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LEASE AGREEMENT EXH. 10.7
THIS LEASE AGREEMENT (this "Lease") is entered into as of June 1, 1999, by and
between Xxx Xxxxxx Limited Partnership (Landlord"), and Flashcom, Inc., a
Delaware corporation ("Tenant").
ARTICLE 1
PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord that
certain real property situated in Orange County, California, commonly known as
0000 Xxxxx Xxx. and as shown on Exhibit A attached hereto, the Premises for the
"Term" (as defined in Article 2) and upon the terms, covenants and conditions
set forth in this Lease.
ARTICLE 2
TERM
This Lease shall be effective from and after, and the term of this Lease
("Term") shall commence on June 1, 1999 (the "Commencement Date"). The Term
shall expire and this Lease shall automatically terminate, unless sooner
terminated in accordance with the provisions of this Lease, on May 31, 2004.
ARTICLE 3
CONDITION OF PREMISES
Tenant hereby accepts the Premises in its "as-is" condition, and Landlord makes
no representation or warranty of any kind with respect to the Premises.
ARTICLE 4
RENTAL
4.1 MONTHLY RENTAL. Tenant shall pay to Landlord Thirty Five Thousand and No/100
Dollars ($35,000.00) ("Monthly Rental"), in advance, on or before the first
(1st) day of each month, without prior demand and without offset or deduction,
commencing on the Commencement Date. Should the Commencement Date be a day other
than the first (1st) day of a calendar month, then the monthly installment of
Monthly Rental for the first partial month shall be equal to one-thirtieth
(1/30th) of the monthly installment of Monthly Rental for each day from the
Commencement Date to the end of the partial month.
4.2 ADDITIONAL RENTAL. In addition to Monthly Rental, Tenant shall pay to
Landlord, as "Additional Rental", all sums required to be paid by Tenant to
Landlord pursuant to this Lease (including, but not limited to, interest, late
charges, "Taxes" (as defined in Section 5.1 of this Lease), utilities,
maintenance expenses, insurance premiums, reimbursement for attorneys' fees and
expenses and auditing costs). Landlord shall have the same rights and remedies
for the nonpayment of Additional Rental as it has with respect to the nonpayment
of Monthly Rental. Monthly Rental and
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Additional Rental are collectively referred to herein as "Rent." It is the
intention of Landlord and Tenant that Rent shall be paid to Landlord absolutely
net without deduction of any amount of any nature whatsoever.
4.3 PLACE OF PAYMENT. Tenant shall pay Rent to Landlord at 00 Xxxxxxxxx Xxx.,
Xxxxxxx Xxxxx, Xx. 00000 Attention: Accounts Receivable, or to such other
address as Landlord may from time to time designate in writing to Tenant.
4.4 LATE PAYMENTS. If Tenant fails to pay any Rent within ten (10) days after
the same is due, the unpaid amounts shall bear interest at the rate of ten
percent (10%) per annum from the date due to and including the date of payment.
In addition, Tenant acknowledges that the late payment of any installment of
Rent will cause Landlord to incur certain costs and expenses, the exact amount
of which are extremely difficult or impractical to fix. These costs and expenses
may include, but are not limited to, administrative and collection costs and
processing and accounting expenses. Therefore, if any installment of Rent is not
received by Landlord from Tenant within ten (10) business days after receipt of
notice from Landlord, Tenant shall immediately pay to Landlord a late charge
equal to three percent (3%) of the amount of any installment of Rent paid late.
Landlord and Tenant agree that this late charge represents a reasonable estimate
of the costs and expenses Landlord will incur and is fair compensation to
Landlord for its loss suffered by reason of late payment by Tenant. Upon
accrual, all such late charges shall be deemed Additional Rental.
ARTICLE 5
TAXES
5.1 REAL PROPERTY TAXES.
(a) As used in this Lease, the term "Taxes" shall include any
form of tax, assessment (general, special or otherwise), license fee, license
tax, use tax, tax or excise on rental, or any other levy, charge, expense or
imposition imposed by any federal, state, county or city authority having
jurisdiction, or any political subdivision thereof, or any school, agricultural,
lighting, drainage or other improvement or special assessment district
(individually and collectively, "Governmental Agencies") on any interest of
Landlord or Tenant (including any legal or equitable interest of Landlord or its
mortgagee, if any) in the Premises or the underlying realty, including any
increases in the foregoing due to a change of ownership, new construction or any
other reason. The term "Taxes" shall not include Landlord's general income,
inheritance, estate or gift taxes.
(b) From and after the Commencement Date, Tenant shall pay, prior
to delinquency, all of the Taxes applicable to the Premises directly to the
appropriate taxing authority. Taxes for any partial year shall be prorated. If
Tenant fails to pay the Taxes, Landlord may, at its option, pay such unpaid
Taxes, along with penalties and interest, if any, and Tenant shall, within ten
(10) written days after demand therefor from Landlord, reimburse all Taxes,
penalties and interest paid by Landlord, and such amounts shall constitute
Additional Rental.
5.2 OTHER PROPERTY TAXES. Tenant shall pay, prior to delinquency, all taxes,
assessments, license fees and public charges levied, assessed or imposed upon
its business operation, trade fixtures and other personal property in, on or
upon the Premises. No taxes, assessments, fees or charges referred to in this
Section 5.2 shall be considered Taxes under the provisions of Section 5.1.
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ARTICLE 6
UTILITIES
Tenant agrees to pay directly to the appropriate utility company all charges for
utility services supplied to Tenant or to the Premises. Landlord shall not be
liable for any failure or interruption of any utility or service. No failure or
interruption of any utility or service shall entitle Tenant to terminate this
Lease or discontinue making payments of Rent. If Tenant fails to pay when due
any charges referred to in this Article 6, Landlord may pay the charge and
Tenant shall reimburse Landlord, as Additional Rental, for any amount so paid by
Landlord within ten (10) days after demand therefor.
ARTICLE 7
TENANT'S CONDUCT OF BUSINESS
7.1 PERMITTED USE. Tenant shall use the Premises solely for office use, and for
no other use or purpose. Tenant shall not change the use of the Premises without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed.
7.2 COMPLIANCE WITH LAWS. Tenant shall, at its sole cost and expense, comply
with all current and future federal, state and local health, safety,
anti-discrimination, environmental, building, zoning, police and other laws,
statutes, ordinances, rules and regulations applicable to Tenant, the Premises,
or Tenant's use of the Premises (collectively, "Applicable Laws"). Without
limiting the generality of the foregoing, Tenant shall, at its sole cost and
expense, make all alterations, additions, improvements, repairs and replacements
to the Premises required by any current or future Applicable Law. Tenant shall
indemnify, defend (with counsel reasonably acceptable to Landlord) and hold
harmless Landlord and its members, managers, officers, employees,
representatives, contractors and agents (collectively, "Landlord" for purposes
of this Section 7.2) from and against, and shall pay for, all losses, costs,
expenses, claims, damages, causes of action and liabilities of any kind
(including but not limited to, court costs and reasonable attorneys' fees)
arising from or relating to any liabilities, lawsuits, administrative actions or
any other matter which may now or in the future involve Landlord by reason of,
resulting from, in connection with, or arising in any manner whatsoever out of
Tenant's breach of its obligations under this Section 7.2.
