tenant or Tenant's
employees leave the Premises. Tenant shall be responsible for any damage to the
Premises, Project or other Tenants caused by a failure to comply with this rule.
1.22. No telegraphic, telephonic, burglar alarm or similar service
shall be installed without the prior written consent of Landlord. Tenant agrees
to acquire, at Tenant's expense, all necessary permits for any burglar or
security alarm systems and provide Landlord with copy of same.
1.23. Tenant shall store all its trash and garbage within its Premises
or in other facilities provided by Landlord and in accordance with directions
issued from time to time by Landlord. Tenant shall not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal.
1.24. Tenant shall not use or keep in the Premises or about the Project
any kerosene, gasoline, or flammable or combustible fluid or material other than
those limited quantities necessary for the operation or maintenance of office
equipment. All flammable liquids and combustible rags are to be stored in
appropriate storage cabinets approved by the fire department. Tenant shall not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of noise,
odors or vibrations. No animals or birds shall be brought in or kept in or about
the Premises.
1.25. Deliveries of equipment, materials, furniture, packages,
supplies, merchandise or other property shall be received at the Project in a
manner and method which does not impede or interfere with other Tenants or in
the operation of any portion of the Project. Tenant shall be responsible for all
repairs and replacements to the Project required as a result of damage or injury
caused by deliveries to Tenant's Premises.
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1.26. Tenant shall not obstruct the sidewalks, halls, passages, exits
and entrances used by them for any purpose other than for ingress to and egress
from their respective Premises. The halls, passages, exits, entrances and roof
are not for the use of the general public and the Landlord shall in all cases
retain the right to control thereof and prevent access thereto by all persons
whose presence in the judgment of the Landlord shall be prejudicial to the
safety, character, reputation and interests of the Project or any of its
Tenants. However, nothing herein contained shall be construed to prevent access
by persons with whom the Tenant normally deals in the ordinary course of
Tenant's business unless such persons are engaged in illegal activities. No
Tenant and no employees or invitees of any Tenant shall go upon the roof of the
Premises or any other building in the Project.
1.27. Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency having authority over the Project.
1.28. Tenant shall be responsible for the enforcement of these Rules as
they pertain to Tenant's employees, agents clients, customers, invitees and
guests.
2. PARKING RULES.
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2.1. Landlord shall not be responsible for loss, injury or damage to
any vehicle arising from the use of parking in the Project. In the event the
general exclusion of liability set forth in the preceding sentence is determined
not to apply to any particular claim, specific limitations on liability set
forth below shall apply to any claim against Landlord arising in connection with
the use of parking areas in the Project. All claimed damage or loss must be
reported and itemized in writing, and delivered to Landlord within two (2)
business days after any claimed damage or loss occurs. Any claim not so made is
waived. Landlord has the option to make repairs, at its expense, of any claimed
damage within two (2) business days after filing of any claim. In all court
actions the burden of proof to establish a claim remains with Tenant. Court
actions by Tenant for any claim must be filed within ninety (90) days from date
of parking when a claimed loss occurred. Landlord is not responsible for damage
by water, fire or defective brakes, or parts, or for the act or omissions of
others, or for articles left in the car. The total liability of Landlord is
limited to Two Hundred Fifty and No/100 Dollars ($250.00) for all damages or
loss to any vehicle. Landlord is not responsible for loss of use.
2.2. Tenant shall not park or permit the parking of any vehicle under
Tenant's reasonable control in any parking areas designated by Landlord as areas
for parking by visitors to the Project or for deliveries or assigned to other
Tenants or occupants of the Project. Tenant shall not leave vehicles in the
parking areas overnight nor park any vehicles in the parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles.
2.3. All vehicles must be parked only within the painted stall lines of
a single parking stall. Parking in any other area shall subject the vehicle to
removal. All directional signs and arrows must be observed. The speed limit
within all parking areas shall be five (5) miles per hour.
2.4. Every xxxxxx is required to park and lock his or her own vehicle.
The xxxxxx assumes all responsibility for damage to a vehicle or theft of
property from a vehicle.
2.5. Parking areas are for the temporary parking of vehicles only. No
storage of vehicles or other items will be permitted. Washing, waxing, cleaning
or servicing of any vehicle is prohibited. No vehicle repair of any type will be
permitted within the industrial units or on or about the common areas.
2.6. Tenant shall acquaint all persons to whom Tenant assigns parking
spaces of these Rules. Parking attendants, if any, are not authorized to make or
allow any exceptions to the Rules.
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3. MISCELLANEOUS PROVISIONS.
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3.1. Landlord reserves the right to exclude or expel from the Project
any person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules. However, Landlord
shall be under no obligation to do so and shall have no liability to Tenant on
account of Landlord's failure to exclude any person.
3.2. Landlord may, in its sole discretion, waive any one or all of
these Rules for the benefit of Tenant or any other Tenant. However, no such
waiver by Landlord shall be construed as a waiver of any other Rule, nor prevent
Landlord from thereafter enforcing any Rules against any or all of the Tenants
of the Project.
