EXHIBIT 10.12
INDUSTRIAL/COMMERCIAL LEASE AGREEMENT
MULTI TENANT - NET
(ONE VIPER WAY)
THIS INDUSTRIAL/COMMERCIAL LEASE AGREEMENT MULTI TENANT - NET ("Lease")
dated as of July 14, 2003, by and between XXXXXX PROPERTIES, INC. a California
corporation ("Landlord") and DIRECTED ELECTRONICS, INC., a California
corporation ("Tenant").
RECITALS:
A. Tenant is the current and sole occupant of the Premises described
below pursuant to that certain American Industrial Real Estate Association
Standard Industrial/Commercial Single Tenant Lease - Net, dated December 7, 1999
("Current Lease").
B. Landlord and Tenant, concurrently herewith, are entering into that
certain Lease Termination Agreement, which provides that the Current Lease shall
terminate as of the Commencement Date of this Lease.
C. Landlord and Tenant desire to enter into this Lease to provide for
Tenant's continued occupancy of the Premises on the terms and conditions set
forth herein.
WITNESSETH:
1. PRINCIPAL TERMS. Capitalized terms, first appearing in quotations in
this Section, elsewhere in the Lease or any Exhibits, are definitions of such
terms as used in the Lease and Exhibits and shall have the defined meaning
whenever used.
1.1 "PREMISES": The real property legally described on Exhibit "A",
which is located at common address of One Viper Way, Vista, California, together
with the "Building" (as such terms is defined in Section 1.2 below) and all
other improvements now or hereafter located thereon. The Premises shall not
include the area of the Building shown on Exhibit "B" and labeled "Suite B"
("Suite B"), which consists of approximately 9,420 square feet of floor area on
2 floors. Landlord shall at all times retain possession of Suite B and shall
have the right to occupy or to lease Suite B to third parties, which right shall
include the non-exclusive right in favor of Landlord, such third parties, and
each of their respective employees, suppliers, shippers, customers, contractors
and invitees, to use all areas and facilities outside the Building on a
non-exclusive basis including, but not limited to, all parking areas (with the
exception of those parking spaces designated for the exclusive use of Tenant),
loading and unloading area, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas ("Common Areas").
1.2 "BUILDING": The building generally depicted on Exhibit "B",
containing approximately 000,000 xxxxxx xxxx xx xxxxx xxxx as of the date of
this Lease plus the "Building Expansion Area" (as such term is defined in the
Construction Agreement attached hereto) to consist of approximately 48,840
square feet of floor area for a combined floor area of approximately 151,640
square feet of floor area. Landlord's space planner or architect shall certify
to Tenant, upon completion of construction by Landlord of the Building Expansion
Area,
1 of 27
the approximate square footage of the Building. If Landlord's space planner or
architect determines that the square footage of the Building is different from
that stated herein, all "Rent" (as that term is defined in Section 4 below) that
is based on that incorrect amount shall be modified in accordance with that
determination. If that determination is made, Landlord to Tenant shall confirm
it in writing by way of amendment to this Lease.
1.3 "CONSTRUCTION PERIOD": The period commencing on the
Commencement Date and ending on the last day of the month in which Landlord
delivers possession of the "Building Expansion Area" to Tenant "Ready For
Occupancy" as such terms are defined in the Construction Agreement attached
hereto. The target date for delivery of the Building Expansion Area to Tenant
Ready for Occupancy is September 1, 2003 (the "Target Delivery Date").
1.4 "INITIAL TERM": 126 full calendar months following the
Commencement Date.
"COMMENCEMENT DATE": July 1, 2003
"EXPIRATION DATE": December 31, 2013
1.5 "BASE RENT":
Period Monthly
-------------------------------------------------- -----------
From the Commencement Date until Expiration of the $078,566.00
Constriction Period
From expiration of the Construction Period until $103,963.00
12/31/03
01/01/04-12/31/04 $106,320.00
01/01/05-12/31/05 $109,509.00
01/01/06-12/31/06 $112,793.00
01/01/07-12131/07 $116,177.00
01/01/08-12/31/08 $119,662.00
01/01/09-12/31/09 $123,252.00
01/01/10-12/31/10 $126,949.00
01/01/11-12/31/11 $129,488.00
01/01/12-12/31/12 $132,078.00
01/01/13-12/31/13 $134,720.00
Option Term $134,720.00
1.6 "DEPOSIT": $103,963.00
1.7 "PERMITTED USE": General office, light assembly, warehouse and
distribution facility.
2 of 27
1.8 "GUARANTOR(S)": N/A
1.9 LANDLORD'S NOTICE ADDRESS
XXXXXX PROPERTIES, INC.
X.X. Xxx 0000, Xxxxx, XX 00000
Attn: Property Manager
1.10 RENT PAYMENT ADDRESS:
XXXXXX PROPERTIES, INC.
X.X. Xxx 0000, Xxxxx, XX 00000
Attn: Property Manager
1.11 LANDLORD'S TAX I.D.: 00-0000000
1.12 TENANTS NOTICE ADDRESS:
DIRECTED ELECTRONICS, INC.
Xxx Xxxxx Xxx
Xxxxx, XX 00000
Attn: President
1.13 TENANT'S TAX I.D.: 00-0000000
1.14 LANDLORD'S BROKER: N/A
1.15 TENANT'S BROKER: N/A
1.16 ATTACHMENTS: [check if applicable]
[X] Addendum
[X] Construction Agreement
[X] Exhibit "A"- Legal Description of the Premises
[X] Exhibit "B" - Site Plan of the Building/Premises
[X] Exhibit "C" - Commencement Certificate
[ ] Exhibit "D"- Guaranty
2. GENERAL COVENANTS. Tenant covenants and agrees to pay Rent and to
perform the obligations hereafter set forth and in consideration therefor
Landlord hereby leases to Tenant the Premises, including the Building Expansion
Area, together with the non-exclusive right to use, in common with others, the
Common Areas, for the Term of the Lease.
3. TERM. The Initial Term of the Lease commences at 12:01 am. on the
Commencement Date and terminates at 12:00 midnight on the Expiration Date (the
Initial Term together with any extensions thereof is herein referred to as the
"Term"), unless sooner terminated as hereinafter provided.
3 of 27
4. RENT. Subject to the provisions below, commencing on the
Commencement Date and on the first day of each month thereafter, Tenant shall
pay Base Rent in the amount stated in Section 1.5, in advance without notice
(all amounts, including Base Rent, to be paid by Tenant pursuant to this Lease
as the context requires are sometimes referred to collectively as "Rent(s)").
Rents shall be paid without set off, abatement, or diminution, at the address
set forth in Section 1.10, or at such other place as Landlord from time to time
designates in writing, unless otherwise provided herein. Tenant shall prepay the
first month's Base Rent upon the execution hereof, which shall be credited
against such amount as of the date that Tenant's rental obligations commence.
5. EXPANSION OF THE BUILDING.
5.1 As partial consideration for Tenant's agreement to enter into
this Lease, Landlord shall expand the Building substantially in accordance with
this Lease and the "Plans and Specifications" defined in the construction
agreement attached hereto (the "Construction Agreement"). As used herein,
"Initial Building Condition" means the Building in its "AS IS" condition as
modified by all work to be performed by Landlord at its expense during the
Construction Period in accordance with the Construction Agreement. Except as
provided in this Lease or the Construction Agreement, Landlord has no obligation
for expansion or remodeling of the Building, and Tenant accepts the Building in
its "AS-IS" condition on the Commencement Date. Landlord and Tenant agree to
execute a commencement certificate in the form attached as Exhibit "C", setting
forth the Commencement Date, Expiration Date and the date the Building Expansion
Area were delivered to Tenant Ready for Occupancy.
5.2 Landlord will exercise reasonable and diligent efforts to
deliver possession of the Building Expansion Area to Tenant Ready for Occupancy
on or before the Target Delivery Date. If Landlord is unable to deliver the
Building Expansion Area to Tenant Ready for Occupancy on or before the Target
Delivery Date (i) this Lease shall not be void or voidable, (ii) Landlord will
not be liable to Tenant for any resultant loss or damage except for the
liquidated damages Tenant may be entitled to as specified below, and (iii)
unless Landlord's inability to deliver possession of the Building Expansion Area
Ready for Occupancy on the Target Delivery Date due to an Event Force Majeure
(as such term is defined in Section 27.21 below) or delay's caused by Tenant,
its agents or employees, Landlord shall credit the first installment(s) of Base
Rent due under this Lease in an amount equal to Two Thousand Five Hundred
Dollars ($2,500.00) for each day Landlord is delayed in delivering the Building
Expansion Area to Tenant Ready for Occupancy beyond the Target Delivery Date for
a period not to exceed 60 days. The foregoing credit against Base Rent shall be
deemed liquidated damages in accordance with California Civil Code Sections 1671
and 1677.
TENANT'S ACTUAL DAMAGES IN THE EVENT THE EXPANSION PREMISES ARE NOT
DELIVERED TO TENANT READY FOR OCCUPANCY ON OR BEFORE THE TARGET DATE ARE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY
SIGNING BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE CREDIT AGAINST
BASE RENT DESCRIBED IN THE PRECEDING PARAGRAPH HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF TENANT'S DAMAGES AND NOT A
PENALTY, AND SHALL BE TENANT'S SOLE AND EXCLUSIVE REMEDY AGAINST
4 of 27
LANDLORD ARISING FROM A FAILURE OF LANDLORD TO DELIVER POSSESSION OF THE
PREMISES READY FOR OCCUPANCY ON OR BEFORE THE TARGET DATE. BY THEIR SEPARATELY
SIGNING BELOW, LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY
WAS REPRESENTED BY COUNSEL WHO EXPLAINED TEE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.
