Exhibit 10.10
STANDARD SUBLEASE
1. Parties. This Sublease, dated, for reference purposes only,
July 30, 1998, is made by and between Shinho Electronics & Communication, Inc.,
a California Corporation ("Sublessor") and Diamond Entertainment Corporation,
Inc., a California Corporation ("Sublessee").
2. Premises. Sublessor hereby subleases to Sublessee and
Sublessee hereby subleases from Sublessor for the term, at the rental, and upon
all of the conditions set forth herein, that certain real property, including
all improvements therein, and commonly known by the street address of 00000-X
Xxxxxxxxx Xxxx, Xxxxxxxx located in the County of Los Angeles, State of
California and generally described as (describe briefly the nature of the
property) an industrial unit of approximately 48,129 SF which is part of a
198,581 SF building ("Premises").
3. Term.
3.1 Term. The term of this Sublease shall be for forty-four
and one half months (44 1/2) commencing on October 1, 1998 and ending on June
14, 2002 unless sooner terminated pursuant to any provision hereof.
3.2 Delay in Commencement. Sublessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises by the
commencement date.
4. Rent.
4.1 Base Rent. Sublessee shall pay to Sublessor as Base Rent
for the Premises equal monthly payments of $21,786.22 in advance, on the first
(1st) day of each month of the term hereof. Sublessee shall pay Sublessor upon
the execution hereof $21,786.22 as Base Rent for October, 1998. Base Rent for
any period during the term hereof which is for less than one month shall be a
pro rata portion of the monthly installment.
4.2 Rent Defined. All monetary obligations of Sublessee to
Sublessor under the terms of this Sublease (except for the Security Deposit) are
deemed to be rent ("Rent"). Rent shall be payable in lawful money of the United
States to Sublessor at the address stated herein or to such other persons or at
such other places as Sublessor may designate in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor
$43,572.44 as security for Sublessee's faithful performance of Sublessee's
obligations hereunder. The rights and obligations of Sublessor and Sublessee as
to said Security Deposit shall be as set forth in Paragraph 5 of the Master
Lease (as modified by Paragraph 7.3 of this Sublease). Fifty
percent (50%) of deposit is due upon execution hereof and the remaining fifty
percent (50%) is due prior to Sublessee taking possession.
6. Use.
6.1 Agreed Use. The Premises shall be used and occupied only
for distribution, storage, duplication, marketing and related office uses of
video tape production and other similar products and for no other purpose.
6.2 Compliance. Sublessor warrants that the improvements on
the Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances ("Applicable
Requirements") in effect on the commencement date. Said warranty does not apply
to the use to which Sublessee will put the Premises or to any alterations or
utility installations made or to be made by Sublessee. NOTE: Sublessee is
responsible for determining whether or not the zoning is appropriate for its
intended use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty, or in the event that
the Applicable Requirements are hereafter changed, the rights and obligations of
Sublessor and Sublessee shall be as provided in Paragraph 2.3 of the Master
Lease (as modified by Paragraph 7.3 of this Sublease).
6.3 Acceptance of Premises and Lessee. Sublessee acknowledges
that:
(a) It has been advised by Brokers to satisfy itself
with respect tot he condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects,
and compliance with Applicable Requirements), and their suitability for
Sublessee's intended use;
(b) Sublessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to its occupancy of the Premises; and
(c) neither Sublessor, Sublessor's agents, nor
any Broker has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Sublease.
In addition, Sublessor acknowledges that:
(a) Broker has made no representations,
promises or warranties concerning Sublessee's ability to honor the Sublease or
suitability to occupy the Premises; and
(b) It is Sublessor's sole responsibility to
investigate the financial capability and/or suitability of all proposed tenants.
7. Master Lease.
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7.1 Sublessor is the lessee of the Premises by virtue of a
lease, hereinafter the "Master Lease", a copy of which is attached hereto marked
Exhibit 1, wherein Mt. Xxxxxx Properties, a California Corporation is the
lessor, hereinafter the "Master Lessor".
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The Terms, conditions and respective obligations of
Sublessor and Sublessee to each other under this Sublease shall be the terms and
conditions of the Master Lease except for those provisions of the master Lease
which are directly contradicted by this Sublease in which event the terms of
this Sublease document shall control over the Master Lease. Therefore, for the
purposes of this Sublease, wherever in the Master Lease the word "Lessor" is
used it shall be deemed to mean the Sublessor herein and wherever in the Master
Lease the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods
subsequent for obligations which have arisen prior to the termination of this
Sublease, Sublessee does hereby expressly assume and agree to perform and comply
with, for the benefit of Sublessor and Master Lessor, each and every obligations
of Sublessor under the Master Lease except for the following paragraphs which
are excluded therefrom: 1.3, 1.4, 1.5, 1.6, 1.9, 51, Exhibit B in its entirety.
7.5 The obligations that Sublessee has assumed under Paragraph
7.4 hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".
The obligations that Sublessee has not assumed under Paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys' fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the
entire term of this Sublease, subject, however, to any earlier termination of
the Master Lease without the fault of the Sublessor, and to comply with or
perform Sublessor's Remaining Obligations and to hold Sublessee free and
harmless from all liability, judgments, costs, damages, claims or demands
arising out of Sublessor's failure to comply with or perform Sublessor's
Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is
in full force and effect and that no default exists on the part of any Party to
the Master Lease.
8. Assignment of Sublease and Default.
8.1 Sublessor hereby assigns and transfers to Master Lessor
the Sublessor's interest in this Sublease, subject, however, to the provisions
of Paragraph 8.2 hereof.
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8.2 Master Lessor, by executing this document, agrees that
until a Default shall occur in the performance of Sublessor's Obligations under
the Master Lease, that Sublessor may receive, collect and enjoy the Rent
accruing under this Sublease. However, if Sublessor shall Default in the
performance of its obligations to Master Lessor then Master Lessor may, at its
option, receive and collect, directly from Sublessee, all Rent owing and to be
owed under this Sublease. Master Lessor shall not, by reason of this assignment
of the Sublease nor by reason of the collection of the Rent from the Sublessee,
be deemed liable to Sublessee for any failure of the Sublessor to perform and
comply with Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocably authorizes and directs
Sublessee upon receipt of any written notice from the Master Lessor stating that
a Default exists in the performance of Sublessor's obligations under the Master
Lease, to pay to Master Lessor the Rent due and to become due under the
Sublease. Sublessor agrees that Sublessee shall have the right to rely upon any
such statement and request from Master Lessor, and that Sublessee shall pay such
Rent to Master Lessor without any obligation or right to inquire as to whether
such Default exists and notwithstanding any notice from or claim from Sublessor
to the contrary and Sublesssor shall have no right or claim against Sublessee
for any such Rent so paid by Sublessee.
8.4 No changes or modification shall be made to this Sublease
without the consent of Master Lessor.
9. Consent of Master Lessor.
9.1 In the event that the Master Lease requires that Sublessor
obtain the consent of Master Lessor to any subletting by Sublessor then, this
Sublease shall not be effective unless, within ten days of the date hereof,
Master Lessor signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under
the Master Lease have been guaranteed by third parties then neither this
Sublease, nor the Master Lessor's consent, shall be effective unless, within 10
days of the date hereof, said guarantors sign this Sublease thereby giving their
consent to this Sublease.
9.3 In the event that Master Lessor does give such consent
then:
(a) Such consent shall not release Sublessor of
its obligations or alter the primary liability of Sublessor to pay the Rent and
perform and comply with all of the obligations of Sublessor to be performed
under the Master Lease.
(b) The acceptance of Rent by Master Lessor from
Sublessee or anyone else liable under the Master Lease shall not be deemed a
waiver by Master Lessor of any provisions of the Master Lease.
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(c) The consent to this Sublease shall not
constitute a consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under
the Master Lease, Master Lessor may proceed directly against Sublessor, any
guarantors or anyone else liable under the Master Lease or this Sublease without
first exhausting Master Lessor's remedies against any other person or entity
liable thereon to Master Lessor.
(e) Master Lessor may consent to subsequent
sublettings and assignments of the Master Lease or this Sublease or any
amendments or modifications thereto without notifying Sublessor or any one else
liable under the Master Lease and without obtaining their consent and such
action shall not relieve such persons from liability.
(f) In the event that Sublessor shall Default in its
obligations under the Master Lease, then Master Lessor, at its option and
without being obligated to do so, may require Sublessee to attorn to Master
Lessor in which event Master Lessor shall undertake the obligations of Sublessor
under this Sublease from the time of the exercise of said option to termination
of this Sublease but Master Lessor shall not be liable for any prepaid Rent nor
any Security Deposit paid by Sublessee, nor shall Master Lessor be liable for
any other Defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this Sublease.
9.5 Master Lessor acknowledges that, to the best of Master
Lessor's knowledge, no Default presently exists under the Master Lease of
obligations to be performed by Sublessor and that the Master Lease is in full
force and effect.
9.6 In the event that Sublessor Defaults under its obligations
to be performed under the Master Lease by Sublessor, Master Lessor agrees to
deliver to Sublessee a copy of any such notice of default. Sublessee shall have
the right to cure any Default of Sublessor described in any notice of default
within ten days after service of such notice of default on Sublessee. If such
Default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessor shall pay
to The Xxxxxx Company a licensed real estate broker, ("Broker"), a fee as set
forth in a separate agreement between Sublessor and Broker, or in the event
there is no such separate agreement, the sum of $ per agreement for brokerage
services rendered by Broker to Sublessor in this transaction.
10.2 Sublessor agrees that if Sublessee exercises any option
or right of first refusal as granted by Sublessor herein, or any option or right
substantially similar thereto, either to extend the term of this Sublease, to
renew this Sublease, to purchase the Premises, or
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to lease or purchase adjacent property which Sublessor may own or in which
Sublessor has an interest, then Sublessor shall pay to Broker a fee in
accordance with the schedule of Broker in effect at the time of the execution of
this Sublease. Notwithstanding the foregoing, Sublessor's obligation under this
Paragraph 10.2 is limited to a transaction in which Sublessor is acting as a
Sublessor, lessor or seller.
10.3 Master Lessor agrees that if Sublessee shall exercise any
option or right of first refusal granted to Sublessee by Master Lessor in
connection with this Sublease, or any option or right substantially similar
thereto, either to extend or renew the Master Lease, to purchase the Premises or
any part thereof, or to lease or purchase adjacent property which Master Lessor
may own or in which Master Lessor has an interest, or if Broker is the procuring
cause of any other lease or sale entered into between Sublessee and Master
Lessor pertaining to the Premises, any part thereof, or any adjacent property
which Master Lessor owns or in which it has an interest, then as to any of said
transactions, Master Lessor shall pay to Broker a fee, in cash, in accordance
with the schedule of Broker in effect at the time of the execution of this
Sublease.
10.4 Any fee due from Sublessor or Master Lessor hereunder
shall be due and payable upon the exercise of any option to extend or renew,
upon the execution of any new lease, or, in the event of a purchase, at the
close of escrow.
10.5 Any transferee of Sublessor's interest in this Sublease,
or of Master Lessor's interest in the Master Lease, by accepting an assignment
thereof, shall be deemed to have assumed the respective obligations of Sublessor
or Master Lessor under this Paragraph 10. Broker shall be deemed to be a
third-party beneficiary of this Paragraph 10.
11. Attorney's Fees. If any party or the Broker named herein
brings an action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court.
12. Additional Provisions. [If there are no additional provisions,
draw a line from this point to the next printed word after the space left here.
If there are additional provisions place the same here.]
13. Tenant Improvements. Sublessor, at Sublessor's cost, shall
accomplish the following prior to lease commencement:
(a) Clean offices;
(b) Broom sweep warehouse area;
(c) Shampoo carpets;
(d) Repair or replace lighting fixtures as needed;
(e) Repair all holes in any wall as needed.
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14. Rent Adjustment. Rent payable for month two (2) of lease term
shall be waived. Net charges during free rent period shall be waived.
15. Notwithstanding, Sublessor shall be responsible for
maintaining the foundation, structural, walls and roof which includes the
membrane.
16. Sublessor agrees to sign "Landlord Waiver" if it is required
by the Sublessee's lender.
17. Sublessee's Agent. Sublessee is being represented by Xxx &
Associates, a licensed broker.
18. Phase 1. This Lease is subject to Sublessee securing and
approving a Phase 1. Sublessor shall not deposit check until Sublessee has
approved Phase 1 in writing. Phase 1 shall be completed within 10 days.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION
OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE
SUITABILITY OF THE PREMISES FOR SUBLESSEES'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
SHINHO ELECTRONICS &
COMMUNICATIONS, INC.
A CALIFORNIA CORPORATION
Executed at:
--------------------- -----------------------------------
on: By
------------------------------- ---------------------------------
Address: By
------------------------- ---------------------------------
"Sublessor" (Corporate Seal)
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DIAMOND ENTERTAINMENT
CORPORATION, INC.
