EXHIBIT 10.17
AIRPORT BUS. CENTER
Dated: December 4, 1997
----------------
1. BASIC LEASE TERMS. For purposes of this Lease, the following terms have the
following definitions and meanings:
(a) LANDLORD: Airport Industrial Complex, a California Limited Partnership
------------------------------------------------------------
Landlord's Address (For Notices):
00000 Xxx Xxxx Xxxx, Xxx 000,
------------------------------------
Xxxxxx, XX 00000
------------------------------------
or such other place as Landlord may from time to time designate by notice
to Tenant with a copy to Xxxx Management Services, X.X. Xxx 0000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000.
(b) Tenant: Litronic Industries, Inc., a California Corporation
---------------------------------------------------
TENANT'S TRADE NAME: Litronic
--------
TENANT'S ADDRESS FOR NOTICES (PREMISES):
00000 Xxx Xxxx Xxxxxx, Xxxxx X
------------------------------
Irvine. CA 92614 Attention: Xxxx Xxxx
------------------------------ ---------
(c) PREMISES: Suite(s) A of building 2401 (the "Building") of AIRPORT BUS.
- ---- ------------
CENTER (the "Project"), located in the City of Irvine ("City"), County of
------ ------
Orange ("County"), State of California ('State") as shown on Exhibit "A-I".
------ ----------
The Premises are depicted on Exhibit "A-II" and contain approximately 1,800
-----
Rentable Square Feet (subject to adjustment as provided in this Lease).
(d) TENANT'S SHARE: 0.2%
----
(e) TERM: 18 Lease Months and 0 Days.
-- -
(f) COMMENCEMENT DATE: January 1, 1998.
---------------
(g) EXPIRATION DATE: June 30, 1999.
-------------
(h) INITIAL MONTHLY BASE RENT: $1,476.00, subject to adjustment as provided in
---------
Exhibit "B" and as otherwise provided in this Lease.
(i) MONTHLY OPERATING EXPENSE CHARGE: $54.00, subject to adjustment as
------
provided in Exhibit "B" and as set forth in Paragraph 6.
(j) SECURITY DEPOSIT: $1,655.00.
---------
(k) NON-REFUNDABLE CLEANING FEE PORTION OF SECURITY DEPOSIT: $125.00
-------
(l) PERMITTED USE: General office for computer programming and installation of
-----------------------------------------------------------
computer chips and no other use without the express written consent of
--------------
Landlord, which consent Landlord may withhold in its sole and absolute
discretion.
(m) BROKER(S): Xxxx Xxxxxx, CB Commercial.
--------------------------
(n) GUARANTOR(S): None
----
(o) INTEREST RATE: The greater of ten percent (10%) per annum or two percent
(2%) in excess of the prime lending or reference rate of Xxxxx Fargo Bank
N.A. or any successor bank in effect on the twenty-fifth (25th) day of the
calendar month immediately prior to the event giving rise to the Interest
Rate imposition; provided, however, the Interest Rate will in no event
exceed the maximum interest rate permitted to be charged by applicable
law.
(p) EXHIBITS: A-l through H, inclusive, which Exhibits are attached to this
Lease and incorporated herein by this reference.
This Paragraph 1 represents a summary of the basic terms and definitions of this
Lease. In the event of any inconsistency between the terms contained in this
Paragraph 1 and any specific provision of this Lease, the terms of the more
specific provision shall prevail.
2. PREMISES AND COMMON AREAS.
(a) PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises upon and subject to the terms, covenants and conditions
contained in this Lease to be performed by each party.
(b) TENANT'S USE OF COMMON AREAS. During the Term of this Lease, Tenant shall
have the nonexclusive right to use in common with all other occupants of the
Project, the following common areas of the Project (collectively, the "Common
Areas"): the parking facilities of the Project which serve the Building, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, and similar areas and facilities situated within
the Project and appurtenant to the Building which are not reserved for the
exclusive use of any Project occupants.
(c) LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access to
the Premises is not interfered with in an unreasonable manner, Landlord reserves
for itself and for all other owner(s) and operator(s) of the Common Areas and
the balance of the Project, the right from time to time to: (i) install, use,
maintain, repair, replace and relocate pipes, ducts, conduits, wires and
appurtenant meters and equipment above the ceiling surfaces, below the floor
surfaces and within the walls of the Building; (ii) make changes to the design
and layout of the Project, including, without limitation, changes to buildings,
driveways, entrances, loading and unloading
2
areas, direction of traffic, landscaped areas and walkways, parking spaces and
parking areas; and (iii) use or close temporarily the Common Areas, and/or other
portions of the Project while engaged in making improvements, repairs or
alterations to the Building, the Project, or any portion thereof.
3. TERM. The term of this Lease ("Term") will be for the period designated in
Subparagraph 1(e), commencing on the Commencement Date, and ending on the
Expiration Date. Each consecutive twelve (12) month period of the Term of this
Lease, commencing on the Commencement Date, will be referred to herein as a
"Lease Year".
4. POSSESSION.
(a) DELIVERY OF POSSESSION. Landlord will deliver possession of the Premises to
Tenant in its current "as-is" condition with the addition of only those items of
work described on Exhibit "C" which are to be completed by Landlord on or before
the Commencement Date. If, for any reason not caused by Tenant, Landlord cannot
deliver possession of the Premises to Tenant on the Commencement Date, this
Lease will not be void or voidable, nor will Landlord be liable to Tenant for
any loss or damage resulting from such delay, but in such event, the
Commencement Date and Tenant's obligation to pay rent will not commence until
Landlord delivers possession to Tenant. If the delay in possession is caused by
Tenant, then the Term and Tenant's obligation to pay rent will commence as of
the Commencement Date even though Tenant does not yet have possession.
Notwithstanding the foregoing, Landlord will not be obligated to deliver
possession of the Premises to Tenant (but Tenant will be liable for rent if
Landlord can otherwise deliver the Premises to Tenant) until Landlord has
received from Tenant all of the following: (i) a copy of this Lease fully
executed by Tenant and the guaranty of Tenant's obligations under this Lease, if
any, executed by the Guarantor(s), (ii) the Security Deposit and the first
installment of Monthly Rase Rent; and (iii) copies of policies of insurance or
certificates thereof as required under Paragraph 19 of this Lease.
(b) CONDITION OF PREMISES. By taking possession of the Premises, Tenant will be
deemed to have accepted the Premises in its "as-is" condition on the date of
delivery of possession and to have acknowledged that all work to be completed by
Landlord as described on Exhibit "C" has been completed and there are no
additional items needing work or repair by Landlord. Tenant acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises, the Building, the Project or any portions
thereof or with respect to the suitability of same for the a conduct of Tenant's
business and Tenant further acknowledges that Landlord will have no obligation
to construct or complete any additional buildings or improvements within the
Project. Landlord shall deliver the premises in a good working condition,
including but not limited to the HVAC, electrical, plumbing and mechanical
systems, etc. Tenant shall have (30) days after possession to notify Landlord.
3
5. RENT
(a) MONTHLY BASE RENT. Tenant agrees to pay Landlord the Monthly Base Rent for
the Premises (subject to adjustment as hereinafter provided) in advance on the
first day of each calendar month during the Term without prior notice or demand,
except that Tenant agrees to pay the Monthly Base Rent for the first month of
the Term directly to Landlord concurrently with Tenant's delivery of the
executed Lease to Landlord. All rent must be paid to Landlord, without any
deduction or offset, in lawful money of the United States of America, at the
address designated by Landlord or to such other person or at such other place as
Landlord may from time to time designate in writing. Monthly Base Rent will be
adjusted during the Term of this Lease as provided in Exhibit "B".
(b) ADDITIONAL RENT. All amounts and charges to be paid by Tenant hereunder,
including, without limitation, payments for Operating Expenses, insurance and
repairs, will be considered additional rent for purposes of this Lease, and the
word "rent" as used in this Lease will include all such additional rent unless
the context specifically or clearly implies that only Monthly Base Rent is
intended.
(c) LATE PAYMENTS. Late payments of Monthly Base Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Subparagraph 22(t) below.
