EXHIBIT 10.20
STANDARD INDUSTRIAL LEASE
(Single Tenant)
1. BASIC LEASE PROVISIONS.
1.1 DATE: August 10, 1999
1.2 LANDLORD: Realty Associates Iowa Corporation, a Delaware corporation
1.3 TENANT: XxxxXxxxxx.xxx, Inc., a Delaware corporation
1.4 PREMISES ADDRESS: 0000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxxxxx
1.5 APPROXIMATE LEASABLE AREA
0F PREMISES: 114,114
(in square feet)
1.6 USE: Warehousing, distribution and associated office uses (including the
distribution of items to retail customers, provided that such
customers do not receive such items at the Premises)
1.7 TERM: Ten (10) years
1.8 COMMENCEMENT DATE: September 1, 1999
1.9 MONTHLY BASE RENT: Commencement Date through the end of the 24th full calendar
month: $42,222.18;
25th through 48th full calendar month: $44,504.46;
49th through 72nd full calendar month: $47,927.88;
73rd through 96th full calendar month: $51,351.30;
97th through 120th full calendar month: $53,633.58
(See section 1 of Addendum for additional Base Rent)
1.10 BASE RENT PAID UPON EXECUTION: $ 42,222.18
APPLIED TO: First full calendar month of Lease term
(insert month(s))
1.11 SECURITY DEPOSIT: $ 42,222.18
1.12 REAL ESTATE BROKER:
LANDLORD: CB Xxxxxxx Xxxxx
TENANT: CB Xxxxxxx Xxxxx
1 .13 EXHIBITS ATTACHED TO LEASE: Exhibit A -- "Premises;" Exhibit B -- "Verification Letter;"
Exhibit C -- "Work Letter Agreement;" Exhibit D - "Addendum to Lease";
1.14 ADDRESSES FOR NOTICES:
LANDLORD: Realty Associates Iowa Corporation
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Asset Manager
WITH A COPY TO: Xxxxx Partners, Incorporated
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Property Manager
TENANT: XxxxXxxxxx.xxx, Inc.
00000 XX Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
2. PREMISES.
2.1 ACCEPTANCE. In consideration of the obligation of Tenant to pay rent
as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant leases from Landlord,
the Premises, to have and to hold for the term of this Lease, subject to the
terms, covenants and conditions of this Lease. The Premises is depicted on
Exhibit "A" attached hereto and contains one or more buildings (collectively,
the "Building") and the other areas depicted on Exhibit "A" as being part of the
Premises. Tenant accepts the Premises in its condition as of the Commencement
Date, subject to all applicable laws, ordinances, and regulations, and except as
may be otherwise expressly provided herein, Landlord shall not be obligated to
make any repairs or alterations to the Premises. Tenant acknowledges that
Landlord has made no representation or warranty as to the suitability of the
Premises for the conduct of Tenant's business, and Tenant waives any implied
warranty that the Premises are suitable for Tenant's intended purposes. Except
as provided in the next sentence, Landlord makes no representation or warranty
to Tenant that the electrical, plumbing, sprinkler or other systems in the
Premises comply with applicable laws, and Landlord shall have no obligation to
bring such systems into compliance with applicable laws. To the actual knowledge
of Landlord, without duty of investigation, as of the date of this Lease, (a)
Landlord has received no written notice from a governmental agency that the
electrical, plumbing,
sprinkler and other systems, in the condition on the date of this Lease, do not
comply with applicable laws or regulations and (b) no agreement, covenant or
restriction affecting the Premises prevents Tenant from using the Premises for
the purposes described in section 1.6. For purposes of the foregoing, the actual
knowledge of Landlord shall be limited to the actual knowledge of Xxxxx X.
Xxxxxxxxxx. In addition, Landlord makes no representation or warranty to Tenant
that the floors, foundations, walls or roof of the Premises will accommodate the
improvements Tenant desires to make to the Premises or that the Premises now
complies, or will comply after Tenant completes its improvements, with any
earthquake or seismic code.
3. TERM.
3.1 TERM AND COMMENCEMENT DATE. The term and Commencement Date of this
Lease are as specified in sections 1.7 and 1.8. The Commencement Date set forth
in section 1.8 is an estimated Commencement Date. The actual Commencement Date
shall be the date possession of the Premises is tendered to Tenant in accordance
with section 3.4 below; provided, however, that the term of this Lease shall be
computed from the first day of the calendar month following the Commencement
Date. When the actual Commencement Date is established by Landlord, Tenant
shall, within thirty (30) days after Landlord's request, complete and execute
the letter attached hereto as Exhibit "B" and deliver it to Landlord. Tenant's
failure to execute the letter attached hereto as Exhibit "B" within said thirty
(30) day period shall be a material default hereunder and shall constitute
Tenant's acknowledgment of the truth of the facts contained in the letter
delivered by Landlord to Tenant.
3.2 DELAY IN POSSESSION. Notwithstanding the estimated Commencement Date
specified in section 1.8, if for any reason Landlord cannot deliver possession
of the Premises to Tenant on said date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Tenant hereunder; provided, however, in such a case, Tenant
shall not be obligated to pay rent or perform any other obligation of Tenant
under this Lease, except as may be otherwise provided in this Lease, until
possession of the Premises is tendered to Tenant, as defined in section 3.4. If
Landlord shall not have tendered possession of the Premises to Tenant within
sixty (60) days following the estimated Commencement Date specified in section
1.8, Tenant may, at Tenant's option, by notice in writing to Landlord within ten
(10) days after the expiration of the sixty (60) day period, terminate this
Lease. If Tenant terminates this Lease as provided in the preceding sentence,
the parties shall be discharged from all obligations hereunder, except that
Landlord shall return any money previously deposited with Landlord by Tenant;
and provided further, that if such written notice by Tenant is not received by
Landlord within said ten (10) day period, Tenant shall not have the right to
terminate this Lease as provided above unless Landlord fails to tender
possession of the Premises to Tenant within one hundred twenty (120) days
following the estimated Commencement Date specified in section 1.8. If Landlord
is unable to deliver possession of the Premises to Tenant on the Commencement
Date due to a "Force Majeure Event," the Commencement Date shall be extended by
the period of the delay caused by the Force Majeure Event, not to exceed sixty
(60) days. A Force Majeure Event shall mean fire, earthquake, weather delays or
other acts of God, strikes, boycotts, war, riot, insurrection, embargoes,
shortages of equipment, labor or materials, delays in issuance of governmental
permits or approvals, or any other cause beyond the reasonable control of
Landlord.
3.3 DELAYS CAUSED BY TENANT. Intentionally deleted.
3.4 TENDER OF POSSESSION. Except as provided below, Tenant accepts the
Premises in its "as is" condition, and Landlord shall not be obligated to make
any modifications or improvements to the Premises. Landlord shall use
commercially reasonable efforts to complete within thirty (30) days after the
Commencement Date, the following items: (a) ensure that all dock doors and dock
levelers are in working order, (b) remove all debris in the Premises that is
located in the Premises prior to the date Tenant enters the Premises or which is
created by Landlord in completing the repairs described in this sentence or in
completing the Seismic Retrofit (as defined below), (c) replace the roof
membrane of the Premises and (d) remove the existing refrigeration unit from the
Premises. In addition, Landlord shall have the right, but not the obligation, -
to perform a seismic retrofit of the Premises (the "Seismic Retrofit"). If
Landlord elects to complete the Seismic Retrofit, Landlord shall use
commercially reasonable efforts to complete the seismic retrofit within thirty
(30) days after the Commencement Date. The scope of the Seismic Retrofit and the
alterations made to the Premises to complete the Seismic Retrofit shall be
determined by Landlord, in Landlord's sole discretion. The work to be completed
by Landlord pursuant to this section shall be completed by Landlord, at
Landlord's sole cost and expense, and the cost of completing such items shall
not be deducted from the Improvement Allowance (as that term is defined in the
Work Letter Agreement attached to this Lease).
3.5 EARLY POSSESSION. Provided that Tenant does not interfere with or
delay the completion by Landlord or its agents or contractors of the work
described in section 3.4, Tenant shall have the right to enter the Premises
prior to the Commencement Date for the purpose of installing its trade fixtures
and equipment. Tenant shall be liable for any damages caused by Tenant's
activities at the Premises. Tenant acknowledges that it may not be able to
install trade fixtures and equipment while Landlord is completing the work
described in section 3.4. Provided that Tenant has not begun operating its
business from the Premises, and subject to all of the terms and conditions of
the Lease, the foregoing activity shall not constitute the delivery of
possession of the Premises to Tenant and the Lease term shall not commence as a
result of said activities. Prior to entering the Premises Tenant shall obtain
all insurance it is required to obtain by the Lease and shall provide
certificates of said insurance to Landlord. Tenant shall coordinate such entry
with Landlord's manager, and such entry shall be made in compliance with all
terms and conditions of this Lease.
4. USE.
4.1 PERMITTED USE. The Premises shall be used only for the purpose
described in section 1.6 and for no other purpose. Landlord makes no
representation or warranty that Tenant's use is permitted by applicable zoning
laws or other laws and regulations. In no event shall retail sales to customers
be made from the Premises: provided, however, Tenant shall be entitled to
deliver full cases of liquor, beer, wine and other alcoholic beverages to
customers from the Premises if, and only if, such deliveries are required in
order for Tenant to maintain a liquor license or permit. No on-site consumption
of alcoholic beverages shall be permitted. Landlord makes no representation or
warranty to Tenant that retail sales of alcoholic beverages will be permitted
from the Premises, and Tenant's obligations under the Lease are not conditioned
upon such sales being permitted. Landlord will not enter into any agreement,
covenant or restriction affecting the Premises during the term of the Lease
which will prevent Tenant from using the Premises for the uses described in
section 1.6.
4.2 COMPLIANCE WITH LAWS. Tenant shall, at Tenant's sole expense, promptly
comply with all applicable laws, ordinances, rules, regulations, orders,
certificates of occupancy, conditional use or other permits, variances,
covenants and restrictions of record, the recommendations of Landlord's
engineers or other consultants, and requirements of any fire insurance
underwriters, rating bureaus or government agencies, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of (he term hereof, relating in
any manner to the Premises or the occupation and use by Tenant of the Premises.
Tenant shall, at Tenant's sole expense, comply with all requirements of the
Americans With Disabilities Act that relate to the Premises, and all federal,
state and local
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laws and regulations governing occupational safety and health. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, noise or
vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with or endanger
Landlord or persons or property within the vicinity of the Premises. Tenant
shall obtain, at its sole expense, any permit or other governmental
authorization required to operate its business from the Premises.
5. BASE RENT. Tenant shall pay Base Rent in the amount set forth on the first
page of this Lease. The first month's Base Rent and the Security Deposit shall
be due and payable on the date this Lease is executed by Tenant, and Tenant
promises to pay to Landlord in advance, without demand, deduction or set-off,
monthly installments of Base Rent on or before the first day of each calendar
month succeeding the Commencement Date. Payments of Base Rent for any fractional
calendar month shall be prorated. All payments required to be made by Tenant to
Landlord hereunder shall be payable at such address as Landlord may specify from
time to time by written notice delivered in accordance herewith. Tenant shall
have no right at any time to xxxxx, reduce, or set-off any rent due hereunder
except where expressly provided in this Lease.
6. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the security deposit set forth in section 1.11 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails
to pay Base Rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may use all or any portion of
said deposit for the payment of any Base Rent or other charge due hereunder, to
pay any other sum to which Landlord may become obligated by reason of Tenant's
default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of said
deposit, Tenant shall within ten (10) days after written demand therefor deposit
cash with Landlord in an amount sufficient to restore said deposit to its full
amount. Landlord shall not be required to keep said security deposit separate
from its general accounts. If Tenant performs all of Tenant's obligations
hereunder, said deposit, or so much thereof as has not heretofore been applied
by Landlord, shall be returned, without payment of interest or other amount for
its use, to Tenant (or, at Landlord's option, to the last assignee, if any, of
Tenant's interest hereunder) at the expiration of the term hereof, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to said security deposit. Tenant acknowledges
that the security deposit is not an advance payment of any kind or a measure of
Landlord's damages in the event of Tenant's default. Tenant hereby waives the
provisions of any law which is inconsistent with this section.
7. UTILITIES.
7.1 PAYMENT. Tenant shall pay for all water, gas, electricity, telephone,
sewer, sprinkler services, refuse and trash collection, and other utilities and
services used at the Premises (collectively "Services"), together with any
taxes, penalties, surcharges or the like pertaining thereto. Tenant shall
contract directly with all providers of Services.