A CALIFORNIA CORPORATION
Executed at:
---------------------- ------------------------------------
on: 8/6/98 By /s/ Xxxxx X.X. Xx
-------------------------------- ----------------------------------
Address: By
--------------------------- ----------------------------------
"Sublessee" (Corporate Seal)
MT. XXXXXX PROPERTIES,
A CALIFORNIA CORPORATION
Executed at:
--------------------- ------------------------------------
on: By
------------------------------- ----------------------------------
Address: By
-------------------------- ----------------------------------
"Master Lessor" (Corporate Seal)
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EXHIBIT I
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-NET
1. Basic Provisions.
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
as of the _____ day of December, 1996, is made by and between Mt. Xxxxxx
Properties, a California corporation ("Landlord"), and Shinho Electronics &
Communications, Inc., a California corporation ("Tenant"), (collectively the
"Parties" or individually a "Party").
1.2 Premises: That certain real property, including all improvements
therein or provided by Landlord under the terms of this Lease, and commonly
known by the street address of 00000X Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx, and
containing approximately forty-eight thousand one hundred twenty-nine (48,129)
square feet of floor area (the "Premises"). The Premises is a portion of a
building (the "Building"), approximately as shown on Exhibit A attached hereto
and incorporated herein by this reference. The Premises, the Building, the
Common Areas and the land upon which the same are located are a part of a larger
industrial park, which, inclusive of the other buildings therein and the land
underlying the same, is referred to herein as the "Project". (See Paragraph 2
for further provisions.)
1.3 Term: Sixty-four (64) months, plus any partial month following the
Commencement Date if the Commencement Date is other than the first day of a
calendar month (the "Term"), commencing upon the date (the "Commencement Date")
which is the earlier to occur of (a) the "Substantial Completion" of the "Tenant
Improvements" (as such terms are defined in Exhibit B attached hereto and
incorporated herein by this reference), or (b) February 15, 1997. (See Paragraph
3 for further provisions.)
1.4 Base Rent: $16,363.86 per month, subject to adjustment as provided
in Paragraph 4 below ("Base Rent"), payable in advance on the first (1st) day of
each month commencing upon the Commencement Date. (See Paragraph 4 for further
provisions.)
1.5 Base Rent Paid Upon Execution: $16,363.86 as Base Rent for the
period of the first full calendar month following the Commencement Date during
which Base Rent is due and payable under this Lease.
1.6 Security Deposit: $18,289.02 ("Security Deposit"). (See Paragraph 5
for further provisions.)
1.7 Permitted Use: Storage, distribution and repair of computer
monitors and related peripherals and ancillary use for the storage and
distribution of paper related products and steel related products, and for no
other use or purpose.
1.8 Tenant's Share: 23.85%. (See Paragraph 4 for further provisions.)
1.9 Real Estate Brokers: Xxx & Associates and Century 21 (collectively,
the "Brokers"). (See Paragraph 15 for further provisions.)
1.10 Guarantor: None. (See Paragraph 37 for further provisions.)
2. Premises.
2.1 Letting. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises, for the Term, of the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental, is an approximation which
Landlord and Tenant agree is reasonable and the rental based thereon is not
subject to revision whether or not the actual square footage is more or less.
2.2 Condition of Premises: Acceptance of Premises. Promptly following
the date hereof, Landlord shall cause the Tenant Improvements to be constructed
in the Premises pursuant to Exhibit B attached hereto and incorporated herein by
this reference. Subject to such construction of the Tenant Improvements, Tenant
hereby acknowledges: (a) that it is familiar with and has had the opportunity to
investigate the condition of the Premises (including but not limited to the
mechanical, electrical and fire sprinkler systems, security, environmental
aspects, compliance with "Applicable Law", as defined in Paragraph 6.3), the
present and future suitability of the Premises for Tenant's intended use and
compliance of the Premises with all applicable covenants, conditions or
restrictions of record and applicable building codes, regulations and
ordinances, (b) that Tenant has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor, and
without in any manner derogating from Tenant's obligations set forth herein
including, without limitation, those relating to maintenance and repair, Tenant
accepts the Premises, including all fixtures, furnishings and equipment, in its
present condition, state of repair and operating order and in its present "AS
IS" condition, and (c) that neither Landlord, nor any of Landlord's agents, has
made any oral or written representations or warranties with respect to said
matters. Correction of any non-compliance with respect to any of said matters
shall be the obligation of Tenant at Tenant's sole cost and expense.
2.3 Vehicle Parking. Tenant shall have the non-exclusive right to use a
proportionate share of unreserved and unassigned Project Common Area vehicle
parking spaces. Tenant shall not use more of such parking spaces than its
proportionate share. Such parking spaces shall be used only for parking by
vehicles no larger than full-sized passenger automobiles or pick-up trucks.
Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to
be loaded, unloaded or parked in areas other than those designated by Landlord
for such activities. If Tenant permits or allows any of the prohibited
activities described herein, then Landlord shall have the right, without notice,
in addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable as additional rent upon demand by Landlord.
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2.4 Common Areas. The term "Common Areas" is defined as all areas and
facilities outside the Premises and within the exterior boundary line of the
Project that are provided and designated by Landlord from time to time for the
general non-exclusive use of Landlord, Tenant and of other occupants of the
Project an their respective employees, suppliers, shippers, customers and
invitees, which may include, without limitation, parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways
and landscaped areas. Landlord hereby grants to Tenant, for the benefit of
Tenant and its employees, suppliers, shippers, customers and invitees, during
the term of this Lease, the non-exclusive right to use, in common with others
entitled to such use, the Common Areas as they exist from time to time, subject
to any rights, powers and privileges reserved by Landlord under the terms of
this Lease or under the terms of any rules or regulations or restrictions
governing the use of the Project. Under no circumstances shall the right herein
granted to use the Common Areas be deemed to include, the right to store any
property, temporarily or permanently, in the Common Areas. In the event that any
such storage shall occur, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove the
property and charge the cost thereof to Tenant, which cost shall be immediately
payable as additional rent upon demand by Landlord. Landlord or such other
person(s) as Landlord may appoint, shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
establish, modify, amend and enforce reasonable rules and regulations with
respect to the Common Areas. Tenant agrees to abide by and conform to all such
rules and regulations, and to cause its employees, suppliers, shippers,
customers and invitees to so abide and conform. Landlord shall not be
responsible to Tenant for the non-compliance with such rules or regulations by
other tenants and users of the Project. Landlord shall have the right, in its
sole and absolute discretion, from time to time (a) to make changes to the
Common Areas, including, without limitation, changes in the location, size,
shape and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas and
walkways, so long as reasonable access to the Premises remains available; (b) to
close temporarily any of the Common Areas for maintenance and/or repair purposes
or to prevent the acquisition of rights in the Common Areas by other persons or
entities, so long as reasonable access to the Premises remains available; (c) to
designate other land outside the boundaries of the Project to be a part of the
Common Areas; (d) to add additional buildings and improvements to the Common
Areas; (e) to use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
(f) to do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and/or Project as Landlord may, in the exercise of
commercially reasonable business judgment, deem to be appropriate.
3. Term. This Lease shall be effective and binding upon the parties from and
after the date hereof. The Commencement Date and Term of this Lease shall be as
specified in Paragraph 1.3 above. Tenant acknowledges that the Tenant
Improvements shall be constructed in accordance with Exhibit B, but that such
Tenant Improvements may not be completed by the Commencement Date. Failure to
complete the Tenant Improvements by the Commencement Date shall not subject
Landlord to any damages or liability therefor, nor shall such failure affect the
validity of this Lease, or the obligations of Tenant hereunder, or extend the
Term
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hereof. Tenant shall be entitled to occupancy of the Premises from and after the
execution and delivery of this Lease by the parties and such occupancy prior to
the Commencement Date shall be subject to all terms and conditions of this Lease
(including, without limitation, Tenant's obligation for payment of Tenant's
Share of Operating Expenses), except that Tenant shall not be liable for payment
of Base Rent with respect to the period prior to the Commencement Date. Tenant's
occupancy of the Premises prior to the Commencement Date shall also be subject
to the condition that no such occupancy shall interfere with, delay or increase
the costs of performance of the Tenant Improvements, and the parties shall
reasonably cooperate to avoid any such interference, delay or increase in costs.
Notwithstanding anything to the contrary contained in this Lease, if the
Commencement Date is other than the first day of a calendar month, the initial
Term shall include the partial month until the first calendar day of the first
full calendar month following the Commencement Date, such that the initial Term
shall be for a period from the Commencement Date until the first day of the
sixty-fourth (64th) full calendar month following Commencement Date.
4. Rent.
4.1 Base Rent. Base Rent payable under this Lease shall initially be
the sum of $16,363.86 per month, provided that such Base Rent amount shall be
adjusted upon the commencement of the thirty-first (31st) full calendar month
following the Commencement Date to equal the product obtained by multiplying
such initial Base Rent amount by a fraction, the numerator of which is the
"Index" (as hereinafter defined) for the calendar month which is two (2) months
prior to such adjustment date and the denominator of which is the Index for the
calendar month which is thirty-two (2) months prior to such adjustment date;
provided, however, that in no event shall such adjustment result in an increase
in Base Rent of more than five percent (5%) per annum on a cumulative and
compounding basis, or of less than three percent (3%) per annum on a cumulative
and compounding basis. As used herein, the "Index" shall mean the Consumer Price
Index published by the United States Department of Labor, Bureau of Labor
Statistics (the "Bureau"), "All Items" for All Urban Consumers in the Los
Angeles-Anaheim-Riverside xxxxxxxxxxxx xxxx, (0000-00 = 100). Should the Bureau
discontinue the publication of the Index, publish the same less frequently or
alter the same in some other manner, the most nearly comparable index or
procedure as determined by Landlord shall be substituted therefor. Tenant shall
cause payment of Base Rent, "Additional Fixed Rent" (as defined in Exhibit B
attached hereto), Tenant's Share of Operating Expenses and other rent or
charges, as the same may be adjusted from time to time, to be received by
Landlord pursuant to this Lease, in lawful money of the United States, without
offset or deduction, on or before the day on which it is due under the terms of
this Lease; except, however, that Tenant's obligation for payment of Base Rent
shall be conditionally abated for the first (1st), second (2nd), third (3rd) and
fourth (4th) full calendar months of the Term following the Commencement Date.
Should this Lease be terminated due to Tenant's Breach under this Lease, then
the total sum of such Base Rent so conditionally abated shall become immediately
due and payable by Tenant to Landlord. If at the date of the expiration of the
Term of this Lease, Tenant is not in default hereunder, Landlord shall waive any
payment of all Base Rent so conditionally abated. Nothing herein stated shall be
deemed to affect the Commencement Date, the Base Rent payable under the lease
for any period other than the
4
period for which Base Rent is so conditionally abated, or the amount of
Tenant's Share of Operating Expenses or other additional rent payable at any
time pursuant to the Lease. Base Rent, Tenant's Share of Operating Expenses
and all other rent and charges for any period during the Term hereof which is
for less than one (1) full calendar month shall be prorated based upon the
actual number of days of the calendar month involved. If the Commencement
Date is not the first calendar day of a calendar month, Base Rent for the
partial calendar month including the Commencement Date shall be paid upon the
Commencement Date and thereafter during the Term, Base Rent shall be payable
on the first calendar day of each calendar month during the Term. Payment of
Base Rent, Additional Fixed Rent, Tenant's Share of Operating Expenses and
other rent and charges shall be made to Landlord at its address stated herein
or to such other persons or at such other addresses as Landlord may from time
to time designate in writing to Tenant.
4.2 Operating Expenses.
(a) For purposes of this Lease, "Operating Expenses" shall
mean the sum of "Common Area Expenses" (as hereinafter defined), costs incurred
by Landlord in performance of obligations with respect to the Building and
improvements therein pursuant to Paragraph 7.2 below and costs of performing
comparable work on other buildings and improvements within the Project, costs
incurred by Landlord in maintaining the insurance described in Paragraph 8.3
below with respect to the Building and other buildings within the Project, the
amount of any insurance deductible pursuant to Paragraph 8.3 in the event of
casualty or comparable insurance deductible in the event of casualty to any
other building in the Project, and costs incurred by Landlord in payment of Real
Property Taxes with respect to the Building pursuant to Paragraph 10.1 below and
for other buildings in the Project. For purposes of this Lease, Tenant's Share
shall mean a fraction, expressed as a percentage, the numerator of which is the
floor area of the Premises and the denominator of which is the total floor area
of buildings within the Project.
(b) For purposes of this Lease, "Common Area Expenses" shall
mean all costs incurred by Landlord for the operation, management, repair,
maintenance and replacement, in neat, clean, good order and condition, of the
Common Areas, including, without limitation, any parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, lighting
facilities, fences and gates, costs of causing the Common Areas to comply with
Applicable Laws, costs incurred by Landlord in maintaining a policy of liability
insurance pursuant to Paragraph 8.2 below, costs incurred by Landlord in payment
of Real Property Taxes with respect to the Common Areas pursuant to Paragraph
10.1 below, and the cost of water, gas and electricity to service the Common
Areas.