7.3 HAZARDOUS MATERIALS RESTRICTIONS. Without obtaining Landlord's prior written
consent, which consent shall not be unreasonably withheld, Tenant shall not, and
shall not allow any individual or entity granted or allowed access to or use of
the Premises (as tenant, occupant, user, contractor or otherwise) by Tenant, or
any employee or other agent or representative of any of the foregoing to, (i)
use, generate, manufacture, treat, store, dispose, dump, handle or bring any
Hazardous Materials on, under, in or over the Premises, (ii) conduct or permit
any activity that may cause or threatens to cause a release of any Hazardous
Material in, on, to, under, from or above the Premises, (iii) conduct or permit
any activity that may result, or could result, in the imposition of a lien on
the Premises or a restriction upon the operation or use of the Premises, (iv)
place any underground storage tank or treatment facility in, on or under the
Premises, or (v) place, incorporate, dispose of or install any asbestos or
asbestos-containing materials, or any polychlorinated biphenyls in, on or under
the Premises. Notwithstanding the foregoing, Landlord agrees that Tenant's
operation of its business as presently conducted shall not violate this Section
7.3, and Landlord's permission shall not be required with respect to any
particular Hazardous Materials to the extent such Hazardous
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Materials are presently used by Tenant in the operation of its business and in
accordance with Applicable Laws.
7.4 PERMITTED USE OF HAZARDOUS MATERIALS. If Landlord grants its permission for
Tenant to use, generate, manufacture, treat, store, dispose, dump, handle or
bring any Hazardous Materials on, under, in or over the Premises (collectively
"Tenant's Use"), then Tenant shall notify Landlord in writing at least ten (10)
days prior to their first appearance on the Premises. Such notification shall
include identification (type and common name) and quantities of all Hazardous
Materials, or any combination thereof, which are to be introduced on the
Premises. Tenant shall, at its sole cost and expense, comply with all Applicable
Laws and Landlord's rules and regulations concerning such Hazardous Materials.
If Landlord in good faith believes that Tenant has violated the provisions of
this Section, then Landlord may, at any time or from time to time, at Tenant's
sole cost and expense, require Tenant to conduct monitoring or evaluation
activities with respect to Hazardous Materials on the Premises, which monitoring
and evaluation shall be performed by environmental specialists approved in
writing in advance by Landlord. Such monitoring and/or evaluation activity may
include, but is not limited to, soil testing, air testing, production waste
stream analysis, and groundwater testing.
7.5 ENVIRONMENTAL REPORTS. Tenant shall promptly notify Landlord of, and shall
promptly provide Landlord with true, correct, complete and legible copies of,
any environmental reports or notices relating to the Premises which may be filed
or prepared by or on behalf of, or delivered to or served upon, Tenant,
including but not limited to reports filed pursuant to any self-reporting
requirements, reports filed pursuant to any Applicable Law or this Lease, all
permit applications, permits, monitoring reports, workplace exposure and
community exposure warnings or notices and all correspondence and other
documents associated with actual or threatened investigation or enforcement
action by any governmental entity or third party. In addition, Tenant shall
promptly notify Landlord of, and shall promptly provide Landlord with true,
correct, complete and legible copies of, environmental items relating to the
Premises which may be filed or prepared by or on behalf of, or delivered to or
served upon, Tenant. In the event of a release of any Hazardous Material on the
Premises or to the environment from the Premises, Tenant shall promptly notify
Landlord and provide Landlord with copies of all reports and correspondence with
or from all governmental agencies, authorities or any other persons relating to
such release.
7.6 DEFINITION OF HAZARDOUS MATERIALS. The term "Hazardous Materials", as used
in this Lease, shall include, without limitation, flammables, explosives,
radioactive materials, asbestos, polychlorinated bipheyls (PCB's), chemicals
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, petroleum and petroleum
products and substances declared to be hazardous or toxic under any law or
regulation now or hereafter enacted or promulgated by any government authority.
7.7 PARKING. Tenant shall be entitled to use all of the parking spaces available
for the Premises, subject to reasonable restrictions imposed by Landlord from
time to time.
7.8 RULES AND REGULATIONS. Landlord may promulgate and enforce reasonable
rules and regulations regarding Tenant's use of the Premises, provided that no
such rules or regulations may supersede or contradict the express terms of this
Lease.
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ARTICLE 8
MAINTENANCE, REPAIRS AND ALTERATIONS
8.1 LANDLORD'S RIGHT OF ENTRY. Landlord, its agents, contractors, servants and
employees may enter the Premises following twenty-four (24) hours' written
notice to Tenant and Landlord's good faith efforts to coordinate such entry with
Tenant's on-site management so as to minimize interference with Tenant's
business operations (except in a case of emergency in which event Landlord may
enter at any time without notice to Tenant): (a) to examine the Premises; (b) to
perform any obligation or exercise any right or remedy of Landlord under this
Lease; (c) to make repairs, alterations, improvements or additions to the
Premises as Landlord reasonably deems necessary or desirable; (d) to perform
work necessary to comply with Applicable Laws; and (e) to perform work that
Landlord deems necessary to prevent waste or deterioration in connection with
the Premises should Tenant fail to commence such repairs or, after commencing
same, fail to diligently pursue such repairs to completion within three (3) days
after written demand by Landlord. If Landlord makes any repairs that Tenant is
obligated to make pursuant to the terms of this Lease, Tenant shall pay to
Landlord the cost of such repairs with interest at the maximum lawful rate from
the date of such expenditure by Landlord, as Additional Rental, within ten (10)
days after receipt of written demand from Landlord therefor.
8.2 TENANTS MAINTENANCE OBLIGATIONS. Tenant, at its sole cost and expense, shall
keep the Premises in the same condition and repair existing as of the
Commencement Date, and shall make replacements necessary to keep the Premises in
such condition, normal wear and tear, casualty and condemnation excepted. In no
event shall Tenant be obligated to repair or remedy any condition or any defect
of the Premises existing as of the Commencement Date. All replacements shall be
of a quality equal to or exceeding that of the original. All costs and expenses
incurred, by either Tenant directly or by Landlord that are passed through to
Tenant pursuant to the terms of this Lease, for items whose useful life will
exceed the then-remaining term of the Lease shall be defined as "Capital
Expenses". Tenant and Landlord shall share such Capital Expenses such that
Tenant shall only pay for the unamortized portion of such Capital Expenses such
that Tenant's portion of such Capital Expenses shall be calculated by
multiplying the Capital Expense by a fraction the numerator of which is the
remaining term of the Lease (without extension) as of the date of the Capital
Expense and the denominator of which is the useful life of the item as of the
date of the Capital Expense. Landlord shall pay for the balance of such Capital
Expense. In addition, Tenant shall contract with a reputable, licensed service
company for the regular (but not less frequently than quarterly) maintenance,
repair and/or replacement (when necessary) of the heating, ventilating and air
conditioning equipment serving the Premises and shall provide Landlord with a
copy of any service contract within ten (10) days following its execution. If
Tenant fails to perform any of its obligations under this Section, then Landlord
may, but shall not be obligated to, perform such obligations and to collect a
reserve or xxxx Tenant for the cost of same, as Additional Rental. The sum so
billed to Tenant shall become due to Landlord within ten (10) days after
Landlord's written demand therefor.
8.3 ALTERATIONS. Without the prior written approval of Landlord, Tenant shall
not make or cause to be made to the Premises any additions, renovations,
alterations, improvements, reconstructions or changes (collectively,
"Alterations") (i) costing in excess of Twenty Thousand Dollars ($20,000) for
any such Alteration, (ii) affecting the structural components, exterior,
mechanical systems, fire sprinkler systems, exterior walls, floors, ceilings or
roof of the Premises, or (iii) requiring or resulting in any penetration of the
roof, walls or floor of the Premises. Tenant shall submit to Landlord reasonably
detailed plans and specifications for all proposed Alterations when
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requesting Landlord's approval of the proposed Alteration. Landlord shall not
unreasonably withhold, condition or delay its approval of such plans and
specifications. All Alterations installed in compliance with this Section shall
remain upon the Premises and shall become Landlord's property upon their
installation unless otherwise agreed in writing by the parties. All Alterations
shall be done in a good and workmanlike manner, in conformity with all
Applicable Laws. Landlord may require Tenant to provide demolition and/or lien
and completion bonds in a form and amount reasonably satisfactory to Landlord.
