EXHIBIT 10.12
SOUTH RIM
Industrial Real Estate Triple Net Sublease
ARTICLE I
BASIC TERMS
This Article One contains the Basic Terms of this Sublease between the Landlord
and Tenant named below. This Sublease is subject to the Master Lease identified
in Section 2.1 below. Other Articles, Sections and Subsections of the Sublease
referred to in this Article One explain and define the Basic Terms and are to be
read in conjunction with the Basic Terms.
1.1 DATE OF SUBLEASE. July 20, 1998
1.2 LANDLORD. PALOMAR ENTERPRISES, INC.
Address of Landlord: P.O. Box 462947, Escondido, CA 92046-2947
1.3 TENANT. COPPER MOUNTAIN NETWORKS, INC., a California corporation
Address of Tenant: 0000 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx, XX 00000
1.4 PREMISES. In consideration of the rents, covenants and agreement on the
part of the Tenant to be paid and performed, the Landlord subleases to the
Tenant, and Tenant subleases from Landlord, those certain Premises
identified on Exhibit "A" attached hereto and by this reference
incorporated herein. The premises are deemed to be approximately 10,735
square feet of space, and are situated within that certain building
("Building") known as Building C and located at 0000 Xxxxxxx Xxxxxx Xxxx.,
Xxxxx 000, Xxx Xxxxx, XX 00000. The Building is situated within that
certain project ("Project") known as SOUTH RIM, located at the north side
of Pacific Center Boulevard between XxXxxxxx Court and Pacific Heights
Boulevard, San Diego, California, more particularly identified on Exhibit
"B" attached hereto and by this reference incorporated herein.
1.5 SUBLEASE TERM. Sixty (60) months beginning on September 1, 1998 or such
other date as is specified in this Sublease, and ending on August 31, 2003
(see Article Two).
1.6 PERMITTED USES. The Premises shall be used and occupied only for General
offices, light manufacturing and warehousing (see Article Two).
1.7 TENANT'S GUARANTOR. (If none, so state.) None
1.8 INITIAL SECURITY DEPOSIT. (See Section 3.3)
Ten Thousand One Hundred Ninety-eight and No/100 Dollars ($10,198.00)
1.9 RENT AND OTHER CHARGES PAYABLE BY TENANT.
1.9.1 BASE RENT. Ten Thousand One Hundred Ninety-eight and No/100 Dollars
($10,198.00) Per month for the first twelve (12) months.
1.9.2 OTHER PERIODIC PAYMENTS: ADDITIONAL RENT. (i) Real Property Taxes;
(ii) Utilities; (iii) Insurance Premiums; (iv) Common Area Charges; (v)
Impounds for Insurance Premiums and Property Taxes; (vi) Maintenance,
Repairs and Alterations (see Articles Four and Six).
1.10 RIDERS. The following Riders are attached to and made a part of this
Sublease: (If none, so state.)
1) Additional Provisions
2) Exhibits A, B & C
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ARTICLE II
SUBLEASE TERM
2.1 MASTER LEASE. Palomar Enterprises, Inc. as ground lessee of the real
property improved with and identified as the Project, and the San Diego Unified
School District ("District") as lessor entered into that certain lease dated
February 14, 1989 (the "Master Lease"). Xxxxxxxx is successor in interest to
under the Master Xxxxx. The Master Lease provides that Landlord may construct
improvements and sublease portions thereof to tenants. Accordingly, and subject
to the Master Lease, Landlord is entering into this sublease with Tenant.
2.2 SUBLEASE OF PREMISES FOR SUBLEASE TERM. Landlord subleases the Premises to
Tenant and Tenant subleases the Premises from Landlord for the Sublease Term.
The Sublease Term is for the period stated in Section 1.5 above and shall begin
and end on the dates specified in Section 1.5 above, unless the beginning or end
of the Sublease Term is changed under any provision of this Sublease. The
"Commencement Date" shall be the date specified in Section 1.5 above for the
beginning of the Sublease Term, unless advanced or delayed under any provision
of this Sublease.
2.3 DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant if Landlord
does not deliver possession of the Premises to Tenant on the first date
specified in Section 1.5 above. Xxxxxxxx's non-delivery of the Premises to
Tenant on that date shall not affect this Sublease or the obligations of Tenant
under this Sublease. However, the Commencement Date shall be delayed until
possession of the Premises is delivered to Tenant. The Sublease Term shall be
extended for a period equal to the delay in delivery of possession of the
Premises to Tenant, plus the number of days necessary to end the Sublease Term
on the last day of a month. If Landlord does not deliver possession of the
Premises to Tenant within ninety (90) days after the first date specified in
Section 1.5 above, Tenant may elect to cancel this Sublease by giving written
notice to Landlord within ten (10) days after the 90-day period ends. If Tenant
gives such notice, the Sublease shall be cancelled and neither Landlord nor
Tenant shall have any further obligations to the other. If Tenant does not give
such notice, Xxxxxx's right to cancel the Sublease shall expire and the Sublease
Term shall commence upon the delivery of possession of the Premises to Tenant.
If delivery of possession of the Premises to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this Sublease setting
forth the Commencement Date and expiration date of the Sublease. For purposes
of this Section 2.3, Landlord's delivery of possession of the Premises shall
mean the earlier of (i) the date Tenant occupies all or any portion of the
Premises, or (ii) the date upon which the Premises are substantially complete in
accordance with Exhibit A.
2.4 EARLY OCCUPANCY. If Tenant occupies the Premises prior to the Commencement
Date, Xxxxxx's occupancy of the Premises shall be subject to all of the
provisions of this Sublease. Early occupancy of the Premises shall not advance
the expiration date of this Sublease.
2.5 HOLDING OVER. Tenant shall vacate the Premises upon the expiration or
earlier termnination of this Sublease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages incurred by Landlord from any delay by
Tenant in vacating the Premises. If Tenant remains in possession of all or any
part of the Premises after the expiration of the term hereof, with or without
the express or implied consent of Landlord, such tenancy shall be from month-to-
month only and not a renewal hereof or an extension for any further term, and in
such case, Base Rent then in effect shall be increased by twenty-five percent
(25%) and other monetary sums due hereunder shall be payable in the amount and
at the time specified in this Sublease; and such month-to-month tenancy shall be
subject to every other term, covenant and agreement contained herein, except
that the month-to-month tenancy will be terminable in thirty (30) days notice
given at any time by either party.
2.6 SURRENDER OF PREMISES. Upon the termination of the Sublease, Xxxxxx shall
surrender the premises to Landlord in the condition specified in and according
to Section 6.7.
ARTICLE III
BASE RENT
3.1 TIME AND MANNER OF PAYMENT. Upon execution of this Sublease, Tenant shall
pay Landlord the Base Rent in the amount stated in Subsection 1.9.1 above for
the first month of the Sublease Term. On the first day of the second month of
the Sublease Term and each month thereafter, Tenant shall pay Landlord the Base
Rent in United States currency, in advance, without offset, deduction or prior
demand. The Base Rent shall be payable at Landlord's address or at such other
place as Landlord may designate in writing.
3.2 INCREASE. The Base Rent shall be increased on an annual basis (see Addendum
to Lease).
3.3 SECURITY DEPOSIT INCREASES.
3.3.1 DEPOSIT. Upon the execution of this Sublease, Tenant shall deposit
with Landlord a cash security Deposit in the amount set forth in Section 1.8
above. Landlord may apply all or part of the security Deposit to any unpaid rent
or other charges due from Tenant or to cure any other defaults of Tenant. If
Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit its full amount within ten (10) days after Landlord's written
request. Tenant's failure to do so shall be a material default under this
Sublease. No Interest shall be paid on the Security Deposit. Landlord shall not
be required to keep the Security Deposit separate from its other accounts and no
trust relationship created with respect to the Security Deposit.
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3.3.2 INCREASE IN DEPOSIT.
3.1 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Sublease under
Article Seven (Damage or Destruction), Article Eight (Condemnation), or any
other termination not resulting from Tenant default, and after Tenant has
vacated the Premises in the manner required by this Sublease, an equitable
adjustment shall be made concerning advance rent, any other advance payments
made by Tenant to Landlord, and accrued real property taxes, and Landlord shall
refund the unused portion of the Security Deposit to Tenant or Tenant's
succcssor.
ARTICLE IV
OTHER CHARGES PAYABLE BY TENANT
4.1 ADDITIONAL RENT. All charges payable by Tenant other than Base Rent are
called "Additional Rent." Unless this Sublease provides otherwise, all
Additional Rent shall be paid with the next monthly installment of Base Rent
and shall be in United States currency. The term "rent" shall mean Base Rent and
Additional Rent.
4.2. REAL PROPERTY TAXES.
4.2.1 PAYMENT OF TAXES. Tenant shall pay its proportionate share of all
real property taxes and general and special assessments, levied and assessed
against the Project of which the Premises are a part. Tenant's proportionate
share of real property taxes shall be the ratio that the total number of square
feet in the Premises bears to the total number of sub-leasable square feet in
the Project. Each year Landlord shall notify Tenant of Landlord's calculation
of Xxxxxx's proportionate share of the real property taxes and together with
such notice shall furnish Tenant with a copy of the tax bill. If any
supplemental tax bills are delivered with respect to the Project, Landlord may
notify Tenant of Landlord's new calculation of Tenant's proportionate share of
real property taxes as soon as such supplemental tax bill is received. Subject
to Section 4.8 below, Tenant shall reimburse Landlord for Xxxxxx's proportionate
share of the Real Property Taxes semiannually no later than fifteen (15) days
before the taxing authority's delinquency date.
4.2.2 DEFINlTION OF "REAL PROPERTY TAX." "Real Property Tax" means: (i)
any fee, license fee, license tax, commercial rental tax, levy, charge,
assessment, penalty or tax (other than inheritance or estate taxes) imposed by
any authority having the direct or indirect power to tax, including any City,
County, State or Federal government, or any school, agriculture, lighting,
drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Premises; (ii) any tax on the Landlord's
right to receive, or the receipt of, rent or income from the Premises or against
Landlord's business of leasing the Premises; (iii) any tax or charge for fire
protection, streets, sidewalks, road maintenance, refuse or other services
provided to the Premises by any governmental agency; (iv) any tax imposed upon
this transaction or based upon a reassessment of the Premises due to a change in
ownership or transfer of all or part of Landlord's interest in the Premises; and
(v) any charge or fee replacing any tax previously included within the
definition of Real Property Tax. "Real Property Tax" does not, however, include
Landlord's Federal or State income, franchise, inheritance or estate taxes.