6. OPERATING EXPENSES.
(a) OPERATING EXPENSES. Throughout the Term of this Lease, commencing on the
Commencement Date, Tenant agrees to pay Landlord as additional rent in
accordance with the terms of this Paragraph 6, Tenant's Share of Operating
Expenses for the taxes and insurance for the Project and all costs and expenses
of the operation, maintenance, repair, and replacement of the Project including,
without limitation: (i) any form of real property tax assessment, license fee,
license tax, business license fee, commercial rental tax, levy, charge,
improvement bond or similar imposition of any kind or nature 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; (ii) any and all assessments
under any covenants, conditions and restrictions affecting the Project; (iii)
water, sewer and other utility charges; (iv) costs of insurance obtained by
Landlord pursuant to Paragraph 19 of the Lease; (v) waste disposal and
janitorial services; (vi) security; (vii) labor; (viii) management costs
including, without limitation: (A) wages and salaries (and payroll taxes and
similar charges) of property management employees, and (B) management office
rental, supplies, equipment and related operating expenses and management fees;
(ix) supplies, materials, equipment and tools including rental of personal
property; (x) repair and maintenance of the structural portions of the buildings
with the Project, including the plumbing, heating, ventilating, air-conditioning
and electrical systems installed or furnished by Landlord; (xi) maintenance,
costs and upkeep of all parking and other Common Areas; (xii) depreciation on a
straight line basis and rental of personal property used in maintenance;
4
(xiii) amortization on a straight line basis over the useful life [together with
interest at the Interest Rate on the unamortized balance] of all capitalized
expenditures which are: (A) reasonably intended to produce a reduction in
operating charges or energy consumption; or (B) required under any governmental
law or regulation that was not applicable to the Project at the time it was
originally constructed; or (C) for replacement of any Project equipment needed
to operate the Project at the same quality levels as prior to the replacement;
(xiv) gardening and landscaping; (xv) maintenance of signs (other than signs of
tenants of the Project); (xvi) personal property taxes levied on or attributable
lo personal property used in connection with the Common Areas; (xvii) reasonable
accounting, audit, verification, legal and other consulting fees; and (xviii)
costs and expenses of repairs, resurfacing, repairing, maintenance, painting,
lighting, cleaning, refuse removal, security and similar items, including
appropriate reserves
(b) DETERMINATION OF TENANT'S MONTHLY OPERATING EXPENSE CHARGE. Tenant's
Monthly Operating Expense Charge shall be determined as provided in Subparagraph
1(i) of this Lease. If Tenant's Monthly Operating Expense Charge is scheduled
for each year of the Lease Term as shown on Exhibit "B", then Subparagraphs (c)
and (d) below will not apply.
(c) ESTIMATE STATEMENT. Prior to the Commencement Date and on or about March
1st of each subsequent calendar year during the Term of this Lease, Landlord
will endeavor to deliver to Tenant a statement ("Estimate Statement") wherein
Landlord will estimate both the Operating Expenses and Tenant's Monthly
Operating Expense Charge for the then current calendar year. Tenant agrees to
pay Landlord, as additional rent, Tenant's estimated Monthly Operating Expense
Charge each month thereafter, beginning with the next installment of rent due,
until such time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year; except that, concurrently with the
regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly
installment of Tenant's estimated Monthly Operating Expense Charge (less any
applicable Operating Expenses already paid) multiplied by the number of months
from January, in the current calendar year, to the month of such rent payment
next due, all months inclusive. If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that
Tenant's's share of Operating Expenses for the current calendar year will be
greater than the amount set forth in the then current Estimate Statement,
Landlord may issue a revised Estimate Statement and Tenant agrees to pay
Landlord, within ten (10) days of receipt of the revised Estimate Statement, the
difference between the amount owed by Tenant under such revised Estimate
Statement and the amount owed by Tenant under the original Estimate Statement
for the portion of the then current calendar year which has expired. Thereafter
Tenant agrees to pay Tenant's Monthly Operating Expense Charge based on such
revised Estimate Statement until Tenant receives the next calendar year's
Estimate Statement or a new revised Estimate Statement for the current calendar
year.
(d) ACTUAL STATEMENT. By March 1st of each calendar year during the Term of
this Lease, Landlord will also endeavor to deliver to Tenant a statement
("Actual Statement") which states Tenant's Share of the actual Operating
Expenses for the preceding calendar year. If the
5
Actual Statement reveals that Tenant's Share of the actual Operating Expenses is
more than the total Additional Rent paid by Tenant for Operating Expenses on
account of the preceding calendar year, Tenant agrees to pay Landlord the
difference in a lump sum within ten (10) days of receipt of the Actual
Statement. If the Actual Statement reveals that Tenant's Share of the actual
Operating Expenses is less than the Additional Rent paid by Tenant for Operating
Expenses on account of the preceding calendar year, Landlord will credit any
overpayment toward the next monthly installment(s) of Tenant's Share of the
Operating Expenses due under this Lease.
(e) MISCELLANEOUS. Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Paragraph 6 will not constitute a
waiver of its right to require an increase in rent nor will it relieve Tenant of
its obligations pursuant to this Paragraph 6, except that Tenant will not be
obligated to make any payments based on such Estimate Statement or Actual
Statement unless ten (10) days after receipt of such Estimate Statement or
Actual Statement. If Tenant does not object to any Estimate Statement or Actual
Statement within thirty (30) days after Tenant receives any such statement, such
statement will be deemed final and binding on Tenant. Even though the Term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's Share of the actual Operating Expenses for the year in which
this Lease terminates, Tenant agrees to promptly pay any increase due over the
estimated expenses paid and, conversely, any overpayment made in the event said
expenses decrease shall promptly be rebated by Landlord to Tenant. Such
obligation will be a continuing one which will survive the expiration or
termination of this Lease. Prior to the expiration or sooner termination of the
Lease Term and Landlord's acceptance of Tenant's surrender of the Premises,
Landlord will have the right to estimate the actual Operating Expenses for the
then current Lease Year and to collect from Tenant prior to Tenant's surrender
of the Premises, Tenant's Share of any excess of such actual Operating Expenses
over the estimated Operating Expenses paid by Tenant in such Lease Year.
7. SECURITY DEPOSIT AND CLEANING FEE. Upon Tenant's execution of this Lease,
Tenant will deposit with Landlord the Security Deposit designated in
Subparagraph 1(j). The Security Deposit will be held by Landlord as security for
the full and faithful performance by Tenant of all of the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the Term
hereof. The Security Deposit is not, and may not be construed by Tenant to
constitute, rent for the last month or any portion thereof. If Tenant defaults
with respect to any provisions of this Lease including, but not limited to, the
provisions relating to the payment of rent or additional rent, Landlord may (but
will not be required to) use, apply or retain all or any part of the Security
Deposit for the payment of any rent or any other sum in default, or for the
payment of any other amount which Landlord may spend by reason of Tenant's
default or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant's default. If any portion to the Security Deposit is
so used or applied, Tenant agrees, within ten (10) days after Landlord's written
demand therefor, to deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount and Tenant's failure to do
so shall constitute a default under this Lease. Landlord is not required to keep
Tenant's Security Deposit separate from its general funds, and Tenant is
not
6
entitled to interest on such Security Deposit. If Tenant is not in default at
the expiration or termination of this Lease, Landlord will return the Security
Deposit to Tenant, less the non-refundable Cleaning Fee portion designated in
Subparagraph 1(k). Landlord's obligations with respect to the Security Deposit
are those of a debtor and not of a trustee.
8. USE.
(a) TENANT'S USE OF THE PREMISES. The Premises may be used for the use or uses
set forth in Subparagraph 1(1) only, and Tenant will not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord, which consent Landlord may not unreasonably withhold. Nothing in this
Lease will be deemed to give Tenant any exclusive right to such use in the
Project.
(b) COMPLIANCE. At Tenant's sole cost and expense, Tenant agrees to procure,
maintain and hold available for Landlord's inspection, all governmental licenses
and permits required for the proper and lawful conduct of Tenant's business from
the Premises, it any. Tenant agrees not to use, alter or occupy the Premises or
allow the Premises to be used, altered and occupied in violation of, and Tenant,
at its sole cost and expense, agrees to use and occupy the Premises, and cause
the Premises to be used and occupied, in compliance with: (i) any and all laws,
statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter in force and any requirements of any insurer, insurance
authority or duly constituted public authority having jurisdiction over the
Premises, the Building or the Project now or hereafter in force, (ii) the
requirements of the Board of Fire Underwriters and any other similar body, (iii)
the Certificate of Occupancy issued for the Building, and (iv) any recorded
covenants, conditions and restrictions and similar regulatory agreements, if
any, which affect the use, occupation or alteration of the Premises, the
Building and/or the Project. Tenant agrees to comply with the Rules and
Regulations referenced in Paragraph 28 below. Tenant agrees not to do or permit
anything to be done in or about the Premises which will in any manner obstruct
or interfere with the rights of other tenants or occupants of the Project, or
injure or unreasonably annoy them, or use or allow the Premises to be used for
any unlawful or unreasonably objectionable purpose. Tenant agrees not to place
or store any articles or materials outside of the Premises or to cause, maintain
or permit any nuisance or waste in, on, under or about the Premises or elsewhere
within the Project. Tenant shall not use or allow the Premises to be used for
lodging, bathing or the washing of clothes.