7.2 INTERRUPTIONS. Tenant shall be solely responsible for obtaining all
Services, and Landlord shall have no liability to Tenant if Tenant is unable to
obtain Services for any reason including, but not limited to, repairs,
replacements or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, telephone service or other utility
at the Premises, by any accident, casualty or event arising from any cause
whatsoever, including the negligence of Landlord, its employees, agents and
contractors, by act, negligence or default of Tenant or any other person or
entity, or by any other cause, and such failures shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from the obligation of paying rent or performing any
of its obligations under this Lease. Furthermore, Landlord shall not be liable
under any circumstances for loss of property or for injury to, or interference
with, Tenant's business, including, without limitation, loss of profits, however
occurring, through or in connection with or incidental to Tenant's inability to
obtain Services. Tenant shall comply with all mandatory controls or guidelines
promulgated by any governmental entity relating to the use or conservation of
energy, water, gas, light or electricity or the reduction of automobile or other
emissions to the extent such regulations apply to Tenant's use of the Premises.
7.3 RAILROAD SPURS. If the Premises is served by a railroad spur, Tenant
shall execute any agreement required by the railroad company serving the
railroad spur, and such agreement shall be satisfactory to Landlord, in
Landlord's sole discretion. Tenant shall pay the cost of maintaining the
railroad spur, at Tenant's sole cost and expense.
8. REAL AND PERSONAL PROPERTY TAXES.
8.1 PAYMENT OF TAXES. Tenant shall pay to Landlord during the term of this
Lease, in addition to Base Rent all "Real Property Taxes" (as defined below).
Real Property Taxes shall be payable by Tenant within ten (10) days after a
reasonably detailed statement of actual expenses is presented to Tenant by
Landlord. At Landlord's option, however, Landlord may, from time to time,
estimate what Real Property Taxes will be, and the same shall be payable by
Tenant monthly during each calendar year of the Lease term, on the same day as
the Base Rent is due hereunder. In the event that Tenant pays Landlord's
estimate of Real Property Taxes, Landlord shall use its best efforts to deliver
to Tenant within one hundred eighty (180) days after the expiration of each
calendar year a reasonably detailed statement (the "Statement") showing the Real
Property Taxes incurred during such year. Landlord's failure to deliver the
Statement to Tenant within said period shall not constitute Landlord's waiver of
its right to collect said amounts or otherwise prejudice Landlord's rights
hereunder, If Tenant's payments under this section during said calendar year
exceed the Real Property Taxes as indicated on the Statement, Tenant shall be
entitled to credit the amount of such overpayment against the Base Rent next
falling due. If Tenant's payments under this section during said calendar year
were less than Real Property Taxes as indicated on the Statement, Tenant shall
pay to Landlord the amount of the deficiency within thirty (30) days after
delivery by Landlord to Tenant of the Statement. Landlord and Tenant shall
forthwith adjust between them by cash payment any balance determined to exist
with respect to that portion of the last calendar year for which Tenant is
responsible for Real Property Taxes, notwithstanding that the Lease term may
have terminated before the end of such calendar year; and this provision shall
survive the expiration or earlier termination of the Lease. If during the term
of this Lease a special assessment for street, water or sewer improvements or
similar items is approved, and Landlord has the right to pay such special
assessment in a lump sum or in installments, Landlord shall not pass through to
Tenant as part of Real Property Taxes each year an amount greater than the
amount that would be due from time to time had Landlord elected to pay such
special assessment in installments. Provided that Tenant pays all Real Property
Taxes as and when due pursuant to this section, Tenant shall have the right to
appeal any Real Property Tax assessment with the Los Angeles County Tax
Assessor, all at Tenant's sole cost and expense. Landlord shall have the right
to approve, in advance, in Landlord's reasonable discretion, any letters,
applications or other written materials Tenant desires to file with the
Assessor.
8.2 DEFINITION OF REAL PROPERTY TAX. As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, improvement bond or bonds imposed
on the Premises or any portion thereof by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, sanitary, fire, street, drainage or other
improvement district thereof, as against any legal or equitable interest of
Landlord in the Premises or in any portion thereof. Real Property Taxes shall
not include income, inheritance and gift taxes.
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8.3 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 related
to Tenant's use of the Premises. If any of Tenant's personal property shall be
assessed with Landlord's real or personal property, Tenant shall pay to Landlord
the taxes attributable to Tenant within ten (10) days after receipt of a written
statement from Landlord setting forth the taxes applicable to Tenant's property.
9. INSURANCE.
9.1 INSURANCE-TENANT.
(a) Tenant shall obtain and keep in force during the term of this
Lease a commercial general liability policy of insurance with coverages
acceptable to Landlord, in Landlord's reasonable discretion, which, by way of
example and not limitation, protects Tenant and Landlord (as an additional
insured) against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $2,000,000 per occurrence with an "Additional Insured-Managers and
Landlords of Premises Endorsement" and contain the "Amendment of the Pollution
Exclusion" for damage caused by heat, smoke or fumes from a hostile fire. The
policy shall not contain any intra-insured exclusions as between insured persons
or organizations, but shall include coverage for liability assumed under this
Lease as an "insured contract" for the performance of Tenant's indemnity
obligations under this Lease.
(b) Tenant shall obtain and keep in force during the term of this
Lease "all-risk-extended coverage property insurance with coverages acceptable
to Landlord, in Landlord's reasonable discretion. Said insurance shall be
written on a one hundred percent (100%) replacement cost basis on Tenant's
personal property, all tenant improvements installed at the Premises by Landlord
or Tenant, Tenant's trade fixtures and other property. By way of example, and
not limitation, such policies shall provide protection against any peril
included within the classification "fire and extended coverage," against
vandalism and malicious mischief, theft, sprinkler leakage, earthquake damage
and flood damage.
(c) Tenant shall, at all times during the term hereof, maintain in
effect workers' compensation insurance as required by applicable law and
business interruption and extra expense insurance reasonably satisfactory to
Landlord.
9.2 INSURANCE-LANDLORD.
(a) Landlord shall obtain and keep in force a policy of general
liability insurance with coverage against such risks and in such amounts as
Landlord deems advisable insuring Landlord against liability arising out of the
ownership, operation and management of the Premises.
(b) Landlord shall also obtain and keep in force during the term of
this Lease a policy or policies of insurance covering loss or damage to the
Premises in the amount of not less than eighty percent (80%) of the full
replacement cost thereof, as determined by Landlord from time to time. The terms
and conditions of said policies and the perils and risks covered thereby shall
be determined by Landlord, from time to time, in Landlord's sole discretion. In
addition, at Landlord's option, Landlord shall obtain and keep in force, during
the term of this Lease, a policy of rental interruption insurance, with loss
payable to Landlord, which insurance shall, at Landlord's option, also cover all
Real Property Taxes. Tenant will not be named as an additional insured in any
insurance policies carried by Landlord and shall have no right to any proceeds
therefrom. The policies purchased by Landlord shall contain such deductibles as
Landlord may determine. Tenant shall pay at Tenant's sole expense any increase
in the property insurance premiums for the Premises over what was payable
immediately prior to the increase to the extent the increase is specified by
Landlord's insurance carrier as being caused by the nature of Tenant's occupancy
or any act or omission of Tenant.
(c) Tenant shall pay for all insurance purchased by Landlord pursuant
to this section 9.2 in the same manner as Tenant pays Real Property Taxes (i.e.,
ten (10) days after delivery of a statement or monthly estimates).
9.3 INSURANCE POLICIES. Tenant shall deliver to Landlord certificates of
the insurance policies required under section 9.1 within fifteen (15) days prior
to the Commencement Date of this Lease, and Landlord shall have the right to
approve the terms and conditions of said certificates. Tenant's insurance
policies shall not be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord.
Tenant shall, at least thirty (30) days prior to the expiration of such
policies, furnish Landlord with renewals thereof. Tenant's insurance policies
shall be issued by insurance companies authorized to do business in the state in
which the Premises is located, and said companies shall maintain during the
policy term a "General Policyholder's Rating" of at least A and a financial
rating of at least "Class X" (or such other rating as may be required by any
lender having a lien on the Premises) as set forth in the most recent edition of
"Best Insurance Reports." All insurance obtained by Tenant shall be primary to
and not contributory with any similar insurance carried by Landlord, whose
insurance shall be considered excess insurance only. Landlord, and at Landlord's
option, the holder of any mortgage or deed of trust encumbering the Premises and
any person or entity managing the Premises on behalf of Landlord, shall be named
as an additional insured on all insurance policies Tenant is obligated to obtain
by section 9.1 above. Tenant's insurance policies shall not include deductibles
in excess of Ten Thousand Dollars ($10,000).
9.4 WAIVER OF SUBROGATION. Landlord and Tenant hereby release each other
from any claims and demands of whatever nature for damage, loss or injury to the
Premises or to the other's property in, on or about the Premises, that are
caused by or result from risks or perils insured against under any property
insurance policies required by this Lease to be carried by Landlord and/or
Tenant whether or not in force at the time of any such damage, loss or injury.
Landlord and Tenant shall cause each such insurance policy obtained by them to
provide that the insurance company waives all right of recovery by way of
subrogation against either Landlord or Tenant in Connection with any damage
covered by any such policy or policies.
9.5 COVERAGE. Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's property or Tenant's obligations under this Lease, and the
limits of any insurance carried by Tenant shall not limit Tenant's obligations
or liability under any indemnity provision included in this Lease or under any
other provision of this Lease.
10. LANDLORD'S REPAIRS. Landlord shall maintain, at Landlord's expense, only
the structural elements of the roof (excluding the roof membrane) of the
Building and the structural soundness of the foundation and exterior walls of
the Building. Tenant shall reimburse Landlord for the cost of any maintenance,
repair or replacement of the foregoing necessitated by Tenant's misuse,
negligence, alterations to the Premises or any breach of its obligations under
this Lease. The term "walls" as used in this section shall not include windows,
glass or plate glass, doors or overhead doors, special store fronts, dock
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bumpers, dock plates or levelers, or office entries. Tenant shall immediately
give Landlord written notice of any repair required by Landlord pursuant to this
section, after which Landlord shall have a reasonable time in which to complete
the repair. Nothing contained in this section shall be construed to obligate
Landlord to make nonstructural repairs, to paint any walls or to seal or
otherwise maintain the surface of any foundation, floor or slab. Landlord shall
have the right upon written notice to Tenant, in Landlord's sole discretion, to
maintain, repair and repaint the exterior walls, overhead doors, canopies,
entries, handrails, gutters and other exposed parts of the Building as necessary
to maintain its existing appearance in good condition (hereinafter the
"Aesthetic Maintenance"). If Landlord elects to perform the Aesthetic
Maintenance, Tenant shall reimburse Landlord for the cost of the Aesthetic
Maintenance as additional rent, and said additional rent shall be payable by
Tenant within ten (10) days after demand by Landlord. Tenant expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair.
11. TENANT'S REPAIRS. Tenant shall, at its sole cost and expense, keep and
maintain all parts of the Premises (except those listed as Landlord's
responsibility in section 10 above) in good and sanitary condition, promptly
making all necessary repairs and replacements, including but not limited to,
windows, glass and plate glass, doors, skylights, any special store front or
office entry, interior walls and finish work, floors and floor coverings, roofs,
sidewalks, roadways, parking areas, exterior lighting, fences, retaining or
similar walls, landscaping, sprinkler systems, gutters, curbs, trash enclosures,
signs, gates, parking lot striping, heating and air conditioning systems, dock
boards, truck doors, dock bumpers, plumbing work and fixtures, electrical
systems, lighting facilities and bulbs, sprinkler systems, fire detection
systems, termite and pest extermination, and regular removal of trash and
debris. Unless Landlord has elected in writing to be responsible for the
Aesthetic Maintenance, Tenant shall, at Tenant's sole expense, be responsible
for the Aesthetic Maintenance. Tenant shall notify Landlord in writing prior to
making any repair or performing any maintenance pursuant to this section, and
Landlord shall have the right to designate the contractor Tenant shall use to
make any repair or to perform any maintenance on the roof, heating, ventilation
and air conditioning systems ("HVAC"), plumbing systems, electrical systems or
fire detection systems located at the Premises; provided, however, in the case
of an emergency, Tenant may make a repair without notifying Landlord if Tenant
notifies Landlord as soon as is reasonably possible after making the repair and
otherwise complies with the terms and conditions of this Lease. Tenant shall, at
its own cost and expense, enter into a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for all hot water,
HVAC systems and the roof of the Premises and all equipment within the Premises.