TENANT LANDLORD
DIRECTED ELECTRONICS, INC., XXXXXX PROPERTIES, INC.,
a California corporation a California corporation
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
_________________________________ _______________________________
Print Name: Xxxxx X. Xxxxxxx Print Name: Xxxxxxx X. Xxxx
____________________
Print Title: President and CEO Print Title: President
____________________
By: _________________________________
Print Name: ____________________
Print Title: ____________________
5.3 Except as provided in the Construction Agreement, taking
possession of the Premises (and the Building Expansion Area) by Tenant is
conclusive evidence that the Premises (and the Building Expansion Area) are in
the condition agreed between Landlord and Tenant and acknowledgment by Tenant of
satisfactory completion of any work, which Landlord has agreed to perform.
6. QUIET ENJOYMENT. Landlord covenants and agrees that so long as an
Event of Default has not occurred, Tenant is entitled to the quiet enjoyment and
peaceful possession of the Premises subject to the provisions of this Lease.
Landlord shall under no circumstances be held responsible for restriction or
disruption of access to the Premises from public streets caused by construction
work or other actions taken by governmental authorities or any other cause not
within Landlord's direct control, and such circumstances shall not constitute a
constructive eviction of Tenant nor give rise to any right of Tenant against
Landlord. This covenant of quiet enjoyment is in lieu of any covenant of quiet
enjoyment provided or implied by law, and Tenant waives any such other covenant
to the extent broader than the covenant contained in this Section.
7. DEPOSIT. Tenant has deposited and will keep on deposit at all times
during the Term with Landlord the Deposit as security for the payment and
performance of Tenant's obligations under this Lease. If, at any time, Tenant
defaults in the performance of any terms of this Lease, Landlord has the right
to use the Deposit, or so much thereof as necessary, in payment of Rent, in
reimbursement of any expense incurred by Landlord, and in payment of any damages
incurred by Landlord by reason of such default. In such event, Tenant shall on
demand of Landlord forthwith remit to Landlord a sufficient amount in cash to
restore the Deposit to the original amount. If the entire Deposit has not been
utilized, the remaining amount will be refunded to Tenant or to whoever is then
the holder of Tenant's interest in this Lease, without
5 of 27
interest, within 30 days after full performance of this Lease by Tenant. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of law, now or hereafter enforced, which provide that
Landlord may claim from a security deposit only those sums reasonably necessary
to remedy defaults in the payment of rent, to repair damage caused by Tenant or
to clean the Premises, it being agreed that Landlord may, in addition, claim
those sums reasonably necessary to compensate Landlord for any other loss or
damage, foreseeable or unforeseeable, caused by the acts of omissions of Tenant
or Tenant's Agents. Landlord may commingle the Deposit with other funds of
Landlord. Landlord shall deliver the Deposit to any successor in interest of
Landlord's interest in the Premises, whether by sale, assignment, death,
appointment of receiver or otherwise, and provide written notice to Tenant of
such delivery and the location at which the Deposit is being held whereupon
Landlord shall be discharged from further liability therefor. Tenant agrees that
if a Mortgagee succeeds to Landlord's interest in the Premises by reason of
foreclosure or deed in lieu of foreclosure, Tenant has no claim against the
Mortgagee for the Deposit or any portion thereof unless such Mortgagee has
actually received the same from Landlord; Tenant waives any right under
California Civil Code Section 1950.7 or any similar or successor law to the
collection of any Deposit from any such Mortgagee or any purchaser at a
foreclosure sale of such Mortgagee's interest unless such Mortgagee or such
purchaser shall have received and not refunded the Deposit. If claims of
Landlord exceed the Deposit, Tenant shall remain liable for the balance.
8. CHARACTER OF OCCUPANCY. Tenant shall occupy the Premises for the
Permitted Use. Tenant, at Tenant's expense, shall comply with all applicable
federal, state, city, quasi-governmental and utility provider laws, codes,
rules, aid regulations now or hereafter in effect ("Applicable Laws") which
impose any duty upon Landlord or Tenant arising from Tenant's use and occupancy
of the Premises, provided, however, that Tenant shall have no obligation for
non-compliance with respect to the Building Expansion Area arising prior to the
date possession of the Building Expansion Area is delivered to Tenant. Tenant
represents, warrant and covenants to Landlord that:
(1) Tenant and the Premises will remain in compliance with all
Applicable Laws (including consent decrees and administrative orders) relating
to public health and safety and protection of the environment, including those
statutes, laws, regulations, and ordinances identified in subsection (6) (f)
below all as amended and modified from time to time (collectively,
"Environmental Laws"). Tenant will obtain and comply with all governmental
permits relating to the use or operation of the Premises required by applicable
Environmental Laws. Tenant will conduct and complete all investigations,
studies, sampling, and testing procedures and all remedial, removal, and other
actions necessary to clean up and remove all hazardous materials on, from or
affecting the Premises which arise from Tenant's use or occupancy of the
Premises in accordance with a applicable Environmental Laws.
(2) Tenant will not permit to occur any release, generation,
manufacture, storage, treatment, transportation, or disposal of "hazardous
material," as that term is defined in subsection (6) below, on, in, under, or
from the Premises. Tenant will promptly notify Landlord, in writing, if Tenant
has or acquires notice or knowledge that any hazardous material has been or is
threatened to be released, discharged, disposed of, transported, or stored on,
in, under, or from the Premises; and if any hazardous material is found on the
Premises, Tenant, at its own cost and expense, will immediately take such action
as is necessary to certain
6 of 27
the spread of and remove the hazardous material in accordance with all
Environmental Laws. This paragraph (2) shall not apply to any release,
generation, manufacture, storage, treatment, transportation or disposal of
"hazardous material" which does not arise out of Tenant's use and occupancy of
the Premises. Tenant shall not be liable or be responsible for any spill,
deposit, emission, disposal, release, generation, transportation, leakage,
handling, management, storage, potential or actual impacts or contamination by
any hazardous material on the Premises that occurred before, and may continue
during, Tenant's occupancy of the Premises or which does not arise out of
Tenant's use or manner of use of the Premises.
(3) Tenant will immediately notify Landlord and provide copies
upon receipt of all written complaint claims, citations, demands, inquiries,
reports, or notices relating to the condition of the Premises or compliance with
Environmental Laws. Tenant will promptly supply Landlord with copies of all
notices, reports, correspondence, and submissions made by Tenant to the United
States Environmental Protection Agency, the United States Occupational Safety
and Health Administration, and any other local, state, or federal authority
which requires submission of any information concerning environmental matters or
hazardous wastes or substances pursuant to Environmental Laws. Tenant will
promptly cure and have dismissed with prejudice any such actions and proceeding
arising out of Tenant's use and occupancy of the Premises. Tenant will keep the
Premises free of any lien imposed pursuant to any Environmental Law arising out
of Tenant's use and occupancy of the Premises. Tenant will promptly notify
Landlord of any liens threatened or attached against the Premises pursuant to
any Environmental Law. If such a lien is filed against the Premises, then,
within the earlier of 20 days or 5 days less than the period to remove the liens
set forth in any underlying mortgage or lease from the date that the lien is
placed against the Premises, and before any governmental authority commences
proceedings to sell the Premises pursuant to the Lien, Tenant will either (x)
pay the claim and remove the lien from the Premises or (y) furnish either (i) a
bond or cash deposit reasonably satisfactory to Landlord and Landlord's
insurance company in an amount not less than the claim from which the lien
arises; or (ii) other security satisfactory to Landlord to and to any superior
mortgagee or lessee in an amount not less than that which is sufficient to
discharge the claim from which the lien arises.
(4) Landlord and Landlord's agents, servants, and employees
including, without limitation, legal counsel and environmental consultants and
engineers retained by Landlord, may (but without the obligation or duty so to
do), at any time and from time to time, on not less than 10 business days'
notice to Tenant (except in the event of an emergency in which case no notice
will be required), inspect the Premises to determine whether Tenant is complying
with Tenant's obligations set forth in this section, and to perform
environmental inspections and sampling, during regular business hours (except in
the event of an emergency) or during such other hours as Landlord and Tenant may
agree. If Tenant is not in compliance, Landlord will have the right, in addition
to Landlord's other remedies available at law and in equity, to enter upon the
Premises immediately and take such action as Landlord in its sole judgment deems
appropriate to remediate any actual or threatened contamination caused by
Tenant's failure to comply. Landlord will use reasonable efforts to minimize
interference with Tenant's business but will not be liable for any interference
caused by Landlord's entry and remediation efforts. Upon completion of any
sampling or testing Landlord will (at Tenant's expense if Landlord's actions are
a result of Tenant's default under this section) restore the affected area of
the Premises from any damage caused by Landlord's sampling and testing.
7 of 27
(5) Tenant shall, within 60 days after written notice
thereof by Landlord, take such actions as may be reasonably necessary to comply
with Environmental Laws, provided however if such compliance cannot be
reasonably completed within 60 days, then Tenant shall commence such reasonably
necessary actions within such period of time and thereafter diligently proceed
to comply will all requirement of such governmental authority. If Tenant fails
to timely take or diligently or expeditiously proceed to complete in a timely
fashion any such action, then, Landlord may cause the removal (or other cleanup
acceptable to Landlord) of any hazardous materials from the Premises. The costs
of hazardous materials removal and any other cleanup (including transportation
and storage costs) will be additional rent under this Lease, whether or not a
court has ordered the cleanup, and such costs shall become due and payable on
demand by Landlord. Tenant will give Landlord, its agents, and employee's access
to the Premises to remove or otherwise clean up any hazardous material.