(c) Tenant shall pay to Landlord, as additional rent, Tenant's
Share of Operating Expenses, within ten (10) days after a reasonably detailed
statement of Tenant's receipt of a statement therefor from Landlord; provided,
however, that at landlord's option, an amount may be estimated by Landlord from
time to time of Tenant's Share of annual Operating Expenses and the same shall
be payable monthly or quarterly, as Landlord shall designate, in
5
advance, during each year of the Lease term, on the same day as the Base Rent is
due hereunder. In the event of payment of Tenant's Share of Operating Expenses
on an estimated basis, Landlord shall have the right to adjust its estimate of
such expenses from time to time during the Lease term upon written notice to
Tenant, based upon reasonably anticipated changes in the amount of such
expenses. For any year during which Tenant's Share of Operating Expenses are so
paid on an estimated basis, within ninety (90) days following the end of such
year or as soon thereafter as information becomes available to Landlord,
Landlord shall deliver to Tenant a statement of actual Operating Expenses for
such year, and if Tenant has overpaid Tenant's Share of Operating Expenses,
Tenant shall be entitled to a credit against Tenant's Share of Operating
Expenses next coming due under this Lease in the amount of such excess (except
that any such overpayment allocable to the final year of the Lease term shall be
refunded to Tenant following the satisfaction of all Tenant obligations under
this Lease), and if the Tenant has underpaid Tenant's Share of Operating
Expenses, Tenant shall pay any such deficiency to Landlord within thirty (30)
days following receipt of such statement. Landlord's obligation to make such
refund and Tenant's obligation to pay such deficiency, as applicable, shall
survive the expiration of the Term or earlier termination of this Lease.
5. Security Deposit. Tenant shall deposit with Landlord upon the execution
hereof, the Security Deposit set forth in Paragraph 1.6 as security for Tenant's
faithful performance of Tenant's obligations under this Lease. If Tenant fails
to pay Base Rent or other rent or charges due hereunder, or otherwise "Defaults"
under this Lease (as defined in Paragraph 13.1), Landlord may use, apply or
retain all or any portion of said Security Deposit for the payment of any amount
due Landlord or to reimburse or compensate Landlord for any liability, cost,
expense, loss or damage (including attorneys' fees) which Landlord may suffer or
incur by reason thereof. If Landlord uses or applies all or any portion of said
Security Deposit, within ten (10) days after Landlord's written request
therefor, Tenant shall deposit with Landlord funds sufficient to restore said
Security Deposit to the full amount required by this Lease. Landlord shall not
be required to keep all or any part of the Security Deposit separate from its
general accounts. If Tenant performs all of Tenant's obligations hereunder,
Landlord shall, at the expiration or earlier termination of the Term hereof and
after Tenant has vacated the Premises, return to Tenant or, at Landlord's
option, to the last assignee, if any, of Tenant's interest herein), that portion
of the Security Deposit not used or applied by Landlord. No part of the Security
Deposit shall be considered to be held in trust, to bear interest or other
increment for its use, or to be prepayment for any moneys to be paid by Tenant
under this Lease.
6. Use.
6.1 Use. Tenant shall use and occupy the Premises only for the purposes
set forth in Paragraph 1.7 and for no other use or purpose. Tenant shall not use
or permit the use of the Premises in a manner that creates waste or a nuisance,
or that disturbs owners and/or occupants of, or causes damage to, neighboring
premises or properties.
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6.2 Hazardous Substances.
(a) Prohibition on Hazardous Substances. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials on the Premises or other
portions of the Building and/or Project, is either: (i) potentially injurious to
the public health, safety or welfare, the environment or the Premises and/or
other portions of the Building and/or Project, (ii) regulated or monitored by
any governmental authority, or (iii) a basis for liability of Landlord to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products, by-products or fractions
thereof. Tenant represents and warrants to Landlord that Tenant's business and
all activities to be performed by Tenant in, on or about the Premises, Building
and Project shall comply with all Applicable Laws respecting Hazardous
Substances and Tenant agrees to change any such activity or install any
equipment, safety devices, pollution control systems and/or other installations
as may be required at any time during the Lease Term to comply therewith. Tenant
shall not cause or permit any Hazardous Substance to be brought upon, kept, or
used in or about the Premises, Building or Project by Tenant, its agents,
employees, contractors or invitees, without the prior written consent of
Landlord, and if any such Hazardous Substances use is approved by Landlord,
Tenant shall comply with any reasonable requirements imposed by Landlord as to
Hazardous Substances handling, storage, use and disposal upon the Premises or
Project. If tenant breaches the obligations stated in the preceding sentence, or
if the presence of Hazardous Substance on the Premises, Building or Project
caused or permitted by Tenant or otherwise caused to be located upon the
Premises, Building or Project during the Lease Term results in contamination of
the Premises, Building, Project or any adjacent property, then Tenant shall
indemnify, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the Premises, Building, Project and/or
adjacent property, damages for the loss or restriction on use of rentable or
usable space or of any amenity of the Premises, Building, Project and/or
adjacent property, damages arising from any adverse impact on marketing of the
Premises, Building, project an/or adjacent property, and sums paid in settlement
of claims, attorneys' fees, consultant fees and expert fees) which arise during
or after the Lease Term as a result of such contamination. This indemnification
of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Substance present in the soil or
ground water on or under the Premises, Building, Project and/or adjacent
property. Without limiting the foregoing, if the presence of any Hazardous
Substance on the Premises, Building and/or Project caused or permitted by Tenant
results in any contamination of the Premises, Building, Project and/or adjacent
property, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Premises, Building, Project and/or adjacent property to
the conditions existing prior to the introduction of any such Hazardous
Substance to the Premises, Building, Project and/or adjacent property; provided
that Landlord's approval of such actions shall first be obtained,
7
which approval shall not be unreasonably withheld so long as such actions would
not potentially have any material adverse long-term or short-term effect on the
Premises, Building, Project or adjacent property.
(b) Duty to Inform Landlord. If Tenant knows, or has
reasonable cause to believe, that a Hazardous Substance, or a condition
involving or resulting from same, has come to be located in, on, under or about
the Premises, Building and/or Project other than as previously consented to by
Landlord, Tenant shall immediately give written notice of such fact to Landlord.
Tenant shall also immediately give Landlord a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim, action
or proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the presence,
spill, release, discharge of, or exposure to, any Hazardous Substance or
contamination in, on, or about the Premises, Building and/or Project.
(c) Indemnification. Tenant shall indemnify, protect, defend
and hold Landlord, its agents, representatives, employees, lenders and ground
landlord, if any, and the Premises, Building and Project harmless from and
against any and all loss of rents, and/or damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance or storage
tank. Tenant's obligations under this Paragraph 6 shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Tenant, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Landlord and
Tenant shall release Tenant from its obligations under this Lease with respect
to Hazardous Substances or storage tanks, unless specifically so agreed by
Landlord in writing at the time of such agreement. Notwithstanding anything to
the contrary contained in this Lease, Tenant shall not be obligated to
indemnify, defend or hold harmless Landlord with respect to, and Tenant shall
not be required to take remediation actions necessary to comply with Applicable
Laws with respect to, any Hazardous Substances which may be existing at the
Premises as of the delivery of possession by Landlord to Tenant (except to the
extent the requirement for indemnification, defense, holding harmless, remedial
action and/or compliance work is necessitated by Tenant's particular use of the
Premises or alterations or improvements to the Premises (other than the Tenant
improvements to be made pursuant to Exhibit B) following the delivery of
possession).
6.3 Tenant's Compliance with Law. Tenant shall, at Tenant's sole cost
and expense, fully, diligently and in a timely manner, comply with all
"Applicable Law," which term is used in this Lease to include all laws, rules,
codes, regulations, ordinances, directives, covenants, easements, restrictions,
permits, the requirements of any applicable fire insurance underwriter or rating
bureau, and the recommendations of Landlord's engineers and/or consultants,
relating in any manner to the Premises, and to the extent such compliance is
necessitated as a result of Tenant's particular use of or alterations or
improvements to the Premises, the Building and/or Common Areas. Tenant's
obligation for compliance with
8
Applicable Law pursuant hereto shall include, without limitation, matters
pertaining to (i) industrial hygiene, (ii) accessibility or usability of the
Premises by disabled persons, (iii) environmental conditions on, in, under or
about the Premises, including soil and groundwater conditions, and (iv) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Tenant shall,
within five (5) days after receipt of Landlord's written request, provide
Landlord with copies of all documents and information, including, but not
limited to, permits, registrations, manifests, applications, reports and
certificates, evidencing Tenant's compliance with any Applicable Law specified
by Landlord, and shall immediately upon receipt, notify Landlord in writing
(with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving
failure by Tenant or the Premises to comply with any Applicable Law.
6.4 Inspection; Compliance. Landlord and Landlord's "Lender(s)" (as
defined in Paragraph 8.3(a)), agents and representatives shall have the right to
enter the Premises at any time, in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the conditions of the Premises
and for verifying compliance by Tenant with this Lease and all Applicable Laws,
and to employ experts and/or consultants in connection therewith and/or to
advise Landlord with respect to Tenant's activities, including but not limited
to the installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or a
contamination is found to exist or be imminent, or unless the inspection is
requested or ordered by a governmental authority as the result of any such
existing or imminent violation or contamination. In any such case, Tenant shall
upon request reimburse Landlord or Landlord's Lender, as the case may be, for
the costs and expenses of such inspections. If Tenant is not in compliance with
the requirements of the provisions of this Lease (including, without limitation,
the provisions of this Lease relating to Hazardous Substances), Landlord shall
have the right, but not the obligation, to immediately enter upon the Premises
to remedy any condition caused by Tenant's failure to comply with the
requirements of this Lease. Landlord shall use reasonable efforts to minimize
unreasonable interference with Tenant's business as a result of any such entry
by Landlord but shall not be liable for any interference caused thereby.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations.
7.1 Tenant's Obligations.
(a) Except for items which are the responsibility of Landlord
pursuant to Paragraph 7.2 below, Tenant shall, at Tenant's sole cost and expense
and at all times, keep the Premises and every part thereof in good order,
condition and repair (whether or not such portion of the Premises requiring
repair, or the means of repairing the same, are reasonably or readily accessible
to Tenant, and whether or not the need for such repairs occurs as a result of
9
Tenant's use, any prior use, the elements or the age of such portion of the
Premises), including, without limiting the generality of the foregoing, all
equipment or facilities within the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or
unfired pressure vessels, fire sprinkler and/or standpipe and hose or other
automatic fire extinguishing system, including fire alarm and/or smoke detection
systems and equipment, fire hydrants, fixtures, walls, ceilings, floors,
windows, doors, plate glass and skylights. Tenant shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Tenant's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance, security and/or
monitoring of, the Premises, the elements surrounding same, or neighboring
properties, or pertaining to or involving any Hazardous Substance and/or storage
tank. Tenant, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Tenant's obligations shall
include restorations, replacements or renewals when necessary to keep the
premises and all improvements thereon or a part thereof in good order, condition
and state of repair.
(b) Tenant shall, at Tenant's sole cost and expense, procure
and maintain contracts, with copies to Landlord, in customary form and substance
for, and with contractors specializing and experienced in and complying with
industry standards for, the inspection, maintenance and service of the following
equipment and improvements, if any, located on the Premises: (i) heating, air
conditioning and ventilation equipment, (ii) boiler, fired or unfired pressure
vessels, and (iii) fire sprinkler and/or standpipe and hose or other automatic
fire extinguishing systems, including fire alarm and/or smoke detection.
7.2 Landlord's Obligations. Subject to the foregoing, Landlord shall
keep and maintain in good order, condition and repair the Common Areas, roof,
exterior walls, structural parts and structural floor of the building and pipes
and conduits outside the Premises for the furnishing to the Premises of various
utilities (except to the extent that the same are the obligation of the
appropriate public utility company). However, any such repairs or maintenance
which is necessitated by the negligence or willful misconduct of the Tenant, its
servants, agents, employees or contractors or anyone claiming under Tenant, or
by reason of the failure of Tenant to perform or observe any condition or
agreement contained in this Lease, or caused by alterations, additions or
improvements made by Tenant or anyone claiming under Tenant, shall be made by
Tenant or, at Landlord's option, by Landlord at Tenant's sole cost and expense.
Except to the extent the same is Tenant's responsibility pursuant to Paragraph
6.3 above, Landlord shall cause the Building to be in compliance with the
requirements of Applicable Laws. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall not be liable to Tenant for failure to
make repairs as herein specifically required of it unless Tenant has previously
notified Landlord, in writing, of the need for such repairs and Landlord has
failed to commence and complete said repairs within a reasonable time following
receipt of Tenant's written notification. It is the intention of the parties
that the terms of this Lease govern the respective obligations of the parties as
to maintenance and repair of the Premises. Tenant and Landlord expressly waive
the benefit of any statute now or hereafter in
10
effect to the extent it is inconsistent with the terms of this Lease with
respect to, or which affords Tenant the right to make repairs at the expense of
Landlord or to terminate this Lease by reason of, any needed repairs.
