Exhibit 10.23
STANDARD INDUSTRIAL LEASE-MODIFIED GROSS
WILCO INVESTMENTS, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
"LANDLORD"
AND
REDLINE PERFORMANCE PRODUCTS, INC.
A MINNESOTA CORPORATION
"TENANT"
TABLE OF CONTENTS
SECTION PAGE
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1. BASIC LEASE PROVISIONS............................................................ 1
2. DEFINITIONS....................................................................... 2
3. PREMISES.......................................................................... 3
4. TERM; DELIVERY OF PREMISES........................................................ 3
5. RENT.............................................................................. 4
6. SECURITY DEPOSIT.................................................................. 6
7. USE............................................................................... 6
8. MAINTENANCE, REPAIRS AND ALTERATIONS.............................................. 7
9. TAXES............................................................................. 8
10. UTILITIES AND SERVICES............................................................ 8
11. INSURANCE......................................................................... 9
12. WAIVER AND INDEMNITY.............................................................. 10
13. DAMAGE AND DESTRUCTION............................................................ 10+
14. CONDEMNATION...................................................................... 11
15. ASSIGNMENT AND SUBLETTING......................................................... 12
16. DEFAULT BY TENANT; REMEDIES....................................................... 13
17. TENANT'S INSOLVENCY............................................................... 15
18. DEFAULT BY LANDLORD............................................................... 15
19. SUBORDINATION AND ESTOPPEL........................................................ 15
20. HAZARDOUS MATERIALS............................................................... 16
21. NOTICE............................................................................ 17
22. OTHER TERMS AND CONDITIONS........................................................ 17
23. GENERAL PROVISIONS................................................................ 18
EXHIBITS
A Site Plan
B Guaranty Agreement
STANDARD INDUSTRIAL LEASE-MODIFIED GROSS
THIS STANDARD INDUSTRIAL LEASE-MODIFIED GROSS ("Lease"), dated for reference
purposes only July 27,2000, is made at Vista California, between WILCO
INVESTMENTS, LLC, a California limited liability company ("LANDLORD"), and
REDLINE PERFORMANCE PRODUCTS, INC. a Minnesota Corporation (TENANT).
1. BASIC LEASE PROVISIONS. The words and figures set forth in this Section 1 are
used as defined terms in this Lease.
1.1 PREMISES: The real property and improvements, which are the subject
of this Lease. The Premises consist of approximately 26,960 square feet, located
at 0000 Xxxxxxxx Xxx, Xxxxx, XX 00000.
1.2 TERM: Sixty (60) months.
1.3 COMMENCEMENT AND EXPIRATION DATES:
(a) Commencement Date: September 1, 2000.
(b) Expiration Date: August 31,2005
(c) Delivery of the Premises (estimate): August 1, 2000.
1.4 EXTENSION OPTION PERIOD: One of twenty-four (24) months.
1.5 INITIAL MONTHLY BASE RENT: $15,500.
1.6 PREPAID BASE RENT: $7,750. (See paragraph 5.2)
1.7 PERIODIC INCREASE IN BASE RENT: See Section 5.3.
1.8 SECURITY DEPOSIT AMOUNT: $25,000.00
1.9 PERMITTED USE: Light industrial uses as
permitted by applicable zoning.
1.10 TENANT'S GUARANTOR(s): Xxxx Xxxxx & Xxxxx X. Xxxxxxxx
1.11 BROKER(s): Landlord's: Xxx & Associates
1.12 LANDLORD'S ADDRESS FOR NOTICE: WILCO INVESTMENTS, LLC
X.X. Xxx 000
Xxxxxxxxx, XX. 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
1.13 TENANT'S ADDRESS FOR NOTICE: Redline Performance Products, Inc.
0000 Xxxxxxxx Xxx
Xxxxx, XX 00000
Tel (000) 000-0000
Fax (000) 000-0000
Attention: Xxxx Xxxxx, President
1.14 ADDENDUM: Section 24
2. DEFINITIONS. The captions appearing in this Section 2 are used as defined
terms in this Lease.
2.1 ADDITIONAL IMPROVEMENTS. The additional improvements to be
constructed by Tenant pursuant to Section 3.3, to outfit the Premises for
Tenant's occupancy and use.
2.2 ADDITIONAL RENT. All sums payable by Tenant hereunder other than Base
Rent, including without limitation: Operating Expenses; late charges; interest
on past due amounts; attorneys' fees; and reimbursements to Landlord of sums
advanced by Landlord to cure any default or discharge any obligation of Tenant
hereunder.
2.3 BASE RENT. The basic monthly rent payable by Tenant for the use and
occupancy of the Premises, in accordance with Section 5 of this Lease.
2.4 COMMENCEMENT DATE. The first day of the Term, AS determined in
accordance with Section 4.1 below.
2.5 DELIVERY OF THE PREMISES. The date of the inspection and acceptance
(or deemed acceptance) of the Premises by Tenant, in the condition required by
Section 3.2.
2.6 HAZARDOUS MATERIALS. Any and all materials or substances which have
been determined to be nuisance or dangerous, toxic or hazardous or a pollutant
or contaminant, including but not limited to any hydrocarbon material, flammable
explosives, asbestos, urea formaldehyde, radioactive materials or waste, or
other hazardous, toxic, contaminating or polluting materials, substances or
wastes, including, without limitation, any "hazardous substances", "hazardous
wastes", "hazardous materials" or "toxic substances" under any Hazardous
Materials Laws.
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2.7 HAZARDOUS MATERIALS LAWS. All federal, state and local laws,
ordinances and regulations, including, but not limited to, the Federal Water
Pollution Control Act (33 U.S.C. ss1251, et seq.), Resource Conservation &
Recovery Act (42 U.S.C. ss6901, et seq.), Safe Drinking Water Act (42 U.S.C.
ss3000f, et seq.), Toxic Substances Control Act (15 U.S.C. ss2601, et seq.), the
Clean Air Act (42 U.S.C. ss7401,et seq.), Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss9601, et seq.), California
HEALTH & SAFETY CODE (ss25100, et seq., ss39000, et seq.), California Safe
Drinking Water & Toxic Enforcement Act of 1986 (California HEALTH & SAFETY CODE
ss25249.5, et seq.), California WATER CODE (ss1 3000, et seq.), and other
comparable federal, state or local law, regulation or interpretation thereof,
whether currently in force or enacted in the future, together with any licenses,
permits, plans or approvals generated pursuant to or as a result of any such
law, which regulates or proscribes the use, storage, disposal, cleanup,
transportation, release or threatened release into the environment or presence
of Hazardous Materials.
2.8 LEASE YEAR. A period of twelve consecutive full calendar months. The
first Lease Year shall begin on the Commencement Date if the Commencement Date
is the first day of a calendar month; otherwise, the first Lease Year shall
begin on the first day of the first full calendar month after the month in which
the Commencement Date occurs. Each succeeding Lease Year shall begin on the
anniversary of the beginning of the first Lease Year. If Tenant should extend
the Term pursuant to any extension option granted herein, the first day of the
Extension Term shall also be deemed to be the first day of a Lease Year for all
purposes of this Lease.
2.9 MORTGAGE. Any mortgage, trust deed or other encumbrance, and all
renewals, extensions or replacements thereof, now or hereafter imposed by
Landlord upon the real property which includes the Premises.
2.10 MORTGAGEE. The holder of a Mortgage.
2.1 1 OPERATING EXPENSES. All costs incurred by Landlord, if any, for any
of the following:
(a) The operation, repair and maintenance, in neat, clean and good
order and condition of (i) the Premises, including without limitation all
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, striping, bumpers, and
irrigation systems, common area lighting facilities, and fences and gates; (ii)
fire detection in the Premises, including sprinkler system maintenance and
repair; and (iii) unless allocated directly to Tenant pursuant to Section
8.1(b), the heating, ventilation and air conditioning ("HVAC") systems serving
the Premises.
(b) To the extent any such services are provided, trash disposal,
security services, gardening, painting, plumbing, electrical, carpentry, window
washing, signage and equipment rental expenses, and any other service to be
provided by Landlord that is elsewhere in the Lease stated to be an item of
Operating Expenses.
(c) Any deductible portion of an insured loss concerning any of
the items or matters described in this Section.
(d) Premiums for any insurance policies maintained by Landlord
pursuant to Section 11 below.
(e) Real Property Taxes to be paid by Landlord.
(f) Independent contractors for services (excluding capital
improvements),and compensation (including employment taxes and fringe benefits)
of all persons who perform regular and recurring duties connected with
day-to-day operation, maintenance and repair of the Premises, provided such
compensation is commercially reasonable.
(g) Maintenance and repair of roofs, building walls, foundations,
and all sewer and water facilities.
The inclusion of the improvements, facilities and services set forth in
the foregoing definition shall not be deemed Landlord's representation that such
improvements or facilities exist, nor shall it impose on Landlord any obligation
either to have those improvements or facilities or to provide those services,
unless the improvements or facilities already exist in the Premises or Landlord
already provides the services as of the Commencement Date, or unless Landlord
has agreed to do so elsewhere in the Lease.
2.12 REAL PROPERTY TAXES. All general property and improvement taxes and
all forms of assessment, special assessment or reassessment, license fee,
license tax, business license tax, commercial rental tax, in lieu tax, levy,
charge, penalty (to the extent not imposed as a result of Landlord's
negligence) or similar imposition, imposed by any authority having the direct
power to tax, including any city, county, state or federal government, or any
school, agricultural, lighting, drainage or other improvement or special
assessment district thereof, or any agency or public body, as against any legal
or equitable interest of Landlord in the Premises and all improvements thereon
and thereto as they presently exist or as they may be expanded, developed,
constructed or altered from time to time, including but not limited to: (i) any
tax on Landlord's rent, right to rent or other income from the Premises or as
against Landlord's business of leasing the Premises, but specifically excluding
Landlord's federal, state or city income, franchise, corporate, personal
property, stock transfer, revenues, inheritance or estate taxes; (ii) any
assessments, taxes, fees, levies or charges in addition to, or in substitution,
partially or totally, for any assessment, tax, fee, levy or charge previously
included within the definition of real property tax before adoption of
Proposition 13 by the voters of the State of California in the June 1978
election, it being acknowledged by Tenant and Landlord that assessments, taxes,
fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services that were before Proposition 13
provided without charge to property owners or occupants; and (iii) any
assessment, tax, fee, levy or charge upon this transaction or any document to
which Tenant is a party which is imposed on the creation or transfer of an
interest or an estate in the Premises. It is the intention of Tenant and
Landlord that all new and increased assessments, taxes, fees, levies and
charges, and all similar assessments, taxes, fees, levies and charges be
included within the definition of Real Property Taxes for the purposes of this
Lease. Real Property Taxes for the first year of the Term shall be calculated as
if the Premises and related improvements were fully assessed. If at any time
during the Term the laws concerning the methods of real property taxation
prevailing at the commencement of the Lease Term are changed so that a tax or
excise on rents or any other tax, however described, is levied or assessed
against Landlord as a substitution in whole or in part for any real property
taxes, then Real Property Taxes shall include, but not be limited to, any such
assessment, tax, fee, levy or
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charge allocable to or measured by the area of the Premises or the rent payable
hereunder, including, without limitation, any gross income tax with respect to
the receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof. With respect to any assessments
that may be levied against or upon the Premises and that under the laws then in
force may be evidenced by improvement or other bonds, or may be paid in annual
installments, there shall be included within the definition of Real Property
Taxes with respect to any tax fiscal year only the amount currently payable on
such tax, bond or assessment, including interest, for such tax fiscal year or
the current annual installment for such tax fiscal year.
2.13 TENANT'S WORK. The Additional Improvements and other work, if any,
to be accomplished by Tenant in accordance with Section 3.3.
3. PREMISES.
3.1 LEASE OF PREMISES. In consideration of the rent and covenants set
forth below, Landlord hereby leases the Premises to Tenant, and Tenant hires the
Premises from Landlord, for the term, at the rental, and upon all of the
conditions set forth herein. Except as otherwise provided herein, this Lease is
subject to: (i) all covenants, conditions, restrictions, easements, mortgages,
deeds of trust, leases, ground or underlying leases, rights of way, reciprocal
easement agreements to which Landlord is a party which affect the Premises and
all other matters now or hereafter affecting the Premises; and (ii) all zoning
laws, ordinances and building codes now or hereafter affecting the Premises.
3.2 CONDITION OF PREMISES. The Premises to be provided by Landlord, at
Landlord's expense, shall consist of a concrete floor, exterior building walls,
and service points from which electrical and telephone service to the Premises
can be made. Prior to Delivery of the Premises, and as a condition thereto,
Landlord shall repair the structural components of the Premises, including any
and all roof leaks, mechanical, electrical and/or plumbing deficiencies, or ADA
deficiencies, and shall cause all HVAC system components to be tested and
certified operational. Tenant acknowledges that except to the extent expressly
set forth in this Lease or in a written addendum or amendment hereto, neither
Landlord nor its agents have made (i) any promise to alter, remodel or otherwise
improve, or (ii) any representation or warranty with respect to the condition
of, the Premises, or improvements thereon or therein. Tenant's taking possession
of the Premises shall be deemed acceptance of the Premises by Tenant, and shall
be deemed conclusively to establish that the Premises are in good and
satisfactory condition as of the date Tenant takes possession, subject to latent
defects and other defects or problems that are not susceptible to discovery upon
cursory inspection. Subject to Landlord's express warranties set forth herein,
Tenant accepts possession of the Premises in their current, "as is", condition,
and acknowledges that it has inspected the Premises before signing this Lease.
3.3 ADDITIONAL IMPROVEMENTS. Tenant shall cause its architect or space
planner to prepare all architectural, mechanical and electrical engineering
plans required for the construction of the Additional Improvements, and shall
cause its contractor to construct the Additional Improvements only upon
Landlord's approval. Construction shall commence promptly following approval of
the plans and issuance of applicable permits, and shall be diligently prosecuted
to completion thereafter.