4.2.3 JOINT ASSESSMENT. If the Premises is not separately assessed,
Xxxxxx's share of the Real Property Tax payable by Tenant under Subsection 4.2.1
shall be determined from reasonably available information. Landlord shall make a
reasonable determination of Tenant's proportionate share of such real property
tax and Tenant shall pay such share to Landlord within fifteen (15) days after
receipt of Landlord's written statement.
4.2.4 PERSONAL PROPERTY TAXES.
(a) Tenant shall pay prior to delinquency all taxes charged against
trade fixtures, furnishings, equipment or any other personal property belonging
to Tenant. Tenant shall attempt to have such personal property taxed separately
from the Premises.
(b) If any such taxes on Xxxxxx's personal property are levied
against Landlord or Landlord's Premises, or if the assessed value of the
Premises is increased by the inclusion therein of a value placed upon such
personal property or trade fixtures of Tenant, then Landlord, after written
notice to Tenant, shall have the right to pay the taxes based upon such
increased assessments, regardless of the validity thereof, but only under proper
protest if requested by Tenant in writing. If Landlord shall do so, then Tenant
shall, upon demand, repay to Landlord the taxes levied against Landlord, or the
proportion of such taxes resulting from such increase in the assessment. In any
such event, however, Tenant, at Xxxxxx's sole cost and expense, shall have the
right, in the name of Landlord and with Landlord's full cooperation, to bring
suit in any court of competent jurisdiction to recover the amount of any such
taxes so paid under protest; any amount so recovered to belong to Tenant,
(c) If any of Tenant's personal property is taxed with the
Premises, Tenant shall pay Landlord the taxes for the personal property within
fifteen (15) days after Xxxxxx receives a written statement from Landlord for
such personal property taxes.
4.2.5 TENANT'S RIGHT TO CONTEST TAXES. Tenant may attempt to have the
assessed valuation of the Premises reduced or may initiate proceedings to
contest the Real Property Tax. If required by law, Landlord shall join in the
proceedings brought by Xxxxxx. However, Tenant shall pay all costs of the
proceedings, including any costs or fees incurred by Landlord. Upon the final
determination of any proceeding or contest, Xxxxxx shall immediately pay the
excess Real Property Tax due, together with all costs, charges, interest and
penalties incidental to the proceedings. If Tenant does not pay the excess
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Real Property Tax when due and contests such taxes, Tenant shall not be in
default under this Sublease for nonpayment of such taxes if Tenant deposits
funds with Landlord or opens an interest bearing account reasonably acceptable
to Landlord in the joint names of Landlord and Tenant. The amount of such
deposit shall be sufficient to pay the excess Real Property Tax plus a
reasonable estimate of the interest, costs, charges and penalties which may
accrue if Tenant's action is unsuccessful, less any applicable tax impound
previously paid by Tenant to Landlord. The deposit shall be applied to the
excess Real Property Tax due, as determined at such proceedings. The excess Real
Property Tax shall be paid under protest from such deposit if such payment under
protest is necessary to prevent the Premises from being sold under a "tax sale"
or similar enforcement proceeding.
4.3 UTILITIES. Tenant shall arrange for and pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer, telephone,
water and other utilities and services supplied to the Premises. Landlord will
cooperate in attempting to have each of the utilities supplied to the Premises
separately metered. However if any such utilities or services are jointly
metered with other premises within the Project, Landlord shall make a reasonable
determination of Tenant's proportionate share of the cost of such utilities and
services, based on information reasonably available to Landlord, and Tenant
shall pay such share to Landlord within fifteen (15) days after receipt of
Landlord's written statement of such cost.
4.4 INSURANCE PREMIUMS.
4.4.1 LIABILITY INSURANCE. During the Sublease Term, Landlord shall
maintain a policy of comprehensive public liability insurance at Tenant's
expense, insuring Landlord against liability arising out of the ownership, use,
occupancy or maintenance of the Premises. The initial amount of such insurance
shall be at least $5,000,000.00, and shall be subject to periodic increase based
upon inflation, increased liability awards, recommendations of professional
insurance advisers, and other relevant factors. However, the amount of such
insurance shall not limit Tenant's liability nor relieve Tenant of any
obligation hereunder. The policy shall contain cross-liability endorsements, if
applicable, and shall insure Tenant's performance of the indemnity provisions of
Section 5.4. Tenant shall, at Tenant's expense, maintain such other liability
insurance as Tenant deems necessary to protect Tenant. Landlord shall provide
proof of insurance, naming Xxxxxx's Premises as a named insured within 30 from
the Commencement Date.
4.4.2 HAZARD AND RENTAL INCOME INSURANCE. During the Sublease Term,
Landlord shall, at Tenant's expense, maintain policies of insurance covering
loss of or damage to the Premises to the extent of at least one hundred percent
(100%) of its replacement value. Such policies shall provide protection against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, and any other perils which Landlord deems
necessary. Landlord may obtain insurance coverage for Tenant's building
improvements installed by Tenant in or on the Premises. Tenant shall, at
Tenant's expense, maintain such primary or additional insurance on its fixtures,
equipment and building improvements as Tenant deems necessary to protect its
interest. During the Sublease Term, Landlord may also maintain a rental income
insurance policy at Tenant's expense, with loss payable to Landlord in an amount
equal to one year's Base Rent (as adjusted periodically), estimated Real
Property Taxes and insurance premiums. Tenant shall not do or permit to be done
anything which invalidates any such insurance policies. Landlord shall provide
proof of insurance, naming Xxxxxx's Premises as a named insured within 30 from
the Commencement Date.
4.4.3 PAYMENT OF PREMIUMS; INSURANCE POLICIES. Tenant shall pay its pro
rata share of the premiums for maintaining the insurance required by Subsections
4.4.1 and 4.4.2. Tenant's pro rate share of all such premiums shall be based on
the same proportion as used for payment of taxes pursuant to Subsection 4.2.1
hereof. All such amounts will be due and payable upon ten (10) days written
notice.
4.4.4 INCREASE IN FIRE INSURANCE PREMIUM. Tenant agrees that it will not
keep, use, manufacture, assemble, sell or offer for sale in or upon the
Premises any article which may be prohibited by the standard form of fire
insurance policy. Tenant agrees to pay any increase in premiums for fire and
extended coverage insurance that may be charged during the term of this Sublease
on the amount of such insurance which may be carried by Landlord on said
Premises or the building of which it is a part, resulting from the acts or
omissions of the Tenant, its agents, servants or employees, or the use or
occupancy of the Premises by the Tenant or from the type of materials or
products stored, manufactured, assembled or sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the result of Tenant's use of the Premises, a schedule,
issued by the organization making the insurance rate on the Premises, showing
the various components of such rate, shall be conclusive evidence of the several
items and charges which make up the fire insurance rate on the Premises.
Landlord shall provide proof of insurance, naming Xxxxxx's Premises as a named
insured within 30 from the Commencement Date.
4.4.5 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party or its property or the property of others under its
control, to the extent that such loss or damage is insured against under any
fire and extended coverage insurance policy which either may have in force at
the time of such loss or damage. Tenant shall, upon the policies of insurance
required under this Sublease, give notice to the Insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Sublease.
4.5 COMMON AREAS.
4.5.1 DEFINITION; LOCATION. As used in this Sublease, "Common Areas" shall
mean all areas within the Project which are available for the common use of
tenants of the Project and which are not leased or held for the exclusive use of
tenants of the Project or which are not leased or held for the exclusive use of
Tenant or other tenants, including, but not limited to, parking areas,
driveways, sidewalks, loading areas, retaining walls, truck serviceways,
pedestrian malls, stairs, ramps, restrooms, access roads, corridors, landscaping
and planted areas. Landlord may from time to time change the size, location,
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nature and use of the Common Areas, including converting Common Areas into
leasable areas, construction of additional parking facilities (including
parking structures) in the Common Areas, and increasing or decreasing Common
Area land and/or facilities. Tenant acknowledges that such activities may
result in occasional inconvenience to Tenant from time to time. Such
activities and changes shall be expressly permitted if they do not materially
affect Tenant's use of the Premises.
4.5.2 USE OF COMMON AREAS. Subject to other provisions of this Sublease,
Tenant shall have the nonexclusive right (in common with other tenants and all
others to whom Landlord has granted or may grant such rights) to use the Common
Areas for the purposes intended, subject to such reasonable rules and
regulations as Landlord may establish from time to time. Tenant shall abide by
such rules and regulations and shall use its best effort to cause others who use
the Common Areas with Xxxxxx's expressed or implied permission to abide by
Landlord's rules and regulations. At any time, Landlord may close any Common
Areas to perform any acts in and to the Common Areas as, in Landlord's judgment,
may be desirable to improve the Project. Tenant shall not, at any time,
intentionally interfere with the rights of Landlord, other tenants, or any other
person entitled to use the Common Areas.
4.5.3 VEHICLE PARKING. Tenant shall be entitled to use 3.8 vehicle parking
spaces in the Project for each 1,000 (One Thousand) square feet within the
Premises without paying any additional rent. Tenant's parking shall not be
reserved and shall be limited to vehicles no larger than standard size
automobiles or pickup utility vehicles. Tenant shall not cause large trucks or
other large vehicles to be parked within the Project or on the adjacent public
streets. Vehicles shall be parked only in striped parking spaces and not in
driveways, loading areas or other locations not specifically designated for
parking. If Tenant parks more vehicles in the parking area than the number
identified herein, such conduct shall be a material breach of the Sublease.
