1
Exhibit 10.25
[WARLAND INVESTMENTS COMPANY LOGO]
[WARLAND INVESTMENTS COMPANY LETTERHEAD]
February 19, 1997
Xx. Xxxxxx Xxxx
Chief Financial Officer
Ikon Office Solutions, Inc.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Re: Consent to Sublease ("Consent") between Edgemont Sales
Company, a division of IKON Office Solutions ("Sublessor") to
Universal Electronics, Inc., a Delaware corporation ("Sublessee") for
the premises located at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx
(the "Premises")
Dear Xx. Xxxx:
You have asked that Warland Investments Company, a California limited
partnership, formerly Warland Investments, Ltd., a California limited
partnership ("Warland"), as owner of the Premises leased to Sublessor under the
lease between Warland and Sublessor, dated May 31, 1988, as amended by those
certain amendments dated January 15, 1989 and October 18, 1991 (collectively,
the "Master Lease"), consent to the sublease of the Premises (the "Subleased
Space") to Sublessee (the "Sublease"). Please be advised that Warland grants its
consent to the Sublease upon the following terms and conditions:
1. The Sublease shall be in the form and content of attached EXHIBIT A.
Sublessee shall perform faithfully and promptly and be bound by all terms,
conditions and covenants of the Master Lease, attached hereto as Exhibit B,
except those inconsistent with the Sublease. Notwithstanding the foregoing, (i)
all claims of Sublessee under the Sublease or the Master Lease (collectively,
the "Leases") shall be brought only against Sublessor, and Sublessee shall have
no claims against Warland thereunder, (ii) Sublessor shall under no
circumstances assign any claims under the leases to Sublessee for prosecution
against Warland, and (iii) Sublessee shall have no right to further assign or
sublease its interest in the Sublease or the Subleased Space without obtaining
Xxxxxxx'x prior written consent (which consent shall be given or withheld in
accordance with the terms of the Master Lease).
2. The Sublease shall at all times remain subordinate, inferior and subject
to the Master Lease. Notwithstanding any provisions in the Sublease to the
contrary, under no circumstances shall the term of the Sublease extend beyond
the term of the Master Lease.
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Xx. Xxxxxx Xxxx
February 19, 1997
Page Two
3. All insurance obtained by Sublessee under the Sublease shall name
Warland as an additional insured and shall require thirty (30) days advance
written notice to Warland in the event of cancellation of such insurance.
4. Under no circumstances shall this consent (a) release or discharge
Sublessor from any liability to Warland, whether past, present or future, (b) be
construed to modify, waive or affect any of the terms, covenants, conditions or
provisions of the Master Lease, to waive any breach thereof, or to enlarge or
increase the obligations of Warland thereunder, or (C) be construed as a consent
by Warland to any further assignment or subletting.
5. Sublessor warrants and represents to Warland that as of the date of this
consent (i) the Master Lease is in full force and effect, (ii) Warland is not in
default under any provision of the Master Lease, (iii) no rent has been prepaid
under the Master Lease, and (iv) there are no offsets or other claims by
Sublessor against Warland.
6. Xxxxxxx'x consent to the Sublease is not a consent to any alterations or
improvements to the Subleased Space, other than the alterations and improvements
depicted on those certain plans prepared by Xxxxxx X. Xxxxxxxx & Associates,
dated February 10, 1997, which have been submitted to Warland and are hereby
approved. Sublessee shall not permit any mechanic's or materialmen's liens to be
recorded against the Premises as a result of any work undertaken on its behalf.
In the event a mechanic's or materialmen's lien is recorded against the
Premises, Sublessee shall, within thirty (30) days after notice from Warland,
either (i) remove the lien by payment of the secured claim, or (ii) obtain a
release bond in the statutory amount. The provisions of this paragraph do not
modify the respective rights and obligations of Warland and Sublessor as set
forth in Section 5.3 of the Master Lease.
7. Sublessor's rights under Section 9 of the Sublease shall be subject to
the terms and conditions of Section 9 of the Master Lease.
8. Sublessor and Sublessee agree that under no circumstances shall Warland
be liable for any brokerage commission, fee, or other charge or expense in
connection with the Sublease, and both Sublessor and Sublessee agree to
indemnify, defend and hold Warland harmless from and against any claims, cost,
expenses (including attorneys' fees), damages, liability incurred by Warland in
connection with any claim for such brokerage commission or fee.
9. This Consent is effective only upon counter-execution without
modifications
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Xx. Xxxxxx Xxxx
February 19, 1997
Page Three
by authorized signatories of Sublessor and Sublessee and is not assignable.
Very truly yours,
WARLAND INVESTMENTS COMPANY,
California limited partnership
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Xxxx X. Xxxxxxxxx
Co-Managing Director
By: /s/ Xxxx X. Xxx
------------------------------
Xxxx X. Xxx
Co-Managing Director
AGREED TO AND ACCEPTED this
25 day of February, 1997:
"Sublessor"
EDGEMONT SALES COMPANY,
a division of IKON OFFICE SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Xxxxxx Xxxx
Chief Financial Officer
"Sublessee"
UNIVERSAL ELECTRONICS, INC.
a Delaware corporation
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Executive Vice President, C.O.O.
By: _________________________
Name: ________________________
Plant Engineer
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EXHIBIT "A"
-----------
THE SUBLEASE
------------
(See Attached)
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[CB COMMERCIAL LOGO] SUBLEASE
CB COMMERCIAL REAL ESTATE GROUP, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
1. PARTIES.
This Sublease, dated January 10 , 19 97 , is made between
----------------------- -----
Edgemont Sales Company, a division of IKON Office Solutions, Inc.
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("Sublessor"), and Universal Electronics, Inc., a Delaware Corporation
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("Sublessee").
2. MASTER LEASE.
Sublessor is the lessee under a written lease dated May 31 , 19 88
------------- ----,
wherein Warland Investments, Ltd. ("Lessor")
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leased to Sublessor the real property located in the City of Cypress ,
---------------
County of Orange , State of California ,
---------------------------- --------------------------
described as that certain approximately 30,768 square foot free standing
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building located at 0000 Xxxxxxx Xxxxx, situated on lot AP# 000-000-00
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("Master Premises"). Said lease has been amended by the following
amendments _______________________________________________________________;
said lease and amendments are collectively referred to as the "Master Lease"
and are attached hereto as Exhibit "A."
3. PREMISES.
Sublessor hereby subleases to Sublessee on the terms and conditions set
forth in this Sublease the following portion of the Master Premises
("Premises"): the entire premises as described in section
-------------------------------------------------------------
"2. Master Lease" above.
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4. WARRANTY BY SUBLESSOR.
Sublessor warrants and represents to Sublessee that the Master Lease has not
been amended or modified except as expressly set forth herein, that
Sublessor is not now, and as of the commencement of the Term hereof will not
be, in default or breach of any of the provisions of the Master Lease, and
that Sublessor has no knowledge of any claim by Lessor that Sublessor is in
default or breach of any of the provisions of the Master Lease.
5. TERM.
The Term of this Sublease shall commence on February 10 , 19 97
--------------------- -----
("Commencement Date"), or when Lessor consents to this Sublease (if such
consent is required under the Master Lease), whichever shall last occur,
and end on December 31 , 19 98 ("Termination Date"),
------------------------------ -----
unless otherwise sooner terminated in accordance with the provisions of this
Sublease. In the event the Term commences on a date other than the
Commencement Date, Sublessor and Sublessee shall execute a memorandum
setting forth the actual date of commencement of the Term. Possession
of the Premises ("Possession") shall be delivered to Sublessee on the
commencement of the Term. If for any reason Sublessor does not deliver
Possession to Sublessee on the commencement of the Term, Sublessor shall
not be subject to any liability for such failure, the Termination Date shall
not be extended by the delay, and the validity of this Sublease shall not
be impaired, but rent shall xxxxx until delivery of Possession. Notwith-
standing the foregoing, if Sublessor has not delivered Possession to
Sublessee within thirty (30) days after the Commencement Date, then at any
time thereafter and before delivery of Possession, Sublessee may give
written notice to Sublessor of Sublessee's intention to cancel this
Sublease. Said notice shall set forth an effective date for such
cancellation which shall be at least ten (10) days after delivery of said
notice to Sublessor. If Sublessor delivers Possession to Sublessee on or
before such effective date, this Sublease shall remain in full force and
effect. If Sublessor fails to deliver Possession to Sublessee on or before
such effective date, this Sublease shall be cancelled, in which case all
consideration previously paid by Sublessee to Sublessor on account of this
Sublease shall be returned to Sublessee, this Sublease shall thereafter be
of no further force or effect, and Sublessor shall have no further liability
to Sublessee on account of such delay or cancellation. If Sublessor permits
Sublessee to take Possession prior to the commencement of the Term, such
early Possession shall not advance the Termination Date and shall not be
subject to the provisions of this Sublease, including without limitation the
payment of rent.
6. RENT.
6.1 Minimum Rent. Sublessee shall pay to Sublessor as minimum rent, without
deduction, setoff, notice, or demand, at
00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000
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or at such other place as Sublessor shall designate from time to time by
notice to Sublessee, the sum of
Sixteen Thousand Nine Hundred Twenty-two & No/100ths Dollars ($16,922.00)
------------------------------------------------------- ---------
per month, in advance on the first day of each month of the Term. Sublessee
shall pay to Sublessor upon execution of this Sublease the sum of
Sixteen Thousand Nine Hundred Twenty-two & No/100ths Dollars ($16,922.00)
------------------------------------------------------- ---------
as rent for the month of April 1-30, 1997
--------------------------------------------------------------.
If the Term begins or ends on a day other than the first or last day of a
month, the rent for the partial months shall be prorated on a per diem
basis. Additional provisions: _____________________________________________
6.2 Operating Costs. If the Master Lease requires Sublessor to pay to Lessor
all or a portion of the expenses of operating the building and/or project of
which the Premises are a part ("Operating Costs"), including but not limited
to taxes, utilities, or insurance, then Sublessee shall pay to Sublessor as
additional rent Sublessor's actual costs [percent ( %) of the
---------------------------------- ---
amounts] payable by Sublessor for Operating Costs incurred during the Term.