4. TERM: DELIVERY OF PREMISES.
4.1 TERM. The Term shall be for the number of months set forth at Section
1 above, beginning on the Commencement Date and ending on the Expiration Date.
Notwithstanding the foregoing, if Delivery of the Premises has not occurred by
the Commencement Date, then the Commencement Date shall be the actual date of
Delivery of the Premises, and the Expiration Date shall be adjusted accordingly
to coincide with the end of a Lease Year.
4.2 DELIVERY OF THE PREMISES. Upon completion of Landlord's Delivery
Work, the parties shall jointly inspect the Premises. If any defects in
Landlord's Delivery Work exist at the time of such inspection, Tenant shall
notify Landlord thereof in writing upon its inspection of the Premises and
Landlord shall correct such defects; provided, however, that Delivery of the
Premises to Tenant shall be delayed only if the existence of any such defects
would materially adversely affect Tenant's occupancy of the Premises for
construction of the Additional Improvements, in which case the date of Delivery
of the Premises shall be the date upon which Landlord notifies Tenant that such
defects have been substantially corrected. Upon inspection and Delivery of the
Premises to Tenant, Tenant shall at Landlord's request sign a written statement
acknowledging Tenant's inspection and acceptance of the Premises, subject to
latent defects and other defects or problems that are not susceptible to
discovery upon cursory inspection. If Tenant shall fail to contact Landlord and
inspect the Premises within five (5) days after notice from Landlord, Landlord's
notice shall be conclusive and binding and Delivery of the Premises shall be
deemed to have occurred on the last day of the five-day period. If a dispute
shall arise between Landlord and Tenant as to the completion of any of
Landlord's Work, the certificate of Landlord's architect shall be binding and
conclusive upon all parties. Notwithstanding the foregoing, unless otherwise
agreed by Landlord, if Tenant shall begin Tenant's Work or shall otherwise
occupy the Premises, Delivery of the Premises shall be deemed to have been the
date of such commencement of Tenant's Work or other occupancy of the Premises.
4.3 TERMINATION FOR NON-COMMENCEMENT. Notwithstanding the foregoing, in
the event that Delivery of the Premises has not occurred within one month after
the Commencement Date set forth in Section 1 then for a period of ten (10) days
after the expiration of such one-month period either party not in default
hereunder may cancel and terminate this Lease, without any liability to the
other party, upon written notice to the other party; and provided further,
however, that if such written notice of termination is not delivered by either
party within the ten-day period, the foregoing right to terminate this Lease
shall itself terminate and be of no further force or effect.
4.4 MEMORANDUM OF COMMENCEMENT DATE. Following the Delivery of the
Premises, Landlord shall prepare and forward to Tenant two copies of a written
Memorandum of Commencement Date, signed by Landlord, confirming the Commencement
Date and the date on which the Term will expire. Within ten (10) days after
receipt thereof, Tenant shall sign and return one copy of the Memorandum of
Commencement Date, indicating either Tenant's agreement with the matters set
forth therein or any areas of disagreement. Tenant's failure to return a copy of
the Memorandum of Commencement Date within such ten-day period shall be
conclusively deemed Tenant's agreement with all matters set forth therein. Any
dispute or disagreement on Tenant's part as to the Commencement Date set forth
in such memorandum shall, at the election of either
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party, be submitted to final, binding arbitration in San Diego, California under
the Commercial Arbitration Rules of the American Arbitration Association.
4.5 EARLY POSSESSION. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this
Lease and shall not advance the Expiration Date.
4.6 OPTION TO EXTEND. Subject to satisfaction of the conditions precedent
set forth below, Tenant shall have one option to extend the Term ("EXTENSION
OPTION"), or the period specified in Section 1, for twenty-four (24) months
beginning the day after the expiration of the initial Term ("EXTENSION TERM"),
on the following terms and conditions:
(a) Each Extension Option shall be subject to satisfaction of each
of the following conditions precedent, which are solely for the benefit of, and
may be waived unilaterally by, Landlord:
(i) The Extension Option shall be exercised by written
notice delivered by Tenant to Landlord not later than nine (9) months
prior to the end of the Term, as the same may have previously been
extended ("Extension Deadline");
(ii) Tenant shall be in occupancy of the entire area of the
Premises directly or through a wholly owned subsidiary (at any tier), and
not through an unaffiliated assignee or sublessee; and
(iii) The Lease shall be in effect and Tenant shall not be
in default of any material provision thereof both on the day such written
notice is delivered to Landlord and on the last day of the Term;
provided, however, if Tenant is in default but the cure period has not
run, this condition shall be deemed satisfied if Tenant cures the default
within the applicable cure period.
(b) In the event the Term shall be extended following exercise by
Tenant of the Extension Option, then all of the terms, covenants and conditions
of this Lease shall remain in full force and effect during the Extension Term.
Thereafter, Base Rent shall be adjusted periodically at the start of each Lease
Year during the Extension Term pursuant to Section 5.3 below.
5. RENT.
5.1 GENERAL. From and after the Commencement Date, Tenant agrees to pay
Landlord, in advance, on the first day of each and every calendar month during
the Term, Base Rent and Additional Rent as specified in this Section. Payment of
all such rent shall be without offset or demand, shall be in lawful money of the
United States of America and shall be made at the address set forth for Landlord
herein or at such other place as Landlord may direct.
5.2 BASE RENT. Base Rent shall initially be in the amount per month set
forth in Section 1.
5.2.1 RENTAL ABATEMENT
5.2.2 September, October, November and December of 2000 rent shall
be 50% of base rent.
5.2.3 November and December of, 2001 rent shall be 50% of base
rent.
5.2.4 December of both 2002 and 2003 rent shall be 50% of base
rent.
5.3 PERIODIC INCREASES TO BASE RENT. Base Rent shall be increased during
the Term as follows: on the first day of the second (2nd year of the Lease, and
each succeeding Lease Year ("ADJUSTMENT DATE"), Base Rent shall be increased by
an amount determined as follows:
(a) The basis for computing each increase shall be the United
States Department of Labor Consumer Price Index All Urban Consumers, Base
1982-84 = 100 (CPI-U) for Los Angeles-Anaheim-Riverside California ("INDEX").
(b) On each Adjustment Date, the Base Rent payable during the
immediately preceding Lease Year shall be increased in the amount of any
percentage increase in the Index last published before the Adjustment Date as
compared with the Index published for the same calendar month of the preceding
Adjustment Date.
(c) The periodic increases in Base Rent provided by this Section
shall not affect Tenant's obligation to pay Operating Expenses as described
below.
5.4 OPERATING EXPENSES. The parties intend that, subject only to Real
Estate Taxes and Casualty Insurance, this Lease be absolutely net to Landlord.
The foregoing not withstanding:
(a) In the case of a general or special assessment levied against
the Premises, regardless of whether Landlord elects to pay the assessment in
installments, Tenant's proportionate share of such assessment shall be computed
as if Landlord had elected to pay the same in installments over the longest
period allowed by applicable law and only those installments (or partial
installments) attributable to installment periods (or partial periods) falling
within the term of this Lease shall be included; and no special assessments
(other than general assessments previously disclosed to Tenant) attributable to
the initial development or construction of the Premises shall be included as
additional rent or otherwise passed on to Tenant, with the exception of
assessments attributable to alterations, additions, changes, added by Tenant.
Landlord shall be obligated to refund to Tenant Tenant's prorata share of the
amount of any refund, rebate or the like of taxes and/or assessments that were
paid by Tenant (directly or as additional rent) regardless of whether such
refund, rebate or the like is received by Landlord after the expiration of the
term of this Lease.
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(b) Without limitation, the following expenses shall be excluded
as Additional Rent and shall not be directly or indirectly charged to Tenant:
(i) leasing commissions and costs of marketing;
(ii) ;
(iii) payments of principal and interest on any mortgages,
deeds of trust or other encumbrances;
(iv) the cost of any item or expense, which, in accordance
with generally accepted accounting principles is, or should be,
capitalized on the books of Landlord, or any depreciation or amortization
thereof except as expressly permitted herein;
(v) the cost of any items for which Landlord is directly
reimbursed by insurance proceeds, condemnation awards, a tenant or the
like;
(vi) wages, salaries or other compensation paid to
executive employees of Landlord or the property manager ranking above the
highest-ranking, on-site employee;
(vii) costs associated with the operation of the business
of the entity which constitutes Landlord, which costs are not directly
related to maintaining or operating the Premises (by way of example, the
formation of the entity, internal accounting and legal matters, including
but not limited to preparation of tax returns and financial statements
and gathering of data therefor, costs of defending any lawsuits unrelated
to maintaining or operating the Premises, costs of selling, syndicating,
financing, mortgaging or hypothecating any of Landlord's interest in the
Premises, and costs of any disputes between Landlord and its employees);
(viii) any expense representing an amount paid for products
or services (other than overall property management) to a person or
entity relating to or affiliated with Landlord which is in excess of the
fair market value of such services and products;
(ix) fees incurred in disputes with tenants;
(x) costs of remediation of Hazardous Materials which are
(i) in or on the subject property as of the date of this Lease and which
are classified as Hazardous Materials as of the date of this Lease under
laws in effect as of the date of this Lease, or (ii) which are
subsequently brought onto the subject property by any person or entity
other than Tenant;
(xi) any management fee in excess of ordinary and customary
management fees;
(xii) franchise, transfer, inheritance or capital stock
taxes or taxes imposed upon or measured by the income or profits of
Landlord;
(xiii) any accrued and unfunded pension or other benefits
for any personnel;
(xiv) any rent, additional rent, imposition or other charge
payable under any lease (including any ground or "sandwich" lease) or
sublease to or assumed by Landlord;
(xv) the cost incurred by Landlord in performing work or
furnishing any service to or for a tenant of space in the Project
(including Tenant) at such tenant's cost and expense, regardless of the
amount billed or received by Landlord for performing such work or
finishing such services;
(xvi) advertising, marketing or promotional expenditures;
(xvii) the cost of the acquisition or leasing of any
artwork;
(xviii) accounting fees, other than those incurred in
connection with the operation of the subject property and the preparation
of statements required pursuant to the provisions of this Lease and
similar provisions of other leases of space in the subject property;
(xix) costs and expenses (including court costs, attorneys'
fees and disbursements) related to or arising under or in connection with
disputes with tenants, any lessor under a lease or any holder of a
mortgage or disputes which result in punitive damages being assessed
against Landlord, or disputes relating to claims of personal injury or
property damage;
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(xx) any cost or expense incurred in connection with
correcting latent defects or inadequacies in the subject property;
(xxi) costs incurred to correct any misrepresentation by
Landlord expressly made herein;
(xxii) late fees, penalties, interest charges or similar
costs incurred by Landlord;
(xxiii) unrecovered expenses resulting directly from the
negligence or willful misconduct of Landlord, its agents, servants or
employees;
(xxiv) costs incurred due to violation by Landlord or any
other tenant of the subject property of the terms of any lease or any
laws, rules, regulations or ordinances applicable to the subject
property;
(xxv) any other cost not reasonably and customarily
included in operating costs for comparable properties.
(c) Landlord shall maintain accurate records of all Additional
Rent items. Tenant shall have the right to inspect and audit all records of
Landlord with respect to additional rent. If Tenant's representatives request
print-outs or copies of any such records, Landlord shall deliver the print-outs
or copies and Tenant shall reimburse Landlord for the reasonable costs of the
print-outs and copies. If the amount of additional rent indicated on any
statement is overstated by more than three percent (3%), Landlord shall
reimburse Tenant for the reasonable cost of the audit and inspection. Landlord
shall reimburse Tenant for any amount paid by Tenant which should not have been
paid, together with interest at the rate of 12% per annum. Landlord shall
provide a true and complete statement of actual Additional Rent costs and
expenses within sixty (60) days after the end of each calendar year during the
Term. Any overpayment by Tenant shall be refunded to Tenant within thirty (30)
days after delivery of said statement. Tenant shall pay the amount of any under
payment within thirty (30) days after the delivery of such statement.
5.5 LATE CHARGES. Tenant acknowledges that late payment by Tenant to
Landlord of Base Rent or Additional Rent due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which is
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by the terms of any mortgage or deed of trust covering the Premises.
Therefore, if any payment of Base Rent or Additional Rent is not paid within
five (5) days after the date due, Tenant shall pay to Landlord six percent
(6%) of the amount due or Two Hundred Fifty Dollars ($250.00),whichever is
greater. The parties agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of the late
payment by Tenant. The late charge shall be deemed Additional Rent and the right
to require it shall be in addition to all of Landlord's other rights and
remedies hereunder or at law and shall not be construed as limiting Landlord's
remedies in any manner.
6. SECURITY DEPOSIT. Tenant shall pay to Landlord, immediately upon execution of
this Lease, a security deposit in the amount set forth at Section 1 ("SECURITY
DEPOSIT"). The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be kept and performed by Tenant. If Tenant defaults with respect
to any provision of this Lease, including, but not limited to, the provisions
relating to the payment of rent, Landlord may (but shall not be required to)
use, apply or retain all or any part of the Security Deposit for the payment of
any rent or any other sum in default, or for the payment of any other amount
which Landlord may spend or become obligated to spend by reason of Tenant's
default or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant's default. If any portion of the Security Deposit
is so used or applied, Tenant shall, upon demand therefore, deliver cash to
Landlord in an amount sufficient to restore the Security Deposit to its original
amount, and Tenant's failure to do so shall be a material breach of this Lease.
Landlord shall not be required to keep the Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest thereon. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it (or if Tenant shall have cured any default in such performance), the
Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord's option, to the last assignee of Tenant's interests hereunder) at the
expiration of the Term, provided that Landlord may retain the Security Deposit
until such time as any amount due from Tenant under this Lease has been
determined and paid in full.