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility
Installations" is used in this Lease to refer to all carpeting, window
coverings, air lines, power panels, electrical distribution, security, fire
protection systems, communication systems, lighting systems and fixtures,
heating, ventilating, and air conditioning equipment, plumbing, and fencing in,
on or about the Premises. The term "Trade Fixtures" shall mean Tenant's
machinery and equipment that can be removed without doing material damage to the
Premises. The term "Alterations" shall mean any modification of the improvements
on the Premises from that which are provided by Landlord under the terms of this
Lease, other than Utility Installations or Trade Fixtures, whether by addition
or deletion. "Tenant Owned Alterations and/or Utility Installations" are defined
as Alterations and/or Utility Installations made by Tenant that are not yet
owned by Landlord as defined in Paragraph 7.4(a). Tenant shall not make any
Alterations or Utility Installations in, on, under or about the Premises without
Landlord's prior written consent. Tenant may, however, make non-structural
Utility Installations to the interior of the Premises (excluding the roof), as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during the term of this Lease does not exceed $25,000. Notwithstanding
anything to the contrary contained herein, no addition, alteration, change,
installation or improvement shall be made which will weaken the structural
strength, lessen the value of, interfere or make inoperable any portion of the
Premises or change the architectural appearance of the Premises.
(b) Consent. Any Alterations or Utility Installations that
Tenant shall desire to make and which require the consent of the Landlord shall
be presented to Landlord in written form with proposed detailed plans. All
consents given by Landlord, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (i) Tenant's
acquiring all applicable permits required by governmental authorities, (ii) the
furnishing of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to Landlord prior to
commencement of the work thereon, and (iii) the compliance by Tenant with all
conditions of said permits in a prompt and expeditious manner. Any Alterations
or Utility Installations by Tenant during the term of this Lease shall be done
in a good and workmanlike manner, with good and sufficient materials, and in
compliance with all Applicable Law. Tenant shall promptly upon completion
thereof furnish Landlord with as-built plans and specifications therefor.
Landlord may (but without obligation to do so) condition its consent to any
requested Alteration or Utility Installation upon Tenant's providing Landlord
with a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation and/or upon Tenant's
posting an additional Security Deposit with Landlord under Paragraph 36 hereof.
(c) Indemnification. Tenant shall pay, when due, all claims
for labor or materials furnished or alleged to have been furnished to or for
Tenant at or for use on the
11
Premises, which claims are or may be secured by any mechanics' or materialmen's
lien against the Premises or any interest therein. Tenant shall give Landlord
not less than ten (10) days' notice prior to the commencement of any work in, on
or about the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Tenant shall, in
good faith, contest the validity of any such lien, claim or demand, then Tenant
shall, at it sole expense defend and protect itself, Landlord and the Premises
against the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the Landlord or the
Premises. If Landlord shall require, Tenant shall furnish to Landlord a surety
bond satisfactory to Landlord in an amount equal to one and one-half times the
amount of such contested lien claim or demand, indemnifying Landlord against
liability for the same, as required by law for the holding of the Premises free
from the effect of such lien or claim. In addition, Landlord may require Tenant
to pay Landlord's attorneys' fees and costs in participating in such action if
Landlord shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Landlord's right to require their
removal or become the owner thereof as hereinafter provided in this Paragraph
7.4, all Alterations and Utility Installations made to the Premises by Tenant
shall be the property of and owned by Tenant, but considered a part of the
Premises. Landlord may, at any time and at its option, elect in writing to
Tenant to be the owner of all or any specified part of the Tenant Owned
Alterations and Utility Installations. Unless otherwise instructed per Paragraph
7.4(b) hereof, all Tenant Owned Alterations and Utility Installations shall, at
the expiration or earlier termination of this Lease, become the property of
Landlord and remain upon and be surrendered by Tenant with the Premises.
(b) Removal. Unless otherwise expressly agreed in writing,
Landlord may require that any or all Tenant Owned Alterations or Utility
Installations be removed by the expiration or earlier termination of this Lease,
notwithstanding their installation may have been consented to by Landlord.
Landlord may require the removal at any time of all or any part of any Tenant
Owned Alterations or Utility Installations made without the required consent of
Landlord. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not be required to remove the initial Tenant Improvements made to
the Premises pursuant to Exhibit B attached hereto.
(c) Surrender/Restoration. Tenant shall surrender the Premises
by the end of the last day of the Lease term or any earlier termination date,
with all of the improvements, parts and surfaces thereof clean and free of
debris and in good operating order, condition and state of repair, ordinary wear
and tear excepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance practice or by
Tenant performing all of its obligations under this Lease. Except as otherwise
agreed or specified in writing by Landlord, the Premises, as surrendered, shall
include the Utility Installations. The obligation of Tenant shall include the
repair of any damage occasioned by the installation, maintenance or removal of
Tenant's Trade Fixtures, furnishings, equipment,
12
and Alterations and/or Utility Installations, as well as the removal of any
storage tank and the removal, replacement, or remediation of any contaminated
soil, material or groundwater, all as may then be required by Applicable Law
and/or good practice. Tenant's Trade Fixtures shall remain the property of
Tenant and shall be removed by Tenant subject to its obligation to repair and
restore the Premises per this Lease. Nothing contained in this Paragraph 7.4(c)
shall be deemed to limit Tenant's repair and maintenance obligations pursuant to
this Lease.
8. Insurance; Indemnity.
8.1 Liability Insurance - Tenant. Tenant shall obtain and keep in force
during the Term of this Lease a Commercial General Liability policy of insurance
protecting Tenant and Landlord, Landlord's Lender(s), if any, and TDA, Inc.
(each as an additional insured) against claims for bodily injury, personal
injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $2,000,000 per occurrence with
an "Additional Insured-Managers or Landlords of Premises" Endorsement and
contain the "Amendment of the Pollution Exclusion" for damage caused by heat,
smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Tenant's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by Tenant shall
not, however, limit the liability of Tenant nor relieve Tenant of any obligation
hereunder. All insurance to be carried by Tenant shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance
shall be considered excess insurance only.
8.2 Liability Insurance - Landlord. In addition to, and not in lieu of,
the insurance maintained by Tenant pursuant to Paragraph 8.1 above, Landlord
shall obtain and keep in force during the Term of this Lease, as an item of
Common Area Expenses, such policies of Commercial General Liability insurance
protecting Landlord, Landlord's Lender(s), if any, and TDA, Inc. against claims
for bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Project and
all areas appurtenant thereto, in such form and amounts and including such
coverages as Landlord deems appropriate. Tenant shall not be named as an
additional insured under such policies.
8.3 Property Insurance-Building, Improvements and Rental Value.
(a) Building and Improvements. Landlord shall obtain and keep
in force during the Term of this Lease, as an item of Operating Expenses, a
policy or policies in the name of Landlord, with loss payable to Landlord and to
the holders of any mortgages, deeds of trust or ground leases on the Premises
("Lender(s)"), insuring loss or damage to the Building, including all
improvements, fixtures, furnishings and equipment. However, Tenant Owned
Alterations and Utility Installations shall be insured by Tenant under Paragraph
8.4 rather than by Landlord. The amount of such insurance shall be equal to the
full replacement cost of the
13
Building, including all improvements, fixtures, furnishings and equipment as the
same shall exist from time to time, or the amount required by Lenders. At
Landlord's option, such policy or policies shall insure against all risks of
direct physical loss or damage (including, without limitation, the perils of
flood and earthquake), including coverage for any additional costs resulting
from debris removal and reasonable amounts of coverage for the enforcement of
any ordinance or law regulating the reconstruction or replacement of any
undamaged sections of the Building required to be demolished or removed by
reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause or loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
Index. If such insurance coverage has a deductible clause, the deductible shall
not exceed commercially reasonable amounts, and in the event of any casualty,
the amount of such deductible shall be an item of Operating Expenses.
(b) Rental Value. Landlord shall, in addition, obtain and keep
in force during the term of this Lease, as an item of Operating Expenses, a
policy or policies in the name of Landlord, with loss payable to Landlord and
Lender(s), insuring the loss of the full rental and other charges payable to
Landlord by Tenant under this Lease and by other occupants of the Building under
their respective leases for one (1) year (including all real estate taxes,
insurance costs, and any scheduled rental increases). Said insurance shall
provide that in the event any applicable lease is terminated by reason of an
insured loss, the period of indemnity for such coverage shall be extended beyond
the date of the completion of repairs or replacement of the Building, to provide
for one full year's loss of rental revenues from the date of any such loss. Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to reflect the
projected rental income, property taxes, insurance premium costs and other
expenses, if any, otherwise payable to Landlord, for the next twelve (12) month
period. Any deductible amount in the event of such loss shall be an item of
Operating Expenses.
(c) Adjacent Premises. Notwithstanding anything to the
contrary contained herein, to the extent the cost of maintaining insurance with
respect to the Building and/or any other buildings within the Project is
increased as a result of Tenant's acts, omissions, use or occupancy of the
Premises, Tenant shall pay for such increase.
8.4 Tenant's Property Insurance. Subject to the requirements of
Paragraph 8.5, Tenant at its cost shall either by separate policy or, at
Landlord's option, by endorsement to a policy already carried, maintain
insurance coverage on all personal property, Tenant Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by the Landlord under Paragraph 8.3(a). Such insurance shall be full
replacement cost coverage with a deductible of not to exceed commercially
reasonable amounts. The proceeds from any such insurance shall be used by Tenant
for the replacement of personal property or the restoration of Tenant Owned
Alterations and Utility Installations. Tenant shall be the Insuring Party with
respect to the insurance required by this Paragraph 8.4 and shall provide
Landlord with written evidence that such insurance is in force.
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8.5 Insurance Policies. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintained during the policy term a "General Policyholders Rating"
of at least B+, X or such other rating as may be required by a Lender having a
lien on the Premises, as set forth in the most current issue of "Best's
Insurance Guide." Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Paragraph 8. Tenant shall
cause to be delivered to Landlord certified copies of policies of such insurance
or certificates evidencing the existence and amounts of insurance required to be
maintained by Tenant pursuant to this Article 8 with the insureds and loss
payable clauses as required by this Lease. No such policy maintained by Tenant
shall be cancelable or subject to modification except after thirty (30) days
prior written notice to Landlord. Tenant shall at least thirty (30) days prior
to the expiration of such policies, furnish Landlord with evidence of renewals
or "insurance binders" evidencing renewal thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant to Landlord upon demand. If Tenant shall fail to procure and maintain
the insurance required to be carried by Tenant under this Xxxxxxxxx 0, Xxxxxxxx
may, but shall not be required to, procure and maintain the same, but at
Tenant's expense.
8.6 Waiver of Subrogation. Landlord and Tenant hereby mutually release
each other from liability and waive all right of recovery against each other for
any loss in or about the Premises, from perils insured against under the
respective property damage insurance policies required to be carried hereunder,
whether due to negligence or any other cause; provided that this Paragraph 8.6
shall be inapplicable if it would have the effect, but only to the extent it
would have the effect, or invalidating any insurance coverage of Landlord or
Tenant. If the waiver of subrogation pursuant hereto results in an additional
premium charge to Landlord, Tenant agrees to promptly pay Landlord such
additional charge upon receiving a written billing therefor. However, if such
insurance policies cannot be obtained with a waiver of subrogation, the parties
are relieved of the obligation to obtain such a waiver hereunder.
8.7 Indemnity. Tenant shall indemnify, protect, defend and hold
harmless the Premises, Building, Project, Landlord and its agents and
representatives, TDA, Inc., Landlord's master or ground landlord, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
occupancy of the Premises by Tenant, the conduct of Tenant's business, any act,
omission or neglect of Tenant, its agents, contractors, employees or invitees,
and out of any Default or Breach by Tenant in the performance in a timely manner
of any obligation on Tenant's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Landlord) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding be brought against
Landlord by reason of any of the foregoing matters, Tenant upon notice from
Landlord shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord and Landlord shall cooperate with Tenant in such
defense. Landlord need not have first paid any such claim in order to be so
15
indemnified. Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to property or injury to persons in, upon or about
the Premises and Common Areas arising from any cause and Tenant hereby waives
all claims in respect thereof against Landlord.
8.8 Exemption of Landlord from Liability. Landlord shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Tenant, Tenant's employees, contractors, invitees, customers, or any
other person in or about the Premises or Project, whether such damage or injury
is caused by or results from fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether the said injury or damage results from
conditions arising upon the Premises, Building or Project, or from other sources
or places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Landlord shall not be liable
for any damages arising from any act or neglect of any other tenant of Landlord.
