Exhibit 10.28
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MODIFIED INDUSTRIAL COMPLEX LEASE (California)
Complex: XXXXX PLAZA
Landlord: XXXXX PLAZA PROPERTY, INC.
Tenant: NETWORK INSTALLATION CORPORATION
Reference Date: June 29, 2004
INDEX TO LEASE
PAGE
TITLE
ARTICLE 1. DEFINITIONS AND CERTAIN BASIC PROVISIONS 1
ARTICLE 2. GRANTING CLAUSE3
ARTICLE 3. LEASEHOLD IMPROVEMENTS/DELIVERY OF DEMISED PREMISES3
ARTICLE 4. RENT4
ARTICLE 5. FINANCIAL STATEMENTS 5
ARTICLE 6. TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE CHARGES AND
INSURANCE EXPENSES5
ARTICLE?. COMMON AREA 6
ARTICLES. INTENTIONALLY DELETED8
ARTICLE 9. USE AND CARE OF DEMISED PREMISES 8
ARTICLE 10. MAINTENANCE AND REPAIR OF DEMISED PREMISES^
ARTICLE 11. ALTERATIONS^
ARTICLE 12. LANDLORD'S RIGHT OF ACCESS11
ARTICLE 13. SIGNS; STORE FRONTS11
ARTICLE 14. UTILITIES12
ARTICLE 15. INSURANCE COVERAGES 12
ARTICLE 16. WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION 14
ARTICLE 17. DAMAGES BY CASUALTY 15
ARTICLE 18. EMINENT DOMAIN16
ARTICLE 19. ASSIGNMENT AND SUBLETTING17
ARTICLE 20. SUBORDINATION; ATTORNMENT; ESTOPPELS19
ARTICLE 21. TENANT'S INDEMNIFICATION19
ARTICLE 22. DEFAULT BY TENANT AND REMEDIES20
ARTICLE 23. LANDLORD'S CONTRACTUAL SECURITY INTEREST24
ARTICLE 24. HOLDING OVER25
ARTICLE 25. NOTICES 25
ARTICLE 26. COMMISSIONS26
ARTICLE 27. REGULATIONS^
ARTICLE 28. HAZARDOUS MATERIALS27
ARTICLE 29. MISCELLANEOUS 29
EXHIBIT A DEMISED PREMISES
EXHIBIT B INTENTIONALLY DELETED
EXHIBIT C TENANT CONSTRUCTION RULES AND REGULATIONS
EXHIBIT D SIGN CRITERIA
EXHIBIT E RULES AND REGULATIONS
(California)
ARTICLE! DEFINITIONS AND CERTAIN BASIC PROVISIONS
1.1 The following list sets out certain defined terms and certain
financial and other information pertaining to this lease:
(a) "Landlord": Xxxxx Plaza Property, Inc., a Delaware corporation.
(b) Landlord's address: do AEW Capital Management LP, World Trade Center East,
Two Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Asset Management and
Legal Department. Copies of notices to Landlord delivered pursuant to Section
25.1 below shall also be delivered to Xxxxxxxx Xxxx Company, Attn.: Vice
President, Operations, 0000 X. Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(c) Tenant": Network Installation Corporation, a California corporation.
(d) Tenant's address: 00000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000.
(e) Tenant's trade name: Network Installation Corp.
(f) Tenant's Guarantor: Not applicable.
(g) "Agent": Xxxxxxxx Xxxx Company.
(h) "Complex": Landlord's property in the City of Irvine, Orange County,
California, which property is commonly known as: Xxxxx Plaza.
(i) "Demised Premises": That certain area in the Complex containing
approximately 10,273 square feet in area, having an address of 00000 Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, and being described or shown
cross-hatched on the floor plan attached hereto as Exhibit A.
(j) "Commencement Date": The date on which the Landlord's Work is substantially
completed (as defined in Section 3.1). The parties anticipate that the
Commencement Date will occur on or about July 15, 2004.
(k) Lease term: Commencing on the Commencement Date and continuing for fifty-one
(51) months after the Commencement Date; provided that if the Commencement Date
is a date other than the first day of a calendar month, the lease term shall be
extended by the number of days remaining in the calendar month in which the
Commencement Date occurs.
Monthly Minimum Guaranteed
As used herein, the term "Lease Month" shall mean each calendar month during the
lease term (and if the Commencement Date does not occur on the first (1*) day of
a calendar month, the period from the Commencement Date to the first (1st) day
of the next calendar month shall be Included in the first (1st) Lease Month for
purposes of determining the duration of the lease term and the monthly minimum
guaranteed rental rate applicable for such partial month).
(m) Common area maintenance charge: A minimum of $1,643.68 per month, payable in
advance
(n) Prepaid rental: $12,430.33, being an estimate of the minimum guaranteed
rental, common area maintenance charge and Tenant's obligations for taxes, other
real estate charges and insurance, for the first month of the lease term, such
prepaid rental being due and payable upon execution of this lease by Tenant.
(o) Security deposit: $17,105.00, such security deposit being due and payable
upon execution of this lease by Tenant.
(p) Permitted use: As Tenant's corporate headquarters and for office
administration, sales, light warehousing and all other functions directly
related to the operation of Tenant's communications networking company
consistent with applicable zoning laws and for no other purpose whatsoever.
(q) "Tenant's proportionate share": ___%.
(r) Tenant parking: Thirty-five (35) unreserved parking spaces.
1.2 The following chart is provided as an estimate of Tenant's initial monthly
payment broken down into its components. This chart, however, does not supersede
the specific provisions contained elsewhere in this lease.
Initial Minimum Guaranteed Rental $9,759.35
(Section 1.1(1))
Initial Common Area Maintenance Charge $1,643.68
(Sections 1.1 (m) and 7.4)
Initial Impound Payment for Taxes and $924.57
Other Real Estate Charges
(Article 6)
Initial Impound Payment for Insurance $102.73
(Article 6)
Total Initial Monthly Payment
$12,430.33
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ARTICLE 2. GRANTING CLAUSE
2.1 Landlord leases the Demised Premises to Tenant, and Tenant leases the
Demised Premises from Landlord, upon all of the terms and conditions set forth
in this lease.
ARTICLE 3. LEASEHOLD IMPROVEMENTS/DELIVERY OF DEMISED PREMISES
3.1 Landlord and Tenant presently anticipate that possession of the Demised
Premises will be tendered to Tenant in the condition required by this lease on
or about July 15, 2004 (the "Estimated Delivery Date"). Prior to tendering the
Demised Premises to Tenant, Landlord shall, at Landlord's sole cost and expense,
(i) install Building-standard carpet in the areas noted on Exhibit A: (ii) clean
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the carpets and floor coverings in the remainder of the Demised Premises; (iii)
demolish the existing drywall cubicles shown on Exhibit A: (iv) add the required
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drywall and other materials necessary to enclose a conference room including the
addition of a door, all as more particularly shown on Exhibit A: (v) refinish
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and paint the interior walls of the newly-constructed conference room in the
Demised Premises using Building-standard paint; (vi) paint and patch all other
walls that require patching in the Demised Premises; (vii) replace all damaged
ceiling tiles; (viii) replace all non-functioning light bulbs or electrical
fixtures in the Demised Premises, and (ix) ensure that the Demised Premises are
"broom swept" (collectively, "Landlord's Work"). Tenant shall make its color
selection for Building-standard carpet and paint no later than the date which is
five (5) business days following the full execution of this lease by Landlord
and Tenant; if Tenant does not timely make its selection, Landlord shall have
sole discretion in choosing such colors. The term "substantial completion" of
Landlord's Work shall mean completion of such work in all material respects
excepting only minor finish and touch-up work which does not interfere with the
occupancy of the Demised Premises by Tenant, as reasonably determined by
Landlord in good faith. If Landlord is unable to tender possession of the
Demised Premises in such condition to Tenant by the Estimated Delivery Date,
then: (1) the validity of this lease shall not be affected or impaired thereby;
(2) Landlord shall not be in default hereunder or be liable for damages
therefor; and (3) Tenant shall accept possession of the Demised Premises when
Landlord tenders possession thereof to Tenant. Should the lease term commence on
a date other than the Estimated Delivery Date, Landlord will send Tenant a
written statement of such adjusted Commencement Date, and Tenant will confirm
such adjusted date in writing.
3.2 Subject to completion of Landlord's Work and the provisions of Section 3.3
below, the taking of possession of the Demised Premises by Tenant shall be
conclusive evidence (a) that Tenant accepts the Demised Premises as suitable for
the purposes for which the same are leased, (b) that Tenant accepts the Complex
and each and every part and appurtenance thereof as being in a good and
satisfactory condition, and (c) that Landlord has fully complied with Landlord's
obligations contained in his lease with respect to the construction of the
Complex. Subject to completion of Landlord's Work and the provisions of Section
3.3 below, Tenant acknowledges that the Demised Premises are being leased "AS
IS," with Tenant accepting all defects, if any; and Landlord makes no warranty
of any kind, express or implied, with respect to the Demised Premises {without
limitation. Landlord makes no warranty as to the habitability, fitness or
suitability of the Demised Premises for a particular purpose nor as to the
absence of any toxic or otherwise hazardous substances). This Section 3.2 is
subject to any contrary requirements under applicable law; however, in this
regard Tenant acknowledges that it has been given the opportunity to inspect the
Demised Premises and to have qualified experts inspect the Demised Premises
prior to the execution of this lease.
3.3 Notwithstanding anything in Section 3.2 to the contrary, on the Commencement
Date Landlord shall deliver the Demised Premises in "broom clean" condition and
warrants that for ninety (90) days following the Commencement Date (the
"Warranty Period") all building operating systems, including the heating,
ventilation and air conditioning ("HVAC"), electrical, lighting, plumbing and
loading doors shall be in good operating condition. Landlord shall repair any
defective or malfunctioning component of such building systems of which Landlord
has received written notice from Tenant describing the failure or malfunction
within the Warranty Period. Landlord shall use commercially reasonable efforts
to respond to Tenant's requests regarding necessary repairs during such Warranty
Period.
ARTICLE 4. RENT
4.1 Intentionally Deleted.
4.2 Rental shall accrue from the Commencement Date, and shall be payable to
Landlord at the following address: x/x Xxxxx Xxxxx Property, Inc., X.X. Xxx
0000, Xxxx 000, Xxxxxxx. XX 00000-0000, oral such other address as Landlord
shall so notify Tenant from time to time.
4.3 Tenant shall pay to Landlord minimum guaranteed rental in monthly
installments in the amounts specified in Section 1.1(1) of this lease. The first
such monthly installment shall be due and payable on or before the Commencement
Date, and subsequent installments shall be due and payable on or before the
first day of each succeeding calendar month during the lease term; provided that
if the Commencement Date is a date other than the first day of a calendar month,
there shall be due and payable on or before such date as minimum guaranteed
rental for the balance of such calendar month a sum equal to that proportion of
the rent specified for the first full calendar month as herein provided, which
the number of days from the Commencement Date to the end of the calendar month
during which the Commencement Date shall fall bears to the total number of days
in such month. Tenant agrees to pay to Landlord, if assessed by the jurisdiction
in which the Complex is located, any sales, excise or other tax imposed,
assessed or levied in connection with Tenant's payment of rents.
4.4 It is understood that the minimum guaranteed rental is payable on or before
the first day of each calendar month (in accordance with Section 4.2 above),
without offset or deduction of any nature. In the event any rental is not
received within three (3) days after its due date for any reason whatsoever, or
if any rental payment is by check which is returned for insufficient funds, then
in addition to the past due amount Tenant shall pay to Landlord one of the
following (the choice to be at the sole option of Landlord unless one of the
choices is improper under applicable law, in which event the other alternative
will automatically be deemed to have been selected): (a) a late charge in an
amount equal to ten percent (10%) of the rental then due, in order to compensate
Landlord for its administrative and other overhead expenses; or (b) interest on
the rental then due at the maximum contractual rate which could legally be
charged in the event of a loan of such rental to Tenant (but in no event to
exceed 1-1/2% per month), such interest to accrue continuously on any unpaid
balance due to Landlord by Tenant during the period commencing with the rental
due date and terminating with the date on which Tenant makes full payment of all
amounts owing to Landlord at the time of said payment. Any such late charge or
interest payment shall be payable as additional rental under this lease, shall
not be considered a waiver by Landlord of any default by Tenant hereunder, and
shall be payable immediately on demand
4.5 If Tenant fails in two (2) consecutive months to make rental payments within
five (5) days after it is due, Landlord, in order to reduce its administrative
costs, may require, by giving written notice to Tenant (and in addition to any
late charge or interest accruing pursuant to Section 4.4 above, as well as any
other rights and remedies accnjing pursuant to Article 22 or Article 23 below,
or any other provision of this lease or at law), that minimum guaranteed rentals
are to be paid quarterly in advance instead of monthly, and that all future
rental payments are to be made on or before the due date by cash, cashier's
check, or money order and that the delivery of Tenant's personal or corporate
check will no longer constitute a payment of rental as provided in this lease.
Any acceptance of a monthly rental payment or of a personal or corporate check
thereafter by Landlord shall not be construed as a subsequent waiver of said
rights.
4.6 Tenant shall pay when due any and all sales taxes levied, imposed or
assessed by the United States of America, the State of California, or any
political subdivision thereof or other taxing authority upon the minimum
guaranteed rental, additional rent and all other sums payable hereunder.