Such
Language indicated as being shown by strike out in the typeset
document is enclosed in brackets "["and"]" in the electronic format.
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additional rent shall be payable as and when Operating Costs are payable by
Sublessor to Lessor. If the Master Lease provides for the payment by
Sublessor or Operating Costs on the basis of an estimate thereof, then as
and when adjustments between estimated and actual Operating Costs are made
under the Master Lease, the obligations of Sublessor and Sublessee
hereunder shall be adjusted in a like manner; and if any such adjustment
shall occur after the expiration or earlier termination of the Term, then
the obligations of Sublessor and Sublessee under this Subsection 6.2 shall
survive such expiration or termination. Sublessor shall, upon request by
Sublessee, furnish Sublessee with copies of all statements submitted by
Lessor of actual or estimated Operating Costs during the Term.
7. SECURITY DEPOSIT.
Sublessee shall deposit with Sublessor upon execution of this Sublease the
sum of Thirty-three Thousand Thousand Eight Hundred forty-four
--------------------------------------------------------------------
and No/100ths------------ Dollars ($33,844.00) as security for Sublessee's
--------------------------- ---------
faithful performance of Xxxxxxxxx's obligations hereunder ("Security
Deposit"). If Sublessee fails to pay rent or other charges when due under
this Sublease, or fails to perform any of its other obligations hereunder,
Sublessor may use or apply all or any portion of the Security Deposit for
the payment of any rent or other amount then due hereunder and unpaid, for
the payment of any other sum for which Sublessor may become obligated by
reason of Sublessee's default or breach, or for any loss or damage
sustained by Sublessor as a result of Sublessee's default or breach. If
Sublessor so uses any portion of the Security Deposit, Sublessee shall,
within ten (10) days after written demand by Sublessor, restore the
Security Deposit to the full amount originally deposited, and Sublessee's
failure to do so shall constitute a default under this Sublease. Sublessor
shall not be required to keep the Security Deposit separate from its
general accounts, and shall have no obligation or liability for payment of
interest on the Security Deposit. In the event Sublessor assigns its
interest in this Sublease, Sublessor shall deliver to its assignee so much
of the Security Deposit as is then held by Sublessor. Within ten (10) days
after the Term has expired, or Sublessee has vacated the Premises, or any
final adjustment pursuant to Subsection 6.2 hereof has been made, whichever
shall last occur, and provided Sublessee is not then in default of any of
its obligations hereunder, the Security Deposit, or so much thereof as had
not theretofore been applied by Sublessor, shall be returned to Sublessee
or to the last assignee, if any, of Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for warehousing, distribution
---------------------------
and engineering of electronic components, and for no other use or purpose.
----------------------------------------
9. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet all or any part
of the Premises without the prior written consent of Sublessor (and the
consent of Lessor, if such is required under the terms of the Master
Lease).
10. OTHER PROVISIONS OF SUBLEASE.
All applicable terms and conditions of the Master Lease are incorporated
into and made a part of this Sublease as if Sublessor were the lessor
thereunder, Sublessee the lessee thereunder, and the Premises the Master
Premises, except for the following: There shall be an abatement of
---------------------------------------
rent during the months of February 1 - March 31, 1997.
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Sublessee assumes and agrees to perform the lessee's obligations under the
Master Lease during the Term to the extent that such obligations are
applicable to the Premises, except that the obligation to pay rent to Lessor
under the Master Lease shall be considered performed by Sublessee to the
extent and in the amount rent is paid to Sublessor in accordance with
Section 6 of this Sublease. Sublessee shall not commit or suffer any act or
omission that will violate any of the provisions of the Master Lease.
Sublessor shall exercise due diligence in attempting to cause Lessor to
perform its obligations under the Master Lease for the benefit of
Sublessee. If the Master Lease terminates, this Sublease shall terminate
and the parties shall be relieved of any further liability or obligation
under this Sublease, provided however, that if the Master Lease terminates
as a result of a default or breach by Sublessor or Sublessee under this
Sublease and/or the Master Lease, then the defaulting party shall be liable
to the nondefaulting party for the damage suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives
Sublessor any right to terminate the Master Lease in the event of the
partial or total damage, destruction, or condemnation of the Master
Premises or the building or project of which the Master Premises are a
part, the exercise of such right by Sublessor shall not constitute a
default or breach hereunder.
11. ATTORNEYS' FEES.
If Sublessor, Sublessee, or Broker shall commence an action against the
other arising out of or in connection with this Sublease, the prevailing
party shall be entitled to recover its costs of suit and reasonable
attorney's fees.
12. AGENCY DISCLOSURE.
Sublessor and Sublessee each warrant that they have dealt with no other
real estate broker in connection with this transaction except: CB
COMMERCIAL REAL ESTATE GROUP, INC., who represents the Sublessor
----------------------,
and Xxxxx & Xxxxx , who represents the Sublessee .
----------------------- -----------------------------
In the event that CB COMMERCIAL REAL ESTATE GROUP, INC. represents both the
Sublessor and Sublessee, Sublessor and Sublessee hereby confirm that they
were timely advised of the dual representation and that they consent to the
same, and that they do not expect said broker to disclose to either of them
the confidential information of the other party.
13. COMMISSION.
Upon execution of this Sublease, and consent thereto by Lessor (if such
consent is required under the terms of the Master Lease), Sublessor shall
pay Broker a real estate brokerage commission in accordance with
Sublessor's contract with Broker for the subleasing of the Premises, if
any, and otherwise in the amount of per agreement
--------------------------------------
Dollars ($_______), for services rendered in effecting this Sublease.
Broker is hereby made a third party beneficiary of this Sublease for
the purpose of enforcing its right to said commission.
14. NOTICES.
All notices and demands which may or are to be required or permitted to be
given by either party on the other hereunder shall be in writing. All
notices and demands by the Sublessor to Sublessee shall be sent by United
States Mail, postage prepaid, addressed to the Sublessee at the Premises,
and to the address hereinbelow, or to such other place as Sublessee may
from
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time to time designate in a notice to the Sublessor. All notices and demands
by the Sublessee to Sublessor shall be sent by United States Mail, postage
prepaid, addressed to the Sublessor at the address set forth herein, and to
such other person or place as the Sublessor may from time to time designate
in a notice to the Sublessee.
To Sublessor: IKON Office Solutions, Inc., Attention: Real Estate
------------------------------------------------------------
Department, 000 Xxxxxxxxx Xxxx, Xxxxx, XX 00000
------------------------------------------------------------
To Sublessee: Universal Electronics, 1864 Enterprise Parkway, West,
------------------------------------------------------------
Twinsburg, OH 44087
------------------------------------------------------------
15. CONSENT BY XXXXXX.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY LESSOR
WITHIN 10 DAYS AFTER EXECUTION HEREOF, IF SUCH CONSENT IS REQUIRED UNDER THE
TERMS OF THE MASTER LEASE.
16. COMPLIANCE.
The parties hereto agree to comply with all applicable federal, state and
local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this
Agreement, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment in Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.
Sublessor: IKON Office Solutions, Inc. Sublessee: Universal Electronics
------------------------------ -------------------------------
By: /s/ Xxxxxx Xxxx By: /s/ Xxxx Xxxxxxxx
------------------------------------- --------------------------------------
Title: CFO Title: EXC. V.P. C.O.O.
---------------------------------- -----------------------------------
By: By: /s/ Xxxx X. Xxxxxxx
------------------------------------- --------------------------------------
Title: Title: Plant Engineer
---------------------------------- -----------------------------------
Date: 2/17/97 Date: 2-10-97
----------------------------------- ------------------------------------
XXXXXX'S CONSENT TO SUBLEASE
The undersigned ("Lessor"), lessor under the Master Lease, hereby consents to
the foregoing Sublease without waiver of any restriction in the Master Lease
concerning further assignment or subletting. Lessor certifies that, as of the
date of Xxxxxx's execution hereof, Sublessor is not in default or breach of any
of the provisions of the Master Lease, and that the Master Lease has not been
amended or modified except as expressly set forth in the foregoing Sublease.
Lessor: Warland Investments, Ltd.
---------------------------------
By:
---------------------------------
Title:
---------------------------------
By:
---------------------------------
Title:
---------------------------------
Date:
---------------------------------
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CONSULT YOUR ADVISORS -- This document has been prepared for approval by your
attorney. No representation or recommendation is made by Broker as to the
legal sufficiency or tax consequences of this document or the transaction to
which it relates. These are questions for your attorney.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
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EXHIBIT "B"
-----------
THE MASTER LEASE
----------------
(See Attached)
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AMENDMENT TO LEASE
-------------------
THIS AMENDMENT TO LEASE (this "Amendment") is made and entered into as
of this 15th day of January, 1989, by and between WARLAND INVESTMENT, LTD., a
California limited partnership ("Warland"); and EDGEMONT SALES COMPANY, INC., a
California corporation ("Edgemont").
R E C I T A L S
- - - - - - - -
WHEREAS Warland and Edgemont as landlord and tenant, respectively,
executed that certain lease (the "Lease") dated May 31, 1988, whereby Warland
leased to Edgemont those certain Premises known as 0000 Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx, and
WHEREAS Warland and Xxxxxxxx have agreed that the Basic Monthly Rent
set forth in Section 5 of the Fundamental Lease Provisions of the Lease shall
be increased due to the cost of the Tenant Improvements installed in the
Premises by Landlord on behalf of Tenant,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. BASIC MONTHLY RENT. The initial Basic Monthly Rent shall be
$19,505.00 per month.
THE PARTIES FURTHER AGREE AS FOLLOWS:
2. TERM COMMENCEMENT DATE. The Term Commencement Date set forth in
Section 8 of the Fundamental Lease Provisions shall be December 12, 1988.
3. RENT COMMENCEMENT DATE. The Rent Commencement Date set forth in
Section 8 of the Fundamental Lease Provisions shall be January 21, 1989.
4. EFFECTIVE DATE. This amendment shall be effective on and as of the
date hereof.