Landlord, however, has no affirmative obligations to remove or otherwise clean
up any hazardous material, and this Lease will not be construed as creating any
such obligation.
(6) Tenant agrees to indemnify, defend (with counsel
reasonably acceptable to Landlord and at Tenant's sole cost), and hold Landlord
and Landlord's affiliates, shareholders, directors, officers, employees, and
agents free and harmless from and against all losses, liabilities, obligations,
penalties, claims, litigation, demands, defenses, costs, judgments, suits,
proceedings, damages (excluding consequential damages), disbursements, or
expenses of any kind (including attorneys and experts fees and expenses and fees
and expenses incurred in investigating, defending, or prosecuting any
litigation, claim, or proceeding that may at any time be imposed upon, incurred
by, or asserted or awarded against Landlord or any of them in connection with or
arising from or out of Tenant's use or occupancy of the Premises and:
(a) the release of any hazardous material on, in, under,
or affecting all on any portion of the Premises by Tenant or any of its agents,
servants, and employees;
(b) any misrepresentation, inaccuracy or breach of any
warranty, covenant, or agreement by Tenant contained or referred to in this
section;
(c) any violation or claim of violation by Tenant of any
Environmental Law; or
(d) the imposition of any lien for the recovery of any
costs for environmental cleanup or other response costs relating to the release
or threatened release of hazardous material by Tenant or any of its agents,
servants, and employees. This indemnification is the personal obligation of
Tenant and will survive termination of this Lease. Tenant, its successors, and
assigns waive, release, and agree not to make any claim or bring any cost
recovery action against Landlord under CERCLA, as that term is defined in
subsection (f), or any state equivalent or any similar law now existing or
enacted after this date. To the extent that Landlord is strictly liable under
any such law, regulation, ordinance, or requirement, Tenant's obligation to
Landlord under this indemnity will likewise be without regard to fault on the
part of Tenant with respect to the violation or condition that result in
liability to Landlord.
8 of 27
(e) The provisions of this Section will be in addition
to any and all obligations and liabilities Tenant may have to Landlord at common
law, and will survive this Lease.
(f) For purposes of this Lease, "hazardous material"
means (i) "hazardous substances" or "toxic substances" as those terms are
defined by the Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), 42 U.S. Section 9601 et seq., or the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, all as amended and amended after
this date (ii) "hazardous wastes, as that term is defined by the Resource
Conservation and Recovery Act (RCRA), 42 U.S.C. Section 6901 et seq.. as amended
and amended after this date; (iii) any pollutant or contaminants or hazardous,
dangerous, or toxic chemicals, materials, or substances with in the meaning of
any other applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic, or
dangerous waste substance or material, all as amended or amended after this
date, (iv) crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure (61 degrees Fahrenheit and 14.7 pounds
per square inch absolute); (v) any radioactive material, including any source,
special nuclear or by-product material as defined at 42 U.S.C. Section 2011 et
seq., as amended and amended after this date; (vi) asbestos in any form or
condition; and (vii) polychlorinated biphenyls (PCBs) or substances or compounds
containing PCBs.
(7) As an inducement to Tenant to enter into this Lease,
Landlord represents and warrants to Tenant that, except as previously disclosed
in writing:
(a) During any and all previous periods of ownership of
the Building and Premises by Landlord, Landlord has received no notice,
directive, violation, report or action by any local, state or federal department
or agency concerning Environmental Laws or regulations, which has not been
disclosed by Landlord to Tenant and remedied in accordance with such laws or
regulations;
(b) To Landlord's current actual knowledge and without
any duty to investigate, there are no soil or geological conditions, which might
impair or adversely affect the current use or future plans for use of the
Building or Premises by the Tenant;
(c) Any business and operations of Landlord on the
Building or Premises will at all times be conducted in compliance in all
material respects with all applicable federal, state, local or foreign laws,
ordinances, regulations, orders and other requirements of governmental
authorities with respect to matters relating to the environment;
(d) There has been no spill, discharge, release, cleanup
or contamination of or by any hazardous or toxic waste or substance used,
generated, treated, stored, disposed of or handled by Landlord at the Building
or Premises;
(e) As of the Commencement Date, no underground storage
tanks are located at, on or under the Premises;
9 of 27
9. MAINTENANCE, ALTERATIONS AND REENTRY BY LANDLORD.
9.1 Except as may be set forth in the Construction Agreement and
this Lease, Landlord shall have no obligation to make any improvements or
repairs to the Premises during the Term.
9.2 Landlord or Landlord's agents may at all reasonable times and,
except in the case of an emergency, upon reasonable prior notice enter the
Premises for examination and inspection, or to perform, if Landlord elects, any
obligations of Tenant which Tenant fails to perform or such cleaning,
maintenance, janitorial services, repairs, replacements, additions, or
alterations as Landlord deems necessary for the safety, improvement, or
preservation of the Premises or as required by Applicable Laws. Furthermore, not
more than once every 2 years following the Commencement Date Landlord shall have
the right, at Landlord's sole cost and expense, to engage a licensed property
inspection firm of Landlord's choice to inspect the Premises to ensure Tenant's
compliance with its maintenance and repair obligations as set forth in Section
10 below. Landlord or Landlord's agents may also show the Premises to
prospective tenants, purchasers and Mortgagees. Any such reentry pursuant to
this Section 9.2 does not constitute an eviction or entitle Tenant to abatement
of Rent.
10. ALTERATIONS, MAINTENANCE AND REPAIRS BY TENANT.
10.1 Tenant shall not make any alterations to the Premises during
the Term, including installation of equipment or machinery, which requires
modifications to the structural, mechanical or electrical systems of the
Building (collectively "Alterations") without in each instance first obtaining
the written consent of Landlord, which consent shall not be unreasonably
withheld; provided however, that this shall not include the moving of any non
load bearing partition walls, minor plumbing, minor electrical work, minor
modification or rearrangement of fixtures or any other minor changes. Landlord's
consent or approval of the plans, specifications and working drawings for any
Alterations shall not constitute any warranty or representation by Landlord (and
shall not impose any liability on Landlord) as to their completeness, design
sufficiency, or compliance with Applicable Laws. Tenant shall at its cost: pay
all engineering and design costs incurred by Landlord as to all Alterations,
obtain all governmental permits and approvals required, and cause all
Alterations to be completely in compliance with Applicable Laws and requirements
of Landlord's insurance. All such work relating to Alterations shall be
performed in a good and workmanlike manner, using new materials and equipment at
least equal in quality to the Initial Building Condition. All Alterations,
repair and maintenance work performed by Tenant shall be done at Tenant's
expense. Tenant shall deliver to Landlord prior to commencement certificates
issued by insurance companies qualified to do business in the state in which the
Premises are located, evidencing that the necessary worker's compensation,
public liability insurance, and property damage insurance (in amounts, with
companies and on forms reasonably satisfactory to Landlord) are in force and
maintained by all contractors and subcontractors engaged to perform such work.
All liability policies shall name Landlord, Building Manager, and Mortgagee as
additional insureds. Each certificate shall provide that the insurance may not
be cancelled or modified without 10 days' prior written notice to Landlord and
Mortgagee. Landlord also has the right to post notices in the Premises in
locations designated by Landlord stating that Landlord is not responsible for
payment for such work and containing such other information as Landlord deems
necessary. At no expense to Landlord,
10 of 27
Landlord shall reasonably cooperate with Tenant in securing building and other
permits or authority required from time to time for any work permitted hereunder
by Tenant.
10.2 All Alterations, excluding moveable partitions and paneling,
cubicles, and other movable office furniture not attached to the Building
purchased by Tenant, are deemed a part of the real estate and the property of
Landlord and remain upon and be surrendered with the Premises at the end of the
Term, whether by lapse of time or otherwise, unless Landlord notifies Tenant no
later than 30 days prior to the end of the Term that it elects to have Tenant
remove all or part of such Alterations, and in such event, Tenant shall at
Tenant's expense promptly remove the Alterations specified and restore the
Premises to the condition which existed as of the Commencement Date, reasonable
wear and tear excepted.
10.3 Tenant shall keep the Premises and the Building (excluding the
interior portions of Suite B, utility connections and HVAC equipment exclusively
servicing Suite B, and doors and plate glass windows associated therewith, which
shall be the sole responsibility of Landlord), including but not limited to, all
equipment or facilities such as plumbing, heating, ventilating,
air-conditioning, electrical, lighting, fire protection systems, fixtures, walls
(interior and exterior), foundations, ceilings, roofs, floors, windows, doors,
plate glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs, sidewalks and parkways located on the Premises, in good order,
condition, and repair, loss by fire or other casualty or ordinary wear excepted.
Tenant shall further keep the exterior appearance of the Building in a
first-class condition consistent with the exterior appearance of other similar
facilities of comparable age and size in the vicinity of the Building,
including, when necessary, repainting the exterior of the Building. If the HVAC
equipment, fire extinguishing systems, including fire alarm and smoke detection,
landscaping and irrigation systems, roofs, driveways and parking lots, and
utility feeder lines cannot be repaired other than at a cost which is in excess
of 50% of the cost of replacing such items, then such item shall be replaced by
Landlord, and the cost thereof shall be prorated between Landlord and Tenant,
and Tenant shall only be obligated to pay, each month during the remainder of
the Term, on the date on which Base Rent is due, an amount equal to the product
of multiplying the cost of such replacement by a fraction, the numerator of
which is one, and the denominator of which is the number of months of useful
life of such item as specified pursuant to Federal income tax regulations or
guidelines for depreciation thereof (including interest on the unamortized
balance as is then commercially reasonable in the judgment of Landlord's
accountants), with Tenant reserving the right to prepay its obligations at
anytime.