4.5.4. MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common
Areas in good order, condition and repair and shall operate the Project, in
Landlord's sole discretion, as a first class industrial/commercial real property
development. Tenant shall pay Tenant's pro rata share (as defined below) of all
costs incurred by Landlord for the operation and maintenance of the Common Area.
Common Area costs include, but are not limited to, costs and expenses for the
following: gardening and landscaping, pest extermination services; utilities,
water and sewage charges; maintenance of signs (other than Tenant's signs);
premiums for liability, property damage, fire and other types of casualty
insurance on the Common Areas and all Common Area improvements; all personal
property taxes levied on or attributable to personal property used in connection
with the Common Areas; straight-line depreciation on personal property owned by
Landlord which is consumed in the operation or maintenance of the Common Areas;
rental or lease payments paid by Landlord for rented or leased personal property
used in the operation or maintenance of the Common Areas; the reasonable rental
value of any Common Area located within any building situated within the
Project; fees for management of the Project and Common Areas; fees for required
licenses and permits; repairing, resurfacing, repaving, maintaining, painting,
lighting, cleaning, refuse removal, security and similar items; reserves; and a
reasonable allowance to Landlord for Landlord's supervision of the Common Areas
(not to exceed five percent (5%) of the total of all other Common Area costs for
the calendar year). Landlord may cause any or all of such services to be
provided by third parties, or by entities associated with Landlord. Common Area
costs shall not include depreciation of real property which forms part of the
Common Areas. Landlord may, at Xxxxxxxx's election, estimate in advance and
charge to Tenant monthly as Common Area costs, all real property taxes for which
Tenant is liable under the Sublease, all insurance premiums for which Tenant is
liable under the Sublease, and all maintenance and repair costs for which Tenant
is liable under the Sublease.
4.5.5 TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual pro
rata share of all estimated Common Area costs, in advance, in monthly
installments on the first day of each month during the Sublease Term (prorated
for any fractional month). Tenant's pro rata share shall be calculated by
dividing the square foot area of the Premises, as set forth in Section 1.4 of
the Sublease, by the aggregate square foot area of the leaseable area within the
Project, whether currently leased or not upon the date the computation is made.
Landlord may adjust such estimates at any time and from time to time based upon
Xxxxxxxx's experience and reasonable anticipation of costs. Such adjustments
shall be effective as of the next rent payment date after notice to Tenant.
Within thirty (30) days after the end of each calendar year of the Sublease
Term, Landlord shall deliver to Tenant a statement prepared in accordance with
generally accepted accounting principles setting forth, in reasonable detail,
the actual Common Area costs paid or incurred by Landlord during the preceding
calendar year and Xxxxxx's pro rata share. Upon receipt of such statement, there
shall be an adjustment between Landlord and Tenant with payment to or credit
given by Landlord (as the case may be) so that Landlord shall receive the entire
amount of Tenant's share of such costs and expenses for such period. Any changes
in the Common Area costs and/or the aggregate area leased or held for lease for
the exclusive use of all tenants of the Project during the Lease Term shall be
effective on the first day of the month after such change occurs.
4.5.5.1 ALTERNATIVE PAYMENT. Notwithstanding the foregoing,
Landlord has the right to notify Tenant on a monthly or other basis of the
actual amount Landlord has expended for all Common Area costs incurred during
the previous month or period. Such notice shall also set forth Tenant's pro rata
share of such actual costs. Upon receipt of such statement, Tenant shall pay
with the next monthly installment of rent Tenant's pro rata share of the actual
Common Area costs incurred during the previous month or period.
4.5.6 ADDITIONAL AREAS. In addition to the Common Areas and costs
associated therewith described in this Section 4.5, Landlord may, but is not
obligated to, provide certain additional spaces and areas within the Project
("Additional Areas") as (and included within the definition of) Common Areas.
The Additional Areas may include, but are not limited to, an office used by and
subject to the exclusive control of Landlord for leasing and/or managing the
Project, a conference room available on a reserved basis for use by tenants
within the Project during normal business hours, and a locker room facility for
use by tenants of the Project and their employees that are employed at the
Project. Common Area costs for which Tenant is liable for its pro rata share as
described in Section 4.5.4 shall include costs of operating and the reasonable
rental value of the space occupied by the Additional Areas.
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4.6 LATE CHARGES. Tenants failure to pay rent promptly may cause Landlord to
incur unanticipated costs. The exact amount of such costs is impractical or
extremely difficult to ascertain. Such costs may include, but are not limited
to, processing and accounting charges and late charges which may be imposed on
Landlord by any ground sublease, mortgage or trust deed encumbering the
Premises. Therefore, if Landlord does not receive any rent payment within five
(5) days after it becomes due, Tenant shall pay Landlord a late charge equal to
ten percent (l0%) of the overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.
4.6.1 REPEATED LATE CHARGES. In the event that a late charge is payable
under this Sublease, whether or not collected, for two installments of Base
Rent during any one calendar year of the Sublease Term, then the Base Rent
shall automatically become due and payable quarterly in advance, rather than
monthly. All monies paid to Landlord under this provision may be commingled
with other monies of Landlord and shall not bear interest.
4.7 INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant to Landlord
which is not paid when due shall bear interest at the rate of fifteen percent
(15%) per annum or at the highest rate then permitted by law, whichever is less,
from the due date of such amount. However, interest shall not be payable on late
charges to be paid by Tenant under this Sublease. The payment of interest on
such amounts shall not excuse or cure any default by Tenant under this Sublease.
If the interest rate specified in this Sublease is higher than the rate
permitted by law, the interest rate is hereby decreased to the maximum legal
interest rate permitted by law.
4.8 IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. If requested by
any ground lessor or lender to whom Landlord has granted a security interest in
the Premises or the Project, if Landlord deems it necessary in Landlord's sole
and absolute discretion, or if Tenant is more than ten (10) days late in the
payment of rent more than once in any consecutive twelve (12) month period,
Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the annual Real
Property Tax and/or insurance premiums payable by Tenant under this Sublease,
together with each payment of Base Rent. Such payments shall be paid to the
ground lessor or lender if required or held by Landlord in an impound account
with no obligation to pay the Tenant interest thereon. The amount of the Real
Property Tax and insurance premiums when unknown shall be reasonably estimated
by Landlord. Funds in the impound account shall be applied by Landlord to the
payment of real property taxes and insurance premiums when due. Any deficiency
of funds in the impound account shall be paid by Tenant to Landlord upon written
request. If Tenant is in material default under this Sublease, Landlord may
apply any funds in the impound account to any obligation then due under this
Sublease.
ARTICLE V
USE OF PREMISES
5.1 PERMITTED USES. Tenant may use the Premises only for the Permitted Uses set
forth in Section 1.6 above.
5.2 MANNER OF USE.
5.2.1 OBJECTIONABLE USES. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way obstruct or interfere with
or infringe on the rights of other occupants of the building, or injure or annoy
them, or use or allow the Premises to be used for any improper, immoral, or
objectionable purposes; nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises or commit or suffer to be committed any waste in,
on or about the Premises. Tenant shall not be liable to Landlord for any other
occupant's failure to so conduct itself.
5.2.2 NONPERMITTED USES. Tenant shall not do or permit to be done in or
about the Premises, nor bring, keep or permit to be brought or kept therein,
anything which is prohibited by or will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated, or which is prohibited by any standard form
of fire insurance policy or will in any way increase the existing rate of or
affect any fire or other insurance upon the building or any part thereof or any
of its contents, or cause a cancellation of any insurance policy covering the
building or any part thereof or any of its contents. Tenant shall comply with
all governmental laws, ordinances and regulations applicable to the Premises,
and the requirements of any Board of Fire Underwriters or other similar body now
or hereafter instituted, with any order, directive or certificate of occupancy
issued pursuant to any law, ordinance or regulation by any public officer
insofar as the same relates to or affects the condition, use or occupancy of
the Premises, including but not limited to, requirements of structural changes
necessitated by Tenant's acts, occupancy or use of the Premises, all at Tenant's
sole expense. The judgment of any court of competent jurisdiction shall be
conclusive in establishing such violations between Landlord and Tenant.
5.2.3 NOXIOUS ODORS. Tenant shall not use, keep or permit to be used or
kept any foul or noxious gas or substance in the Premises, or permit or suffer
the Premises to be occupied or used in a manner offensive or objectionable to
the Landlord or other occupants of the building by reason of noise, odors and/or
vibrations, or interfere in any way with other Tenants or those having business
therein, nor shall any animals or birds be brought in or kept in or about the
Premises or the building. Tenant shall not conduct any auction on the Premises.
No cooking shall be done or permitted by any Tenant on the Premises, nor shall
the Premises be used for the storage of merchandise, for washing clothes, for
lodging, or for any improper, objectionable or immoral purposes. Tenant shall
not use or keep in the Premises or the building any kerosene, gasoline or
inflammable or combustible fluid or material, or use any method of heating or
air conditioning other than that supplied by Landlord.
5.2.4 PERMIT. Tenant shall obtain and pay for all permits required for
Xxxxxx's occupancy of the
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rules, regulations, orders and requirements regulating the use by Tenant of the
Premises, including the Occupational Health and Safety Act.
5.3 SIGNS AND AUCTIONS.
5.3.1 AUCTION. Tenant shall not conduct, or permit to be conducted, any
sale by auction on the Premises.
5.3.2 PROHIBITED SIGNS. Tenant shall not place, or suffer to be placed or
maintained, on any exterior door, wall or window of the Premises any sign,
awning or canopy, or advertising matter or other thing of any kind, and will not
place or maintain any decoration, lettering or advertising matter on the glass
of any window or door, or that can be seen through the glass, of the Premises
without Landlord's prior written approval. Tenant further agrees to maintain
such sign, awning, canopy, decoration, lettering, advertising matter or thing as
may be approved, in good condition and repair at all times.
5.3.3 SIGN CRITERIA. Tenant is responsible for installation of sign, which
includes all costs and labor, in accordance with the criteria described on
Exhibit "C".