5. SEVERABILITY. If any covenant or agreement of this Amendment or
the application thereof to any person or circumstance shall be held to the
invalid or uneforceable, then in each such event the remainder of this
Amendment or the application of such covenant or agreement to any other person
or any other circumstance shall not be thereby affected, and each covenant and
agreement hereof shall remain valid and enforceable to the fullest extent
permitted by law.
6. FURTHER ASSURANCES. Each of the parties hereto agrees that it will
without further consideration execute and deliver such other documents and take
such other action as may be reasonably requested by the other party to
consummate more effectively the purposes or subject matter of this Amendment,
so long as such actions do not adversely and materially affect the rights
hereunder of the party to whom such action is required.
7. ATTORNEY'S FEES. In the event of any controversy, claim or dispute
between the parties affecting or relating to the purposes or subject matter of
this Amendment, the prevailing party shall be entitled to recover from the
nonprevailing party all of its reasonably expenses, including attorney's and
accountant's fees.
IN WITNESS WHEREOF, the parties hereto have entered into this Amendment
as of the date first above written.
WARLAND INVESTMENTS, LTD.
a California limited partnership
By /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxxx
Managing Director
"Landlord"
EDGEMONT SALES COMPANY, INC.,
a California corporation
By /s/ Xxxxxx Xxxxxxx, President
--------------------------------------
Xxxxxx Xxxxxxx, President
"Tenant"
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SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Second Amendment") is made and
entered into as of this 18th day of October, 1991, by and between WARLAND
INVESTMENTS, LTD., a California limited partnership, as Landlord, (hereinafter
"Landlord"); and EDGEMONT SALES COMPANY, INC., a California corporation, as
Tenant (hereinafter "Tenant").
R E C I T A L S
- - - - - - - -
WHEREAS Xxxxxxxx and Xxxxxx executed that certain lease (the "Lease")
dated May 31, 1988, and amended by the Amendment to Lease dated January 15,
1989, whereby Landlord leased to Tenant those certain Premises known as 0000
Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, and
WHEREAS Section 6 of the Lease provides that Tenant shall obtain Rental
Insurance as defined in Section 6.1.3,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
(1) RENTAL INSURANCE
(a) Section 6 of the Lease shall be amended to provide that
Landlord shall obtain the Rental Insurance as defined in Section 6.1.3.
(b) Tenant shall reimburse Landlord in full for the cost of the
insurance obtained by Landlord pursuant to Section 6.1.3 within thirty (30)
days of receipt of written demand therefore by Landlord.
(c) All other insurance provided for in Section 6 of the Lease
shall continue to be obtained and kept in full force and effect by Xxxxxx, at
Tenant's sole cost and expense.
2. OTHER TERMS AND CONDITIONS. All other terms of the Lease dated May
32, 1988, as amended by the Amendment to Lease dated January 15, 1989, shall be
in full force and effect.
3. EFFECTIVE DATE. This Second Amendment shall be effective on and as
of the date hereof.
4. SEVERABILITY. If any covenant or agreement of this Second
Amendment or the application thereof to any person or circumstance shall be
held to be invalid or unenforceable, then and in each such event the remainder
of this Amendment or the application of such covenant or agreement to any other
person or any other circumstance shall not be thereby affected, and each
covenant and agreement hereof shall remain valid and enforceable to the fullest
extent permitted by law.
5. FURTHER ASSURANCES. Each of the parties hereto agrees that it will
without further consideration execute and deliver such other documents and take
such other action as may be reasonably requested by the other party to
consummate more effectively the purposes or subject matter of this Second
Amendment, so long as such actions do not adversely and materially affect the
rights hereunder of the party to whom such action is required.
6. ATTORNEY'S FEES. In the event of any controversy, claim or dispute
between the parties affecting or relating to the purposes or subject matter of
this Second
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Amendment, the prevailing party shall be entitled to recover from the
nonprevailing party all of its reasonable expenses, including attorney's and
accountant's fees.
IN WITNESS WHEREOF, the parties hereto have entered into this Second
Amendment as of the date first above written.
WARLAND INVESTMENTS COMPANY
a California general partnership
By /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxxx
Managing Director
"Landlord"
EDGEMONT SALES COMPANY,
a California corporation
By /s/ Xxx Xxxxxx
-------------------------------
Xxx Xxxxxx
President
"Tenant"
12
LEASE
WARLAND/CYPRESS BUSINESS CENTER
-------------------------------
A Project of Warland Investments, Ltd.
WARLAND INVESTMENTS, LTD.
Landlord,
AND
EDGEMONT SALES COMPANY, INC.,
a California corporation,
Tenant
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L E A S E
THIS LEASE (this "Lease") is made and entered by and between WARLAND
INVESTMENTS, LTD., a California limited partnership ("Landlord"), and the tenant
("Tenant") described in Item 1 of the Fundamental Lease Provisions.
LEASE OF PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, subject to all of the terms and conditions set forth herein, those
certain premises (the "Premises") containing approximately the number of square
feet of land area described in Item 2(b) of the Fundamental Lease Provisions
outlined in red and cross-hatched on that certain plot plan ("Plot Plan")
attached hereto as Exhibit "A" and legally described on Exhibit "B-1", on which
Landlord has constructed, or will construct pursuant to the Construction
Provisions attached hereto as Exhibit "C" (the "Construction Provisions"),
improvements (the "Building") containing approximately the number of
square feet of rentable area described in Item 2(c) of the Fundamental Lease
Provisions.
The Premises are a part of certain real property owned by Landlord
located in the City of Cypress, County of Orange, State of California more
particularly described on Exhibit "B-2" attached hereto, on which Landlord has
developed the Warland/Cypress Business Center (the "Business Center").
FUNDAMENTAL LEASE PROVISIONS
1. TENANT: EDGEMONT SALES COMPANY, INC.
a California corporation
2. Premises:
(a) Premises Address: 0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx
(b) Premises Land Area: 86,681 square feet
(c) Premises Building Area: 30,768 square feet
(d) Premises Parking Spaces: 120 spaces
3. Initial Term: 120 months and one (1) partial month if
the Lease Term commences on a day other than the first
day of a calendar month
(See Section 1)
4. Options to Extend Initial Term: One (1) Ten-Year Option
(See Section 13)
5. Basic Monthly Rent: $18,400 (may be adjusted: See
Section 6 of Exhibit "C", the Construction Provisions)
Partial Lease Month (if any) (prorated on a 30 day
basis): $613.13 per day.
First Month's Rent (payable upon execution): $18,400.00
6. Security Deposit: $18,400.00 (one month's rent)
(See Section 2.3)
7. Permitted Use: Administrative offices, warehouse and
distribution
8. Commencement Date: November 1, 1988
Rent Commencement Date: Thirty (30) days after Term
Commencement Date
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9. Broker(s) Fremont Properties
000 Xxxx 000xx, Xxxxx 000
Xxxxxxxx, XX 00000
10. Address for Notice:
Landlord:
Warland Investments, Ltd.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx,
Managing Director
TENANT:
Edgemont Sales Company, Inc.
00000 Xxxxxxx Xxxxxx
X.X. Box 918
Los Alamitos, CA 90720
Attention: Xxx Xxxxxxx, President
11. Contents of Lease: Pages 1-25
Standard Lease Provisions (Sections 1 through 13)
Exhibits "A" Plot Plan
"B-1" Legal Description of the Premises
"B-2" Legal Description of the Business Center
"C" Construction Provisions
"D" Tenant's Certificate
"E" Sign Criteria
"F" Landscape Maintenance Specifications
"G" Painting Specifications
"H" Architect's Certificate
"I" Estoppel Certificate
12. Date of this Lease: May 31, 1988
--------------------
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References in the Fundamental Lease Provisions to Sections in this Lease
are for convenience only and designate some of the Sections of the Standard
Lease Provisions in which references to particular Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental
Lease Provisions shall be construed to incorporate all the terms provided under
each such Fundamental Lease Provision. In the event of any conflict between any
Fundamental Lease Provision and the balance of the Lease, the latter shall
control.
IN WITNESS WHEREOF, the parties hereto have executed this Lease, consisting
of the foregoing provisions and Sections 1 through 13 of the Standard Lease
Provisions which follow, together with the Exhibits described in Item 11 of
the Fundamental Lease Provisions, all of which is incorporated herein by this
reference.
WARLAND INVESTMENTS, LTD.,
a California limited partnership
By /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxxx
Title: Managing Director
"LANDLORD"
EDGEMONT SALES COMPANY, INC.