(c) HAZARDOUS MATERIALS. Except for ordinary and general office supplies, such
as copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute "Hazardous Materials" as defined in this
Lease), Tenant agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Building, the Common Areas or any other portion
of the Project by Tenant, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, "Tenant's Parties"), without
the prior written consent of Landlord, which consent Landlord may withhold in
its sole and absolute discretion. Concurrently
7
with the execution of this Lease, Tenant agrees to complete and deliver to
Landlord an Environmental Questionnaire in the form of Exhibit "G" attached
hereto. Upon the expiration or earlier termination of this Lease, Tenant agrees
to promptly remove from the Premises, the Building and the Project, at its sole
cost and expense, any and all Hazardous Materials, including any equipment or
systems containing Hazardous Materials which are installed, brought upon,
stored, used, generated or released upon, in, under or about the Premises, the
Building and/or the Project or any portion thereof by Tenant or any of Tenant's
Parties. To the fullest extent permitted by law, Tenant agrees to promptly
indemnity, protect, defend and hold harmless Landlord and Landlord's partners,
officers, directors, employees, agents, successors and assigns (collectively,
"Landlord indemnified Parties") from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs (including, without limitation, clean-up, removal,
remediation and restoration costs, sums paid in settlement of claims, attorneys'
fees, consultant fees and expert fees and court costs) which arise or result
from the presence of Hazardous Materials on, in, under or about the Premises,
the Building or any other portion of the Project and which are caused or
permitted by Tenant or any of Tenant's Parties. Tenant agrees to promptly notify
Landlord of any release of Hazardous Materials in the Premises, the Building or
any other portion of the Project which Tenant becomes aware of during the Term
of this Lease, whether caused by Tenant or any other persons or entities. In the
event of any release of Hazardous Materials caused or permitted by Tenant or any
of Tenant's Parties, Landlord shall have the right, but not the obligation, to
cause Tenant to immediately take all steps Landlord deems necessary or
appropriate to remediate such release and prevent any similar future release to
the satisfaction of Landlord and Landlord's mortgagee(s). At all times during
the Term of this Lease, Landlord will have the right, but not the obligation, to
enter upon the Premises to inspect, investigate, sample and/or monitor the
Premises to determine if Tenant is in compliance with the terms of this Lease
regarding Hazardous Materials. As used in this Lease, the term "Hazardous
Materials" shall mean and include any hazardous or toxic materials, substances
or wastes as now or hereafter designated under any law, statute, ordinance,
rule, regulation, order or ruling of any agency of the State, the United States
Government or any local governmental authority, including, without limitation,
asbestos, petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and freon and
other chlorofluorocarbons. The provisions of this Subparagraph 8(c) will survive
the expiration or earlier termination of this Lease.
(d) REFUSE AND SEWAGE. Tenant agrees not to keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Tenant shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition. Tenant shall properly dispose of all sanitary sewage and
shall not use the sewage disposal system for the disposal of anything except
sanitary sewage. Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition. If the volume of Tenant's trash
becomes excessive in Landlord's judgment, Landlord shall have the right to
charge Tenant for additional trash disposal services and/or to
8
require that Tenant contract directly for additional trash disposal services at
Tenant's sole cost and expense.
9. NOTICES. Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery (including delivery by overnight
courier or an express mailing service) or by mail, if sent by registered or
certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at
the Premises and notices to Landlord shall be sufficient if delivered to
Landlord at the address designated in Subparagraph 1(a). Either party may
specify a different address for notice purposes by written notice to the other,
except that the Landlord may in any event use the Premises as Tenant's address
for notice purposes.
10. BROKERS. The parties acknowledge that the broker(s) who negotiated this
Lease are stated in Subparagraph 1(m) Landlord and Tenant each agree to promptly
indemnify, protect, defend and hold harmless the other from and against any and
all claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including attorneys" fees and court
costs) resulting from any breach by the indemnifying party of the foregoing
representation, including, without limitation, any claims that may be asserted
by any broker, agent or finder undisclosed by the indemnifying party. The
foregoing mutual indemnity shall survive the expiration or earlier termination
of this Lease. Tenant agrees that Landlord will not recognize or compensate any
third party broker with regards to any renewals and/or expansions unless such
renewal or expansion rights are included within this Lease at the time of
execution by the parties and in Landlord's commission agreement with the
broker(s) specified in Subparagraph 1(m).
11. SURRENDER; HOLDING OVER.
(a) SURRENDER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not constitute a merger, and shall, at the
option of Landlord, operate as an assignment to Landlord of any or all subleases
or subtenancies. Upon The expiration or earlier termination of this Lease,
Tenant agrees to peaceably surrender the Premises to Landlord broom clean and in
a state of good order, repair and condition, ordinary wear and tear and casually
damage excepted, with all of Tenant's personal property and alterations removed
from the Premises to the extent required under Paragraph 13 and all damage
caused by such removal repaired as required by Paragraph 13. The delivery of
keys to any employee of Landlord or to Landlord's agent or any employee thereof
alone will not be sufficient to constitute a termination of this Lease or a
surrender of the Premises.
(b) HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, and evict Tenant immediately, or consent in writing to the
continued occupancy by Tenant which shall be subject to all of the terms,
covenants and conditions of this Lease, so far as applicable, including the
payment of Operating Expenses, except that the Monthly Base Rent for any month
or partial month during which Tenant holds over shall be equal to one hundred
fifty percent
9
(150%) of the Monthly Base Rent in effect under this Lease immediately prior to
such holdover. Acceptance by Landlord of rent alter such expiration or earlier
termination will not result in a renewal of this Lease. If Tenant fails to
surrender the Premises upon the expiration of this Lease in accordance with the
terms of this Paragraph 11 despite demand to do so by Landlord, Tenant agrees to
promptly indemnify, protect, defend and hold Landlord harmless from all claims,
damages, judgments, suits, causes of action, losses, liabilities, penalties,
fines, expenses and costs (including attorneys" fees and costs), including,
without limitation, costs and expenses incurred by Landlord in returning the
Premises to the condition in which Tenant was to surrender it and claims made by
any succeeding tenant founded on or resulting from Tenant's failure to surrender
the Premises. The provisions of this Subparagraph 11(b) will survive the
expiration or earlier termination of this Lease.
12. TAXES ON TENANT'S PROPERTY. Tenant agrees to pay before delinquency, all
taxes and assessments (real and personal) levied against Tenant's business
operations or any personal property, improvements, alterations, trade fixtures
or merchandise placed by Tenant in or about the Premises
13. ALTERATIONS. Tenant shall not make any alterations to the Premises or any
other aspect of the Project, without Landlord's prior written consent, which
consent Landlord may withhold in its reasonable but subjective discretion. All
permitted alterations must be performed in compliance with Landlord's standard
rules and regulations regarding alterations. All alterations will become the
property of Landlord and will remain upon and be surrendered with the Premises
at the end of the Term of this Lease; provided, however, Landlord may require
Tenant to remove any or all alterations at the end of the Term of this Lease. If
Tenant fails to remove by the expiration or earlier termination of this Lease
all of its personal property, or any alterations identified by Landlord for
removal, Landlord may, at its option, treat such failure as a hold-over pursuant
to Subparagraph 11(b) above, and/or Landlord may (without liability to Tenant
for loss thereof) treat such personal property and/or alterations as abandoned
and, at Tenant's sole cost and expense and in addition to Landlord's other
rights and remedies under this Lease, at law or in equity: (a) remove and store
such items; and/or (b) upon ten (10) days" prior notice to Tenant, sell, discard
or otherwise dispose of all or any such items at private or public sale for such
price as Landlord may obtain or by other commercially reasonable means. Tenant
shall be liable for all costs of disposition of Tenant's abandoned property and
Landlord shall have no liability to Tenant with respect to any such abandoned
property. Landlord agrees to apply the proceeds of any sale of any such property
to any amounts due to Landlord under this Lease from Tenant (including
Landlord's attorneys" fees and other costs incurred in the removal, storage
and/or sale of such items), with any remainder to be paid to Tenant.
14. REPAIRS.
(a) LANDLORD'S OBLIGATIONS. Landlord agrees to repair and maintain the
structural portions of the Building, including the foundations, bearing and
exterior walls (excluding glass),
10
subflooring and roof (excluding skylights), and the unexposed electrical,
plumbing and sewer systems, including those portions of such systems which are
outside the Premises, gutters and downspouts on the Building and the heating,
ventilating and air conditioning systems which serve the Premises, unless such
maintenance and repairs are caused in part or in whole by the act, neglect or
omission of any duty by Tenant, its agents, servants, employees or invitees, in
which case Tenant will pay to Landlord, as additional rent, the reasonable cost
of such maintenance and repairs. The costs of maintenance and repairs performed
by Landlord will be included in Operating Expenses. Except as provided in this
Subparagraph 14(a), Landlord has no obligation to alter, remodel, improve,
repair, decorate or paint the Premises or any part thereof. Landlord will not be
liable for any failure to make any such repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after written notice
of the need of such repairs or maintenance is given to Landlord by Tenant.
Tenant will not be entitled to any abatement of rent and Landlord will not have
any liability by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures, appurtenances and
equipment therein. Tenant waives the right to make repairs at Landlord's expense
under any law, statute, ordinance, rule, regulation, order or ruling (including,
without limitation, to the extent the Premises are located in California, the
provisions of California Civil Code Sections 1941 and 1942 and any successor
statutes or laws of a similar nature).
(b) TENANT'S OBLIGATIONS. Tenant agrees to keep, maintain and preserve the
Premises in a state of condition and repair consistent with the Building and,
when and if needed, at Tenant's sole cost and expense, to make all repairs to
the Premises and every part thereof including, without limitation, all walls,
storefronts, floors, ceilings, interior and exterior doors and windows and
fixtures and interior plumbing. Any such maintenance and repairs will be
performed by Landlord's contractor, or at Landlord's option, by such contractor
or contractors as Tenant may choose from an approved list to be submitted by
Landlord. Tenant agrees to pay all costs and expenses incurred in such
maintenance and repair within seven (7) days after billing by such contractor or
contractors. If Tenant refuses or neglects to repair and maintain the Premises
property as required hereunder to the reasonable satisfaction of Landlord,
Landlord, at any time following ten (10) days from the date on which Landlord
makes a written demand on Tenant to effect such repair and maintenance, may
enter upon the Premises and make such repairs and/or maintenance, and upon
completion thereof, Tenant agrees to pay to Landlord as additional rent,
Landlord's costs for making such repairs plus an amount not to exceed ten
percent (10%) of such costs for overhead, within ten (10) days of receipt from
Landlord of a written itemized xxxx therefor. Any amounts not reimbursed by
Tenant within such ten (10) day period will bear interest at the interest Rate
until paid by Tenant.