Notwithstanding Landlord's negligence or breach of this Lease, Landlord shall
under no circumstances be liable for injury to Tenant's business or for any loss
of income or profit therefrom.
9. Damage or Destruction.
9.1 Insured Casualty. If the Premises is partially or totally destroyed
by fire or any other peril covered by insurance maintained pursuant to Paragraph
8.3, except as otherwise provided in this Xxxxxxxxx 0, Xxxxxxxx shall, within
120 days after the occurrence of such destruction, but only to the extent that
proceeds of such insurance are available to Landlord for such purpose, commence
reconstruction and restoration of the Premises (but not Tenant's Trade Fixtures,
Tenant Owned Alterations and Utility Installations, furnishings, equipment and
personal property) and prosecute the same diligently to completion, in which
event this Lease shall continue in full force and effect. If, however, insurance
proceeds are not sufficient to pay the full cost of such reconstruction, if the
damage or destruction is due to the acts or omissions of Tenant, its agents,
employees or contractors, or if Landlord is restricted by any governmental
authority, Landlord may elect to either terminate this Lease or pay the cost of
such reconstruction. In the event of the repair and/or restoration of the
Premises following casualty pursuant to this Paragraph 9, following the
completion of such repair and/or restoration, Tenant shall promptly commence and
diligently prosecute to completion the repair and restoration of Tenant's Trade
Fixtures, Tenant Owned Alterations and Utility Installations, furnishings,
equipment and personal property.
9.2 Uninsured Casualty. If the Premises are damaged or destroyed to any
extent whatever as a result of any casualty or peril not covered by the
insurance maintained pursuant to Paragraph 8.3, Landlord may within 120 days
after the occurrence of such destruction: (a) commence reconstruction and
restoration of the Premises and prosecute the same diligently to completion, in
which event this Lease shall continue in full force and effect; or (b) notify
Tenant in writing that it elects not to reconstruct or restore the Premises, in
which event this Lease shall cease and terminate as of the date of service of
such notice. If Landlord elects to
16
reconstruct the Premises following destruction as a result of any casualty or
peril not covered by such insurance, Landlord's and Tenant's obligations with
respect to the reconstruction of the Premises shall be as described and limited
in Paragraph 9.1 above.
9.3 Damage Near End of Term. Notwithstanding anything to the contrary
contained in Paragraphs 9.1 and 9.2 above, if the Premises is damaged by
casualty during the last twelve (12) months of the Term to an extent whereby
repairs and/or restoration cannot be completed within the shorter of (i) 90 days
or (ii) the remaining Term of this Lease, then Landlord and Tenant each shall
have the option to terminate this Lease by giving written notice to the other of
the exercise of such option within 60 days after such casualty, in which event
this Lease shall cease and terminate as of the date of service of such notice.
9.4 Abatement of Rent. During the period following the casualty until
the completion of Landlord's repair and/or restoration of casualty damage to the
Premises, Tenant's obligation for payment of Base Rent and Operating Expenses,
shall be abated in proportion to the degree to which Tenant's use of the
Premises is impaired but only to the extent to which Landlord receives
reimbursement (or would have received reimbursement had Landlord maintained the
insurance required to be maintained by Landlord under this Lease) for such
abatement pursuant to the rental value insurance maintained under Paragraph
8.3(b) above. Except for abatement of Base Rent and Operating Expenses, as
aforesaid, all other obligations of Tenant hereunder shall be preformed by
Tenant, and Tenant shall have no claim against Landlord for any damage suffered
by reason of any such damage, repair or restoration.
9.5 Termination-Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Tenant to Landlord.
Landlord shall, in addition, return to Tenant so much of Tenant's Security
Deposit as has not been, or is not then required to be, used by Landlord under
the terms of this Lease.
9.6 Waive Statutes. Landlord and Tenant agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statue to the extent inconsistent herewith.
10. Real Property Taxes.
10.1 Payment of Taxes. During the Term of this Lease, Landlord shall
pay the "Real Property Taxes", as defined in Paragraph 10.2 below, applicable to
the Building (as an item of Operating Expenses), and applicable to the Common
Areas (as an item of Common Area Expenses).
10.2 Definition of "Real Property Taxes." As used herein, the term
"Real Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any
17
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, levied against any legal or
equitable interest of Landlord in the Premises, Building and/or Project,
Landlord's right to rent or other income therefrom, and/or Landlord's business
of leasing the Premises, Building and/or Project. The term "Real Property Taxes"
shall also include any tax, fee, levy, assessment or charge, or any increase
therein, imposed by reason of events occurring, or changes in applicable law
taking effect, during the term of this Lease, including but not limited to a
change in the ownership of the Premises, Building and/or Project or in the
improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.
10.3 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
contained in the Premises or elsewhere. When possible, Tenant shall cause its
Trade Fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord. If any of
Tenant's said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Tenant's property or, at Landlord's option, as provided in Paragraph 10.1(b).
11. Utilities. Tenant shall contract for, in Tenant's name, and shall pay for
all water, gas, heat, light, power, telephone, trash disposal and other
utilities and services supplied to the Premises, together with any taxes
thereon. If any such services are not separately metered to Tenant, Tenant shall
pay a reasonable proportion, to be determined by Landlord, of all charges
jointly metered with other premises. Landlord shall not be liable in damages or
otherwise for any failure or interruption for any utility service being
furnished to the Premises, and no such failure or interruption shall be deemed
to constitute an actual or constructive eviction or entitle Tenant to terminate
this Lease or withhold any rent or any other sum due under this Lease.
12. Assignment and Subletting.
12.1 Landlord's Consent Required.
(a) Tenant shall not voluntarily or by operation of law
assign, transfer, mortgage or otherwise transfer or encumber or enter into a
concession, license, management or operating agreement with respect to
(collectively, "assignment") or sublet all or any part of Tenant's interest in
this Lease or in the Premises without Landlord's prior written consent given
under and subject to the terms of Paragraph 36. Notwithstanding anything to the
contrary contained in this Paragraph 12, Tenant shall have the right to permit
occupancy of portions of the Premises for the permitted use under this Lease by
entities controlling, controlled by or under majority common control with Tenant
(collectively, "Tenant's Affiliates") without Landlord's prior consent (but upon
fifteen (15) days prior written notice to Landlord), and Tenant shall have the
right to assign this lease (without being subject to the provisions of
Paragraphs 12.2(e), (h) or (i) below), to any of Tenant's Affiliates assuming
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Tenant's obligations under this Lease in writing, without Landlord's prior
consent (but upon fifteen (15) days prior written notice to Landlord) provided
that such assignee has a net worth at lease equal to the greater of (i) Tenant's
net worth as of the execution of this Lease, or (ii) Tenant's net worth
immediately prior to such assignment.
(b) A change in the control of Tenant shall constitute an
assignment requiring Landlord's consent. The transfer, on a cumulative basis, of
twenty-five percent (25%) or more of the voting control of Tenant or of the
beneficial ownership of Tenant shall constitute a change in control for this
purpose.
(c) The involvement of Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Tenant's assets
occurs, which results or will result in a reduction of the Net Worth of Tenant,
as hereinafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Tenant as it was represented to Landlord at
the time of the execution by Landlord of this Lease or at the time of the most
recent assignment to which Landlord has consented, or as it exists immediately
prior to said transaction or transactions constituting such reduction, at
whichever time said Net Worth of Tenant was or is greater, shall be considered
an assignment of this Lease by Tenant to which Landlord may reasonably withhold
its consent. "Net Worth of Tenant" for purposes of this Lease shall be the net
worth of Tenant (excluding any guarantors) established under generally accepted
accounting principles consistently applied.
(d) An assignment or subletting of Tenant's interest in this
Lease without Landlord's specific prior written consent shall, at Landlord's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Landlord's consent, any assignment or
subletting shall not: (i) be effective without the express written assumption by
such assignee or subtenant of the obligations of Tenant under this Lease, (ii)
release Tenant of any obligations hereunder, or (iii) alter the primary
liability of Tenant for the payment of Base Rent and other sums due Landlord
hereunder or for the performance of any other obligations to be performed by
Tenant under this Lease.
(b) Landlord may accept any rent or performance of Tenant's
obligations from any person other than Tenant pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Landlord's right to exercise its remedies for the Default or Breach
by Tenant of any of the terms, covenants or conditions of this Lease.
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(c) The consent of Landlord to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Tenant or to any subsequent or successive assignment or subletting by the
subtenant. However, Landlord may consent to subsequent sublettings and
assignments of the sublease or any amendment or modifications thereto without
notifying Tenant or anyone else liable on the Lease or sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or sublease.
(d) In the event of any Default or Breach of Tenant's
obligations under this Lease, Landlord may proceed directly against Tenant, any
Guarantors or anyone else responsible for the performance of the Tenant's
obligations under this Lease, including any subtenant, without first exhausting
Landlord's remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord or Tenant.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to the Landlord's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or subtenant, including but not limited
to the intended use and/or required modification of the Premises, if any,
together with a non-refundable deposit of $1,000 as reasonable consideration for
Landlord's considering and processing the request for consent. Tenant agrees to
provide Landlord with such other or additional information and/or documentation
as may be reasonably requested by Landlord, in determining whether to reasonably
consent to a proposed assignment or subletting, (i) it shall not be unreasonable
for Landlord to withhold its consent to any such assignment or subletting if a
proposed assignee's or subtenant's anticipated or proposed use of the Premises
involves the generation, storage, use, treatment or disposal of any Hazardous
Substance; and (ii) Landlord may consider, among other things, any or all of the
following factors: (1) the reputation of the proposed assignee or subtenant
(including any principals, partners or shareholders of such assignee or
subtenant), including, without limitation, the reputation of the proposed
assignee or subtenant for dishonesty, criminal conduct and unethical business
practices; (2) whether the business experience and quality of business
operations of the proposed assignee or subtenant is comparable to that of
Tenant; (3) the credit history of the proposed assignee or subtenant; (4) the
intended use of the Premises by the proposed assignee or subtenant; and/or (5)
whether the use of the Premises by the proposed assignee or subtenant will
involve the generation, storage, use, treatment or disposal of any Hazardous
Substances, or will in any way increase any potential risk or liability to
Landlord arising out of or relating to Hazardous Substances. Should Tenant
desire to enter into an assignment or subletting, Tenant shall provide not less
than ninety (90) days prior written notice thereof to Landlord setting forth the
name of the proposed assignee or subtenant, the term, use, rental rate and other
relevant particulars of the proposed assignment or subletting, including,
without limitation, evidence satisfactory to Landlord that the proposed assignee
or subtenant will not use, store or dispose of any Hazardous Substances in or on
the Premises, and that the proposed assignee or subtenant will immediately
occupy and thereafter use the Premises for the entire term of the Lease or the
sublease (as the case may be). Such notice shall be accompanied by a copy of the
proposed assignment or sublease agreement and any documents or financial
20
information Landlord may require in order to make a determination as to the
suitability of the assignee or subtenant.
(f) Any assignee of, or subtenant under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Landlord, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Tenant during the term of said assignment or sublease.
(g) The occurrence of a transaction described in Paragraph
12.1(c) shall give Landlord the right (but not the obligation) to require that
the Security Deposit be increased to an amount equal to six (6) times the then
monthly Base Rent, and Landlord may make the actual receipt by Landlord of the
amount required to establish such Security Deposit a condition to Landlord's
consent to such transaction.
(h) In the event of any assignment or sublease, Landlord shall
receive as additional rent hereunder fifty percent (50%) of Tenant's "Excess
Consideration" derived from such assignment or sublease. If Tenant shall elect
to assign or sublet, Tenant shall use reasonable and good faith efforts to
secure consideration from any such assignee or subtenant which would be
generally equivalent to then-current market rent, but in no event shall Tenant's
monetary obligations to Landlord, as set forth in this Lease, be reduced. In the
event of a sublease, "Excess Consideration" shall mean all rent, additional rent
or other consideration actually received by Tenant from such subtenant and/or
actually paid by such subtenant on behalf of Tenant in connection with the
subletting in excess of the rent, additional rent and other sums payable by
Tenant under this Lease during the term of the sublease on a per square foot
basis if less than all of the Premises is subleased, less marketing costs,
attorneys' fees and brokerage commissions, if any, reasonably incurred by Tenant
to procure the sublease, and the cost of any alterations made by Tenant
specifically for the benefit of such subtenant. In the event of an assignment,
"Excess Consideration" shall mean key money, bonus money or other consideration
paid by the assignee to Tenant in connection with such assignment, and any
payment in excess of fair market value for services rendered by Tenant to
assignee or for assets, fixtures, inventory, equipment, or furniture transferred
by Tenant to assignee in connection with such assignment, less marketing costs,
attorneys' fees and brokerage commissions, if any, reasonably incurred by Tenant
to procure the assignment, and the cost of any alterations made by Tenant
specifically for the benefit of such assignee. If part of the Excess
Consideration shall be payable by the assignee or subtenant other than in cash,
then Landlord's share of such non-cash consideration shall be in such form as is
reasonably satisfactory to Landlord.