a California corporation
By /s/ Xxx Xxxxxxx
-------------------------------
Xxx Xxxxxxx
Title: President
"TENANT"
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TABLE OF CONTENTS
SECTION PAGE
1. Term................................................... 6
1.1 Term .............................................. 6
1.2 Commencement Date ................................. 6
1.3 Tenant's Certificate .............................. 6
1.4 Lease Year ........................................ 6
2. Rent and Security Deposit ............................. 6
2.1 Rent .............................................. 6
2.2 Additional Rent ................................... 7
2.3 Security Deposit .................................. 7
3. Taxes and Utilities ................................... 7
3.1 Real Property Taxes ............................... 7
3.2 Personal Property Taxes ........................... 8
3.3 Utility Charges ................................... 8
4. Operation ............................................. 8
4.1 Use ............................................... 8
4.2 General ........................................... 9
4.3 Signs ............................................. 9
4.4 Parking ........................................... 9
4.5 Hazardous Materials ............................... 9
5. Maintenance, Repairs, and Alterations ................. 10
5.1 Tenant Maintenance, Repair and
Restoration Obligations ........................... 10
5.2 Landlord Maintenance and Repair ................... 11
5.3 Alterations and Additions ......................... 11
5.4 Mechanics' Liens .................................. 12
5.5 Failure ........................................... 12
5.6 Title ............................................. 12
5.7 Surrender ......................................... 12
6. Insurance and Liability ............................... 13
6.1 Insurance ......................................... 13
6.2 Insurer and Policy Form ........................... 13
6.3 Xxxxxx and Subrogation ............................ 14
6.4 Indemnification ................................... 14
7. Casualty .............................................. 14
7.1 Reconstruction .................................... 14
7.2 Termination ....................................... 14
7.3 Waiver of Civil Code Sections ..................... 15
8. Condemnation .......................................... 15
8.1 Definitions ....................................... 15
8.2 Total Condemnation ................................ 15
8.3 Partial Condemnation .............................. 16
8.4 Allocation of Award ............................... 16
8.5 Waiver of Code of Civil Procedure Section ......... 16
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SECTION PAGE
9. Assignment and Subletting .............................. 16
9.1 Assignment and Subletting ........................ 16
9.2 Notice ........................................... 16
9.3 Termination, Sublease or Assign .................. 17
9.4 Consent .......................................... 17
9.5 Additional Transactions .......................... 17
9.6 Limitation ....................................... 17
9.7 Assignment and Subletting Profit Recapture ....... 18
9.8 Permitted Sublesses .............................. 18
10. Subordination .......................................... 18
10.1 Tenant's Agreement to Subordinate ................ 18
10.2 Attornment ....................................... 19
11. Default and Remedies ................................... 19
11.1 Default .......................................... 19
11.2 Remedies ......................................... 20
11.3 Late Charge and Interest ......................... 21
12. Miscellaneous .......................................... 21
12.1 Default by Landlord .............................. 21
12.2 Estoppel Certificates ............................ 21
12.3 Holding Over ..................................... 22
12.4 Quiet Enjoyment .................................. 22
12.5 Force Majeure .................................... 22
12.6 Sale of the Premises ............................. 22
12.7 Construction Warranties .......................... 23
12.8 Recording ........................................ 23
12.9 Financial Statements ............................. 23
12.10 Access by Landlord ............................... 23
12.11 Notice ........................................... 23
12.12 Time ............................................. 23
12.13 Entire Agreement ................................. 23
12.14 Further Assurances ............................... 24
12.15 Applicable Law ................................... 24
12.16 Controversy ...................................... 24
12.17 Headings and Gender .............................. 24
12.18 Successors ....................................... 24
12.19 Corporate Authority .............................. 24
13. Addendum ............................................... 24
13.1 Rental Adjustments ............................... 24
13.2 Option of Renew .................................. 24
13.3 Calculation of Rent During Option Period .........
13.4 Rental Adjustments During Option Period .......... 25
13.5 Rent Relief ...................................... 25
EXHIBIT "A" Plot Plan
EXHIBIT "B-1" Legal Description of the Premises
EXHIBIT "B-2" Legal Description of the Business Center
EXHIBIT "C" Construction Provisions
EXHIBIT "D" Tenant's Certificate
EXHIBIT "E" Sign Criteria
EXHIBIT "F" Landscape Maintenance Specifications
EXHIBIT "G" Painting Specifications
EXHIBIT "H" Architech's Certificate
EXHIBIT "I" Estoppel Certificate
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STANDARD LEASE PROVISIONS
1. TERM
1.1 TERM. The initial term of this Lease ("Initial Term") shall be as
specified in Item 3 of the Fundamental Lease Provisions, commencing as of the
date (the "Commencement Date") described in Section 1.2 and, unless sooner
terminated in accordance with the provisions hereof, ending on the last day of
the Initial Term. Notwithstanding the foregoing, in the event the Commencement
Date is a day other than the first day of a month, there shall be added to the
Initial Term specified in Item 3 of the Fundamental Lease Provisions, the period
(the "Partial Lease Month") from the Commencement Date to the first day of the
next calendar month. As used herein, "Term" shall mean the Initial Term and all
option periods ("Option Periods"), if any, described in Section 13.
1.2 COMMENCEMENT DATE. The Commencement Date shall be either (i) the
date of substantial completion ("Substantial Completion") of Landlord's
obligations for construction of the Premises in accordance the Construction
Provisions (Exhibit "C"), or (ii) November 1, 1988, whichever occurs last.
Substantial Completion is defined as the date Landlord notifies Tenant that
Landlord's obligations for construction of the Premises have been substantially
completed in accordance with the Construction Provisions. Certification by
Xxxxxxxx's Architect (the "Project Architect") of Substantial Completion shall
be conclusive and binding upon the parties hereto. Notwithstanding the
foregoing, in the event that Substantial Completion is delayed by reason of any
act or omission of Tenant, (a "Tenant Delay"), the date specified in clause
(i) above shall be the date Substantial Completion would have occurred had the
Tenant Delay(s) not occurred. In no event shall Tenant be required to take
possession of the Premises prior to November 1, 1988.
Landlord may provide for Substantial Completion of the Premises on or
after the Target Commencement Date. Landlord shall deliver possession of the
Premises to Tenant on or before the date of Substantial Completion of the
Premises. Landlord shall exercise reasonable efforts to notify Tenant 30 days in
advance of the estimated Commencement Date. However, in the event delivery of
the Premises is delayed beyond the Target Commencement Date for any reason,
Landlord shall not be liable or responsible to Tenant for any loss or damage
suffered by Tenant resulting from such delay.
1.3 TENANT'S CERTIFICATE AND CERTIFICATE OF OCCUPANCY. Tenant shall
execute and deliver to Landlord within 10 days after the Commencement Date a
certificate substantially in the form of Exhibit "D" (the "Tenant's
Certificate"). The failure of Tenant to execute and deliver the Tenant's
Certificate shall constitute an acknowledgment by Tenant that the statements
included in Exhibit "D" are true and correct, without exception. Within 60 days
following the Commencement Date, Landlord shall procure and deliver to Tenant a
copy of the certificate of occupancy for the Premises issued by the appropriate
governmental agency.
1.4 LEASE YEAR. A Lease Year shall consist of a period of 12
consecutive full calendar months. The first Lease Year shall begin on the
Commencement Date or, if the Commencement Date does not occur on the first day
of a calendar month, on the first day of the calendar month next following the
Commencement Date. Each succeeding Lease Year shall commence upon the
anniversary date of the first Lease Year.
2. RENT AND SECURITY DEPOSIT.
2.1 RENT. Tenant shall pay to Landlord as rent ("Rent") for the Partial
Lease Month, if any, and for each month of each Lease Year during the Term,
when due and without offset or deduction, the Basic Monthly Rent described in
Item 5 of the Fundamental Lease Provisions.
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Each installment of Basic Monthly Rent shall be paid in lawful tender
in advance to Landlord at the address specified in Item 10 of the Fundamental
Lease Provisions or such other address as Landlord shall designate in writing to
Tenant on or before the first day of the calendar month for which Rent is due.
If the Commencement Date is on a day other than the first day of a calendar
month, then the Rent for the Partial Lease Month shall be prorated on the basis
of a 30-day month and shall be payable in advance on or before the Commencement
Date.
2.2 ADDITIONAL RENT. Tenant shall also pay as additional rent
("Additional Rent") all other payments, if any, to be made by Tenant pursuant to
the provisions of this Lease, payable when due. Additional Rent and Basic
Monthly Rent are sometimes collectively referred to herein as "Rent."
2.3 SECURITY DEPOSIT. Xxxxxx agrees to deposit with Xxxxxxxx
simultaneously with the execution of this Lease by Landlord a security deposit
(the "Security Deposit") securing Xxxxxx's faithful performance of all the
terms, covenants and conditions hereunder in the amount set forth in Item 6 of
the Fundamental Lease Provisions. In the event of any default ("Default")
described in Section 11.1, Landlord may from time to time, without any
obligation to do so, use, apply or retain all or any part of the Security
Deposit for the payment of any Rent or any other sum in Default, or for the
payment of any amount which Landlord may spend or become obligated to spend by
reason of Tenant's Default, or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of Tenant's Default. If any portion of the
Security Deposit is so used or applied Tenant shall, within five days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount; Tenant's failure to do so
shall be a Default under this Lease. Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit or any remaining balance thereof, shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Xxxxxx's interest hereunder) within
10 days following expiration of the Term. In the event of termination of
Xxxxxxxx's interest in this Lease, Landlord shall transfer the Security Deposit
to Landlord's successor in interest.
TAXES AND UTILITIES.
3.1 REAL PROPERTY TAXES.
3.1.1 REAL PROPERTY TAXES DEFINED. "Real Property Taxes" means (i)
any and all forms of tax, assessment, license fee, excise, bond, levy, charge or
imposition (collectively referred to herein as "Taxes", general, special,
ordinary or extraordinary, imposed, levied or assessed against the Building, the
Premises, the Business Center or any interest of Landlord or any mortgagee
thereof in the same, by any authority or entity having the direct or indirect
power to tax, including without limitation, any city, county, state or federal
government, or any fire, school, redevelopment, agricultural, sanitary, street,
lighting, security, drainage or other authority, political subdivision or
improvement district thereof, (ii) any Tax in substitution, partially or
totally, of any Tax now or previously included within the definition of Real
Property Taxes, including without limitation, those imposed, levied or assessed
to increase tax increments to governmental agencies, or for services such as
(but not limited to ) fire protection, police protection, street, sidewalk and
road maintenance, refuse removal or other governmental services previously
provided without charge (or for a lesser charge) to property owners and/or
occupants, (iii) any Taxes allocable to or measured by the area of the Building,
the Premises, the Business Center or any Rent payable hereunder, including
without limitation, any gross income tax or excise tax on the receipt of such
Rent or upon the possession, leasing, operation, maintenance, repair, use or
occupancy by Tenant or Landlord of the Premises, and (iv) any Taxes on the
transfer or transaction directly or indirectly represented by this Lease, by any
subleases or assignments
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hereunder or by other leases in the Business Center or by any document to which
Tenant is a party, creating or transferring (or reflecting the creation or
transfer) of an interest or estate in the Premises. Notwithstanding the
foregoing, during the Initial Term of this Lease, Tenant shall not be obligated
to pay increases in Real Estate Taxes due to the sale of the Building, the
Premises or the Business Center. Real Property Taxes shall not include any
general franchise, income, estate or inheritance tax imposed on Landlord.