Landlord shall reimburse Tenant, on an annual basis and within 30 days
written notice thereof by Tenant to Landlord, for "Suite B's Pro Rata Share" of
(i) costs paid by Tenant to maintain, repair, and illuminate the Common Areas
and (ii) costs paid by Tenant to maintain and repair the Building, including the
central heating and air conditioning system, roof and structural components of
the Building (collectively, "Common Area Costs"). In no event shall Common Area
Costs include costs incurred by Tenant for maintenance, repair, or illumination
of any portion of the Building occupied exclusively by Tenant or for services
and utilities exclusively servicing any such portion of the Building. Upon
Landlord's request, Tenant shall provide Landlord with a detailed breakdown of
such costs together with copies of such supporting documentation as Landlord may
reasonably request. Landlord and Tenant agree that as of the Commencement Date,
"Tenant's Pro Rata Share" means 94.2% and "Suite B's Pro Rata Share"
11 of 27
means 5.8%. If Tenant, at any time during the Term, leases additional space in
the Building or if the floor area of the Building is adjusted, Suite B's Pro
Rata Share and Tenant's Pro Rata Share shall be recomputed by Landlord based
upon the relative floor area of each in relation to the total floor area of the
Building.
11. MECHANICS' LIENS. Tenant shall pay for all work done on the Premises
by Tenant or at its request (other than the Initial Building Condition) of a
character which may result in liens on Landlord's or Tenant's interest and
Tenant will keep the Premises free of all construction liens, and other liens on
account of such work. Tenant indemnifies, defends, and saves Landlord and all
Mortgagees harmless from all liability, loss, damage, or expenses, including
attorneys' fees, on account of any claims of laborers, materialmen or others for
work performed or for materials or supplies furnished to Tenant or persons
claiming under Tenant. If any lien is recorded against the Premises or any suit
affecting title thereto is commenced as a result of such work, or supplying of
materials, Tenant shall cause such lien to be removed of record within 10 days
after notice from Landlord. If Tenant desires to contest any claim, Tenant must
furnish Landlord adequate security of at least 150% of the amount of the claim,
plus estimated costs and interest and, if a final judgment establishing the
validity of any lien is entered, Tenant shall immediately pay and satisfy the
same. If Tenant fails to proceed as aforesaid, Landlord may pay such amount and
any costs, and the amount paid, together with reasonable attorneys' fees
incurred, shall be immediately due Landlord upon notice.
12. SUBLETTING AND ASSIGNMENT.
12.1 Tenant shall not sublet any part of the Premises nor assign or
otherwise transfer this Lease or any interest herein (sometimes referred to as
"Transfer," and the subtenant or assignee may be referred to as "Transferee")
without the consent of Landlord first being obtained, which consent will not be
unreasonably withheld provided that: (1) Tenant complies with the provisions of
Section 12.3; (2) the Transferee is engaged in a business and the portion of the
Premises will be used for the Permitted Use in a manner which is in keeping with
the then standards of the Building; (3) the Transferee has reasonable financial
worth in light of the responsibilities involved; (4) Tenant is not in default at
the time it makes its request; and (5) the Transferee is not a governmental or
quasi-governmental agency. Without limiting the generality of the foregoing,
Tenant may consolidate with or merge into any other corporation, partnership or
limited liability company, convey or transfer all or substantially all of its
assets to any other corporation, partnership or limited liability company or
permit any other corporation, partnership or limited liability company to
consolidate with or merge into it upon condition that: (i) the resulting
corporation, partnership or limited liability company which results from such
consolidation or merger or transferee to which such sale shall have been made
(the "Surviving Entity") is organized or formed under the laws of any State of
the United States, and the Surviving Entity shall have a positive net worth,
computed in accordance with generally accepted accounting principles,
consistently applied at least equal to the positive net worth of Tenant on the
day immediately preceding such consolidation, merger or transfer, and (ii) the
Surviving Entity shall expressly and unconditionally assume by written agreement
to perform all such obligations of the Tenant hereunder and shall be obligated
to perform all such obligations of the Tenant hereunder to the same extent as if
the Surviving Entity had originally executed and delivered this Lease.
12 of 27
12.2 Following any Transfer in accordance with this Section 12,
Landlord may, after default by Tenant, collect rent from the Transferee or
occupant and apply the net amount collected to the Rent, but no Transfer or
collection will be deemed an acceptance of the Transferee or occupant as Tenant
or release Tenant from its obligations. Consent to a Transfer shall not relieve
Tenant from obtaining Landlord's consent to any other Transfer. Notwithstanding
Landlord's consent to a Transfer, Tenant shill continue to be primarily liable
for all obligations of Tenant under this Lease. If Tenant collects any rent or
other amounts from a Transferee in excess of the Rent for any monthly period,
Tenant shall pay Landlord one-half of the excess monthly, as and when received.
12.3 Tenant must notify Landlord at least 6 days prior to the
desired date of the Transfer ("Tenant's Notice"). Tenant's Notice shall describe
the portion of the Premises to be transferred and the terms and conditions.
Landlord agrees to provide or withhold consent to any Transfer within 30 days
after receipt of Tenant's Notice, provided that Tenant has delivered the
information required by this Section. Landlord's failure to provide or withhold
consent within such 30-day period shall be deemed consent to Tenants request.
12.4 All documents utilized by Tenant to evidence a Transfer are
subject to approval by Landlord, which approval shall not be unreasonably
withheld. Tenant shall pay Landlord's expenses, including reasonable attorneys'
fees, which shall not exceed $2,500.00, of determining whether to consent and in
reviewing and approving the documents. Tenant shall provide Landlord with such
information as Landlord reasonably requests regarding a proposed Transferee,
including financial information.
12.5 If a trustee or debtor in possession in bankruptcy is entitled
to assume control over Tenant's rights under this Lease and assigns such rights
to any third party notwithstanding the provisions hereof, such assignee shall
deposit with Landlord, as security for the timely payment of Rent and for the
performance of all other obligation of Tenant under this Lease, an amount equal
to three (3) monthly installments of Rent. If Landlord is entitled under the
Bankruptcy Code to "Adequate Assurance" of future performance of this Lease, the
parties agree that such term includes the following:
(1) Any assignee must demonstrate to Landlord's reasonable
satisfaction a net worth (as defined in accordance with generally accepted
accounting principles consistently applied) to fulfill Tenant's obligations
under this Lease. Tenant's financial condition was a material inducement to
Landlord in executing this Lease.
(2) The assignee must assume and agree to be bound by the
provisions of this Lease.
12.6 Notwithstanding the foregoing, Landlord hereby waives its
right to consent to a sublease of the Building Expansion Area; provided,
however, that all of the conditions contained in this Section and all other
provisions of this Lease are complied with as herein provided.
12.7 Landlord agrees to not unreasonably withhold or delay its
execution and delivery of a Non-Disturbance Agreement in a form that is
reasonably satisfactory to Landlord
13 of 27
with any subtenant authorized by Landlord or permitted under the provisions of
this Lease as and when required to do so by Tenant.
13. DAMAGE TO PROPERTY. Except as may be the direct and proximate result
of Landlord's gross negligence or willful misconduct, Tenant agrees Landlord is
not liable for any injury or damage, either proximate or remote, occurring
through or caused by fire, water, steam, or any repairs, alterations, injury,
accident, or any other cause to the Premises, to any furniture, fixtures, Tenant
improvements, or other personal property of Tenant kept or stored on the
Premises; and the keeping or storing of all property of Tenant on the Premises
is at the sole risk of Tenant.
14. INDEMNITY TO LANDLORD. Tenant agrees to indemnify, defend, and hold
Landlord and Building Manager harmless from all liability, costs, or expenses,
including attorneys' fees, on account of damage to the person or property of any
third party, to the extent caused by the negligence or breach of this Lease by
the Tenant or Tenant's Agents.
15. SURRENDER AND NOTICE. Upon the expiration or other termination of
this Lease, Tenant shall immediately quit and surrender to Landlord the Premises
broom clean, in good order and condition, ordinary wear and tear and loss by
fire or other casualty excepted, and Tenant shall remove all of its movable
furniture and other effects, all telephone cable and related equipment in the
Building installed for Tenant, and such Alterations, as Landlord requires. If
Tenant fails to timely vacate the Premises as required, Tenant is responsible to
Landlord for all resulting costs and damages of Landlord, including any amounts
paid to third parties who are delayed in occupying the Premises.
16. INSURANCE, CASUALTY, AND RESTORATION OF PREMISES.
16.1 Tenant shall obtain and keep in force, during the Term, the
following policies of insurance:
(1) A policy or policies of Commercial General Liability
Insurance protecting Tenant and Landlord against claims for bodily injury,
personal injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance and repair of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000.00 per occurrence
with an "Additional Insured-Managers or Lessor of Premises Endorsement" and
contain "Amendment of the Pollution Exclusion Endorsement" for damage caused by
heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Tenant's indemnity obligations under this Lease. The
limits of said insurance shall not, however, limit the liability of Tenant nor
relieve Tenant of any obligation hereunder. All insurance carried by Tenant
shall be primary and not contributory with any similar insurance carried by
Landlord, whose insurance shall be considered excess insurance only.