ARTICLE 5. FINANCIAL STATEMENTS
5.1 Intentionally deleted.
5.2 Tenant shall, when requested by Landlord from time to time, furnish a true
and accurate audited statement of its financial condition prepared in conformity
with recognized accounting principles and in a form reasonably satisfactory to
Landlord.
ARTICLE 6.
TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE CHARGES AND INSURANCE
EXPENSES
6.1 Tenant shall be liable for all taxes levied against personal property and
trade fixtures placed by Tenant in the Demised Premises which taxes shall be
paid when due and before any delinquency. If any such taxes are levied against
Landlord or Landlord's property and if Landlord elects to pay the same or if the
assessed value of Landlord's property is increased by inclusion of personal
property and trade fixtures placed by Tenant in the Demised Premises and
Landlord elects to pay the taxes based on such increase, Tenant shall pay to
Landlord upon demand that part of such taxes for which Tenant is primarily
liable hereunder.
6.2 Tenant shall also be liable for "Tenant's proportionate share" (as defined
below) of all "real estate charges" (as defined below) and "insurance expenses"
(as defined below) related to the Complex or Landlord's ownership of the
Complex. Tenant's obligations under this Section 6.2 shall be prorated during
any partial year (i.e., the first year and the last year of the lease term).
"Tenant's proportionate share" shall be a fraction, the numerator of which is
the total floor area (all of which is deemed "leasable") in the Demised Premises
and the denominator of which is the total leasable floor area of all buildings
in the Complex at the time when the respective charge was incurred, excluding,
however, areas for which any such real estate charges or insurance expenses, or
both, are paid by a party or parties other than Landlord. "Real estate charges"
shall include ad valorem taxes, general and special assessments, parking
surcharges, any tax or charge for governmental services (such as street
maintenance or fire protection) which are attributable to the transfer or
transaction directly or indirectly represented by this Lease, by any sublease or
assignment hereunder or by other leases in the Complex or by any document to
which Tenant is a party creating or transferring (or reflecting the creation or
transfer of) any interest or an estate in the Demised Premises and any tax or
charge which replaces or is in addition to any of such above-described "real
estate charges"; real estate charges shall also include any fees, expenses or
costs (including attorneys' fees, expert fees and the like) incurred by Landlord
in protesting or contesting any assessments levied or the tax rate. "Real estate
charges" shall not be deemed to include sales tax payable by Tenant pursuant to
Section 4.6 above and any franchise, estate, inheritance or general income tax.
"Insurance expenses" shall include all premiums and other expenses incurred by
Landlord for liability insurance and fire and extended coverage property
insurance (plus whatever endorsements or special coverages which Landlord, in
Landlord's sole discretion, may consider appropriate) business interruption, and
rent loss, earthquake and any other insurance policy which may be carried by
Landlord insuring the Demised Premises, the Common Area, the Complex, or any
improvements thereon.
6.3 Tenant agrees to keep the Demised Premises free from any lien or attachment;
moreover, as to all periods of time during the lease term, this covenant of
Tenant shall survive the termination of the lease. With regard to the calendar
year during which the lease term expires, Landlord at its option either may xxxx
Tenant when the charges become payable or may charge Tenant an estimate of
Tenant's pro rata share of whichever charges have been paid directly by Tenant
(based upon information available for the current year plus, if current year
information is not adequate In itself, information relating to the immediately
preceding year).
6.4 At such time as Landlord has reason to believe that at some time within the
immediately succeeding twelve (12) month period Tenant will owe Landlord any
amounts pursuant to one or more of the preceding sections of this Article 6,
Landlord may direct that Tenant prepay monthly a pro rata portion of the
prospective future payment (i.e., the prospective future payment divided by the
number of months before the prospective future payment will be due). Tenant
agrees that any such prepayment directed by Landlord shall be due and payable
monthly on the same day that minimum guaranteed rental is due.
6.5 In the event that any payment due from Tenant to Landlord is not received
within five (5) days after its due date for any reason whatsoever, or if any
such payment is by check which is returned for insufficient funds, then in
addition to the amount then due, Tenant shall pay to Landlord interest on the
amount then due at the maximum contractual rate which could legally be charged
in the event of a loan of such amount to Tenant (but in no event to exceed
1-1/2% per month), such interest to accrue continuously on any unpaid balance
until paid.
ARTICLE 7. COMMON AREA
7.1 The term "Common Area" is defined for all purposes of this lease as that
part of the Complex intended for the common use of all tenants, including among
other facilities (as such may be applicable to the Complex), parking areas,
private streets and alleys, landscaping, curbs, loading areas, sidewalks, malls
and promenades (enclosed or otherwise), lighting facilities, drinking fountains,
meeting rooms, public toilets, and the like, but excluding (i) space in
buildings (now or hereafter existing) designated for rental for commercial
purposes, as the same may exist from time to time; (ii) streets and alleys
maintained by a public authority; (iii) areas within the Complex which may from
time to time not be owned by Landlord (unless subject to a cross-access
agreement benefiting the area which includes the Demised Premises); and (iv)
areas leased to a single-purpose user where access is restricted. In addition,
although the roofs of the buildings in the Complex are not literally part of the
Common Area, they will be deemed to be so included for purposes of (i)
Landlord's ability to prescribe rules and regulations regarding same, and (ii)
their inclusion for purposes of common area maintenance reimbursements. Landlord
reserves the right to change from time to time the dimensions and location of
the Common Area, as well as the dimensions, identities, locations and types of
any buildings, signs or other improvements in the Complex. For example, and
without limiting the generality of the immediately preceding sentence, Landlord
may from time to time substitute for any parking area other areas reasonably
accessible to the tenants of the Complex, which areas may be elevated, surface
or underground.
7.2 Tenant, and its employees and customers, and when duly authorized pursuant
to the provisions of this lease, its subtenants, licensees, invitees,
contractors and concessionaires, shall have the nonexclusive right to use the
Common Area (excluding roofs of buildings in the Complex) as constituted from
time to time, such use to be in common with Landlord, other tenants in the
Complex and other persons permitted by Landlord to use the same, and subject to
rights of governmental authorities, easements, and other restrictions of record.
Provided, further, Tenant shall comply with the Complex Rules and Regulations
attached hereto as Exhibit E as well as all changes therein and additions
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thereto that may from time to time be adopted by Landlord for the operation and
protection of the Complex and the protection and welfare of its tenants and
invitees. Landlord expressly reserves the right at any time and from time to
time to make such reasonable changes in and additions to such Rules and
Regulations, provided, however, that such changes shall not become effective and
a part of this Lease until a copy thereof shall have been delivered to Tenant.
Without in any way limiting the generality of Landlord's ability to establish
and/or modify rules and regulations governing all aspects of the Common Area,
Tenant further agrees as follows:
(a) Landlord may from time to time designate specific areas within the Complex
or in reasonable proximity thereto in which automobiles owned by Tenant, its
employees, subtenants, licensees, and concessionaires shall be parked in a
non-reserved manner in common with other tenants of the Complex; and in this
regard, Tenant shall furnish to Landlord upon request a complete list of license
numbers of all automobiles operated by Tenant, its employees, its subtenants,
its licensees or its concessionaires, or their employees; and Tenant agrees that
if any automobile or other vehicle owned by Tenant or any of its employees, its
subtenants, its licensees or its concessionaires, or their employees, shall at
any time be parked in any part of the Complex other than the specified areas
designated for employee parking, Tenant shall pay to Landlord as additional rent
upon demand an amount equal to the daily rate or charge for such parking as
established by Landlord from time to time for each day, or part thereof, that
such automobile or other vehicle is so parked. Subject to the foregoing, during
the initial lease term, provided no event of default has occurred under this
lease, Landlord agrees to make available to Tenant, at no additional charge to
Tenant, on an unreserved basis in common with the other tenants of the Complex,
the number of parking spaces set out in Section 1.1 (r) above.
(b) Tenant shall not solicit business within the Common Area nor take any action
which would interfere with the rights of other persons to use the Common Area.
(c) Landlord may temporarily close any part of the Common Area for such periods
of time as may be necessary to make repairs or alterations or to prevent the
public from obtaining prescriptive rights.
(d) With regard to the roofs of the buildings in the Complex, use of the roofs
is reserved to Landlord, or with regard to any tenant demonstrating to
Landlord's satisfaction a need to use same, to such tenant after receiving prior
written consent from Landlord.
7.3 Landlord shall be responsible for the operation, management and maintenance
of the Common Area, the manner of maintenance and the expenditures therefor to
be in the sole discretion of Landlord, but to be generally in keeping with
similar industrial centers within the same geographical area as the Complex.
Landlord shall be the sole determinant of the type and amount of access control
services to be provided, if any. Landlord shall not be liable to Tenant, and
Tenant hereby waives any claim against Landlord for (i) any unauthorized or
criminal entry of third parties into the Demised Premises or Complex, (ii) any
damage to persons or property, or (iii) any loss of property in and about the
Demised Premises or Complex from any unauthorized or criminal acts of third
parties, regardless of any action, inaction, failure, breakdown or insufficiency
of access control services.
7.4 In addition to the rentals and other charges prescribed in this lease,
Tenant shall pay to Landlord Tenant's proportionate share of the cost of
operation and maintenance of the Common Area which may be incurred by Landlord
in its discretion, including, among other costs, those for trash removal,
lighting, painting, cleaning, policing, inspecting, repairing, replacing, and
Tenant's proportionate share of capital expenditures and expenses incurred by
Landlord to increase the operating efficiency of the Complex or to cause the
Common Area to comply with applicable Regulations (as such term is defined in
Section 27.1), it being agreed that the cost of such capital expenditures and
installation shall be amortized over the reasonable life of the capital
expenditure, with the reasonable life and amortization schedule being determined
in accordance with generally accepted accounting principles consistently
applied; the management fee Landlord pays to the property manager for the
Complex; a reasonable allowance for Landlord's overhead costs and the cost of
any insurance for which Landlord is not reimbursed pursuant to Section 6.2, but
specifically excluding all expenses paid or reimbursed pursuant
to Article 6. In addition, although the roofs of the buildings in the Complex
are not literally part of the Common Area, Landlord and Tenant agree that roof
maintenance, repair and replacement shall be included as a common area
maintenance item to the extent not specifically allocated to Tenant under this
lease nor to another tenant pursuant to its lease. With regard to capital
expenditures other than the capital expenditures contemplated by the first
sentence of this Section, (i) the original investment in capital improvements,
i.e., upon the initial construction of the Complex, shall not be included, and
(ii) improvements and replacements, to the extent capitalized on Landlord's
records, shall be included only to the extent of a reasonable depreciation or
amortization (including interest accruals commensurate with Landlord's interest
costs). The proportionate share to be paid by Tenant of the cost of operation
and maintenance of the Common Area shall be computed on the ratio that the total
floor area (all of which is deemed "leasable") of the Demised Premises bears to
the total leasable floor area of all buildings within the Complex which is open
and occupied (excluding, however, areas owned or maintained by a party or
parties other than Landlord); provided that in no event shall such share be less
than the amount specified in Section 1.1 (m) above. If this lease should
commence on a date other than the first day of a calendar year or terminate on a
date other than the last day of a calendar year, Tenant's reimbursement
obligations under this Section 7.4 shall be prorated based upon Landlord's
expenses for the entire calendar year. Tenant shall make such payment to
Landlord on demand, at intervals not more frequent than monthly. Landlord may,
at its option, make monthly or other periodic charges based upon the estimated
annual cost of operation and maintenance of the Common Area, payable in advance
but subject to adjustment after the end of the year on the basis of the actual
cost for such year. Landlord has the right to establish as a reserve, such
amounts as Landlord deems reasonable for the maintenance, repair and restoration
of the roof and parking of the Complex, in the event that any payment due from
Tenant to Landlord is not received within five (5) days after its due date for
any reason whatsoever, or if any such payment is by check which is returned for
insufficient funds, then, in addition to the amount then due, Tenant shall pay
to Landlord interest on the amount then due at the maximum contractual rate
which could legally be charged in the event of a loan of such amount to Tenant
(but in no event to exceed 1-1/2% per month), such interest to accrue
continuously on any unpaid balance until paid. Any delay or failure of Landlord
in delivering any estimate or statement described in this Section 7.4 or in
computing or billing Tenant's proportionate share of the foregoing costs shall
not constitute a waiver of Landlord's right to require an increase in rent as
provided herein or in any way impair the continuing obligations of Tenant under
this Section.
ARTICLE 8. INTENTIONALLY DELETED
ARTICLE 9. USE AND CARE OF DEMISED PREMISES
9.1 The Demised Premises shall be used and occupied by Tenant solely for the
permitted use specified in Section 1,1 (p) above and for no other purpose.
Tenant, at its sole cost and expense, shall obtain and keep in effect during the
term, all permits, licenses and other authorizations necessary to permit Tenant
to use and occupy the Demised Premises for the permitted use. Without limiting
the generality of the foregoing. Tenant shall not use or store any gasoline or
flammable or so called "Red Label" materials in or about the Demised Premises.