15. LIENS. Tenant agrees not to permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project, the Building or the
Premises, nor against Tenant's leasehold interest in the Premises, by reason of
or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Tenant or any other act or omission
11
of Tenant or Tenant's agents, employees, contractors, licensees or invitees. At
Landlord's request, Tenant agrees to provide Landlord with enforceable,
conditional and final lien releases (or other evidence reasonably requested by
Landlord to demonstrate protection from liens) from all persons furnishing labor
and/or materials at the Premises. Landlord will have the right at all reasonable
times to post on the Premises and record any notices o/ non-responsibility which
it deems necessary for protection from such liens. If any such liens are filed,
Tenant will, at its sole cost and expense, promptly cause such liens to be
released of record or bonded so that it no longer affects title to the Project,
the Building or the Premises. If Tenant fails to cause any such liens to be so
released or bonded within ten (10) days after filing thereof, such failure will
be deemed a material breach by Tenant under this Lease without the benefit of
any additional notice or cure period described in Paragraph 22 below, and
Landlord may, without waiving its rights and remedies based on such breach, and
without releasing Tenant from any of its obligations, cause such liens to be
released by any means it shall deem proper, including payment in satisfaction of
the claims giving rise to such liens. Tenant agrees to pay to Landlord within
ten (10) days after receipt of invoice from Landlord, any sum paid by Landlord
to remove such liens, together with interest at the Interest Rate from the date
of such payment by Landlord.
16. ENTRY BY LANDLORD. Landlord and its employees and agents will at all
reasonable times have the right to enter the Premises to inspect the same, to
show the Premises to prospective purchasers or tenants, to post notices of
nonresponsibility, and/or to repair the Premises as permitted or required by
this Lease. In exercising such entry rights, Landlord will endeavor to minimize
as reasonably practicable, the interference with Tenant's business, and will
provide Tenant with reasonable advance notice of any such entry (except in
emergency situations). Landlord will at all times have and retain a key with
which to unlock all doors in the Premises, excluding Tenant's vaults and safes.
Tenant shall not alter any lock or install any new or additional locks or bolts
on any door of the Premises without Landlord's prior written consent and without
providing Landlord with a key to all such locks. Except in the case of the gross
negligence or willful misconduct of Landlord, any entry to the Premises obtained
by Landlord will not be construed or deemed to be a forcible or unlawful entry
into the Premises, or an eviction of Tenant from the Premises and Landlord will
not be unable to Tenant for any damages or losses resulting from any such entry.
17. UTILITIES AND SERVICES. Throughout the Term of this Lease, Tenant shall pay
directly to the utility company providing such service all costs for water, gas,
heat, light, power, sewer, electricity, telephone and other services metered,
chargeable or provided to the Premises. Landlord will not be liable to Tenant
for any failure to furnish any of the foregoing utilities and services if such
failure is caused by all or any of the following: (i) accident, breakage or
repairs" (ii) strikes, lockouts or other labor disturbance or labor dispute of
any character; (iii) governmental regulation, moratorium or other governmental
action or inaction; (iv) inability despite the exercise of reasonable diligence
to obtain electricity, water or fuel, or (v) any other cause beyond Landlord's
reasonable control. In addition, in the event of any stoppage or interruption of
services or utilities, Tenant shall not be entitled to any abatement or
reduction of
12
rent (except as expressly provided in Subparagraphs 20(f) or 21(b) if such
failure results from a damage or taking described therein), no eviction of
Tenant will result from such failure and Tenant will not be relieved from the
performance of any covenant or agreement in this Lease because of such failure.
In the event of any failure, stoppage or interruption thereof, Landlord agrees
to diligently attempt to resume service promptly.
18. ASSUMPTION OF RISK AND INDEMNIFICATION.
(a) ASSUMPTION OF RISK. Tenant, as a material part other consideration to
Landlord, agrees that neither Landlord nor any Landlord indemnified Parties (as
defined in Subparagraph 8(c) above) will be liable to Tenant for, and Tenant
expressly assumes the risk of and waives any and all claims it may have against
Landlord or any Landlord Indemnified Parties with respect to, (i) any and all
damage to property or injury to persons in, upon or about the Premises, the
Building or the Project resulting from the act or omission (except for the
grossly negligent or intentionally wrongful act or omission) of Landlord, (ii)
any such damage caused by other tenants or persons in or about the Building or
the Project, or caused by quasi-public work, (iii) any damage to property
entrusted to employees of the Building, (iv) any loss of or damage to property
by them or otherwise, or (v) any injury or damage to persons or property
resulting from any casualty, explosion, falling plaster or other masonry or
glass, steam, gas, electricity, water or rain which may leak from any part of
the Building or any other portion of the Project or from the pipes, appliances
or plumbing works therein or from the root, street or subsurface or from any
other place, or resulting from dampness. Neither Landlord nor any Landlord
Indemnified Parties will be liable for consequential damages arising out of any
loss of the use of the Premises or any equipment or facilities therein by Tenant
or any Tenant Parties (as defined in Subparagraph 8(c) above) or for
interference with light. Tenant agrees to give prompt notice to Landlord in case
of fire or accidents in the Premises or the Building, or of detects therein or
in the fixtures or equipment.
(b) INDEMNIFICATION. Tenant will be liable for, and agrees, to the maximum
extent permissible under applicable law, to promptly indemnify, protect, defend
and hold harmless Landlord and all Landlord Indemnified Parties, from and
against, any and all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs, including attorneys"
fees and court costs (collectively, "Indemnified Claims"), arising or resulting
from (i) any act or omission of Tenant or any Tenant Parties; (ii) the use of
the Premises and Common Areas and conduct of Tenant's business by Tenant or any
Tenant Parties, or any other activity, work or thing done, permitted or suffered
by Tenant or any Tenant Parties, in or about the Premises, the Building or
elsewhere within the Project and/or (iii) any default by Tenant of any
obligations on Tenant's part to be performed under the terms of this Lease. In
case any action or proceeding is brought against Landlord or any Landlord
indemnified Parties by reason of any such indemnified Claims, Tenant, upon
notice from Landlord, agrees to promptly defend the same at Tenant's sole cost
and expense by counsel approved in writing by Landlord, which approval Landlord
will not unreasonably withhold.
13
(c) SURVIVAL; NO RELEASE OF INSURERS. Tenant's indemnification obligations
under Subparagraph 18(b) will survive the expiration or earlier termination of
this Lease Tenant's covenants, agreements and indemnification obligation in
Subparagraphs 18(a) and 18(b) above, are not intended to and will not relieve
any insurance carrier of its obligations under policies required to be carried
by Tenant pursuant to the provisions of This Lease.
19. INSURANCE.
(a) TENANT'S INSURANCE. On or before the earlier to occur of (i) the
Commencement Date, or (ii) the date Tenant commences any work of any type in the
Premises pursuant to this Lease (which may be prior to the Commencement Date),
and continuing throughout the entire Term hereof and any other period of
occupancy, Tenant agrees to keep in full force and effect, at its sole cost and
expense, the insurance specified on Exhibit "F" attached hereto. Landlord
reserves the right to require any other form or forms of insurance as Tenant or
Landlord or any mortgagees of Landlord may reasonably require from time to time
in form, in amounts, and for insurance risks against which, a prudent tenant
would protect itself, but only to the extent coverage for such risks and amounts
are available in the insurance market at commercially acceptable rates Landlord
makes no representation that the limits of liability required to be carried by
Tenant under the terms of this Lease are adequate to protect Tenant's interests
and Tenant should obtain such additional insurance or increased liability limits
as Tenant deems appropriate.
(b) SUPPLEMENTAL TENANT INSURANCE REQUIREMENTS. All policies must be in a form
reasonably satisfactory to Landlord and issued by an insurer admitted to do
business in the State. All policies must be issued by insurers with a
policyholder rating of "A" and a financial rating of "X" in the most recent
version of Best's Key Rating Guide. All policies must contain a requirement to
notify Landlord (and Landlord's property manager and any mortgagees or ground
lessors of Landlord who are named as additional insureds, if any) in writing not
less than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. Tenant agrees to deliver to Landlord,
as soon as practicable after placing the required insurance, but in any event
within the time frame specified in Subparagraph 19(a) above, certificate(s) of
insurance and/or if required by Landlord, certified copies of each policy
evidencing the existence of such insurance and Tenant's compliance with the
provisions of this Paragraph 19. Tenant agrees to cause replacement policies or
certificates to be delivered to Landlord not less than thirty (30) days prior to
the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s)
specified herein, Landlord will have the right, but not the obligation, to
obtain such insurance as Landlord deems necessary to protect Landlord's
interests at Tenant's expense. Tenant's insurance under Subparagraphs 19(a)(iii)
and (iv) must name Landlord and Landlord's property manager (and at Landlord's
request, Landlord's mortgagees and ground lessors of which Tenant has been
informed in writing) as additional insureds and must also contain a provision
that the insurance afforded by such policy is primary insurance and any
14
insurance carried by Landlord and Landlord's property manager or Landlord's
mortgagees or ground lessors, if any, will be excess over and non-contributing
with Tenant's insurance.