(2) A policy or policies of property insurance insuring loss
or damage to the Building. The amount of such insurance shall be equal to the
full replacement cost of the
14 of 27
Premises, as the same shall exist from time to time, or the amount required by
any lender of Landlord for the Building, but in no event more than the
commercially reasonable and available insurable value thereof. Such policy or
policies shall insure against all risks of direct loss or damage, including the
perils of flood and/or earthquake, debris removal and the enforcement of any
applicable laws and ordinances requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Building as the result of
the covered loss. Said policy or policies shall also contain an agreed upon
valuation provision in lieu of any coinsurance clause, waiver of subrogation,
and inflation guard protection causing an increase in the annual property
insurance coverage amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All Urban Consumers for the city
nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $10,000.00 per
occurrence, and Tenant shall be liable for such deductible amount in the event
of an insured loss.
(3) A policy or policies insuring the loss of the full Rent
payable under this Lease for one (1) year. Said insurance shall provide that in
the event the Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of completion of
repairs or replacements of the Premises, to provide for one full years' loss of
Rent from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent otherwise
payable by Tenant for the next 12 month period. Tenant shall be liable for any
deductible amount in the event or such loss.
(4) A policy or policies of insurance on all of Tenant's
personal property, trade fixtures and equipment located on the Premises. Such
insurance shall be full replacement cost coverage with a deductible not to
exceed $10,000.00 per occurrence. Tenant shall use the proceeds from any such
insurance for the replacement of personal property, trade fixtures and equipment
located on the Premises. Tenant shall provide Landlord with written evidence
that such insurance is in force.
(5) A Policy or policies of insurance for loss of income and
extra expense insurance in amounts as will reimburse Tenant for direct and
indirect loss of earnings attributable to all perils commonly insured against by
prudent tenants in the business of Tenant or attributable to prevention access
to the Premises as a result of such perils.
(6) All of the foresaid insurance, except for the insurance
required by subsection (4) and (5) above, shall insure and name the Landlord
(and any designee of Landlord) and the holders of all superior mortgages, if
required by such mortgages, as additional insureds as their respective interest
may appear. The insurance required by subsection (2) above shall name Landlord
or, at Landlord's direction, Landlord's lender, as loss payee.
(7) Tenant shall pay all premiums for the foresaid insurance
provided, however, that Landlord shall reimburse Tenant, on an annual basis and
within thirty (30) days notice thereof by Tenant to Landlord, for Suite B's Pro
Rata Share of the premiums paid by Tenant for the property insurance described
in subsection (2) above.
15 of 27
16.2 Insurance required herein shall be by companies duly licensed
or admitted to transact business in the State of California, and maintaining
during the policy term a "General Policyholders Rating" of at least B+, V, as
set forth in the most current issue of "Best's Insurance Guide", or such other
rating as may be required by Landlord's lender for the Premises. Tenant shall
not do anything that invalidates the required insurance policies. Tenant shall,
prior to the Commencement Date, deliver to Landlord certified copies of policies
of such insurance or certificates evidencing the existence and amounts of the
required insurance. No such policy shall be cancelable or subject to
modification except after 30 days prior written notice to Landlord. Tenant
shall, at least 30 days prior to the expiration of such policies, furnish
Landlord with evidence of renewals or "insurance binders" evidencing the renewal
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord upon written demand
therefore. Such policies shall be for a term at least one year, or the length of
the remaining Term, whichever is less.
16.3 Landlord and Tenant waive all rights of recovery against the
other and its respective officers, partners, members, agents, representatives,
and employees for loss or damage to its real and personal property kept on the
Premises, or for loss of business revenue or extra expense arising out of or
related to the use and occupancy of the Premises. This release shall be
applicable and in force and effect only with respect to loss or damage occurring
during such time as the releaser's policies shall contain a clause or
endorsement to the effect that any such release shall not adversely affect or
impair said policies or prejudice the rights of the releasor to recover
thereunder. Tenant also waives all such rights of recovery against Building
Manager. Each party shall, upon obtaining the property damage insurance required
by this Lease, notify the insurance carrier that the foregoing waiver is
contained in this Lease and use reasonable efforts to obtain an appropriate
waiver of subrogation provision in the policies. Tenant hereby waives the
provisions of Section 1932(2) and Section 1933(4) of the California Civil Code
and the provisions of any similar or successor statutes.
16.4 If the Building is damaged by fire or other casualty which
renders the Building wholly untenantable and the damage is so extensive that an
architect selected by the Landlord certifies in writing to Landlord and Tenant
within 60 days of said casualty that the Building cannot, with the exercise of
reasonable diligence, be made fit for occupancy within 1 year from the happening
thereof, then, at the option of the Landlord or Tenant exercised in writing to
the other within 30 days of such determination, this Lease shall terminate as of
the occurrence of such damage. In the event of termination, Tenant shall pay
Rent duly apportioned up to the time of such casualty and forthwith surrender
the Premises and all interest. If Tenant fails to do so, Landlord may reenter
and take possession of the Premises and remove Tenant. If, however, the damage
is such that the architect certifies that the Premises can be made tenantable
within such 1-year period or neither Landlord nor Tenant elects to terminate the
Lease despite the extent of damage, then the provisions below apply.
16.5 If the Building is damaged by fire or other casualty that does
not render it wholly untenantable or require a repair period in excess of 1
year, Landlord shall with reasonable promptness repair the Premises to the
extent of the Initial Building Condition. Notwithstanding the foregoing, if the
required insurance was not in force or the insurance proceeds are not sufficient
to effect such repairs, Tenant shall promptly contribute the shortage in
proceeds as and when required by Landlord to complete said repairs. Tenant's
failure to contribute the shortage shall constitute a default by Tenant under
this Lease and, in addition to all other remedies Landlord may have against
Tenant, Landlord shall be excused from its obligation to effect the repairs.
16.6 If at any time during the last 2 years of the Term there is
damage for which the cost to repair exceeds 50% of the replacement value of the
Building, either Landlord or Tenant may terminate this Lease effective 60 days
following the date of occurrence of such damage by giving a written termination
notice to the other party within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Tenant at that time has an exercisable
option to extend the Term, then Tenant may preserve this Lease by, (a)
exercising such option and (b) providing Landlord with any shortage in insurance
proceeds (or adequate assurance thereof) needed to make the repairs on or before
the earlier of (i) the date which is 10 days after Tenant's receipt of
Landlord's written notice purporting to terminate this Lease, or (ii) the day
prior to the date upon which such option expires. If Tenant duly exercises such
option during such period and provides Landlord with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Landlord shall,
at Landlord's commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If
Tenant fails to exercise such option and provide such funds or provide such
assurances then this Lease shall terminate on the date specified in the
termination notice and Tenant's option shall be extinguished.
16.7 Rent shall xxxxx during any period of repair and restoration
to the extent of any recovery by Landlord under its loss of rent insurance
related to the Premises in the same proportion that the part of the Premises
rendered untenantable bears to the whole.
17. REAL PROPERTY TAXES. As used herein, the term "Real Property Taxes"
shall include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance personal income or
estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Landlord in the Premises, Landlord's
right to other income therefrom, and/or Landlord's business of leasing, by any
authority having the direct or indirect power to tax and where the funds are
generated with reference to the Building address and where the proceeds; so
generated are to be applied by the city, county or other local taxing authority
of a jurisdiction within which the Premises are located. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring during the Term,
16 of 27
including but not limited to, a change in the ownership of the Premises. The
term "Real Property Taxes" shall not include inheritance, estate, succession,
gift, franchise, corporation, income or profit taxes imposed upon Landlord.
Landlord shall furnish promptly upon receipt, a copy of any tax xxxx for
Real Property Taxes from an applicable government authority, to the Tenant.
Tenant shall pay the entire amount of the tax xxxx for the Premises at least 10
days prior to any delinquency date. Tenant shall promptly furnish Landlord with
satisfactory evidence that such taxes have been paid. Within 30 days of
Landlord's receipt of evidence of Tenant's payment of such taxes, Landlord shall
reimburse Tenant for Suite B's Pro Rata Share of Real Property Taxes. If any
Real Property Taxes shall cover any period of time prior to or after the
expiration or termination of this Lease, Tenant's Pro Rata Share of such Real
Property Taxes shall be prorated to cover only that portion of the tax xxxx
applicable to the period that this Lease is in effect, and Landlord shall
reimburse Tenant for any overpayment. If Tenant shall fail to pay any required
taxes, Landlord shall have the right to pay the same, and Tenant shall reimburse
Landlord therefor upon demand. Landlord shall reimburse Tenant, on an annual
basis, for Suite B's Pro Rata Share of Real Property Taxes paid by Tenant within
10 days of notice thereof by Tenant.
In the event Tenant incurs a late charge on any payment of Real Property
Taxes, Landlord may, at Landlord's option, estimate the current Real Property
Taxes, and require that such taxes be paid in advance to Landlord by Tenant,
either: (i) in a lump sum amount equal to the installment due, at least 20 days
prior to the applicable delinquency date, or (ii) monthly in advance with the
payment of Base Rent. If Landlord elects to require payment monthly in advance,
the monthly payment shall be an amount equal to the amount of estimated
installment of taxes divided by the number of months remaining before the month
in which said installment becomes delinquent. When the actual amount of the
applicable tax xxxx is known, the amount of such equal monthly advance payments
shall be adjusted as required to provide the funds needed to pay applicable
taxes. If the amount collected by Landlord is insufficient to pay such Real
Property Taxes when due, Tenant shall pay Landlord, upon demand, such additional
sums as are necessary to pay such obligations. All monies paid to Landlord under
this Section may be intermingled with other monies of Landlord and shall not
bear interest. In the event of a breach by Tenant in the performance of its
obligations under this Lease, then any balance of funds paid to Landlord under
the provisions of this Section may, at the option of Landlord, be treated as an
additional Security Deposit.