(i) In addition to Landlord's right of approval of any
proposed assignment or subletting and without limiting the other provisions of
this Xxxxxxxxx 00, Xxxxxxxx shall have the option, in the event of any proposed
assignment or subletting, to terminate the Lease as to the affected portion of
the Premises as of the proposed effective date of the proposed assignment or
subletting set forth in Tenant's notice. Such option to terminate shall be
exercised, if at all, by Landlord giving Tenant written notice thereof within
sixty (60) days
21
following Landlord's receipt of Tenant's written request. In the event of such
termination by Landlord, from and after the effective date of such termination,
Landlord and Tenant shall have no further obligations or liabilities to each
other with respect to the affected portion of the Premises, except with respect
to obligations or liabilities which have accrued as of, or survive, such
termination (in the same manner as if such termination date were the date
originally fixed for the expiration of the Lease Term). Without in any manner
limiting the rights of Landlord, following any such termination by Landlord,
Landlord may lease the affected portion of the Premises to the prospective
assignee or subtenant proposed by Tenant, without liability to the Tenant.
Landlord's failure to exercise such termination right as herein provided shall
not be construed as Landlord's consent to the proposed assignment or subletting.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein.
(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Tenant, and Landlord
may collect such rent and income and apply same toward Tenant's obligations
under this Lease, provided, however, that until a Breach (as defined in
Paragraph 13.1) shall occur in the performance of Tenant's obligations under
this Lease, Tenant may, except as otherwise provided in this Lease, receive,
collect and enjoy the rents accruing under such sublease. Landlord shall not, by
reason of this or any other assignment of such sublease to Landlord, nor by
reason of the collection of the rents from a subtenant, be deemed liable to the
subtenant for any failure of Tenant to perform and comply with any of Tenant's
obligations to such subtenant under such sublease. Tenant hereby irrevocably
authorizes and directs any such subtenant, upon receipt of a written notice from
Landlord stating that a Breach exists in the performance of Tenant's obligations
under this Lease, to pay to Landlord the rents and other charges due and to
become due under the sublease. Subtenant shall rely upon any such statement and
request from Landlord and shall pay such rents and other charges to Landlord
without any obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Tenant to the contrary. Tenant
shall have no right or claim against said subtenant, or, until the Breach has
been cured, against Landlord, for any such rents and other charges so paid by
said subtenant to Landlord.
(b) In the event of a Breach by tenant in the performance of
its obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in which
event Landlord shall undertake the obligations of the sublandlord under such
sublease from the time of the exercise of said option to the expiration of such
sublease; provided, however, Landlord shall not be liable for any prepaid rents
or security deposit paid by such subtenant to such sublandlord or for any other
prior Defaults or Breaches of such sublandlord under such sublease.
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(c) Any matter or thing requiring the consent of the
sublandlord under a sublease shall also require the consent of Landlord herein.
(d) No subtenant shall further assign or sublet all or any
part of the Premises without Landlord's prior written consent.
(e) If Landlord delivers a copy of any notice of Default or
Breach by Tenant to the subtenant, such subtenant shall have the right to cure
the Default of Tenant within the grace period, if any, specified in such notice.
In such event, the subtenant shall have a right of reimbursement and offset from
and against Tenant for any such Defaults cured by the subtenant.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default" is defined as a failure by the Tenant
to observe, comply with or perform any of the terms, covenants, conditions or
rules applicable to Tenant under this Lease. A "Breach" is defined as the
occurrence of any one or more of the following Defaults, and, where a grace
period for cure after notice is specified herein, the failure by Tenant to cure
such Default prior to the expiration of the applicable grace period, and shall
entitle Landlord to pursue the remedies set forth in Paragraphs 13.2 and/or
13.3:
(a) The vacating or abandonment of the Premises.
(b) The failure by Tenant to make any payment of Base Rent or
any other monetary payment required to be made by Tenant hereunder, whether to
Landlord or to a third party, as and when due, the failure by Tenant to provide
Landlord with reasonable evidence of insurance or surety bond required under
this Lease, or the failure of Tenant to fulfill any obligation under this Lease
which endangers or threatens life or property, where such failure continues for
a period of three (3) days following written notice thereof by or on behalf of
Landlord to Tenant.
(c) Except as expressly otherwise provided in this Lease, the
failure by Tenant to provide Landlord with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with Applicable Law per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Tenant's obligations under this Lease if
required under Paragraphs 1.10 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Landlord may reasonably require of Tenant under the terms of
this Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Landlord to Tenant.
(d) A Default by Tenant as to the terms, covenants, conditions
or provisions of this Lease, one of the rules adopted under Paragraph 40 hereof,
that are to be observed,
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complied with or performed by Tenant, other than those described in
subparagraphs (a), (b) or (c), above, where such Default continues for a period
of thirty (30) days after written notice thereof by or on behalf of Landlord to
Tenant; provided, however, that if the nature of Tenant's Default is such that
more then thirty (30) days are reasonably required for its cure, then it shall
not be deemed to be a Breach of this Lease by Tenant if Tenant commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
(e) The occurrence of any of the following events: (i) the
making by Tenant of any general arrangement or assignment for the benefit of
creditors; (ii) tenant's becoming a "debtor" as defined in 11 U.S.C. Sections
101 or any successor statute thereto (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days), (iii) 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
(iv) 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,
provided, however, in the event that any provision of this subparagraph (e)
is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery by Landlord that any financial statement
given to Landlord by Tenant or any Guarantor of Tenant's obligations hereunder
was materially false.
(g) If the performance of Tenant's obligations under this
Lease is guaranteed: (i) the death of a guarantor, (ii) the termination of a
guarantor's liability with respect to this Lease other than in accordance with
the terms of such guaranty, (iii) a guarantor's becoming insolvent or the
subject of a bankruptcy filing, (iv) a guarantor's refusal to honor the
guaranty, or (v) a guarantor's breach of its guaranty obligation on an
anticipatory breach basis, and Tenant's failure, within sixty (60) days
following written notice by or on behalf of Landlord to Tenant of any such
event, to provide Landlord with written alternative assurance or security,
which, when coupled with the then existing resources of Tenant, equals or
exceeds the combined financial resources of Tenant and the guarantors that
existed at the time such guaranty was furnished.
13.2 Remedies. If Tenant fails to perform any affirmative duty or
obligation of Tenant under this Lease, within ten (10) days after written notice
to Tenant (or in case of an emergency, without notice), Landlord may at its
option (but without obligation to do so), perform such duty or obligation on
Tenant's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Landlord shall be
due and payable by Tenant to Landlord upon invoice therefor. If any check given
to Landlord by Tenant shall not be honored by the bank upon which it is drawn,
Landlord, at its option, may require all future payments to be made under this
Lease by Tenant to be made only by cashier's check. In the event of a Breach of
this Lease by Tenant, as defined in Paragraph
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13.1, with or without further notice or demand, and without limiting Landlord in
the exercise of any right or remedy which Landlord may have by reason of such
Breach, Landlord may:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
In such event Landlord shall be entitled to recover from Tenant: (i) the worth
at the time of the award of the unpaid rent which had been earned at the time of
termination, (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 rental loss that the Tenant proves could have
been reasonably avoided, (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 rental loss that the Tenant proves could be
reasonably avoided, and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by the 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 the cost to recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of the leasing commission paid by Landlord applicable to the unexpired
term of this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the prior sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent. Efforts by Landlord to mitigate damages caused
by Tenant's Default or Breach of this Lease shall not waive Landlord's right to
recover damages under this Paragraph. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Landlord shall have the
right to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Landlord may reserve therein the right to recover all or
any part thereof in a separate suit for such rent and/or damages. If a notice
and grace period required under Subparagraphs 13.1(b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Tenant under any statute authorizing the forfeiture of
leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by Subparagraphs 13.1(b), (c) or (d). In such
case, the applicable grace period under Subparagraphs 13.1(b), (c) or (d) and
under the unlawful detainer statute shall run concurrently after the one such
statutory notice, and the failure of Tenant to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful detainer
and a Breach of this Lease entitling Landlord to the remedies provided for in
this Lease and/or by said statute.
(b) Continue the Lease and Tenant's right to possession in
effect (under California Civil Code Section 1951.4) after Tenant's Breach and
abandonment and recover the rent as it becomes due, provided Tenant has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Tenant and Landlord agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Landlord's interest under the Lease, shall not constitute a
termination of the Tenant's right to possession.
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(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state wherein the Premises
are located.
(d) The expiration or termination of this Lease and/or the
termination of Tenant's right to possession shall not relieve Tenant from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof or by reason of Tenant's occupancy of the
Premises.
13.3 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from
Tenant shall not be received by Landlord or Landlord's designee within ten (10)
days after such amount shall be due, then, without any requirement for notice to
Tenant, Tenant shall pay to Landlord a late charge equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's Default or Breach with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments of
Base Rent, then notwithstanding Paragraph 4.1 or any other provision of this
Lease to the contrary, Base Rent shall, at Landlord's option, become due and
payable quarterly in advance.
13.4 Breach by Landlord. Landlord shall not be deemed in breach of this
Lease unless Landlord fails within a reasonable time to perform an obligation
required to be performed by Landlord. For purposes of this Paragraph 13.4, a
reasonable time shall in no event be less than thirty (30) days after receipt by
Landlord, and by the holders of any ground lease, mortgage or deed of trust
covering the Premises whose name and address shall have been furnished Tenant in
writing for such purpose, of written notice specifying wherein such obligation
of Landlord has not been performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days after such notice
are reasonably required for its performance, then Landlord shall not be in
Breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or a material portion of the Common Areas, is taken by
condemnation and such taking materially interferes with Tenant's use of the
Premises,
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Tenant may, at Tenant's option, to be exercised in writing within ten (10) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Tenant does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises taken
bears to the total rentable floor area of the Premises prior to such taking (and
Tenant's Share, for purposes of calculation of Operating Expenses, shall be
adjusted as appropriate to reflect the new proportion of Premises floor area to
total Project floor area). No reduction of Base Rent shall occur with respect to
any taking of Common Areas. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Landlord, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Tenant
shall be entitled to any compensation separately awarded to Tenant for Tenant's
relocation expenses and/or loss of Tenant's Trade Fixtures. In the event that
this Lease has not terminated by reason of such condemnation, Landlord shall to
the extent of its net severance damages received, over and above the legal and
other expenses incurred by Landlord in the condemnation matter, repair any
damage to the Premises caused by such condemnation, except to the extent that
Tenant has been reimbursed therefor by the condemning authority. Tenant shall be
responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.
15. Brokers.
15.1 The Brokers named in Paragraph 1.9 are the procuring causes of
this Lease.
15.2 Upon execution of this Lease by both Parties, Landlord shall pay
to said Brokers jointly, or in such separate shares as they may mutually
designate in writing, a fee as set forth in a separate written agreement between
Landlord and said Brokers.
15.3 Landlord and Tenant each represent and warrant to the other that
it has had no dealings with any person, firm, broker or finder (other than the
Brokers, if any, named in Paragraph 1.9) in connection with the negotiation of
this Lease and/or the consummation of the transaction contemplated hereby, and
that no broker or other person, firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said transaction.
Landlord and Tenant do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges which
may be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the Indemnifying Party, including any
costs, expenses and attorneys' fees reasonably incurred with respect thereto.
15.4 Landlord and Tenant hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.9.
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16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within ten (10) days
after written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing (a)
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this Lease
as so modified is in full force and effect), and the date to which rental and
other charges are paid in advance, if any, (b) acknowledging that there are not,
to the Responding Party's knowledge, any uncured defaults on the part of
Landlord or Tenant, or specifying such defaults if any are claimed, plus such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 If Landlord desires to finance, refinance, or sell the Premises,
Building and/or Project or any part thereof, Tenant and all Guarantors of
Tenant's performance hereunder shall deliver to any potential lender or
purchaser designated by Landlord such financial statements of Tenant and such
Guarantors as may be reasonably required by such lender or purchaser, including
but not limited to Tenant's financial statements of the past three (3) years.
All such financial statements shall be received by Landlord and such lender or
purchaser in confidence and shall be used only for the purposes herein set
forth.
17. Landlord's Liability. The Term "Landlord" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Tenant's interest in the prior lease. In the event of
a transfer of Landlord's title or interest in the Premises or in this Lease,
Landlord shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Landlord at the time of such transfer or
assignment. Upon such transfer or assignment, the prior Landlord shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the "Landlord." The obligations and/or
covenants in this Lease to be performed by the Landlord shall be binding only
upon the Landlord as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Landlord
hereunder not received by Landlord on the date on which it was due, shall
thereafter bear interest at the rate of 12% per annum, but not exceeding the
maximum rate allowed by law, in addition to the late charge provided for in
Paragraph 13.3.
20. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Tenant to Landlord under the terms
of this Lease are deemed to be rent.
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22. No Prior or Other Agreements. This Lease contains all agreements
between the Parties with respect to the leasing of the Premises from Landlord to
Tenant, and no other prior or contemporaneous agreement or understanding shall
be effective.
23. Notices.
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail or other reputable overnight courier service, with postage
prepaid, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph 23. The addresses noted adjacent to Landlord's signature on
this Lease shall be Landlord's address for delivery or mailing of notice
purposes, unless Landlord by written notice to Tenant, specifies a different
address for notice purposes. The Premises shall constitute Tenant's address for
the purpose of mailing or delivering notices to Tenant. A copy of all notices
required or permitted to be given to Landlord hereunder shall be concurrently
transmitted to such party or parties at such addresses as Landlord may from time
to time hereafter designate by written notice to Tenant.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If notice is received on a
Sunday or legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Landlord of the Default or Breach of any term,
covenant or condition hereof by Tenant, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Tenant of the same or of any other term, covenant or condition hereof.
Landlord's consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Landlord's consent to, or approval of, any
subsequent or similar act by Tenant, or be construed as the basis of an estoppel
to enforce the provision or provisions of this Lease requiring such consent.
Regardless of Landlord's knowledge of a Default or Breach at the time of
accepting rent, the acceptance of rent by Landlord shall not be a waiver of any
preceding Default or Breach by Tenant of any provision hereof, other than the
failure of Tenant to pay the particular rent so accepted. Any payment given
Landlord by Tenant may be accepted by Landlord on account of moneys or damages
due Landlord, notwithstanding any qualifying statements or conditions made by
Tenant in connection therewith, which such statements and/or conditions shall be
of no force or effect whatsoever.
25. Recording. Neither this Lease nor any memorandum hereof shall be
recorded by either Landlord or Tenant.
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26. No Right to Holdover. Tenant has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. Any holding over by Tenant after the expiration or earlier
termination of this Lease shall be construed to be a tenancy at sufferance on
all of the terms and conditions set forth herein to the extent not inconsistent
with a tenancy at sufferance, provided that the Base Rent for such holdover
period shall be an amount equal to two (2) times the monthly Base Rent due for
the last full month of the Term. Acceptance by Landlord of rent or any other sum
payable hereunder after such expiration or earlier termination shall not result
in an extension or renewal of this Lease. If Tenant fails to surrender the
Premises upon the expiration or earlier termination of this Lease, Tenant shall
indemnify, defend and hold harmless Landlord from and against all loss, damage,
cost, liability or expense (including, without limitation, attorneys' fees and
expenses) resulting from or relating to such failure to surrender the Premises
including, without limitation, any claim made by any succeeding tenant.
27. Cumulative Remedies. No remedy or election of Landlord hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed
or performed by Tenant are both covenants and conditions.
29. Binding Effect; Choice of Law. Except as otherwise provided herein,
this Lease shall be binding upon the Parties, their personal representatives,
successors and assigns and be governed by the laws of the State in which the
Premises are located. Any litigation between the Parties hereto concerning this
Lease shall be initiated in the county in which the Premises are located.
30. Subordination; Attornment.
30.1 Subordination. This Lease and Tenant's rights hereunder shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Landlord upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Tenant
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Landlord under this
Lease, but that in the event of Landlord's default with respect to any such
obligation, Tenant will give any Lender whose name and address have been
furnished Tenant in writing for such purpose notice of Landlord's default and
allow such Lender thirty (30) days (or if more than thirty (30) days is required
to effect such cure, such additional time as may be necessary) following receipt
of such notice for the cure of said default before invoking any remedies Tenant
may have by reason thereof. If any Lender shall elect to have this Lease and/or
Tenant's rights hereunder superior to the lien of its Security Device and shall
give written notice thereof to Tenant, this Lease and such rights shall be
deemed prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
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30.2 Attornment. Notwithstanding any such subordination, and at the
election of a Lender or any other party who acquires ownership of the Premises
by reason of a foreclosure of a Security Device, Tenant agrees to attorn to such
Lender or other party, and in the event of such foreclosure and such election,
such new owner shall not: (i) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of ownership,
(ii) be subject to any offsets or defenses which Tenant might have against any
prior lessor, or (iii) be bound by prepayment of more than one month's rent.
30.3 Self-Executing. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents and shall
survive the foreclosure of a Security Device; provided, however, that, upon
written request from Landlord or a Lender, Tenant and Landlord shall execute
such further writings as may be reasonably required to separately document any
of the matters provided for herein.
31. Attorneys' Fee. If any Party brings an action or proceeding to enforce
the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter
defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other Party of its claim or defense. The attorneys' fee award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees reasonably incurred. In addition
to the foregoing award of attorneys' fees to the Prevailing Party, the
Prevailing Party shall be entitled to its attorneys' fees incurred in any
post-judgment proceedings to collect or enforce the judgment. This provision is
separate and several and shall survive the merger of this Lease into any
judgment on this Lease. Landlord shall be entitled to attorneys' fees, costs and
expenses incurred in the preparation and service of notices of Default and
consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach.
32. Landlord's Access; Showing Premises; Repairs. Landlord and Landlord's
agents shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of inspection,
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part, as Landlord may reasonably deem necessary.
Landlord may at any time place on or about the Premises or building any ordinary
"For Sale" signs and landlord may at any time during the last one hundred twenty
(120) days of the term hereof place on or about the Premises any ordinary "For
Lease" signs. All such activities of Landlord shall be without abatement of rent
or liability to Tenant.
33. Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Landlord's prior written consent. Notwithstanding anything the contrary
in this Lease, Landlord shall not be
31
obligated to exercise any standard of reasonableness in determining whether to
grant such consent.
34. Signs. Subject to compliance with Applicable Laws and Landlord's
reasonable approval as to design, materials and manner of installation, Tenant
may install Building front signage over the Premises identifying Tenant. Other
than such sign, Tenant shall not place any sign upon the Premises, except that
Tenant may, with Landlord's prior written consent, install (but not on the roof)
such signs as are reasonably required to advertise Tenant's own business. The
installation of any sign on the Premises by or for Tenant shall be subject to
the provisions of Paragraph 7.
35. Termination; Merger. The voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof, or a termination hereof
by Landlord for Breach by Tenant, shall automatically terminate any sublease or
lesser estate in the Premises; provided, however, Landlord shall, in the event
of any such surrender, termination or cancellation, have the option to continue
any one or all of any existing subtenancies. Landlord's failure within ten (10)
days following any such event to make a written election to the contrary by
written notice to the holder of any such lesser interest, shall constitute
Landlord's election to have such event constitute the termination of such
interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to an
act by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Landlord's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Tenant for any
Landlord consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance or storage tank, shall be paid by Tenant to Landlord upon
receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting), Landlord may, as a
condition to considering any such request by Tenant, require that Tenant deposit
with Landlord an amount of money (in addition to the Security Deposit held under
Paragraph 5) reasonably calculated by Landlord to represent the cost Landlord
will incur in considering and responding to Tenant's request. Except as
otherwise provided, any unused portion of said deposit shall be refunded to
Tenant without interest. Landlord's consent to any act, assignment of this Lease
or subletting of the Premises by Tenant shall not constitute an acknowledgment
that no Default or Breach by Tenant of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach.
(b) All conditions to Landlord's consent authorized by this
Lease are acknowledged by Tenant as being reasonable. The failure to specify
herein any particular condition to Landlord's consent shall not preclude the
imposition by Landlord at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter for
which consent is being given.
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37. Guarantor.
37.1 If there are to be any Guarantors of this Lease per Paragraph
1.10, each such Guarantor shall execute the form of Guaranty provided by
Landlord, and each said Guarantor shall have the same obligations as Tenant
under this Lease, including but not limited to the obligation to provide the
Tenancy Statement and information called for by Paragraph 16.
37.2 It shall constitute a Default of the Tenant under this Lease if
any such Guarantor fails or refuses, upon reasonable request by Landlord to
give: (a) evidence of the due execution of the guaranty called for by this
Lease, including the authority of the Guarantor (and of the party signing on
Guarantor's behalf to obligate such Guarantor on said guaranty, and including in
the case of a corporate Guarantor, a certified copy of a resolution of its board
of directors authorizing the making of such a guaranty, together with a
certificate of incumbency showing the signatures of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may from
time to time be requested by Landlord, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
38. Quiet Possession. Upon payment by Tenant of the rent for the Premises
and the observance and performance of all of the covenants, conditions and
provisions on Tenant's part to be observed and performed under this Lease,
Tenant shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease and all matters of record against
the Premises.
39. Options.
39.1 Definition. As used in this Paragraph 39 the word "Option" has the
following meaning: (a) the right to extend the Term of this Lease or to renew
this Lease or to extend or renew any lease that Tenant has on other property of
Landlord, (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Landlord or the right of first offer to lease other property of
Landlord, (c) the right to purchase the Premises, or the right of first refusal
to purchase the Premises, or the right of first offer to purchase the Premises,
or the right to purchase other property of Landlord, or the right of first
refusal to purchase other property of Landlord, or the right of first offer to
purchase other property of Landlord.
39.2 Options Personal to Original Tenant. Each Option granted to Tenant
in this Lease is personal to the original Tenant named in Paragraph 1.1 hereof,
and cannot be voluntarily or involuntarily assigned or exercised by any person
or entity other than said original Tenant while the original Tenant is in full
and actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Tenant are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
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39.3 Multiple Options. In the event that Tenant has any multiple
Options to extend or renew this Lease, a later option cannot be exercised unless
the prior Options to extend or renew this Lease have been validly exercised.
39.4. Effect of Default.
(a) Tenant shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i) during
the period commencing with the giving of any notice of Default under Paragraph
13.1 and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Landlord from Tenant is unpaid
(without regard to whether notice thereof is given Tenant), or (iii) during the
time Tenant is in Breach of this Lease, or (iv) in the event that Landlord has
given to Tenant three (3) or more notices of Default under Paragraph 13.1,
whether or not the Defaults are cured, during the twelve (12) month period
immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Tenant's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Tenant under the provisions of an Option
shall, at Landlord's option, terminate and be of no further force or effect,
notwithstanding Tenant's due and timely exercise of the Option, if, after such
exercise and during the Term of this Lease, (i) Tenant fails to pay to Landlord
a monetary obligation of Tenant for a period of thirty (30) days after such
obligation becomes due (without any necessity of Landlord to give notice thereof
to Tenant), or (ii) Landlord gives to Tenant three or more notices of Default
under Paragraph 13.1 during any twelve month period, whether or not the Defaults
are cured, or (iii) if Tenant commits a Breach of this Lease.
40. Rules and Regulations. Tenant agrees that it will abide by, keep and
observe all reasonable rules and regulations which Landlord may make from time
to time for the management, safety, care, and cleanliness of the grounds, the
parking and unloading of vehicles and the preservation of good order within the
Project, as well as for the convenience of occupants or tenants of the Project
and their invitees.
41. Security Measures. Tenant hereby acknowledges that the rental payable
to Landlord hereunder does not include the cost of guard service or other
security measures, and that Landlord shall xxxx no obligation whatsoever to
provide same (provided that Landlord has the right, in its sole and absolute
discretion, to provide security services and include the cost thereof as an item
of Common Area Expenses). Tenant assumes all responsibility for the protection
of the Premises, Tenant, its agents and invitees and their property from the
acts of third parties.
42. Reservations. Landlord reserves to itself the right, from time to time,
to grant, without the consent or joinder of Tenant, such easements, rights and
dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such
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easements, rights, dedications, maps and restrictions do not unreasonably
interfere with the use of the Premises by Tenant. Tenant agrees to sign any
documents reasonably requested by Landlord to effectuate any such easement
rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recover of such sum. If it shall
be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
44. Authority. If either Party hereto is a corporation, trust, or general
or limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Tenant is a corporation, trust or
partnership, Tenant shall, within thirty (30) days after request by Landlord,
deliver to Landlord evidence satisfactory to Landlord of such authority.
45. Offer. Preparation of this Lease by Landlord or Landlord's agent and
submission of same to Tenant shall not be deemed an offer to lease to Tenant.
This Lease is not intended to be binding until executed by all Parties hereto.
46. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. Tenant agrees to make such
reasonable modifications to this Lease as may be reasonably required by a Lender
in connection with the obtaining of financing or refinancing of the property of
which the Premises are a part.
47. Multiple Parties. Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Landlord or Tenant, the
obligations of such multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such Landlord or
Tenant.
48. Non-Discrimination. Tenant herein covenants by and for himself, his
heirs, executors, administrators and assigns, and all persons claiming under or
through him, and this Lease is made and accepted upon and subject to the
following conditions: That there shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed,
religion, national origin, ancestry, sex, handicaps, age or marital status in
the leasing, subleasing, transferring, use or enjoyment of the land herein
leased nor shall the lessee himself, or any person claiming under or through
him, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants or vendees in the land herein
leased.