(c) WAIVER OF SUBROGATION. Tenant's property insurance shall contain a clause
whereby the insurer waives all rights of recovery by way of subrogation against
Landlord. Tenant shall also obtain and furnish evidence to Landlord of the
waiver by Tenant's worker's compensation insurance carrier of all rights of
recovery by way of subrogation against Landlord.
20. DAMAGE OR DESTRUCTION.
(a) PARTIAL DESTRUCTION. If the Premises or the Building are damaged by fire or
other casualty to an extent not exceeding twenty-five percent (25%) of the full
replacement cost thereof and Landlord's contractor reasonably estimates in a
writing delivered to Landlord and Tenant that the damage thereto may be
repaired, reconstructed or restored to substantially its condition immediately
prior to such damage within one hundred eighty (180) days from the date of such
casualty, and Landlord will receive insurance proceeds sufficient to cover the
costs of such repairs reconstruction and restoration (including proceeds from
Tenant and/or Tenants insurance which Tenant is required to deliver to Landlord
pursuant to Subparagraph 20(d) below to cover Tenant s obligation for the costs
of repair, reconstruction and restoration of any portion of the tenant
improvements and any alterations for which Tenant is responsible under this
Lease) then Landlord agrees to commence and proceed diligently with the work of
repair, reconstruction and restoration and this Lease will continue in full
force and effect.
(b) SUBSTANTIAL DESTRUCTION. Any damage or destruction to the Premises or the
Building which Landlord is not obligated to repair pursuant to Subparagraph
20(a) above will be deemed a substantial destruction. In the event of a
substantial destruction, Landlord may elect to either: (i) repair reconstruct
and restore the portion of the Building or the Premises damaged by such casualty
in which case this Lease will continue in full force and effect, subject to
Tenant's termination right contained in Subparagraph 20(c) below; or (ii)
terminate this Lease effective as of the date of Tenant's receipt of Landlord s
election to so terminate.
(c) TERMINATION RIGHTS. It Landlord elects to repair, reconstruct and restore
pursuant to Subparagraph 20(b)(i) hereinabove, and if Landlord's contractor
estimates that as a result of such damage, Tenant cannot be given reasonable use
of and access to the Premises within two hundred forty (240) days after the date
of such damage then either Landlord or Tenant may terminate this Lease effective
upon delivery of written notice to the other within ten (10) days after Landlord
delivers notice to Tenant of its election to so repair reconstruct or restore;
provided, however, Tenant shall have no right to terminate this Lease if
Landlord can relocate Tenant to other comparable Premises in the Building or the
Project within one hundred eighty (180) days after the date of such damage.
15
(d) TENANTS COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant agrees to immediately (i)
notify Landlord thereof, and (ii) deliver to Landlord all property insurance
proceeds received by Tenant with respect to any tenant improvements installed by
or at the cost of Tenant and any alterations , but excluding proceeds for Tenant
s furniture, fixtures, equipment and other personal property whether or not this
Lease is terminated as permitted in this Paragraph 20 and Tenant hereby assigns
to Landlord all rights to receive such insurance proceeds. If for any reason
(including Tenants failure to obtain required insurance) Tenant fails to receive
insurance proceeds covering the full replacement cost of any tenant improvements
and any alterations which are damaged, Tenant will be deemed to have self-
insured the replacement cost of such items, and upon any damage or destruction
thereto Tenant agrees to immediately pay to Landlord the full replacement cost
of such items less any insurance proceeds actually received by Landlord from
Landlord's or Tenant's insurance with respect to such items.
(e) ABATEMENT OF RENT. In the event of any damage, repair reconstruction and/or
restoration described in this Paragraph 20, rent will be abated or reduced, as
the case may be, from the date of such casualty in proportion to the degree to
which Tenant s use of the Premises is impaired during such period of repair
until such use is restored. Except for abatement of rent as provided
hereinabove, Tenant will not be entitled to any compensation or damages for loss
of, or interference with, Tenant's business or use or access of all or any part
of the Premises or for lost profits or any other consequential damages of any
kind or nature, which result from any such damage, repair, reconstruction or
restoration.
(f) DAMAGE NEAR END OF TERM. Landlord and Tenant shall each have the right to
terminate this Lease if any damage to the Premises or the Building occurs during
the last twelve (12) months of the Term of this Lease where Landlord s
contractor estimates in a writing delivered to Landlord and Tenant that the
repair, reconstruction or restoration of such damage cannot be completed within
sixty (60) days after the date of such casualty. If either party desires to
terminate this Lease under this Subparagraph (f), it shall provide written
notice to the other party of such election within ten (10) days after receipt of
Landlord's contractor's repair estimates.
(g) WAIVER OF TERMINATION RIGHT. Landlord and Tenant agree that the foregoing
provisions of this Paragraph 20 are to govern their respective rights and
obligations in the event of any damage or destruction and supersede and are in
lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for
damage or destruction of leased premises (including, without limitation, to the
extent the Premises are located in California, the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 and any
successor statute or laws of a similar nature).
21. EMINENT DOMAIN.
16
(a) SUBSTANTIAL TAKING. If the whole of the Premises or such part hereof as
shall substantially interfere with Tenant s use and occupancy of the Premises,
as contemplated by this Lease, is taken for any public or quasi-public purpose
by any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
will have the right to terminate this Lease effective as of the date possession
is required to be surrendered to such authority.
(b) PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a portion of
the Premises which does not substantially interfere with Tenant s use and
occupancy of the Premises including any temporary taking of ninety (90) days or
less, then, neither party will have the right to terminate this Lease and
Landlord will thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent will be abated with respect to
the part of the Premises which Tenant is deprived of on account of such taking.
Notwithstanding the immediately preceding sentence to the contrary , if any part
of the Building or the Project is taken (whether or not such taking
substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant if
Landlord also terminates the leases of the other tenants of the Building which
are leasing comparably sized space for comparable lease terms.
(c) CONDEMNATION AWARD. In connection with any taking of the Premises or the
Building Landlord will be entitled to receive the entire amount of any award
which may be made or given in such taking or condemnation, without deduction or
apportionment for any estate or interest of Tenant, it being expressly
understood and agreed by Tenant that no portion of any such award will be
allowed or paid to Tenant for any so-called bonus or excess value of this Lease,
and such bonus or excess value will be the sole property of Landlord. Tenant
agrees not to assert any claim against Landlord or the taking authority for any
compensation because of such taking (including any claim for bonus or excess
value of this Lease); provided, however, if any portion of the Premises is
taken, Tenant will have the right to recover from the condemning authority (but
not from Landlord) any compensation as may be separately awarded or recoverable
by Tenant for the taking of Tenant's furniture, fixtures, equipment and other
personal property within the Premises, for Tenant's relocation expenses, and for
any loss of goodwill or other damage to Tenant's business by reason of such
taking.
22. DEFAULTS AND REMEDIES.
(a) DEFAULTS. The occurrence of any one or more of the following events will be
deemed a default by Tenant:
(i) The abandonment or vacation of the Premises by Tenant
(ii) The failure by Tenant to make any payment of rent or additional rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure
17
continues for a period of three (3) days after written notice thereof from
Landlord to Tenant; provided, however that any such notice will be in lieu of,
and not in addition to, any notice required under applicable law (including,
without limitation, to the extent the Premises are located in California, the
provisions of California Code of Civil Procedure Section 1161 regarding unlawful
detainer actions or any successor statute or law of a similar nature).
(iii) The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in Subparagraph 22(a)(i) or (ii) above, where
such failure continues for a period of five (5) days after written notice
thereof from Landlord to Tenant the provisions of any such notice will be in
lieu of, and not in addition to, any notice required under applicable law
(including, without limitation, to the extent the Premises are located in
California, California Code of Civil Procedure Section 1161 regarding unlawful
detainer actions and any successor statute or similar law). If the nature of
Tenants default is such that more than five (5) days are reasonably required for
its cure, then Tenant will not be deemed to be in default if Tenant, with
Landlord's concurrence, commences such cure within such five (5) day period and
thereafter diligently prosecutes such cure to completion.
(iv) (A) The making by Tenant of any general assignment for the benefit of
creditors; (B) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or 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); (C) 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 thirty (30) days; or (D) 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 thirty (30) days.