Tenant shall give Landlord at least twenty (20) days' written notice prior to
the commencement of any Alterations to the Premises. Landlord shall have the
right to post notices of non-responsibility and any other notices required or
permitted by Applicable Law to avoid liability for any work performed by or on
behalf of Tenant. Tenant shall keep the Premises free and clear of all
mechanics' liens arising out of any work performed by or on behalf of Tenant. If
Tenant makes or causes to be made any Alteration in violation of this Section,
then Landlord shall have the right to require Tenant to remove such Alteration
and restore the Premises to the condition existing prior to the making of such
Alteration.
ARTICLE 9
EMINENT DOMAIN
9.1 TAKING. The term "Taking", as used in this Article 9, shall mean an
appropriation or taking under the power of eminent domain by any public or
quasi-public authority or a voluntary sale or conveyance in lieu of condemnation
but under threat of condemnation.
9.2 TOTAL TAKING. In the event of a Taking of the entire Premises, this Lease
shall terminate and expire as of the date possession is delivered to the
condemning authority, and Landlord and Tenant shall each be released from any
liability accruing pursuant to this Lease after the date of such termination,
but Rent for the last month of Tenant's occupancy shall be prorated, and
Landlord shall refund to Tenant any Rent paid in advance.
9.3 PARTIAL TAKING. If there is a Taking of (a) more than seventy percent (70%)
of the area of the Premises or, (b) a portion of the Premises and, regardless of
the amount taken, the remainder of the Premises is not a single undivided parcel
of property (each a "Partial Taking"), or (c) any portion of a building on the
Premises is taken, then either Landlord or Tenant may terminate this Lease as of
the date Tenant is required to vacate a portion of the Premises, upon giving
notice in writing of such election to the other party within thirty (30) days
after receipt by Tenant from Landlord of written notice that a portion of the
Premises shall be or has been so appropriated or Taken.
9.4 AWARD. The entire award or compensation in any such condemnation proceeding,
whether for a total or partial Taking, or for diminution in the value of the
leasehold or for the fee, shall belong to and be the property of Landlord.
Without derogating the rights of Landlord under the preceding sentence, Tenant
shall be entitled to recover from the condemning authority such compensation as
may be separately awarded by the condemning authority to Tenant or recoverable
from the condemning authority by Tenant in its own right for the taking of trade
fixtures, inventory, equipment, and other personal property owned by Tenant,
Tenant's goodwill and for the expense of removing and relocating its personal
property and business.
9.5 CONTINUATION OF LEASE. In the event of a Partial Taking, if neither Landlord
nor Tenant elect to terminate this Lease as provided above, thereafter, Monthly
Rental shall be reduced
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on an equitable basis, taking into account the relative value of the portion
Taken as compared to the portion remaining, and Landlord shall be entitled to
receive the total award or compensation in such proceedings.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not assign, sublet or license all
or any part of this Lease or the Premises (collectively, "Assignment" or
"Assign") without Landlord's prior written consent, which consent shall not be
unreasonably withheld. Any purported Assignment without Landlord's prior written
consent shall be void and of no force or effect and shall not confer any estate
or benefit on anyone. Further, any such purported Assignment shall constitute an
event of default by Tenant. A consent by Landlord to any single Assignment shall
not be deemed to be a consent to any other Assignment.
10.2 PROCEDURES. Should Tenant desire to enter into an Assignment requiring
Landlord's consent, Tenant shall request, in writing, Landlord's consent to the
proposed Assignment at least five (5) days before the intended effective date of
the proposed Assignment, which request shall include the following: (a) business
terms of the proposed Assignment including its effective date, terms and
conditions, (b) a description of the identity, net worth and previous business
experience of the proposed assignee or sublessee ("Assignee" for purposes of
this Article 10), and (c) any further information relevant to the proposed
Assignment that Landlord may reasonably request. Within five (5) days after
receipt of Tenant's request for consent to the proposed Assignment together with
all of the above-required information, Landlord shall respond and shall have the
right either to: (i) consent to the proposed Assignment, or (ii) refuse to
consent to the proposed Assignment.
10.3 NO RELEASE. No Assignment, whether with or without Landlord's consent,
shall relieve Tenant from its covenants and obligations under this Lease.
10.4 FORM. Any Assignment shall be evidenced by an instrument in form and
content reasonably satisfactory to Landlord and executed by Tenant and the
Assignee.
ARTICLE 11
INSURANCE AND INDEMNITY
11.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense, shall procure,
pay for and keep in full force and effect throughout the Term the following
types of insurance, in at least the amounts and in the forms specified below:
(a) Comprehensive or commercial general liability insurance with
combined single limit for bodily injury, personal injury, death and property
damage liability coverage in the amount of the greater of (i) Two Million
Dollars ($2,000,000) per occurrence, or (ii) the current limit carried by
Tenant. Such policy shall insure against any and all liability of the insureds
with respect to the Premises or arising out of the maintenance, use or occupancy
of the Premises or related to the exercise of any rights of Tenant pursuant to
this Lease, and shall be subject to increases in amount as Landlord may
reasonably require from time to time. All such liability insurance shall
specifically insure the performance by Tenant of the indemnity agreement as to
liability for injury to or death of
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persons and injury or damage to property set forth in this Lease. Further, all
such liability insurance shall include, but not be limited to, personal injury,
blanket contractual, cross-liability and severability of interest clauses,
products/completed operations, broad form property damage, independent
contractors, owned, nonowned and hired vehicles and, if alcoholic beverages are
served, sold, consumed or obtained in the Premises, liquor law liability.
(b) Worker's compensation coverage as required by law, including
employer's liability coverage, with a limit of not less than Five Hundred
Thousand Dollars ($500,000) and waiver by Tenant's insurer of any right of
subrogation against Landlord by reason of any payment pursuant to such coverage.
(c) Business interruption or loss of income insurance in amounts
sufficient to insure Tenant's business operations for a period of not less than
one (1) year.
(d) Plate glass insurance covering all plate glass on the
Premises at full replacement value. Tenant shall have the option either to
insure this risk or to self-insure.
(e) Insurance covering all of Tenant's leasehold improvements,
Alterations permitted under Article 8, trade fixtures, merchandise and personal
property from time to time in, on or about the Premises in an amount not less
than their full replacement value from time to time, including replacement cost
endorsement, providing protection against any peril included within the
classification Fire and Extended Coverage, sprinkler damage, vandalism,
malicious mischief and such other additional perils as covered in an "all risks"
standard insurance policy. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed unless this Lease shall cease
and terminate under the provisions of Article 12.
(f) Any insurance policies designated necessary by Landlord with
regard to Tenant's or Tenant's contractors' construction of any Alterations
including, but not limited to, contingent liability and "all risks" builders'
risk insurance, in amounts acceptable to Landlord.
(g) A policy of insurance insuring against all risks of direct
physical loss or damage (excepting loss or damage caused by flood or earthquake)
to any or all buildings and other improvements located on the property where the
Premises are located in an amount equal to or greater than the full replacement
cost of all such buildings and improvements, the exact amount and type of such
insurance to be approved, in writing, by Landlord in its reasonable discretion.
Any such insurance may be brought within the coverage of any so-called blanket
policy or policies of insurance carried and maintained by Tenant.