If the Premises are not separately assessed, Tenant's liability shall be
an equitable proportion of the Real Property Taxes for all of the land and
improvements included within the tax parcel assessed, such proportion to be
conclusively determined by Landlord from the respective valuations assigned in
the assessor's work sheets or such other information as may be reasonably
available.
Tenant shall pay, prior to delinquency, all taxes assessed against and
levied upon furnishings, fixtures, equipment and personal property of Tenant.
When possible, Tenant shall cause such property to be assessed and billed
separately from the real property of Landlord. If any of Tenant's personal
property shall be assessed with Landlord's real property, Tenant shall pay
Landlord the taxes attributable to Tenant's property within 10 days after
receipt of a written statement.
17 of 27
18. UTILITIES AND SERVICES. Tenant shall pay for all water, gas, heat,
power, telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon, excluding Suite B which shall be
the sole responsibility of Landlord. If any such services are not separately
metered, Tenant shall pay a reasonable proportion, to be determined by Landlord,
of all charges jointly metered. In the event that such services are not
separately metered, Tenant shall have the right to obtain a survey of its
electrical usage at Tenant's sole cost and expense. Tenant may, at its option,
install separate electrical meters at its own expense.
19. CONDEMNATION. If the Premises or substantially all of it or any
portion of the Building which renders the Premises untenantable for Tenant's
use, is taken by right of eminent domain, or by condemnation (which includes a
conveyance in lieu of a taking), this Lease, at the option of either Landlord or
Tenant exercised by notice to the other within 30 days after the Taking, shall
terminate and any Rent and any other prepaid monetary obligations under this
Lease, including, but not limited to payment of Real Estate Taxes shall be
apportioned as of the date of the taking. Tenant shall forthwith surrender the
Premises and all interest in this Lease, and, if Tenant fails to do so,
Landlord may reenter and take possession of the Premises. If less than all the
Premises is taken, Landlord shall promptly repair the Premises as nearly as
possible to its condition immediately prior to the taking, unless Landlord
elects not to rebuild under Section 16.5. Landlord shall receive the entire
award or consideration for the taking. Each party hereby waives the provisions
of Section 1265.130 of the California Code of Civil Procedure and any similar
or successor law allowing either party to petition the Superior Court to
terminate this Lease in the event of a partial taking of the Building or
Premises.
20. DEFAULT BY TENANT
-----------------
20.1 Each of the following events is an "Event of Default":
(1) Any failure by Tenant to pay Rent on the due date unless
such failure is cured within 5 business days after notice to Tenant by Landlord
(notice given hereunder shall be in lieu of, and not in addition to, any notice
required under Section 1161, et seq., of the California Code of Civil Procedure
of any similar or successor law);
(2) Tenant vacates or abandons the Premises;
(3) This Lease or Tenant's interest is transferred whether
voluntarily or by operation of law except as permitted in Section 12;
(4) This Lease or any part of the Premises is taken by process
of law and is not released within 15 days after a levy;
(5) Commencement by Tenant of a proceeding under any provision
of federal or state law relating to insolvency, bankruptcy, or reorganization
("Bankruptcy Proceeding");
(6) Commencement of a Bankruptcy Proceeding against Tenant,
unless dismissed within 60 days after commencement;
(7) Tenant shall make an assignment of its property for the
benefit of creditors or shall institute any proceedings relating to it or its
property under any bankruptcy or insolvency laws of any jurisdiction;
(8) Tenant fails to take possession of the Premises on the
Commencement Date or the Building Expansion Area upon expiration of the
Construction Period;
(9) Tenant fails to perform any of its other obligations and
non-performance continues for 30 days after notice by Landlord or, if such
performance cannot be reasonably had within such 30 day period, Tenant does not
in good faith commence performance
18 of 27
within such 30 day period and diligently proceed to completion; provided,
however, Tenant's right to cure shall not exceed the period provided by
Applicable Law (notice given hereunder shall be in lieu of, and not in addition
to, any notice required under Section 1161, et seq., of the California Code of
Civil Procedure or any similar or successor law);
(10) Any event, which is expressly defined as or deemed an
Event of Default under this Lease.
20.2 Remedies of Landlord. If an Event of Default occurs, Landlord
may then or at any time thereafter, either:
(1) (a) Without further notice except as required by
Applicable Laws, reenter and repossess the Premises or any part and eject Tenant
and all other persons, subject only to the nondisturbance provisions herein
without any prejudice to any remedies for arrears of Rent or preceding breach of
this Lease. Should Landlord reenter or take possession pursuant to legal
proceedings or any notice provided for by Applicable Law, Landlord may, from
time to time, without terminating this Lease, relet the Premises or any part, in
Landlord's or Tenant's name but for the account of Tenant, for such periods
(which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions and upon such other
terms (which may include concessions of free rent and alteration and repair of
the Premises) as Landlord determines and Landlord may collect the rents
therefor, which rights include the rights of Landlord under Section 1951.4 of
the California Civil Code. In the event that Landlord elects to avail itself of
the remedy provided by this subsection (1), Landlord shall not unreasonably
withhold its consent to an assignment or subletting of the Premises subject to
the reasonable standards for Landlord's consent as are contained in this Lease.
In addition, in the event Tenant has entered into a sublease which is valid
under the terms of this Lease, Landlord may also, at its option, cause Tenant to
assign to Landlord the interest of Tenant under said sublease, including, but
not limited to, Tenant's right to payment of rent as it becomes due. Landlord is
not in any way responsible or liable for failure to relet the Premises, or any
part thereof, or for any failure to collect any rent due upon such reletting. If
there is other unleased space in the Building, Landlord may lease such other
space without prejudice to its remedies against Tenant. No such reentry,
repossession or notice from Landlord, or any other acts or omissions of
Landlord, including maintenance, preservation, efforts to relet the Premises, or
appointment of a receiver, shall be construed as an election by Landlord to
terminate this Lease unless specific notice of such intention is given Tenant.
Landlord reserves the right following any reentry and/or reletting to exercise
its right to terminate this Lease by giving Tenant notice, in which event this
Lease will terminate as specified in the notice.
(b) If Landlord takes possession of the Premises without
terminating this Lease, Tenant shall pay Landlord (i) the Rent which would be
payable if repossession had not occurred, less (ii) the net proceeds, if any, of
any reletting of the Premises after deducting all of Landlord's expenses
reasonably incurred in connection with such reletting (collectively "Reletting
Expenses"). If, in connection with any reletting, the new lease term extends
beyond the Term or the premises covered thereby include other premises not part
of the Premises, a fair apportionment of the rent received from such reletting
and the Reletting Expenses, will be made in determining the net proceeds
received from the reletting. In determining such net proceeds, rent concessions
will also be apportioned over the term of the
19 of 27
new lease. Tenant shall pay such amounts to Landlord monthly on the days on
which the Rent would have been payable if possession had not been retaken, and
Landlord is entitled to receive the same from Tenant on each such day; or
(2) Give Tenant notice of termination of this Lease on the
date specified and, on such date, Tenant's right to possession of the Premises
shall cease and the Lease will terminate except as to Tenant's liability as
hereafter provided as if the expiration of the term fixed in such notice were
the end of the Term. If this Lease terminates pursuant to this Section, Tenant
remains liable to Landlord, and Landlord shall have the right to recover from
Tenant, an amount equal to (i) the worth at the time of the award of the unpaid
Rents which had been earned at the time of termination, (ii) the worth at the
time of award of the amount by which the unpaid Rents which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; (iii) the
worth at the time of the award by which the unpaid Rents for the balance of the
Term after the time of the award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom; and (v) at Landlord's
election, such other amounts in addition to or in lieu of the foregoing as may
be permitted by law. "Worth at the time of award" as used in clauses (i) and
(ii) above, shall be computed at the rate provided in Section 20.6 below. As
used in clause (iii) above, "worth at the time of award" shall be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus 1%.
20.3 Cumulative Remedies. Suits to recover Rent and damages may be
brought by Landlord, from time to time, and nothing herein requires Landlord to
await the date the Term would expire had there been no Event of Default or
termination, as the case may be. Each right and remedy provided for in this
Lease is cumulative and non-exclusive and in addition to every other right or
remedy now or hereafter existing at law or equity, including suits for
injunctive relief and specific performance. The exercise or beginning of the
exercise by Landlord of one or more rights or remedies shall not preclude the
simultaneous or later exercise by Landlord of other rights or remedies. All
costs incurred by Landlord to collect any Rent and damages or to enforce this
Lease are also recoverable from Tenant. If any suit is brought because of an
alleged breach of this Lease, the prevailing party is also entitled to recover
from the other party all reasonable attorneys' fees and costs incurred in
connection therewith.
20.4 No Waiver. No failure by Landlord to insist upon strict
performance of any provision or to exercise any right or remedy upon a breach
thereof, and no acceptance of full or partial Rent during the continuance of any
breach constitutes a waiver of any such breach or such provision, except by
written instrument executed by Landlord. No waiver shall affect or alter this
Lease but each provision hereof continues in effect with respect to any other
then existing or subsequent breach thereof.
20.5 Bankruptcy. Nothing contained in this Lease limits Landlord's
right to obtain as liquidated damages in any bankruptcy or similar proceeding
the maximum amount allowed by law at the time such damages are to be proven,
whether such amount is greater, equal to, or less than the amounts recoverable,
either as damages or Rent, referred to in any of the
20 of 27
preceding provisions of this Section. Notwithstanding anything in this Section
to the contrary, any proceeding described in Section 20.1(5), (6) and (7) is an
Event of Default only when such proceeding is brought by or against the then
holder of the leasehold estate under this Lease.
20.6 Late Payment Charge. Any Rent not paid within 5 days after the
due date shall thereafter bear interest at 5 percentage points above the Prime
Rate or the highest rate permitted by law, whichever is lower, until paid.