All equipment used within the Demised Premises shall be subject to approval by
Landlord's Insurance carriers and shall be Underwriters Laboratory or Factory
Mutual approved for the uses intended, evidence of which shall be furnished to
Landlord upon request. Tenant shall not operate any machinery or equipment in
the Demised Premises which, in Landlord's sole discretion, shall cause any
excessive noise, vibration, damage or disturbance to the other tenants in the
Complex. The Demised Premises shall not be used for any use which is
disreputable or creates any fire hazard.
9.2 Tenant shall take good care of the Demised Premises and keep the same free
from waste at all times. Tenant shall not overload the floors in the Demised
Premises, nor deface or injure the Demised Premises. Tenant shall keep the
Demised Premises and all sidewalks, serviceways and loading areas adjacent to
the Demised Premises neat, clean and free from dirt and rubbish at all times.
Tenant shall store all trash and garbage within the Demised Premises or in a
trash dumpster or similar container approved by Landlord as to type, location
and screening; and Tenant shall arrange for the regular pickup of such trash and
garbage at Tenant's expense (unless Landlord finds its necessary to furnish such
a service, in which event Tenant shall be charged an equitable portion of the
total of the charges to all tenants using the service). Receiving and delivery
of goods and merchandise and removal of garbage and trash shall be made only in
the manner and areas prescribed by Landlord. Tenant shall not operate an
incinerator or burn trash or garbage within the Complex.
ARTICLE 10. MAINTENANCE AND REPAIR OF DEMISED PREMISES
10.1 Landlord shall keep the foundation, the exterior walls (except plate glass;
windows, doors and other exterior openings; window and door frames, molding,
closure devices, locks and hardware; special store fronts; lighting, heating,
air conditioning, plumbing and other electrical, mechanical and electromotive
installation, equipment and fixtures; signs, placards, decorations or other
advertising media of any type; and interior painting or other treatment of
exterior walls) and roof (subject to the second sentence in Section 7.4 above)
of the Demised Premises in good repair. Landlord, however, shall not be required
to make any repairs occasioned by the act or negligence of Tenant, its agents,
contractors, employees, subtenants, invitees, customers, licensees and
concessionaires (including, but not limited to, roof leaks resulting from
Tenant's installation of air conditioning equipment or any other roof
penetration or placement); and the provisions of the previous sentence are
expressly recognized to be subject to the provisions of Article 17 and Article
18 of this lease. In the event that the Demised Premises should become in need
of repairs required to be made by Landlord hereunder, Tenant shall give
immediate written notice thereof to Landlord and Landlord shall have a
reasonable time after receipt by Landlord of such written notice in which to
make such repairs. Landlord shall not be liable to Tenant for any interruption
of Tenant's business or inconvenience caused due to any work performed in the
Demised Premises or in the Complex pursuant to Landlord's rights and obligations
under the Lease, so long as the work is performed without gross negligence or
willful misconduct.
10.2 Tenant shall keep the Demised Premises in good, clean and habitable
condition and shall at its sole cost and expense keep the Demised Premises free
of insects, rodents, vermin and other pests and make all needed repairs and
replacements, including replacement of cracked or broken glass, except tor
repairs and replacements required to be made by Landlord under the provisions of
Section 10.1, Article 17 and Article 18. Without limiting the coverage of the
previous sentence, it is understood that Tenant's responsibilities therein
include the repair and replacement in accordance with all applicable Regulations
(as defined in Section 27.1 below) of all lighting, heating, air conditioning,
plumbing and other electrical, mechanical and electromotive installation,
equipment and fixtures and also include all utility repairs in ducts, conduits,
pipes and wiring, and any sewer stoppage located in, under and above the Demised
Premises, regardless of when or how the defect or other cause for repair or
replacement occurred or became apparent; provided, however, that as to the
maintenance and repair of the HVAC equipment in the Demised Premises, Landlord
shall have the option of contracting directly with an HVAC servicing company for
all such work and charging Tenant for all costs thereof. If any repairs required
to be made by Tenant hereunder are not made within ten (10) days after written
notice delivered to Tenant by Landlord, Landlord may at its option make such
repairs without liability to Tenant for any loss or damage which may result to
its stock or business by reason of such repairs and Tenant shall pay to Landlord
upon demand, as additional rental hereunder, the cost of such repairs plus
interest at the maximum contractual rate which could legally be charged in the
event of a loan of such payment to Tenant (but in no event to exceed 1-1/2% per
month), such interest to accrue continuously from the date of payment by
Landlord until repayment by Tenant. At the expiration of this lease, Tenant
shall surrender the Demised Premises in good condition, excepting reasonable
wear and tear and losses required to be restored by Landlord in Section 10.1,
Article 17 and Article 18 of this lease.
10.3 Tenant waives the right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code and all other laws now or
hereafter in effect.
ARTICLE 11. ALTERATIONS
11.1 Tenant shall not make any alterations, additions or improvements to the
Demised Premises (collectively, the "Alterations") without the prior written
consent of Landlord, except for the installation of unattached, movable trade
fixtures which may be installed without drilling, cutting or otherwise defacing
the Demised Premises. Tenant shall furnish complete plans and specifications to
Landlord at the time it requests Landlord's consent to any Alterations if the
desired Alterations (i) will affect the Complex's mechanical, electrical,
plumbing or life safety systems or services, or (ii) will affect any structural
component of the Demised Premises or the Complex, or (iii) will require the
filing of plans and specifications with any governmental or quasi-governmental
agency or authority, or (iv) will cost in excess of Five Thousand Dollars
($5,000.00). Subsequent to obtaining Landlord's consent and prior to
commencement of the Alterations, Tenant shall deliver to Landlord any building
permit required by applicable law and a copy of the executed construction
contract(s). Tenant shall reimburse Landlord within ten (10) days after the
rendition of a xxxx for all of Landlord's actual out-of-pocket costs incurred in
connection with any Alterations, including, without limitation, all management,
engineering, outside consulting, and construction fees incurred by or on behalf
of Landlord for the review and approval of Tenant's plans and specifications and
for the monitoring of construction of the Alterations. If Landlord consents to
the making of any Alterations, such Alterations shall be made by Tenant at
Tenant's sole cost and expense by a contractor approved in writing by Landlord.
Tenant shall give Landlord not less than ten (10) days advance written notice of
the commencement of Tenant's Alterations to enable Landlord to post and record
notices of nonresponsibility. Tenant shall require its contractor to maintain
insurance in such amounts and in such form as Landlord may require. Any
construction, alteration, maintenance, repair, replacement, installation,
removal or decoration undertaken by Tenant in connection with the Demised
Premises shall be completed in accordance with plans and specifications which
must be approved by Landlord, shall be carried out in a good, workmanlike and
prompt manner and in accordance with the provisions of Exhibit C attached
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hereto, shall comply with all applicable Regulations of the authorities having
jurisdiction thereof, and shall be subject to supervision by Landlord or its
employees, agents or contractors. Without limiting the generality of the
immediately preceding sentence, any installation or replacement of Tenant's
heating or air conditioning equipment must be effected strictly in accordance
with Landlord's instructions, the Clean Air Act and all other applicable
Regulations. Without Landlord's prior written consent, Tenant shall not use any
portion of the Common Areas either within or without the Complex in connection
with the making of any Alterations. If the Alterations which Tenant causes to be
constructed result in Landlord being required to make any alterations and/or
improvements to other portions of the Complex in order to comply with any
applicable Regulations, then Tenant shall reimburse Landlord upon demand for all
costs and expenses incurred by Landlord in making such alterations and/or
improvements. Any Alterations made by Tenant shall become the property of
Landlord upon installation and shall remain on and be surrendered with the
Demised Premises upon the expiration or sooner termination of this lease, except
Tenant shall upon demand by Landlord, at Tenant's sole cost and expense,
forthwith and with all due diligence remove all or any portion of any
Alterations made by Tenant which are designated by Landlord to be removed and
repair and restore the Demised Premises in a good and workmanlike manner to
their original condition, reasonable wear and tear excepted.
11.2 All construction work done by Tenant within the Demised Premises shall be
performed in a good and workmanlike manner with new materials of first-class
quality, lien-free and in compliance with all governmental requirements and
Regulations, and in such manner as to cause a minimum of interference with other
construction in progress and with the transaction of business in the Complex.
Tenant agrees to indemnify Landlord and hold Landlord harmless against any loss,
liability or damage resulting from such work, and Tenant shall, if requested by
Landlord, furnish a bond or other security satisfactory to Landlord against any
such loss, liability or damage.
11.3 In the event Tenant uses a general contractor to perform construction work
within the Demised Premises, Tenant shall, prior to the commencement of such
work, require said general contractor to execute and deliver to Landlord a
waiver and release of any and all claims against Landlord and liens against the
Complex to which such contractor might at any time be entitled and to execute
and record a Bond to Pay Claims (the "Bond") and shall deliver a copy of the
recorded Bond to Landlord. Thedelivery of the waiver and release of lien and the
Bond within the time period set forth above shall be a condition precedent to
Tenant's ability to enter on and begin its construction work at the Demised
Premises and, if applicable, to any reimbursement from Landlord for its
construction work.
11.4 Nothing contained in this lease shall be construed as constituting the
consent or request of Landlord, express or implied, to or for the performance by
any contractor, laborer, materialman or vendor of any labor or services or for
the furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to the Demised Premises or any part thereof. All
materialmen, contractors, artisans, mechanics, laborers and any other persons
now or hereafter furnishing any labor, services, materials, supplies or
equipment to Tenant with respect to any portion of the Demised Premises are
hereby charged with notice that they must look exclusively to Tenant to obtain
payment for same. Tenant and any subtenants shall have no power to do any act or
make any contract which may create or be the foundation of any lien, mortgage or
other encumbrance upon the reversionary or other estate of Landlord, or any
interest of Landlord in the Demised Premises. NOTICE IS HEREBY GIVEN THAT
LANDLORD IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING THE DEMISED PREMISES
OR ANY PART THEREOF, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND
TO THE DEMISED PREMISES.
11.5 In the event that Landlord elects to remodel all or any portion of the
Complex, Tenant will cooperate with such remodeling, including Tenant's
tolerating temporary inconveniences (and even the temporary removal of Tenant's
signs in order to facilitate such remodeling, as it may relate to the exterior
of the Demised Premises).
ARTICLE 12. LANDLORD'S RIGHT OF ACCESS
12.1 Landlord and Landlord's agents and representatives shall have the right to
enter the Demised Premises at any time in case of an emergency, and at all
reasonable times for any purpose permitted pursuant to the terms of this lease,
including, but not limited to, examining the Demised Premises; making such
repairs or alterations therein as may be necessary or appropriate in Landlord's
sole judgment for the safety and preservation thereof; erecting, installing,
maintaining, repairing or replacing wires, cables, conduits, vents, ducts,
risers, pipes, HVAC equipment or plumbing equipment running in, to or through
the Demised Premises; showing the Demised Premises to prospective purchasers or
mortgagees and during the last year of this lease, prospective tenants; and
posting notices of nonresponsibility.
12.2 Tenant shall give Landlord a key for all of the doors for the Demised
Premises, excluding Tenant's vaults, safes and files. Landlord shall have the
right to use any and all means to open the doors to the Demised Premises in an
emergency in order to obtain entry thereto without liability to Tenant
therefore. Any entry to the Demised Premises by Landlord by any of the foregoing
means, or otherwise, shall not be construed or deemed to be a forcible or
unlawful entry into or a retainer of the Demised Premises, or an eviction,
partial eviction or constructive eviction of Tenant from the Demised Premises or
any portion thereof, and shall not relieve Tenant of its obligations hereunder.
ARTICLE 13. SIGNS; STORE FRONTS
13.1 Tenant shall not place or permit to be placed any signs upon (i) the roof,
facade or windows of the Demised Premises, or (ii) the Common Areas or any
exterior area of the Complex without Landlord's prior written approval which
approval shall not be unreasonably withheld or delayed provided any proposed
sign is placed only in those locations as may be designated by Landlord, and
complies with the sign criteria attached hereto as Exhibit D, and as may
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otherwise be promulgated by Landlord from time to time. Notwithstanding the
foregoing, Tenant, at Tenant's sole cost and expense, shall be permitted to
install its standard corporate signage on the exterior of the building in which
the Demised Premises are located in a location to be approved by Landlord,
provided that such sign complies with the criteria set forth in this Article 13
and has been approved by the applicable City of Irvine governmental agency. Upon
request of Landlord, Tenant shall immediately remove any sign, advertising
material or lettering which Tenant has placed or permitted to be placed upon the
exterior or interior surface of any door or window or at any point inside the
Demised Premises, on the exterior of the Complex if required in connection with
any cleaning, maintenance or repairs to the Complex or which, in Landlord's
reasonable opinion, is of such a nature as to not be in keeping with the
standards of the Complex and if Tenant fails to do so, Landlord may without
liability remove the same at Tenant's expense. Tenant shall comply with such
regulations as may from time to time be promulgated by Landlord governing signs,
advertising material or lettering of all tenants in the Complex.