11.2 POLICY FORM. All policies of insurance required of Tenant herein shall be
issued by insurance companies with general policy holder's rating of not less
than A- and a financial rating of not less than Class X, as rated in the most
current available "Best's Key Rating Guide", and which are qualified to do
business in the State of California. All such policies, except for the Worker's
Compensation coverage, shall name, and shall be for the mutual and joint benefit
and protection of, Landlord, Tenant and Landlord's agents and mortgagee(s) or
beneficiary(ies) as additional insureds. The policies described in subparagraphs
(c), (e) and (g) of Section 11.1 above shall also name Landlord and Landlord's
mortgagee(s) or beneficiary(ies), to the extent identified to Tenant in writing,
as loss payees. Executed copies of the policies of insurance or certificates
thereof shall be delivered to Landlord concurrently with Tenant's execution of
this Lease. Thereafter, executed copies of renewal policies or certificates
thereof shall be delivered to Landlord within thirty (30) days
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prior to the expiration of the term of each policy. All policies of insurance
delivered to Landlord must contain a provision that the company writing the
policy will give to Landlord thirty (30) days' prior written notice of any
cancellation or lapse or the effective date of any reduction in the amounts of
insurance. All policies required of Tenant herein shall be endorsed to read that
such policies are primary policies and any insurance carried by Landlord or
Landlord's property manager shall be noncontributing with such policies. No
policy required to be maintained by Tenant shall have a deductible greater than
Ten Thousand Dollars ($10,000) unless approved in writing by Landlord.
11.3 BLANKET POLICIES. Notwithstanding anything to the contrary contained in
this Article 11, Tenant's obligation to carry insurance may be satisfied by
coverage under a so-called blanket policy or policies of insurance; provided,
however, that the coverage afforded Landlord will not be reduced or diminished
and the requirements set forth in this Lease are otherwise satisfied by such
blanket policy or policies.
11.4 TENANT'S INDEMNITY. "Landlord" for the purposes of this Section 11.4 shall
mean and include Landlord and Landlord's successors, assigns, members, managers,
officers, employees, representatives, contractors and agents. To the fullest
extent permitted by law, Tenant covenants with Landlord that Landlord shall not
be liable for any damage or liability of any kind or for any injury to or death
of persons or damage to property of Tenant or any other person occurring at any
time, whether before or after the Commencement Date, from any cause whatsoever
related to the use, occupancy or enjoyment of the Premises by Tenant or any
invitee, licensee or other person on the Premises, or any other person holding
under Tenant. Tenant shall indemnify, defend (with counsel reasonably acceptable
to Landlord) and hold harmless Landlord from and against any real or alleged
damage or injury and from all claims, actions, causes of action, demands,
rights, damages, costs (including attorney's fees and court costs), liabilities,
debts, obligations, judgments, remedies, benefits, losses and expenses of any
kind whatsoever (collectively, "Claims") which may now or in the future be
incurred or suffered by Landlord by reason of, arising out of or connected with
(i) Tenant's use, occupancy or enjoyment of the Premises and its facilities,
(ii) any repairs, Alterations or improvements that Tenant may make or cause to
be made upon the Premises, (iii) any breach of this Lease by Tenant, (iv) any
condition relating to the environment or any other matter within the
jurisdiction of, or regulated by, any Applicable Law that arose or arises while
Tenant was or is in possession of the Premises, (v) the release of Hazardous
Materials in, on, to, from, under or above the Premises that occurred or occurs
while Tenant was or is in possession of the Premises; or (vi) any violation or
alleged violation of any Applicable Law based, in whole or in part, on the acts
or omissions of Tenant, whenever occurring, or the operation or use of the
Premises by Tenant; provided, however (and though Tenant shall in all cases
accept any tender of defense of any action or proceeding in which Landlord is
named or made a party and shall, notwithstanding any allegations of wrong-doing
or misconduct on the part of Landlord, defend Landlord as provided herein),
Tenant shall not be liable for such damage or injury to the extent and in the
proportion that the same is ultimately determined to be attributable to the
negligence or intentional misconduct of Landlord. This obligation to indemnify
shall include all of Landlord's reasonable attorneys' fees, litigation costs,
investigation costs and court costs and all other costs, expenses and
liabilities incurred by Landlord or its counsel from the first notice that any
claim or demand is to be made or may be made, and shall also include
indemnification for consequential damages, including but not limited to loss of
profit, loss of investment, loss of product and business interruption. Tenant's
obligations under this Section 11.4 shall survive the termination of this Lease.
The agreement to indemnify, defend and hold harmless set forth in this Section
11.4 is in addition to, and in no way shall be construed to limit or replace,
any other rights or remedies which Landlord may have against Tenant at law or in
equity.
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11.5 LANDLORD'S INDEMNITY. Landlord shall defend (with counsel reasonably
acceptable to Tenant), indemnify and hold harmless Tenant and its affiliates,
predecessors, successors and assigns, and their respective officers, directors,
shareholders, subsidiaries, employees, agents and representatives, from and
against any and all Claims arising, whether before or after the expiration or
earlier termination of this Lease, out of or in connection with any negligence
or intentional misconduct of Landlord or Landlord's employees, agents,
representatives, or contractors.
11.6 WAIVER OF SUBROGATION. Except to the extent that insurance required to be
maintained by Tenant pursuant to this Article 11 covers loss to Landlord,
Landlord and Tenant each waive any rights each may have against the other on
account of any loss or damage occasioned to Landlord or Tenant, as the case may
be, their respective property, or the Premises or its contents, arising from any
liability, loss, damage or injury caused by fire or other casualty for which
property insurance is carried or required to be carried pursuant to this Lease.
The insurance policies obtained by Landlord and Tenant pursuant to this Lease
shall contain endorsements waiving any right of subrogation which the insurer
may otherwise have against the noninsuring party. The foregoing release and the
foregoing requirement for waivers of subrogation shall be operative only so long
as the same shall neither preclude the obtaining of such insurance nor diminish,
reduce or impair the liability of any insurer. If Landlord has contracted with a
third party for the management of the Premises, the waiver of subrogation by
Tenant herein shall also run in favor of such third party. This Section 11.6
shall in no way affect or impair Tenant's release, indemnity and other
obligations under this Lease.
11.7 FAILURE BY TENANT TO MAINTAIN INSURANCE. If Tenant refuses or neglects to
secure and maintain insurance policies complying with the provisions of this
Article 11, Landlord may secure the appropriate insurance policies and Tenant
shall pay, within ten (10) days after demand by Landlord therefor, the cost of
same to Landlord as Additional Rental.
11.8 SUFFICIENCY OF COVERAGE. Neither Landlord nor any of Landlord's agents make
any representation that the types of insurance and limits specified to be
carried by Tenant under this Lease are adequate to protect Tenant. If Tenant
believes that any such insurance coverage is insufficient, Tenant shall provide,
at its sole cost and expense, such additional insurance as Tenant deems
adequate. Nothing contained herein shall limit Tenant's liability under this
Lease.
ARTICLE 12
DAMAGE
12.1 CASUALTY. Within ninety (90) days after the date of damage to the Premises
by fire or other casualty, subject to reasonable delays, not caused by Tenant,
in obtaining applicable permits, Tenant shall commence the repair,
reconstruction and restoration of the Premises and shall diligently prosecute
the same to completion. In addition, Tenant, at its sole cost and expense, shall
repair and restore all of Tenant's leasehold improvements, and shall replace its
stock in trade, trade fixtures, furniture, furnishings and equipment.