5.4 HAZARDOUS MATERIALS
5.4.1 PROHIBITION OF STORAGE. Tenant shall not cause or permit any
Hazardous Material (as hereinafter defined) to be brought upon, kept or used in
or about the Premises or the Project by Tenant, its agents, employees,
contractors or invitees, other than those expressly permitted by Landlord and
identified below. If Tenant breaches the obligation stated in the preceding
sentence, or if the presence of Hazardous Materials on the Premises caused or
permitted by Tenant (including Hazardous Material specifically permitted and
identified below) results in contamination of the Premises, or if contamination
of the Premises by Hazardous Material otherwise occurs for which Tenant is
legally liable to Landlord for damage resulting therefrom, then Tenant shall
indemnify, defend and hold Landlord, its agents and contractors harmless from
any and all claims, judgments, damages, penalties, fines, costs, liabilities, or
losses (including without limitation diminution in value of the Premises or any
portion of the Project damages for the loss or restriction on use of rentable or
usable space or of any amenity of the Premises or Project, damages arising from
any adverse impact on marketing of space in the Premises or the Project and sums
paid in settlement of claims, attorneys' fees, consultant fees and expert fees)
which arise during or after the Sublease Term as a result of such contamination.
This indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Material
present in the soil or ground water on or under the Premises. Without limiting
the foregoing, if the presence of any Hazardous Material on the Premises caused
or permitted by Tenant results in any contamination of the Premises, Tenant
shall promptly take all actions at its sole expense as are necessary to return
the Premises to the condition existing prior to the introduction of any such
Hazardous Material to the Premises, provided that Landlord's approval of such
action shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have any material adverse
long-term or short-term effect on the Premises or the Project.
5.4.2 TERMINATION OF LEASE. Notwithstanding the provisions of Paragraph
5.4.1 above, if (i) any anticipated use of the Premises by Tenant or any
proposed assignee or sublessee of Tenant involves generation, storage, use,
treatment or disposal of Hazardous Material, (ii) Tenant or the proposed
assignee or sublessee has been required by any prior landlord, lender or
governmental authority to take remedial action in connection with Hazardous
Material contaminating a property if the contamination resulted from such
party's action or use of the property in question, or (iii) Tenant or the
proposed assignee or sublessee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal or storage of a
Hazardous Material, Landlord shall have the right to terminate the Lease in
Landlord's sole and absolute discretion (with respect to any such matter
involving Tenant) and it shall not be unreasonable for Landlord to withhold its
consent to any proposed assignment or subletting (with respect to any such
matter involving a proposed assignee or sublessee).
5.4.3 TESTING. At any time prior to the expiration of the Sublease Term,
Landlord shall have the right at its own expense to conduct appropriate tests of
water and soil and to deliver to Tenant the results of such tests to
demonstrate that contamination in excess of legally permissible levels has
occurred as a result of Xxxxxx's use of the Premises. Tenant shall further be
solely responsible for and shall defend, indemnify and hold the Landlord, its
agents and contractors harmless from and against all claims, costs and
liabilities including actual attorneys' fees and costs, arising of or in
connection with any removal, clean up, restoration and materials required
hereunder to return the Premises and any other property of whatever nature to
their condition existing prior to the commencement date of the lease.
5.4.4 UNDERGROUND TANKS. If underground or other storage tanks storing
Hazardous Materials are placed on the Premises by Tenant, Tenant's Contractors
or Agents. Tenant shall monitor the storage tanks, maintain appropriate records,
implement reporting procedures, properly close any underground storage tanks,
and take or cause to be taken all other steps necessary or required under the
California Administrative Code, Title 23, Chapter 3, Subchapter 16, "Underground
Storage Tank Regulations," and Division 20, Chapter 6.7 of the California Health
& Safety Code, "Underground Storage of Hazardous Substances," as they now exist
or may hereafter be adopted or amended.
5.4.5 TENANT'S OBLIGATIONS. Tenant's obligations under this Paragraph 5.4
shall survive the termination of the Sublease. During any period of time
employed by Tenant after the Termination of this Sublease to complete the
removal from the Premises of any such Hazardous Materials, Lessee shall continue
to pay the full rental in accordance with this Sublease, which rental shall be
prorated daily.
5.4.6 DEFINITION OF "HAZARDOUS MATERIAL." As used herein, the term
"Hazardous Material"
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means any hazardous or toxic substance, material or waste which is or becomes
regulated by any local governmental authority, the State of California or the
United States Government. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) defined as a "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under
Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste
Control Law), (ii) defined as a "hazardous substance" under Section 25316 of
the California Health and Safety Code, Division 2, Chapter 6.8 (Xxxxxxxxx-
Xxxxxx-Xxxxxx Xxxxxxxxx Substance Account Act), (iii) defined as a "hazardous
material," "hazardous substance" or "hazardous waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous
Substances) (v) petroleum, (vi) asbestos, (vii) listed under Article 9 and
defined as hazardous or extremely hazardous pursuant to Article 11 of Title 22
of the California Administrative Code, Division 4, Chapter 20, (viii) designated
as a "hazardous substance" pursuant to Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. Section 1317), (ix) defined as a "hazardous
waste" pursuant to Section 1004 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et.seq. (42 U.S.C. Section 6903), or (x)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response Compensation and Liability Act, 42 U S.C. Section 9601
et.seq. (42 U.S.C. Section 9601).
5.5 INDEMNIFICATION OF LANDLORD. With the exception of gross negligence or
willful misconduct on the part of the Landlord, Tenant shall indemnify Landlord
and save it harmless from and against any and all claims, actions, damages,
liability and expense in connection with loss of life personal injury and/or
damage to property arising from or out of any occurrence in, upon or about the
Premises, or the occupancy or use by Tenant of the Premises or any part thereof,
or occasioned wholly or in part by any act of omission of Tenant, its agents,
contractors, employees, servants, tenants or concessionaires. Tenant shall
further indemnify and hold Landlord harmless from and against any and all claims
arising from any breach or default in performance of any obligation on Tenant's
part to be performed under the terms of this Sublease, or arising from any act,
neglect, fault or omission of Tenant or its agents, contractors, employees,
servants, tenants or concessionaires, and from and against all costs, attorneys'
fees, expenses and liabilities incurred in connection with such claim or any
action or proceeding brought thereon. In case any action or proceeding shall be
brought against Landlord by reason of any such claim, Tenant upon notice from
Landlord shall defend the same at Tenant's expense by counsel approved in
writing by Xxxxxxxx. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury to persons in,
upon or about the Premises from any cause whatsoever except (i) that which is
caused by the failure of Landlord to observe any of the terms and conditions of
this Sublease where such failure has persisted for an unreasonable period of
time after written notice of such failure, and (ii) Landlord's gross negligence
or intentional misconduct. Tenant hereby waives all its claims in respect
thereof against Landlord.
5.6 In the event that the Master Lease is terminated for any reason, then Tenant
shall have the right to terminate this sublease.
5.7 LANDLORD'S ACCESS. Landlord or its agents may enter the Premises at all
reasonable times to show the Premises to potential buyers, investors or tenants
or other parties, or for any other purpose Landlord deems necessary. Landlord
shall give Tenant prior notice of such entry, except in the case of an
emergency. Landlord may place customary "For Sale" or "For Sublease" signs on
the Premises.
5.8 QUIET POSSESSION. If Tenant pays the rent and complies with all other terms
of this Sublease, Tenant may occupy and enjoy the Premises for the full Sublease
Term, subject to the provisions of this Sublease.
5.9 WINDOW COVERING. Landlord shall select and install a standard window
covering for use throughout the Project, including all windows in the Premises.
ARTICLE VI
CONDITION OF PREMISES;
MAINTENANCE, REPAIRS AND ALTERATIONS
6.1 EXISTING CONDITIONS. Tenant accepts the Premises in its condition as of the
execution of the Sublease, subject to any other provisions of this Sublease and
to all recorded matters, laws, ordinances and governmental regulations and
orders. Tenant acknowledges that neither Xxxxxxxx nor any agent of Landlord has
made any representation as to the suitability of the Premises for Xxxxxx's
intended use. The Landlord represents that the HVAC, water, electrical and
plumbing systems are all in good working order and that the premises are in
compliance with the ADA.
6.2 EXEMPTION OF LANDLORD FROM LIABILITY; WAIVER. Landlord shall not be liable
for any damage or injury to the person, business (or any loss of income
therefrom), goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers or any other person in or about the Premises,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in or about the
Premises or upon other portions of any building of which the Premises is a part,
or from other sources or places; or (d) any act or omission of any other tenant
of any building of which the Premises is a part. Landlord shall not be liable
for any such damage or injury even though the cause of or the means of repairing
such damage or injury are not accessible to Tenant. Tenant, as a material part
of the consideration to be rendered to Landlord, hereby waives all claims
against Landlord for the foregoing damages from the aforementioned arising at
any time. The provisions of this Section 6.2 shall not however, exempt Landlord
from liability for Landlord's gross negligence or willful misconduct.
6.3 TENANT'S OBLIGATIONS.
6.3.1 MAINTENANCE AND REPAIR. Tenant shall keep the Premises (including
all nonstructural interior and exterior areas, systems and equipment, all glass,
glazing, window moldings, partitions, doors, door hardware, interior painting,
fixtures and appurtenances thereof [including electrical, lighting, plumbing and
plumbing fixtures]) in good order, condition and repair during the Sublease
Term. Tenant shall promptly
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replace any portion of the Premises or system or equipment in the Premises which
cannot be fully repaired regardless of whether the benefit of such replacement
extends beyond the Sublease Term. Tenant shall also maintain a preventive
maintenance contract providing for the regular inspection and maintenance of the
heating and air conditioning system (including leaks around ducts, pipes, vents,
or other parts of the air conditioning) by a licensed heating and air
conditioning contractor. However, Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility for preventive maintenance of
the heating and air conditioning system, at Tenant's expense. It is the
intention of the Landlord and Tenant that, at all times during the Sublease
Term, Tenant shall maintain the Premises in an attractive first-class and fully
operative condition.