(b) LANDLORD'S REMEDIES; TERMINATION. In the event of any default by Tenant, in
addition to any other remedies available to Landlord at law or in equity under
applicable law (including without limitation to the extent the Premises are
located in California, the remedies of Civil Code Section 1951.4 and any
successor statute or similar law), Landlord will have the immediate right and
option to terminate this Lease and all rights of Tenant hereunder. If Landlord
elects to terminate this Lease then, to the extent permitted under applicable
law Landlord may recover from Tenant: (i) the worth at the time of award of any
unpaid rent which had been earned at the time of such termination; plus (ii) the
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount of
such rent loss that Tenant proves could have been reasonably avoided; plus (iii)
the worth at the time of award of the amount by which the unpaid rent for the
balance of the Term after the time of award exceeds the amount of such rent loss
that Tenant proves could be reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its
18
obligations under this Lease or which, in the ordinary course of things, results
therefrom including, but not limited to: attorneys" fees and costs; brokers
commissions; the costs of refurbishment, alterations, renovation and repair of
the Premises, and removal (including the repair of any damage caused by such
removal) and storage (or disposal) of Tenant's personal property, equipment,
fixtures, alterations, the tenant improvements and any other items which Tenant
is required under this Lease to remove, but does not remove, as well as the
unamortized value of any free rent, reduced rent, free parking, reduced rate
parking and any tenant improvement allowance or other costs or economic
concessions provided, paid, granted, or incurred by Landlord pursuant to this
Lease. As used in Subparagraphs 22(b)(i) and (ii) above the "worth at the time
of award" is computed by allowing interest at the interest Rate. As used in
Subparagraph 22(b)(iii) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
(c) LANDLORD S REMEDIES; RE-ENTRY RIGHTS. In the event of any default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord will also 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 and/or disposed of at the sole cost and expense of and
for the account of Tenant in accordance with the provisions of Paragraph 13 of
this Lease or any other procedures permitted by applicable law. No re-entry or
taking possession of the Premises by Landlord pursuant to this Subparagraph
22(c) will be construed as an election to terminate this Lease unless a written
notice of such intention is given to Tenant or unless the termination thereof is
decreed by a court of competent jurisdiction.
(d) LANDLORD S REMEDIES; RE-LETTING. If Landlord does not elect to terminate
this Lease, Landlord may from time to time, without terminating this Lease,
either recover all rent as it becomes due or relate the Premises or any part
thereof on terms and conditions as Landlord in its sole and absolute discretion
may deem advisable with the right to make alterations and repairs to the
Premises in connection with such reletting. If Landlord elects to relet the
Premises then rents received by Landlord from such reletting will be applied:
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any cost of such reletting; third,
to the payment of the cost of any alterations and repairs to the Premises
incurred in connection with such reletting; fourth, to the payment of rent due
and unpaid hereunder and the residue, if any will be held by Landlord and
applied to payment of future rent as the same may become due and payable
hereunder. Should that portion of such rents received from such reletting during
any month, which is applied to the payment of rent hereunder, be less than the
rent payable during that month by Tenant hereunder, then Tenant agrees to pay
such deficiency to Landlord immediately upon demand therefor by Landlord. Such
deficiency will be calculated and paid monthly.
(e) LANDLORD'S REMEDIES; PERFORMANCE FOR TENANT. All covenants and agreements
to be performed by Tenant under any of the terms of this Lease are to be
performed by Tenant
19
at Tenant's sole cost and expense and without any abatement of rent. If Tenant
fails to pay any sum of money owed to any party other than Landlord, for which
it is liable under this Lease, or if Tenant fails to perform any other act on
its part to be performed hereunder, and such failure continues for ten (10) days
after notice thereof by Landlord, Landlord may, without waiving or releasing
Tenant from its obligations, but shall not be obligated to, make any such
payment or perform any such other act to be made or performed by Tenant. Tenant
agrees to reimburse Landlord upon demand for all sums so paid by Landlord and
all necessary incidental costs, together with interest thereon at the Interest
Rate, from the date of such payment by Landlord until reimbursement by Tenant.
This remedy shall be in addition to any other right or remedy of Landlord set
forth in this Paragraph 22.
(f) LATE PAYMENT. If Tenant fails to pay any installment of rent within seven
(7) days when due or if Tenant fails to make any other payment for which Tenant
is obligated under this Lease when due, such late amount will accrue interest at
the Interest Rate until such amount is paid by Tenant to Landlord. In addition
Tenant agrees to pay to Landlord concurrently with such late payment amount, as
additional rent, a late charge equal to ten percent (10%) of the amount due to
compensate Landlord for the extra costs Landlord will incur as a result of such
late payment. Landlord and Tenant agree that such late charge represents a fair
and reasonable estimate of the costs that Landlord will incur by reason of any
such late payment. Acceptance of any such interest and late charge will not
constitute a waiver of the Tenant's default with respect to the overdue amount,
or prevent Landlord from exercising any of the other rights and remedies
available to Landlord. If Tenant incurs a late charge more than three (3) times
in any period of twelve (12) months during the Lease Term, then, notwithstanding
that Tenant cures the late payments for which such late charges are imposed
Landlord will have the right to require Tenant thereafter to pay all
installments of Monthly Base Rent quarterly in advance in the form of a
cashier's check throughout the remainder of the Lease Term. Any payments of any
kind returned for insufficient funds will be subject to an additional handling
charge of $25.00 and thereafter, Landlord may require Tenant to pay all future
payments of rent or other sums due by money order or cashier's check.
(g) RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Lease will be construed and held to be cumulative,
and no one of them will be exclusive of the other, and Landlord shall have the
right to pursue any one or all of such remedies or any other remedy or relief
which may be provided by law or in equity whether or not stated in this Lease.
Nothing in this Paragraph 22 will be deemed to limit or otherwise affect
Tenant's indemnification of Landlord pursuant to any provision of This
Lease.
23. LANDLORD'S DEFAULT. Landlord will not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord fails to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided, however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for performance, then Landlord will
not be deemed in default if it commences such performance within such
thirty
20
(30) day period and thereafter diligently pursues the same to completion. Upon
any default by Landlord, Tenant may exercise any of its rights provided at law
or in equity subject to the limitations on liability set forth in Paragraph 35
of This Lease.
24. ASSIGNMENT AND SUBLETTING.
(a) RESTRICTION ON TRANSFER. Except as expressly provided in this Paragraph 24,
Tenant will not, either voluntarily or by operation of law, assign or encumber
this Lease or any interest herein or sublet the Premises or any part thereof, or
permit the use or occupancy of the Premises by any party other than Tenant (any
such assignment encumbrance sublease, or the like will sometimes be referred to
as a "Transfer"), without the prior written consent of Landlord, which consent
Landlord will not unreasonably withhold. For purposes of this Paragraph 24 , if
Tenant is a corporation, partnership or other entity, any transfer, assignment,
encumbrance or hypothecation of fifty percent (50%) or more (individually or in
the aggregate) of any stock or other ownership interest in such entity, and/or
any transfer, assignment, hypothecation or encumbrance of any controlling
ownership or voting interest in such entity, will be deemed a Transfer and will
be subject to all of the restrictions and provisions contained in this Paragraph
24; provided, however, this provision will not apply to public corporations, the
stock of which is traded through a public stock exchange or over the counter
system.
(b) TRANSFER NOTICE. If Tenant desires to elect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "Transfer Date") Tenant agrees to give Landlord a notice (the
"Transfer Notice") stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"Transferee") reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.
(c) LANDLORDS OPTIONS. Within fifteen (15) days of Landlord's receipt of any
Transfer Notice and any additional information requested by Landlord concerning
the proposed Transferee's financial responsibility, Landlord will notify Tenant
of its election to do one of the following: (i) consent to the proposed Transfer
subject to such reasonable conditions as Landlord may impose in providing such
consent; (ii) refuse such consent, which refusal shall be on reasonable grounds;
or (iii) terminate this Lease as to all or such portion of the Premises which is
proposed to be sublet or assigned and recapture all or such portion of the
Premises for reletting by Landlord.
(d) ADDITIONAL CONDITIONS. A condition to Landlord's consent to any transfer of
this Lease will be the delivery to Landlord of a true copy of the fully executed
instrument of assignment, sublease, transfer or hypothecation, in form and
substance reasonably satisfactory to Landlord.
21
Tenant agrees to pay to Landlord, as additional rent, all sums and other
consideration payable to and for the benefit of Tenant by the assignee or
sublessee in excess of the rent payable under this Lease for the same period and
portion of the Premises. In calculating excess rent or other consideration which
may be payable to Landlord under this paragraph, Tenant will be entitled to
deduct commercially reasonable third party brokerage commissions and attorney's
fees and other amounts reasonably and actually expended by Tenant in connection
with such assignment or subletting if acceptable written evidence of such
expenditures is provided to Landlord. No Transfer will release Tenant of
Tenant's obligations under This Lease or alter the primary liability of Tenant
to pay the rent and to perform all other obligations to be performed by Tenant
hereunder. Landlord may require that any Transferee remit directly to Landlord
on a monthly basis, all monies due Tenant by said Transferee. Consent by
Landlord to one Transfer will not be deemed consent to any subsequent Transfer.
In the event of default by any Transferee 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
Transferee or successor. If Tenant effects a Transfer or requests the consent of
Landlord to any Transfer (whether or not such Transfer is consummated), then,
upon demand, Tenant agrees to pay Landlord a non-refundable administrative fee
of not less than One Hundred Dollars ($100.00) and actual expenses incurred,
plus Landlord's reasonable attorneys" fees.
25. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee or beneficiary with a deed of trust
encumbering the Building and/or the Project, or any lessor of a ground or
underlying lease with respect to the Building, this Lease will be subject and
subordinate at all times to: (i) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Building; and (ii) the lien
of any mortgage or deed of trust which may now exist or hereafter be executed
for which the Building, the Project or any leases thereof, or Landlord's
interest and estate in any of said items, is specified as Security.