12.2 ABATEMENT. Rent payable hereunder shall not be abated during any period of
repair, reconstruction and restoration. Tenant shall not be entitled to any
compensation or damages from Landlord for loss of use of the whole or any part
of the Premises or the building of which the Premises are a part, Tenant's
personal property or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.
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12.3 WAIVER OF TERMINATION. Tenant waives any statutory rights of termination
which may arise by reason of any partial or total destruction of the Premises.
ARTICLE 13
DEFAULTS BY TENANT
13.1 EVENTS OF DEFAULT. Should Tenant at any time:
(a) be in default with respect to any payment of Rent or any
other charge payable by Tenant pursuant to this Lease for a period of five (5)
days after written notice from Landlord to Tenant (provided, however, any notice
shall be in lieu of, and not in addition to, any notice required under Section
1161 of the Code of Civil Procedure of California or any similar, superseding
statute), or
(b) be in default in the prompt and full performance of any other
of its promises, covenants or agreements herein contained for more than thirty
(30) days after written notice thereof from Landlord to Tenant specifying the
particulars of the default (provided, however, any notice shall be in lieu of,
and not in addition to, any notice required under Section 1161 of the Code of
Civil Procedure of California or any similar, superseding statute), or
(c) vacate or abandon the Premises and stop paying Rent, or
(d) make any general assignment for the benefit of creditors, or
(e) have filed against Tenant a petition to have Tenant adjudged
a bankrupt or a petition for reorganization or arrangement under any law,
statute, ordinance, rule or regulation relating to bankruptcy (unless, in the
case of a petition filed against Tenant, same is dismissed within sixty (60)
days), or
(f) institute any proceedings under the Bankruptcy Code or any
similar or successor statute, code or act, or should an appointed trustee or
receiver take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease where possession is not restored
to Tenant within sixty (60) days, or
(g) have substantially all of Tenant's assets located at the
Premises or Tenant's interest in this Lease attached or judicially seized where
the seizure is not discharged within sixty (60) days, then Landlord may treat
the occurrence of any one (1) or more of the foregoing events as a material
breach of this Lease and, in addition to any or all other rights and remedies
available to Landlord at law or in equity, Landlord shall have the right, at
Landlord's option, without further notice or demand of any kind to Tenant or any
other person, (i) to declare the Term ended and to re-enter and take possession
of the Premises and remove all persons therefrom, or (ii) without declaring this
Lease terminated and without terminating Tenant's right to possession, to
re-enter the Premises and occupy the whole or any part for and on account of
Tenant and to collect any unpaid rentals and other charges which have become
payable or which may thereafter become payable, or (iii) even though it may have
re-entered the Premises as provided in subparagraph (ii) of this Section 13.1,
to thereafter elect to terminate this Lease and all of the rights of Tenant in
or to the Premises. Landlord has the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant's breach
and abandonment and recover Rent as it
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becomes due, Tenant has the right to sublet or assign, subject only to
reasonable limitations). Landlord shall not be deemed to have terminated this
Lease, or the liability of Tenant to pay any Rent or other charges later
accruing, by any re-entry of the Premises pursuant to subparagraph (ii) of this
Section 13.1, or by any action in unlawful detainer or otherwise to obtain
possession of the Premises, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease.
13.2 TERMINATION OF LEASE. Should Landlord elect to terminate this Lease
pursuant to the provisions of subparagraphs (i) or (iii) of Section 13.1,
Landlord may recover from Tenant, as damages, the following: (a) The worth at
the time of award of any unpaid rental which had been earned at the time of the
termination, plus (b) the worth at the time of award of the amount by which the
unpaid rental which would have been earned after termination until the time of
award exceeds the amount of rental loss Tenant proves could have been reasonably
avoided, plus (c) the worth at the time of award of the amount by which the
unpaid rental for the balance of the Term after the time of award exceeds the
amount of rental loss that Tenant proves could be reasonably avoided, plus (d)
any other amounts necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be likely to result
therefrom including, but not limited to, any costs or expenses incurred by
Landlord in (i) retaking possession of the Premises, including, but not limited
to, reasonable attorneys' fees and court costs therefor, (ii) maintaining or
preserving the Premises after any default, (iii) preparing the Premises for
reletting to a new tenant, including, but not limited to, repairs or alterations
to the Premises, (iv) leasing commissions, or (v) any other costs necessary or
appropriate to relet the Premises, plus (e) at Landlord's election, any other
amounts in addition to or in lieu of the foregoing as may be permitted from time
to time by the laws, statutes, ordinances, rules or regulations of the State of
California.
As used in subparagraphs (a) and (b) of Section 13.2, the "worth at the time of
award" is computed by allowing interest at the maximum lawful rate. As used in
subparagraph (c) of Section 13.2, the "worth at the time of award" is computed
by discounting such amount at the discount rate of the Federal Reserve Bank
situated nearest to the location of the Premises at the time of award plus one
percent (1%).
13.3 DEFINITION OF RENTAL. For purposes of this Article 13 only, the term
"rental" shall be deemed to be Monthly Rental, Additional Rental and all other
sums required to be paid by Tenant pursuant to the terms of this Lease. All
sums, other than Monthly Rental, shall, for the purpose of calculating any
amount due under the provisions of subparagraph (c) of Section 13.2, be computed
on the basis of the average monthly amount accruing during the immediately
preceding sixty (60) month period, except that if it becomes necessary to
compute these sums before the sixty (60) month period has occurred, then these
sums shall be computed on the basis of the average monthly amount accruing
during the shorter period.
13.4 NONMONETARY DEFAULTS. Notwithstanding any other provision of this Article
13, if the default complained of, other than a default for the payment of
monies, cannot be cured within the period requiring curing, as specified in the
written notice relating to the default, then, the default shall be deemed to be
cured if Tenant, within the notice period, shall have commenced to cure the
default and shall thereafter diligently and continuously prosecute same to
completion.
13.5 ASSIGNMENT OF RENTS AND PROFITS. In the event of default by Tenant
hereunder, Tenant hereby grants to and confers upon Landlord the right, power
and authority, at Landlord's sole option and without affecting any of Landlord's
other rights or remedies hereunder, to collect all rents
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and profits received by Tenant as a result of the possession by Tenant of the
Premises. Such amounts shall include, but shall not be limited to, amounts due
under sublease, license or concession arrangements. Upon any such default,
Landlord shall have the right to collect such rents and profits, including those
past due and unpaid. The collection of such rents and profits shall not cure,
waive or satisfy any default or notice of default hereunder.
ARTICLE 14
DEFAULTS BY LANDLORD
14.1 LANDLORD'S LIABILITY. If Landlord fails to perform any of the terms,
covenants, or conditions contained in this Lease on its part to be performed
within thirty (30) days after written notice of default (or if more than thirty
(30) days shall be required because of the nature of the default, if Landlord
shall fail to commence to cure the default after written notice and diligently
prosecute the same to completion), then to the extent permitted below, Landlord
shall be liable to Tenant for all damages sustained by Tenant as a direct result
of Landlord's breach and Tenant shall not be entitled to terminate this Lease as
a result thereof. It is expressly understood and agreed that any judgment
against Landlord resulting from any default or other claim under this Lease
shall be satisfied only out of Landlord's interest in the Premises, including,
but not limited to, the net rents, issues, profits and other income actually
received from the operation of the Premises, and Tenant shall have no claim
against Landlord (as Landlord is defined in Section 11.4) or any of Landlord's
personal assets for satisfaction of any judgment with respect to this Lease or
the Premises.