7. USE.
7.1 PERMITTED USE. The Premises shall be used and occupied only for the
purposes and activities set forth in Section 1 above, and for no other uses or
purposes whatsoever. If any governmental license or permit shall be required for
the proper and lawful conduct of Tenant's business or other activity carried on
in the Premises, or if a failure to procure such a license or permit might or
would in any way affect Landlord or the Premises, then Tenant, at Tenant's
expense, shall (i) duly procure and thereafter maintain such license or permit
and submit the same for inspection by Landlord, (ii) install and pay for any
improvements, changes or alterations in the Premises, required by any
governmental authority, as a result of its proposed use of the Premises or its
manner of operation, and (iii) at all times, comply with the requirements of
each such license or permit. Tenant warrants that it has investigated whether
its proposed use of the Premises and its proposed manner of operation will
comply with, and Tenant assumes the risk that its proposed use of the Premises
and its proposed manner of operation are and will continue to be in compliance
with, all applicable land use approvals, laws and regulations, including without
limitation all zoning laws regulating the use of and enjoyment of the Premises.
Tenant agrees that under no circumstances shall Tenant be released in whole or
in part from any of its obligations under this Lease as a result of any
governmental authority's disallowing or limiting Tenant's proposed use of the
Premises or its manner of operation.
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7.2 CONDITION OF PREMISES. Landlord warrants to Tenant, but without
regard either to any Tenant's Work or to the use for which Tenant will use the
Premises, that as of the date of Delivery of the Premises, the Premises do not
violate the Declaration or any other covenants or restrictions of record or any
applicable building code, regulation or ordinance in effect on the date of this
Lease. In addition, prior to Delivery of the Premises, and as a condition
thereto, Landlord shall repair the structural components of the Premises,
including any and all roof leaks, mechanical deficiencies, or ADA deficiencies,
and shall cause all HVAC system components to be tested and certified
operational. In the event it should be determined that the foregoing warranty
and/or covenant should have been violated, then after written notice from
Tenant, Landlord shall promptly, at its sole cost and expense, rectify any such
violation. In the event Tenant does not give Landlord any such written notice of
violation within three (3) months after the Commencement Date, the correction of
such violation shall thereafter be Tenant's obligation, to be performed at
Tenant's sole cost and expense.
7.3 COMPLIANCE WITH REQUIREMENTS. Subject to Section 7.2 above, Tenant
shall, at Tenant's expense, promptly comply with all applicable statutes,
ordinances, rules, regulations, applicable covenants and restrictions of record,
and requirements of any fire insurance underwriters or rating bureaus, now in
effect or which may hereafter come into effect during the Term, whether or not
they reflect a change in policy from that now existing, relating in any manner
to the Premises and the occupation and use by Tenant of the Premises. Tenant
shall not use or permit the use of the Premises in any manner that will tend to
create waste or a nuisance. Without limiting the generality of the foregoing,
Tenant shall, at its sole cost and expense, comply promptly with all Hazardous
Materials Laws and with all environmental laws and ordinances applicable to the
conduct of Tenant's business, including all air quality and air pollution
regulations of the regional air pollution control district. If at any time it
reasonably appears to Landlord that Tenant is not fulfilling its obligations
under this Section, Landlord may cause to be performed, at Tenant's sole cost,
an audit or inspection of the Premises to evaluate Tenant's compliance herewith.
7.4 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT.
(a) Subject to Section 7.4(d), Landlord shall ensure that at all
times the design and construction of the Premises are in compliance with Title
III of the Americans With Disabilities Act, together with all amendments thereto
which may be adopted from time to time, and all regulations and rules
promulgated thereunder, and other applicable laws and regulations that relate to
access by the disabled or handicapped (collectively, the "ADA"). All such ADA
compliance shall be at Landlord's sole cost and expense (subject to amortization
as permitted in Subsection (c) below), except for new regulations or amendments
to the ADA which pertain solely to the Premises and which become effective after
the date of this Lease, which shall be the responsibility of Tenant.
(b) Landlord warrants and represents to Tenant that at the time of
Delivery of the Premises, the Premises (including any exterior areas) complies
with and satisfies any and all requirements of accessibility as required by the
ADA in effect as of the date of this Lease.
(c) Landlord agrees that no cost or expense related to
requirements of accessibility pursuant to the provisions of the ADA in effect as
of the date of this Lease shall be included in Operating Expenses. Landlord
agrees that any improvements or modifications made to the Premises as a result
of amendments to or subsequent regulations under the ADA which become effective
after the date of this Lease shall be made by Landlord in a cost effective
manner, and there shall be included within Operating Expenses each year
thereafter amortization in accordance with generally accepted accounting
principles consistently applied, together with interest at a rate not to exceed
the usual and customary market interest rate in force from time to time for
credit-worthy landlords, of all costs incurred by Landlord in connection
therewith.
(d) Tenant shall be responsible for compliance with the ADA and
related statutes with respect to the Additional Improvements and any other
alterations or improvements to the interior of the Premises and the operation of
any businesses conducted from the Premises; Landlord shall have no
responsibility or liability with respect thereto.
8 MAINTENANCE, REPAIRS AND ALTERATIONS.
8.5 TENANT'S OBLIGATIONS.
(a) Subject to Section 8.3, Tenant shall keep and maintain in
good, sanitary order, condition, and repair (including replacement of parts and
equipment if necessary) the Premises and every part thereof and any and all
appurtenances thereto wherever located, including, without limitation, the
interior surfaces of the exterior wall, the exterior and interior portion of all
doors, door frames, door checks, windows (including window sashes, casements and
frames), plate glass, storefront, Tenant's signs, all plumbing and sewage
facilities within the Premises (including free flow up to the main sewer line),
fixtures, heating and air conditioning and electrical systems (whether or not
located in the Premises), sprinkler system, walls, floor and ceilings, the
parking lot and other exterior areas of the Premises, and all other repairs,
replacements, renewals and restorations, interior and exterior, ordinary and
extraordinary, foreseen and unforeseen, and all other work performed, and
additions, alterations, and improvements installed by or on behalf of Tenant.
Any glass broken shall promptly be replaced by Tenant with glass of the same
quality, size and kind. If Tenant shall fail to replace same within seventy-two
(72) hours after such glass is broken, Landlord shall have the right, but shall
not be obligated, to replace such glass, in which event Tenant shall, promptly
upon demand therefore by Landlord, reimburse Landlord for expenses incurred by
Landlord in connection therewith.
(b) Tenant shall, at Tenant's sole cost and expense but subject to
Section 7.2 and Section 7.4, comply with all laws, rules, orders, ordinances,
directions, regulations and legal requirements of federal, state, county or
municipal governmental authorities now or hereafter affecting or applying to the
Premises.
8.6 CONDITION ON TERMINATION. On the last day of the Term, or on any
sooner termination, Tenant shall surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear excepted, clean and free of
debris. Any damage or deterioration of the Premises shall not be deemed ordinary
wear and tear if the same would have been prevented by good maintenance
practices. Tenant shall repair any damage to the Premises occasioned by the
installation or removal of Tenant's trade fixtures, alterations, furnishings and
equipment, and shall leave all air lines, power panels, electrical distribution
systems, lighting fixtures, HVAC systems, plumbing and fencing in good operating
condition.
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8.7 LANDLORD'S OBLIGATIONS. Notwithstanding anything to the contrary in
Section 8.1, and except for (i) damage caused by any negligence or intentional
act or omission of Tenant, Tenant's employees, suppliers, shippers, customers,
or invitees (which damage Tenant shall repair at its expense), and (ii) other
damage or destruction which Landlord is not obligated under Section 13 to repair
or replace, Landlord shall keep the structural components of the Building in
good condition and repair, including without limitation the foundations
(including the floor slab except for non-structural or cosmetic matters),
exterior walls, structural condition of interior bearing walls, and roof of the
Building, and all parking lots and walkways in the Common Areas, and all
utilities to their point of entry into the Premises. Landlord shall ensure that
the HVAC compressors serving the Premises are operational as of Delivery of the
Premises.
8.8 LANDLORD'S RIGHTS. If Tenant fails to perform Tenant's obligations
under Section 8.1 or 8.2 or under any other provision of this Lease, Landlord
may enter the Premises after three (3) days' prior written notice to Tenant
(except in the case of emergency, in which case no notice shall be required) and
perform such obligations on Tenant's behalf and put the Premises in good order,
condition and repair, and the cost thereof together with interest thereon from
the date incurred at the maximum rate then allowed by law shall be due and
payable as Additional Rent to Landlord together with Tenant's next Base Rent
installment.
8.9 WAIVER. Tenant expressly waives all rights to make repairs at the
expense of Landlord or deduct any amounts from rent as provided in any statute
or law in effect during the Term of this Lease, including its rights under the
provisions of ss1941 and ss1942 of the CIVIL CODE of the State of California.
8.10 ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written consent
which shall not be unreasonably withheld, make any alterations, improvements,
additions, or Utility Installations in, to or about the Premises. Tenant shall
make no change or alteration to the exterior of the Premises without Landlord's
prior written consent, which consent may be withheld for any reason in
Landlord's sole discretion and which may at Landlord's discretion be conditioned
upon Tenant's providing Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half (1 1/2) times the cost of
the work. As used in this Section, the term "UTILITY INSTALLATIONS" shall mean
carpeting, window coverings, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning, plumbing and
fencing. Landlord may require that Tenant remove at the expiration of the Term
any or all alterations, improvements, additions or Utility Installations which
were not part of the original Tenant Improvements, and restore the Premises and
the Common Areas to their prior condition. Should Tenant make any alterations,
improvements, additions or Utility Installations without the prior approval of
Landlord, Landlord may, at any time during the Term of this lease, require that
Tenant remove any or all of the same.
(b) Except for improvements to be accomplished by Landlord at its
expense, if any, Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than ten days' notice prior to the commencement of any
work in the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Tenant shall, in
good faith, contest the validity of any such lien, claim or demand, then Tenant
shall, at its sole expense, defend itself and Landlord against the same and
shall pay and satisfy any adverse judgment that may be rendered thereon before
the enforcement thereof against the Landlord or the Premises, upon the condition
that if Landlord shall require, Tenant shall furnish to Landlord a surety bond
satisfactory to Landlord in an amount equal to one and one-half (1 1/2) times
the amount of such contested lien claim or demand, indemnifying Landlord against
liability for such claim or lien and for all costs of defense thereof, of
obtaining the release of any lien, and of making the Premises free from the
effect of such lien or claim. In addition, Landlord may require Tenant to pay
Landlord's attorneys' fees and costs in participating in such action if Landlord
shall decide it is in Landlord's best interest to do so. In any event, Landlord
may pay the lien claim prior to the enforcement thereof, in which event Tenant
shall reimburse Landlord in full, including attorneys' fees for any such
expense, as Additional Rent, with the next due rents.
(c) All alterations, improvements, additions and Utility
Installations (exclusive of all trade fixtures of Tenant) which may be made on
the Premises, shall be the property of Landlord and shall remain upon and be
surrendered with the Premises at the expiration of the Lease term, unless
Landlord requires their removal. Notwithstanding the provisions of this Section
8.6, Tenant's machinery and equipment (other than Utility Installations), other
than that which is affixed to the Premises so that it cannot be removed without
material damage to the Premises, shall remain the property of Tenant and may be
removed by Tenant subject to the provisions of Section 8.2.
9 TAXES.
9.11 REAL PROPERTY TAXES. Landlord shall pay all Real Property Taxes with
respect to the Premises.
9.12 PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Landlord. If any of Tenant's said personal property
shall be assessed with Landlord's real property, Tenant shall pay to Landlord
the taxes attributable to Tenant within ten days after a receipt of a written
statement setting forth the taxes applicable to Tenant's property.
10 UTILITIES AND SERVICES. Tenant shall be solely responsible for, shall arrange
for, and shall promptly pay all charges, including meter and connection fees,
for water, gas, electricity, sewer, trash collection and any other utility or
service used upon or furnished to the Premises. Landlord does not warrant that
any services Landlord supplies will not be interrupted, e.g., because of
accidents, repairs, alterations, improvements or any reason beyond the
reasonable control of Landlord. No such interruption shall: (i) be considered an
eviction or disturbance of Tenant's use and possession of the Premises; (ii)
entitle Tenant to terminate this Lease; (iii) make Landlord liable to Tenant for
damages; (iv) xxxxx Base Rent, Additional Rent or any other sums due hereunder;
or (v) relieve Tenant from performing its obligations hereunder.
11 INSURANCE.
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11.13 LIABILITY INSURANCE-TENANT. Prior to the earlier of the
Commencement Date or Tenant's occupancy of the Premises, Tenant, at its own
expense, shall obtain from and shall thereafter keep in force with companies
reasonably acceptable to Landlord, commercial general liability insurance
applying to the use and occupancy of the Premises, or any areas adjacent
thereto, and the business operated by Tenant or any other occupant on the
Premises. Such insurance shall: include broad form contractual liability
insurance coverage specifically insuring all of Tenant's indemnity obligations
under this Lease; have a minimum combined single limit liability of at least
$2,000,000; be written to apply to all bodily injury, property damage, personal
injury and other covered loss, however occasioned, occurring during the policy
term; contain endorsements deleting any employee exclusion on personal injury
coverage; include products and completed operations coverage; provide for
severability of interests or a cross-liability provision or endorsement; be
endorsed to delete any liquor liability exclusion; and afford coverage for all
claims based on acts, omissions, injury and damage, which claims occurred or
arose (or the onset of which occurred or arose) in whole or in part during the
policy period. The foregoing policy of insurance shall name Landlord and any
parties designated by Landlord as additional insureds, and shall include a
per-location endorsement, Form C62504 or equivalent. In addition, Tenant shall
maintain non-owned automobile liability insurance. The policy limits herein
specified shall be increased from time to time upon written demand from
Landlord, if circumstances reasonably justify such increases. Tenant shall
furnish Landlord with a certificate of such insurance within thirty days after
the Commencement Date and whenever requested shall satisfy Landlord that such
policy is in full force and effect. The policy shall be endorsed to provide that
its coverage shall be primary and noncontributing with any insurance carried by
Landlord, and shall be further endorsed to provide that it shall not be canceled
or altered without thirty days' prior written notice to Landlord.