ARTICLE 14. UTILITIES
14.1 Tenant shall obtain electricity and telephone service directly from the
public utility company furnishing same; water and sewerage charges are included
in Common Area charges. Any meters required in connection with Tenant's
utilities shall be installed at Tenant's sole cost. Tenant shall pay all utility
deposits and fees, and all monthly service charges, for its electricity,
telephone and any other utility services furnished directly to the Demised
Premises during the term of this lease, in the event any such utilities are not
separately metered on the Commencement Date, then until such time as such
services are separately rnetered, Tenant shall pay Landlord Tenant's equitable
share of the cost of such services, as determined by Landlord. If for any reason
the use of any utility is measured on a meter(s) indicating the usage of Tenant
and other tenants of the Complex, Tenant and such other tenants shall allocate
the cost of such utility amongst themselves and shall each be responsible for
the payment of its allocable share. Landlord shall furnish and install all
piping, feeders, risers and other connections necessary to bring utilities to
the perimeter walls of the Demised Premises. Anything to the contrary
notwithstanding, Tenant shall remain obligated for the payment of Tenant's pro
rata share of any heating costs and/or other utilities or services furnished to
the Common Areas pursuant to Section 7.4.
14.2 Tenant shall have the right to use the existing heating, air conditioning
and ventilation equipment in the Demised Premises, if any. All such equipment
shall be maintained, repaired and replaced, as necessary, by Tenant at its sole
expense and shall be surrendered by Tenant to Landlord at the end of the term of
this lease together with the Demised Premises. Landlord makes no representation
or warranty as to the condition or capacity of such equipment. Landlord shall
have no obligation whatsoever to provide the Demised Premises with heat, air
conditioning, ventilation or hot water.
14.3 Landlord shall not be liable for any interruption whatsoever, nor shall
Tenant be entitled to an abatement or reduction of rent on account thereof, in
utility services not furnished by Landlord, nor for interruptions in utility
services furnished by Landlord which are due to fire, accident, strike, acts of
God or other causes beyond the control of Landlord or which are necessary or
useful in connection with making any alterations, repairs or improvements.
14.4 Tenant shall not install any equipment which exceeds or overloads the
capacity of the utility facilities serving the Demised Premises.
ARTICLE 15. INSURANCE COVERAGES
15.1 Landlord shall procure and maintain throughout the term of this lease a
policy or policies of insurance, at its sole cost and expense (but subject to
Article 6 above), causing the Complex to be insured under standard fire and
extended coverage insurance (excluding hurricane and storm insurance unless
readily obtainable at commercially reasonable rates) and liability insurance
(plus whatever endorsements or special coverages Landlord, in its sole
discretion, may consider appropriate), to the extent necessary to comply with
Landlord's obligations pursuant to other provisions of this lease. All payments
for losses thereunder shall be made solely to Landlord. If the annual premiums
charged to Landlord shall exceed the standard rates because of Tenant's acts or
omissions, Tenant's operations, the contents of the Demised Premises, or
improvements made to the Demised Premises beyond standard improvements, and
Tenant fails to promptly cure such act or omission after notice thereof, then
such act or omission shall be deemed an event of default hereunder, Tenant shall
pay the excess amount of the premium upon demand therefor by Landlord, and
acceptance of such payment shall not waive any of Landlord's other rights
hereunder, at law or equity.
15.2 Tenant shall procure and maintain throughout the term of this lease, at its
sole cost and expense, for the benefit of Tenant and Landlord (as their
interests may appear) all of the following insurance coverages:
(a) Commercial General Liability Insurance providing coverage for bodily injury
(including death) and property damage, with coverage for premises/operations,
personal and advertising injury, products/completed operations and contractual
liability. This policy shall contain a broad form contractual liability
endorsement under which the insurer agrees to insure Tenant's obligations under
Section 16.2 and Article 21 hereof. Such insurance shall have a combined single
limit of not less than Five Million Dollars ($5,000,000) per occurrence, or such
greater amount as Landlord may from time to time require. If Tenant uses
vehicles, owned and non-owned, in any way to carry out business on or about the
Complex, Tenant shall also maintain Motor Vehicle Liability Insurance; such
insurance shall have a combined single limit of not less than One Million
Dollars ($1,000,000) for bodily injury and property damage.
(b) Fire and extended coverage insurance covering Tenant's personal property,
fixtures, improvements, wall coverings, floor coverings, window coverings,
signs, alterations, furniture, furnishings, equipment, lighting, ceilings,
heating, ventilation and air conditioning equipment and interior plumbing
against loss or damage by fire, flood, windstorms, hail, earthquakes, explosion,
riot, damage from aircraft and vehicles, smoke damage, sprinkler leakage,
vandalism and malicious mischief, terrorism and such other risks as are from
time to time covered under "extended coverage" endorsements and special extended
coverage endorsements commonly known as "all risks" endorsements, containing the
waiver of subrogation required in Section 16.3 of this lease and in an amount
equal to the greater of the full replacement value or the amount required by the
holder of any mortgage from time to time placed upon the Complex or a portion of
the Complex containing the Demised Premises, with business interruption
insurance covering the Demised Premises. Replacement value is understood to mean
the cost to replace without deduction for depreciation.
(c) State Worker's Compensation Insurance In the statutorily mandated
limits.
(d) Employer's Liability Insurance with limits of not less than Five Hundred
Thousand Dollars ($500,000) for bodily injury per accident and each disease, per
employee, and a total combined limit for bodily injury in amounts not less than
Five Hundred Thousand ($500,000) per accident and Five Hundred Thousand
($500,000) per each disease, or such greater amount as Landlord may from time to
time require.
(e) Plate Glass Insurance.
(f) Host Liquor Insurance, naming Landlord, Landlord's management, leasing and
redevelopment agents and any mortgagees designated by Landlord as additional
insureds, covering any liability that might arise from the provision or use of
alcoholic beverages by Tenant on the Demised Premises, in an amount reasonably
satisfactory to Landlord from time to time in light of statutory limits. It is
expressly understood and agreed that the foregoing minimum limits of insurance
coverage shall not limit the liability of Tenant for its acts or omissions as
provided in this lease. All of the foregoing insurance policies (with the
exception of Worker's Compensation Insurance to the extent not available under
applicable law) shall name Landlord, AEW Capital Management LP, the Agent
identified in Section 1.1 (g), any redevelopment agent, any mortgagee, the
managing agent for the Complex, and such other parties as Landlord shall from
time to time designate, as additional insureds as their respective interests may
appear, through an ISO Additional Insured Endorsement CG20261185 or equivalent,
and shall provide that any loss shall be payable to Landlord and such other
additional insured parties as their respective interests may appear. All
insurance required hereunder shall be placed with companies which are rated
A:VII or better by Best's Insurance Guide (or such other comparable publication
if Best's is no longer published) and which are licensed to do business in the
State of California. All such policies shall be written as primary policies with
deductibles not to exceed One Thousand Dollars ($1,000); provided, however, that
the deductible for the Plate Glass Insurance shall not exceed Two Hundred Fifty
Dollars ($250). Any other policies, including Landlord's policy, will serve as
excess coverage. Tenant shall deliver duplicate original copies of all such
policies and all endorsements thereto (or certificates evidencing that the
required insurance coverages and endorsements, including waiver of subrogation,
are in full force and effect) to Landlord, prior to the Commencement Date, or,
in the case of renewals thereto, thirty (30) days prior to the expiration of the
prior insurance policy, together with evidence that (1) such policies are fully
paid for, and (2) no cancellation, material change or non-renewal thereof shall
be effective except upon thirty (30) days' prior written notice by registered
mail from the insurer to Landlord, as well as to Landlord's managing agent (at
the following address: 00 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX 92S14).
Whenever, in Landlord's reasonable judgment, good business practice or change in
conditions indicate a need for additional or different types of insurance,
Tenant shall, within fifteen (15) days of receipt of Landlord's request
therefore, obtain the insurance at its own expense. If Tenant should fail to
comply with the foregoing requirements' relating to insurance, Landlord may
obtain such insurance and Tenant shall pay to Landlord on demand as additional
rental hereunder the premium cost thereof plus interest at the maximum
contractual rate (but in no event to exceed 1-1/2% per month) from the date of
payment by Landlord until repaid by Tenant.
15.3 In addition to the foregoing, Tenant shall obtain certificates of insurance
evidencing Commercial General Liability Insurance, including Completed
Operations, Motor Vehicle Liability Insurance, Worker's Compensation Insurance
and Employer's Liability Insurance in the amounts required above from any
contractor or subcontractor engaged by Tenant for repairs or maintenance during
the lease term.
ARTICLE 16. WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION
16.1 Landlord and its partners, affiliates, officers, agents and employees shall
not be liable to Tenant, nor to Tenant's employees, agents, contractors,
subcontractors, invitees, subtenants or licensees, nor to any other person
whomsoever, for any injury to person or damage to property caused by the Demised
Premises or other portions of the Complex becoming out of repair or by defect or
failure of any structural element of the Demised Premises or of any equipment,
pipes, faucets, sprinklers, plumbing or wiring, or broken glass, or by the
backing up of drains, or by gas, water, steam, electricity, or oil leaking,
escaping or flowing into the Demised Premises (except where due to Landlord's
willful failure to make repairs required to be made by Landlord hereunder, after
the expiration of a reasonable time after written notice to Landlord of the need
for such repairs), nor shall Landlord or its partners, affiliates, officers,
agents and employees be liable to Tenant, nor to Tenant's employees, agents,
contractors, subcontractors, invitees, subtenants or licensees, nor to any other
person whomsoever, for any loss or damage that may be occasioned by or through
the acts or omissions of other tenants of the Complex or of any other persons
whomsoever, excepting only duly authorized employees and agents of Landlord.
Landlord shall not be held responsible in any way on account of any
construction, repair or reconstruction (including widening) of any private or
public roadways, walkways or utility lines. Tenant further agrees that all
personal property upon the Demised Premises, or upon loading docks, recovering
and holding areas, or freight elevators of the Building, shall be at the risk of
Tenant only, and that Landlord shall not be liable for any loss or damage
thereto or theft thereof.
16.2 Landlord and its partners, affiliates, officers, agents and employees shall
not be liable to Tenant or to Tenant's employees, agents, contractors,
subcontractors, invitees, subtenants or licensees, or to any other person
whomsoever, for any injury to person or damage to property on or about the
Demised Premises or the Common Area caused by the negligence or misconduct of
Tenant, its employees, agents, contractors, subcontractors, invitees, subtenants
or licensees, or of any other person entering the Complex under express or
implied invitation of Tenant (with the exception of invitees in the Common
Area), or arising out of the use of the Demised Premises by Tenant and the
conduct of its business therein, or arising out of any breach or default by
Tenant in the performance of its obligations under this lease; and Tenant hereby
agrees to indemnify, defend, protect and hold harmless Landlord and its
partners, affiliates, officers, agents and employees and Landlord's management,
leasing and redevelopment agents from any loss, expense or claims arising out of
such damage or injury. Furthermore, Tenant agrees to indemnify, defend, protect
and hold harmless Landlord and its partners, affiliates, officers, agents and
employees and Landlord's management, leasing and redevelopment agents from and
against any and all liability, claims, demands, causes of action of any kind and
nature arising or growing out of or in any way connected with Tenant's use,
occupancy, management or control of the Demised Premises and Tenant's operations
or activities in the Complex. Upon notice from Landlord, Tenant shall defend any
such claim, demand, cause of action or suit referenced hereinabove at Tenant's
expense by counsel satisfactory to Landlord in its sole discretion.
16.3 Landlord and Tenant each hereby release the other from any and all
liability or responsibility to the other, or to any other party claiming through
or under them by way of subrogation or otherwise, for any loss or damage to
property caused by a casualty which is insured or insurable under standard fire
and extended coverage insurance; provided, however, that this mutual waiver
shall be applicable only with respect to a loss or damage occurring during the
time when property insurance policies, which are readily available in the
marketplace, contain a clause or permit an endorsement to the effect that any
such release shall not adversely affect or impair the policy or the right of the
insured party to receive proceeds under the policy; provided, further, that this
release shall not be applicable to the portion of any damage which is not
reimbursed by the damaged party's insurer because of the "deductible" in the
damaged party's insurance coverage. The release specified in this Section 16.3
is cumulative with any releases or exculpations which may be contained in other
provisions of this lease. Landlord and Tenant agree that all policies of
insurance obtained by them pursuant to the terms of this lease shall contain
provisions or endorsements thereto waiving the insurer's rights of subrogation
with respect to claims against the other, and, unless the policies permit waiver
of subrogation without notice to the insurer, each shall immediately notify its
insurance companies of the existence of the waiver and indemnity provisions set
forth in this lease.
ARTICLE 17. DAMAGES BY CASUALTY
17.1 Tenant shall give immediate written notice to Landlord of any damage caused
to the Demised Premises by fire or other casualty.
17.2 In the event that the Demised Premises shall be damaged or destroyed by
fire or other casualty insurable under standard fire and extended coverage
insurance and Landlord does not elect to terminate this lease as hereinafter
provided. Landlord shall proceed with reasonable diligence and at its sole cost
and expense to rebuild and repair the Demised Premises. In the event (a) the
building in which the Demised Premises are located is destroyed or substantially
damaged by a casualty not covered by Landlord's insurance, or (b) such building
is destroyed or rendered untenantable either (i) to an extent in excess of fifty
percent (50%) of the first floor area by a casualty covered by Landlord's
insurance, or (ii) to the extent that the building systems are inoperable and
such systems cannot be repaired in Landlord's reasonable estimate within 365
days from the date of such damage; or (c) the holder of a mortgage, deed of
trust or other lien on such building at the time of the casualty elects,
pursuant to such mortgage, deed of trust or other lien, to require the use of
all or part of Landlord's insurance proceeds in satisfaction of all or part of
the indebtedness secured by the mortgage, deed of trust or other lien, or (d)
the Demised Premises shall be damaged to the extent of fifty percent (50%) or
more of the cost of replacement, then Landlord may elect either to terminate
this lease or to proceed to rebuild and repair the Demised Premises. Landlord
shall give written notice to Tenant of such election within one hundred twenty
(120) days after the occurrence of such casualty and, if it elects to rebuild
and repair, shall proceed to do so with reasonable diligence and at its sole
cost and expense.