14.2 CURE BY ASSIGNEE. If any part of the Premises is at any time subject to a
mortgage or a deed of trust, and this Lease or the rentals due from Tenant
hereunder are assigned by Landlord to a mortgagee, trustee or beneficiary
("Mortgagee" for purposes of this Article 14 only) and Tenant is given written
notice of the assignment including the post office address of Mortgagee, then
Tenant shall also give written notice of any default by Landlord to Mortgagee,
specifying the default in reasonable detail and affording Mortgagee a reasonable
opportunity to cure such default and on behalf of Landlord.
ARTICLE 15
SUBORDINATION, ATTORNMENT AND TENANT'S CERTIFICATE
15.1 SUBORDINATION. If Tenant receives a fully executed non-disturbance
agreement in a form reasonably acceptable to Tenant allowing Tenant to remain in
possession of the Premises on the terms of this Lease after a foreclosure sale
or deed in lieu, provided Tenant is not in default beyond applicable notice and
cure periods, then, upon written request of Landlord, Landlord's mortgagee, the
beneficiary of a deed of trust of Landlord, or a lessor of Landlord, Tenant will
subordinate its rights pursuant to this Lease in writing to the lien of any
mortgage, deed of trust or the interest of any lease in which Landlord is the
lessee (or, at Landlord's option, cause the lien of said mortgage, deed of trust
or the interest of any lease in which Landlord is the lessee to be subordinated
to this Lease), and to all advances made or hereafter to be made upon the
security thereof.
15.2 ATTORNMENT. In the event any proceedings are brought for foreclosure, or in
the event of the exercise of the power of sale under any mortgage or deed of
trust made by Landlord encumbering the Premises, or should a lease in which
Landlord is the lessee be terminated, Tenant shall attorn to the purchaser or
lessor under such lease upon any foreclosure, sale or lease
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termination, and shall recognize the purchaser or lessor as Landlord under this
Lease, provided that the purchaser or lessor shall acquire and accept the
Premises subject to this Lease.
15.3 TENANT'S CERTIFICATE. Tenant agrees, upon not less than ten (10) days prior
notice by Landlord, to execute, acknowledge and deliver to Landlord, a statement
in writing in such form as may be reasonably required by Landlord or Landlord's
mortgagee or beneficiary ("Tenant's Certificate"). It is intended that any
Tenant's Certificate delivered pursuant hereto may be relied upon by Landlord,
any prospective tenant of the Premises, any current or prospective mortgagee or
beneficiary, or by any other party who may reasonably rely on such statement. At
Landlord's option, the failure to deliver such Tenant's Certificate within such
time shall be a default under this Lease by Tenant, and it shall be conclusively
presumed, and shall constitute a representation and warranty by Tenant, that (i)
this Lease is in full force and effect without modification, and (ii) Landlord
is not in breach or default of any of its obligations under the Lease.
15.4 NON-DISTURBANCE AGREEMENT. Upon execution of this Lease, Landlord shall
deliver to Tenant a non-disturbance agreement, executed by Landlord's existing
lender(s), if any, in a form reasonably acceptable to Tenant that will allow
Tenant to remain in possession of the Premises on the terms of this Lease after
a foreclosure sale or deed in lieu, provided Tenant is not then in default under
this Lease beyond applicable notice and cure periods.
15.5 MORTGAGE CHANGES. Tenant shall not unreasonably withhold its consent to
changes or amendments to this Lease requested by the holder of a mortgage or
deed of trust or such similar financing instrument encumbering Landlord's fee
interest in the Premises so long as such changes do not materially alter the
economic terms of this Lease or materially diminish the rights, or materially
increase the obligations, of Tenant.
ARTICLE 16
QUIET ENJOYMENT
Upon Tenant's payment of Monthly Rental and Additional Rental, and its
observation and performance of all of the terms, covenants and conditions of
this Lease to be observed and performed by Tenant, Tenant shall peaceably and
quietly hold and enjoy the Premises from and after delivery thereof to Tenant;
subject, however, to (a) the rights of the parties as set forth in this Lease,
(b) any mortgage or deed of trust to which this Lease is subordinate, (c) any
ground or underlying leases, agreements and encumbrances to which this Lease is
subordinate, (d) all matters of record, and (e) disturbances, odors and similar
inconveniences which are commonly associated with properties of the type and
size of the Premises and/or with tenants located in such properties.
ARTICLE 17
NOTICES
Every notice, demand or request (collectively "Notice") required hereunder or by
law to be given by either party to the other shall be in writing. Every
provision of this Lease which provides that either party shall notify the other
of any particular matter shall be governed by this Section. Notices shall be
given by personal service, by United States certified or registered mail,
postage prepaid, return receipt requested, by telegram, mailgram or same-day or
overnight private courier, or by facsimile addressed to the party to be served
at the following address:
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To Landlord: Xxx Xxxxxx Limited Partnership
00 Xxxxxxxxx Xxx.
Xxxxxxx Xxxxx, Xx. 00000
Attention: Property Manager
To Tenant: Flashcom, Inc.,
a Delaware corporation
0000 Xxxxx Xxx.
Xxxxxxxxxx Xxxxx, Xx. 00000
Attention: Office Manager
or such other address as the party to be served may from time to time designate
in a Notice to the other party. Notice personally served shall be effective when
delivered to the party upon whom such Notice is served. If served by registered
or certified mail, Notice shall be conclusively deemed served on the date shown
on the return receipt, but if delivery is refused or the Notice is unclaimed,
Notice shall conclusively be deemed given forty eight (48) hours after mailing.
If served by telegram, mailgram or private courier, Notice to the addressee
shall be conclusively deemed given as confirmed by the telegraphic agency or
private courier service making delivery. If served by facsimile, Notice shall be
conclusively be deemed served on the date sent, provided that electronic
confirmation of successful transmission is obtained.
ARTICLE 18
MISCELLANEOUS
18.1 WAIVER. Any waiver by either party of a breach by the other party of a
term, covenant or condition of this Lease shall not be construed as a waiver of
a subsequent breach of the same term, covenant or condition. The consent or
approval by either party to anything requiring such party's consent or approval
shall not be deemed a waiver of such party's right to withhold consent or
approval of any subsequent similar act. No breach of a term, covenant or
condition of this Lease shall be deemed to have been waived by the other party
unless the waiver is in writing and is signed by such party.
18.2 RIGHTS CUMULATIVE. Except as provided herein to the contrary, and subject
to the specific limitations contained in Article 14, the respective rights and
remedies of the parties specified in this Lease shall be cumulative and in
addition to any rights and remedies not specified in this Lease.
18.3 ENTIRE AGREEMENT. It is understood that there are no oral or written
agreements or representations between the parties hereto relating to this Lease
and this Lease supersedes and cancels any and all previous negotiations,
arrangements, representations, agreements and understandings, if any, between
Landlord and Tenant relating to the leasing of the Premises from Landlord to
Tenant.
18.4 AMENDMENTS IN WRITING. No provision of this Lease may be amended except by
an agreement in writing signed by Landlord and Tenant.
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18.5 NO PRINCIPAL/AGENT RELATIONSHIP. Nothing contained in this Lease shall be
construed as creating the relationship of principal and agent or of partnership
or joint venture between Landlord and Tenant.
18.6 GOVERNING LAW. This Lease shall be governed by and construed in accordance
with the laws, statutes, rules and regulations of the state in which the
Premises are located, without giving effect to the choice of law provisions
thereof.
18.7 SEVERABILITY. If any provision of this Lease or the application of such
provision to any person, entity or circumstance is found invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
enforced to the fullest extent permitted by law, such determination shall not
affect the other provisions of this Lease, and all other provisions of this
Lease shall be deemed valid and enforceable.