11.14 PROPERTY INSURANCE-LANDLORD.
(a) Landlord shall maintain in full force and effect at all times
a standard policy or policies insuring against "all risk" perils (also known as
"special perils") covering the Premises in an amount at least sufficient to
avoid the effects of coinsurance provisions of the policy or policies (i.e., not
less than ninety percent [90%] of the actual replacement cost of the Premises
and other improvements, without deduction for depreciation and excluding
foundations, excavation costs and the cost of underground flues, pipes and
drains, if such costs are properly excludable under coinsurance requirements).
Such insurance shall include (i) a standard form of lender's loss payable
endorsement, issued to the holder or holders of a mortgage or deed of trust
secured in whole or in part by the Premises and the other property on which the
insured improvements are located; (ii) at Landlord's sole option, coverage for
flood or earthquake or both; and (iii) rental income insurance equal to Base
Rent and Operating Expenses for up to one year. In addition, Landlord shall
obtain and keep in force during the Term such other insurance as Landlord deems
advisable.
(b) Tenant shall pay for any increase in the property insurance of
the Premises or such other building or buildings if the increase is caused by
Tenant's acts, omissions, use or occupancy of the Premises. Tenant shall not do
or permit to be done anything which shall invalidate the insurance policies
referred to in this Section. If Tenant does or permits to be done anything which
shall increase the cost of the insurance policies referred to in this Section,
then Tenant shall within thirty (30) days after demand therefore by Landlord
reimburse Landlord for any additional premiums attributable to any act or
omission or operation of Tenant causing such increase in the cost of insurance.
Landlord shall deliver to Tenant a written statement setting forth the amount of
any such insurance cost increase and showing in reasonable detail the manner in
which it has been computed.
11.15 PROPERTY INSURANCE-TENANT. Tenant shall pay for and shall maintain
in full force and effect at all times, a standard policy insuring against "all
risk" perils (also known as "special perils"), covering all exterior glass,
whether plate or otherwise, and all interior glass, stock in trade, merchandise,
trade fixtures, equipment and other personal property located in the Premises
and used by Tenant in connection with its business. Tenant shall furnish
Landlord with a duly executed certificate evidencing such coverage at the
commencement of the Term and not less than thirty (30) days before the
expiration of the term of such coverage.
11.16 INSURANCE POLICIES. Each policy of insurance required to be
maintained by Tenant hereunder shall name Landlord, and any other parties in
interest designated by Landlord, as additional insureds and shall contain a
clause that the insurer will not cancel or change such insurance without first
giving Landlord thirty (30) days' prior written notice. Such insurance may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy therefore; provided that such blanket policy shall contain an endorsement
that names Landlord (and any other parties in interest designated by Landlord)
as an additional insured, references the Premises and guarantees that a minimum
limit equal to the insurance amounts required in this Lease will be available
specifically for the Premises. All insurance shall be with a good and solvent
insurance company authorized to do business in the State in which the Business
Park is located, having a minimum rating of A and X in Best's Insurance Guide. A
copy of the paid-up policy or other evidence reasonably satisfactory to Landlord
shall be delivered to Landlord prior to the Term Commencement Date and not less
than thirty (30) days prior to each renewal or extension of such policy of
insurance. In the event that Tenant shall deliver a certificate of insurance in
lieu of a copy of the paid-off insurance policy at any time during the Term of
this Lease, a copy of such insurance policy shall be provided to Landlord as
soon thereafter as practicable. No policy of insurance under this Section shall
provide for a deductible in excess of Ten Thousand Dollars ($10,000), provided
that Tenant shall remain obligated for the insurance deductible. All public
liability, property damage or casualty policies and the coverage evidenced
thereby shall be primary with respect to any policies carried by Landlord and
any coverage carried by Landlord shall pay only amounts in excess of the limits
in said policies of Tenant. In addition to the foregoing, in the event Tenant
fails to provide or keep in force any of the insurance required pursuant to this
Section 11, then Landlord, in its discretion and without waiving any of its
rights under this Lease, may provide such insurance, in which event the cost
thereof shall be payable by Tenant to Landlord as Additional Rent on the first
day of the calendar month immediately following demand therefore from Landlord.
11.17 WAIVER OF SUBROGATION. Each party hereby waives any and all rights
of recovery against the other party hereto and its officers, agents, employees,
or representatives, and Tenant hereby waives any rights it may have against any
trust deed holder, for the LOSS, damage, or injury to property arising from any
event which is covered by insurance against fire, vandalism, malicious mischief,
and extended coverage, and such other perils as are from time to time included
in the "all risk" insurance policy(ies) carried by Landlord and Tenant pursuant
to this Section 11, provided that such waiver shall apply only to the extent of
any recovery by the injured party under such insurance. In the event the other
party is a self-insurer (as may be permitted herein), such waiver shall be to
the limit of that insurance required to be carried hereunder. Each party hereto,
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on behalf of its respective insurance companies hereby waives, to the extent of
any recovery under any such insurance policies, any right of subrogation that
one may have against the other, and Tenant, on behalf of its insurance
companies, hereby waives any right of subrogation which such insurer may have
against any trust deed holder. Each party hereto shall cause its respective
insurance policies to contain endorsements evidencing such waivers of
subrogation. The foregoing releases and waivers of subrogation shall be
operative only so long as same shall neither preclude the obtaining of insurance
nor diminish, reduce or impair the liability of any insurer. In the event that a
waiver of subrogation cannot be obtained, the other party is relieved of the
obligation to obtain a waiver of subrogation rights with respect to the
particular insurance involved. This paragraph shall govern any contradictory or
inconsistent provision in this Lease.
12 WAIVER AND INDEMNITY.
12.18 WAIVER AND EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby
agrees that except for damage or injury resulting from Landlord's negligence or
willful misconduct, Landlord shall not be liable for injury to Tenant's business
or any loss of income, including damage to the goods, wares, merchandise or
other property of Tenant or of Tenant's employees, invitees, customers, or any
other person in or about the Premises, or the Common Areas. Landlord shall not
be liable, except when the damage or injury is a result of Landlord's negligence
or willful misconduct, for injury to the person of Tenant, Tenant's employees,
agents or contractors, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures or from any other cause, whether
said damage or injury results from conditions arising upon the Premises, or the
Common Areas or from other sources or places and regardless of whether the cause
of such damage or injury or the means of repairing the same is inaccessible to
Tenant. Landlord shall not be liable for any damages arising from any act or
neglect of any other tenant, occupant or use of the Business Park or from the
failure of Landlord to enforce the provisions of any other lease in the Business
Park. Except as otherwise set forth herein, Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property of
Tenant or injury to persons, in, upon or about the Premises and elsewhere
arising from the above or any other causes, and Tenant hereby waives all claims
in respect thereof against Landlord.
12.19 TENANT'S INDEMNITY. Tenant shall indemnify, protect, defend, and
hold Landlord and Landlord's officers, directors, employees and agents
(collectively, "representatives") harmless from and against any and all claims,
actions, demands, proceedings, losses, damages, costs of any kind or character
(including reasonable attorneys' fees and court costs), expenses, liabilities,
judgments, fines, penalties, or interest (collectively, "Losses"), arising from
or out of Tenant's use of the Premises, or from the conduct of Tenant's business
or from any activity, work or things done, permitted or suffered by Tenant in or
about the Premises or elsewhere. Tenant shall also indemnify, protect, defend,
and hold Landlord and Landlord's representatives harmless from and against any
and all Losses arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease, or
arising from any act or omission of Tenant, or any of Tenant's agents,
contractors, or employees, and from and against all costs, attorneys' fees,
expenses and liabilities reasonably incurred in the defense of any such claim or
any action or proceeding brought thereon; and in case any action or proceeding
be brought against Landlord or any of Landlord's representatives by reason of
any such claim, Tenant upon notice from Landlord shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord and Landlord
shall cooperate with Tenant in such defense. Neither termination of this Lease
nor completion of the acts to be performed under this Lease shall release Tenant
from its obligations to defend or indemnify Landlord as required hereunder so
long as the event upon which any such Loss is predicated shall have occurred
prior to the effective date of any such termination or completion.
12.20 LANDLORD'S INDEMNITY. Landlord shall defend, indemnify and hold
Tenant and Tenant's representatives harmless from and against any and all Losses
arising in any way from (i) the negligence or willful misconduct of Landlord; or
(ii) any breach or default in the performance of any obligation on Landlord's
part to be performed under this Lease. Landlord shall defend any such action or
proceeding brought against Tenant or its representatives at Landlord's expense
with counsel reasonably satisfactory to Tenant. Neither termination of this
Lease nor completion of the acts to be performed under this Lease shall release
Landlord from its obligations to defend or indemnify Tenant as required
hereunder so long as the event upon which any such Loss is predicated shall have
occurred prior to the effective date of any such termination or completion.
13 DAMAGE AND DESTRUCTION.
13.21 DEFINITIONS.
(a) "PARTIAL DAMAGE" shall mean if the Premises are damaged or
destroyed to the extent that the cost of repair is less than fifty percent (50%)
of the then replacement cost of the Premises.
(b) "TOTAL DESTRUCTION" shall mean if the Premises are damaged or
destroyed to the extent that the cost of repair is fifty percent (50%) or more
of the then replacement cost of the Premises.
(c) "INSURED LOSS" shall mean damage or destruction which was
covered by an event required to be covered by the insurance described in Section
11.2. The fact that an Insured Loss has a deductible amount shall not make the
LOSS an uninsured loss.
(d) "REPLACEMENT COST" shall mean the amount of money necessary to
be spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by tenants.
13.22 PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of Sections 13.4 and
13.5, if at any time during the Term there is damage which is an Insured Loss
and which falls into the classification of Partial Damage, then Landlord shall,
at Landlord's expense, repair such damage to the Premises, but not Tenant's
fixtures or equipment, as soon as reasonably possible and this Lease shall
continue in full force and effect. In no event, however, shall Landlord be
obligated to spend for such repairs more than the amount of available insurance
proceeds, plus the amount of any deductible elected by Landlord.
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(b) Uninsured Loss: Subject to the provisions of Sections 13.4 and
13.5, if at any time during the Term there is damage which is not an Insured
Loss and which falls within the classification of Partial Damage, unless caused
by a negligent or willful act of Tenant (in which event Tenant shall make the
repairs at Tenant's expense), which damage causes substantial interference with
the normal conduct of Tenant's business, Landlord may at Landlord's option
either (i) repair such damage as soon as reasonably possible at Landlord's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Tenant within thirty days after the date of the
occurrence of such damage of Landlord's intention to cancel and terminate this
Lease as of the date of the occurrence of such damage. In the event Landlord
elects to give such notice of Landlord's intention to cancel and terminate this
Lease, Tenant shall have the right within ten days after the receipt of such
notice to give written notice to Landlord of Tenant's intention to repair such
damage at Tenant's expense, without reimbursement from Landlord, in which event
this Lease shall continue in full force and effect, and Tenant shall proceed to
make such repairs as soon as reasonably possible. If Tenant does not give such
notice within such ten-day period this Lease shall be canceled and terminated as
of the date of the occurrence of such damage.
13.23 TOTAL DESTRUCTION. Subject to the provisions of Sections 13.4 and
13.5, if at any time during the Term there is damage, whether or not it is an
Insured Loss, which falls into the classification of Total Destruction, then
Landlord may at Landlord's option either (i) repair such damage or destruction,
but not Tenant's fixtures, equipment or tenant improvements (except for tenant
improvements initially constructed at the commencement of the Term), as soon as
reasonably possible at Landlord's expense, and this Lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty days after
the date of occurrence of such damage of Landlord's intention to cancel and
terminate this Lease, in which case this Lease shall be canceled and terminated
as of the date of the occurrence of such damage.
13.24 DAMAGE NEAR END OF TERM. Subject to the following sentence, if at
any time during the last year of the Term of this Lease as extended from time to
time there is substantial damage, whether or not an Insured Loss, which falls
within the classification of Partial Damage, either Tenant or Landlord may at
its option cancel and terminate this Lease as of the date of occurrence of such
damage by giving written notice to the other party, within thirty days after the
date of occurrence of such damage, of its election to terminate. Notwithstanding
the foregoing, in the event that Tenant has an option to extend or renew this
Lease, and the time within which said option may be exercised has not yet
expired, Tenant shall exercise such option, if it is to be exercised at all, no
later than thirty days after the occurrence of an Insured Loss falling within
the classification of Partial Damage during the last year of the Term. If Tenant
duly exercises such option during the thirty day period, Landlord shall, at
Landlord's expense, repair such damage, but not Tenant's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that in no event shall
Landlord be obligated to spend for such repairs more than the amount of
available insurance proceeds, plus the amount of any deductible elected by
Landlord. If Tenant fails to exercise such option during the thirty day period,
then Landlord may at Landlord's option terminate and cancel this Lease as of the
date of the occurrence of such damage.
13.25 ABATEMENT OF RENT. In the event Landlord repairs or restores the
Premises pursuant to the provisions of this Section 13, the rent payable
hereunder for the period during which such damage, repair or restoration
continues shall be abated in proportion to the degree to which Tenant's normal
and customary use of the Premises is impaired. Except for abatement of rent, if
any, Tenant shall have no claim against Landlord for any damage suffered by
reason of any such damage, destruction, repair or restoration.