17.3 Landlord's obligation to rebuild and repair under this Article 17 shall in
any event be limited to restoring the Demised Premises to substantially the
condition in which the same existed prior to such casualty, exclusive of any
alterations, additions, improvements, fixtures and equipment installed by
Tenant. Tenant agrees that promptly after completion of such work by Landlord,
Tenant will proceed with reasonable diligence and at Tenant's sole cost and
expense to restore, repair and replace all alterations, additions, improvements,
fixtures, signs and equipment installed by Tenant. Notwithstanding anything to
the contrary herein set forth, Landlord shall have no duty pursuant to this
Article 17 to repair or restore any portion of any alterations, additions or
improvements in the Demised Premises or the decorations thereto except to the
extent that the proceeds of the insurance carried by Tenant are timely received
by Landlord. If Tenant desires any additional repairs or restoration, and if
Landlord consents thereto, it shall be done at Tenant's sole cost and expense
subject to all of the applicable provisions of this lease. Tenant acknowledges
that Landlord shall be entitled to the full proceeds of any insurance coverage
whether carried by Landlord or Tenant, for damage to any alterations, additions,
improvements or decorations which would become Landlord's property upon the
termination of the lease.
17.4 Tenant agrees that during any period of reconstruction or repair of the
Demised Premises, it will continue the operation of its business within the
Demised Premises to the extent practicable. During the period from the
occurrence of the casualty until Landlord's repairs are completed, the minimum
guaranteed rental shall be reduced to such extent as may be fair and reasonable
under the circumstances; however, there shall be no abatement of the charges
provided for herein. Landlord shall have no liability to Tenant, and Tenant
shall not be entitled to terminate this lease, by virtue of any delays in
completion of the reconstruction or repair of the Demised Premises.
17.5 Notwithstanding anything to the contrary contained in this Article 17,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Demised Premises when the damage resulting from any casualty covered
under this Article 17 occurs during the last twenty-four (24) months of the term
of this lease or any extension hereof.
17.6 Tenant hereby waives the provisions of California Civil Code Sections
1932(2) and 1933(4) and the provisions of any successor or other law of like
import.
ARTICLE 18. EMINENT DOMAIN
18.1 If more than thirty percent (30%) of the floor area of the Demised Premises
should be taken for any public or quasi-public use under any governmental law,
ordinance or regulation or by right of eminent domain or by private purchase in
lieu thereof, this lease shall terminate and the rent shall be abated during the
unexpired portion of this lease, effective on the date physical possession is
taken by the condemning authority.
18.2 If less than thirty percent (30%) of the floor area of the Demised Premises
should be taken as aforesaid, this lease shall not terminate; however, the
minimum guaranteed rental payable hereunder during the unexpired portion of this
lease shall be reduced in proportion to the area taken, effective on the date
physical possession is taken by the condemning authority. Following such partial
taking, Landlord shall make all necessary repairs or alterations to the
remaining premises required to make the remaining portions of the Demised
Premises an architectural whole, but in no event shall Landlord be required to
expend an amount greater than the award actually received by Landlord in
connection with such taking.
18.3 If any part of the Common Area should be taken as aforesaid, this lease
shall not terminate, nor shall the rent payable hereunder be reduced, except
that either Landlord or Tenant may terminate this lease if the area of the
Common Area remaining following such taking plus any additional parking area
provided by Landlord in reasonable proximity to the Complex shall be less than
seventy percent (70%) of the area of the Common Area immediately prior to the
taking. Any election to terminate this lease in accordance with this provision
shall be evidenced by written notice of termination delivered to the other party
within thirty (30) days after the date physical possession is taken by the
condemning authority.
18.4 All compensation awarded for any taking (or the proceeds of private sale in
lieu thereof) of the Demised Premises or Common Area shall be the property of
Landlord, and Tenant hereby assigns its interest in any such award to Landlord;
provided, however, Landlord shall have no interest in any award made to Tenant
for Tenant's moving and relocation expenses or for the loss of Tenant's fixtures
and other tangible personal property if a separate award for such items is made
to Tenant as long as such separate award does not reduce the amount of the award
that would otherwise be awarded to Landlord.
18.5 The rights contained in this Article 18 shall be Tenant's sole and
exclusive remedy in the event of a taking or condemnation. Each party waives the
provisions of Sections 1265.130 and 1265.150 of the California Code of Civil
Procedure and the provisions of any successor or other law of like import.
18.6 Notwithstanding anything to the contrary, Landlord may terminate this lease
with no further liability to Tenant if (I) Landlord reasonably estimates the
cost of restoration or reconfiguration of the Complex would exceed 25% of the
replacement cost of the Complex or (ii) if following any taking, Landlord's
mortgagee elects to require Landlord to apply all or a portion of such award to
the outstanding indebtedness.
ARTICLE 19. ASSIGNMENT AND SUBLETTING
19.1 Tenant shall not assign or in any manner transfer this lease or any estate
or interest therein, or sublet the Demised Premises or any part thereof, or
grant any license, concession or other right of occupancy of any portion of the
Demised Premises without the prior written consent of Landlord. Landlord agrees
that it will not withhold consent in a wholly unreasonable and arbitrary manner
(as further explained in Section 29.4 of this lease); however, in determining
whether or not to grant its consent, Landlord shall be entitled to take into
consideration factors such as Landlord's desired tenant mix, the reputation and
net worth of the proposed transferee, and the then current market conditions
(including market rentals). Further, Landlord shall not be required to consent
to any assignment or sublease that would result in a violation of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Any purported
assignment or sublease that would result in a violation of ERISA shall be void
and of no effect. Landlord shall be entitled to charge Tenant a reasonable fee
for processing Tenant's request. Consent by Landlord to one or more assignments
or sublettings shall not operate as a waiver of Landlord's rights as to any
subsequent assignments and sublettings. In all events, Landlord can refuse to
consent to an assignment or sublease if there shall exist any uncured default of
Tenant or a matter which will become a default with the passage of time.
19.2 If Tenant is a corporation, partnership or other entity and if at any time
during the term of this lease the person or persons who own a majority of either
the outstanding voting rights or the outstanding ownership interests of Tenant
at the time of the execution of this lease cease to own a majority of such
voting rights or ownership interests (except as a result of transfers by devise
or descent), the loss of a majority of such voting rights or ownership interests
shall be deemed an assignment of this lease by Tenant and, therefore, subject in
all respects to the provisions of Section 19.1 above. The previous sentence
shall not apply, however, if at the time of the execution of this lease, Tenant
is a corporation and the outstanding voting shares of capital stock of Tenant
are listed on a recognized security exchange or over-the-counter market.
19.3 Notwithstanding anything to the contrary contained herein, and without
prejudice to Landlord's right to require a written assumption from each
assignee, any person or entity to whom this lease is assigned including, without
limitation, assignees pursuant to the provisions of the Bankruptcy Code, 11
U.S.C. Paragraph 101, et seq. (the "Bankruptcy Code"), shall automatically be
----
deemed, by acceptance of such assignment or sublease or by taking actual or
constructive possession of the Demised Premises, to have assumed all obligations
of Tenant arising under this lease effective as of the earlier of the date of
such assignment or sublease or the date on which the assignee or sublessee
obtains possession of the Demised Premises. In the event this lease is assigned
to any person or entity pursuant to the provisions of the Bankruptcy Code, any
and all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Landlord and shall
remain the exclusive property of Landlord and not constitute the property of
Tenant or Tenant's estate within the meaning of the Bankruptcy Code. All such
money or other consideration not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord.
19.4 Notwithstanding any assignment or subletting, Tenant and any guarantor of
Tenant's obligations under this lease shall at all times remain fully
responsible and liable for the payment of the rent herein specified and for
compliance with all of its other obligations under this lease (even if future
assignments and sublettings occur subsequent to the assignment or subletting by
Tenant, and regardless of whether or not Tenant's approval has been obtained for
such future assignments and sublettings). Moreover, in the event that the rental
due and payable by a sublessee (or a combination of the rental payable under
such sublease plus any bonus or other consideration therefor or incident
thereto) exceeds the rental payable under this lease, or if with respect to a
permitted assignment, permitted license or other transfer by Tenant permitted by
Landlord, the consideration payable to Tenant by the assignee, licensee or other
transferee exceeds the rental payable under this lease, then Tenant shall be
bound and obligated to pay Landlord all such excess rental and other excess
consideration within ten (10) days following receipt thereof by Tenant from such
sublessee, assignee, licensee or other transferee, as the case may be. Finally,
in the event of an assignment or subletting, it is understood and agreed that
all rentals paid to Tenant by an assignee or sublessee shall be received by
Tenant in trust for Landlord, to be forwarded immediately to Landlord without
offset or reduction of any kind; and upon election by Landlord such rentals
shall be paid directly to Landlord as specified in Section 4.2 of this lease (to
be applied as a credit and offset to Tenant's rental obligation).
19.5 Tenant shall not mortgage, pledge or otherwise encumber its interest in
this lease or in the Demised Premises.
19.6 In the event of the transfer and assignment by Landlord of its interest in
this lease and in the building containing the Demised Premises to a person
expressly assuming Landlord's obligations under this lease, Landlord shall
thereby be released from any further obligations hereunder, and Tenant agrees to
look solely to such successor in interest of the Landlord for performance of
such obligations. Any security given by Tenant to secure performance of Tenant's
obligations hereunder may be assigned and transferred by Landlord to such
successor in interest and Landlord shall thereby be discharged of any further
obligation relating thereto.
19.7 Notwithstanding anything to the contrary contained herein, Landlord shall
have the option, in its sole discretion, in the event of any proposed subletting
or assignment, to terminate this lease, or in the case of a proposed subletting
of less than the entire Demised Premises, to recapture the portion of the
Demised Premises to be sublet, as of the date the subletting or assignment is to
be effective. The option shall be exercised by Landlord giving Tenant written
notice within sixty (60) days following Landlord's receipt of Tenant's written
notice as required above. If this lease shall be terminated with respect to the
entire Demised Premises, the term shall end on the date stated in Tenant's
notice as the effective date of the sublease or assignment as if that date had
been originally fixed in this lease for the expiration of the term. If Landlord
recaptures only a portion of the Demised Premises, the minimum guaranteed rental
during the unexpired term shall xxxxx, proportionately, based on the minimum
guaranteed rental due as of the date immediately prior to such recapture.
19.8 Tenant hereby waives any suretyship defenses it may now or hereafter have
to an action brought by Landlord including those contained in Sections 2787
through 2856, inclusive, 2899 and 3433 of the California Civil Code, as now or
hereafter amended, or similar laws of like import.
ARTICLE 20. SUBORDINATION; ATTORNMENT; ESTOPPELS
20.1 Tenant accepts this lease subject and subordinate to any mortgage, deed of
trust or other lien presently existing or hereafter placed upon the Complex or
any portion of the Complex which includes the Demised Premises, and to any
renewals, modifications and extensions thereof and this subordination shall be
self operative and no further instrument of subordination is needed. Tenant
agrees that any mortgagee shall have the right at any time to subordinate its
mortgage, deed of trust or other lien to this lease; provided, however,
notwithstanding that this lease may be (or is made to be) superior to a
mortgage, deed of trust or other lien, the mortgagee shall not be liable for
prepaid rentals, security deposits and claims accruing during or with respect to
Landlord's ownership, any amendment or modification made to this lease without
its prior written consent or any offsets or claims against Landlord; further
provided that the provisions of a mortgage, deed of trust or other lien relative
to the right of the mortgagee with respect to proceeds arising from an eminent
domain taking (including a voluntary conveyance by Landlord) and provisions
relative to proceeds arising from insurance payable by reason of damage to or
destruction of the Demised Premises shall be prior and superior to any contrary
provisions contained in this instrument with respect to the payment or usage
thereof. Landlord is hereby irrevocably vested with full power and authority to
subordinate this lease to any mortgage, deed of trust or other lien hereafter
placed upon the Demised Premises or the Complex as a whole, and Tenant agrees
upon demand to execute such further instruments subordinating this lease as
Landlord may request. If the holder of any mortgage, indenture or deed of trust
or similar instrument (each a "Mortgagee") succeeds to Landlord's interest in
the Demised Premises, Tenant shall, upon request of any such Mortgagee,
automatically become the tenant of and attorn to and recognize such Mortgagee as
the landlord under this lease and will pay to it all rents and other amounts
payable by Tenant under this lease, in accordance with the applicable terms of
this lease. Notwithstanding that the foregoing provisions of this Section are
self-operative, upon request of Landlord or any Mortgagee, Tenant shall execute
and deliver to Landlord and to such Mortgagee a subordination and attornment
agreement in recordable form confirming the foregoing and otherwise in form and
substance acceptable to Landlord and such Mortgagee.