3.1.2 PAYMENT. Tenant shall pay all Real Property Taxes applicable
to the Premises during the Term not less than 10 days prior the delinquency date
therefor and within five days thereafter shall provide Landlord with written
evidence satisfactory to Landlord of payment of the same. In the event that any
such Real Property Taxes are applicable to periods other than during the Term,
the parties shall equitably prorate the amount payable by Xxxxxx and shall
provide for reimbursement to Landlord or Tenant, as required. Landlord shall be
responsible for and shall pay the Real Property Taxes up to the Commencement
Date. At Landlord's option, Landlord shall pay on behalf of Tenant the Real
Property Taxes. Landlord shall invoice Tenant for said Real Property Taxes and
Tenant shall remit same within five days for receipt of said invoice. Landlord
shall forward Real Property Taxes statements to Tenant within a reasonable time
period following receipt of same from the County Tax Collector.
3.1.3 SEPARATE ASSESSMENT. Landlord shall use its best efforts to
cause the Premises to be separately assessed from other real property owned by
Landlord. In the event Landlord is unable to obtain a separate assessment of the
Premises, the county assessor's work sheets or other records, if available,
shall be used by Landlord in reasonably determining that portion of the Real
Property Taxes levied or assessed against the tax assessment parcel, of which
the Premises are a part, properly allocable to the Premises. In the event such
work sheets or other records are not available, Landlord shall reasonably and
equitably allocate the Real Property Taxes levied or assessed against the tax
assessment parcel of which the Premises are a part between the Premises and the
remainder of such tax assessment parcel.
3.2 PERSONAL PROPERTY TAXES. Tenant shall pay, or cause to be paid, not
less than 10 days prior to delinquency any and all taxes, assessments, license
fees and other charges levied or assessed during the Term upon all of Tenant's
Alterations, leasehold improvements, equipment, furniture, fixtures, and any
other personal property located in, on or about the Premises. In the event of
any or all of Tenant's Alterations, leasehold improvements, equipment,
furniture, fixtures and other personal property shall be assessed and taxed with
the real property, Tenant shall pay to Landlord such taxes within 10 days after
delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant's property.
3.3 UTILITY CHARGES. Tenant shall be solely responsible for, and shall
pay promptly the cost of, (including connection and other charges) all heat,
water, gas, light, electrical, sewer, telephone and other services and utilities
supplied to the Premises, together with any taxes thereon. If any such services
are not separately metered to the Premises, Tenant shall pay Tenant's share, as
reasonably determined by Landlord, of all charges jointly metered with other
real property owned by Landlord.
4. OPERATION.
4.1 USE. Tenant shall use the Premises solely for the purpose set forth
under Item 7 of the Fundamental Lease Provisions and shall not use or permit the
Premises or any part thereof to be used for any other purpose or purposes
whatsoever. Tenant shall keep the Premises and every part thereof, in a clean
and wholesome condition, free from any objectionable noises, odors, or
nuisances, and shall comply with all health and police regulations applicable
thereto in all respects. Tenant
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agrees that all trash and rubbish of Tenant shall be deposited only in
receptacles as provided by Landlord and that there shall be no other trash
receptacles permitted to remain outside the Premises.
4.2 GENERAL. Tenant, for itself, its sub-tenants, concessionaires and
its and their employees, agents, customers, invitees and licensees, agrees (a)
not to cause, permit or suffer any nuisance or waste to or of the Premises or
any disturbance of the quiet enjoyment of any other tenant in the Business Park,
including, without limitation, (i) the use or permission of use of any medium,
such as loudspeakers, sound amplifiers, exterior lighting or other devices,
capable of being heard or seen outside the Premises, such as flashing lights,
searchlights, loudspeakers, phonographs or radio broadcasts, or (ii) the
affixing, posting or distribution in, on or about the Premises or the Business
Center of any signs, handbills, circulars, advertisements or papers or other
materials or matters, except upon the prior written consent of Landlord, (b) to
comply with (i) any and all federal, state, county or municipal statutes, laws,
ordinances, rules, regulations and orders at any time, now or in the future
affecting the Premises, including, without limitation, any of the same requiring
improvements to or alteration of the Premises, (ii) any and all covenants,
conditions, restrictions or easements affecting the Premises or the Property and
(iii) each and all of the provisions of this Lease, any policies of insurance at
any time now or in the future in effect pursuant to this Lease and any deeds of
trust at any time now or in the future affecting the Premises and (c) not to
take or do, permit or suffer any action or thing which would in any way (i)
increase or cause to be increased the rates of any policy of insurance at any
time now or in the future in any way affecting the Premises, or (ii) subject
Landlord, its other tenants or subtenants, or their employees, agents,
customers, invitees or licensees, to any liability for injury to any person or
any property as a result thereof.
4.3 SIGNS. Tenant shall be permitted to construct and maintain on or
about the Premises such monument, free-standing or attached signs ("Signs")
identifying Tenant, the number, type design, color, location, site
configurations and materials which shall be (a) consistent with the Sign
Criteria of the Warland/Cypress Business Center ("Sign Criteria") attached
hereto as Exhibit "E", (b) consistent with applicable governmental statutes,
laws, ordinances, rules, regulations and orders and shall have been approved by
all governmental entities having jurisdiction with respect thereto, (c) approved
by Landlord in advance in writing and (d) subject to the provisions of Section
5.3.
4.4 PARKING. Tenant shall limit its parking to the parking lot on the
Premises. Tenant shall not permit any parking by its employees, agents,
subtenants, customers, invitees, concessionaires or visitors on the streets
surrounding the premises.
4.5 HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with
respect to the existence or use of "Hazardous Material" (as defined below) on
the Premises:
4.5.1 Tenant shall (i) not cause or permit any Hazardous Material
to be brought upon, kept or used in or about the Premises by Tenant, its agents,
employees, contractors or invitees, without the prior written consent of
Landlord which Landlord shall not unreasonably withhold as long as Tenant
demonstrates to Landlord's reasonable satisfaction that such Hazardous Material
is necessary for Tenant's business and will be used, kept and stored in a manner
that complies with all Laws pertaining to any such Hazardous Material. If Tenant
breaches the obligations stated in the preceding sentence, or if the presence of
Hazardous Material on the Premises caused or permitted by Tenant 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 harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses (including, without limitation, diminution
in value of the Premises, damages for the loss or restriction on use of
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rentable or usable space or of any amenity of the Premises, damages arising
from any adverse impact on marketing of space in the building in which the
Premises is located, and sums paid in settlement of claims, attorneys's fees,
consultant fees and expert fees) which arise during or after the Lease 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 government agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Property. Without limiting the foregoing, if the
presence of any Hazards 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 (i) Landlord's approval of such actions 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 and (ii) such actions are calculated to cause
the least amount of inconvenience to other Tenants.
4.5.2 Notwithstanding anything in this Lease to the contrary, it
shall not be unreasonable for Landlord to withhold its consent to any proposed
assignment, sublease of transfer if (i) the proposed transferee's anticipated
use of the Premises involves the generation, storage, use, treatment or disposal
of Hazardous Material; (ii) the proposed transferee 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 transferee's actions or use of the property in
question; or (iii) the proposed transferee is subject to any enforcement order
issued by any governmental authority in connection with the use, disposal or
storage of a Hazardous Material.
4.5.3 As used herein, the term "Hazardous Material" 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 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-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
Materials Release Response Plans and Inventory), (iv) defined as a "hazardous
substance" under Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v)
petroleum, (vi) asbestos, (vii) listed under Article 9 or 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. (421 U.S.C.
Section 9601).
5. MAINTENANCE, REPAIRS, AND ALTERATIONS
5.1 TENANT MAINTENANCE, REPAIR AND RESTORATION OBLIGATIONS. Subject to
the provisions of Sections 5.2, 7.1 and 8.3., Tenant shall,
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during the Term, at Tenant's sole cost and expense, keep the Premises and every
part thereof in good, clean, safe, attractive and lawful order, condition and
repair. The portions of the Premises subject to such maintenance and repair
obligations shall include, but shall not be limited to, the roof, walls and
foundation of the Building, all parts of all electrical, water, gas, telephone,
security, sewage and other utility systems located on the Premises or serving
the Premises, all portions of the heating, ventilation and air conditioning
systems ("HVAC") serving the Premises and all sidewalks, driveways, landscaping,
signs, truck travel lanes, parking lots, and fences located or to be located on
the Premises.
In the performance of its landscape maintenance obligations,
Tenant shall follow the Landscape Maintenance Specifications of the
Warland/Cypress Business Center attached hereto as Exhibit "F". Furthermore,
Tenant shall contract with R&D Landscaping & Irrigation for the on-going
maintenance of the landscaping, or with such other landscaping maintenance firm
as shall be approved by Landlord. Tenant shall obtain a service contract for
repairs and maintenance of the HVAC system, which maintenance contract shall
conform to the requirements of the warranty, if any, provided in connection with
the initial HVAC system, with a copy of the service contract to be furnished to
Landlord within 30 days of execution of this Lease. In addition, Xxxxxx shall be
responsible for the repainting of the exterior of the Premises during the fifth
to sixth year of the Lease Term, if reasonably required, at Tenant's sole cost,
and pursuant to the original Painting Specifications (including, but not limited
to, the color specifications), attached hereto as Exhibit "G". Tenant shall be
responsible for the resurfacing of the parking lot of the Premises during the
fifth to sixth year of the Lease Term, if reasonably required, at Tenant's sole
cost.
Tenant expressly waives the benefits of any statute at any time
now or in the future in effect which would otherwise afford Tenant the right to
make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition or repair,
including, without limitation, California Civil Code Sections 1940, 1941 and
1942.
5.2 LANDLORD MAINTENANCE AND REPAIR. Except as specifically provided
in this Section 5.2 and Section 7 and 8, Landlord shall have no obligation to
maintain or repair the Premises. Except as provided in Sections 7 and 8, there
shall be no abatement of Rent and in no case shall there be any liability of
Landlord to Tenant or any other individual or entity by reason of (a) any injury
to unless such injury is directly caused by Xxxxxxxx's gross negligence or
wilful act) or interference with Xxxxxx's business arising from the making of
any repairs, alterations or improvements in or to any portion of the Business
Center, the Building or to the Premises or in or to fixtures, appurtenances and
equipment therein or (b) any entry onto the Premises by Landlord for purposes of
making such repairs, alterations or improvements or any other purpose.