6.3.2 TENANT EXPENSE. All of Tenant's obligations to maintain and repair
shall be accomplished at Tenant's sole expense. If Tenant refuses or neglects to
repair properly as required hereunder and to the reasonable satisfaction of
Landlord, Landlord may, on ten (10) days' prior notice (except that no notice
shall be required in case of emergency) enter the property and perform such
repair and maintenance on behalf of Tenant without liability to Tenant for any
loss or damage that may accrue to Tenant's merchandise, fixtures, or other
property or to Tenant's business by reason thereof, and upon completion thereof,
Tenant shall pay Landlord's costs for making such repairs plus ten percent (10%)
for overhead upon presentation of bill therefor, as additional rent. Said bill
shall include interest at ten percent (10%) on said costs from the date of
completion of repairs by Landlord.
6.4 LANDLORD'S OBLIGATIONS. Landlord shall be responsible for the maintenance
and repair of structural portions of the Premises and Common Areas and Parking
Lots. As used herein, structural portions of the Premises shall only refer to
the foundation and slabs, exterior walls, load bearing walls and exterior roof
of the building in which the Premises is located. If Landlord is required to
make repairs to structural portions by reason of Tenant's conduct or activities,
Landlord may add the cost of such repairs to the rent which shall thereafter
become due if Tenant refuses or neglects to repair property as required
hereunder, and to the reasonable satisfaction of Landlord as soon as reasonably
possible after written demand, Landlord may make such repairs without liability
to Tenant for any loss or damage that may accrue to Tenant's merchandise,
fixtures or other property or to Tenant's business by reason thereof, and upon
completion thereof, Tenant shall pay Landlord as additional rent Landlord's cost
for making such repairs, plus twenty percent (20%) for overhead upon
presentation of bill thereafter. Said bill shall include interest at ten percent
(10%) per year on said cost from the date of completion of repairs by Landlord.
The Tenant shall pay its pro rata share, computed in accordance with Subsection
4.2.1 hereof, of all repairs by Landlord to the structural portions of the
building where the Premises are located. All such amounts shall be due and
payable upon five (5) days written notice from Landlord.
6.5 ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
6.5.1 PROHIBITED ACTIONS. Tenant shall not make any alterations, additions
or improvements to the Premises without Landlord's prior written consent, except
for non-structural alterations which do not exceed Five Thousand Dollars
($5,000) in cost cumulatively over the Sublease Term and which are not visible
from the outside of any building of which the Premises is part. Landlord may
require Tenant to provide demolition and/or lien and completion bonds in form
and amount satisfactory to Landlord Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Subsection 6.5.1 upon Landlord's written request. All alterations, additions,
and improvements will be accomplished in good and workmanlike manner, in
conformity with all applicable laws and regulations and by a contractor approved
by Landlord. Upon completion of any such work, Tenant shall provide Landlord
with "as built" plans, copies of all construction contracts, and proof of
payment for all labor and materials. Any additions to, or alterations of, the
Premises, except moveable furniture and trade fixtures shall become at once a
part of the Premises and belong to Landlord. However, this shall not prevent the
Tenant from installing trade fixtures, machinery or other trade equipment in
conformance to all applicable ordinances of the above-specified city and county,
and the same may be removed upon the termination of this Sublease, provided the
Premises is not damaged by such removal, and Tenant shall not then be in default
under the terms and conditions of this Sublease.
6.5.2 PAYMENT BY TENANT. Tenant shall pay when due all claims for labor and
material furnished to the Premises. Tenant shall give Landlord at least thirty
(30) days prior written notice of the commencement of any work on the Premises.
Landlord may elect to record and post notices of nonresponsibility on the
Premises.
6.5.3 FREEDOM FROM LIENS. Tenant shall keep the Premises, all other
property therein and the Building free from any liens arising out of any work
performed, material furnished or obligations incurred by Tenant, and shall
indemnify, hold harmless and defend Landlord from any liens and encumbrances
arising out of any work performed or materials furnished by or at the direction
of Tenant. In the event that Tenant shall not, within twenty (20) days following
the imposition of any such lien cause such lien to be released of record by
payment or posting of a proper bond, Landlord shall have in addition to all
other remedies provided herein and by law, the right, but no obligation, to
cause the same to be released by such means as it shall deem proper, including
payment of the claim giving rise to such lien. All such sums paid by Xxxxxxxx
and all expenses incurred by it in connection therewith including attorneys'
fees and costs, shall be payable to Landlord by Tenant on demand with interest
at the maximum rate allowed by law.
6.5.4 WRITTEN NOTIFICATION REQUIRED. Tenant will notify Landlord in
writing thirty (30) days prior to commencing any alterations or additions to
allow Landlord time to file notices of nonresponsibility. The Landlord reserves
the right to approve any contractor and method of payment, prior to said
contractor making any improvements to the Premises.
6.5.5 COMMON AREA CONSTRUCTION. Tenant acknowledges that from time to time
Landlord must be required to construct, alter, or improve Common Areas within
the Project. Landlord will attempt to minimize any disruption to Xxxxxx's
business, but Tenant hereby releases Landlord from any and all claims pertaining
to such construction, alteration, or improvement.
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6.6 RULES AND REGULATIONS.
6.6.1 The Tenant agrees as follows:
(1) Landlord shall arrange for a trash collection service which will
provide and periodically empty trash containers placed in designated areas for
use by Tenant and other tenants in the Project. Tenant shall be responsible for
placing all of its garbage and trash in such trash containers.
(2) No aerial shall be erected on the roof or exterior walls of the
Premises, or on the grounds, without in each instance, the written consent of
the Landlord. Any aerial so installed without such written consent shall be
subject to removal without notice at any time.
(3) No loudspeakers, televisions, phonographs, radios, or other
devices shall be used in a manner so as to be heard or seen outside of the
Premises without the prior written consent of the Landlord.
(4) The outside areas immediately adjoining the Premises shall be
kept clean and free from dirt and rubbish by the Tenant to the satisfaction of
the Landlord and Tenant shall not place or permit any obstruction or materials
in such areas. No exterior storage shall be allowed without permission in
writing from Landlord.
(5) The plumbing facilities shall not be used for any other purpose
than that for which they are constructed, and no foreign substance of any kind
shall be thrown therein, and the expense of any breakage, stoppage, or damage
resulting from a violation of this provision shall be borne by Tenant who
shall, or whose employees, agents or invitees shall have caused it.
(6) Tenant shall not burn any trash or garbage of any kind in or about
the Premises, or the Project.
(7) The sidewalks, halls, passages, exits, entrances, and stairways in
and about the Project shall not be obstructed by any of the tenants or used by
them for any purpose other than for ingress to and egress from their
respective Premises. The halls, passages, exits, entrances, stairways,
balconies and roof are not for the use of the general public and the Landlord
shall in all cases retain the right to control and prevent access thereto by
all persons whose presence in the judgment of the Landlord shall be prejudicial
to the safety, character, reputation and interests of the Project and their
Tenants, provided that nothing herein contained shall be constructed to
prevent such access to persons with whom the Tenant normally deals in the
ordinary course of Tenant's business unless such persons are engaged in illegal
activities. No Tenant and no employees or invitees of any Tenant shall go upon
the roof of the building without Landlord's Prior Consent.
(8) No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by Tenant, nor shall any changes be made in existing
locks or the mechanisms thereof. Tenant must, upon the termination of Tenant's
tenancy, restore to Landlord all keys of stores, offices and toilet rooms
either furnished to or otherwise procured by Tenant, and in the event of the
loss of any keys so furnished Tenant shall pay to Landlord the cost thereof.
(9) No Tenant shall lay linoleum or other similar floor covering so
that the same shall be affixed to the floor of the Premises in any manner
except by a paste, or other material, which may easily be removed with water,
the use of cement or other similar adhesive materials being expressly
prohibited. The method of affixing any such linoleum or other similar floor
covering to the floor, as well as the method of affixing carpets or rugs to the
Premises, shall be subject to approval by Landlord. The expense of repairing any
damage resulting from a violation of this rule shall be borne by Tenant by whom,
or by whose agents, clerks, employees, or visitors, the damage shall have been
caused.
(10) Tenant will not install blinds, shades, awnings, or other form of
inside or outside window covering, or window ventilators or similar devices,
without the prior written consent of Landlord.
Landlord reserves the right from time to time to amend or supplement the
foregoing rules and regulations, and to adopt and promulgate additional rules
and regulations applicable to the Premises. Notice of such rules and regulations
and amendments and supplements thereto, if any, shall be given to the Tenant and
Xxxxxx agrees to comply with all such rules and regulations upon receipt of
notice to Tenant from Landlord. Landlord shall not be liable in any way to
Tenant for any damage or inconvenience caused by any other Tenant's non-
compliance with these rules and regulations.
6.7 CONDITION UPON TERMINATION. Upon the termination of the Sublease, Xxxxxx
shall surrender the Premises to Landlord, broom-clean and in the same condition
as received except for ordinary wear and tear which Tenant was not otherwise
obligated to remedy under any provision of this Sublease. However, Tenant
shall not be obligated to repair any damage which Landlord is required to repair
under Article Seven (Damage or Destruction). In addition, Landlord may require
Tenant to remove any alterations, additions or improvements (whether or not made
with Xxxxxxxx's consent) prior to the termination of the Sublease and to restore
the Premises to its prior condition, all at Tenant's expense. All alterations,
additions and improvements which Landlord has not required Tenant to remove
shall become Landlord's property and shall be surrendered to Landlord upon the
termination of the Sublease, except that Tenant may remove any of Tenant's
machinery or equipment which can be removed without material damage to the
Premises. Tenant shall repair, at Tenant's expense, any damage to the Premises
caused by the removal of any such machinery or equipment. In no event, however,
shall Tenant remove any of the following materials or equipment without
Landlord's prior written consent: any power wiring or power panels or lighting
fixtures; wall coverings; drapes, blinds or other window coverings: carpets or
other floor coverings; heaters, air conditioners or any other heating or air
conditioning equipment; fencing or security gates; or other similar building
operating equipment and decorations.
6.8 MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common Areas as
set forth in Section 4.5 above.
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ARTICLE VII
DAMAGE OR DESTRUCTION
7.1 PARTIAL DAMAGE TO PREMISES. Tenant shall notify Landlord in writing
immediately upon the occurrence of any damage to the Premises or the Building.