13.26 WAIVER. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
13.27 In the event of Partial Damage or Total Destruction which is
estimated to take longer than one hundred and fifty (150) days to fully repair
and restore, Tenant shall have the right to terminate this Lease by delivery of
written notice to that effect to Landlord within thirty (30) days after the
occurrence of the damage or destruction.
14 CONDEMNATION.
14.27 TOTAL CONDEMNATION OF PREMISES. If the whole of the Premises shall
be taken by any public authority under condemnation, the power of eminent
domain, or by a sale in lieu thereof under threat of condemnation (collectively
"taking" or "taken" as the case may be), then the Term shall cease as of the day
of possession pursuant to such taking, and the Rent shall be paid up to that
day. Landlord shall refund such rent as may have been paid in advance for the
period subsequent to the date of such possession.
14.28 PARTIAL CONDEMNATION.
(a) If less than the whole but more than twenty percent (20%) of
the Premises shall be taken, Tenant shall have the right to terminate this Lease
or, subject to Landlord's right of termination as set forth in Section 14.2(b),
to continue in possession of the remainder of the Premises and shall notify
Landlord in writing within ten (10) days after notice of such taking of Tenant's
intention. If twenty percent (20%) or less of the Premises shall be so taken,
the Term shall cease with respect to the part so taken as of the day possession
shall be taken, and Tenant shall pay rent up to that day for the part so taken.
(b) If more than twenty percent (20%) of the Premises shall be
taken, Landlord may, by notice to Tenant delivered on or before the date
surrendering possession, terminate this Lease.
(c) In the event this Lease is not so terminated, Tenant shall
remain in the portion of the Premises not so taken, and all of the terms,
provisions, covenants, conditions, and agreements contained herein shall
continue in effect with respect to the portion not so taken, except that Base
Rent shall be reduced in proportion to the amount of the Premises taken, and
Landlord shall, to the extent of severance damages received by Landlord in
connection with such condemnation, repair any damage to the Premises caused by
such condemnation except to the extent that Tenant has been reimbursed therefor
by the condemning authority. Tenant shall pay any amount in excess of such
severance damages required to complete such repair, up to the amount, if any,
Tenant has been reimbursed therefor by the condemning authority.
14.29 LANDLORD'S AND TENANT'S DAMAGES. Any award for the taking of all or
any part of the Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Landlord,
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whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Tenant shall be entitled to any award for loss of or damage to
Tenant's trade fixtures, moving costs and removable personal property to the
extent separately awarded. Tenant shall have the right to negotiate its award
separately with the condemning authority; provided, however, that Tenant's right
to pursue its claim shall be subordinate to the right of Landlord's first lien
Mortgagee to the extent required to discharge the first lien mortgage after
application of Landlord's award.
14.30 WAIVER. This Article 14 is in lieu of, and Tenant hereby expressly
waives any rights it may have under, any statute governing the condemnation of
the Premises, including section 1932 and section 1933 of the California
CIVIL CODE and section 1265.130 of the California CODE OF CIVIL PROCEDURE.
15 ASSIGNMENT AND SUBLETTING.
15.31 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in the Lease or in the Premises,
without Landlord's prior written consent, which shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance or sublease
without such consent shall be void, and shall constitute a breach of this Lease
without the need for notice to Tenant.
15.32 PROCEDURE. In the event Tenant wishes to sublet or assign the
Premises, or any portion thereof, Tenant shall submit in writing to Landlord (i)
the name of the proposed sublessee or assignee, (ii) a statement describing the
nature of the business to be carried on in the Premises, (iii) a copy of the
proposed sublease or assignment, including all terms and conditions thereof,
(iv) Landlord's lease application form, completed by the proposed assignee or
sublessee, (v) financial statements for the proposed assignee or sublessee,
which shall include, at a minimum, prior year and year to date (current to
within six months) balance sheets, income and expense statements and sources and
uses of cash statements, and (vi) such other financial information regarding
such sublessee or assignee as Landlord shall reasonably request.
15.33 PROVISIONS APPLICABLE TO BOTH ASSIGNMENT AND SUBLETTING.
(a) No sublessee or assignee shall further assign or sublet all or
any part of the Premises without Landlord's prior written consent.
(b) The consent by Landlord to any assignment or sublease shall
not constitute a consent to any subsequent assignment or sublease by Tenant or
to any assignment or sublease by the sublessee. However, Landlord may consent to
subsequent subleases and assignments of the sublease or any amendments or
modifications thereto, provided Landlord notifies Tenant or anyone else liable
on the Lease or sublease and Landlord shall obtain their consent thereto.
(c) If Tenant subleases the Premises or any part of it or assigns
any of its rights under this Lease in and to the Premises, all rents paid by the
sublessee or assignee which are in excess of the amount of Base Rent and
Additional Rent then payable by Tenant under this Lease shall be the property of
and shall be paid to Landlord, unless the assignment or sublease is to an
Affiliate, as defined below in this Section 15. Any other attempt on the part of
Tenant to enter into a sublease or assignment which does not provide for the
payment of such excess rent to Landlord shall be deemed to be a material breach
of this Lease. The parties acknowledge that the provisions of this Section are a
material inducement for Landlord's execution of this Lease and that Tenant has
represented and warranted that its sole purpose for entering into this Lease is
to obtain possession of the Premises and not to generate revenues from the
leasing or subleasing of any portion of the Premises.
(d) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or any one else responsible for
the performance of this Lease, including the sublessee, without first exhausting
Landlord's remedies against any other person or entity responsible therefore to
Landlord, or any security held by Landlord or Tenant.
15.34 PROVISIONS APPLICABLE TO SUBLETTING. Regardless of Landlord's
consent, the following terms and conditions shall apply to any sublease by
Tenant of all or any part of the Premises and shall be included in subleases.
(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease made by
Tenant, and Landlord may collect such rent and income and apply the same toward
Tenant's obligations under this Lease; provided, however, that until a default
shall occur in the performance of Tenant's obligations under this Lease, Tenant
may receive, collect and enjoy the rents accruing under such sublease. Landlord
shall not, by reason of any assignment of such sublease to Landlord or by reason
of the collection of the rents from a sublessee, be deemed liable to the
sublessee for any failure of Tenant to perform and comply with any of Tenant's
obligations to such sublessee under such sublease. Tenant hereby irrevocably
authorizes and. directs any such sublessee, upon receipt of a written notice
from Landlord stating that a default exists in the performance of Tenant's
obligations under this Lease, to pay to Landlord the rents due and to become due
under the sublease. Tenant agrees that such sublessee shall have the right to
rely upon any such statement and request from Landlord, and that such sublessee
shall pay such rents to Landlord without any obligation or right to inquire as
to whether such default exists and notwithstanding any notice from or claim from
Tenant to the contrary. Tenant shall have no right or claim against such
sublessee or Landlord for any such rents so paid by said sublessee to Landlord.
(b) No sublease entered into by Tenant shall be effective unless
and until it has been approved in writing by Landlord. By entering into a
sublease, any sublessee shall be deemed, for the benefit of Landlord, to have
assumed and agreed to comply with all of Tenant's obligation hereunder, except
to the extent such obligations are contrary to or inconsistent with provisions
contained in a sublease to which Landlord has expressly consented in writing.
(c) Landlord's written consent to any sublease of the Premises by
Tenant shall not constitute an acknowledgment that no default then exists under
this Lease of the obligations to be performed by Tenant nor shall such consent
be deemed a waiver of any then existing default, except as may be otherwise
stated by Landlord at the time in writing.
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(d) With respect to any sublease to which Landlord has consented,
Landlord agrees to deliver a copy of any notice of default by Tenant to the
sublessee. Such sublessee shall have the right to cure a default of Tenant
within ten days after service of said notice of default upon such sublessee, and
the sublessee shall have a right of reimbursement and offset from and against
Tenant for any such defaults cured by the sublessee.
(e) If Tenant's obligations under this Lease have been guaranteed
by third parties, then a sublease, and Landlord's consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease and
the terms thereof.
(f) The consent by Landlord to any sublease shall not release
Tenant from its obligations or alter the primary liability of Tenant to pay the
rent and perform and comply with all of the obligations of Tenant to be
performed under this Lease.
(g) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord, at its option and without any obligation
to do so, may require any sublessee to attorn to Landlord, in which event
Landlord shall undertake the obligations of Tenant under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or
security deposit paid by such sublessee to Tenant or for any other prior
defaults of Tenant under such sublease.
(h) Each and every consent required of Tenant under a sublease
shall also require the consent of Landlord.
15.35 ATTORNEYS' FEES. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or sublease or if
Tenant shall request the consent of Landlord for any act Tenant proposes to do,
then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith, such attorneys' fees not to exceed $500.00 for each such
request.
15.36 CONTINUING LIABILITY OF TENANT. NO transfer permitted by this
Section shall release Tenant or change Tenant's primary liability to pay the
rent and to perform all other obligations of Tenant under this Lease. Landlord's
acceptance of rent from any other person is not a waiver of any provision of
this Section. Consent to one transfer is not a consent to any subsequent
transfer. If Tenant's transferee defaults under this Lease, Landlord may proceed
directly against Tenant without pursuing remedies against the transferee.
Landlord may consent to subsequent assignments or modifications of this Lease by
Tenant's transferee, without notifying Tenant or obtaining its consent. Such
action shall not relieve Tenant of its liability under this Lease.
15.37 EFFECT OF TERMINATION. In the event of Tenant's surrender of this
Lease or the termination of this Lease in any other manner, Landlord may, at its
option, either terminate any or all subtenancies or succeed to the interest of
Tenant as sublessor thereunder. No merger shall result from Tenant's sublease
of the Premises under this Section, Tenant's surrender of this Lease or the
termination of this Lease in any other manner.
15.38 ASSIGNMENT TO AFFILIATE. Notwithstanding anything herein to the
contrary, Tenant shall have the right, on prior written notice to but without
the prior consent of Landlord, to assign this Lease or sublet the whole or any
part of the Premises to any corporation which controls, is controlled by or is
under common control with Tenant, or to any corporation resulting from a merger
or consolidation with Tenant, or to any person or entity which acquires all the
assets of Tenant's business as a going concern (collectively,
"Affiliate"),provided that (i) the assignee or sublessee shall expressly assume
all obligations of Tenant under this Lease, (ii) Tenant shall remain fully
liable under this Lease, and (iii) the use of the Premises shall remain
unchanged.
16 DEFAULT BY TENANT: REMEDIES.
16.39 EVENTS OF DEFAULT. The occurrence of any of the following (each, a
"DEFAULT") shall constitute a material breach or default by Tenant of its
obligations hereunder:
(a) Failure by Tenant to pay rent when due if the failure
continues for three (3) days after notice has been given to Tenant that the rent
is delinquent.
(b) Failure by Tenant to perform any provision of this Lease
required of it other than clause (a) above if the failure is not cured within
thirty (30) days after notice has been given to Tenant. If, however, the failure
cannot reasonably be cured within the cure period, Tenant shall not be in
default of this Lease if Tenant commences to cure the failure within the cure
period and diligently and in good faith continues to cure the failure.
(c) To the extent permitted by law, a general assignment by Tenant
or any Guarantor of the Lease for the benefit of creditors, or the filing by or
against Tenant or any Guarantor of any proceeding under any insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
Guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any Guarantor, unless possession is restored to Tenant or such
Guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty days (each, an "INSOLVENCY EVENT").
16.40 DEFAULT NOTICES. Notices given under this Section will specify the
alleged failure or breach and the applicable Lease provisions; and shall demand
that Tenant perform the provisions of this Lease or pay the rent that is
delinquent, as the case may be, within the applicable period of time or quit the
Premises. No such notice shall be deemed a forfeiture or a termination of this
Lease unless Landlord so elects in the notice. The purpose of the notice
requirements in this Section is to
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extend the notice requirements of the unlawful detainer statutes. Such notice
shall, however, be in lieu of and not in addition to any notice required under
the unlawful detainer statutes.
16.41 LANDLORD'S REMEDIES. Landlord shall have the below listed remedies
if Tenant commits a default. These remedies are not exclusive; they are
cumulative to any remedies now or later allowed by law.
(a) Landlord may terminate Tenant's right to possession of the
Premises at any time. No act by Landlord other than giving notice of termination
to Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the
Premises or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession. On termination, Landlord shall have the right to
recover from Tenant:
(i) The worth at the time of the award of the unpaid rent
that had been earned at the time of termination of this Lease;
(ii) The worth at the time of the award of the amount by
which the unpaid rent that would have been earned after the date of
termination of this Lease until the time of award exceeds the amount of
the loss of rent that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of the award of the amount by
which unpaid rent for the balance of the Term after the time of award
exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; and
(iv) Any other amount, including reasonable attorneys' fees
and court costs, necessary to compensate Landlord for all detriment
proximately caused by Tenant's default or which in the ordinary course of
things would be likely to result therefrom.
The phrase "worth at the time of the award" as used in clauses (i) and (ii)
above is to be computed by allowing interest at the rate of twelve percent (12%)
per annum, but not to exceed the then legal rate of interest. The same phrase as
used in clause (iii) above is to 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 one percent (1%).
(b) Landlord may exercise the remedy provided in California CIVIL
CODE Section 1951.4, that is, Landlord may continue this Lease in full force and
effect, and collect Base Rent and Operating Expenses as they become due, so long
as Landlord does not terminate Tenant's right to possession pursuant to Section
16.3(a) above. During the period that Tenant is in default, Landlord may enter
the Premises and relet them or any part of them, to third parties for Tenant's
account, for a shorter or longer term than the Term of this Lease, and for such
rental and on such other terms as Landlord, in its sole discretion, shall deem
advisable and Tenant shall be immediately liable to Landlord for all reasonable
costs which Landlord incurs in reletting the Premises, including, without
limitation, broker's commissions, advertising expenses, the cost of remodeling
the Premises which may be required for reletting, and all such similar costs. No
act by Landlord pursuant to this Section shall terminate this Lease unless
Landlord shall notify Tenant that it elects to terminate this Lease. After
Tenant's default and for as long as Landlord does not terminate Tenant's right
to possession of the Premises, Tenant shall have the right to assign its
interest in the Lease upon the reasonable prior consent of Landlord; provided,
however, that Tenant shall not be released from any liability under this Lease
as a result of such assignment.