5.3 ALTERATIONS AND ADDITIONS. Tenant shall not, without Xxxxxxxx's
prior written consent, which consent shall not be unreasonably withheld, make
any alterations, additions, improvements or utility installations
("Alterations") in, on or about the Premises. Landlord hereby consents to all
nonstructural Alterations to the interior of the Premises, the cost of which
does not exceed $100,000.00 in the aggregate in any one Lease Year. As a
condition to its consent, Landlord may require (a) Alterations to be made under
the supervision of a competent architect or structural engineer in accordance
with plans and specifications approved in advance by Landlord, and (b) Tenant to
provide Landlord, at Tenant's sole cost and expense, with a lien and completion
bond in an amount equal to one and one-quarter times the estimated cost of such
alterations to insure Landlord against any liability for liens and to insure
completion of such Alterations. In determining whether to grant or deny such
consent, Landlord may also consider the aesthetics of any proposed Alterations
and whether such Alterations would enhance the physical appearance and value of
the Premises. Upon completion of any Alterations, Xxxxxx agrees to (i) cause a
Notice of Completion to be
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recorded in the Office of the County Recorder in the County of Orange in
accordance with Section 3093 of the California Civil Code, and (ii) cause
Tenant's Architect to complete and sign the Architect's Certificate in the form
attached hereto as Exhibit "H". All such Alterations shall be done in a good,
workmanlike manner, shall be diligently prosecuted to completion and shall be
performed and done strictly in accordance with all applicable governmental
statutes, laws, rules, regulations, ordinances and orders, including, without
limitation the State of California Title 24 Energy Regulations. In any event,
Tenant shall give Landlord not less than 30 days' written notice prior to the
commencement of any Alterations and Landlord shall have the right to post
notices of nonresponsibility on or about the Premises.
5.4 MECHANICS' LIENS. Tenant agrees (a) that it will promptly pay for
all costs of Alterations or other work done or permitted by it or caused to be
done by it on or about the Premises, (b) that it will keep the Premises free and
clear of any liens arising out of any such Alterations or otherwise, (c) that
should any such lien by made or filed against the Premises on account of such
Alterations, or other work done, permitted, or caused to be done, by Tenant,
Tenant shall, at its sole cost and expense, bond against or discharge such lien
within 10 days after receipt of written request to do so from Landlord.
5.5 FAILURE. In the event that Tenant fails, refuses or neglects to
commence and complete repairs promptly and adequately, to remove any liens, pay
any costs, expense, to reimburse Landlord or to otherwise perform any act or
fulfill any obligation required of Tenant pursuant to this Section 7.5, Landlord
may, at its option, make or complete any such repairs, remove such lien, pay
such costs, or perform such acts, or the like, without prior notice to do so but
at the sole cost and expense of Xxxxxx; Xxxxxx agrees to reimburse Landlord for
all costs and expenses of Landlord thereby incurred within ten (10) days after
receipt by Xxxxxx from Landlord of a statement setting forth an amount of such
costs and expenses. The failure by Tenant to so make repairs, to remove any
lien, to pay any such costs or expense or to so reimburse Landlord (in the case
of reimbursement within such ten (10) day period), shall constitute a default
by Tenant under this Lease and shall carry with it the same consequences as the
failure to pay any installment of rent. Xxxxxxxx's rights and remedies,
pursuant to this Section 7.5, shall be in addition to any and all other rights
and remedies provided under this lease or by law.
5.6 TITLE. All right, title and interest in and to the Premises and any
Alterations thereto including, without limitation, all improvements constructed
pursuant to the Construction Provisions, shall be held by and retained by
Landlord and shall be free and clear of any claim or interest of Tenant upon
expiration or sooner termination of this Lease. Subject to the provisions of
Section 5.6, Tenant shall not waste, destroy or remove any improvements,
fixtures, or other property affixed to the Premises without the prior written
consent of Landlord, which consent shall not be unreasonably withheld.
5.7 SURRENDER. Upon expiration or any sooner termination of this Lease,
Tenant shall, at its sole cost and expense, excepting reasonable wear and tear
not resulting from the failure of Tenant to perform its obligations under this
Section 5, promptly (i) at Landlord's written election, undo and remove all
trade fixtures, personal property, installations, Alterations, signs and
leasehold improvements made by, on behalf of, or otherwise within the possession
of, Tenant, its subtenants, or their employees or agents, on or about the
Premises requested to be removed and undone by Landlord, (ii) restore, at
Landlord's written election, the floor, ceiling and walls of the Premises to
their condition immediately preceding the Commencement Date, and (iii) surrender
up and deliver possession of the Premises to Landlord, broom clean and in the
same condition, order and repair existing immediately preceding the Commencement
Date.
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6. INSURANCE AND LIABILITY.
6.1 INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in
full force during all portions of the Term and effective upon tender of
possession of the Premises:
6.1.1 LIABILITY INSURANCE. A policy of comprehensive public
liability insurance insuring against any liability arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto
and contractual indemnity insurance insuring Tenant's obligations under Section
6.5.1 (collectively, "Liability Insurance"). Such Liability Insurance shall have
limits of not less than $6,000,000 for combined single limit for injury, death
or any one or more persons and property damage. The limits of the Liability
Insurance shall never be decreased, but shall be increased in accordance with
increases, if any, reasonably determined by Landlord to be necessary to maintain
policy limits from time to time in amounts customary and usual for premises
comparable to the Premises; such increases, if any, are to be made on a yearly
basis on or about the anniversary of the Commencement Date;
6.1.2 ALL RISK INSURANCE. A policy of All Risk Insurance ("All
Risk Insurance") insuring the Premises, all improvements contained thereon,
Alterations thereto and all other property located on the Premises against loss
by all perils covered under All Risk Insurance including, without limitation,
fire, malicious mischief, extended coverage, vandalism, and special extended
perils in an amount equal to their full new replacement cost. The All Risk
Insurance shall not cover Xxxxxx's personal property, removable trade fixtures
and Alterations not constituting replacements of components of the original
Building demised hereunder.
6.1.3 RENTAL INSURANCE. A policy of rental insurance ("Rental
Insurance") against loss or damage by fire and other perils covered by All Risk
Insurance in an amount, during the Partial Lease Month, if any, and the first
Lease Year, not less than the Basic Annual Rent payable hereunder for the
Partial Lease Month, if any, and the first Lease Year, and during each Lease
Year thereafter in an amount not less than the greater of the Basis Monthly Rent
payable hereunder for such Lease Year or the sum of all Rent which was payable
hereunder for the then immediately preceding Lease Year;
6.1.4 PLATE GLASS INSURANCE. A policy of full coverage plate glass
insurance on the Premises (provided, however, Tenant may self-insure for this
coverage); and
6.1.5 WORKERS' COMPENSATION INSURANCE. A policy of workers'
compensation insurance insuring all of Tenant's employees working on or about
the Premises with coverage limits not less than those required by applicable
law.
6.2 INSURER AND POLICY FORM. All insurance policies required to be obtained
by Tenant pursuant to the provisions of this Section 6, (i) shall be carried
only through responsible insurance companies rated A:XII or better in the most
current "Best's Key Rating Guide", (ii) shall be primary and noncontributing
with, and not in excess of, any insurance coverage which may be carried by
Landlord, (iii) shall name Landlord and any other parties designated by Landlord
as an insured, and (iv) shall contain language or bear endorsements that such
policy or policies shall not lapse, be cancellable or be subject to reduction of
coverage without giving Landlord 30 days' prior written notice thereof. Within
30 days after the initial purchase of said insurance policies, but not more than
25 days after the Commencement Date and within 30 days after every material
change therein, Tenant shall provide Landlord a copy of each such policy of
insurance or a certificate of insurance certifying to the existence of such
insurance ineffect in a form consistent with the requirements of this Section 6.
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6.3 WAIVER OF SUBROGATION. Each policy of insurance obtained by either
party pursuant to this Lease insuring against the perils required to be covered
in the All Risk Insurance, whether or not such policy is required to be obtained
hereunder, shall expressly waive all rights of subrogation against the other and
their respective officers, directors, general partners, employees, agents and
representatives.
6.4 INDEMNIFICATION. From and after the date of execution hereof by
Landlord, Tenant shall indemnify, defend and hold Landlord harmless against and
from all claims, demands, actions, causes of actions, damages, liabilities,
obligations, costs and expenses, including, without limitation, attorneys' fees
arising from (i) the construction, repair, alteration, improvement, use,
occupancy or enjoyment of the Premises by Tenant or any person thereon,
including, without limitation, any labor dispute involving Xxxxxx, (ii) any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease or (iii) any negligent or wrongful act
or omission of Tenant, or any officer, agent, employee, guest or invitee of
Tenant in or about the Premises. Notwithstanding the foregoing, the
indemnifications provided under this Section 6.5.1 shall not apply to any claims
resulting from the gross negligence or wilful misconduct of Landlord.
7. CASUALTY.
7.1 RECONSTRUCTION. Subject to the provisions of Sections 7.1.2 and
7.2, in the event the Premises are damaged by fire or any other peril (other
than, at the option of Landlord, the negligence or wilful misconduct of Tenant,
its employees or contractors), Landlord shall repair, reconstruct and restore
(collectively, "Restore" or "Restoration") with reasonable promptness the
Premises (other than any property of Tenant which is not insured pursuant to
Section 6.1, Restoration of which shall be conducted by Tenant) to a condition
reasonably equivalent to its condition immediately prior to such damage. In such
case, this Lease shall remain in full force and effect, except that in all cases
of damage (other than that resulting from the negligence or wilful misconduct of
Tenant, its employees or contractors) Tenant shall be entitled to a
proportionate reduction of the Basic Annual Rent from the date of damage until
substantial completion, as certified by Landlord's architect, of Restoration of
such damage, based upon the extent to which the damage and making of such
repairs shall reasonably interfere with the occupancy by Tenant of the Premises;
provided, however, that such reduction of Basic Monthly Rent shall by only to
the extent of the proceeds of the rent insurance to be obtained under Section
6.1.3.