If the Premises or the Building is only partially damaged and if the proceeds
received by Landlord from the insurance policies described in Subsection 4.4.2
are sufficient to pay for the necessary repairs, this Sublease shall remain in
effect and Landlord shall repair the damage as soon as reasonably possible.
Landlord may elect to repair any damage to Tenant's fixtures, equipment, or
improvements. If the insurance proceeds received by Landlord are not sufficient
to pay the entire cost of repair, or if the cause of the damage is not covered
by the insurance policies which Landlord maintains under Subsection 4.4.2,
Landlord may elect either to (a) repair the damage as soon as reasonably
possible, in which case this Sublease shall remain in full force and effect or
(b) terminate this Sublease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the occurrence
of the damage, whether Landlord elects to repair the damage or terminate the
Sublease. If the damage was due to an act or omission of Tenant the difference
between the actual cost of repair and any insurance proceeds received by
Landlord. If Landlord elects to terminate this Sublease, Tenant may elect to
continue this Sublease in full force and effect, in which case Tenant shall
repair any damage to the Premises and any building in which the Premises is
located. Tenant shall pay the cost of such repairs, except that, upon
satisfactory completion of such repairs, Landlord shall deliver to Tenant any
insurance proceeds received by Landlord for the damage repaired by Tenant.
Tenant shall give Landlord written notice of such election within ten (10) days
after receiving Landlord's termination notice. If the damage to the Premises
occurs during the last six (6) months of the Sublease Term, Landlord may elect
to terminate this Sublease as of the date the damage occurred, regardless of the
sufficiency of any insurance proceeds and Landlord may retain at such proceeds.
In such event, Landlord shall not be obligated to repair or restore the Premises
and Tenant shall have no right to continue this Sublease. Landlord shall notify
Tenant of its election within thirty (30) days after receipt of notice of the
occurrence of the damage.
PARTIAL DAMAGE TO PREMISES (Continued). This section 7.1 shall not apply to any
damage to the Premises or the Building, the cost of repair of which is less than
five percent (5%) of the replacement value of the Premises or Building.
7.2 TOTAL OR SUBSTANTIAL DESTRUCTION. If the Premises is totally or
substantially destroyed by any cause whatsoever, or if the Premises is in a
building which is substantially destroyed (even though the Premises is not
totally or substantially destroyed), this Sublease shall, at the election of
either Party terminate as of the date the destruction occurred regardless of
whether Landlord receives any insurance proceeds. However, if the Premises can
be rebuilt within one (1) year after the date of destruction, Landlord may elect
to rebuild the Premises at Landlord's own expense (with all insurance proceeds
being made available to the Landlord to apply against such costs), in which case
the tenant will have a right of first refusal to re-sublease the Premises.
Landlord shall notify Tenant of such election within thirty (30) days after the
occurrence of total or substantial destruction. If the destruction was caused by
an act of omission of Tenant, Tenant shall pay Landlord the difference between
the actual cost of rebuilding and any insurance proceeds received by Landlord.
7.3 UNINSURED CASUALTY. In the event the Premises are destroyed to the extent of
fifteen percent (15%) or more of the replacement value thereof by any casualty
not covered under the fire and extended coverage insurance covered by Landlord
or Tenant, then Landlord may elect to terminate this Sublease. In the event of
such termination the rights and obligations of the parties hereunder shall
cease. If the Landlord does not elect to so terminate, then the Landlord shall
promptly commence repairing such damage at the Landlord's cost and expense.
7.4 LANDLORD'S OBLIGATIONS. Landlord shall not be required to repair any
injury or damage by fire or other cause, or to make any restoration or
replacement of any panelings, decorations, partitions, railings, floor
coverings, office fixtures or any other Improvements or property installed in
the Premises by Tenant or at the direct or indirect expense of Tenant which are
not part of the original Tenant improvements paid for by Landlord. Tenant shall
be required to restore or replace same in the event of damage except for damage
caused solely by the Landlord's negligence or intentional misconduct. Tenant
shall have no claim against Landlord for any damage suffered by reason of any
such damage, destruction, repair or restoration, nor shall Tenant have the right
to terminate this Sublease as the result of any statutory provision now or
hereafter in effect pertaining to the damage and destruction of the Premises,
except as expressly provided herein.
7.5 TEMPORARY REDUCTION OF RENT. If the Premises are destroyed or damaged and
Landlord or Tenant repairs or restores the Premises pursuant to the provisions
of this Article Seven, any rent payable during the period of such damage,
repair and/or restoration shall be reduced to reflect the degree to which
Xxxxxx's use of Premises is impaired. Except for such possible reduction in
payments required from the Tenant, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Premises. (See Page
11a).
TEMPORARY REDUCTION OF RENT (Continued). In the event of repair, reconstruction
restoration by Landlord as provided herein, the rental to be paid under this
Lease shall be xxxxx proportionately to the degree to which Xxxxxx's use of the
Premises is impaired during the period such repair, reconstruction, or
restoration.
7.6 WAIVER. Tenant waives the protection of any statute, code or judicial
decision which grants a tenant the right to terminate a sublease in the event
of damage or destruction of the premises. Xxxxxx agrees that the provisions of
this Article Seven shall govern the rights and obligations of Landlord and
Tenant in the event of any damage or destruction of the Premises.
ARTICLE VII
CONDEMNATION
8.1 CONDEMNATION. If all or any portion of the Premises is taken under the power
of eminent domain
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or sold under the threat of that power (all of which are called "Condemnation"),
this Sublease shall terminate as to the part taken or sold on the date the
condemning authority takes title or possession whichever occurs first. If more
than twenty percent (20%) of the floor area of the Premises is taken either
Landlord or Tenant may terminate this Sublease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority)
takes possesson). If more than twenty percent (20%) of all subleaseable space in
the building in which the Premises are located is taken the Landlord may elect
to terminate this Sublease by delivering such notice to Tenant. If neither
Landlord nor Tenant terminates this Sublease, this Sublease shall remain in
effect as to the portion of the Premises not taken, except that the Base Rent
shall be reduced in proportion to the reduction in the floor area of the
Premises. Any Condemnation award or payment shall be distributed in the
following order: (a) first, to any ground lessor, mortgagee or beneficiary under
a deed of trust encumbering the Premises, the amount of its interest in the
Premises and the Tenant hereby assigns any other rights which the Tenant may
have now or in the future to any other award to the Landlord; (b) second, to
Tenant, only the amount of any award specifically designated for loss of or
damage to Tenant's trade fixtures or removable personal property, and the Tenant
hereby assigns any other rights which the Tenant may have now or in the future
to any other award to the Landlord, and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the
subleasehold, the taking of the fee, or otherwise, If this Sublease is not
terminated, Landlord shall repair any damage to the Premises caused by the
Condemnation, except that Landlord shall not be obligated to repair any damage
for which Xxxxxx has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Sublease or make
such repair at Landlord's expense.
ARTICLE IX
ASSIGNMENT AND SUBLETTING
9.1 LANDLORD'S CONSENT REQUIRED. No portion of the Premises or of Tenant's
interest in this Sublease may be acquired by any other person or entity, whether
by assignment, mortgage, sublease transfer, operation of law, or act of Tenant,
without Xxxxxxxx's prior written consent which shall not be unreasonably
withheld, except as provided in Section 9.2 below. Any attempted transfer
without consent shall be void and shall constitute a noncurable breach of this
Sublease.
9.2 TENANT AFFILIATE. Tenant may assign this Sublease or sublease the Premises
without Landlord's consent, to any corporation which controls, is controlled by
or is under common control with Tenant, or to any corporation resulting from the
merger of or consolidation with Tenant or to any entity which acquires
substantially all of Tenant's voting stock ("Tenant's Affiliate"). In the event
that Xxxxxx's Affiliate has a net worth of less than twenty-five million dollars
($25,000,000.00) then Landlord's written consent to assign shall be required. In
such case, any Tenant's Affiliate shall assume in writing all of Tenant's
obligations under this Sublease, but the Tenant shall remain primarily liable
hereunder.
9.3 NO RELEASE OF TENANT. No transfer permitted by this Article Nine, whether
with or without Landlord's consent, shall release Tenant or change Tenant's
primary liability to pay the rent and to perform all other obligations of Tenant
under this Sublease. Xxxxxxxx's acceptance of rent from any other person is not
a waiver of any provision of this Article Nine. Consent to one transfer is not a
consent to any subsequent transfer. If Xxxxxx's transferee defaults under this
Sublease, Landlord may proceed directly against Tenant without pursuing remedies
against the transferee. Landlord may consent to subsequent assignments or
modifications of this Sublease by Xxxxxx's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Xxxxxx's liability under
this Sublease.
9.4 LANDLORD'S ELECTION. Xxxxxx's request for consent to any transfer described
in Section 9.1 above shall be accompanied by a written statement setting forth
the details of the proposed transfer, including the name, business and financial
condition of the prospective transferee, financial details of the proposed
transfer (e.g., the term of and rent and security deposit payable under any
assignment or sublease), and any other information Landlord deems relevant.
Landlord shall have the right (a) to withhold consent, if reasonable; (b) to
grant consent; or (c) if the transfer Is a sublease of the Premises or an
assignment of this Sublease, to terminate this Sublease as of the effective date
of such sublease or assignment, in which case Landlord may elect to enter into a
direct sublease with the proposed assignee or subtenant.
9.5 NO MERGER. No merger shall result from Xxxxxx's sublease of the Premises
under this Article Nine, Xxxxxx's surrender of this Sublease or the termination
of this Sublease in any other manner. In any such event, Landlord may terminate
any or all subtenancies or succeed to the interest of Xxxxxx as sublandlord
thereunder.
ARTICLE X
DEFAULTS; REMEDIES
10.1 COVENANTS AND CONDITIONS. Xxxxxx's performance of each of Tenant's
obligations under this Sublease is a condition as well as a covenant. Xxxxxx's
right to continue in possession of the Premises is conditioned upon such
performance. Time is of the essence in the performance of all covenants and
conditions.