The maintenance contractor and the contract must be approved by Landlord and, at
Landlord's election, Landlord may designate the maintenance contractor, provided
the charges of Landlord's maintenance contractor are commercially reasonable and
Landlord's maintenance contractor provides competent and timely service. The
service contract must include all services suggested by the equipment
manufacturer within the operation/maintenance manual and must become effective
(and a copy thereof delivered to Landlord) within thirty (30) days after the
date Tenant takes possession of the Premises. If Tenant fails to keep the
Premises in good condition and repair, Landlord may, but shall not be obligated
to, make any necessary repairs. upon ten (10) days' advance written notice to
Tenant. If Landlord makes such repairs, Landlord may xxxx Tenant for the cost of
the repairs as additional rent, and said additional rent shall be payable by
Tenant within ten (10) days after demand by Landlord. Landlord shall have the
right, but not the obligation, to assume responsibility for maintaining any
landscaping or maintenance contracts (including, but not limited to, the
maintenance of the HVAC and roof of the Premises), in which event Tenant shall
reimburse Landlord for the cost of such maintenance within ten (10) days after
written demand by Landlord.
12. ALTERATIONS AND SURRENDER.
12.1 CONSENT OF LANDLORD. Tenant shall not make any alterations,
improvements, additions, utility installations or repairs (hereinafter
collectively referred to as "Alterations") in, on or about the Premises without
Landlord's prior written consent which shall not be unreasonably withheld,
conditioned or delayed. Alterations shall include, but shall not be limited to,
the installation or alteration of security or fire protection systems,
communication systems, millwork, shelving, retrieval or storage systems,
carpeting or other floor covering, window and wall coverings, electrical
distribution systems, lighting fixtures, telephone or computer system wiring,
HVAC and plumbing. At the expiration of the term, Landlord may require the
removal of any Alterations installed by Tenant and the restoration of the
Premises to its prior condition, at Tenant's expense. Should Landlord permit
Tenant to make its own Alterations, Tenant shall use only such contractor as has
been reasonably approved by Landlord, and Landlord may require Tenant to provide
to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such Alterations,
to insure Landlord against any liability for mechanic's and materialmen's liens
and to insure completion of the work. In addition, Tenant shall pay to Landlord
a fee equal to three percent (3%) of the cost of the Alterations to compensate
Landlord for the overhead and other costs it incurs in reviewing the plans for
the Alterations and in monitoring the construction of the Alterations; provided,
however, this fee shall not apply to the construction of the Tenant Improvements
described in the Work Letter Agreement attached hereto. Should Tenant make any
Alterations without the prior approval of Landlord, or use a contractor not
expressly approved by Landlord, Landlord may, at any time during the term of
this Lease, require that Tenant remove all or part of the Alterations and return
the Premises to the condition it was in prior to the making of the Alternations.
In the event Tenant makes any Alterations, Tenant agrees to obtain or cause its
contractor to obtain, prior to the commencement of any work, "builders all-risk"
insurance in an amount approved by Landlord and workers compensation insurance.
12.2 PERMITS. Any Alterations in or about the Premises that Tenant shall
desire to make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building permit. If
Landlord consents to an Alteration, the consent shall be deemed conditioned upon
Tenant acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Landlord prior to the commencement of the work, and
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner. Tenant shall provide Landlord with as-built plans and
specifications for any Alterations made to the Premises.
12.3 MECHANICS LIENS. 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. If Tenant
shall, in good faith, contest the validity of any such lien, Tenant shall
furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to
not less than one and one half times the amount of such contested lien claim
indemnifying Landlord against liability arising out of such lien or claim. Such
bond shall be sufficient in form and amount to free the Premises from the effect
of such lien. In addition, Landlord may require Tenant to pay Landlord's
reasonable attorneys' fees and costs in participating in such action.
12.4 NOTICE. Tenant shall give Landlord not less than ten (10) days'
advance written notice prior to the commencement of any work in the Premises by
Tenant, and Landlord shall have the right to post notices of non-responsibility
in or on the Premises.
12.5 SURRENDER. Subject to Landlord's right to require removal or to elect
ownership as hereinafter provided, all Alterations (Alterations do not include
trade fixtures and equipment) made by Tenant to the Premises shall be the
property
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of Tenant, but shall be considered to be a part of the Premises. At Landlord's
option, the Alterations shall become the property of Landlord at the end of the
term of this Lease; provided, however, Tenant shall be entitled to remove the
HVAC system it installs at the Premises ("Tenant's HVAC System"). If Tenant
removes Tenant's HVAC System, it shall reinstall at the Premises prior to the
end of the term of this Lease, a HVAC system that is comparable to the HVAC
system at the Premises on the Commencement Date of this Lease and such HVAC
system shall be in good working order and condition. Landlord may require on
notice to Tenant, that some or all Alterations be removed prior to the end of
the term of this Lease and that any damages caused by such removal be repaired
at Tenant's sole expense. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises (including, but not limited to,
all doors, windows, floors and floor coverings, skylights, heating and air
conditioning systems, dock boards, truck doors, dock bumpers, plumbing work and
fixtures, electrical systems, lighting facilities, sprinkler systems, fire
detection systems and nonstructural elements of the exterior walls, foundation
and roof (collectively the "Elements of the Premises")) to Landlord in the same
condition as received, ordinary wear and tear and casualty damage excepted,
clean and free of debris and Tenant's personal property, trade fixtures and
equipment. Provided, however, if Landlord has not elected to have Tenant remove
the Alterations, Tenant shall leave the Alterations at the Premises in good
condition and repair, ordinary wear and tear excepted. Tenant shall repair any
damage to the Premises occasioned by the installation or removal of Tenant's
trade fixtures, furnishings, equipment and Alterations. Damage to or
deterioration of any Element of the Premises or any other item Tenant is
required to repair or maintain at the Premises shall not be deemed ordinary wear
and tear if the same could have been prevented by good maintenance practices.
12.6 FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated due
to the expiration of its term or otherwise, and Tenant fails to remove its
property, in addition to any other remedies available to Landlord under this
Lease, and subject to any other right or remedy Landlord may have under
applicable law, Landlord may remove any property of Tenant from the Premises and
store the same elsewhere at the expense and risk of Tenant.
13. DAMAGE AND DESTRUCTION.
13.1 EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Premises is
damaged by fire, earthquake, flood, explosion, the elements, riot, the release
or existence of Hazardous Substances (as defined below) or by any other cause
whatsoever (hereinafter collectively referred to as "damages"), but the damages
are not material (as defined in section 13.2 below), Landlord shall repair the
damages to the Premises as soon as is reasonably possible, and this Lease shall
remain in full force and effect. If all or part of the Premises is destroyed or
materially damaged (as defined in section 13.2 below), Landlord shall have the
right, in its sole and complete discretion, to repair or to rebuild the Premises
or to terminate this Lease. Landlord shall within ninety (90) days after the
discovery of such material damage or destruction notify Tenant in writing of
Landlord's intention to repair or to rebuild or to terminate this Lease. Tenant
shall in no event be entitled to compensation or damages on account of annoyance
or inconvenience in making any repairs, or on account of construction, or on
account of Landlord's election to terminate this Lease. Notwithstanding the
foregoing, if Landlord shall elect to rebuild or repair the Premises after
material damage or destruction, but in good faith determines that the Premises
cannot be substantially repaired within three hundred sixty (360) days after the
date of the discovery of the material damage or destruction, without payment of
overtime or other premiums, and the damage to the Premises will render the
entire Premises unusable during said three hundred sixty (360) day period,
Landlord shall notify Tenant thereof in writing at the time of Landlord's
election to rebuild or repair, and Tenant shall thereafter have a period of
thirty (30) days within which Tenant may elect to terminate this Lease, upon
thirty (30) days' advance written notice to Landlord. Tenant's termination right
described in the preceding sentence shall not apply if the damage was caused by
the negligent or intentional acts of Tenant or its employees, agents,
contractors or invitees. Failure of Tenant to exercise said election within said
thirty (30) day period shall constitute Tenant's agreement to accept delivery of
the Premises under this Lease whenever tendered by Landlord, provided Landlord
thereafter pursues reconstruction or restoration diligently to completion,
subject to delays caused by Force Majeure Events. Subject to section 13.3 below,
if Landlord or Tenant terminates this Lease in accordance with this section
13.1, Tenant shall continue to pay all Base Rent and other amounts due hereunder
which arise prior to the date of termination.
13.2 DEFINITION OF MATERIAL DAMAGE. Damage to the Premises shall be deemed
material if, in Landlord's reasonable judgment, the uninsured cost of repairing
the damage will exceed One Hundred Thousand Dollars ($100,000). If insurance
proceeds are available to Landlord in an amount which is sufficient to pay the
entire cost of repairing all of the damage to the Premises the damage shall be
deemed material if the cost of repairing the damage exceeds Three Hundred
Thousand Dollars ($300,000). Damage to the Premises shall also be deemed
material if (a) the Premises cannot be rebuilt or repaired to substantially the
same condition it was in prior to the damage due to laws or regulations in
effect at the time the repairs will be made, (b) the holder of any mortgage or
deed of trust encumbering the Premises requires that insurance proceeds
available to repair the damage in excess of One Hundred Thousand Dollars
($100,000) be applied to the repayment of the indebtedness secured by the
mortgage or the deed of trust, or (c) the damage occurs during the last twelve
(12) months of the Lease term.
13.3 ABATEMENT OF RENT. If Landlord elects to repair damage to the
Premises and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired, and
the damage was not caused by the negligence or intentional acts of Tenant or its
employees, agents, contractors or invitees, Tenant's Base Rent shall be abated
until the repairs are completed in proportion to the amount of the Premises
which is unusable or inaccessible to Tenant in the ordinary conduct of its
business. Notwithstanding the foregoing, there shall be no abatement of Base
Rent by reason of any portion of the Premises being unusable or inaccessible for
a period equal to five (5) consecutive business days or less.
13.4 TENANT'S ACTS. If such damage or destruction occurs as a result of
the negligence or the intentional acts of Tenant or Tenant's employees, agents,
contractors or invitees, and the proceeds of insurance which are actually
received by Landlord are not sufficient to pay for the repair of all, of the
damage, Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon
demand, the difference between the cost of repairing the damage and the
insurance proceeds received by Landlord.
13.5 TENANT'S PROPERTY. Landlord shall not be liable to Tenant or its
employees, agents, contractors, invitees or customers for loss or damage to
merchandise, tenant improvements, fixtures, automobiles, furniture, equipment,
computers, files or other property (hereinafter collectively "Tenant's
property") located at the Premises. Tenant shall repair or replace all of
Tenant's property at Tenant's sole cost and expense. Tenant acknowledges that it
is Tenant's sole responsibility to obtain adequate insurance coverage to
compensate Tenant for damage to Tenant's property.
13.6 WAIVER. Landlord and Tenant hereby waive the provisions of any
present or future statutes which relate to the termination of leases when leased
property is damaged or destroyed and agree that such event shall be governed by
the terms of this Lease.
14. CONDEMNATION. If any portion of the Premises is taken under the power of
eminent domain, or sold under the threat of the exercise of said power (all of
which are herein called "condemnation"), this Lease shall terminate as to the
part so taken
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as of the date the condemning authority takes title or possession, whichever
first occurs; provided that if so much of the Premises is taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Tenant's business conducted from the Premises, and said taking
lasts for ninety (90) days or more, Tenant shall have the option, to be
exercised only in writing within thirty (30) days after Landlord shall have
given Tenant written notice of such taking (or in the absence of such notice,
within thirty (30) days after the condemning authority shall have taken
possession), to terminate this Lease as of the date the condemning authority
takes such possession. If a taking lasts for less than ninety (90) days.