(c) Landlord may, after expiration of any applicable cure period,
unless there is an emergency (in which case Landlord need not wait), correct or
remedy any failure of Tenant not timely cured. The reasonable cost paid by
Landlord to correct or remedy any such default will immediately become due and
payable to Landlord as additional rent.
(d) Nothing contained in this Lease shall limit Landlord to the
remedies specifically set forth in this Section 16.3. Upon Tenant's default or
breach, Landlord shall be entitled to exercise any right or remedy then provided
by law, including without limitation the right to obtain injunctive relief and
the right to recover all damages caused by Tenant's default or breach in the
performance of any of its obligations under this Lease.
16.42 INTEREST. Any amount owed to Landlord under the terms and
provisions of this Lease which is not paid when due shall bear interest at the
highest rate allowed by applicable law from the date the same becomes due and
payable by the terms and provisions of this Lease until paid, unless otherwise
specifically provided in this Lease.
16.43 MITIGATION. Efforts by Landlord to mitigate damages caused by
Tenant's breach shall not be construed as a waiver of Landlord's right to
recover damages. Landlord shall use reasonable efforts to mitigate damages in
the event of a breach or default by Tenant.
16.44 RIGHT OF LANDLORD TO RE-ENTER. In the event of any termination of
this Lease, Landlord shall have the immediate right to enter upon and repossess
the Premises, and any personal property of Tenant may be removed from the
Premises and stored in any public warehouse at the risk and expense of Tenant.
16.45 RECAPTURABLE EXPENSES. Tenant acknowledges that Landlord has
undertaken or may undertake certain expenses in connection with the Lease,
including payment of some or all of the following: brokerage commissions, the
costs of any Landlord's Work, moving expenses or other categories of cost or
expense ("RECAPTURABLE EXPENSES"). Notwithstanding any provision or implication
to the contrary in this Lease, in the event of premature termination of the Term
of this Lease pursuant to Section 16.3(a) following Tenant's default, there
shall be immediately due and payable from Tenant, as Additional Rent which has
been fully earned at the time of termination, the unamortized portion of the
Recapturable Expenses actually incurred by Landlord. For purposes of this
Section, the unamortized portion of the Recapturable Expenses shall be
determined by multiplying the total Recapturable Expenses actually incurred by
Landlord by a fraction, the numerator of which is the number of months remaining
in the Term following premature termination in which unabated Base Rent would
have been payable to Landlord pursuant to the Lease, and the denominator of
which is the total number of months in the Term, both before and after the
premature termination, in which unabated Base Rent was paid or would have been
payable to Landlord had the Lease not been terminated. Any Recapturable Expenses
due to Landlord in accordance with this Section shall be subtracted from any
sums otherwise recoverable pursuant to Section 16.3(a) of this Lease.
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17 TENANT'S INSOLVENCY.
17.46 APPLICABILITY OF SECTION. In addition to any rights or remedies of
Landlord under the terms of this Lease, the following provisions shall
specifically apply upon the occurrence of an Insolvency Event (as defined in
Section 16.1(c) above).
17.47 ASSUMPTION OR REJECTION OF LEASE.
(a) Notwithstanding anything to the contrary contained herein,
Tenant as debtor in possession and any receiver or trustee in bankruptcy for
Tenant (collectively, "TENANT'S TRUSTEE") shall either assume or reject this
Lease within sixty (60) days following the entry of an order for relief or
within such earlier time as may be provided by applicable law.
(b) Notwithstanding anything to the contrary contained herein, in
the event that this Lease is attempted to be assumed under the Bankruptcy Code
by Tenant's Trustee during the existence of any Default by Tenant, no such
attempted assumption shall be effective unless and until Tenant's Trustee: (i)
cures, or provides adequate assurance that it will promptly cure, such Default;
and (ii) compensates, or provides adequate assurance that it will promptly
compensate, Landlord for any actual pecuniary loss to Landlord resulting from
such Default; and (iii) provides adequate assurance of future performance of
Tenant's obligations and covenants under this Lease. Landlord shall be entitled
to reimbursement from the estate of Tenant for all actual costs incurred by
Landlord in considering any proposed assignee of the Lease pursuant to this
Section 17.
(c) Tenant's Trustee may assign this Lease pursuant to the
provisions of the Bankruptcy Code only if: (A) Tenant's Trustee assumes the
Lease in accordance with the above provisions of this Section 17.2; and (B) the
assignee of Tenant's Trustee assumes all of the obligations arising under this
Lease and provides adequate assurance of its future performance of Tenant's
obligations and covenants under this Lease (whether or not a Default has
occurred under the Lease). Any such assignee shall, upon demand; execute and
deliver to Landlord, an instrument confirming such assumption.
(d) For purposes of Section 17.2(b) and (c), the term "adequate
assurance of future performance" shall include, without limitation, any proposed
assignee must have, as demonstrated to Landlord's satisfaction, a net worth (as
defined in accordance with generally accepted accounting principles consistently
applied) in an amount sufficient to assure that the proposed assignee will have
the resources to meet the financial responsibilities under this Lease, including
the payment of all rent. The financial condition and resources of Tenant and any
Guarantor(s) are material inducements to Landlord entering into this Lease.
18. DEFAULT BY LANDLORD.
18.1 LANDLORD'S DEFAULT. Landlord shall be in default if Landlord fails
to perform any provision of this Lease required of it and the failure is not
cured within thirty (30) days after notice has been given to Landlord. If,
however, the failure cannot reasonably be cured within the cure period, Landlord
shall not be in default of this Lease if Landlord commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure. Notices given under this Section shall specify the alleged breach and
the applicable Lease provisions. If Landlord shall at any time default beyond
the applicable notice and cure period, Tenant shall have the right to cure such
default on Landlord's behalf. Any sums expended by Tenant in doing so, and all
reasonably necessary incidental costs and expenses incurred in connection
therewith, shall be payable by Landlord to Tenant within thirty days following
demand therefore by Tenant; provided, however, that Tenant shall not be entitled
to any deduction or setoff against any rent otherwise payable to Landlord under
this Lease.
18.2 NOTICE TO MORTGAGEE(s). Whenever Tenant serves notice on Landlord of
Landlord's default, written notice shall also be served at the same time upon
the Mortgagee under any first- or second-priority Mortgage; provided, however,
that Tenant shall have no obligation to provide such notice unless and until
Tenant has received written notice of the Mortgagee's existence and address.
Such Mortgagee shall have the periods of time within which to cure Landlord's
defaults as are provided in Section 18.1, which periods shall commence to run
thirty (30) days after the commencement of the periods within which Landlord
must cure its defaults under Section 18.1. In this connection, any
representative of the Mortgagee shall have the right to enter upon the Premises
for the purpose of curing Landlord's default. Such Mortgagee shall notify
Landlord and Tenant of the address of such Mortgagee to which such notice shall
be sent, and the agreements of Tenant under this Section are subject to prior
receipt of such notice. If the nature of the default is such that the
Mortgagee's possession is required to cure the default, then Tenant will not
terminate the Lease so long as such Mortgagee commences proceedings to obtain
possession of the Premises within the period of time afforded to the Mortgagee
to cure such default, and once the Mortgagee has obtained possession, diligently
proceeds to cure the default. Nothing contained in this Lease shall be construed
to impose any obligation on any Mortgagee to cure any default by Landlord under
the Lease.
19. SUBORDINATION AND ESTOPPEL.
19.1 SUBORDINATION. Subject to the provisions of this Section 19, at the
option and upon written declaration of Landlord, this Lease and the leasehold
estate created hereby shall be subject, subordinate and inferior to the lien and
charge of any Mortgage; provided, however, that this Lease shall not be
subordinate to any Mortgage arising after the date of this Lease, or any
renewal, extension or replacement thereof, unless and until Landlord provides
Tenant with an agreement from the Mortgagee of the type normally provided by
commercial lenders and accepted by institutional commercial tenants in southern
California ("NON-DISTURBANCE AGREEMENT"), setting forth that so long as Tenant
is not in default hereunder, Landlord's and Tenant's rights and obligations
hereunder shall remain in force and Tenant's right to possession shall be upheld
and Tenant's rights under the Lease shall be honored. Subject to the foregoing
condition, (i) Landlord hereby expressly reserves the right, at its option and
declaration, to place Mortgages upon and against the Premises and/or any part
thereof, superior in lien and effect to this Lease and the estate created
hereby, and (ii) Landlord shall be entitled to sign, acknowledge and record in
the Office of the County Recorder of the County in which the Premises are
situated, a declaration that this Lease and leasehold estate are subject,
subordinate and inferior to any Mortgage placed or to be placed by Landlord upon
or against the Premises and/or any part thereof (in favor of any Mortgagee,
trustee or title insurance company insuring the interest of any such Mortgagee),
recordation of which shall, of and by itself and without further notice to or
act or agreement of Tenant, make this Lease and the estate created hereby
subject, subordinate and inferior thereto. Notwithstanding the foregoing, Tenant
shall, promptly following a request by Landlord and after receipt of the
Non-Disturbance Agreement, execute and acknowledge any subordination agreement
or other documents required to establish of record the
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priority of any such Mortgage over this Lease, so long as such agreement does
not otherwise increase Tenant's obligations or risks or diminish Tenant's rights
hereunder. Landlord shall obtain and deliver to Tenant, no later than thirty
(30) days after the Commencement Date, a Non-Disturbance Agreement, in
recordable form, from each existing Mortgagee.
19.2 ATTORNMENT. In the event of foreclosure of any Mortgage, whether
superior or subordinate to this Lease, then (a) this Lease shall continue in
force; (b) Tenant's quiet possession shall not be disturbed if Tenant is not in
default hereunder; (c) Tenant shall attorn to and recognize the Mortgagee or
purchaser at foreclosure sale ("NEW OWNER") as Tenant's landlord for the
remaining term of this Lease; and (d) the New Owner shall not be bound by (i)
any payment of rent for more than one month in advance, (ii) any amendment,
modification or ending of this Lease without the New Owner's consent after the
New Owner's name is given to Tenant, unless the amendment, modification or
ending is specifically authorized by the original Lease and does not require
Landlord's prior agreement or consent, or (iii) any liability for any act or
omission of a prior Landlord, except to the extent the default by Landlord
continues to exist as a result thereof. At the request of the New Owner, Tenant
shall execute a new lease for the Premises, setting forth all of the provisions
of this Lease except that the term of the new lease shall be for the balance of
the Term.
19.3 ESTOPPEL CERTIFICATE. Tenant shall execute and deliver to Landlord,
within ten days after receipt of Landlord's request, any estoppel certificate or
other statement to be furnished to any prospective purchaser of or any lender
against the Premises. Such estoppel certificate shall acknowledge and certify
each of the following matters, to the extent each may be true: that the Lease is
in effect and not subject to any rental offsets, claims or defenses to its
enforcement; the commencement and termination dates of the Term; that Tenant is
paying rent on a current basis; that any Landlord's Work required to be
furnished under the Lease has been completed in all respects; that the Lease
constitutes the entire agreement between Tenant and Landlord relating to the
Premises; that Tenant has accepted the Premises and is in possession thereof;
that the Lease has not been modified, altered or amended except in specified
respects by specified instruments; and that Tenant has no notice of any prior
assignment, hypothecation or pledge of rents or the Lease. Tenant shall also,
upon request of Landlord, certify and agree for the benefit of any Mortgagee
against the Premises that Tenant will not look to such Mortgagee: as being
liable for any act or omission of Landlord; as being obligated to cure any
defaults of Landlord under the Lease which occurred prior to the time Mortgagee,
its successors or assigns, acquired Landlord's interest in the Premises by
foreclosure or otherwise; as being bound by any payment of Base Rent or
Additional Rent by Tenant to Landlord for more than one month in advance; or as
being bound by Landlord to any amendment or modification of the Lease without
Mortgagee's written consent.
19.4 REMEDIES. Failure of the Tenant to sign any statement or instrument
delivered by Landlord or Mortgagee to effectuate the provisions of this Section
19 within ten (10) days after request to do so by Landlord shall constitute a
material breach of this Lease, and Landlord shall have the right, by not less
than ten (10) days' (additional) notice and opportunity to cure to Tenant, to
declare this Lease terminated and the Term ended; in which event, this Lease
shall cease and terminate on the date specified in such notice with the same
force and effect as though the date set forth in such notice were the date
originally set forth herein and fixed as the Expiration Date, and Tenant shall
vacate and surrender the Premises but shall remain liable as hereinafter
provided. The foregoing shall be in addition to, rather than in lieu of, any
remedies or rights Landlord may now or hereafter have hereunder or at law or in
equity.
19.5 LANDLORD WAIVER. Landlord agrees to execute waiver and consent
instruments in conjunction with the financing of Tenant's fixtures, inventory
and/or equipment in form reasonably satisfactory to Landlord. Landlord agrees to
advise Tenant at any time and from time to time whether the form waiver proposed
for use by an existing or potential lender will be reasonably acceptable to
Landlord.
20. HAZARDOUS MATERIALS.
20.1 TENANT'S OBLIGATIONS.
(a) Tenant shall at all times and in all respects comply with all
Hazardous Materials Laws, and shall, at its own expense, procure, maintain in
effect and comply with all conditions of any and all permits, licenses, and
other governmental and regulatory approvals required for Tenant's use of the
Premises, including, without limitation, discharge of (appropriately treated)
materials or wastes into or through any sanitary sewer serving the Premises.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes. Tenant shall in all respects handle, treat, deal
with and manage any and all Hazardous Materials in, on, under or about the
Premises in total conformity with all applicable Hazardous Materials Laws and
prudent industry practices regarding management of such Hazardous Materials.