7.1.2 INSURANCE DEFICIENCY. In the event of any damage to the
Premises by fire or any other peril required to be insured by Tenant pursuant to
Section 6.1, (i) Tenant shall bear the risk that the insurance coverage to be
provided by Tenant under Sections 6.1.2 and 6.1.3 will be sufficient to cover
the full replacement cost of the Restoration of the Premises by Landlord under
Section 7.1 and any abatement of Basic Monthly Rent under Section 7.1 and (ii)
Tenant shall be solely responsible for the payment of the cost of any deficiency
thereof. Following adjustment of the loss and the obtaining of a guaranteed
maximum cost construction contract covering the Restoration, if Landlord
determines there may be a deficiency in insurance proceeds, Landlord shall
deliver written notice thereof to Tenant, together with an estimate of the
deficiency. Promptly following receipt of such notice, Tenant shall promptly
deposit in cash the amount of such deficiency with Landlord. Following
completion of the Restoration, if the deposit was insufficient Tenant shall pay
the cost of the remaining deficiency; if the deposit was excessive, Landlord
shall return the excess to Tenant. Landlord shall not be required to commence
the Restoration until it has received such deposit.
7.2 TERMINATION.
7.2.1 UNINSURED CASUALTY. In the event the Premises are
damaged as a result of any peril other than the perils covered by
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insurance or self-insured by Tenant pursuant to Section 6.1 (an "Uninsured
Casualty"), then Landlord shall forthwith Restore the same, provided the cost of
such Restoration does not exceed $200,000.00. In the event of an Uninsured
Casualty where the cost of Restoration of the Premises, as reasonably determined
by Landlord, exceeds such amount, then Landlord shall have the option to (a)
Restore such damage, with this Lease continuing in full force and effect, but
with the Basic Annual Rent to be proportionately reduced as provided in Section
7.1, or (b) terminate this Lease. Xxxxxxxx's option to terminate this Lease
shall be exercisable by delivery of 30 days' prior written notice to Tenant,
given at any time within 60 days of such damage or destruction.
7.2.2 OTHER TERMINATION. In the event that any damage occurs
during the last 12 months of the Term and the cost of Restoration of such damage
exceeds $300,000.00, Landlord and Tenant (except as to Tenant in the case where
such damage results from the negligence or wilful misconduct of Tenant, its
employees or contractors) shall each have the option, exercisable at any time
within 60 days of such damage, to terminate this Lease on 30 days' prior written
notice to the other party.
7.2.3 PAYMENT OF RENT. In the case of any termination of this
Lease pursuant to this Section 7.2, all Rent, reduced for the period from the
date of damage through the date of termination of this Lease in an amount
proportionate to the extent, if any, to which such damage interfered with
Xxxxxx's occupancy of the Premises, shall be paid by Tenant through the date of
such termination.
7.3 WAIVER OF CIVIL CODE SECTIONS. Tenant hereby waives the benefit of
the provisions of Sections 1932(2) and 1933(4) of the California Civil Code with
respect to any partial or total destruction of the Premises.
8. CONDEMNATION.
8.1 DEFINITIONS.
8.1.1 CONDEMNATION. Condemnation ("Condemnation") shall be
defined as (i) the taking of all or any portion of the Premises through the
exercise of any governmental power of condemnation or eminent domain, whether by
legal proceedings or otherwise, by any public or quasi-public authority, private
corporation, entity or individual having the power of condemnation or eminent
domain ("Condemnor") or (ii) any voluntary sale or transfer by Landlord, either
under the threat of Condemnation or while Condemnation proceedings are pending.
8.1.2 TOTAL CONDEMNATION. Total condemnation ("Total
Condemnation") shall be defined as the Condemnation of the entire Premises.
8.1.3 PARTIAL CONDEMNATION. Partial condemnation ("Partial
Condemnation") shall be defined as any Condemnation that does not constitute a
Total Condemnation.
8.1.4 CONDEMNATION DATE. Condemnation date ("Condemnation Date")
shall be defined as the earlier of (i) the date of constructive or actual
possession of that portion of the Premises subject to Condemnation is taken by
the Condemnor or (ii) the date when title to that portion of the Premises
subject to Condemnation vests in the Condemnor or its nominee.
8.1.5 AWARD. Award ("Award") shall be defined as all compensation
awarded, paid or received in connection with a Condemnation.
8.2 TOTAL CONDEMNATION. In the event of a Total Condemnation, this
Lease shall terminate as of the Condemnation Date.
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8.3 PARTIAL CONDEMNATION.
8.3.1 TERMINATION. In the event of any Partial Condemnation of
the Premises which substantially impairs the use of the remainder of the
Premises by Tenant, Tenant and Landlord shall each have the option to terminate
this Lease, exercisable upon 60 days' prior written notice delivered to the
other party at any time within 30 days after the Condemnation Date.
8.3.2 ABATEMENT OF RENT. In the event of any Partial
Condemnation, Rent payable as of the Condemnation Date, but during and only
during the period of such Partial Condemnation, shall be abated by an amount
equal to the then Rent multiplied by a fraction, the numerator of which is equal
to the total square footage of rentable area of that portion of the Premises
which is subject to Condemnation and the denominator of which is equal to the
total ground floor square footage of the Premises.
8.3.3 RESTORATION. In the event of any Partial Condemnation where
this Lease is not terminated pursuant to Section 8.3.1, Landlord shall with
reasonable promptness, Restore the Premises to a single self-contained unit in a
condition as near as reasonably possible to the condition of the Premises
immediately preceding Condemnation; provided, however, Xxxxxxxx's obligation to
Restore the Premises shall be limited to that portion of the Award received by
Landlord attributable to severance damages.
8.4 ALLOCATION OF AWARD. Subject to the provisions of this Section
8.4, the entire Award made as a result of any Condemnation shall belong solely
to, and shall be the sole property of, Landlord, whether such Award shall be as
compensation for diminution in value of this Lease, for the value of any
unexpired portion of the Term, or as compensation for the fee or for the
Premises, and Tenant shall have no claim against either Landlord or the
Condemnor with respect thereto. Notwithstanding the foregoing, Tenant shall be
entitled to pursue an Award for moving or relocation expenses and for the
unamortized value of any trade fixtures or Alterations of Tenant subject to
Condemnation. Xxxxxx does hereby covenant and agree, upon the request of
Xxxxxxxx, to execute an assignment of any Award in substance consistent with the
provisions of this Section 8.4.
8.5 WAIVER OF CODE OF CIVIL PROCEDURE SECTION. Each Party hereby
waives the provisions of Section 1265.130 of the California Code of Civil
Procedure and the provisions of any successor or other law of the like import.
9. ASSIGNMENT AND SUBLETTING.
9.1 ASSIGNMENT AND SUBLETTING. Subject to the provisions of Section
9.8 herein, Tenant may not assign, transfer, hypothecate, encumber, by operation
of law or otherwise, this Lease, or any of its interest herein or hereto, nor
sublet the Premises, or any portion thereof, nor grant any license or right of
use or occupancy with respect to the Premises, without the prior written consent
of Landlord which consent (i) in the case of a proposed assignment of the Lease
shall not be unreasonably withheld subject to Section 10.5 and (ii) in all other
cases, including subleases of all or any portion of the Premises, may be
withheld in the sole and absolute discretion of Landlord. Any attempt to do
otherwise shall be absolutely and unconditionally null and void and of no force
or effect whatsoever.
9.2 NOTICE. If Tenant desires to undertake any such transaction, it
shall provide Landlord with written notice of such desire specifying the
consideration for, and all other terms and conditions of, and identifying the
proposed assignee or subtenant (the "Proposed Party") and including with the
notice the current financial statement of the Proposed Party.
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9.3 TERMINATION, SUBLEASE, OR ASSIGN. At any time within 30 days after
Xxxxxxxx's receipt of the information specified in Section 9.2, Landlord may by
written notice to Tenant elect (i) to sublease from Tenant the Premises or the
portion thereof so proposed to be subleased by Xxxxxx, or to take an assignment
of Tenant's leasehold estate hereunder, or such part thereof as shall be
specified in said notice, upon the same terms as those offered to the proposed
subtenant or assignee, as the case may be, except that the Rent payable by
Landlord in the case of a sublease to Landlord shall be the same rent per square
foot as is payable by Tenant hereunder for the same period; or (ii) to terminate
this Lease as to the portion of the Premises so proposed to be subleased or
assigned (which may include all of the Premises), with a proportionate abatement
in the Rent payable hereunder. In the case where Landlord elects to sublease
space or receive an assignment from Tenant or terminate all or any portion of
this Lease pursuant to this Section 9.3, Landlord may thereafter lease the space
affected to Tenant's proposed assignee or subtenant, without liability to
Tenant, provided, however, in such event Tenant shall be relieved of all
obligations under this Lease to Landlord, with respect to exercise its option to
sublet or receive an assignment from Tenant (or terminate this Lease as to any
portion of the Premises), (i) Landlord and its subtenants shall have the right
to use in common with Tenant all parking spaces, lavatories, corridors and
lobbies within the Premises the use of which is reasonably required for the use
of such sublet, assigned or terminated space.
9.4 CONSENT. Subject to the provisions of Section 9.5, Xxxxxx may
neither consummate, nor agree to consummate, any proposed transaction subject to
the provisions of this Section 9 without the prior written consent of Landlord.
Landlord shall not unreasonably withhold its consent to any assignment of the
Lease or to any sublease of space in excess of 5,000 square feet of building
area; with respect to all other transactions subject to this Section 9,
Landlord may withhold its consent in its sole discretion. In addition, in each
such case Tenant shall pay to Landlord all expenses, including reasonable
attorneys' fees and reasonable accountants' fees, incurred by Landlord in
determining whether or not to consent to any such transaction, (b) Tenant and
its assignees and sublessees shall, within 10 days after Landlord provides
Tenant with written notice to do so, execute and deliver to Landlord such
documents, and take such further action, as Landlord may deem necessary or
advisable to effect or maintain such transaction or to protect Landlord's
rights under this Lease, (c) the acceptance by Landlord of rent from any person
other than Tenant shall not be deemed a consent to any particular assignment,
subletting or other such transfer shall not be deemed a consent to any other
assignment, subletting or other such transfer and (e) the consent to any
assignment, subletting or other such transfer shall not in any way whatsoever
relieve Tenant of any of its obligations under this Lease, whether arising
before or after such consent. In no event shall there be more than one
sublessee in the Premises.