Tenant's rent shall be abated during said period but Tenant shall not have the
right to terminate this Lease, If Tenant does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that all rent shall be
reduced in the proportion that the usable floor area of the Premises taken bears
to the total usable floor area of the Premises. Landlord shall have the option
in its sole discretion to terminate this Lease as of the taking of possession by
the condemning authority, by giving written notice to Tenant of such election
within thirty (30) days after receipt of notice of a taking by condemnation of
any part of the Premises, provided that the fair market value of the property
taken exceeds Three Hundred Thousand Dollars ($300,000). Any award for the
taking of all or any part of the Premises under the power of eminent domain or
any payment made under threat of the exercise of such power shall be the
property of Landlord, whether such award shall be made as compensation for
diminution in value of the leasehold, for good will, for the taking of the fee,
as severance damages, or as damages for tenant improvements; provided, however,
that Tenant shall be entitled to any separate award for loss of or damage to
Tenant's removable personal property and for moving expenses. In the event that
this Lease is not terminated by reason of such condemnation, and subject to the
requirements of any lender that has made a loan to Landlord encumbering the
Premises, 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. This section, not general principles of
law or California Code of Civil Procedure sections 1230.010 et ~ shall govern
the rights and obligations of Landlord and Tenant with respect to the
condemnation of all or any portion of the Premises.
15. ASSIGNMENT AND SUBLETTING.
15.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld, Landlord shall
respond to Tenant's written request for consent hereunder within thirty (30)
days after Landlord's receipt of the written request from Tenant. Any attempted
Transfer without such consent shall be void and shall constitute a material
default and breach of this Lease. Tenant's written request for Landlord's
consent shall include, and Landlord's thirty (30) day response period referred
to above shall not commence, unless and until Landlord has received from Tenant,
all of the following information: (a) financial statements for the proposed
assignee or subtenant for the past three (3) years prepared in accordance with
generally accepted accounting principles, (b) federal tax returns for the
proposed assignee or subtenant for the past three (3) years, (c) a TRW credit
report or similar report on the proposed assignee or subtenant, (d) a detailed
description of the business the assignee or subtenant intends to operate at the
Premises, (e) the proposed effective date of the assignment or sublease, (f) a
copy of the proposed sublease or assignment agreement which includes all of the
terms and conditions of the proposed assignment or sublease, (g) a detailed
description of any ownership or commercial relationship between Tenant and the
proposed assignee or subtenant and (h) a detailed description of any Alterations
the proposed assignee or subtenant desires to make to the Premises. If the
obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant's written request shall not be considered complete
until the information described in (a), (b) and (c) of the previous sentence has
been provided with respect to each proposed guarantor. "Transfer" shall also
include the transfer (a) if Tenant is a corporation, and Tenant's stock is not
publicly traded over a recognized securities exchange, of more than fifty
percent (50%) of the voting stock of such corporation during the term of this
Lease (whether or not in one or more transfers) or the dissolution, merger or
liquidation of the corporation, or (b) if Tenant is a partnership, limited
liability company, limited liability partnership or other `entity, of more than
twenty five percent (25%) of the profit and loss participation in such
partnership or entity during the term of this Lease (whether or not in one or
more transfers) or the dissolution, merger or liquidation of the partnership,
limited liability company, limited liability partnership or other entity. If
Tenant is a limited or general partnership (or is comprised of two or more
persons, individually or as co-partners), Tenant shall not be entitled to change
or convert to (i) a limited liability company, (ii) a limited liability
partnership or (iii) any other entity which possesses the characteristics of
limited liability without the prior written consent of Landlord, which consent
may be given or withheld in Landlord's sole discretion. Tenant's sole remedy in
the event that Landlord shall wrongfully withhold consent to or disapprove any
assignment or sublease shall be to obtain an order by a court of competent
jurisdiction that Landlord grant such consent; in no event shall Landlord be
liable for damages with respect to its granting or withholding consent to any
proposed assignment or sublease. If Landlord shall exercise any option to
recapture the Premises, or shall deny a request for consent to a proposed
assignment or sublease, Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all losses, liabilities, damages, costs and
claims that may be made against Landlord by the proposed assignee or subtenant,
or by any brokers or other persons claiming a commission or similar compensation
in connection with the proposed assignment or sublease.
15.2 LEVERAGED BUY-OUT. The involvement by Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, sale of company stock, refinancing, transfer, leveraged buy-out or
otherwise) whether or not a formal assignment or hypothecation of this Lease or
Tenant's assets occurs, which results or will result in a reduction of the "Net
Worth" of Tenant, as hereinafter defined, by an amount equal to or greater than
twenty-five percent (25%) of such Net Worth of Tenant as it exists immediately
prior to said transaction or transactions constituting such reduction shall be
considered to be an assignment of this Lease by Tenant to which Landlord may
reasonably withhold its consent (a "Leveraged Buy-out Event"). A Leveraged Buy-
out Event in which the Net Worth of Tenant is reduced by less than twenty-five
percent (25%) shall not be considered an assignment of this Lease for purposes
of this section 15.2. "Net Worth" of Tenant for purposes of this section shall
be the net worth of Tenant established under generally accepted accounting
principles consistently applied.
15.3 STANDARD FOR APPROVAL. Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has complied with each and every
requirement, term and condition of this section 15. Tenant acknowledges and
agrees that each requirement, term and condition in this section 15 is a
reasonable requirement, term or condition. It shall be deemed reasonable for
Landlord to withhold its consent to a Transfer if any requirement, term or
condition of this section 15 is not complied with or: (a) the Transfer would
cause Landlord to be in violation of its obligations under another lease or
agreement to which Landlord is a party; (b) in Landlord's reasonable judgment, a
proposed assignee or subtenant has a smaller net worth than Tenant had on the
date this Lease was entered into with Tenant or is less able financially to pay
the rents due under this Lease as and when they are due and payable; (c) a
proposed assignee's or subtenant's business will impose a burden on the
Premises' parking facilities or utilities that is greater than the burden
imposed by Tenant, in Landlord's reasonable judgment; (d) the terms of a
proposed assignment or subletting will allow the proposed assignee or subtenant
to exercise a right of renewal, right of expansion, right of first offer, right
of first refusal or similar right held by Tenant; (e) a proposed assignee or
subtenant refuses to enter into a written assignment agreement or sublease,
reasonably satisfactory to Landlord, which provides that It will abide by and
assume all of the terms and conditions of this Lease for the term of any
assignment or
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sublease and containing such other terms and conditions as Landlord reasonably
deems necessary; (f) the use of the Premises by the proposed assignee or
subtenant will not be a use permitted by this Lease; (g) Tenant is in default as
defined in section 16 at the time of the request; (h) if requested by Landlord,
the assignee or subtenant refuses to sign a nondisturbance and attornment
agreement in favor of Landlord's lender; (i) Landlord has sued or been sued by
the proposed assignee or subtenant or has otherwise been involved in a legal
dispute with the proposed assignee or subtenant; (j) the assignment or sublease
will result in there being more than one subtenant of the Premises; or (k) the
assignee or subtenant is a governmental or quasi-governmental entity or an
agency, department or instrumentality of a governmental or quasi-governmental
agency.
15.4 ADDITIONAL TERMS AND CONDITIONS. The following terms and conditions
shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall release
Tenant from Tenant's obligations hereunder or alter the primary liability of
Tenant to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any guarantor
from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a Transfer, nor
the acceptance of rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its rights and remedies for the breach of any of the terms or
conditions of this section.
(d) The consent by Landlord to any Transfer shall not constitute a
consent to any subsequent Transfer by Tenant or to any subsequent or successive
Transfer by an assignee or subtenant.
(e) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant shall not
constitute an acknowledgment that no default then exists under this Lease nor
shall such consent be deemed a waiver of any then existing default.
(g) The discovery of the fact that any financial statement relied
upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent null
and void.
(h) Landlord shall not be liable under this Lease or under any
sublease to any subtenant.
(i) No assignment or sublease may be modified or amended without
Landlord's prior written consent.
(j) The occurrence of a transaction described in section 15.2 shall
give Landlord the right (but not the obligation) to require that Tenant
immediately provide Landlord with an additional security deposit equal to two
(2) times the monthly Base Rent payable under the Lease, and Landlord may make
its receipt of such amount a condition to Landlord's consent to such
transaction.
(k) Any assignee of, or subtenant under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Landlord, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Tenant during the term of said assignment or sublease, other than
such obligations as are contrary or inconsistent with provisions of an
assignment or sublease to which Landlord has specifically consented in writing.
15.5 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a 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 this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease or
to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, `Tenant's obligation to return any security
deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
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 as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant 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.
(b) 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 subtenant 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 subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
15.6 TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent the following amounts (hereinafter the "Transfer Premium"): (a)
if a sublease is for less than fifty percent (50%) of the usable square feet in
the Premises, one-half of all amounts received by Tenant from the subtenant in
excess of the amounts payable by Tenant to Landlord hereunder or (b) if a
sublease is for fifty percent (50%) or more of the usable square feet in the
Premises or Tenant assigns the Lease, all amounts received by Tenant from the
subtenant or assignee in excess of the amounts payable by Tenant to Landlord
hereunder. The Transfer Premium shall be reduced by the reasonable brokerage
commissions and legal fees actually paid by Tenant in order to assign the Lease
or to sublet a portion of the Premises, "Transfer Premium" shall mean all Base
Rent, additional rent or other consideration of any type whatsoever payable by
the assignee or subtenant in excess of the Base Rent and additional rent
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payable by Tenant under this Lease. If less than all of the Premises is
transferred, the Base Rent and the additional rent shall be determined on a per
rentable square foot basis. "Transfer Premium" shall also include, but not be
limited to, key money and bonus money paid by the assignee or subtenant to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to the assignee or subtenant or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
the assignee or subtenant in connection with such Transfer.
15.7 LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to the
contrary contained in this section 15, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request by
Tenant to assign this Lease or to sublease space in the Premises, to terminate
this Lease with respect to said space as of the date thirty (30) days after
Landlord's election. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, the Base Rent
and the number of parking spaces Tenant may use shall be adjusted on the basis
of the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the original Premises, and this
Lease as so amended shall continue thereafter in full force and effect, and upon
request of either party, the parties shall execute written confirmation of same.
If Landlord recaptures only a portion of the Premises, it shall construct and
erect at its sole cost such partitions as may be required to sever the space to
be retained by Tenant from the space recaptured by Landlord. Landlord may, at
its option, lease any recaptured portion of the Premises to the proposed
subtenant or assignee or to any other person or entity without liability to
Tenant. Tenant shall not be entitled to any portion of the profit, if any,
Landlord may realize on account of such termination and reletting. Tenant
acknowledges that the purpose of this section is to enable Landlord to receive
profit in the form of higher rent or other consideration to be received from an
assignee or subtenant and to permit Landlord to control the leasing of space in
the Premises. Tenant acknowledges and agrees that the requirements of this
section are commercially reasonable and are consistent with the intentions of
Landlord and Tenant.
15.8 LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses, not to exceed Three
Thousand Dollars ($3,000) per transaction incurred in connection therewith,
including, but not limited to, attorneys', architects', accountants', engineers'
or other consultants' fees.
16. DEFAULT REMEDIES.
16.1 DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in section 16.2. Landlord or Landlord's authorized agent shall have
the right to execute and to deliver any notice of default, notice to pay rent or
quit or any other notice Landlord gives Tenant.
(a) Tenant's failure to make any payment of Base Rent, Real Property
Taxes or any other payment required to be made by Tenant hereunder, as and when
due, where such failure shall continue for a period of three (3) days after
written notice thereof from Landlord to Tenant. In the event that Landlord
serves Tenant with a notice to pay rent or quit pursuant to applicable unlawful
detainer statutes, such notice shall also constitute the notice required by this
section 16.1(a).
(b) Intentionally deleted.
(c) The failure of Tenant to comply with any of its obligations under
sections 4, 9, 11, 12, 15. 18, 23, 25 and 26 where Tenant fails to comply with
its obligations or fails to cure any earlier breach of such obligation within
ten (10) days following written notice from Landlord to Tenant. In the event
Landlord serves Tenant with a notice to quit or any other notice pursuant to
applicable unlawful detainer statutes, said notice shall also constitute the
notice required by this section 16.1(c).
(d) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant
(other than those referenced in sections 16.1(a), (b) and (c), above), where
such failure shall continue for a period of thirty (30) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's non-performance is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. In the event that Landlord serves
Tenant with a notice to quit or any other notice. pursuant to applicable
unlawful detainer statutes, said notice shall also constitute the notice
required by this section 16.1(d).