(b) Upon expiration or earlier termination of the Term, Tenant
shall cause all Hazardous Materials that were brought on to the Premises by or
on behalf of Tenant to be removed from the Premises and transported for use,
storage or disposal in accordance with and compliance with all applicable
Hazardous Materials Laws.
(c) Except in the event of an emergency, Tenant shall not take any
remedial action in response to the presence of any Hazardous Materials in or
about the Premises, nor enter into any settlement agreement, consent decree or
other compromise in respect to any claims relating to any Hazardous Materials in
any way connected with the Premises, without first notifying Landlord of
Tenant's intention to do so and affording Landlord ample opportunity to appear,
intervene or otherwise appropriately assert and protect Landlord's interest with
respect thereto.
(d) Tenant shall immediately notify Landlord in writing of: (i)
any enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Laws;
(ii) any claim made or threatened by any person against Tenant or the Premises
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from or claimed to result from any Hazardous Materials; and (iii) any
reports made to any environmental agency arising out of or in connection with
any Hazardous Materials in or removed from the Premises, including any
complaints, notices, warnings or asserted violations in connection therewith.
Tenant shall also supply to Landlord as promptly as possible, and in any event
within five business days after Tenant first receives or sends the same, copies
of all claims, reports, complaints, notices, warnings or asserted violations,
relating in any way to the Premises or
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Tenant's use thereof, Upon request, Tenant shall promptly deliver to Landlord
copies of hazardous waste manifests reflecting the legal and proper disposal of
all Hazardous Materials removed from the Premises.
20.2 INDEMNITY. With respect to Tenant's use and occupancy of the
Premises and Common Areas, Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect, and hold Landlord and each of Landlord's
officers, directors, shareholders, employees, agents, attorneys, successors and
assigns, free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including attorneys' fees), or death
of or injury to any person or damage to any property whatsoever, arising from or
caused in whole or in part, directly or indirectly, by (i) the presence in, on,
under or about the Premises, or discharge in or from the Premises, of any
Hazardous Materials that arose or occurred during Tenant's occupancy thereof;
(ii) Tenant's use, analysis, storage, transportation, disposal, release,
threatened release, discharge or generation of Hazardous Materials to, in, on,
under, about or from the Premises; or (iii) Tenant's failure to comply with any
Hazardous Materials Law. Tenant's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary repair, cleanup or detoxification or decontamination of the
Premises, or the preparation and implementation of any closure, remedial action
or other required plans in connection therewith, and shall survive the
expiration or earlier termination of the Term. For purposes of the release and
indemnity provisions hereof, any acts or omissions of Tenant, or by employees,
agents, assignees, subtenants, contractors or subcontractors of Tenant or others
acting for or on behalf of Tenant (whether or not they are negligent,
intentional, willful or unlawful) shall be strictly attributable to Tenant.
20.3 LANDLORD'S REPRESENTATION AND COVENANTS. Landlord warrants,
represents, covenants and agrees as follows:
(a) Except in compliance with applicable law, Landlord has not
used, generated, manufactured, produced, stored, released, discharged or
disposed of on, under or about the Premises (or off the Premises affecting the
Premises) or transported to or from the Premises, any Hazardous Materials or
allowed any agent or representative of Landlord to do so. Landlord has no
current actual knowledge that any Hazardous Materials has, in violation of
applicable law, been produced, stored, released, discharged or disposed of on,
under or about the Premises (or to or from other property affecting the
Premises) or transported to or from the Premises (or off the Premises affecting
the Premises) by any entity, firm or person, or from any source whatsoever.
(b) Except in compliance with applicable law, Landlord shall not
use, generate, manufacture, produce, store, release, discharge or dispose of on,
under or about the Premises (or off the Premises affecting the Premises), or
transport to or from the Premises, any Hazardous Materials or allow any agent or
representative of Landlord to do so.
(c) Landlord shall defend, indemnify and hold harmless Tenant and
its directors, officers, employees, contractors, agents, parents, subsidiaries,
successors and assigns from and against any and all loss, damage, cost, expense
or liability (including attorneys' fees and actual litigation costs) directly or
indirectly arising out of or attributable to (i) the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal or presence of Hazardous Materials by Landlord on, under or about the
Premises (or off the Premises on property owned or operated by Landlord that
affects the Premises), or (ii) Landlord's breach of any representation,
warranty, covenant or agreement relating to Hazardous Materials contained
herein. Landlord's indemnity shall include without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary repair,
cleanup or detoxification or decontamination of the Premises, or the preparation
and implementation of any closure, remedial action or other required plans in
connection therewith, and shall survive the expiration or earlier termination of
the Term.
21. NOTICE. All notices, demands or requests from one party to the other shall
be in writing. Notices may be personally delivered, sent by Federal Express or
other reputable express delivery service, sent by telecopier with first-class
mail backup, or sent by certified mail, postage prepaid, to the addresses set
forth at Section 1. Notices shall be deemed received upon actual delivery to the
addressee with respect to personal or express delivery service or telecopier,
and three (3)days after deposit in the mails with respect to mailing. Each party
shall have the right, from time to time, to designate a different address by
notice given in conformity with this Section to the other party.
22. OTHER TERMS AND CONDITIONS.
22.1 SIGNAGE. Tenant shall not place or permit to be placed, any sign,
advertisement, notice or other similar matter on the doors, windows, exterior
walls, roof or other areas of the Premises which are open to the view of persons
outside the Premises, except in accordance with The City of Vista's signage plan
for the Business Park..
22.2 NO LIGHT, AIR OR VIEW EASEMENTS. No diminution or shutting off of
light, air or view by any structure which may be erected on lands adjacent to
the Premises shall in any way affect this Lease or impose any liability on
Landlord.
22.3 SECURITY MEASURES. Tenant acknowledges that Landlord does not intend
to provide guard service or other security measures for the benefit of the
Premises. Tenant assumes all responsibility for the protection of Tenant, its
agents, and invitees and the property of Tenant and of Tenant's agents and
invitees from acts of third parties, and assumes all risk in connection with any
failure to provide or lack of such security measures. Tenant hereby waives any
and all claims for damages to persons or property sustained by Tenant, or by any
other person or entity, arising from, out of or in connection with, or alleged
to arise from, out of or in connection with, Landlord's not providing any
security measure for the Premises. Nothing herein contained shall prevent
Landlord, at Landlord's sole option, from providing security protection for the
Premises, in which event the costs thereof shall be included within Operating
Expenses.
22.4 HOLDING OVER BY TENANT. Tenant agrees upon the expiration or
termination of this Lease, immediately and peaceably to yield up and surrender
the Premises; notice to quit or vacate is hereby expressly waived; provided,
however, that Tenant shall be entitled to hold over after the expiration of this
Lease for a period of no more than six (6) months, upon the same terms,
conditions and provisions set forth in the Lease, but at a Base Rent that is one
hundred ten percent (110%) of the Base Rent in effect immediately prior to the
expiration of the Term (as the same may then have been extended). Subject to the
foregoing, Tenant shall be liable to Landlord for any and all damages incurred
by Landlord as the result of any failure by Tenant to timely surrender
possession of the Premises as required herein. If Tenant shall hold over after
the expiration of the Term for any cause, such holding over shall be deemed a
tenancy for month-to-month during the authorized
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holdover period specified above, and thereafter shall be deemed a tenancy at
sufferance or, at the sole discretion of Landlord, a tenancy from
month-to-month. Any further holding over beyond the authorized six-month period
shall be at a Base Rent that is one hundred fifty percent (150%) of the Base
Rent that was in effect immediately prior to the termination.
22.5 LANDLORD'S RIGHT OF ENTRY. Landlord and Landlord's agents may enter
upon the Premises at any reasonable time and upon reasonable notice (except no
notice shall be required in an emergency) to make such repairs, additions or
improvements as Landlord shall deem necessary; to post such notices as Landlord
may deem necessary to exempt Landlord and Landlord's interest in the Premises
from responsibility on account of any work or repairs done by Tenant upon or in
connection with the Premises; to inspect and examine the Premises and see that
the covenants hereof are being kept and performed; or to exhibit the Premises to
prospective tenants or purchasers.
22.6 FURNISHING OF FINANCIAL STATEMENTS. Tenant acknowledges that
Landlord entered into this Lease in reliance upon receiving current and periodic
financial reports documenting the progress of Tenant's business operations.
Accordingly, Tenant shall deliver to Landlord, within ten (10) days after
request therefore from time to time and in any event no later than June 30 of
each year of the Term, financial statements reflecting Tenant's current
financial condition and financial statements for each of the two (2) years prior
to the then-current fiscal statement year. Such statements shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant.
22.7 AUCTIONS. Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises, without
first having obtained Landlord's prior written consent. Notwithstanding anything
to the contrary in this Lease, Landlord shall not be obligated to exercise any
standard of reasonableness in determining whether to grant such consent.
22.8 KEYS. Keys to all doors to the Premises will be furnished by
Landlord. Tenant agrees, at the termination of the tenancy, to return all keys
of all doors.
22.9 BROKERS' FEES. Landlord has agreed to pay a fee for brokerage
services rendered in this transaction to the broker(s) identified in Section 1.
Such brokerage commission shall be payable in accordance with the separate
written agreement between Landlord and such broker(s), which alone shall govern
such brokers' entitlement to any commission. Landlord and Tenant each represent
and warrant to the other that no broker, agent or finder, licensed or otherwise
has been engaged by it, respectively, in connection with the transaction
contemplated by this Agreement, other than the broker(s) named above. In the
event of any other claim for broker's, agent's or finder's fee or commission in
connection with this transaction, the party upon whose alleged statement,
representation or agreement such claim or liability arises shall indemnify,
save, hold harmless and defend the other party from and against such claim and
liability.
22.10 OTHER REPRESENTATIONS BY LANDLORD. Landlord represents and warrants
that: (i) Landlord is the owner in fee simple absolute of the Premises and has
good and marketable title thereto; (ii) Landlord has full right and lawful
authority to execute this Lease for the term, in the manner, and upon the
conditions and provisions herein contained; (iii) Landlord is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of California; (iv) neither the execution by Landlord of this
Lease nor the performance by Landlord of the terms hereof will conflict with or
violate any other agreement or instrument or any writ, order or decree to which
Landlord is a party or by which Landlord is bound; (v) there is no litigation
currently pending or, to the Landlord's current actual knowledge, threatened
against Landlord which could adversely affect Landlord's ability to perform any
of its obligations hereunder; and (vi) to Landlord's current actual knowledge,
upon Delivery of the Premises, the Premises will be in compliance with all
applicable zoning, building and fire codes and ordinances.
23. GENERAL PROVISIONS.
23.1 EXCULPATION. The obligations of Landlord under this Lease do not
constitute personal obligations of Landlord or its directors, officers or
shareholders, and Tenant shall look solely to the Premises and to no other
assets of Landlord for satisfaction of any liability with respect to this Lease,
and agrees not to seek recourse against the directors, officers or share-
holders of Landlord, nor against any of their personal assets, for such
satisfaction.
23.2 CONVEYANCE BY LANDLORD. Landlord shall be free at all times, without
need of consent or approval by Tenant, to assign its interest in this Lease
and/or to convey fee title to the Premises. Each conveyance by Landlord of
Landlord's interest in the Lease or the Premises prior to expiration or
termination hereof shall be subject to this Lease and shall relieve the grantor
of any further obligations or liability as Landlord, and Tenant shall look
solely to Landlord's successor in interest for all future obligations of
Landlord. Tenant hereby agrees to attorn to Landlord's successors in interest,
whether such interest is acquired by sale, transfer, foreclosure, deed in lieu
of foreclosure or otherwise. The term "Landlord" as used in this Lease, so far
as covenants and obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner at the time in question of the fee
title of the Premises. Without further agreement, the transferee of such title
shall be deemed to have assumed and agreed to observe and perform any and all
obligations of Landlord hereunder during its ownership of the Premises.
23.3 SALE-LEASEBACK. Without limitation of Section 23.2, in the event of
any transfer or transfers of Landlord's interest in the Premises structured as a
so-called sale-leaseback, Landlord shall be automatically relieved of any and
all obligations on the part of Landlord accruing under this Lease from and after
the date of such transfer. Upon the termination of any sale-leaseback
transaction prior to the termination of this Lease, the former lessee thereunder
shall become and remain liable as Landlord hereunder until a further transfer.
No Mortgagee to which this Lease is or may be subordinate or landlord under a
so-called sale-leaseback shall be responsible in connection with the Security
Deposit deposited hereunder, unless such Mortgagee or such landlord shall have
actually received the Security Deposit deposited hereunder.
23.4 QUIET ENJOYMENT. Landlord agrees that so long as Tenant is not in
default hereunder Tenant shall have the quiet enjoyment of the Premises without
hindrance on the part of Landlord. Landlord further agrees that Landlord will
warrant and defend Tenant in the peaceful and quiet enjoyment of the Premises
against the lawful claims of all persons claiming by, through or under Landlord.
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23.5 NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord shall accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this Lease provided.
23.6 WAIVER. No delay or omission in the exercise of any right or remedy
of Landlord or Tenant for any Default by the other party hereunder shall impair
such right or remedy or be construed as a waiver thereof. One or more waivers of
any covenant or condition by Landlord or Tenant shall not be construed as a
waiver of a subsequent breach of the same covenant or condition, and the consent
or approval by Landlord to or of any act by Tenant requiring Landlord's consent
or approval shall not be deemed to render unnecessary Landlord's consent or
approval to or of any subsequent similar act by Tenant. No breach of a covenant
or condition of this Lease shall be deemed to have been waived by Landlord or
Tenant unless such waiver is in writing signed by the nondefaulting party. The
acceptance of any rent or other charges hereunder shall not be deemed a waiver
of any breach or Default hereunder other than the payment of the amount accepted
by Landlord.