18.8 SUCCESSORS. All rights and obligations of Landlord and Tenant under this
Lease shall extend to and bind the respective heirs, executors, administrators
and the permitted concessionaires, successors, subtenants and assignees of the
parties. If there is more than one (1) Tenant hereunder, each shall be bound
jointly and severally by the terms, covenants and conditions contained in this
Lease.
18.9 TIME OF THE ESSENCE. Time is of the essence of all provisions of this Lease
of which time is an element.
18.10 WARRANTY OF AUTHORITY. If either Tenant or Landlord is a corporation,
limited liability company or partnership, each individual executing this Lease
on behalf of the corporation, limited liability company or partnership
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of the corporation, limited liability company or
partnership and that this Lease is binding upon the corporation, limited
liability company or partnership.
18.11 WAIVER OF RIGHTS OF REDEMPTION. Tenant waives any and all rights of
redemption granted under any present and future laws, statutes, ordinances,
rules and regulations in the event Landlord obtains the right to possession of
the Premises by reason of the violation by Tenant of any of the terms, covenants
and conditions of this Lease or otherwise.
18.12 NO BROKERAGE COMMISSIONS. Tenant and Landlord each represent and warrant
to the other party that no broker or finder can properly claim a right to a
commission or finder's fee based upon contacts between the claimant and the
warranting party with respect to the other party or the Premises. Tenant and
Landlord shall indemnify, defend and hold each other harmless from and against
any loss, cost or expense, including, but not limited to, reasonable attorneys'
fees and court costs, resulting from any claim for a fee or commission by any
broker or finder in connection with the Premises and this Lease resulting from
the indemnifying party's actions.
18.13 NO RECORDING. Tenant shall not record this Lease or any short form
memorandum of this Lease.
18.14 TRANSFER OF LANDLORD'S INTEREST. Should Landlord sell, exchange or assign
this Lease (other than a conditional assignment as security for a loan), then
Landlord, as transferor, shall be relieved of any and all obligations on the
part of Landlord accruing under this Lease from
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and after the date of such transfer provided that Landlord's successor in
interest shall assume such obligations from and after such date.
18.15 INTEREST ON PAST DUE OBLIGATIONS. Except where another rate of interest or
accrual period is specifically provided for in this Lease, any amount due from
either party to the other under this Lease which is not paid when due, shall
bear interest at the rate per annum ("Interest Rate") equal to the prime
interest rate charged by Xxxxx Fargo Bank plus two (2) percentage points (but in
no event to exceed the maximum lawful rate) from the date ten (10) days after
such amount was originally due to and including the date of payment.
18.16 RIGHT TO SHOW PREMISES. During the last one hundred twenty (120) days of
the Term or earlier termination of this Lease, Landlord shall have the right to
go upon the Premises to show same to prospective tenants or purchasers and to
post appropriate signs, during normal business hours and upon no less than
twenty-four (24) hours' prior written notice to Tenant.
18.17 LIENS. Tenant shall pay all costs for work performed by or on account of
it and shall keep the Premises free and clear of mechanics' liens or any other
liens. Tenant shall give Landlord immediate notice of any lien recorded against
the Premises as a result of any work of improvement performed by or on behalf of
Tenant. Tenant shall, within thirty (30) days after recordation of any lien
cause such lien to be discharged or removed of record by either paying the
amount thereof or recording a statutory lien release bond in an amount equal to
one hundred fifty percent (150%) of the amount of said lien. If Tenant fails to
do so, Landlord shall have the right, but not the obligation, in addition to all
other rights and remedies available to Landlord under this Lease, at law and in
equity, to either pay and discharge such lien, without regard to the validity
thereof, or procure and cause to be recorded a statutory lien release bond, and
to collect from Tenant as Additional Rental (i) all costs incurred by Landlord
in paying and discharging such lien, or in procuring such bond, and (ii) all
expenses incurred by Landlord in connection with such lien including, but not
limited to, reasonable attorneys' fees and court costs, recording fees and
administrative costs and expenses.
18.18 TRADE FIXTURES, PERSONAL PROPERTY AND ALTERATIONS. Upon the expiration or
earlier termination of the Term, Tenant shall, at its sole cost and expense,
remove from the Premises all of Tenant's trade fixtures, furniture, equipment,
signs, improvements, additions and Alterations to the extent such items are not
permanently affixed to the Premises, except for any such items with respect to
which Landlord agreed otherwise at the time of installation by Tenant, and
immediately repair any damage occasioned to the Premises by reason of such
removal so as to leave the Premises in a neat and clean condition. Tenant may,
within thirty (30) days' prior notice to Landlord, encumber or finance its
movable fixtures and equipment installed in the Premises, and no such
encumbrance or financing shall be deemed an Assignment, provided such
encumbrance or financing creates a security interest in such movable fixtures
and equipment only, and confers no interest in the Premises. All trade fixtures,
signs and other personal property installed in or attached to the Premises by
Tenant must be new or like new when so installed or attached.
18.19 FORCE MAJEURE. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, judicial orders, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
(except financial) beyond the reasonable control of the party obligated to
perform, shall excuse the performance by that party for a period equal to the
prevention, delay or stoppage, except the obligations imposed with regard to
Rent to be paid by Tenant pursuant to this Lease; provided the
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party prevented, delayed or stopped shall have given the other party written
notice thereof within thirty (30) days after such event causing the prevention,
delay or stoppage.
18.20 TERMINATION AND HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term. Upon the expiration or earlier
termination of the Term, Tenant shall peaceably and quietly surrender the
Premises broom-clean and in the same condition as the Premises were in on the
Commencement Date, reasonable wear and tear and any damage to the Premises which
Tenant is not required to repair pursuant to this Lease excepted. Should Tenant
hold over in the Premises beyond the expiration or earlier termination of this
Lease, the holding over shall not constitute a renewal or extension of this
Lease or give Tenant any rights under this Lease. In such event, Landlord may,
in its sole discretion, either (i) upon written notice to Tenant, treat Tenant
as a month-to-month tenant at will, subject to all of the terms, covenants and
conditions in this Lease, except that Monthly Rental shall be an amount equal to
one and one-half (1-1/2) times the sum of Monthly Rental which was payable by
Tenant for the period immediately preceding the expiration or earlier
termination of this Lease, or (ii) proceed with an unlawful detainer action and
pursue all other rights and remedies available to Landlord. If Tenant fails to
surrender the Premises upon the expiration or earlier termination of this Lease,
Tenant shall indemnify, defend (with counsel reasonably acceptable to Landlord)
and hold harmless Landlord from and against, all Claims which may accrue
therefrom including, but not limited to, any claims made by any succeeding
tenant or purchaser of the Premises founded on or resulting from Tenant's
failure to surrender. Acceptance by Landlord of any Rent after the expiration or
earlier termination of this Lease shall not constitute a consent to a holdover
hereunder, constitute acceptance of Tenant as a tenant at will, or result in a
renewal of this Lease.
18.21 ATTORNEYS' FEES AND PROCESSING CHARGES. If it becomes necessary for either
Landlord or Tenant to employ an attorney to enforce its rights pursuant to this
Lease because of the default of the other party, the defaulting party will
reimburse the non-defaulting party for the non-defaulting party's reasonable
attorneys' fees, court costs and expert fees. Tenant shall also indemnify,
defend (with counsel reasonably acceptable to Landlord) and hold harmless
Landlord from and against all Claims Landlord may incur if Landlord becomes or
is made a party to any claim or action (a) instituted by Tenant against any
third party, or by any third party against Tenant, or by or against any person
holding any interest under or using the Property by license of or agreement with
Tenant; (b) for foreclosure of any lien for labor or material furnished to or
for Tenant or such other person; (c) otherwise arising out of or resulting from
any act or transaction of Tenant or any party claiming under Tenant or that
relate to the Property, or such other person; or (d) necessary to protect
Landlord's interest under this Lease in a bankruptcy proceeding or other
proceeding under Title 11 of the United States Code, as amended.