(e) (i) The making by Tenant or any guarantor of Tenant's.
obligations hereunder of any general arrangement or general assignment for the
benefit of creditors; (ii)Tenant or any guarantor becoming a "debtor" as defined
in 11 U.S.C. 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant or guarantor. the same is dismissed within sixty
(60) days): (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) the insolvency of Tenant. In the event that any provision of this
section 16.1(e) is unenforceable under applicable law, such provision shall be
of no force or effect.
(f) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, was materially false at the time given. Tenant
acknowledges that Landlord has entered into this Lease in material reliance on
such information.
(g) If Tenant is a corporation, partnership, limited liability
company or similar entity, the dissolution or liquidation of Tenant.
16.2 REMEDIES.
(a) In the event of any material default or breach of this Lease by
Tenant, Landlord may, at any time thereafter, with or without notice or demand,
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default:
(i) terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. If
Landlord terminates this Lease, Landlord may recover from Tenant (A) the worth
at the time of award of the unpaid rent which had been earned at the time of
termination; (B) the worth at the time of award of the amount by which the
unpaid rent
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which would have been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided; (C) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; and (D) any
other amount necessary to compensate Landlord for all detriment proximately
caused by Tenant's failure to perform its obligations under the Lease or which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to, the cost of recovering possession of the Premises, expenses
of releasing, including necessary renovation and alteration of the Premises,
reasonable attorneys' fees, any real estate commissions actually paid by
Landlord and the unamortized value of any free rent, reduced rent, tenant
improvement allowance or other economic concessions provided by Landlord. The
"worth at time of award" of the amounts referred to in section 16.2(a)(i)(A) and
(B) shall be computed by allowing interest at the lesser of ten percent (10%)
per annum or the maximum interest rate permitted by applicable law. The worth at
the time of award of the amount referred to in section 16.2(a)(i)(C) shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%). For purposes
of this section 16.2(a)(i), "rent" shall be deemed to be all monetary
obligations required to be paid by Tenant pursuant to the terms of this Lease.
(ii) maintain Tenant's right of possession in which event
Landlord shall have the remedy described in California Civil Code section 1951.4
which permits Landlord to continue this Lease in effect after Tenant's breach
and abandonment and recover rent as it becomes due. In the event Landlord elects
to continue this Lease in effect, Tenant shall have the right to sublet the
Premises or assign Tenant's interest in the Lease subject to the reasonable
requirements contained in section 15 of this Lease and provided further that
Landlord shall not require compliance with any standard or condition contained
in section 15 that has become unreasonable at the time Tenant seeks to sublet or
assign the Premises pursuant to this section 16.2(a)(ii).
(iii) collect sublease rents (or appoint a receiver to collect
such rent) and otherwise perform Tenant's obligations at the Premises, it being
agreed, however, that the appointment of a receiver for Tenant shall not
constitute an election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which the Premises
are located.
(b) No remedy or election hereunder shall be deemed exclusive, but
shall, wherever possible, be cumulative with all other remedies at law or in
equity. The expiration or termination of this Lease and/or the termination of
Tenant's right to possession of the Premises shall not relieve Tenant of
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term of the Lease or by reason of Tenant's occupancy of
the Premises.
(c) If Tenant abandons or vacates the Premises, Landlord may re-enter
the Premises and such re-entry shall not be deemed to constitute Landlord's
election to accept a surrender of the Premises or to otherwise relieve Tenant
from liability for its breach of this Lease. No surrender of the Premises shall
be effective against Landlord unless Landlord has entered into a written
agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery by Tenant to Landlord of possession of the Premises shall not
constitute the termination of the Lease or the surrender of the Premises.
16.3 DEFAULT BY LANDLORD, Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the holder of
any mortgage or deed of trust encumbering the Premises whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. In no event shall Tenant have the
right to terminate this Lease as a result of Landlord's default, and Tenant's
remedies shall be limited to damages and/or an injunction. Tenant hereby waives
its right to recover lost profits or punitive damages arising out of a Landlord
default. This Lease and the obligations of Tenant hereunder shall not be
affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so, if such inability or delay is
caused by reason of a Force Majeure Event, and the time for Landlord's
performance shall be extended for the period of any such delay. Any claim,
demand, right or defense by Tenant that arises out of this Lease or the
negotiations which preceded this Lease shall be barred unless Tenant commences
an action thereon, or interposes a defense by reason thereof, within twelve (12)
months after the date of the inaction, omission, event or action that gave rise
to such claim, demand, right or defense.
16.4 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of Base Rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the Premises.
Accordingly, if any installment of Base Rent or any other sum due from Tenant
shall not be received by Landlord when such amount shall be due, then, without
any requirement for notice or demand to Tenant, Tenant shall immediately pay to
Landlord a late charge equal to six percent (6%) of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder including
the assessment of interest under section 16.5.
16.5 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of ten percent (10%) per annum or the maximum rate
permitted by applicable law. Payment of such interest shall not excuse or cure
any default by Tenant under this Lease; provided, however, that interest shall
not be payable on late charges incurred by Tenant nor on any amounts upon which
late charges are paid by Tenant.
16.6 PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant fails
to pay Base Rent or any other monetary obligation due hereunder on the date it
is due, after Tenant's third failure to pay any monetary obligation on the date
it is due, at Landlord's option, all monetary obligations of Tenant hereunder
shall thereafter be paid by cashiers check, and Tenant shall, upon demand,
provide Landlord with an additional security deposit equal to three (3) months'
Base Rent. If Landlord has required Tenant to make said payments by cashiers
check or to provide an additional security deposit, Tenant's failure to make a
payment by cashiers check or to provide the additional security deposit shall be
a material default hereunder.
17. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease,
Landlord may but shall not be
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obligated to, after three (3) days prior written notice to Tenant, make any such
payment or perform any such act on Tenant's behalf without waiving its rights
based upon any default of Tenant and without releasing Tenant from any
obligations hereunder. Tenant shall pay to Landlord, within ten (10) days after
delivery by Landlord to Tenant of statements therefore, an amount equal to the
expenditures reasonably made by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of this section.
18. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold harmless
Landlord and its employees, partners, agents, contractors, lenders and ground
lessors (said persons and entities are hereinafter collectively referred to as
the "Indemnified Parties") from and against any and all liability, loss, cost,
damage, claims, loss of rents, liens, judgments, penalties, fines, settlement
costs, investigation costs, the cost of consultants and experts, attorneys fees,
court costs and other legal expenses, the effects of environmental
contamination, the cost of environmental testing, the removal, remediation
and/or abatement of Hazardous Substances (as said term are defined below),
insurance policy deductibles and other expenses (hereinafter collectively
referred to as "Damages") arising out of or related to an "Indemnified Matter"
(as defined below). For purposes of this section, an "Indemnified Matter" shall
mean any matter for which one or more of the Indemnified Parties incurs
liability or Damages if the liability or Damages arise out of or involve,
directly or indirectly, (a) Tenant's or its employees, agents, contractors or
invitees (all of said persons or entities are hereinafter collectively referred
to as "Tenant Parties") use or occupancy of the Premises, (b) any act, omission
or neglect of a Tenant Party, (c) Tenant's failure to perform any of its
obligations under the Lease, (d) the existence, use or disposal of any Hazardous
Substance (as defined below) brought on to the Premises by a Tenant Party, or
(e) any other matters for which Tenant has agreed to indemnify Landlord pursuant
to any other provision of this Lease. Tenant's obligations hereunder shall
include, but shall not be limited to (f) compensating the Indemnified Parties
for Damages arising out of Indemnified Matters within ten (10) days after
written demand from an indemnified Party and (g) providing a defense, with
counsel reasonably satisfactory to the Indemnified Party, at Tenant's sole
expense, within ten (10) days after written demand from the Indemnified Party,
of any claims, action or proceeding arising out of or relating to an Indemnified
Matter whether or not litigated or reduced to judgment and whether or not well
founded. If Tenant is obligated to compensate an Indemnified Party for Damages
arising out of an Indemnified Matter, Landlord shall have the immediate and
unconditional right, but not the obligation, without notice or demand to Tenant,
to pay the damages and Tenant shall, upon ten (10) days advance written notice
from Landlord, reimburse Landlord for the costs incurred by Landlord. The
Indemnified Parties need not first pay any Damages to be indemnified hereunder.
Tenant's obligations under this section shall not be released, reduced or
otherwise limited because one or more of the Indemnified Parties are or may be
actively or passively negligent with respect to an Indemnified Matter or because
an Indemnified Party is or was, partially responsible for the Damages incurred.
This indemnity is intended to apply to the fullest extent permitted by
applicable law. Tenant's obligations under this section shall survive the
expiration or termination of this Lease unless specifically waived in writing by
Landlord after said expiration or termination.
19. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for loss of or damage to the merchandise, tenant improvements,
fixtures, furniture, equipment, computers, files, automobiles, or other property
of Tenant, Tenant's employees, agents, contractors or invitees, or any other
person in or about the Premises, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents, contractors or invitees, whether
such damage or injury is caused by or results from any cause whatsoever
including, but not limited to, theft, criminal activity at the Premises,
negligent security measures, bombings or bomb scares, Hazardous Substances,
fire, steam, electricity, gas, water or rain, flooding, breakage of pipes,
sprinklers, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said damage or injury results from conditions arising upon the
Premises, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Premises, and regardless of
whether the cause of the damage or injury arises out of Landlord's or its
employees, agents or contractors negligent or intentional acts. Landlord shall
not be liable for any damages arising from any act or neglect of any employees,
agents, contractors or invitees of any other tenant, occupant or user of the
Premises. Tenant, as a material part of the consideration to Landlord hereunder,
hereby assumes all risk of damage to Tenant's property or business or injury to
persons, in, upon or about the Premises arising from any cause, including
Landlord's negligence or the negligence of its employees, agents or contractors,
and Tenant hereby waives all claims in respect thereof against Landlord, its
employees, agents and contractors.
20. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Premises and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease if the transferee assumes Landlord's obligations under this Lease; and
Tenant hereby agrees to look solely to Landlord's transferee for the performance
of Landlord's obligations hereunder after the date of the transfer. Upon such a
transfer, Landlord shall, at its option, return Tenant's security deposit to
Tenant or transfer Tenant's security deposit to Landlord's transferee and, in
either event, Landlord shall have no further liability to Tenant for the return
of its security deposit. Subject to the rights of any lender holding a mortgage
or deed of trust encumbering all or part of the Premises, Tenant agrees to look
solely to Landlord's equity interest in the Premises for the collection of any
judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or willful misconduct of Landlord, its partners, employees and
agents. No other property or assets of Landlord shall be subject to levy,
execution or other enforcement procedure for the satisfaction of any judgment or
writ obtained by Tenant against Landlord. No partner, employee or agent of
Landlord shall be personally liable for the performance of Landlord's
obligations hereunder or be named as a party in any lawsuit arising out of or
related to, directly or indirectly, this Lease and the obligations of Landlord
hereunder. The obligations under this Lease do not constitute personal
obligations of the individual partners of Landlord, if any, and Tenant shall not
seek recourse against the individual partners of Landlord or their assets.
21. SIGNS. Tenant shall not make any changes to the exterior of the Premises,
install any exterior lights, decorations, balloons, flags, pennants, banners, or
painting, or erect or install any signs, windows or door lettering, placards,
decorations, or advertising media or any type which can be viewed from the
exterior of the Premises, without Landlord's prior written consent, which may be
given or withheld in Landlord's reasonable discretion. Upon vacation of the
Premises, Tenant shall remove all signs and repair, paint, and/or replace the
building facia surface to which its signs are attached. Tenant shall obtain all
applicable governmental permits and approvals for signs and exterior treatments.
22. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
section 1.12, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party. The commission payable to Landlord's broker with respect to
this Lease shall be pursuant to the terms of the separate commission agreement
in effect between Landlord and Landlord's broker. Landlord's broker shall pay a
portion of its commission to Tenant's broker, if so provided in any agreement
between Landlord's broker and Tenant's broker. Nothing in this Lease shall
impose any obligation on Landlord to pay a commission or fee to any party
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other than Landlord's broker. Landlord shall pay the commission due to CB
Xxxxxxx Xxxxx.
23. ESTOPPEL CERTIFICATE.
23.1 DELIVERY OF CERTIFICATE. Tenant shall from time to time upon not less
than ten (10) days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request including, but not limited to, the following:
(a) that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) (b) the date to which the Base Rent and
other charges are paid in advance and the amounts so payable, (c) that there are
not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on
the part of Landlord, or specifying such defaults or unfulfilled obligations, if
any are claimed, (d) that all tenant improvements to be constructed by Landlord,
if any, have been completed in accordance with Landlord's obligations and (e)
that Tenant has taken possession of the Premises. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.