Further, if such Rent is not paid within 5 days after notice, Tenant agrees
Landlord will incur additional administrative expenses, the amount of which will
be difficult to determine; Tenant therefore shall also pay Landlord a late
charge for each late payment of 5% of such payment. Any amounts paid by Landlord
to cure a default of Tenant which Landlord has the right but not the obligation
to do, shall, if not repaid by Tenant within 5 days of demand by Landlord,
thereafter bear interest at 5 percentage points above the Prime Rate until paid.
"Prime Rate" means that rate announced by Xxxxx Fargo Bank, N.A. as its prime
rate on the date closest to the date interest commences.
20.7 Waiver of Jury Trial. Tenant and Landlord waive any right to a
trial by jury in suits arising out of or concerning the provisions of this
Lease.
21. DEFAULT BY LANDLORD. The failure of Landlord to perform any
obligation of Landlord as set forth in this Lease shall be an event of default
by Landlord. In the event of any alleged default on the part of Landlord, Tenant
shall give notice to Landlord and afford Landlord a reasonable opportunity to
cure such default. Such notice shall be ineffective unless a copy is
simultaneously also delivered in the manner required in this Lease to any holder
of a mortgage and/or deed of trust affecting all or any portion of the Premises
(collectively, "Mortgagee"), provided that prior to such notice Tenant has been
notified (by way of notice of Assignment of Rents and Leases, or otherwise), of
the address of a Mortgagee. If Landlord fails to cure such default within the
time provided, then Mortgagee shall have an additional 30 days following a
second notice from Tenant or, if such default cannot be cured within that time,
such additional time as may be necessary provided within such 30 days, Mortgagee
commences and diligently pursues a cure (including commencement of foreclosure
proceedings if necessary to effect such cure). Tenant's sole remedy will be
equitable relief or actual damages but in no event is Landlord or any Mortgagee
responsible for consequential damages or lost profit incurred by Tenant as a
result of any default by Landlord. If a Mortgagee, or transferee under such
Mortgage (hereafter defined), succeeds to Landlord's interest as a result of
foreclosure or otherwise, Tenant shall thereafter have the same remedies against
such Mortgagee or transferee for breach of the Lease that Tenant might have had
against Landlord if such Mortgagee or transferee had not succeeded to the
interest of Landlord; provided, however, in no event shall such party be: (i)
liable to Tenant for any damages arising against Landlord; (ii) bound by any
amendment (including an agreement for early termination) without its consent
made at any time after notice to Tenant that such Mortgage requires such
consent; and (iii) bound by payment of Rent in advance for more than 30 days.
Tenant agrees to pay Rent (and will receive credit under this Lease) as directed
in any Mortgagee's notice of Landlord's default under the Mortgage reciting that
Mortgagee is entitled to collect Rent.
21 of 27
22. SUBORDINATION AND ATTORNMENT.
22.1 This Lease at Landlord's option will be subordinate to any
mortgage, deed of trust and related documents now or hereafter placed upon the
Premises (including all advances made thereunder), and to all amendments,
renewals, replacements, or restatements thereof (collectively, "Mortgage").
Tenant agrees that no documentation other than this Lease is required to
evidence such subordination.
22.2 If any Mortgagee elects to have this Lease superior to the lien
of its Mortgage and gives notice to Tenant, this Lease will be deemed prior to
such Mortgage whether this Lease is dated prior or subsequent to the date of
such Mortgage or the date of recording thereof.
22.3 In confirmation of subordination or superior position, as the
case may be, Tenant will execute such documents as may be required by Mortgagee
and if it fails to do so within 10 days after demand, Tenant hereby irrevocably
appoints Landlord as Tenant's attorney-in-fact and in Tenant's name, place, and
stead, to do so.
22.4 Tenant hereby attorns to all successor owners of the Premises,
whether such ownership is acquired by sale, foreclosure of a Mortgage, or
otherwise and agrees to execute upon demand by Landlord documents evidencing
such attornment.
23. REMOVAL OF TENANTS PROPERTY. All movable personal property of Tenant
not removed from the Premises upon vacation, abandonment, or termination of this
Lease shall be conclusively deemed abandoned and may be sold, or otherwise
disposed of by Landlord without notice to Tenant and without obligation to
account; Tenant shall pay Landlord's expenses in connection with such
disposition.
24. HOLDING OVER; TENANCY MONTH-TO-MONTH. If, after the expiration or
termination of this Lease and any renewal or extension thereof, Tenant remains
in possession of the Premises without a written agreement as to such holding
over and continues to pay rent and Landlord accepts such rent, such possession
is a tenancy from month-to-month, subject to all provisions hereof but at a
monthly rent equivalent to 125% of the monthly Rent paid by Tenant immediately
prior to such expiration or termination. Rent shall continue to be payable in
advance on the first day of each calendar month. Such tenancy may be terminated
by either party upon 10 days' notice prior to the end of any monthly period.
Nothing contained herein obligates Landlord to accept rent tendered after the
expiration of the Term or relieves Tenant of its liability under Section 14.
25. PAYMENTS AFTER TERMINATION. No payments by Tenant after expiration
or termination of this Lease or after any notice (other than a demand for
payment of money) by Landlord to Tenant reinstates, continues, extends the Term,
or affects any notice given to Tenant prior to such payments. After notice,
commencement of a suit, or final judgment granting Landlord possession of the
Premises, Landlord may collect any amounts due or otherwise exercise Landlord's
remedies without waiving any notice or affecting any suit or judgment.
22 of 27
26. STATEMENT OF PERFORMANCE; ADDITIONAL DOCUMENTS OR INSTRUMENTS.
26.1 Statement of Performance. Not more than one (1) time per month,
Tenant agrees at any time upon not less than 10 days' notice to execute and
deliver to Landlord a written statement certifying 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 modified stating the modifications); that
there have been no defaults by Landlord or Tenant and no event which with the
giving of notice or passage of time, or both, would constitute such a default
(or, if there have been defaults, setting forth the nature thereof); the date to
which Rent has been paid in advance and such other information as Landlord
requests. Such statement may be relied upon by a prospective purchaser of
Landlord's interest or Mortgagee. Tenant's failure to timely deliver such
statement is conclusive upon Tenant that: (i) this Lease is in full force and
effect without modification except as may be represented by Landlord; (ii) there
are no uncured defaults in Landlord's performance; and (iii) not more than 1
month's Rent has been paid in advance. Upon request, Tenant will furnish
Landlord an appropriate resolution confirming that the party signing the
statement is authorized to do so.
26.2 Additional Requested Documents or Instrument. Tenant further
agrees at any time upon not less than 10 days' notice to execute and deliver to
Landlord whatever other documents or instruments may be reasonably required for
sale or financing purposes, including (if requested by Landlord) a current
financial statement and financial statements for the two (2) years preceding the
current financial statement year. Those statements shall be prepared in
accordance with generally accepted accounting principles and .;hall be audited
by an independent certified public accountant. Notwithstanding the forgoing,
Tenant may require the execution of a non-disclosure agreement by any party
prior to the disclosure of any confidential or proprietary information and shall
have no obligation under this section until such time as the non-disclosure
agreement is executed.
27. MISCELLANEOUS.
27.1 Transfer by Landlord. The term "Landlord" means so far as
obligations of Landlord are concerned, only the owner of the Premises at the
time in question and, if any transfer of the title occurs, Landlord herein named
(and in the case of any subsequent transfers, the then grantor) is automatically
released from and after the date of such transfer of all liability as respects
performance of any obligations of Landlord thereafter to be performed; provided,
however, that such transfer shall not release the Landlord from any obligation
or liability which arose prior to such transfer. Any funds in Landlord's
possession at the time of transfer in which Tenant has an interest will be
turned over to the grantee and any amount then due Tenant under this Lease will
be paid to Tenant.
27.2 No Merger. The termination or mutual cancellation of this Lease
will not work a merger, and such termination or cancellation will at the option
of Landlord either terminate all subleases or operate as an automatic assignment
to Landlord of such subleases.
27.3 Independent Covenants. This Lease is to be construed as though
the covenants between Landlord and Tenant are independent and not dependent and
Tenant is not
23 of 27
entitled to any setoff of the Rent against Landlord if Landlord fails to perform
its obligations; provided, however, the foregoing does not impair Tenant's right
to commence a separate suit against Landlord for any default by Landlord so long
as Tenant complies with Section 21.
27.4 Validity of Provisions. If any provision is invalid under
present or future laws, then it is agreed that the remainder of this Lease is
not affected and that in lieu of each provision that is invalid, there will be
added as part of this Lease a provision as similar to such invalid provision as
may be possible and is valid and enforceable.
27.5 Captions. The caption of each Section is added for convenience
only and has no effect in the construction of any provision of this Lease.
27.6 Construction. The parties waive any rule of construction that
ambiguities are to be resolved against the drafting party. Any words following
the words "include," "including," "such as," "for example," or similar words or
phrases shall be illustrative only and are not intended to be exclusive, whether
or not language of non-limitation is used.
27.7 Applicability. Except as otherwise provided, the provisions of
this Lease are applicable to and binding upon Landlord's and Tenant's respective
heirs, successors and assigns. Such provisions are also considered to be
covenants running with the land to the fullest extent permitted by law. Whenever
a provision in this Lease is stated to apply to the Term of this Lease, or words
of similar import, the same shall be deemed to mean and include any extensions
of or renewal options thereof as well, unless specific reference is made to such
provision as having applicability only to all or any portions of the initial
Term and or any extension or renewal term.