20.2 Tenant may not exercise any remedies for default by Landlord hereunder
unless and until Landlord and the holder(s) of any indebtedness secured by
mortgage, deed of trust or other lien on the Demised Premises shall have
received written notice of such default and a reasonable time (not less than 90
days) shall thereafter have elapsed without the default having been cured.
20.3 Tenant agrees that it will from time to time upon request by Landlord
execute and deliver to Landlord a written statement addressed to Landlord (and
to any parties designated by Landlord), which statement shall identify Tenant
and this lease, shall certify that this lease is unmodified and in full force
and effect (or if there have been modifications, that the same is in full force
and effect as so modified), shall confirm that Landlord is not in default as to
any obligations of Landlord under this lease (or if Landlord is in default,
specifying any default), shall confirm Tenant's agreements contained above in
this Article 20, and shall contain such other information or confirmations as
Landlord may reasonably require. Landlord is hereby irrevocably appointed and
authorized as the agent and attorney-in-fact of Tenant to execute and deliver
any such written statement on Tenant's behalf if Tenant fails to do so within
seven (7) days after the delivery of a written request from Landlord to Tenant.
ARTICLE 21. TENANT'S INDEMNIFICATION
21.1 Tenant shall indemnify, defend and hold harmless Landlord, Landlord's asset
manager, Landlord's subasset manager, Landlord's partners, any subsidiary or
affiliate of Landlord and the officers, directors, shareholders, partners,
employees, managers, independent contractors, attorneys and agents of any of the
foregoing (collectively, the "Indemnitees") from and against any and all claims,
demands, causes of action, judgments, costs and expenses, and all losses and
damages (including consequential and punitive damages) arising from Tenant's use
of the Demised Premises or from the conduct of its business or from any
activity, work, or other acts or things done, permitted or suffered by Tenant in
or about the Demised Premises, and shall further indemnify, defend and hold
harmless the Indemnitees from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this lease, or arising from any act, omission or
negligence or willful or criminal misconduct of Tenant, or any officer, agent,
employee, independent contractor, guest, or invitee thereof, and from all costs,
attorneys' fees and disbursements, and liabilities incurred in the defense of
any such claim or any action or proceeding which may be brought against, out of
or in any way related to this lease. Upon notice from Landlord, Tenant shall
defend any such claim, demand, cause of action or suit at Tenant's expense by
counsel satisfactory to Landlord in its sole discretion. As a material part of
the consideration to Landlord for this lease, Tenant hereby assumes all risk of
damage to property or injury to persons in, upon or about the Demised Premises
from any cause, and Tenant hereby waives all claims with respect thereto against
Landlord. Tenant shall give immediate notice to Landlord in case of casualty or
accidents in the Demised Premises. The provisions of this Article 21 shall
survive the expiration or sooner termination of this lease.
21.2 All personal property of Tenant, including goods, wares, merchandise,
inventory, trade fixtures and other personal property of Tenant, shall be stored
at the sole risk of Tenant. Landlord or its agents shall not be liable for any
loss or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak from any part of
the Complex or from the pipes, appliances or plumbing works therein or from the
roof, street or subsurface or from any other places resulting from dampness or
any other cause whatsoever, or from the act or negligence of any other tenant or
any officer, agent, employee, contractor or guest of any such tenant, except
personal injury caused by or due to the gross negligence or willful misconduct
of Landlord. Landlord or its agents shall not be liable for interference with
the electrical service, ventilation, or for any latent defect in the Demised
Premises.
21.3 The parties hereto acknowledge that all or a part of the Demised Premises
may be used for the storage and shipment of goods not owned by Tenant, and
Landlord is not willing to enter into this lease unless Tenant indemnifies the
Indemnitees to Landlord's satisfaction from any liability on the part of the
Indemnitees to the owner(s) of such goods for damage to the same arising out of
any acts or omissions of the Indemnitees. As a material inducement to Landlord
to enter into this lease, Tenant agrees to defend, indemnify and hold the
Indemnitees harmless from and against any and all losses, claims, liabilities,
obligations and damages imposed upon or incurred or asserted against the
Indemnitees by reason of damage to goods of persons storing such goods with
Tenant, notwithstanding the fact that such losses, claims, liabilities,
obligations or damages may have been caused by the acts or omissions of
Landlord. Tenant agrees that at all times during which it shall store goods not
owned by it in the Demised Premises, it shall insure the indemnity described
under this Section 21.3 in a manner reasonably satisfactory to Landlord.
Landlord shall not be deemed a bailee, consignee, or warehouseman (or
responsible for the standard of care incidental thereto) with respect to any
goods stored or shipped to or from the Demised Premises for consignment or
bailment and Tenant shall insert a clause to that effect in all warehouse
receipts or consignment agreements for the storage or shipment of goods to or
from the Demised Premises.
ARTICLE 22. DEFAULT BY TENANT AND REMEDIES
22.1 The following events shall be deemed to be events of default by Tenant
under this lease:
(a) Tenant shall fail to pay any installment of rental or any other obligation
under this lease involving the payment of money and such failure shall continue
for a period of three (3) days after such payment shall become due and payable.
(b) Tenant shall fail to comply with any provision of this lease, other than as
described in subsection (a) above, and either shall not cure such failure within
fifteen (15) days after written notice thereof to Tenant, or shall cure that
particular failure but shall again fail to comply with the same provision of
this lease within three (3) months after Landlord's written notice; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 etsea. of the California Code of Civil
Procedure.
(c) Tenant or any guarantor of Tenant's obligations under this lease shall
become insolvent, or shall make a transfer in fraud of creditors, or shall make
an assignment for the benefit of creditors.
(d) Tenant or any guarantor of Tenant's obligations under this lease shall file
a petition under any section or chapter of the federal Bankruptcy Code, as
amended, or under any similar law or statute of the United States or any state
thereof; or Tenant or any guarantor of Tenant's obligations under this lease
shall be adjudged bankrupt or insolvent in proceedings filed against Tenant or
any guarantor of Tenant's obligations under this lease thereunder.
(e) A receiver or Trustee shall be appointed for the Demised Premises or for all
or substantially all of the assets of Tenant or any guarantor of Tenant's
obligations under this lease.
(f) Tenant shall desert or vacate or shall commence to desert or vacate the
Demised Premises or any substantial portion of the Demised Premises or at any
time prior to the last month of the lease term shall remove or attempt to
remove, without the prior written consent of Landlord, all or a substantial
amount of Tenant's goods, wares, equipment, fixtures, furniture, or other
personal property.
(g) Tenant shall do or permit to be done anything which creates a lien upon the
Demised Premises or upon all or any part of the Complex.
(h) Any transfer of a substantial portion of the assets of Tenant, or any
incurrence of a material obligation by Tenant, unless such transfer or
obligation is undertaken or incurred in the ordinary course of Tenant's business
or in good faith for equivalent consideration, or with Landlord's consent.
(i) The default of any guarantors of Tenant's obligations hereunder under any
guaranty of this Lease, or the attempted repudiation or revocation of any such
guaranty.
22.2 Upon the occurrence of any such event of default, Landlord shall have
the option to pursue any one or more of the following remedies to the extent
permitted by law:
(a) Without any further notice or demand whatsoever, Tenant shall be obligated
to reimburse Landlord for the damages suffered by Landlord as a result of the
event of default, plus interest on such amount at the maximum contractual rate
which could legally be charged in the event of a loan of such amount to Tenant
(but in no event to exceed 1-1/2% per month); and Landlord may pursue a monetary
recovery from Tenant.
(b) Without any further notice or demand whatsoever, Landlord may take any one
or more of the actions permissible at law to insure performance by Tenant of
Tenant's covenants and obligations under this lease. In this regard, and without
limiting the generality of the immediately preceding sentence, it is agreed that
if Tenant fails to open for business as required in this lease or, having opened
for business, deserts or vacates the Demised Premises, Landlord may enter upon
and take possession of such premises in order to protect them from deterioration
and continue to demand from Tenant the monthly rentals and other charges
provided in this lease, without any obligation to relet; however, if Landlord
does, at its sole discretion, elect to relet the Demised Premises, such action
by Landlord shall not be deemed an acceptance of Tenant's surrender of the
Demised Premises unless Landlord expressly notifies Tenant of such acceptance in
writing pursuant to this Section 22.2(b), Tenant hereby acknowledging that
Landlord shall otherwise be reletting as Tenant's agent and Tenant furthermore
hereby agreeing to pay to Landlord on demand any deficiency that may arise
between the monthly rentals and other charges provided in this lease and that
actually collected by Landlord. In the event that Landlord shall elect to relet,
then rentals received by Landlord from such reletting shall be applied: first,
to the payment of any indebtedness (other than rent) due hereunder from Tenant
to Landlord; second, to the payment of any cost of such reletting (including
brokerage commissions); third, to the payment of the cost of any alterations and
repairs to the Demised Premises; fourth, to the payment of rent due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future rent as the same may become due and payable hereunder. Should
reletting, during any month to which such rent is applied, result in the actual
payment of rentals at less than the rent payable during that month by Tenant
hereunder, then Tenant shall pay such deficiency to Landlord immediately upon
demand therefor by Landlord. Such deficiency shall be calculated and paid
monthly. Tenant shall also pay to Landlord as soon as ascertained, any costs and
expenses incurred by Landlord in such reletting or in making such alterations
and repairs not covered by the rentals received from such reletting. Finally, it
is agreed that in the event of any default described in Section 22.1(g),
Landlord may pay or bond around such lien, whether or not contested by Tenant;
and in such event Tenant agrees to reimburse Landlord on demand for all costs
and expenses incurred in connection with any such action, with Tenant further
agreeing that Landlord shall in no event be liable for any damages or claims
resulting from such action. No action or inaction by Landlord including, without
limitation, the re-entry or taking of possession of the Demised Premises by
Landlord pursuant to this Section 22.2(b) shall be construed as an election to
terminate this lease or as interference with Tenant's rights of possession,
assignment or subletting unless a written notice of such election shall be given
to Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord,
Landlord may, at any time after such reletting, elect to terminate this lease
for any such default.
(c) Landlord may terminate this lease by written notice to Tenant, in which
event Tenant shall immediately surrender the Demised Premises to Landlord. In
the event that Landlord shall elect to so terminate this lease, then Landlord
may recover from Tenant:
(I) The worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss Tenant proves reasonably could have been avoided;
plus
(iii) The worth at the time of award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves reasonably could be avoided; plus
(iv) Any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under this
lease or which in the ordinary course would be likely to result therefrom; plus
(v) At Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California law.
As used in subparagraphs (i) and (ii) above, the "worth at the time of award" is
computed by allowing interest at the maximum rate permitted by law. As used in
subparagraph (iii) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
Forbearance by Landlord to enforce one or more of the remedies herein provided
upon an event of default shall not be deemed or construed to constitute a waiver
of such default. Tenant hereby waives for Tenant and for all those claiming
under Tenant all right now or hereafter existing to redeem by order or judgment
of any court or by any legal process or writ, Tenant's right of occupancy of the
Demised Premises after any termination of this lease. (d) In addition to all
other rights and remedies provided Landlord in this lease and by law, Landlord
shall xxxx the remedy described in California Civil Code Section 1951.4
(Landlord may continue the lease in effect after Tenant's breach and abandonment
and recover rent as it becomes due if Tenant has the right to sublet or assign
the lease, subject to reasonable limitations).
22.3 It is expressly agreed that in determining "the unpaid rent" as that term
is used throughout Sections 22.2(c)(i) and 22.2(c)(ii) above, there shall be
added to the minimum guaranteed rental (as specified in Section 1.1(1) of this
lease) a sum equal to the charges for maintenance of the Common Area (as
specified in Sections 1.1 (m) and 7.4 of this lease), and the payments for
taxes, charges and insurance (as specified in Article 6 of this lease).
22.4 It is further agreed that, in addition to payments required pursuant to
Sections 22.2(b) and 22.2(c) above, Tenant shall compensate Landlord for all
expenses incurred by Landlord in repossession (including, among other expenses,
any increase in insurance premiums caused by the vacancy of the Demised
Premises), all expenses incurred by Landlord in reletting (including, among
other expenses, repairs, remodeling, replacements, advertisements and brokerage
fees), all concessions granted to a new tenant upon reletting (including, among
other concessions, renewal options), all losses incurred by Landlord as a djrect
or indirect result of Tenant's default (including, among other losses, any
adverse reaction by Landlord's mortgagee or by other tenants or potential
tenants of the Complex) and a reasonable allowance for Landlord's administrative
efforts, salaries and overhead attributable directly or indirectly to Tenant's
default and Landlord's pursuing the rights and remedies provided herein and
under applicable law.
22.5 Landlord may restrain or enjoin any breach or threatened breach of any
covenant, duty or obligation of Tenant herein contained without the necessity of
proving the inadequacy of any legal remedy or irreparable harm. The remedies of
Landlord hereunder shall be deemed cumulative and not exclusive of each other.
22.6 If on account of any breach or default by Tenant in its obligations
hereunder, Landlord shall employ an attorney to present, enforce or defend any
of Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable
attorneys' fees incurred by Landlord in such connection.