23.2 FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the failure of
Tenant to deliver such statement within such time shall constitute a material
default of Tenant hereunder.
24. FINANCIAL INFORMATION. From time to time, at Landlord's request, Tenant
shall cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord a current quarterly financial statement for Tenant
and Tenant's financial statements for the previous two accounting years. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant. Prior
to receiving confidential financial information from Tenant, Landlord shall
execute a confidentiality agreement prepared by Tenant and including reasonable
terms and conditions relating to the dissemination of confidential financial
information. There shall be no limitations on the dissemination by Landlord of
financial information that is publicly available or is otherwise not
confidential.
25. HAZARDOUS SUBSTANCES.
25.1 USE. Notwithstanding anything contained in this Lease to the
contrary, Tenant has not caused or permitted, and shall not cause or permit any
Hazardous Substances (as defined below) to be brought upon, kept, stored,
discharged, released or used in, under or about the Premises by Tenant, its
agents, employees, contractors, subcontractors, licensees or invitees, unless(a)
such Hazardous Substances are reasonably necessary to Tenant's business and will
be handled, used, kept, stored and disposed of in a manner which complies with
all Hazardous Substances Laws (as defined below); (b) Tenant will comply with
such other rules or requirements as Landlord may from time to time impose,
including without limitation that (i) such materials are in small quantities,
properly labeled and contained, (ii) such materials are handled and disposed of
in accordance with the highest accepted industry standards for safety, storage,
use and disposal, and (iii) such materials are for use in the ordinary course of
business (i.e., as with office or cleaning supplies), (c) notice of and a copy
----
of the current material safety data sheet is provided to Landlord for each such
Hazardous Substances, and (d) Landlord shall have granted its prior written
consent to the use of such Hazardous Substances, which consent may be given or
withheld in Landlord's sole discretion. Notwithstanding anything to the contrary
contained in this Lease, Tenant shall not install storage tanks or electrical
generators of any size or shape in or around the Premises, above or below
ground, without the consent of the Landlord which may be given or withheld in
Landlord's sole discretion.
25.2 DEFINITION. As used herein, the term "Hazardous Substances" means any
(a) oil, petroleum, petroleum products, flammable substances, explosives,
radioactive materials, hazardous wastes or substances, toxic wastes or
substances or any other wastes, materials or pollutants which (I) pose a hazard
to the Premises or to persons on or about the Premises or (ii) cause the
Premises to be in violation of any Hazardous Substances Laws (as hereinafter
defined); (b)asbestos in any form, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels
of polychlorinated biphenyls, or radon gas; (c) chemical, material or substance
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous waste," or "toxic substances" or words of similar import under any
applicable local, state or federal law or under the regulations adopted or
publications promulgated pursuant thereto, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. (S) 9601, et sea. the Resources Conservation Recovery Act, 42
------
U.S.C. (S) 6901, et seq. the Hazardous Materials Transportation Act, as amended,
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49 U.S.C. (S) 1801, et sea. the Federal Water Pollution Control Act,, as
------
amended, 33 U.S.C. (S) 1251, et see. Sections 25115, 25117, 25122.7, 25140,
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25249.8, 25281, 25316 and 25501 of the California Health and Safety Code; and
Title 22 of the California Code of Regulations, Division 4.5, Chapter 11;(d)
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or may or could pose a hazard to the
health and safety of the occupants of the Premises or the owners and/or
occupants of property adjacent to or surrounding the Premises, or any other
person coming upon the Premises or adjacent property; and (e) other chemical,
materials or substance which may or could pose a hazard to the environment. As
used here the term "Hazardous Substances Laws" means any federal, state or local
laws, ordinances, regulations or policies relating to the environment, health
and safety, and Hazardous Substances (including, without limitation, the use,
handling, transportation, production, disposal, discharge or storage thereof) or
to industrial hygiene or the environmental conditions on, under or about the
Premises, including, without limitation, soil, groundwater and indoor and
ambient air conditions. Tenant shall at all times and in all respects comply
with all Hazardous Substances Laws.
25.3 REMEDIATION. Upon expiration or earlier termination of this Lease,
Tenant shall, at Tenant's sole cost and expense, cause all Hazardous Substances
brought on the Premises by Tenant to be removed from the Premises in compliance
with all applicable Hazardous Substances Laws, If Tenant or its employees,
agents, or contractors violates the provisions of this section, or if Tenant's
acts, negligence, or business operations contaminate, or expand the scope of
contamination of, the Premises from such Hazardous Substances, then Tenant shall
promptly, at Tenant's expense, take all investigatory and/or remedial action
(collectively, the "Remediation") that is necessary in order to clean up, remove
and dispose of such Hazardous Substances causing the violation on the Premises
or the underlying groundwater or the properties adjacent to the Premises to the
extent such contamination was caused by Tenant, in compliance with all
applicable Hazardous Substances Laws. Tenant shall further repair any damage to
the Premises caused by the Hazardous Substances contamination. Tenant shall
provide prior written notice to Landlord of such Remediation, and Tenant shall
commence such Remediation no later than thirty (30) days after such notice to
Landlord and diligently and continuously complete such Remediation. Such written
notice shall also include Tenant's method, time and procedure for such
Remediation and Landlord shall have the right to require reasonable changes in
such method, time or procedure of the Remediation. Tenant shall not take any
Remediation in response to the presence of any Hazardous Substances in or about
the Premises or enter into any settlement agreement, consent decree or other
compromise in respect to any claims relating to any Hazardous Substances 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 interests with respect
thereto.
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25.4 NOTIFICATION. Tenant shall immediately notify Landlord in writing of:
(a) any enforcement, cleanup. removal or other governmental or regulatory action
threatened, instituted, or completed pursuant to any Hazardous Substances Laws
with respect to the Premises; (b) any claim, demand, or complaint made or
threatened by any person against Tenant or the Premises relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Substances; and (c) any reports made to any governmental authority
arising out of any Hazardous Substances on or removed from the Premises.
Landlord shall have the right (but not the obligation) to join and participate,
as a party, in any legal proceedings or actions affecting the Premises initiated
in connection with any Hazardous Substances Laws.
25.5 No RELEASE. Tenant's obligations under this section and under section
18 shall survive the expiration or earlier termination of this Lease and shall
continue to be binding on Tenant notwithstanding such expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Landlord and Tenant shall release Tenant of its obligations
under this section or section 18 unless specifically so agreed by Landlord in
writing at the time such agreement is entered into.
25.6 Violation of Laws. To the actual knowledge of Landlord, without duty
of investigation, as of the date of this Lease, Landlord has received no written
notice that the Premises contains Hazardous Substances that are in violation of
any state or Federal law or regulation. For purposes of the forgoing, the actual
knowledge of Landlord shall be limited to the actual knowledge of Xxxxx 0.
Xxxxxxxxxx.
26. SUBORDINATION.
26.1 EFFECT OF SUBORDINATION. This Lease, and any Option (as defined
below) granted hereby, upon Landlord's written election, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation or security now or hereafter placed upon the Premises and to any
and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such
person or entity. If any mortgagee, trustee or ground lessor shall elect to have
this Lease and any Options granted hereby prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof to Tenant,
this Lease and such Options shall be deemed prior to such mortgage, deed of
trust or ground lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof. In the event of the foreclosure of a security device,
the new owner shall not (a) be liable for any act or omission of any prior
landlord or with respect to events occurring prior to its acquisition of title,
(b) be liable for the breach of this Lease by any prior landlord, (c) be subject
to any offsets or defenses which Tenant may have against the prior landlord or
(d) be liable to Tenant for the return of its security deposit.
25.2 EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge any
documents Landlord reasonably requests that Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Tenant's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Tenant hereunder.
27. OPTIONS.
27.1 DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease, (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises and (3) the right or
option to terminate this Lease prior to its expiration date or to reduce the
size of the Premises. Any Option granted to Tenant by Landlord must be evidenced
by a written option agreement attached to this Lease as a rider or addendum or
said option shall be of no force or effect.
27.2 OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant and may be exercised only by the
original Tenant while occupying the entire Premises and may not be exercised or
be assigned, voluntarily or involuntarily, by or to any person or entity other
than Tenant, including, without limitation, any transferee approved by Landlord
in accordance with section 15. The Options, if any, herein granted to Tenant are
not assignable separate and apart from this Lease, nor may any Option be
separated from this Lease in any manner, either by reservation or otherwise. If
at any time an Option is exercisable by Tenant, the Lease has been assigned, or
a sublease exists as to any portion of the Premises, the Option shall be deemed
null and void and neither Tenant nor any assignee or subtenant shall have the
right to exercise the Option.
27.3 MULTIPLE OPTIONS. In the event that Tenant has multiple Options to
extend or renew this Lease a later Option cannot be exercised unless the prior
Option to extend or renew this Lease has been so exercised.
27.4 EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to exercise
an Option (i) during the time commencing from the date Landlord gives to Tenant
a notice of default pursuant to section 16.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease. The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this section.
27.5 LIMITATIONS ON OPTIONS. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any options, rights of first
refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space
becomes available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity.
28. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the
name and address of the Building upon not less than ninety (90) days prior
written notice and (b) to place signs, notices or displays upon the roof,
interior, exterior of the Building. Landlord reserves the right to use the
exterior walls of the Premises, and the area beneath, adjacent to and above the
Premises together with the right to install, use, maintain and replace
equipment, machinery, pipes, conduits and wiring through the Premises, which
serve other real property provided that Landlord's use does not unreasonably
interfere with Tenant's use of the Premises. Landlord will provide reasonable
advance notice to Tenant of its intention to take actions pursuant to this
section, and Landlord shall use commercially reasonable efforts to minimize
interference with Tenant's use of the Premises when taking such actions.
Landlord shall not place signage on the building except for "for sale" signs at
any time and "for lease" signs during the last twelve (12) months of a lease
term.
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29. HOLDING OVER, If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable shall be the greater of two hundred
percent (200%) of the Base Rent payable immediately preceding the termination
date of this Lease or one hundred twenty-five percent (125%) of the fair market
Base Rent for the Premises as of the date Tenant holds over, and all Options, if
any, shall be deemed terminated and be of no further effect. If Tenant remains
in possession of the Premises or any part thereof after the expiration of the
term hereof without Landlord's consent, Tenant shall, at Landlord's option, be
treated as a tenant at sufferance or a trespasser. Nothing contained herein
shall be construed to constitute Landlord's consent to Tenant holding over at
the expiration or earlier termination of the Lease term or to give Tenant the
right to hold over after the expiration or earlier termination of the Lease
term. Tenant hereby agrees to indemnify, hold harmless and defend Landlord from
any cost, loss, claim or liability (including attorneys' fees) Landlord may
incur as a result of Tenant's failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.
30. LANDLORD'S ACCESS. Landlord and Landlord's agents, contractors and
employees shall have the right to enter the Premises at reasonable times upon
reasonable advance notice for the purpose of inspecting the Premises, performing
any services required of Landlord, showing the Premises to prospective
purchasers, lenders, or tenants, undertaking safety measures and making
alterations, repairs, improvements or additions to the Premises. In the event of
an emergency, Landlord may gain access to the Premises by any reasonable means,
and Landlord shall not be liable to Tenant for damage to the Premises or to
Tenant's property resulting from such access.
31. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises, and Landlord shall have no liability to Tenant due
to its failure to provide such services. Tenant assumes all responsibility for
the protection of Tenant, its agents, employees, contractors and invitees and
the property of Tenant and of Tenant's agents, employees, contractors and
invitees from acts of third parties.
32. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not interfere
with the use of the Premises by Tenant. Tenant shall sign any of the
aforementioned documents within thirty (30) days after Landlord's request and
Tenant's failure to do so shall constitute a material default by Tenant. The
obstruction of Tenant's view, air, or light by any structure erected in the
vicinity of the Premises, whether by Landlord or third parties, shall in no way
affect this Lease or impose any liability upon Landlord.
33. TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Premises or the metropolitan area in
which the Premises is located.
34. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
35. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.
36. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, hut not limited to, Base Rent
and late charges shall be deemed to be rent.
37. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed in
section 1.13 contain all agreements of the parties with respect to the lease of
the Premises and any other matter mentioned herein. No prior or contemporaneous
agreement or understanding pertaining to any such matter shall be effective.