23.7 CUMULATIVE RIGHTS. The various rights, options, elections, powers
and remedies contained in this Lease shall be construed as cumulative and no one
of them shall be exclusive of any of the others, or of any other legal or
equitable remedy which either party might otherwise have in the event of breach
or default in the terms hereof, and the exercise of one right or remedy by such
party shall not impair its right to any other right or remedy until all
obligations imposed upon the other party have been fully performed.
23.8 INDEPENDENT COVENANTS. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent,
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the rent or other amounts owing
hereunder against Landlord; provided, however, the foregoing shall in no way
impair the right of Tenant to commence a separate action against Landlord for
any violation by Landlord of the provisions hereof so long as notice is first
given to Landlord and any Mortgagee (of whose address Tenant has theretofore
been notified) and an opportunity is granted to Landlord and such holder to
correct such violation as provided above.
23.9 RELATIONSHIP OF THE PARTIES. Nothing contained herein shall be
deemed or construed by the parties hereto, nor by any third party, as creating
the relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of computation of rent, nor any other provision contained herein, nor any
acts of the parties hereto, shall be deemed to create any relationship between
the parties hereto other than the relationship of landlord and tenant.
23.10 FORCE MAJEURE. If either party is delayed in the performance of any
covenant of this Lease because of any of the following causes, then such
performance shall be excused for the period of the delay and the period for such
performance shall be extended for a period equivalent to the period of such
delay: acts of the other party; action of the elements; war, riot or civil
insurrection; building moratoria, trip generation restrictions or other similar
action by the City of Vista or other governmental agency or entity; labor
disputes; inability to procure or a general shortage of labor or materials in
the normal channels of trade; delay in transportation; delay in inspections; or
any other cause beyond the reasonable control of the party so obligated, whether
similar or dissimilar to the foregoing, financial inability excepted; provided,
however, that except as specifically set forth elsewhere in this Lease, no such
events shall affect Tenant's obligation to pay Base Rent, Additional Rent or any
other amount payable under this Lease, nor shall such events affect the length
of the Term (except to the extent expressly provided herein).
23.11 CONSENTS. In the event the consent or approval of Landlord is
required under this Lease, or if Landlord has a right hereunder to exercise its
discretion, Landlord agrees that it shall not unreasonably withhold or delay
such consent or approval and that it shall not exercise its discretion in an
unreasonable or arbitrary manner.
23.12 COUNTERPARTS. This Lease may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
23.13 AUTHORITY. Each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of said entity. Upon the request of the other
party, any such party shall, at the time of the execution of this Lease, deliver
to the other party evidence of such authority satisfactory to the other party.
23.14 RECORDING. Tenant shall not record this Lease or any short form or
memorandum version hereof without the prior written consent of Landlord, which
may be withheld at Landlord's sole discretion.
23.15 INTERPRETATION AND USE OF PRONOUNS. Wherever herein the singular
number is used, the same shall include the plural, and the masculine gender
shall include the feminine and the neuter genders. ALL conditions contained
herein shall be deemed covenants. The words "breach" or "default" are used
interchangeably herein and each shall be deemed to include the other.
23.16 CAPTIONS AND INTERPRETATIONS. Section titles or captions contained
in this Lease are inserted as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Lease or any
provision hereof. No provision in this Lease is to be interpreted for or against
either party because that party or its legal representative drafted such
provision.
23.17 SEVERABILITY. If any term, covenant, condition or provision of this
Lease is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
23.18 APPLICABLE LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California, notwithstanding the fact
that Landlord or Tenant may be located in another State or that this Lease may
be
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executed in another State. If any provision of this Lease or the application
thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law. Any action brought to enforce or nullify this Lease or
the provisions hereof shall be brought in San Diego County, California, and in
no other forum.
23.19 WAIVER OF RIGHT OF REDEMPTION. Tenant hereby waives for Tenant and
for all those claiming under Tenant all right now or hereafter existing to
redeem, by statute or by order or judgment of any court or by any legal process
or writ, Tenant's right of occupancy of the Premises after any termination of
this Lease. Tenant hereby waives its rights under California CODE OF CIVIL
PROCEDURE Section 1179.
23.20 ATTORNEYS' FEES. In case suit shall be brought for any unlawful
detainer of the Premises, for the recovery of any rent due under the provisions
of this Lease, or because of the breach or alleged breach of any other covenant
herein contained, the prevailing party shall recover from the non-prevailing
party all costs and expenses incurred therein, including reasonable attorneys'
fees and expenses incurred in enforcing any judgment. If Landlord, through no
fault of its own, is made a party to any litigation relating to the subject
matter covered by this Lease instituted by or against Tenant, then Tenant shall
defend, indemnify and hold Landlord harmless from and against all costs and
expenses, including reasonable attorneys' fees, incurred by Landlord in
connection therewith. In addition thereto, Tenant agrees to pay Landlord's
costs, expenses and reasonable attorneys' fees with respect to: (i) each request
to Landlord for permission or consent to assign or sublet the Premises, as
provided in Section 15.5 above; (ii) any breach or default by Tenant which is
cured prior to litigation. Landlord shall notify Tenant of the amount of such
attorneys' fees, and Tenant shall pay the same (as Additional Rent) within
fifteen (15) days after such notice.
23.21 JOINT AND SEVERAL OBLIGATIONS. If there shall be more than one
Tenant, they shall all be bound jointly and severally by the terms, provisions,
covenants, conditions, and agreements herein. No rights, however, shall inure to
the benefit of any assignee of Tenant unless the assignment to such assignee has
been approved by Landlord in writing as required hereunder.
23.22 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained shall, subject to the provisions as to assignments, apply to and bind
the heirs, successors, executors, administrators and assigns of the respective
parties hereof. If this Lease is signed by more than one person as Tenant, their
obligation shall be joint and several.
23.23 TIME OF THE ESSENCE. Time is expressly declared to be of the
essence of this Lease, and of all covenants and conditions herein contained.
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23.24 NO THIRD-PARTY BENEFICIARIES. The provisions of this Lease are
solely for the benefit of the parties hereto, and no broker or other third party
shall be entitled to any benefits hereof or hereunder.
23.25 ENTIRE AGREEMENT. This Lease and the exhibits, and the Addendum, if
any, attached hereto and forming a part hereof, set forth all the terms,
provisions, covenants, conditions, promises, agreements and understandings
between Landlord and Tenant concerning the Premises. There are no warranties,
representations, covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than set forth herein. No alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and signed by each party.
23.26 NO OPTION BY LANDLORD. Preparation of this Lease by Landlord or
Landlord's agent and submission of same to Tenant shall not be deemed an option
or offer to lease the Premises on the terms and conditions contained herein or a
reservation of the Premises in favor of Tenant. This Lease shall become binding
upon Landlord only upon Landlord's execution and delivery of this Lease to
Tenant. The receipt (which shall include the cashing, deposit or other
negotiation of checks, money orders and the like) of any moneys by Landlord
which are tendered by Tenant along with a Tenant-executed copy of this Lease, or
at any time prior to Landlord's delivery of a fully executed copy of this Lease
to Tenant, shall not constitute an acceptance of Tenant's offer to lease as
contained herein. Tenant acknowledges that Landlord will not deliver a fully
executed copy of this Lease until Landlord has received both any Guaranties
required hereunder, and such corporate resolutions or other information as
reasonably satisfies Landlord as to the incumbency and authority to sign of each
individual signing this Lease or any Guaranty. Tenant also acknowledges that the
fully executed Lease will not be delivered by Landlord to Tenant unless and
until approved by Landlord's lender, and that in determining whether to approve,
Landlord's lender will consider Tenant's lease application, credit information,
biographical data on Tenant's key officers or principals, and financial
statements relating to Tenant's business.
23.27 EXHIBITS. All exhibits described herein, if any, are part of this
Lease and by this reference are expressly incorporated herein. This Lease
contains the following Exhibits:
Exhibit A Site Plan
Exhibit B Guaranty Agreement
23.28 ADDENDUM. The attached Addendum, if any is specified in Section 1
above, is part of this Lease and by this reference is expressly incorporated
herein.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s)
set forth by their respective signatures.
LANDLORD:
Date: 8/2/00 WILCO INVESTMENTS, LLC, a California
limited liability company
By: /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx, Member
TENANT:
Date: 8/1/00
REDLINE PERFORMANCE PRODUCTS, INC. a
Minnesota Corporation
By: /s/ Xxxx Xxxxx
----------------------------------
Xxxx Xxxxx, President
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx, Vice President
A-1
EXHIBIT A
SITE PLAN
26,960 SQ. FT. - DIVISIBLE
0000 XXXXXXXX XXX
Xxxxx, XX
[FLOOR PLAN]
EXHIBIT B
GUARANTY AGREEMENT
FOR VALUE RECEIVED, and in consideration for WILCO INVESTMENTS, LLC, a
California limited liability company ("LANDLORD"),entering into that certain
STANDARD INDUSTRIAL LEASE dated for reference purposes only as of July 27,2000
("LEASE") between Landlord and REDLINE PERFORMANCE PRODUCTS, INC., a Minnesota
Corporation ("TENANT"), relating to the leased premises as more particularly
described in the Lease ("PREMISES"), the undersigned XXXX XXXXX and XXXXX X.
XXXXXXXX ("GUARANTORS") hereby guarantees to Landlord (i) the prompt payment in
accordance with its terms of all rent due to Landlord under the Lease, and (ii)
strict compliance by Tenant with the terms, covenants and conditions of the
Lease. If more than one person or entity guaranties the obligations of Tenant
under the Lease (whether by signing this Guaranty or otherwise), the liability
of each guarantor (including Guarantor) shall be joint and several with that of
each and every other person or persons guarantying the obligations of Tenant
under the Lease.
Guarantor hereby waives the benefits and protection of the provisions of
California CIVIL CODE section 2819, and Guarantor hereby grants to Landlord full
power and authority to: (i) change, alter, cancel, renew or extend the time for
payment of rent due under the Lease or performance by Tenant of any other terms
or conditions of the Lease as Landlord and Tenant may expressly or impliedly
agree upon; or (ii) change, modify, extend or otherwise amend the Lease,
including increasing the rental payable thereunder by Tenant; or (iii) otherwise
deal with Tenant as Landlord may elect, without in any way diminishing,
releasing or discharging the liability hereunder of Guarantor. Such liability
shall be continuing and shall only be terminated by full compliance by Tenant
with all the terms of the Lease.
Notice of acceptance of this Guaranty as well as all demands,
presentations, notices of protest and notices of every kind or nature, including
those of any action or non-action on the part of Tenant, Landlord or other
party, are hereby fully waived by Guarantor. Upon any default of Tenant under
the Lease, Landlord may, at its option, proceed directly and at once, without
notice of such default, against Guarantor to collect and recover the full amount
of the liability hereunder or any portion thereof without proceeding against
Tenant or any other party or foreclosing upon, selling, or otherwise disposing
of or collecting or applying any property, real or personal, Landlord may then
have as security for the performance by Tenant under the Lease. Guarantor hereby
waives the right to require Landlord to proceed against Tenant or to pursue any
other remedy Landlord may have, waive the right to plead or assert any election
of remedies Landlord may have, waives the pleading of any statute of limitations
as a defense to the obligation hereunder, and waives any other defense arising
by reason of any disability or other defenses of Tenant or by reason of the
cessation from any cause whatsoever of the liability of Tenant.
If legal action is commenced by Landlord to enforce this Guaranty or any
term or condition hereof, Guarantor agrees to pay to Landlord costs of
collection and, as part of the costs incurred therein, such additional sums as
the Court may adjudge reasonable as attorneys' fees in said suit. No indulgence,
forbearance or extensions of time of payment or performance permitted or granted
to Tenant by Landlord shall in any way release Guarantor from liability or
diminish Guarantor's obligations hereunder.
Any indebtedness of Tenant now or hereafter held by Guarantor is hereby
subordinated to any indebtedness under the Lease of Tenant to Landlord, and such
indebtedness of Tenant to Guarantor if Tenant so requests shall be collected,
enforced and received by Guarantor as trustee for Tenant and held as security
for performance of the obligation of Tenant to Landlord, but without reducing or
affecting in any manner the liability of Guarantor under the other provisions of
this Guaranty.
In conjunction with an assignment of the Lease, Landlord may without
notice assign this Guaranty in whole or in part. No assignment of the Lease
shall diminish, release, discharge or otherwise modify Guarantor's liability
under this Guaranty. Guarantor hereby waives any right it might otherwise have
to require Landlord to apply any security deposit or other security that it may
hold under the Lease to any default. So long as Landlord's interest in the Lease
is subject to a mortgage or deed of trust, no acquisition by Guarantor of
Landlord's interest under the Lease shall affect Guarantor's obligations under
this Guaranty, which shall remain in effect for the benefit of Landlord's
lender.
Any other provision in this Guaranty and/or the Lease to the contrary
notwithstanding, if no material Default (as defined in the Lease) has occurred
within the first forty-eight (48) months of the Term of the Lease, then this
Guaranty shall terminate and be of no further force or effect. However, in the
event Tenant elects to increase the Security Deposit to $50,000.00 at any time
after the first eighteen (18) months of the Term of the Lease, then this
Guaranty shall terminate at that time. If this Guaranty shall terminate as
described in this paragraph, then Landlord shall upon the request of Guarantor
(or either one of them) deliver a written acknowledgment to that effect.
However, the failure of Guarantor to request such acknowledgment (or the failure
of Landlord to provide the same) shall not be deemed to affect the termination
hereof.
Date: 8/1/00 Xxxx Xxxxx: /s/ Xxxx Xxxxx
------------------------------------
Xxxxx X. Xxxxxxxx: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
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