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10.2 DEFAULTS. Tenant shall be in material default under this Sublease:
10.2.1 VACATION OR ABANDONMENT. If Tenant abandons the Premises or if
such abandonment of the Premises results in the cancellation of any insurance
described in Section 4.4; or
10.2.2 FAILURE TO PAY. If Tenant fails to pay rent or any other charge
required to be paid by Xxxxxx, as and when due; or
10.2.3 FAILURE TO PERFORM. If Xxxxxx fails to perform any of Tenant's
nonmonetary obligations under this Sublease for a period of fifteen (15) days
after written notice from Landlord; provided that if more time is required to
complete such performance, Tenant shall not be in default if Tenant commences
such performance within the fifteen (15) day period and thereafter diligently
pursues its completion. However, Landlord shall not be required to give such
notice if Xxxxxx's failure to perform constitutes a non-curable breach of this
Sublease. The notice required by this Subsection is intended to satisfy any and
all notice requirements imposed by law on Landlord and is not in addition to any
such requirement.
10.2.4 OTHER DEFAULTS. (i) If Tenant makes a general assignment or
general arrangement for the benefit of creditors; (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed by
or against Tenant and is not dismissed within thirty (30) days; (iii) if a
trustee or receiver is appointed to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Sublease
and possession is not restored to Tenant within thirty (30) days; or (iv) if
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Sublease is subjected to attachment, execution or other
judicial seizure which is not discharged within thirty (30) days. If a court of
competent jurisdiction determines that any of the acts described in this
Subsection 10.2.4 is not a default under this Sublease, and a trustee is
appointed to take possession (or If Tenant remains a debtor in possession) and
such trustee or Tenant transfers Xxxxxx's interest hereunder, then Landlord
shall receive. as Additional Rent, the difference between the rent (or any other
consideration) paid in connection with such assignment or sublease and the rent
payable by Tenant hereunder.
10.3 REMEDIES. On the occurrence of any material default 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:
10.3.1 TERMINATION OF POSSESSION. Terminate Xxxxxx's right to possession
of the Premises by any lawful means, in which case this Sublease shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
In such event Landlord shall have the immediate right to reenter and remove all
persons and property and such property may be removed and stored in a public
warehouse or elsewhere at the cost of, and for the account of Tenant, all
without service of notice or resort to legal process and without being deemed
guilty of trespass, or becoming liable for any loss or damage which may be
occasioned thereby; and Landlord shall be entitled to recover from Tenant all
damages incurred by Landlord by reason of Tenant's default, including (i) the
worth at the time of the award of all Base Rent, Additional Rent and other
charges which were earned or were payable at the time of the termination; (ii)
the worth at the time of the award of the amount by which the unpaid Base Rent,
Additional Rent and other charges which would have been earned or were payable
after termination until the time of the award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; (iii) the worth at
the time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which would have been payable for the balance of the term
after the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Xxxxxx's
failure to perform its obligations under the Sublease or which in the ordinary
course of things would be likely to result therefrom, including, but not limited
to, any costs or expenses incurred by Landlord in maintaining or preserving the
Premises after such default, the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation or alteration of the
Premises, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commissions or other such fees paid or payable.
As used in subparts (i) and (ii) above, the "worth at the time of the award" is
computed by allowing interest on unpaid amounts at the rate of ten percent (10%)
per annum, or such lesser amount as may then be the maximum lawful rate. As used
in subpart (iii) above, the "worth at the time of the award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%). If Tenant shall have
abandoned the Premises, Landlord shall have the option of (i) retaking
possession of the Premises and recovering from Tenant the amount specified in
this Subsection 10.3.1, or (ii) proceeding under Subsection 10.3.2.
10.3.2 MAINTENANCE OF POSSESSION. Maintain Tenant's right to possession,
in which case this Sublease shall continue in effect whether or not Tenant shall
have abandoned the Premises. In such event, Landlord shall be entitled to
enforce all of Landlord's rights and remedies tinder this Sublease, including
the right to recover the rent as it becomes due hereunder.
10.3.3 OTHER REMEDIES. Pursue any other remedy now or hereafter available
to Landlord under the laws or judicial decisions of the state in which the
Premises is located.
10.4 THE RIGHT TO RELET THE PREMISES. Should Landlord elect to re-enter, as
herein provided, or should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, it may either terminate this
Sublease or it may from time to time without terminating this Sublease, make
such alterations and repairs as may be necessary in order to relet the property,
and relet said property or any part thereof for such term or terms (which may be
for a term extending beyond the term of this Sublease) and at such rental or
rentals and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable; upon each such reletting all rentals received by
the Landlord from such reletting shall be applied, first, to the repayment of
any indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the
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payment of any costs and expenses of such reletting, including brokerage fees
and attorneys' fees and of costs of such alterations and repairs; third, to the
payment of rent due and unpaid hereunder, and the residue, if any, shall be held
by Landlord and applied in payment of future rent as the same may become due and
payable hereunder. If such rentals received from such reletting during any month
are less than that to be paid during that month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be calculated
and paid monthly. No such re-entry or taking possession of said property by
Landlord shall be construed as an election on its part to terminate this
Sublease unless a written notice of such intention be given to Tenant or unless
the termination thereof be decreed by a court of competent jurisdiction.
10.5 WAIVER OF RIGHTS OF REDEMPTION. Tenant hereby expressly waives any and all
rights of redemption granted by or under any present or future laws in the
event of Tenant being evicted or dispossessed for any cause, or in the event of
Landlord obtaining possession of the Premises, by reason of an uncured material
default by Tenant of any of the covenants or conditions of this Sublease, or
otherwise.
10.6 CUMULATIVE REMEDIES. Landlords exercise of any right or remedy shall not
prevent it from exercising any other right or remedy.
ARTICLE XI
PROTECTION OF CREDITORS
11.1 SUBORDINATION
11.1.1 LANDLORD'S ELECTION. This Sublease is and shall remain subordinate
to the Master Lease. In addition, Landlord shall have the right to require
Tenant to subordinate this Sublease to any other ground lease deed of trust or
mortgage encumbering the Premises, any advances made on the security thereof and
any renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. However, Tenants right to quiet possession of the
Premises during the Sublease Term shall not be disturbed if Tenant pays the rent
and performs all of Tenant's obligations under this Sublease and is not
otherwise in default. It any ground lessor, beneficiary or mortgagee elects to
have this Sublease pier to the lien of its ground sublease, deed of trust or
mortgage and gives written notice thereof to Tenant, this Sublease shall be
deemed prior to such ground sublease, deed of trust or mortgage whether this
Sublease is dated prior or subsequent to the date of said ground sublease, deed
of trust or mortgage or the date of recording thereof.
11.1.2 ADDITIONAL DOCUMENTS. Xxxxxx agrees to execute any documents
required to effectuate such subordination or to make this Sublease prior to the
lien of any ground sublease, mortgage or deed of trust, as the case may he, and
failing to do so within ten (10) days after written demand, does hereby make,
constitute and irrevocably appoint Landlord as Xxxxxx's attorney-in-fact and in
Tenant's name, place and stead, to do so.
11.2 ATTORNMENT. If Xxxxxxxx's interest in the Premises is acquired by any
ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a
foreclosure sale, Tenant shall attorn to the transferee of or successor to
Xxxxxxxx's interest in the Premises and recognize such transferee or successor
as Landlord under this Sublease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant any right to terminate this
Sublease or surrender possession of the Premises upon the transfer of Landlord's
interest.
11.3 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any instrument or
documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so. If Tenant fails to do so within (10) days
after written request, Tenant hereby makes, constitutes and irrevocably appoints
Landlord, or any transferee or successor of Landlord, the attorney-in-fact of
Tenant to execute and deliver any such instrument or document.
11.4 ESTOPPEL CERTIFICATES.
11.4.1 LANDLORD'S REQUEST. Upon Landlord's written request, Tenant shall
execute, acknowledge and deliver to Landlord a written statement certifying: (1)
that none of the terms or provisions of this Sublease have been changed (or if
they have been changed, stating how they have been changed); (ii) that this
Sublease has not been cancelled or terminated; (iii) the last date of payment of
the Base Rent and other charges and the time period covered by such payment; and
(iv) that Landlord is not in default tinder this Sublease (or, if the Landlord
is claimed to be in default, stating why). Tenant shall deliver such statement
to Landlord within ten (10) days after Xxxxxxxx's request. Any such statement by
Tenant may be given by Landlord to any prospective purchaser or encumbrancer of
the Premises. Such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
11.4.2 FAILURE TO DELIVER. If Tenant does not deliver such statement to
Landlord within such ten (10) day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon the following
facts: (i) that the terms and provisions of this Sublease have not been changed
except as otherwise represented by Landlord; (ii) that this Sublease has not
been cancelled or terminated except as otherwise represented by Landlord; (iii)
that not more than one month's Base Bent or other charges have been paid in
advance; and (iv) that Landlord is not in default under the Sublease. In such
event, Tenant shall be estopped from denying the truth of such facts.
11.5 TENANT'S FINANCIAL CONDITION. Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord such financial statements as are
reasonably required by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall deliver
to any lender or proposed purchaser of the Premises designated by Landlord any
financial statements
14
required by such lender to facilitate the sale, financing or refinancing of the
Premises. Tenant represents and warrants to Landlord that each such financial
statement is a true and accurate statement of the date of such statement. All
financial statements shall be confidential and shall be used only for the
purposes set forth herein.
ARTICLE XII
LEGAL COSTS
12.1 LEGAL PROCEEDINGS. Tenant shall reimburse Landlord, upon demand, for any
costs or expenses incurred by Landlord in connection with any material default
of Tenant under this Sublease, whether or not suit is commenced or judgment
entered. Such costs shall include legal fees and costs incurrent for the
negotiation of a settlement, enforcement of rights or otherwise. Furthermore, if
any action for breach of or to enforce the provisions of this Sublease is
commenced, the court in such action shall award to the party in whose favor a
judgment is entered, a reasonable sum as attorneys' fees and costs Such
attorneys' fees and costs shall be paid by the losing party in such action.