22.7 Tenant acknowledges its obligation to deposit with Landlord the sum stated
in Section 1.1(0) above, to be held by Landlord without interest as security for
the performance by Tenant of Tenant's covenants and obligations under this
lease. Tenant agrees that such deposit may be commingled with Landlord's other
funds and is not an advance payment of rental or a measure of Landlord's damages
in case of default by Tenant. Upon the occurrence of any event of default by
Tenant, Landlord may, from time to time, without prejudice to any other remedy
provided herein or provided by law, use such fund to the extent necessary to
make good any arrears of rentals and any other damage, injury, expense or
liability caused to Landlord by such event of default, and Tenant shall pay to
Landlord on demand the amount so applied in order to restore the security
deposit to its original amount. The security deposit shall be increased as the
minimum guaranteed rental increases and such increase shall be due and payable
on the same date that each minimum guaranteed rental increase becomes effective.
If Tenant is not then in default hereunder, any remaining balance of such
deposit shall be returned by Landlord to Tenant upon termination of this lease
(subject to the provisions of Section 19.6 above). Tenant hereby waives the
protections of Section 1950.7(c) of the California Civil Code, as it may
hereafter be amended, or similar laws of like import.
22.8 (a) In the event of any default described in Section 22.1(d), any
assumption and assignment must conform with the requirements of the Bankruptcy
Code and, in order to provide Landlord with the assurances contemplated by the
Bankruptcy Code, Tenant must fulfill the following obligations, in addition to
any other reasonable obligations that Landlord may require, before any
assumption of this lease is effective: (i) all defaults under Section 22.1 (a)
must be cured within ten (10) days after the date of assumption; (ii) all other
defaults under Section 22.1 of this lease other than under Section 22.1 (d) must
be cured within fifteen (15) days after the date ofassumption; (iii) all actual
monetary losses incurred by Landlord (including, but not limited to, reasonable
attorneys' fees) must be paid to Landlord within ten (10) days after the date of
assumption; and (iv) Landlord must receive within ten (10) days after the date
of assumption a security deposit in the amount of six (6) months minimum
guaranteed rent (using the minimum guaranteed rent in effect for the first full
month immediately following the assumption) and an advance prepayment of minimum
guaranteed rent in the amount of three (3) months minimum guaranteed rent (using
the minimum guaranteed rent in effect for the first full month immediately
following the assumption), both sums to be held by Landlord in accordance with
Section 22.7 above and deemed to be rent under this lease for the purposes of
the Bankruptcy Code as amended and from time to time in effect.
(b) In the event this lease is assumed in accordance with the requirements of
the Bankruptcy Code and this lease, and is subsequently assigned, then, in
addition to any other reasonable obligations that Landlord may require and in
order to provide Landlord with the assurances contemplated by the Bankruptcy
Code, Landlord shall be provided with (i) a financial statement of the proposed
assignee prepared in accordance with generally accepted accounting principles
consistently applied, though on a cash basis, which reveals a net worth in an
amount sufficient, in Landlord's reasonable judgment, to assure the future
performance by the proposed assignee of Tenant's obligations under this lease;
or (il) a written guaranty by one or more guarantors with financial ability
sufficient to assure the future performance of Tenant's obligations under this
lease, such guaranty to be in form and content satisfactory to Landlord and to
cover the performance of all of Tenant's obligations under this lease.
ARTICLE 23 LANDLORD'S CONTRACTUAL SECURITY INTEREST
23.1 In addition to the statutory Landlord's lien, Landlord shall have at all
times a valid security interest to secure payment of all rentals and other sums
of money becoming due hereunder from Tenant, and to secure payment of any
damages or loss which Landlord may suffer by reason of the breach by Tenant of
any covenant, agreement or condition contained herein, upon all goods, wares,
equipment, fixtures, furniture, improvements and other personal property of
Tenant presently, or which may hereafter be, situated on the Demised Premises,
and all proceeds therefrom, and such property shall not be removed without the
consent of Landlord until all arrearages in rent as well as any and all other
sums of money then due to Landlord or to become due to Landlord hereunder shall
first have been paid and discharged and all the covenants, agreements and
conditions hereof have been fully complied with and performed by Tenant. Upon
the occurrence of an event of default by Tenant, Landlord may, in addition to
any other remedies provided herein, enter upon the Demised Premises and take
possession of any and all goods, wares, equipment, fixtures, furniture,
improvements and other personal property of Tenant situated on the Demised
Premises, without liability for trespass or conversion, and sell the same at
public or private sale, with or without having such property at the sale, after
giving Tenant reasonable notice of the time and place of any public sale or of
the time after which any private sale is to be made, at which sale Landlord or
its assigns may purchase unless otherwise prohibited by law. Unless otherwise
provided by law, and without intending to exclude any other manner of giving
Tenant reasonable notice, the requirement of reasonable notice shall be met if
such notice is given in the manner prescribed in this lease at least five (5)
days before the time of sale. Any sale made pursuant to the provisions of this
Section shall be deemed to have been a public sale conducted in a commercially
reasonable manner if held in the Demised Premises or where the property is
located after the time, place and method of sale and a general description of
the types of property to be sold have been advertised in a daily newspaper
published in the county in which the property is located, for five (5)
consecutive days before the date of the sale. The proceeds from any such
disposition, less any and all expenses connected with the taking of possession,
holding and selling of the property (including reasonable attorneys' fees and
legal expenses), shall be applied as a credit against the indebtedness secured
by the security interest granted in this Section. Any surplus shall be paid to
Tenant or as otherwise required by law; Tenant shall pay any deficiencies
forthwith. Tenant hereby agrees that a carbon, photographic or other
reproduction of this lease shall be sufficient to constitute a financing
statement. Tenant nevertheless agrees that upon request by Landlord, Tenant will
execute and deliver to Landlord a financing statement in form sufficient to
perfect the security interest of Landlord in the aforementioned property and
proceeds thereof under the provisions of the California Uniform Commercial Code,
as well as any other state the laws of which Landlord may at any time consider
to be applicable; moreover, Landlord is hereby irrevocably vested with a power
of attorney from Tenant to execute any and all such financing statements on
behalf of Tenant.
23.2 Notwithstanding Section 23.1, Landlord agrees that it will subordinate its
security interest and landlord's lien to the security interest of Tenant's
supplier or institutional financial source for as long as the rental account of
Tenant under this lease is current (or is brought current), provided that (i)
Landlord approves the transaction as being reasonably necessary to Tenant's
operations at the Demised Premises, (ii) the subordination must be limited to a
specified transaction and specified items of the fixtures, equipment or
inventory involved in the transaction, (iii) such subordination shall be in
writing, signed by all parties and in a form acceptable to Landlord; and (iv)
Tenant promptly reimburses Landlord for Landlord's reasonable legal and
administrative fees incurred in providing any such subordination or lien waiver
agreement.
ARTICLE 24. HOLDING OVER
24.1 In the event Tenant remains in possession of the Demised Premises after the
expiration of this lease and without the execution of a new lease, it shall be
deemed to be occupying said premises as a tenant from month to month at a rental
equal to the rental herein provided plus one hundred percent (100%) of such
amount and otherwise subject to all the conditions, provisions and obligations
of this lease insofar as the same are applicable to a month-to-month tenancy.
Neither any provision hereof nor acceptance by Landlord of rent after such
expiration or earlier termination shall be deemed a consent to a holdover
hereunder or result in a renewal of this lease or an extension of the Term.
Notwithstanding any provision to the contrary contained herein, (i) Landlord
expressly reserves the right to require Tenant to surrender possession of the
Demised Premises upon the expiration of the Term of this lease or upon the
earlier termination hereof, the right to renter the Demised Premises, and the
right to assert any remedy at law or in equity to evict Tenant and collect
damages in connection with any such holding over, and (ii) Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
claims, demands, actions, losses, damages, obligations, costs and expenses,
including, without limitation, attorneys' fees incurred or suffered by Landlord
by reason of Tenant's failure to surrender the Demised Premises on the
expiration or earlier termination of this Lease in accordance with the
provisions of this lease.
ARTICLE 25. NOTICES
25.1 Wherever any notice is required or permitted hereunder, such notice shall
be in writing. Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered when actually received by the
designated addressee or, if earlier and regardless of whether actually received
or not, when deposited in the United States mail, postage prepaid, certified
mail, return receipt requested, addressed to the parties hereto at the
respective addresses set out in Section 1.1 above (or at Landlord's option, to
Tenant at the Demised Premises), or at such other addresses as they have
theretofore specified by written notice.
25.2 If and when included within the term "Landlord" as used in this instrument
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice specifying some
individual at some specific address for the receipt of notices and payments to
Landlord; if and when included within the term "Tenant" as used in this
instrument there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address for the receipt of notices
and payments to Tenant. All parties included within the terms "Landlord" and
"Tenant," respectively, shall be bound by notice and payments given in
accordance with the provisions of this Article to the same effect as if each had
received such notice or payment. In addition, Tenant agrees that actions by
Landlord and notices to Tenant hereunder may be taken or given by Landlord's
attorney, property manager or other agent.
ARTICLE 26. COMMISSIONS
26.1 Landlord shall pay to CB Xxxxxxx Xxxxx ("Landlord's Broker) a commission
for negotiating this lease, in accordance with the Exclusive Listing
Agreement-Leasing between Landlord and Landlord's Broker. Tenant and Landlord
warrant that they have had no dealings with any broker or agent in connection
with this lease, other than Landlord's Broker and Xxx & Associates (Tenant's
broker). Landlord and Tenant covenant to pay, hold harmless and indemnify each
other from and against any and all cost, expense or liability for any
compensation, commissions or charges claimed by any other broker or agent
utilized by the indemnitor with respect to this lease or the negotiation hereof.
ARTICLE 27. REGULATIONS
27.1 Landlord and Tenant acknowledge that there are now in effect and may
hereafter be enacted or go into effect federal, state, county and municipal
laws, orders, rules, directives and regulations relating to or affecting the
Demised Premises or the Complex, concerning the impact on the environment of
construction, land use, maintenance and operation of structures, toxic or
otherwise hazardous substances, and, the conduct of business, including, without
limitation, the Americans With Disabilities Act of 1990 and the Clean Air Act
and regulations issued thereunder (all of the foregoing, as amended from time to
time, being herein called the "Regulations"). Tenant will not cause or permit to
be caused, any act or practice, by negligence, omission or otherwise, that would
adversely affect the environment or do anything or permit anything to be done
that would violate any of said Regulations. Moreover, Tenant shall have no claim
against Landlord by reason of any changes Landlord may make in the Complex or
the Demised Premises pursuant to said Regulations or any charges imposed upon
Tenant, Tenant's customers or other invitees pursuant to same.
27.2 If, by reason of any Regulations, the payment to, or collection by,
Landlord of any rental or other charge (collectively referred to hereinafter as
"Lease Payments") payable by Tenant to Landlord pursuant to the provisions of
this lease is in excess of the amount (the "Maximum Charge") permitted by the
Regulations, then Tenant, during the period (the "Freeze Period") when the
Regulations shall be in force and effect shall not be required to pay, nor shall
Landlord be permitted to collect, any sum in excess of the Maximum Charge. Upon
the earlier of (i) the expiration of the Freeze Period, or (ii) the issuance of
a final order or judgment of a court of competent jurisdiction declaring the
Regulations to be invalid or not applicable to the provisions of this lease,
Tenant, to the extent not then proscribed by law, and commencing with the first
day of the month immediately following, shall pay to Landlord as additional
rental, in equal monthly installments during the balance of the term of this
lease, a sum equal to the cumulative difference between the Maximum Charges and
the Lease Payments during the Freeze Period. If any provisions of this Section,
or the application thereof, shall to any extent be declared to be invalid and
unenforceable, the same shall not be deemed to affect any of the other
provisions of this Section or of this lease, all of which shall be deemed valid
and enforceable to the fullest extent permitted by law.
27.3 Tenant acknowledges that it will be wholly responsible for any
accommodations or alterations which need to be made to the Demised Premises to
accommodate disabled employees and customers of Tenant, including without
limitation, the requirements under the Americans With Disabilities Act of 1990
and any equivalent California law. Any alterations made to the Demised Premises
in order to comply with either statute must be made solely at Tenant's expense
and in compliance with all terms and requirements of this lease. Landlord agrees
to make reasonable efforts to ensure that the Common Area is in compliance with
the applicable disability access laws as of the date hereof If a complaint is
received by Landlord from either a private or government source regarding
disability access to the Common Area of the Complex, Landlord reserves the right
to mediate, contest, comply with or otherwise respond to such complaint as
Landlord deems to be reasonably prudent under the circumstances. If Landlord
decides to make alterations to the Common Area of the Complex in response to any
such complaints or in response to legal requirements Landlord considers to be
applicable to the Common Area of the Complex, the cost of such alterations shall
be included in the Common Area maintenance charge under this lease. Landlord and
Tenant agree that so long as the governmental entity or entities charged with
enforcing such statutes have not expressly required Landlord to take specific
action to effectuate compliance with such statutes, Landlord shall be
conclusively deemed to be in compliance with such statutes. Tenant agrees to
provide Landlord with written notice should Tenant become aware of a violation
of such statutes with respect to the Common Area. In the event Landlord is
required to take action to effectuate compliance with such statutes, Landlord
shall have a reasonable period of time to make the improvements and alterations
necessary to effectuate such compliance, which period of time shall be extended
by any time necessary to cause any necessary improvements and alterations to be
made.