49. ERISA. Neither Tenant or any of its affiliates, partners or fiduciaries
in respect to the Lease (collectively, the "Tenant Group") is a Disqualified
Person under Section 4975(e) of the
35
Internal Revenue Code (the "Code") or a Party in Interest within the meaning of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), with
respect to Landlord or any investor therein disclosed to Tenant during the term
of this Lease, and the Tenant Group shall not enter into any subleases or other
agreements respecting the Premises with any party which is a Disqualified Person
as defined in the Code or a Party in Interest within the meaning of ERISA, with
respect to Landlord. Following the date hereof and thereafter, as reasonably
required during the term of the Lease, Tenant shall furnish Landlord with all
such certifications of the Tenant Group or other information which Landlord
reasonably requests in order to insure compliance with the Code and ERISA.
Without limiting the foregoing, Tenant acknowledges that ERISA prohibits the
lease, directly or indirectly, of any property between a pension plan and a
Party in Interest or a Disqualified Person as to that plan, as such terms are
defined in ERISA and the Code, respectively.
50. Exculpation. It is expressly understood and agreed that notwithstanding
anything in the Lease to the contrary, and notwithstanding any Applicable Law to
the contrary, the liability of Landlord hereunder (including any successor to
Landlord) and any recourse by Tenant against Landlord shall be limited solely
and exclusively to the equity interest of Landlord in and to the Premises,
Landlord shall not have any personal liability therefor, and Tenant hereby
expressly waives and releases such personal liability on behalf of itself and
all persons claiming by, through or under Tenant. If the Lease is being executed
by TDA, Inc. ("TDA"), on behalf of Landlord, no present or future officer,
director, employee, trustee, member, investment manager or agent of TDA shall
have any personal liability, directly or indirectly, and recourse shall not be
had against any such officer, director, employee, trustee, member, investment
manager or agent under or in connection with the Lease or any other document or
instrument heretofore or hereafter executed in connection with the Lease. Tenant
hereby waives and releases any and all such personal liability and recourse. The
limitations of liability provided in this Paragraph are in addition to, and not
in limitation of, any limitation on liability applicable to Landlord provided by
law or in any other contract, agreement or instrument.
51. Option to Extend.
51.1 Grant of Option to Extend. Subject to the provisions of Paragraph
39 above, Landlord hereby grants to Tenant the option to extend (the "Option to
Extend") the Term of the Lease for an additional consecutive term of sixty (60)
months (the "Option Term"), on the same terms and conditions as set forth in the
Lease, except that Base Rent during the Option Term be the amount determined as
set forth below. The Option to Extend shall be exercised only by written notice
delivered to Landlord at least one hundred eighty (180) days before the
expiration of the Initial Term of this Lease. If Tenant fails to deliver to
Landlord written notice of the exercise of the Option to Extend within the time
period prescribed above, the Option to Extend shall lapse and there shall be no
further right to extend the Term of the Lease. If Tenant properly exercises the
Option to Extend, all references in this Lease to the "Term" of this Lease shall
mean the initial term of this Lease as extended by the Option Term, as
applicable.
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51.2 Base Rent During Option Term. Base Rent shall be adjusted as of
the commencement of the Option Term (the "Base Rent Adjustment Date") to equal
the then "Fair Market Rental Value" of the Premises determined in the following
manner: Not later than one hundred fifty (150) days prior to the Base Rent
Adjustment Date, Landlord and Tenant shall meet in an effort to negotiate in
good faith the Fair Market Rental Value of the Premises as of the Base Rent
Adjustment Date. If Landlord and Tenant have not agreed upon the Fair Market
Rental Value of the Premises at lease one hundred twenty (120) days prior to the
Base Rent Adjustment Date, the Fair Market Rental Value shall be determined by
the following appraisal method:
(a) If Landlord and Tenant are not able to agree upon the Fair
Market Rental Value of the Premises within the time period prescribed above,
then Landlord and Tenant shall attempt to agree in good faith upon a single
appraiser not later than one hundred five (105) days prior to the Base Rent
Adjustment Date. If Landlord and Tenant are unable to agree upon a single
appraiser within such time period, then Landlord and Tenant shall each appoint
one appraiser not later than ninety-five (95) days prior the Base Rent
Adjustment Date, and Landlord and Tenant shall each give notice to the other of
such appointment at the time of such appointment. Within ten (10) days
thereafter, the two appointed appraisers shall appoint a third appraiser. If
either Landlord or Tenant fails to appoint its appraiser and to give written
notice thereof to the other party within the prescribed time period, the single
appraiser appointed shall determine the Fair Market Rental Value of the
Premises. If both parties fail to appoint appraisers within the prescribed time
periods, then an appraiser shall be selected by the presiding judge of the Los
Angeles Superior Court upon application by either party, which appraiser shall
determine the Fair Market Rental Value of the Premises. Each party shall bear
the costs of its own appraiser and the parties shall share equally the cost of
the single or third appraiser if applicable. All appraisers shall have at least
five (5) years' experience in the appraisal of commercial/industrial real
property in the area in which the Premises is located and shall be members of
professional organizations such as MAI or its equivalent.
(b) For the purpose of such appraisal, the term "Fair Market
Rental Value" shall mean the price that a ready and willing tenant would pay, as
of the Base Rent Adjustment Date, as monthly base rent, to a ready and willing
landlord of property comparable to the Premises if such property were exposed
for lease on the open market for a reasonable period of time and taking into
account all of the purposes for which such property may be used. Such
determination of Fair Market Rental Value shall be based upon the rental of
space of comparable age, construction, size and location as the Premises with
the improvements then existing in the Premises and shall take into account
Tenant's obligation to pay additional rent under this Lease and the then
prevailing market for rental increases during the Option Term. If a single
appraiser is chosen, then such appraiser shall determine the Fair Market Rental
Value of the Premises. Otherwise, the Fair Market Rental Value of the Premises
shall be the arithmetic average of the three appraisals, provided that any
appraisal which is more then ten percent (10%) above or below the middle
appraisal shall be disregarded. Landlord and Tenant shall instruct the
appraiser(s) to complete their determination of Fair Market Rental Value not
later than sixty (60) days prior to the Base Rent Adjustment Date. If the Fair
Market Rental Value is not determined prior to the Base Rent Adjustment Date,
then Tenant shall continue to
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pay to Landlord the monthly Base Rent applicable to the Premises immediately
prior to the Base Rent Adjustment Date until the Fair Market Rental Value is
determined. When the Fair Market Rental Value is determined, Landlord shall
deliver notice thereof to Tenant, and Tenant shall pay to Landlord within ten
(10) days after receipt of such notice, the difference between the monthly
Base Rent actually paid by Tenant to Landlord for the period from and after
the Base Rent Adjustment Date and the new monthly Base Rent determined
hereunder effective as of the Base Rent Adjustment Date. Notwithstanding
anything to the contrary contained herein, in no event shall monthly Base
Rent be reduced below the monthly Base Rent applicable to the Premises
immediately prior to the Base Rent Adjustment Date.
52. Interpretation. The language in all parts of this Lease shall be in all
cases construed as a whole according to its fair meaning and not strictly for
nor against either Landlord or Tenant.
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
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The parties hereto have executed this Lease as of the date first written above.
LANDLORD: TENANT:
MT XXXXXX PROPERTIES, SHINHO ELECTRONICS &
a California corporation COMMUNICATIONS, INC.,
a California corporation
By: /s/ X.X. Xxxxxx By: /s/ Seo Xxxxx Xxx
---------------------------------- -------------------
Name Printed: Xxxxx X. Xxxxxx Name Printed: Seo Xxxxx Xxx
------------------------- -------------
Title: Chairman of the Board Title: President
---------------------------------- ------------------
Address: c/o TDA, Inc. Address: Prior to Commencement
0000 Xxxxxxxx Xxxxxx Date:
Xxxxxxxxxx, XX 00000 00000 Xxxxxxx Xxx
Attn: Xxxxx Xxxxxx Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
Following Commencement Date:
The Premises
Attn: Xxxxxxx Xxxx
with a copy to:
Xxxxxxxx Xxxx, Esq.
Loeb & Loeb LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
39
EXHIBIT A
Site Plan
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EXHIBIT B
Tenant Improvements
1. Plans. The parties intend that the Premises shall be leased to
Tenant pursuant hereto on an entirely "AS IS" basis, excepting only that
Landlord shall cause certain improvements to be permanently affixed to the
Premises and constructed by Landlord in accordance herewith (the "Tenant
Improvements"), which Tenant Improvements shall consist of (a) recarpeting the
existing office with carpeting substantially equivalent to the existing grade of
carpet, and (b) performance of such other permanently affixed office space
improvements as the parties shall reasonably approve. Within ten (10) days
following the execution of this Lease, Tenant shall provide to Landlord for
delivery to the approved contractor for construction of the Tenant Improvements
(the "Contractor"), which Contractor shall be selected by a process of
competitive bidding to Xxxxxxx Construction and another licensed, experienced
general contractor designated by Landlord and meeting Landlord's requirements
regarding use of union labor, such information respecting Tenant's requirements
as is necessary for the Contractor to prepare plans and specifications for the
Tenant Improvements. Promptly following Tenant's submission of such information
to the Contractor, Landlord shall cause the Contractor to prepare and submit
construction plans and specifications for the Tenant Improvements (the "Final
Plans") to Landlord and Tenant for approval, which approval shall not be
unreasonably withheld, and which approval shall be granted or withheld within
five (5) business days following delivery thereof (with Tenant's failure to
respond within such period being deemed approval). Upon written approval of the
Final Plan by the parties, Landlord shall be authorized to cause Contractor to
proceed with the process of obtaining permits for, and construction of, the
Tenant Improvements in accordance with the Final Plans. For purposes of this
Lease, the Final Plans shall mean such Final Plans as so approved by the
parties, subject to such changes to reflect modifications and/or additions to
the Tenant Improvements required by applicable governmental authorities in order
to comply with Applicable Laws.
2. Tenant Improvements Construction; Additional Fixed Rent.
(a) Subject to the provisions of Section 3 below, Landlord
shall cause the Contractor to construct the Tenant Improvements in accordance
with the approved Final Plans. All Tenant Improvements shall be deemed
Landlord's property under the terms of this Lease.
(b) As used herein, the "TI Costs" shall mean all of
Landlord's costs in connection with the Tenant Improvements (other than
recarpeting the existing office pursuant to Section 1(a) above, which shall be
performed at Landlord's sole cost), including, without limitation, costs of
design and engineering, purchase of materials, obtaining of permits and costs of
construction. Tenant shall reimburse Landlord for all TI Costs by amortization
of TI Costs over the final sixty (60) months of the Initial Term of the Lease
using an interest rate of eleven and one-quarter percent (11.25%), with Tenant
paying equal month installments of such amortized amount, monthly in advance as
additional rent (the "Additional Fixed Rent").
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Additional Fixed Rent shall not be subject to CPI increase and shall not be
payable during the Option Term in the event of the extension of the Term by the
Option Term.
3. Substantial Completion; Force Majeure Delays.
(a) For purposes of this Lease, the "Substantial Completion"
of the Tenant Improvements shall be deemed to occur upon the date of Tenant's
receipt from Landlord of factually correct notice that the Tenant Improvements
have been substantially completed pursuant to the "Final Plans" (as defined in
Exhibit B), as determined by the Contractor, with the exception of (1) any
punch-list items and (2) any tenant fixtures, work-stations, built-in furniture
or equipment to be installed by Tenant. Any such punch-list items shall be
promptly corrected by the Contractor.
(b) As used in this lease, "Force Majeure Delays" shall mean
the amount of any delay in the substantial completion of the Tenant Improvements
resulting from the occurrence of one or more of the following events: fire,
earthquake, explosion, flood, casualty, weather, the elements, acts of God or
the public enemy, strike, other labor trouble, interference or acts of
governmental authorities or agents (including, without limitation, delays in
approval and/or permit processing) or shortages of fuel, supplies or labor
resulting therefrom, or any other cause beyond the reasonable control of
Landlord (financial inability excepted).
4. Miscellaneous.
(a) Tenant has designated Xxxxx Xxxx as its sole
representative with respect to the matters set forth in this Exhibit B, who,
until further notice to Landlord, shall have full authority and responsibility
to act on behalf of the Tenant as required in this Exhibit B.
(b) Landlord has designated Xxxx Spanner as its sole
representative with respect to the matters set forth in this Exhibit B, who,
until further notice to Tenant, shall have full authority and responsibility to
act on behalf of the Landlord as required in this Exhibit B.
(c) All references herein to a number of days shall mean and
refer to calendar days. In all instances where Tenant is required to approve or
deliver an item, if no written notice of approval is given or the item is not
delivered within the stated time period, at Landlord's sole option, at the end
of such period the item shall automatically be deemed approved or delivered by
Tenant and the next succeeding time period shall commence.
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