Tenant shall also indemnify Landlord against and hold Landlord harmless from all
costs, expenses, demands and liability incurred by Landlord if Landlord becomes
or is made a party to any claim or action (a) instituted by Tenant or by any
third party against Tenant, or by or against any person holding any interest or
using the Premises by license of or agreement with Tenant; (b) for foreclosure
of any lien for labor or material furnished to or for Tenant or such other
person; (c) otherwise arising out of or resulting from any act or transaction of
Tenant or such other person; or (d) necessary to protect Landlord's interest
under this Sublease in a bankruptcy proceeding, or other proceeding under Title
11 of the United States Code, as amended Tenant shall defend Landlord against
any such claim or action at Tenant's expense with counsel reasonably acceptable
to Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs incurred by Landlord in any such claim or action.
12.2 LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable attorneys' fees
incurred in connection with Xxxxxx's request for Xxxxxxxx's consent under
Article Nine (Assignment and Subletting) or in connection with any other act
which Xxxxxx proposes to do and which requires Xxxxxxxx's consent.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 SUBSTITUTED PREMISES.
13.2 LANDLORD'S LIABILITY; CERTAIN DUTIES.
13.2.1 LANDLORD. As used in this Sublease, the term "Landlord" means only
the current owner or owners of the leasehold estate under the Master Lease at
the time in question. Each Landlord is obligated to perform the obligations of
Landlord under this Sublease only during the time such Landlord owns such
interest or title. Any Landlord who transfers its title or interest is relieved
of all liability with respect to the obligations of Landlord under this Sublease
to be performed on or after the date of transfer. However, each Landlord shall
deliver to its transferee all funds previously paid by Tenant if such funds have
not yet been applied under the terms of this Sublease.
13.2.2 WRITTEN NOTICE. Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Sublease to Landlord and
to the district, any ground lessor, mortgages or beneficiary under any deed of
trust encumbering the Premises whose name and address have been furnished to
Tenant in writing. Landlord shall not be in default under this Sublease unless
Landlord (or the district, or such ground lessor, mortgagee or beneficiary)
falls to cure such non-performance within thirty (30) days after receipt of
Tenant's notice. However, if such non-performance reasonably requires more than
thirty (30) days to cure, Landlord shall not be in default if such cure is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
13.3 SEVERABILITY. A determination by a court of competent jurisdiction that
any provision of this Sublease or any part thereof is illegal or unenforceable
shall not cancel or Invalidate the remainder of such provision or this Sublease,
which shall remain in full force and effect:
13.4 INTERPRETATION. The captions of the Articles or Sections of this Sublease
are to assist the parties in reading this Sublease and are not a part of the
terms or provisions of this Sublease.
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The masculine, feminine and neuter genders shall each include the other. In any
provision relating to the conduct, acts or omissions of Tenant, the term
"Tenant" shall include Tenant's agents, employees, contractors, invitees,
successors or others using the Premises with Xxxxxx's expressed or implied
permission.
13.5 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This Sublease is the
only agreement between the parties pertaining to the sublease of the Premises
and no other agreements are effective. All amendments to this Sublease shall be
in writing and signed by all parties. Any other attempted amendment shall be
void.
13.6 NOTICES. All notices required or permitted under this Sublease shall be in
writing and shall be personally delivered or sent by certified mail, return
receipt requested, postage prepaid. Notices to Tenant shall be delivered to the
address specified in Section 1.3 above, except that upon Xxxxxx's taking
possession of the Premises, the Premises shall be Tenant's address for notice
purposes. Notices to Landlord shall be delivered to the address specified in
Section 1.2 above. All notices shall be effective upon personal delivery or
three (3) days after deposit in the U.S. Mail. Either party may change its
notice address upon written notice to the other party.
13.7 WAIVERS. All waivers must be in writing and signed by the waiving party.
Landlord's failure to enforce any provision of this Sublease or its acceptance
of rent shall not be a waiver and shall not prevent Landlord from enforcing
that provision or any other provision of this Sublease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
13.8 NO RECORDATlON. Tenant shall not record this Sublease without prior
written consent from Landlord. However, either party may require that a "Short
Form" memorandum of this Sublease be executed by both parties and recorded.
13.9 BINDING EFFECT; CHOICE OF LAW. This Sublease binds any party who legally
acquires any rights or interest in this Sublease from Landlord or Tenant.
However, Landlord shall have no obligation to Xxxxxx's successor unless the
rights or interests of Xxxxxx's successor are acquired in accordance with the
terms of this Sublease. The laws of the state in which the Premises are located
shall govern this Sublease.
13.10 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant or Landlord is a
corporation, each person signing this Sublease on behalf of Tenant represents
and warrants that he has full authority to do so and that this Sublease binds
the corporation. Within five (5) days after this Sublease is signed, Tenant
shall deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Sublease or other evidence of such
authority reasonably acceptable to Landlord. If Xxxxxx is a partnership, each
person signing this Sublease for Tenant represents and warrants that he is a
general partner of the partnership, that he has full authority to sign for the
partnership and that this Sublease binds the partnership and all general
partners of the partnership. Tenant shall give written notice to Landlord of any
general partner's withdrawal or addition. Within five (5) days after this
Sublease is signed, Tenant shall deliver to Landlord a copy of Xxxxxx's recorded
statement of partnership or certificate of limited partnership.
13.11 JOINT AND SEVERAL LIABILITY. All parties signing this Sublease as Tenant
shall be jointly and severally liable for all obligations of Tenant.
13.12 FORCE MAJEURE. If Landlord cannot perform any of its obligations due to
events beyond Landlord's control, the time provided for performing such
obligations shall be extended by a period of time equal to the duration of such
events. Events beyond Xxxxxxxx's control include, but are not limited to, acts
of God, war, civil commotion, labor disputes, strikes, fire, flood or other
casualty, shortages of labor or material, government regulation or restriction
and weather conditions.
13.13 NO OPTION. The submission of this Sublease for examination does not
constitute a reservation of or option to sublease the Premises and this Sublease
becomes effective only upon execution and delivery thereof by Landlord and
Tenant.
TENANT: LANDLORD:
Copper Mountain Networks, Inc., Palomar Enterprises, Inc.,
a California corporation a California corporation
/s/ Xxxx X. Xxxxxxxx
----------------------------------------- /s/ [SIGNATURE ILLEGIBLE]^^
BY: Xxxx X. Xxxxxxxx, V.P. of Finance/CFO BY:------------------------------
Signed on Tuesday August 4, 1998 Signed on 8/10/98
--------------------------------- ----------------------
at ______________________________________ at ESCONDIDO, CA
------------------------------
10/1/89 Initials: J.A.C.
-----------
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ADDITIONAL PROVISIONS
SUBLEASE RIDER
This Additional Provisions Sublease Rider ("Rider") is attached to and made a
part of that certain Industrial Real Estate Triple Net Sublease dated July 20,
1998 between Palomar Enterprises, Inc., A California corporation as Landlord,
and Copper Mountain Networks, Inc., a California corporation as Tenant,
covering the Premises commonly known as 0000 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxx, XX 00000 Xxx Xxxxx, Xxxxxxxxxx (the "Sublease"). The terms used
in this Rider shall have the same definitions as set forth in the Sublease and
the other riders attached to and a part of the Sublease. The provisions of this
Rider shall supersede any inconsistent or conflicting provisions of the
Sublease, including the other riders attached to and made a part of the
Sublease.
1. TENANT IMPROVEMENTS:
Landlord and Tenant hereby agree that plans and specifications for the
improvements of the Tenant's area will be approved by the Landlord and
the Tenant jointly which shall not be unreasonably withheld by
Landlord. Landlord shall be responsible for the construction associated
with the tenant improvements illustrated and set forth in Exhibit "B"
which shall be attached hereto and made a part of this lease at a later
date. Landlord shall provide Tenant with a "Tenant Improvement
Allowance" equal to Thirty-two Thousand Two Hundred Five Dollars
($32,205.00) to complete construction and the Tenant Improvements in
accordance with the plans and specifications outlined in Exhibit "B".
The above mentioned Tenant Improvement Allowance shall include all
architectural planning and permitting fees. Any additional cost
associated with construction of the tenant improvements shall be paid
for by the Tenant at Tenant's sole cost and expense.
Tenant shall pay to Landlord, upon Xxxxxxxx's written demand, all
contractor's invoices in excess of the above mentioned Tenant
Improvement Allowance for the overage tenant improvement costs.
Landlord (at it's own expense) agrees to reinstall two grade level
roll-up doors and remove any refuse (including but not limited to the
batteries and battery rack on the Premises), prior to the Commencement
Date of this Sublease.
2. RENTAL SCHEDULE:
Months 1-12 / $10,198.00 per Month + operating expenses
Months 13-24 / $10,504.00 per Month + operating expenses
Months 25-36 / $10,819.00 per Month + operating expenses
Months 37-48 / $11,144.00 per Month + operating expenses
Months 49-60 / $11,478.00 per Month + operating expenses
3. TERMINATION CLAUSE:
Provided Tenant is not in material default of this lease, Tenant shall
have the option to terminate this lease agreement on October 31, 2000
by giving the Landlord at least six (6) months prior written notice and
paying a termination buyout fee in the amount of Forty Thousand Dollars
($40,000.00) at the time notice is given. Tenant shall also have the
option to terminate this lease on October 31, 2001 by giving Landlord
at least six (6) months prior written notice and paying a termination
fee in the amount of Twenty-five Thousand Dollars ($25,000.00) at the
time notice is given.
MODIFICATIONS TO THE SUBLEASE BETWEEN COPPER MOUNTAIN NETWORKS, INC.
AND PALOMAR ENTERPRISES INC.
Insert #13 Sublease Rider - Landlord (at it's own expense) agrees to reinstall
two grade level roll-up doors and remove any refuse (including but not limited
to the batteries and battery rack on the Premises), prior to the Commencement
Date of this Sublease.
EXHIBIT A
[PLAN APPEARS HERE]
EXHIBIT B
TO BE ATTACHED AT A LATER DATE
FLOOR PLAN APPEARS HERE]
EXHIBIT C