ARTICLE 28. HAZARDOUS MATERIALS
28.1 During the term of this lease, Tenant shall comply with all Environmental
Laws and Environmental Permits (each as defined in Section 28.7 hereof)
applicable to the operation or use of the Demised Premises, will cause all other
persons occupying or using the Demised Premises to comply with all such
Environmental Laws and Environmental Permits, will immediately pay or cause to
be paid all costs and expenses incurred by reason of such compliance, and will
obtain and renew all Environmental Permits required for the operation or use of
the Demised Premises.
28.2 Tenant shall not generate, use, treat, store, handle, release or dispose
of, or permit the generation, use, treatment, storage, handling, release or
disposal of Hazardous Materials (as defined in Section 28.7 hereof) on the
Demised Premises, or the Complex, or transport or permit the transportation of
Hazardous Materials to or from the Demised Premises or the Complex except for
limited quantities used or stored at the Demised Premises and required in
connection with the routine operation and maintenance of the Demised Premises,
and then only upon the written consent of Landlord and in compliance with all
applicable Environmental Laws and Environmental Permits.
28.3 At any time and from time to time during the term of this lease, Landlord
may perform, at Tenant's sole cost and expense, an environmental site assessment
report concerning the Demised Premises, prepared by an environmental consulting
firm chosen by Landlord, indicating the presence or absence of Hazardous
Materials caused or permitted by Tenant and the potential cost of any
compliance, removal or remedial action in connection with any such Hazardous
Materials on the Demised Premises. Tenant shall grant and hereby grants to
Landlord and its agents access to the Demised Premises and specifically grants
Landlord an irrevocable non-exclusive license to undertake such an assessment;
and the cost of such assessment shall be immediately due and payable on demand.
28.4 Tenant will immediately advise Landlord in writing of any of the following:
(1) any pending or threatened Environmental Claim (as defined in Section 28.7
hereof) against Tenant relating to the Demised Premises or the Complex; (2) any
condition or occurrence on the Demised Premises or the Complex that (a) results
in noncompliance by Tenant with any applicable Environmental Law, or (b) could
reasonably be anticipated to form the basis of an Environmental Claim against
Tenant or Landlord or the Demised Premises; (3) any condition or occurrence on
the Demised Premises or any property adjoining the Demised Premises that could
reasonably be anticipated to cause the Demised Premises to be subject to any
restrictions on the ownership, occupancy, use or transferability of the Demised
Premises under any Environmental Law; and (4) the actual or anticipated taking
of any removal or remedial action by Tenant in response to the actual or alleged
presence of any Hazardous Material on the Demised Premises or the Complex. All
such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Tenant's
response thereto. In addition, Tenant will provide Landlord with copies of all
communications regarding the Demised Premises with any government or
governmental agency relating to Environmental Laws, all such communications with
any person relating to Environmental Claims, and such detailed reports of any
such Environmental Claim as may reasonably be requested by Landlord.
28.5 Tenant will not change or permit to be changed the present use of the
Demised Premises unless Tenant shall have notified Landlord thereof in writing
and Landlord shall have determined, in itssole and absolute discretion, that
such change will not result in the presence of Hazardous Materials on the
Demised Premises except for those described in Section 28.2 above.
28.6 (a) Tenant agrees to defend, indemnify and hold harmless the Indemnities
(as defined in Section 21.1) from and against all obligations (including removal
and remedial actions), losses, claims, suits, judgments, liabilities, penalties,
damages (including consequential and punitive damages), costs and expenses
(including attorneys' and consultants' fees and expenses) of any kind or nature
whatsoever that may at any time be incurred by, imposed on or asserted against
such Indemnities directly or indirectly based on, or arising or resulting from
(a) the actual or alleged presence of Hazardous Materials on the Complex which
is caused or permitted by Tenant and (b) any Environmental Claim relating in any
way to Tenant's operation or use of the Demised Premises (the "Hazardous
Materials Indemnified Matters"). The provisions of this Article 28 shall survive
the expiration or sooner termination of this lease.
(b) To the extent that the undertaking in the preceding paragraph may be
unenforceable because it is violative of any law or public policy. Tenant will
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Hazardous Materials
Indemnified Matters incurred by the Indemnities.
(c) All sums paid and costs incurred by Landlord with respect to any Hazardous
Materials Indemnified Matter shall bear interest at the lesser of (i) eighteen
(18%) percent per annum, or (ii) the maximum legal rate of interest allowed in
the State of California, from the date so paid or incurred until reimbursed by
Tenant, and all such sums and costs shall be immediately due and payable on
demand.
28.7 (a) "Hazardous Materials" means (i) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, and radon gas; (ii) any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (iii)
any other substance exposure to which is regulated by any governmental
authority; (b) "Environmental Law" means any federal, state or local statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
9601 etsefl.; the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq.: the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seg; the
Clean Water Act, 33 U.S.C. 1251 et eg-; the Toxic Substances Control Act, 15
U.S.C. 2601 et sea.;the Clean Air Act, 42 U.S.C. 7401 et seq.: the Safe
DrinKing Water Act, 42 U.S.C. 300f et sea.: the Atomic Energy Act, 42 U.S.C.
2011 et seg.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 u.S.c.
136 et sea.: and the Occupational Safety and Health Act, 29 U.S.C. 651 et
sea.: (c) "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law or any
Environmental Permit, including without limitation (i) any and all Environmental
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Environmental Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment;
and (d) "Environmental Permits" means all permits, approvals, identification
numbers, licenses and other authorizations required under any applicable
Environmental Law.
ARTICLE 29. MISCELLANEOUS
29.1 Nothing in this lease shall be deemed or construed by the parties hereto,
nor by any third party, as creating the relationship of principal and agent or
of partnership or of joint venture between the parties hereto, it being
understood and agreed that neither the method of computation of rent, nor any
other provision contained herein, nor any acts of the parties hereto, shall be
deemed to create any relationship between the parties hereto other than the
relationship of landlord and tenant.
29.2 Tenant shall not for any reason withhold or reduce Tenant's required
payments of rentals and other charges provided in this lease, it being agreed
that the obligations of Landlord under this lease are independent of Tenant's
obligations except as may be otherwise expressly provided. The immediately
preceding sentence shall not be deemed to deny Tenant the ability of pursuing
all rights granted it under this lease or at law; however, at the direction of
Landlord, Tenant's claims in this regard shall be litigated in proceedings
different from any litigation involving rental claims or other claims by
Landlord against Tenant (i.e., each party may proceed to a separate judgment
without consideration, counterclaim or offset as to the claims asserted by the
other party).
29.3 The liability of Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders, or employees to Tenant for or in
respect of any default by Landlord under the terms of this lease or in respect
of any other claim or cause of action shall be limited to the interest of
Landlord in the Complex, and Tenant agrees to look solely to Landlord's interest
in the Complex for the recovery and satisfaction of any judgment against
Landlord, any agent of Landlord, or any of their respective officers, directors,
shareholders, and employees.
29.4 In all circumstances under this lease where the prior consent of one party
(the "consenting party"), whether it be Landlord or Tenant, is required before
the other party (the "requesting party") is authorized to take any particular
type of action, such consent shall not be withheld in a wholly unreasonable and
arbitrary manner; however, the requesting party agrees that its exclusive remedy
if it believes that consent has been withheld improperly (including, but not
limited to, consent required from Landlord pursuant to Section 19.1) shall be to
institute litigation either for a declaratory judgment or for a mandatory
injunction requiring that such consent be given (with the requesting party
hereby waiving any claim for damages, attorneys' fees or any other remedy unless
the consenting party refuses to comply with a court order or judgment requiring
it to grant its consent).
29.5 Whenever a period of time is herein prescribed for action to be taken by
Landlord, Landlord shall not be liable or responsible for, and there shall be
excluded from the computation of any such period of time, any delays due to
strikes, riots, acts of God, shortages of labor or materials, war, governmental
laws, regulations or restrictions or any other causes of any kind whatsoever
which are beyond the reasonable control of Landlord.
29.6 From time to time during the term of this lease, Landlord may, by written
notice to Tenant, substitute for the Demised Premises other space that has an
area, finish-out and improvements at least equal to that of the Demised Premises
and is located in the Complex (the "Substitution Space"). Tenant may either
accept possession of the Substitution Space in its "as is" condition or require
Landlord to alter the Substitution Space in the same manner as the Demised
Premises were altered or were to be altered. If Landlord exercises its
substitution right, Landlord shall reimburse Tenant for Tenant's reasonable
out-of-pocket expenses for moving Tenant's furniture, equipment, supplies and
telephone equipment from the Demised Premises to the Substitution Space.
29.7 If any provision of this lease should be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this lease shall not be affected thereby.
29.8 The laws of the State of California shall govern the interpretation,
validity, performance and enforcement of this lease. Venue for any action under
this lease shall be Orange County, California.
29.9 The captions used herein are for convenience only and do not limit or
amplify the provisions hereof.
29.10 Whenever herein the singular number is used, the same shall include the
plural, and words of any gender shall include each other gender.
29.11 All covenants and obligations contained within this lease shall bind and
inure to the benefit of Landlord, its successors and assigns, and shall be
binding upon Tenant, its permitted successors and assigns.
29.12 This lease contains the entire agreement between the parties, and no
rights are created in favor of either party other than as specified or expressly
contemplated in this lease. No brochure, rendering, information or
correspondence shall be deemed to be a part of this agreement unless
specifically incorporated herein by reference. In addition, no agreement shall
be effective to change, modify or terminate this lease in whole or in part
unless such is in writing and duly signed by the party against whom enforcement
of such change, modification or termination is sought.
29.13 LANDLORD AND TENANT HEREBY ACKNOWLEDGE THAT THEY ARE NOT RELYING UPON ANY
BROCHURE, RENDERING, INFORMATION, REPRESENTATION OR PROMISE OF THE OTHER, OR of
THE AGENT, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE.
29.14 No waiver of any of the terms, covenants, provisions, conditions, rules
and regulations imposed by this lease, and no waiver of any legal or equitable
relief or remedy, shall be implied by the failure of Landlord to assert any
rights, declare any forfeiture, or for any other reason. No waiver of any of the
terms, provisions, covenants, conditions, rules and regulations shall be valid
unless it shall be in writing signed by Landlord. No express waiver shall affect
any provision other than the provision specified in such waiver and that one
only for the time and in the manner specifically stated. No waiver by Landlord
or forgiveness of performance by Landlord for one or more tenants shall
constitute a waiver or forgiveness of performance in respect to Tenant.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval under this lease shall not be deemed to render unnecessary
the obtaining of Landlord's consent to or approval of any subsequent act of
Tenant. No act or thing done by Landlord or Landlord's agents during the term of
this lease shall be deemed an acceptance of a surrender of the Demised Premises,
unless in writing signed by Landlord. The delivery of the Keys to any employee
or agent of Landlord shall not operate as a termination of this lease or a
surrender of the Demised Premises. The acceptance of any rent by Landlord
following a breach of this lease by Tenant shall not constitute a waiver by
Landlord of such breach or any other breach unless such waiver is expressly
stated in a writing signed by Landlord,
29.15 Tenant shall deliver and surrender to Landlord possession of the Demised
Premises (including all of Tenant's permanent work upon and to the Demised
Premises, all replacements and all fixtures permanently attached to the Demised
Premises) immediately upon the expiration of the term or the termination of this
lease in as good condition and repair as the same were on the delivery date
(loss by any insured casualty and ordinary wear and tear only excepted) and
deliver the keys at the office of Landlord or Landlord's agent; provided,
however, that upon Landlord's request made at least thirty (30) days prior to
the end of the term, or the date Tenant is otherwise required to vacate the
Demised Premises, Tenant shall remove all fixtures and equipment affixed to the
Demised Premises by Tenant, and repair and restore the Demised Premises to their
condition on the delivery date (loss by any insured casualty and ordinary wear
and tear only excepted), at Tenant's sole expense. The removal shall be
performed prior to the earlier of the end of the term or the date Tenant is
required to vacate the Demised Premises.
29.16 Tenant shall not record this lease. Without the prior written consent of
Landlord, Tenant shall not record any memorandum of this lease, short form or
other reference to this lease.29.17 The submission of this lease for examination
does not constitute a reservation of or option for the Demised Premises or any
other space in the Complex, and shall not vest any right in Tenant. This lease
shall become effective as a lease only upon its execution and delivery by the
parties.
29 18 LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENTS CONTEMPLATED TO
BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY ARISING OUT OF
OR RELATED IN ANY MANNER WITH THE DEMISED PREMISES (INCLUDING WITHOUT
LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR ANY CLAIMS OR DEFENSES
ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD TO ENTER INTO AND
ACCEPT THIS LEASE.
29.19 This lease consists of twenty-nine Articles and Exhibits A through E. With
the exception of Article 7, in the event any provision of an exhibit shall be
inconsistent with a provision in the body of the lease, the provision as set
forth in the exhibit shall be deemed to control.
EXECUTED as of the latest date accompanying a signature by Landlord or Tenant
below.
LANDLORD:
/s/ Xxxxx Plaza Property
XXXXX PLAZA PROPERTY. INC., a Delaware corporation
TENANT:
/s/ Xxxxxxx Xxxxxxxx
NETWORK INSTALLATION CORPORATION, a California corporation