Except as otherwise stated in this Lease, Tenant hereby acknowledges that no
real estate broker nor Landlord or any employee or agents of any of said persons
has made any oral or written warranties or representations to Tenant concerning
the condition or use by Tenant of the Premises or concerning any other matter
addressed by this Lease.
38. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
39. NOTICES. All notices required or permitted by this Lease shall be in
writing and may be delivered (a) in person (by hand, by messenger or by courier
service), (b) by U.S. Postal Service regular mail, (c) by U.S. Postal Service
certified mail, return receipt requested, (d) by US, Postal Service Express
Mail, Federal Express or other overnight courier, or (e) by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this section. Any notice permitted or required hereunder, and any
notice to pay rent or quit or similar notice, shall be deemed personally
delivered to Tenant on the date the notice is personally delivered to any
employee of Tenant at the address set forth in section 1.14. The addresses set
forth in section 1.14 of this Lease shall be the address of each party for
notice purposes. Landlord or Tenant may by written notice to the other specify a
different address for notice purposes. A copy of all notices required or
permitted to be given to Landlord hereunder shall be concurrently transmitted to
such party or parties at such addresses as Landlord may from time to time
hereinafter designate by written notice to Tenant. Any notice sent by regular
mail or by certified mail, return receipt requested, shall be deemed given three
(3) days after deposited with the U.S. Postal Service. Notices delivered by U.S.
Express Mail, Federal Express or other courier shall be deemed given on the date
delivered by the carrier to the appropriate party's address for notice purposes.
If any notice is transmitted by facsimile transmission, the notice shall be
deemed delivered upon telephone confirmation of receipt of the transmission
thereof at the appropriate party's address for notice purposes. A copy of all
notices delivered to a party by facsimile transmission shall also be mailed to
the party on the date the facsimile transmission is completed. If notice is
received on Saturday, Sunday or a legal holiday, it shall be deemed received on
the next business day. Nothing contained herein shall be construed to limit
Landlord's right to serve any notice to pay rent or quit or similar notice by
any method permitted by applicable law, and any such notice shall be effective
if served in accordance with any method permitted by applicable law whether or
not the requirements of this section have been met.
40. WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be
deemed an accord and satisfaction.
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41. COVENANTS. This Lease shall be construed as though Landlord's covenants
contained herein are independent and not dependent and Tenant hereby waives the
benefit of any statute to the contrary. All provisions of this Lease to be
observed or performed by Tenant are both covenants and conditions.
42. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state in which the Premises is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Premises is located.
43. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled to
reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such default. Landlord and Tenant agree that attorneys' fees incurred with
respect to defaults and bankruptcy are actual pecuniary losses within the
meaning of section 365(b)(1)(B) of the Bankruptcy Code or any successor
statute.
44. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction or going-out-of-business sale upon the
Premises.
45. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
46. QUIET POSSESSION. Subject to the other terms and conditions of this Lease,
and provided Tenant is not in default hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.
47. AUTHORITY. If Tenant is a corporation, trust, limited liability company,
limited liability partnership or general or limited partnership, Tenant, and
each Individual executing this Lease on behalf of such entity, represents and
warrants that such individual is duly authorized to execute and deliver this
Lease on behalf of said entity, that said entity is duly authorized to enter
into this Lease, and that this Lease is enforceable against said entity in
accordance with its terms. If Tenant is a corporation, trust, limited liability
company, limited liability partnership or other partnership, Tenant shall
deliver to Landlord upon demand evidence of such authority satisfactory to
Landlord.
48. CONFLICT. Except as otherwise provided herein to the contrary, any conflict
between the printed provisions, exhibits, addenda or riders of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
49. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with section 39 on one Tenant shall be deemed service of notice on
all Tenants.
50. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
51. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
52. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship
of principal and agent, partnership, joint venturer or any association between
Landlord and Tenant.
53. CONFIDENTIALITY. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute proprietary information of Landlord.
Disclosure of the terms hereof could adversely affect the ability of Landlord to
negotiate other leases. Tenant agrees that it and its partners, officers,
directors, employees, brokers, and attorneys, if any, shall not disclose the
terms and conditions of this Lease to any other person or entity without the
prior written consent of Landlord which may be given or withheld by Landlord, in
Landlord's sole discretion. It is understood and agreed that damages alone would
be an inadequate remedy for the breach of this provision by Tenant, and Landlord
shall also have the right to seek specific performance of' this provision and to
seek injunctive relief to prevent its breach or continued breach.
54. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-
COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT
OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE OR REGULATION,
EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR
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LANDLORD'S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER
BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT
TO LEASE THE PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD ONLY WHEN
FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD TENANT
REALTY ASSOCIATES IOWA CORPORATION, XXXXXXXXXX.XXX, INC., a Delaware
a Delaware corporation corporation
By: /s/ Xxxxx Xxxxxx By:__________________________________
-----------------------------
_________________________________ _____________________________________
(print name) (print name)
Its:_____________________________ Its:_________________________________
(print title) (print title)
By: /s/ Xxxxx Xxxxxxx
---------------------------------
(print name)
Its:________________________________
(print title)
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Addendum to Standard Industrial Lease (the "Lease")
dated the 10th day of August, 1999 Between
Realty Associates Iowa Corporation ("Landlord") and
XxxxXxxxxx.xxx, Inc. ("Tenant")
It is hereby agreed by Landlord and Tenant that the provisions of this
Addendum are a part of the Lease. If there is a conflict between the terms and
conditions of this Addendum and the terms and conditions of the Lease, the terms
and conditions of this Addendum shall control. Capitalized terms in this
Addendum shall have the same meaning as capitalized terms in the Lease, and, if
a Work Letter Agreement is attached to this Lease, as those terms have been
defined in the Work Letter Agreement.
1. Base Rent Increase. The Work Letter Agreement attached to the Lease as
------------------
Exhibit "C" provides Tenant with a "Tenant Improvement Allowance" of up to Five
Hundred Thousand Dollars ($500,000.00). Any portion of the Tenant Improvement
Allowance paid by Landlord pursuant to the Work Letter Agreement shall be repaid
to Landlord by Tenant in equal monthly installments by amortizing the amount of
the Tenant Improvement Allowance paid by Landlord over the months of the initial
Lease term remaining after Landlord makes a disbursement of the Tenant
Improvement Allowance with an interest factor from the date of such disbursement
of eleven percent (11%) per annum. The additional amount payable by Tenant each
month shall be added to the Base Rent described in section 1.9 of the Lease and
shall be treated as additional Base Rent for all purposes. For example, if
Landlord disburses the $250,000 of the Tenant Improvement Allowance to Tenant in
the sixth month of the initial lease term, and Landlord makes a final
disbursement of the Tenant Improvement Allowance in the amount of $250,000 in
the twelfth month of the initial Lease term, the. Base Rent would be increased
on the first day of the seventh month of the initial term by $3,544.02 per month
and would be increased on the first day of the thirteenth month of the initial
lease term by an additional $3,656.47 per month (i.e., the total Base Rent
beginning on the first day of the seventh month would be $45,766.20, and the
total Base Rent on the first day of the thirteenth month would be $49,422.67).
2. Abatement of Rent. Landlord hereby agrees to conditionally waive the
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Base Rent due between the Commencement Date and the first to occur of (a) the
date which is sixty (60) days after the Commencement Date and (b) the date
Tenant commences business operations from the Premises. No amounts due to
Landlord under the Lease other than the Base Rent referred to above shall be
conditionally waived. In the event Tenant commits a default as defined in
section 16 of the Lease, Base Rent coming due thereafter shall not be waived,
and all Base Rent that Landlord conditionally waived in the past shall be
immediately due and payable by Tenant to Landlord without notice or demand from
Landlord. If the Lease expires in accordance with its terms, and does not
terminate as a result of a default by Tenant, Landlord agrees to permanently
waive the Base Rent it has conditionally waived.
3. Option to Extend. Landlord hereby grants to Tenant the option to extend
----------------
the term of the Lease for two (2) consecutive five (5)-year periods (the
"Extension Options") commencing when the initial lease term expires and when the
first option term expires upon each and all of the following terms and
conditions:
(a) Tenant shall give to Landlord on a date which is prior to the date that
the applicable option period would commence (if exercised) by at least three
hundred sixty (360) days and not more than four hundred fifty (450) days, a
written notice of the exercise of the option to extend the Lease for said
additional term, time being of the essence. Such notice shall be given in
accordance with the requirements of section 39 of the Lease. If notification of
the exercise of an option is not so given and received, all options granted
hereunder shall automatically expire.
(b) The provisions of section 27 of the Lease apply to the option granted
hereunder.
(c) All of the terms and conditions of the Lease except where specifically
modified by this Addendum shall apply to each option term.
(d) The Base Rent payable during each option term shall be the Market Rate
on the date the option term commences.
(e) The term "Market Rate" shall mean the annual amount per rentable square
foot that a willing, comparable renewal tenant would pay and a willing,
comparable landlord of a similar industrial building would accept at arm's
length for similar space, giving appropriate consideration to the following
matters: (i) annual rental rates per rentable square foot; (ii) the type of
escalation clauses (including, but without limitation, operating expense, real
estate taxes, and CPI) and the extent of liability under the escalation clauses
(i.e., whether determined on a "net lease" basis or by increases over a
particular base year or base dollar amount); (iii) rent abatement provisions
reflecting free rent and/or no rent during the lease term; (iv) length of lease
term; (v) size and location of premises being leased; and (vi) other generally
applicable terms and conditions of tenancy for similar space; provided, however,
Tenant shall not be entitled to any tenant improvement or refurbishment
allowance. The Market Rate may also designate periodic rental increases, a new
Base Year and similar economic adjustments. The Market Rate shall be the Market
Rate in effect as of the beginning of the applicable option period, even though
the determination may be made in advance of that date, and the parties may use
recent trends in rental rates in determining the proper Market Rate as of the
beginning of the option period.
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(f) If Tenant exercises the Extension Option, Landlord shall determine the
Market Rate by using its good faith judgment. Landlord shall provide Tenant with
written notice of such amount not less than one hundred eighty (180) days prior
to the day the option term will commence. Tenant shall have fifteen (15) days
("Tenant's Review Period") after receipt of Landlord's notice of the new rental
within which to accept such rental. In the event Tenant fails to accept in
writing such rental proposal by Landlord, then such proposal shall be deemed
rejected, and Landlord and Tenant shall attempt to agree upon such Market Rate,
using their best good faith efforts. If Landlord and Tenant fail to reach
agreement within fifteen (15) days following Tenant's Review Period ("Outside
Agreement Date"), then each party shall place in a separate sealed envelope
their final proposal as to the Market Rate, and such determination shall be
submitted to arbitration in accordance with subsections (i) through (v) below.
In the event that Landlord fails to timely generate the initial notice of
Landlord's opinion of the Market Rate on or before the day that is one hundred
eighty (180) days prior to the date the option term will commence, then Tenant
may commence such negotiations by providing the initial notice, in which event
Landlord shall have fifteen (15) days ("Landlord's Review Period") after receipt
of Tenant's notice of the new rental within which to accept such rental. In the
event Landlord fails to accept in writing such rental proposed by Tenant, then
such proposal shall be deemed rejected, and Landlord and Tenant shall attempt in
good faith to agree upon such Market Rate, using their best good faith efforts.
If Landlord and Tenant fail to reach agreement within fifteen (15) days
following Landlord's Review Period (which shall be, in such event, the "Outside
Agreement Date" in lieu of the above definition of such date), then each party
shall place in a separate sealed envelope their final proposal as to Market
Rate, and such determination shall be submitted to arbitration in accordance
with subsections (i) through (v) below.