If at the request of Tenant or in connection with any such transaction initiated
by Tenant, Landlord shall prepare, review or execute any amendment,
modification, consent to Assignment, approval, fixture subordination, waiver or
other agreement or instrument relating to this Lease or the Premises, Tenant
agrees to pay to Landlord, as Additional Rental, (i) a reasonable processing
charge to be determined by Landlord, which charge shall not exceed One Thousand
Dollars ($1,000) and (ii) Landlord's reasonable attorneys' fees and expenses
incurred in connection with the evaluation and documentation thereof. Landlord
may, at its option, require the payment of all or a portion of such changes
and/or fees in advance.
18.22 WAIVER OF TRIAL BY JURY. Landlord and Tenant desire and intend that any
disputes arising between them with respect to or in connection with this Lease
be subject to expeditious
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resolution in a court trial without a jury. Therefore, Landlord and Tenant each
hereby waive the right to trial by jury of any cause of action, claim,
counterclaim or cross-complaint in any action, proceeding or other hearing
brought by either Landlord against Tenant or Tenant against Landlord on any
matter whatsoever arising out of, or in any way connected with, this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
any claim of injury or damage, or the enforcement of any remedy under any law,
statute or regulation, emergency or otherwise, now or hereafter in effect.
ARTICLE 19
OPTION TO RENEW
19.1 GRANT OF OPTION. Provided that this Lease shall be in full force and
effect, Tenant shall not have been in default beyond all applicable cure periods
under any of Tenant's obligations under this Lease more than three (3) times
during the Term, and Tenant shall not be in default under any of Tenant's
obligations under this Lease either at the time of Tenant's election to exercise
the Option (as defined below) or upon the commencement of the Option Term (as
defined below), Tenant shall have two (2) options to extend the Term (each an
"Option", and collectively, "Options") for additional consecutive terms of sixty
(60) months each to commence upon the expiration of the initial Term or the
Option Term, as applicable. If the Term is extended, all of the terms and
provisions of this Lease shall extend to and be applicable during the Term so
extended (the "Option Term"), except as specifically set forth in this Exhibit
to the contrary. The Options granted to Tenant pursuant to this Lease are
personal to the original Tenant and shall not be assignable or transferable to
any person.
19.2 EXERCISE OF OPTION. Such Options shall be exercised by Tenant giving
written notice thereof to Landlord at least nine (9) months but no more than
twelve (12) months prior to the expiration of the then current Term, and
Tenant's right to exercise any consecutive Option shall be contingent upon
Tenant's exercise of the previous Option. The exercise of an Option shall be
irrevocable.
19.3 OPTION RENTAL. Monthly Rental for each Option Term ("Option Rental") shall
be the greater of (i) the then current Monthly Rental, or (ii) the fair market
five-year fixed triple net base rent of the Premises as of the date of the
exercise of the Option. Tenant shall also continue to pay Additional Rental as
required by this Lease. If the parties are unable to agree on the Option Rental
within thirty (30) days after the date of the exercise of the Option, then the
Option Rental shall be determined by the following procedure: Within sixty (60)
days after the date of the exercise of the Option, Landlord and Tenant will
attempt to agree on a single MAI appraiser with at least five (5) years
experience in appraising industrial properties in the county in which the
Premises are located (a "Qualified Appraiser"). If the parties agree on a single
Qualified Appraiser, then each party shall submit to such Qualified Appraiser
its opinion of the fair market five-year fixed triple net base rent of the
Premises as of the date of the exercise of the Option. The sole responsibility
of the Qualified Appraiser will be to determine which of the rental amounts
submitted by Landlord and Tenant most accurately reflects the fair market
five-year fixed triple net base rent of the Premises as of the date of the
exercise of the Option. The Qualified Appraiser shall select either Landlord's
or Tenant's rental amount and such amount shall be the Option Rental. The
Qualified Appraiser has no right to propose a middle ground or any modification
of either of the determinations made by either party. The Qualified Appraiser's
choice will be submitted to the parties within twenty (20) days after his or her
selection. Such determination will bind both Landlord and Tenant and will
establish the Option
19
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Rental. If the parties are unable to agree on a single Qualified Appraiser
within such thirty (30) day period, each party will appoint a Qualified
Appraiser. Each such Qualified Appraiser will then designate a third Qualified
Appraiser, who shall make the determination described above. Each party will pay
one-half (1/2) of the fees and expenses of the determining Qualified Appraiser.
Each party will pay the fees and expenses of the Qualified Appraiser selected by
it, if applicable.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease on the day
and year first above written.
"Landlord" "Tenant"
Xxx Xxxxxx Limited Partnership, Flashcom, Inc.,
a California LLP a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxx
----------------------- -----------------------
Its: Partner Its: President / CEO
---------------------- ----------------------
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EXHIBIT A
PREMISES
0000 Xxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xx., 00000
1
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FIRST AMENDMENT TO LEASE AGREEMENT[PART OF EXH. 10.7]
This First Amendment to Lease Agreement (the "First Amendment") is
entered into as of January 14, 2000 by and between Xxxxxxxx X. Xxxxx, a married
man as his sole and separate property ("Sachs") as landlord, and Flashcom, Inc.,
a Delaware corporation ("Tenant").
R E C I T A L S
A. WHEREAS, Sachs purchased the property consisting of approximately
25,200 rentable square feet located at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx (the "Premises") are a part (the "Property") as indicated by that
certain Grant Deed dated March 30, 1999 (the "Grant Deed"). The Grant Deed was
executed by Korean American Food Marketing Institute, a California corporation,
as grantor, in favor of Sachs as grantee. The Grant Deed was recorded in the
Official Records of Orange County, California (the "Official Records") on May
17, 1999 as Instrument No. 19990361838; and
B. WHEREAS, in order to confirm title to the Property in Sachs as the
sole owner, Xxxxx Xxxxx, a married woman, executed an Interspousal Transfer Deed
dated May 13, 1999, which was recorded in the Official Records on May 17, 1999
as Instrument No. 1990361839; and
C. WHEREAS, Xxx Xxxxxx Limited Partnership ("MSLP") as landlord, and
Tenant, entered into that certain Lease Agreement as of June 1, 1999 (the
"Lease") with respect to the Premises; and
D. WHEREAS, Sachs executed the Lease in his capacity as a partner of
MSLP; and
E. WHEREAS, the parties to the Lease now recognize that the Lease was
entered into by landlord in the incorrect name and the parties desire to enter
into this First Amendment to correct the name of the landlord under the Lease.
NOW THEREFORE, the parties desire to enter into this First Amendment on
the terms set forth below.
1. Incorporation of Recitals. The foregoing recitals are incorporated
herein by this reference.
2. Correction of Name of Landlord. The name of the "Landlord" as defined
in the Lease is hereby corrected and changed from MSLP to Sachs. Upon execution
of this First Amendment by Sachs as Landlord, and by Tenant, the original Lease
shall be deemed to have been executed in the name of Sachs as Landlord, and by
Tenant as "Tenant", on the identical terms and conditions as appear therein.
3. No Further Modifications. Except as specifically modified by the
terms of this First Amendment, the Lease shall remain in full force and effect.
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IN WITNESS WHEREOF, landlord and tenant have entered into this First
Amendment as of the date first set forth above.
Landlord:
/s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxx, a married man as his
sole and separate property
Tenant:
Flashcom, Inc., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: President / COO
-----------------------------------