Notwithstanding the foregoing, Landlord reserves the right to subordinate any
such ground leases or underlying leases or any such liens to This Lease. If any
such ground lease or underlying lease terminates for any reason or any such
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, at the election of Landlord's successor in interest,
Tenant agrees to attorn to and become the tenant of such successor in which
event Tenant's right to possession of the Premises will not be disturbed as long
as Tenant is not in default under this Lease. Tenant hereby waives its rights
under any law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form
reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease and Tenant's attornment agreement with
respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust. If Tenant fails to sign and return any such documents
within ten (10) days of receipt, Tenant will be in default hereunder.
22
26. ESTOPPEL CERTIFICATE. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant agrees to execute and deliver
to Landlord an estoppel certificate, in Landlord's standard form or as may
reasonably be required by Landlord's lender. Landlord and Tenant intend that any
Statement delivered pursuant to this Paragraph 26 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
any interest therein. Tenant's failure to deliver such statement within such
time will be conclusive upon Tenant (i) that this Lease is in full force and
effect without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not more
than one (1) month's rent has been paid in advance. Without limiting the
foregoing, if Tenant fails to deliver any such statement within such ten (10)
day period, Landlord may deliver to Tenant an additional request for such
Statement and Tenant's failure to deliver such Statement to Landlord within ten
(10) days after delivery of such additional request will constitute a default
under this Lease. Tenant agrees to indemnify and protect Landlord from and
against any and all claims, damages, losses, liabilities and expenses (including
attorneys fees and costs) attributable to any failure by Tenant to timely
deliver any such estoppel certificate to Landlord as required by this Paragraph
26.
27. BUILDING PLANNING. If Landlord requires the Premises for use in conjunction
with another suite or for other reasons connected with the planning program for
the Building or the Project, Landlord will have the right upon sixty (60) days'
prior written notice to Tenant, to move Tenant to other space in the Building of
substantially similar size as the Premises, and with tenant improvements of
substantially similar age, quality and layout as then existing in the Premises.
Any such relocation will be at Landlord's cost and expense, including the cost
of providing such substantially similar tenant improvements (but not any
furniture or personal property) and Tenant's reasonable moving, telephone
installation and stationary reprinting costs. If Landlord so relocates Tenant,
the terms and conditions of this Lease will remain in full force and effect and
apply to the new space, except that (a) a revised Exhibit "A" will become part
of this Lease and will reflect the location of the new space, (b) Paragraph 1 of
This Lease will be amended to include and state all correct data as to the new
space, (c) the new space will thereafter be deemed to be the "Premises," and (d)
all economic terms and conditions (e.g. rent, total Operating Expense Allowance,
etc.) will be adjusted on a per square foot basis based on the total number of
rentable square feel of area contained in the new space. Landlord and Tenant
agree to cooperate fully with one another in order to minimize the inconvenience
to Tenant resulting from any such relocation.
28. RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with
the "Rules and Regulations," a copy of which is attached hereto and incorporated
herein by this reference as Exhibit "E," and all reasonable and
nondiscriminatory modifications thereof and additions thereto from time to time
put into effect by Landlord. Landlord will not be responsible to Tenant for the
violation or non-performance by any other tenant or occupant of the Building of
any of the Rules and Regulations.
23
29. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS. Tenant,
within ten (10) days after request therefor, agrees to execute any reasonable
amendments to this Lease which may be requested by any lender or ground lessor
of the Project, provided any such amendments do not increase the obligations of
Tenant under this Lease or adversely affect the leasehold estate created by this
Lease. In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgage covering the Premises or ground lessor of Landlord whose address has
been furnished to Tenant, and Tenant agrees to offer such beneficiary, mortgagee
or ground lessor a reasonable opportunity to cure the default (including with
respect to any such beneficiary or mortgagee, time to obtain possession of the
Premises, subject to this Lease and Tenant's rights hereunder, by power of sale
or a judicial foreclosure, if such should prove necessary to effect a
cure).
30. DEFINITION OF LANDLORD. The term "Landlord" as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Landlord herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects, the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and
Landlord's transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Project, the Building,
the Premises and/or this Lease without the consent of Tenant, and such transfer
or subsequent transfer will not be deemed a violation on Landlord's part of any
of the terms and conditions of This Lease.
31. WAIVER. The waiver by either party of any breach or any term, covenant or
condition herein contained will not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained,
nor will any custom or practice which may develop between the parties in the
administration of the terms hereof be deemed a waiver of or in any way affect
the right of either party to insist upon performance in strict accordance with
said terms. The subsequent acceptance of rent or any other payment hereunder by
Landlord will not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rent so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of a lesser sum than the basic rent and additional rent or other sum
then due will be deemed to be other than on account of the earliest installment
of such rent or other amount due, nor will any endorsement or statement on any
check or any letter accompanying any check be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such installment or other amount or pursue any
other remedy provided in this Lease. The consent or
24
approval of Landlord to or of any act by Tenant requiring Landlord's consent or
approval will not be deemed to waive or render unnecessary Landlord's consent or
approval to or of any subsequent similar acts by Tenant.
32. PARKING. So long as this Lease is in effect and provided Tenant is not in
default hereunder, Landlord grants to Tenant, Tenant's visitors and guests a
non-exclusive license to use the parking areas which serve the Building subject
to the terms and conditions of this Paragraph 32 and the Rules and Regulations
regarding parking contained in Exhibit "E" attached hereto. Tenant will not use
or allow any of Tenant's employees or guests to use any parking spaces which
have been specifically assigned by Landlord to other tenants or occupants or for
other uses such as visitor parking or which have been designated by any
governmental entity as being restricted to certain uses. Landlord may assign any
unreserved and unassigned parking spaces and/or make all or any portion of such
spaces reserved, if Landlord reasonably determines that it is necessary for
orderly and efficient parking or for any other reasonable reason. Tenant agrees
to cause its employees, subtenants, assignees, contractors, suppliers, customers
and invitees to comply with the Rules and Regulations. Landlord reserves the
right from time to lime to modify and/or adopt such other reasonable and non-
discriminatory rules and regulations for the parking facilities as it deems
reasonably necessary for the operation of the parking facilities.
33. FORCE MAJEURE. If either Landlord or Tenant is delayed, hindered in or
prevented from the performance of any act required under this Lease by reason of
strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws, regulations or orders or
governmental action or inaction (including failure, refusal or delay in issuing
permits, approvals and/or authorizations which is not the result of the action
or inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption of any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act will be extended for a period
equivalent to the period of such delay. The provisions of this Paragraph 33 will
not operate to excuse Tenant from prompt payment of rent or any other payments
required under the provisions of this Lease.
34. SIGNS. Landlord will designate the location on the Premises, if any, any
for one or more Tenant identification sign(s). Tenant has no right to install
Tenant identification signs in any other location in on or about the Premises or
the Project and will not display or erect any other signs, displays or other
advertising materials that are visible from the exterior of the Building or from
within the Building in any interior or exterior common areas. The size, design,
color and other physical aspects of any and all permitted sign(s) will be
subject to (i) Landlord's written approval prior to installation, which approval
may be withheld in Landlord s discretion (ii) any covenants, conditions or
restrictions and sign criteria governing the
25
Project, and (iii) any applicable municipal or governmental permits and
approvals. Tenant will be solely responsible for all costs for installation,
maintenance, repair and removal of any Tenant identification sign(s). If Tenant
fails to remove Tenant's sign(s) upon termination of this Lease and repair any
damage caused by such removal, Landlord may do so at Tenant's sole cost and
expense. Tenant agrees to reimburse Landlord for all costs incurred by Landlord
to effect any installation, maintenance or removal on Tenant's account, which
amount will be deemed additional rent, and may include, without limitation, all
sums disbursed, incurred or deposited by Landlord including Landlord's costs,
expenses and actual attorneys" fees with interest thereon at the Interest Rate
from the date of Landlord's demand until paid by Tenant. Any sign rights granted
to Tenant under this Lease are personal to Tenant and may not be assigned,
transferred or otherwise conveyed to any assignee or subtenant of Tenant without
Landlord's prior written consent, which consent Landlord may withhold in its
sole and absolute discretion.
35. LIMITATION ON LIABILITY. In consideration of the benefits accruing
hereunder, Tenant on behalf of itself and all successors and assigns of Tenant
covenants and agrees that, in the event of any actual or alleged failure, breach
or default hereunder by Landlord: (a) Tenant's recourse against Landlord for
monetary damages will be limited to Landlord's interest in the Building
including, subject to the prior rights of any Mortgagee, Landlord's interest in
the rents of the Building and any insurance proceeds payable to Landlord; (b)
except as may be necessary to secure jurisdiction of the partnership, no partner
of Landlord shall be sued or named as a party in any suit or action and no
service of process shall be made against any partner of Landlord; (c) no partner
of Landlord shall be required to answer or otherwise plead to any service of
process; (d) no judgment will be taken against any partner of Landlord and any
judgment taken against any partner of Landlord may be vacated and set aside at
any time after the fact; (e) no writ of execution will be levied against the
assets of any partner of Landlord; (f) the obligations under this Lease do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord, and Tenant shall not seek recourse against the
individual partners, directors, officers or shareholders of Landlord or any of
their personal assets for satisfaction of any liability in respect to this
Lease; and (g) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
36. FINANCIAL STATEMENTS. Prior to the execution of this Lease by Landlord and
at any time during the Term of this Lease upon ten (10) days prior written
notice from Landlord, Tenant agrees to provide Landlord with a current financial
statement for Tenant and any guarantors of Tenant and financial statements for
the two (2) years prior to the current financial statement year for Tenant and
any guarantors of Tenant. Such statements are to be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Tenant, audited by an independent certified public accountant.
37. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the rent required under this Lease and paying all other charges and
performing all of the covenants and provisions on Tenant's part to be observed
and performed under this Lease Tenant
26
may peaceably and quietly have hold and enjoy the Premises in accordance with
this Lease
38. MISCELLANEOUS.
(a) CONFLICT OF LAWS. This Lease shall be governed by and construed solely
pursuant to the laws of the State without giving effect to choice of law
principles thereunder.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Lease all of
the covenants conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(c) PROFESSIONAL FEES AND COSTS. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, then all costs and expenses,
including without limitation, actual professional fees and costs such as
appraisers, " accountants" and attorneys" fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of
the other party shall be deemed to have accrued on the date of the commencement
of such action and shall be enforceable whether or not the action is prosecuted
to judgment. As used herein , attorneys" fees and costs shall include, without
limitation , attorneys" fees, costs and expenses incurred in connection with any
(i) post-judgment motions; (ii) contempt proceedings; (iii) garnishment, levy
and debtor and third party examination; (iv) discovery; and (v) bankruptcy
litigation. Tenant agrees to pay all collection agency fees and attorneys " fees
charged to Landlord in connection with any late payment or non-payment of rent
or any other amounts due under this Lease including, without limitation, a fee
of $75.00 for the preparation of any demand for delinquent rent or any notice to
pay rent or quit.
(d) TERMS AND HEADINGS. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The paragraph headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.
(e) TIME. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
(f) PRIOR AGREEMENT; AMENDMENTS. This Lease constitutes and is intended by the
parties to be a final, complete and exclusive statement of their entire
agreement with respect to the subject matter of this Lease. This Lease
supersedes any and all prior and contemporaneous agreements and understandings
of any kind relating to the subject matter of this Lease. There are no other
agreements, understandings, representations, warranties or statements, either
oral or in written form, concerning the subject matter of this Lease. No
alteration, modification, amendment or
27
interpretation of this Lease shall be binding on the parties unless contained in
a writing which is signed by both parties.
(g) SEPARABILITY. The provisions of this Lease shall be considered separable
such that it any provision or part of this Lease is ever held to be invalid,
void or illegal under any law or ruling all remaining provisions of this Lease
shall remain in full force and effect to the maximum extent permitted by law.
(h) RECORDING. Neither Landlord nor Tenant shall record this Lease nor a short
form memorandum thereof without the consent of the other.
(i) COUNTERPARTS. This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.
(j) NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlords relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other Tenant or apparent prospective tenant of the Building
or other portion of the Project, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
(k) NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be no
discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
39. EXECUTION OF LEASE.
(a) Joint and Several Obligations. If more than one person executes this Lease
as Tenant, their execution of this Lease will constitute their covenant and
agreement that (i) each of them 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
(ii) the term "Tenant" as used in this Lease means and includes 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, will 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
28
them had so acted or so given or received such notice or refund or so
signed.
(b) TENANT AS CORPORATION OR PARTNERSHIP. If Tenant executes this Lease as a
corporation or partnership, then Tenant and the persons executing this Lease on
behalf of Tenant represent and warrant that such entity is duly qualified and in
good standing to do business in California and that the individuals executing
this Lease on Tenant's behalf are duly authorized to execute and deliver this
Lease on its behalf, and in the case of a corporation, in accordance with a duly
adopted resolution of the board of directors of Tenant, a copy of which is to be
delivered to Landlord on execution hereof, if requested by Landlord, and in
accordance with the by-laws of Tenant, and, in the case of a partnership, in
accordance with the partnership agreement and the most current amendments
thereto, if any, copies of which are to be delivered to Landlord on execution
hereof, if requested by Landlord, and that this Lease is binding upon Tenant in
accordance with its terms.
(c) EXAMINATION OF LEASE. Submission of this instrument by Landlord to Tenant
for examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by
their duly authorized representatives as of the date first above written.
TENANT: LANDLORD:
Litronic Industries, Inc., Airport Industrial Complex,
a California Corporation a California Limited Partnership
By: /S/ XXXX XXXX By: /S/ XXXXX XXXXX
--------------------------- -------------------------
Name: Xxxx Xxxx Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer Title: Senior Manager
29
ADDITIONAL LEASE PROVISIONS
17.(a) UTILITIES AND SERVICES: The electricity for the Premises is currently
in Landlord's name. Tenant agrees to contact Southern California Edison at
(000) 000-0000 within ten (10) days from the date Tenant takes possession of the
Premises and have the xxxx for electricity put into Tenant's name.
Tenant shall reimburse Landlord for any interim charges actually billed to
Landlord for electricity from the date Tenant takes possession of the Premises
until the date the xxxx is put into Tenant's name.
In the event Tenant fails to put the xxxx for electricity in Tenant's name
within ten (10) days from the date Tenant takes possession of the Premises,
Landlord shall have the right to contact Southern California Edison on the
eleventh (11th) day after Tenant takes possession of the Premises and have the
electricity for the Premises turned off.
Tenant hereby acknowledges that Tenant has the absolute responsibility to
contact Southern California Edison and have electrical service put into Tenant's
name. In the event Tenant fails to put the xxxx for electrical service into
Tenant's name as required hereinabove and Landlord has electrical service turned
off, Tenant understands that there will be no electrical service to the
Premises. In such event, Tenant releases and holds Landlord harmless from any
claims, demands, liabilities, damages, expenses, actions and causes of action
based on, arising out of, or related thereto.
Tenant waives the right to additional notice of any kind from Landlord and/or
Southern California Edison and specifically waives any rights or remedies
provided by Civil Code Section 789.3.
Landlord (initials)
Tenant ________
Tenant ________
30
ADDITIONAL SECTIONS
40. OPTION TO EXTEND: Provided Tenant has complied with all of the terms and
conditions of the Lease and is still in occupancy of the Premises, Tenant shall
have an option to extend the Least Term for one (1) additional eighteen (18)
month period on the same general terms and conditions then in existence under
the Lease, except that all economic terms of the Lease for the option period
shall be adjusted to the prevailing market terms and conditions for like or
similar space in the project, but in any event, no less than the then-applicable
Monthly Base Rent under the Lease. Tenant shall notify Landlord at least three
(3) months, but no earlier than six (6) months, prior to the end of the Lease
Term if Tenant desires to exercise its option. Tenant's option to extend shall
be personal to Tenant and shall not be assignable.
Landlord (initials)
Tenant (initials
Tenant ________
31
Exhibit A-1 - THE PROJECT
[P L A T M A P]
AIRPORT INDUSTRIAL COMPLEX
INITIAL
Landlord (initials)
Tenant _______
XXXX
32
EARLY POSSESSION AGREEMENT
Reference is made to that lease dated December 4, 1997 ("Lease") Between Airport
Industrial Complex, a California Limited Partnership , Landlord, and Litronic
Industries, Inc., a California Corporation , Tenant, at 00000 Xxx Xxxx Xxxxxx,
Xxxxx X, Xxxxxx, XX 00000 Building/Unit 2401/A
Tenant is to be allowed to occupy the premises on December 05, 1997 and rent is
to begin on January 01, 1998 (the "Early Possession Period"). Landlord and
Tenant agree that all the terms and conditions of the Lease are to be in full
force and effect as of the date of Tenant's possession of the premises.
Tenant accepts premises in their present condition. Landlord agrees to complete
all tenant improvements as set forth in the Lease. Tenant understands that his
early occupancy may cause some delay in the construction of the tenant
improvements and that such delay will not be a cause for forgiveness of any rent
due. It is further understood that any improvement of the leased premises by
the Tenant which may result in the delay in construction of tenant improvements
or in the obtaining of a building permit without prior written consent of
Landlord is hereby prohibited.
(initials)
In the event Tenant takes possession of the premises prior to completion of any
construction, Tenant agrees to hold Landlord harmless from any and all claims
for damages to goods, equipment or inconvenience.
Tenant hereby agrees that if Tenant breaches the Lease and/or abandons the
premises before the end of the Lease term, if Tenant's right to possession is
terminated by Landlord because of Tenant's breach of the Lease, Landlord shall,
at its option, (i) void this Early Possession Agreement; and (ii) recover from
Tenant, in addition to any damages due Landlord under the terms and conditions
of the Lease, rent prorated for the duration of the Early Possession Period at a
rental rate equivalent to one and a half (1 1/2) times the monthly rental rate
in effect at the commencement of the Lease.
DATE: December 4, 1997
LANDLORD: Airport Industrial Complex, a California Limited Partnership
By: /S/ XXXXX XXXXX
33
Xxxxx X. Xxxxx, Senior Manager
TENANT: Litronic Industries, Inc., a California Corporation
By: /S/ XXXX XXXX
Xxxx Xxxx, Chief Executive Officer
34