27.8 Authority. Tenant and the party executing this Lease on behalf
of Tenant represent to Landlord that such party is authorized to do so by
requisite action of Tenant and agree, upon request, to deliver Landlord a
resolution, similar document, or opinion of counsel to that effect. Landlord and
the party executing this Lease on behalf of Landlord represents to Tenant that
such party is authorized to do so.
27.9 Severability. If there is more than one party, which is the
Tenant, the obligations imposed upon Tenant are joint and several.
27.10 Acceptance of Keys, Rent or Surrender. No act of Landlord or
its representatives during the Term, including any agreement to accept a
surrender of the Premises or amend this Lease, is binding on Landlord unless
such act is by a partner, member or officer of Landlord, as the case may be, or
other party designated in writing by Landlord as authorized to act. The delivery
of keys to Landlord or its representatives will not operate as a termination of
this Lease or a surrender of the Premises. No payment by Tenant of a lesser
amount than the entire Rent owing is other than on account of such Rent nor is
any endorsement or statement on any check or letter accompanying payment an
accord and satisfaction. Landlord may accept payment without prejudice to
Landlord's right to recover the balance or pursue any other remedy available to
Landlord.
24 of 27
27.11 Diminution of View. Tenant agrees that no diminution of light,
air, or view from the Building entitles Tenant to any reduction of Rent under
this Lease, results in any liability of Landlord, or in any way affects Tenant's
obligations.
27.12 Limitation of Liability. Notwithstanding anything to the
contrary contained in this Lease, Landlord's liability is limited to Landlord's
interest in the Premises and Landlord shall never be personally liable for
recovery of any judgment.
27.13 Non-Reliance. Tenant confirms it has not relied on any
statements, representations, or warranties by Landlord or its representatives
except as set forth herein.
27.14 Written Modification. No amendment or modification of this
Lease is valid or binding unless in writing and executed by the parties.
27.15 Lender's Requirements. Tenant will make such modifications to
this Lease as may hereafter be required to conform to any lender's requirements,
so long as such modifications do not increase Tenant's obligations or materially
alter its rights.
27.16 Effectiveness. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or option to lease
and it is not effective unless and until execution and delivery by both Landlord
and Tenant.
27.17 Survival. This Lease, notwithstanding expiration or
termination, continues in effect as to any provisions requiring observance or
performance subsequent to termination or expiration.
27.18 Time of Essence. Time is of the essence herein.
27.19 Rules and Regulations. If rules and regulations are attached
hereto, they are a part of this Lease and Tenant agrees that Tenant and Tenant's
Agents shall at all times abide by such rules and regulations.
27.20 Recording. Tenant will not record this Lease. Recording of the
Lease by or on behalf of Tenant is an Event of Default.
27.21 Force Majeure. Except as specifically set forth in this Lease,
in the event that any of the parties to this Lease are prevented from proceeding
with any of their obligations under this Lease (other than the payment of money)
by reason of events that are beyond that party's control, such as strikes,
lockouts, earthquake, war, insurrection, riots, floods, acts of God, acts of the
public enemy, epidemics, quarantine restrictions, freight embargoes, or
inclement weather (an "Event Force Majeure"), then that party shall be entitled
to an additional grace period or extension of time in which event to perform the
obligation whose performance is precluded by such event, equal to the period of
delay caused by such event beyond that party's control, provided the party
seeking such extension shall have provided notice of the event to the other
party within ten (10) days of the event's occurrence.
25 of 27
28. AUTHORITIES FOR ACTION AND NOTICE.
28.1 Unless otherwise provided, Landlord may act through Landlord's
Building Manager or other designated representatives from time to time.
28.2 All notices or other communications required or desired to be
given to Landlord must be in writing and shall be deemed received when delivered
personally to any officer, partner, or member of Landlord (depending upon the
nature of Landlord) or the manager of the Building (the "Building Manager")
whose office is in the Building, or when deposited in the United States mail,
postage prepaid, certified or registered, return receipt requested, addressed as
set forth in Section 1.9. All notices or communications required or desired to
be given to Tenant shall be in writing and deemed duly served when delivered
personally to any officer, employee, partner, or member of Tenant (depending
upon the nature of Tenant), individually if a sole proprietorship, or manager of
Tenant whose office is in the Building, or when deposited in the United States
mail, postage prepaid, certified or registered, return receipt requested,
addressed to the appropriate address set forth in Section 1.10. Either party may
designate in writing served as above provided a different address to which
notice is to be mailed. The foregoing does not prohibit notice from being given
as provided in the rules of civil procedure, as amended from time to time, for
the state in which the Premises are located.
29. PARKING. Tenant shall be entitled to the exclusive use of 275 vehicle
parking spaces within the parking areas located on the Premises. Landlord
retains the right to all other vehicle parking spaces located on the Premises.
All vehicles parked in the parking area and the personal property therein shall
be at the sole risk of Tenant, Tenant's Agents and the users of such spaces and
Landlord shall have no liability for loss or damage thereto for whatever cause.
Landlord and any other occupant of Suite B shall have the right to ingress,
egress and vehicle parking within the parking, driveway and sidewalk areas
located on the Premises.
30. BROKERAGE. Tenant represents it has not employed any broker with
respect to this Lease and has no knowledge of any broker's involvement in this
transaction except those listed in Sections 1.14 and 1.15 (collectively, the
"Brokers"). Tenant shall indemnify Landlord against any expense incurred by
Landlord as a result of any claim for commissions or fees by any other broker,
finder, or agent, whether or not meritorious, employed by Tenant or claiming by,
through, or under Tenant, other than the Brokers. Tenant acknowledges Landlord
is not liable for any representations by the Brokers regarding the Premises,
Building or this Lease.
31. COUNTERPARTS. This Lease may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Any one or more counterpart signature
pages may be removed from one counterpart of the Lease and annexed to another
counterpart of the Lease to form a completely executed original instrument
without impairing the legal effect of the signature thereon.
32. ADDENDUM/EXHIBITS. Any Addenda and/or Exhibits referred to herein and
attached hereto are incorporated herein by reference.
26 of 27
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and
year first above written and it is effective upon delivery of a fully executed
copy to Tenant.
TENANT LANDLORD
DIRECTED ELECTRONICS, INC., XXXXXX PROPERTIES, INC.,
a California corporation a California corporation
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
___________________________________ _________________________________
Print Name: Xxxxx X. Xxxxxxx Print Name: Xxxxxxx X. Xxxx
________________________
Print Title: President and CEO Print Title: President
_______________________
By:___________________________________
Print Name:________________________
Print Title:_______________________
27 OF 27
ADDENDUM TO INDUSTRIAL/COMMERCIAL LEASE AGREEMENT
MULTI TENANT - NET
This Addendum to Industrial Lease Agreement Single Tenant - Net
("Addendum") is made to the Lease dated as of August 20, 2003 ("Lease"), by and
between XXXXXX PROPERTIES, INC., California corporation ("Landlord") and
DIRECTED ELECTRONICS, INC., a California corporation ("Tenant").
Landlord and Tenant hereby agree that notwithstanding anything contained
in the Lease to the contrary, the provisions set forth below shall be deemed to
be a part of the Lease and shall supersede to the extent appropriate, any
contrary provision in the Lease. All references in the Lease and in this
Addendum to Lease shall be construed to mean the Lease as a amended and
supplemented by this Addendum. All capitalized terms used in this Addendum
unless specifically defined in this Addendum shall have the same meaning as the
terms used in the Lease.
AGREEMENT
1. The following shall be deemed added to the Lease as Section 33 thereof:
33. Option To Extend Term. Landlord grants to Tenant 1 option to
extend ("Extension Option") the initial Term of the Lease for 1 period of
5 years ("Option Term"), subject to the conditions described herein below.
Tenant shall have no other right to extend the Term beyond the Option
Term.
33.1. Conditions of Option. The Extension Option is subject to
the following conditions: (a) the Extension Option may be exercised only
by written notice delivered by Tenant to Landlord as provided in Section
33.3 below and (b) only if, as of the date of delivery of the notice,
Tenant is not in default under the Lease. If Tenant properly exercises the
Extension Option and is not in default under this Lease at the end of the
initial Term, then the Term, as it applies to the entire Premises then
leased by Tenant, shall be extended for the Option Term. The Base Rent
payable by Tenant during the Option Term shall be as set forth in Section
1.6 of the Lease.
33.2 Exercise of Option. At anytime after December 31, 2010,
Tenant shall have the right to exercise the Extension Option by giving
Landlord not less than 6 months advance written notice of exercise
("Exercise Notice"). If Tenant timely exercises the Extension Option, the
Option Term and the Base Rent applicable during the Option Term as set
forth in Section 1.5, shall commence on the first day of the next
succeeding calendar year. If Tenant fails to timely deliver the Exercise
Notice, Tenant shall be considered to have elected not to exercise the
Extension Option and the Term of the Lease shall expire on the Expiration
Date. Time is expressly made of the essence with regard to Tenant's
delivery of the Exercise Notice.
33.3 Amendment to Lease. If Tenant timely exercises its
Extension Option, Landlord and Tenant shall execute an amendment to this
Lease extending the Lease Term on the terms and conditions set forth in
this Section 33.
1
2.Effectiveness of Lease. Except as and to the extent modified by this
Addendum, all provisions of the Lease shall remain in full force and effect.
TENANT LANDLORD
DIRECTED ELECTRONICS, INC., XXXXXX PROPERTIES, INC.,
a California corporation a California corporation
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
__________________________________ _____________________________
Print Name: Xxxxx X. Xxxxxxx Print Name: Xxxxxxx X. Xxxx
Print Title: President and CEO Print Title: President
By:___________________________________
Print Name:________________________
Print Title:_______________________
2