ARBITRATION OF DISPUTES
-----------------------
(i) LANDLORD AND TENANT SHALL MEET WITH EACH OTHER WITHIN FIVE (5)
BUSINESS DAYS AFTER THE OUTSIDE AGREEMENT DATE AND EXCHANGE THEIR SEALED
ENVELOPES AND THEN OPEN SUCH ENVELOPES IN EACH OTHER'S PRESENCE. IF LANDLORD AND
TENANT DO NOT MUTUALLY AGREE UPON THE MARKET RATE WITHIN ONE (1) BUSINESS DAY OF
THE EXCHANGE AND OPENING OF ENVELOPES, THEN, WITHIN TEN (10) BUSINESS DAYS OF
THE EXCHANGE AND OPENING OF ENVELOPES, LANDLORD AND TENANT SHALL AGREE UPON AND
JOINTLY APPOINT A SINGLE ARBITRATOR WHO SHALL BY PROFESSION BE A REAL ESTATE
BROKER OR AGENT WHO SHALL HAVE BEEN ACTIVE OVER THE FIVE (5) YEAR PERIOD ENDING
ON THE DATE OF SUCH APPOINTMENT IN THE LEASING OF INDUSTRIAL BUILDINGS SIMILAR
TO THE PREMISES IN THE GEOGRAPHICAL AREA OF THE PREMISES. NEITHER LANDLORD NOR
TENANT SHALL CONSULT WITH SUCH BROKER OR AGENT AS TO HIS OR HER OPINION AS TO
THE MARKET RATE PRIOR TO THE APPOINTMENT. THE DETERMINATION OF THE ARBITRATOR
SHALL BE LIMITED SOLELY TO THE ISSUE OF WHETHER LANDLORD'S OR TENANT'S SUBMITTED
MARKET RATE FOR THE PREMISES IS THE CLOSEST TO THE ACTUAL MARKET RATE FOR THE
PREMISES AS DETERMINED BY THE ARBITRATOR, TAKING INTO ACCOUNT THE REQUIREMENTS
FOR DETERMINING MARKET RATE SET FORTH HEREIN. SUCH ARBITRATOR MAY HOLD SUCH
HEARINGS AND REQUIRE SUCH BRIEFS AS THE ARBITRATOR, IN HIS OR HER SOLE
DISCRETION, DETERMINES IS NECESSARY. IN ADDITION, LANDLORD OR TENANT MAY SUBMIT
TO THE ARBITRATOR WITH A COPY TO THE OTHER PARTY WITHIN FIVE (5) BUSINESS DAYS
AFTER THE APPOINTMENT OF THE ARBITRATOR ANY MARKET DATA AND ADDITIONAL
INFORMATION SUCH PARTY DEEMS RELEVANT TO THE DETERMINATION OF THE MARKET RATE
("RR DATA"), AND THE OTHER PARTY MAY SUBMIT A REPLY IN WRITING WITHIN FIVE (5)
BUSINESS DAYS AFTER RECEIPT OF SUCH RR DATA.
(ii) THE ARBITRATOR SHALL, WITHIN THIRTY (30) DAYS OF HIS OR HER
APPOINTMENT, REACH A DECISION AS TO WHETHER THE PARTIES SHALL USE LANDLORD'S OR
TENANT'S SUBMITTED MARKET RATE AND SHALL NOTIFY LANDLORD AND TENANT OF SUCH
DETERMINATION.
(iii) THE DECISION OF THE ARBITRATOR SHALL BE FINAL AND BINDING UPON
LANDLORD AND TENANT.
(iv) IF LANDLORD AND TENANT FAIL TO AGREE UPON AND APPOINT AN
ARBITRATOR, THEN THE APPOINTMENT OF THE ARBITRATOR SHALL BE MADE BY THE
PRESIDING JUDGE OF THE LOS ANGELES COUNTY SUPERIOR COURT, OR, IF HE OR SHE
REFUSES TO ACT, BY ANY JUDGE HAVING JURISDICTION OVER THE PARTIES.
(v) THE COST OF THE ARBITRATION SHALL BE PAID BY LANDLORD AND TENANT
EQUALLY.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
DECIDED BY NEUTRAL ARBITRATION AS. PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
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AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
(Landlord initials) (Tenant initials)
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4. Assignment and Subleasing. Notwithstanding anything to the contrary
-------------------------
contained in section 15 of the Lease, Tenant shall have the right, without
Landlord's consent, upon fifteen (15) days advance written notice to Landlord,
to assign the Lease to any entity which acquires substantially all of Tenant's
stock or assets: provided. that such assignment is subject to the satisfaction
of the following conditions:
(a) The entity that assumes the Lease shall have a net worth equal to
or greater than Tenant's as of the date of the assignment;
(b) In addition to the requirements of this Addendum section, any
such assignment shall be subject to all of the terms, covenants and conditions
of the Lease;
(c) The use of the Premises by the assignee must be permitted by the
Lease;
(d) Prior to the date an assignment will take effect, the assignee
and Tenant shall enter into a commercially reasonable consent to assignment
agreement; and
(e) Prior to the date an assignment will take effect, Tenant shall
pay the reasonable costs and expenses not to exceed Five Thousand Dollars
($5,000) (including legal fees) incurred by Landlord in confirming that the
assignment meets the requirements of this Addendum section and in preparing and
negotiating the consent to assignment agreement.
5. Antennas. Tenant shall have the right to install and use one or more
--------
satellite dishes or other antennas on the roof of the Premises (collectively,
"Antennas"). Prior to the installation of an Antenna, Tenant shall submit plans
and specifications to Landlord for its review and approval, which approval shall
not be unreasonably withheld, conditioned or delayed. Tenant shall be solely
responsible for the cost of installation, operation, maintenance, insurance,
compliance with all laws and ordinances, and removal of the Antennas and
repairing any damage resulting from such removal. Tenant shall not install an
antenna in a way that may damage the roof of the Premises. Tenant will install
and operate the Antennas in accordance with all federal, state and local
rules, regulations, laws, statutes and ordinances. In addition, Tenant shall be
responsible to obtain any permits and licenses required to install and operate
the Antennas. Landlord makes no representation or warranty to Tenant that it
will be able to obtain the necessary permits or approvals to install the
Antennas.
6. Alterations. Notwithstanding anything to the contrary contained in
-----------
section 12(a) of the Lease, Tenant shall have the right, without Landlord's
consent, to make non-structural, cosmetic Alterations to the Premises (e.g.,
paint and carpet) that do not require a building permit or other governmental
permit or authorization provided that Tenant gives Landlord ten (10) days
advance written notice of its intention to make the Alterations (said written
notice shall include a detailed description of the Alterations) and the cost of
the Alterations does not exceed Fifteen Thousand Dollars ($15,000). Tenant's
right to make such Alterations is conditioned on Tenant complying with the
requirements of section 12 of the Lease and all rules and regulations of
Landlord then in effect relating to construction activities at the Premises. For
purposes of this Addendum section, the "cost of the Alteration" shall mean the
cost of the Alteration Tenant intends to make plus the cost of all other
Alterations Tenant has made to the Premises pursuant to this Addendum section
during the immediately preceding twelve (12) month period.
7. Indemnity. Notwithstanding the provisions of sections 7.2, 18 and 19
---------
of the Lease to the contrary, Tenant shall not be required to indemnify, defend
and hold Landlord harmless from any loss, cost, liability, damage or expense
(collectively "Claims"), to any person, property or entity resulting from the
gross negligence or willful misconduct of Landlord or its agents or employees,
in connection with Landlord's activities at the Premises, and Landlord hereby
indemnities, defends and saves Tenant harmless from any such Claims. Tenant's
agreement to indemnify, defend and hold Landlord harmless pursuant to section 18
of the Lease, the exclusion from Tenant's indemnity set forth above, and the
agreement by Landlord to indemnify, defend and hold Tenant harmless set forth
above are not intended to, and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Landlord or Tenant pursuant
to the provisions of the Lease to the extent that such policies cover the
results of such acts or conduct.
8. Non-Disturbance Agreement. Notwithstanding anything to the contrary
-------------------------
contained in section 26.2 of the Lease, Tenant shall not be obligated to
subordinate its interest in the Lease to a mortgage or deed of trust obtained by
Landlord in the future unless the lender provides Tenant with a commercially
reasonable nondisturbance agreement.
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9. Letter of Credit.
----------------
(a) Delivery of Letter of Credit. Concurrently with Tenant's execution
----------------------------
and delivery of this Lease, and as a condition to Landlord's obligations under
the Lease, Tenant covenants and agrees to deliver to Landlord an irrevocable
standby letter of credit (the "L/C") in the form of, and upon all of the terms
and conditions contained in, Exhibit "1" attached hereto and incorporated herein
by reference. The L/C shall be issued by an institutional lender of good
financial standing (which lender shall, in any event, have assets equal to or
exceeding $500,000,000 as of the date of issuance of the L/C), having a place of
business where the L/C can be presented for payment in Los Angeles, California.
The lender shall be subject to Landlord's prior written approval, not to be
unreasonably withheld or delayed. The L/C shall provide for one (1) or more
draws by Landlord or its transferee up to the aggregate amount of US Seven
Hundred Thousand Dollars ($700,000) (the "L/C Amount") on the terms and
conditions of Exhibit "1", which L/C shall secure the payment and performance of
Tenant's obligations under the Lease.
(b) Renewal of L/C. Tenant shall maintain the L/C in effect from the
--------------
date of Tenant's execution of this Lease until the date the initial ten (10)
year term of this Lease expires (said period is hereinafter referred to as the
"L/C Term"). If the expiration date of the L/C (or any renewal or replacement
L/C provided pursuant to this Addendum section) occurs prior to the end of the
L/C Term, then Tenant shall deliver to Landlord a renewal of the L/C or a
replacement L/C meeting all of the terms and conditions of this Addendum
section, not later than thirty (30) days prior to the then-applicable expiration
date. Each L/C provided pursuant to this Addendum section shall have an
expiration date which is at least one (1) year from such L/C's date of issue
except where the then-applicabIe expiration date of the L/C is less than one (1)
year from the end of the L/C Term, in which case the renewal or replacement L/C
shall be for such lesser period. The issuing bank's agreement to place an
automatic renewal provision in the L/C, as required pursuant to said Exhibit
"1", shall not relieve or release Tenant from its obligation to provide a
renewal or replacement L/C on the terms hereinabove stated, it being understood
that any such automatic renewal is an independent obligation of the issuing bank
which is intended for Landlord's sole benefit. If Tenant fails to provide the
renewal or replacement L/C not later than thirty (30) days prior to the then-
applicable, stated expiration date (excluding automatic renewal provisions),
then Landlord shall have the right to draw upon the entire remaining proceeds of
the L/C.
(c) Reduction in Amount of L/C. Provided Tenant has not committed a
--------------------------
default as defined in section 16 of the Lease, on each one (1) year anniversary
of the initial ten (10) year Lease term, Tenant shall have the right to reduce
the L/C Amount by Seventy Thousand Dollars ($70,000). For example, one year
after the Commencement Date of the Lease, Tenant would have the right to reduce
the L/C Amount to Six Hundred Thirty Thousand Dollars ($630,000) and two years
after the Commencement Date, Tenant would have the right to reduce the L/C
Amount to Five Hundred Sixty Thousand Dollars ($560,000). The documents
evidencing the reduction of the L/C Amount shall be satisfactory to Landlord, in
Landlord's sole discretion.
(d) Breach of Lease. If Tenant commits a default as defined in section
---------------
16 of the Lease, Landlord may draw upon the entire remaining proceeds of the
L/C.
(e) Application of L/C Proceeds. All amounts drawn under the L/C shall
---------------------------
be applied to amounts then due and owing to Landlord pursuant to the Lease and
then to the Base Rent and other amounts coming due (although not presently due
and owing) to Landlord during the remainder of the term of the Lease, and such
application shall be deemed a prepayment of such amounts; and the remainder of
the L/C proceeds drawn, if any, shall be refunded to Tenant.
(f) Enforcement. Tenant's obligation to furnish the L/C shall not be
-----------
released, modified or affected by any failure or delay on the part of Landlord
to enforce or assert any of its rights or remedies under the Lease, whether
pursuant to the terms thereof or at law or in equity. Landlord's right to draw
upon the L/C shall be without prejudice or limitation to Landlord's right to
draw upon the security deposit provided by Tenant to Landlord or to avail itself
of any other rights or remedies under the Lease.
(g) Event of Default. Tenant's failure to perform its obligations
----------------
under subsections (a), (b), (c) or (d) above within the time limits prescribed
therein (time being of the essence) shall constitute an event of default
pursuant to section 16 of the Lease, and shall entitle Landlord to exercise all
of its remedies under the Lease or at law or in equity.
IN WITNESS WHEREOF, the parties hereto have respectively executed this Addendum.
LANDLORD: TENANT:
REALTY ASSOCIATES IOWA CORPORATION, XXXXXXXXXX.XXX, INC., a Delaware
a Delaware corporation corporation
By: /s/ Xxxxx Xxxxxx By:____________________________________
----------------------------------
Its:_________________________________ Its:___________________________________
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Its:___________________________________
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