3.3. The Rules 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 Tenant's Lease of its Premises in the Project. The Rules
supplement the Lease and in the event of any conflict or inconsistency between
the Lease and the Rules, the Lease shall control.
LANDLORD TENANT
SQUARE ONE PARTNERS, LA JOLLA FRESH SQUEEZED COFFEE CO., INC.,
a California general partnership a Washington corporation
By:_____________________________ By:_____________________________
Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxxx,
General Partner CFO
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EXHIBIT "C"
FLOOR PLAN AND
TENANT IMPROVEMENTS
The cost of the following Tenant Improvements shall be borne by
Landlord. Landlord shall provide the building to Tenant with the
following modifications as per the attached floor plan approved by
Tenant and Landlord. Improvements to include the following;
1. Replace Carpet in ALL Currently Carpeted Areas & Add Hallways With 26
Oz. Commercial Grade Glue Down "Queen Sequence #Q0617", "Front to Back"
Pattern. Cove Base Shall be Carpet to Match.
2. REPLACE FLOORING IN THE FOLLOWING AREAS:
a. Lunchrooms with "Mohawk Hellas Beige" ceramic tile with 6"
tile base.
b. Lab/ Production Area with "Mannington Fine Fields, Cool Beige"
sheet vinyl flooring with self cove and heat welded seams.
c. Warehouse offices flooring will be carpet "Queen Sequence
#Q0617", "Front to Back" pattern. Cove base shall be carpet to
match.
d. Front entry tile will be replaced with "Lago Maggiore " tiles
with 6" tile base.
e. Bathrooms with "Mohawk Hellas Biege" ceramic tile with 6" tile
base.
3. MEN'S BATHROOMS:
a. Replace bathroom partitions with "Wilsonart, Pebble, #D337"
color.
b. Replace FRP. Tenant shall be allowed to choose color.
c. Replace toilets where necessary.
d. Replace any existing vanity/ sink. Laminate shall be
Wilsonart. "Pebble #D337".
4. WOMEN'S BATHROOMS:
a. Replace bathroom partitions, color to be Wilsonart "Pebble
#D337".
b. Replace FRP. Tenant shall be allowed to choose color.
c. Replace vanity /sink. Laminate shall be Wilsonart. "Pebble
#D337".
5. MISCELLANEOUS IMPROVEMENTS:
a. Replace ceiling tiles where missing, broken or stained.
b. Repair and/or replace doors, locks sets, hardware & closers
that do not function properly.
c. Paint interior "Navajo White" & touch up exterior of building.
d. Paint Lab/ Production areas and staging area "Bright White"
high gloss.
e. Replace light bulbs interior and exterior where needed.
f. Repair roof penetrations left by previous tenant.
g. Reinstall handrail on lobby stairs.
h. General overall clean up of warehouse & interior.
i. Paint warehouse ceiling.
j. Remove two (2) warehouse offices located at the north end of
the building.
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k. Re-laminate exposed laminate surfaces on cabinetry.
Countertops shall be Pionite, "Slate Impressions #AV741S".
Cabinets shall be Poinite, "Natural Birdseye #WM901-S".
l. Install 335 lineal feet of 6" drywall walls in warehouse.
m. Replace missing double doors in lab area.
n. Install a 4' door with glass window in lab/ production area.
o. From lab to warehouse, close opening in lab area with drywall.
p. Add one wall on the second floor to create an additional
conference room with a door and two sidelights. Door to match
existing interior doors.
q. Replace trash enclosure doors.
r. Landlord shall be responsible for the cost and construction of
removing the storefront glass in the warehouse and close
opening with drywall. Tenant shall be responsible for
re-pouring any concrete in this area after storefront is
removed.
In the event that any upgrades or additional Tenant Improvements (referred
to herein as "Extras") are requested by Tenant, such Extras shall be
installed at the expense of the Tenant. Tenant shall request any Extras in
writing. Following receipt of Tenant's written request, Landlord will
prepare and provide to Tenant an estimate of the price of such Extras.
Prior to commencement of installation of the requested Extras, Tenant shall
pay to Landlord fifty percent (50%) of the amount of the estimated price of
the Extras. Upon completion or immediately prior to occupancy, whichever
comes first, Tenant shall pay to Landlord the balance of the actual price
of the Extras.
Landlord's Initials:______________
Tenant's Initials: _______________
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EXHIBIT "C"
FLOOR PLAN AND
CHANGES TO THE TENANT IMPROVEMENTS
Landlord's Initials: ______________
Tenant's Initials: ________________
3
EXHIBIT "C"
FLOOR PLAN AND
EXISTING TENANT IMPROVEMENTS
FIRST FLOOR
Landlord's Initials: ______________
Tenant's Initials: ________________
4
EXHIBIT "C"
FLOOR PLAN AND
EXISTING TENANT IMPROVEMENTS
SECOND FLOOR
Landlord's Initials: ______________
Tenant's Initials: ________________
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