9.5 ADDITIONAL TRANSACTIONS. If Tenant is a corporation which is not the
issuer of any security registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, or is an unincorporated association, trust or partnership,
the transfer, sale, assignment, pledge or hypothecation of any stock or interest
in such corporation, association, trust or partnership in excess of thirty-three
percent in the aggregate during the Term of the total stock or interest in such
corporation, association, trust or partnership shall be deemed to be an
assignment of this Lease for purposes of this Section 9.
9.6 LIMITATION. If Landlord does not terminate this Lease pursuant to
Section 9.2, and if Landlord consents to the proposed transaction pursuant to
Section 9.3, then, at any time within 60 days after such consent, Tenant may
consummate the proposed transaction, at the price, and on the terms and
conditions, and with the parties, specified in the notice referred to in Section
9.1. If the proposed transfer is not so consummated within such 60 day period,
it shall again be subject to all of the provisions of this Section 9.
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9.7 ASSIGNMENT AND SUBLETTING PROFIT RECAPTURE. Subject to the
provisions of Section 9.8 below, in the event that the Tenant receives any net
profits by virtue of any assignment of this Lease or any sublease of the
Premises permitted hereunder, whether in the form of sublease rentals in excess
of the Rent payable hereunder, periodic payments, "key" money, lump-sum
payments, or otherwise, this Lease shall be deemed to be amended to provide, (a)
in a case where such net profits are received in periodic payments, that the
Rent hereunder for the term of such sublease or commencing with the effective
date of such assignment, as the case may be, shall be increased by fifty percent
(100%) of the net profits payable in periodic payments to Tenant in connection
with such sublease or assignment and (b) in the case of "key" money, lump-sum
payments, or other non-continuing payments, that such payments shall be promptly
delivered in full to Landlord. Each assignor and assignee, in the case of an
assignment, and each sublessor and sublessee, in the case of a sublease, shall
be responsible for performance under this Section 9.6. "Net profits" for this
purpose shall refer to all payments or other consideration received by Tenant in
connection with the transaction, directly or indirectly, less reasonable amounts
(collectively, "Deductions") for legal expenses and brokerage commissions
incurred by Tenant with respect to such assignment or sublease and tenant
improvement costs incurred by Tenant solely as an inducement to the transferee
to consummate the assignment or sublease; provided, however, in the case where
such net profits are received by Tenant in periodic payments, Deductions shall
be evenly amortized over the period of such payments. Notwithstanding the
foregoing, in the event that the transaction involves the transfer of property
other than solely a sublease of the Premises or an assignment of Tenant's
interest in the Lease, Landlord shall be fully advised of all relevant
information concerning the transaction (including the total consideration for
all aspects of the transaction) and shall be entitled to allocate a reasonable
amount, based upon then current market rents and the total consideration to be
received by Tenant in connection with the transaction, to the net profits,
realized by Tenant in the sale of its interest in this Lease, notwithstanding
the fact that the Tenant and the transferee may have made some different
allocation among themselves.
9.8 PERMITTED SUBLESSEES. Notwithstanding anything to the contrary
contained in Section 9, Tenant shall be permitted to sublease a portion or all
of the Premises to a wholly-owned subsidiary of Edgemont Sales Company, Inc., or
one in which the controlling interest of the proposed transferee is held by
either Edgemont Sales Company, Inc., or by Xx. Xxxxxx Xxxxxxx, without the prior
consent of Landlord. Landlord shall, however, be notified by Xxxxxx in writing
of such sublease. Tenant shall not be obligated to share with Landlord any
sublease profits from such permitted sublease.
10. SUBORDINATION.
10.1 TENANT'S AGREEMENT TO SUBORDINATE. Tenant, for itself and its
subtenants, agrees, without the necessity of any further consideration or
action, to subordinate all of its right, title and interest in and to this
Lease to the lien of any mortgage or deed of trust now or hereafter encumbering
the Premises or any portion thereof, and to all advances made or hereafter to
be made upon the security thereof, provided, however, (i) that such beneficiary
or beneficiaries shall agree in writing (on such beneficiary's standard
non-disturbance agreement) delivered to Tenant to recognize all of Tenant's
right, title and interest in and to this Lease so long as Tenant performs and
complies with each and all of its covenants, agreements, terms and conditions
under this Lease, (ii) that all terms of such indebtedness, including, but not
by way of limitation, the precise amount thereof and the interest rate with
respect thereto, shall be as determined solely by Landlord and such beneficiary
or beneficiaries, and (iii) Tenant, for itself and its subtenants, shall within
10 days after Landlord or such beneficiary or beneficiaries provide
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Tenant with written notice to do so, execute and deliver to Landlord such
documents and take such further action as Landlord or such beneficiary or
beneficiaries may deem necessary or advisable to effect or maintain such
subordination. Tenant shall be liable to Landlord for all losses incurred by
Landlord in the event of Xxxxxx's failure to comply with Xxxxxxxx's written
request.
10.2 ATTORNMENT. Tenant, for itself and its subtenants, agrees that
(i) upon delivery to Landlord of the written election of the beneficiary or
beneficiaries of any mortgage or deed of trust encumbrance affecting the
Premises which is superior to this Lease, that such encumbrance shall be deemed
subordinate to this Lease, (a) this Lease shall, without the necessity of any
further consideration or action whatsoever, be deemed superior to such
encumbrance, whether this Lease was executed before or after the execution of
such encumbrance, and (b) the beneficiary or beneficiaries of such encumbrance
shall have the same rights with respect to this Lease as if this Lease had been
executed and delivered prior to execution and delivery of such encumbrance and
had thereafter been assigned to such beneficiary or beneficiaries and (b) if, by
reason of Landlord's default under any encumbrance now or hereinafter affecting
the Premises in any way, any or all of Landlord's right, title or interest in
and to the Premises is terminated, Tenant (a) shall waive all rights at law or
in equity now or hereafter in effect to terminate this Lease and surrender
possession of the Premises, (b) shall attorn to the transferee, whether by
foreclosure, judicial or trustees' sale, deed in lieu of foreclosure or
otherwise, of any or all of Landlord's right, title or interest in or to the
Premises, (c) shall recognize such transferee and its transferees as a Landlord
under this Lease, and (d) shall execute and deliver to Landlord and to such
transferee and its transferees within 10 days after Landlord, such transferee
or its transferees may deem necessary or advisable to effect or maintain such
attornment.
11. DEFAULT AND REMEDIES.
11.1 DEFAULT. Tenant agrees that the occurrence of any of the
following events shall constitute a material default ("Default") under this
Lease by Xxxxxx:
11.1.1 FAILURE TO PAY RENT. The continued failure of Tenant to
pay in full when due any installment of Rent, or any other payment required to
be made by Tenant hereunder, for 10 days after receipt by Tenant of written
notice from Landlord of such failure; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under Section
1161 et seq., of the California Code of Civil Procedure.
11.1.2 ABANDONMENT. The abandonment or vacation of the Premises
by Tenant for more than 10 days without the prior written consent of Landlord,
which consent may be granted or withheld in the sole but reasonable discretion
of Landlord; provided, however, that any such notice shall be in lieu of, and
not in addition to, any notice required under Section 1161 et seq., of the
California Code of Civil Procedure.
11.1.3 BANKRUPTCY. The levy or attachment or other judicial
seizure of all or substantially all of the assets of Tenant located in, on or
about the Premises or of the right, title or interest of Tenant in and to this
Lease unless dismissed within 30 days thereafter, the making by or on behalf of
Tenant of any general assignment for the benefit of creditors, the voluntary
or involuntary filing of a petition for adjudication of Tenant as insolvent or
bankrupt or for reorganization
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or arrangement under an insolvency act or any law relating to bankruptcy,
unless dismissed within 30 days thereafter, the appointment of any receiver or
trustee in any insolvency proceedings for Tenant or for all or substantially
all of the assets of Tenant located in, on or about the Premises or for the
right, title or interest of Tenant in and to this Lease, unless dismissed within
30 days thereafter, or the filing of any petition for or consent to any of the
foregoing insolvency or bankruptcy matters.
11.1.4 OTHER. The continued failure by Tenant in the performance
of or compliance with any of the other covenants, terms, or conditions of this
Lease for 10 days after Landlord shall have given written notice of such failure
to Tenant, provided, however, that if the nature of such Default is such that
Tenant cannot reasonably cure such Default within said 10 day period, such
failure shall not constitute a Default if Tenant shall, within such period of
time, commence such performance and thereafter diligently and continuously
pursue such performance or compliance to completion; and provided further, that
any notice required hereunder shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161, as
amended.
11.2 REMEDIES. In the event of a Default, Landlord may, in addition to
all remedies or means of redress to which it may be lawfully or equitably
entitled, in its discretion, while such Default continues:
11.2.1 TERMINATION. Terminate this Lease and any and all rights
of Tenant hereunder, by any lawful means, in which event, Landlord, without the
requirement of any further notice to Tenant, shall have the right immediately to
enter the Premises and take full possession thereof, in which event Landlord
shall also have the right to recover from Tenant (i) the worth at the time of
award made on account of the Default resulting in such termination ("Award"),
together with interest thereon at the maximum lawful interest rate per annum, of
any unpaid portion of the Rent which had been earned by Landlord at the time of
such termination, (ii) the worth at the time of Award, together with interest
thereon at the maximum lawful interest rate per annum, of the amount by which
any unpaid portion of the Rent which would have been earned after such
termination until the time of Award exceeds the amount of loss of any unpaid
portion of the Rent which Tenant proves could have reasonably been avoided,
(iii) the worth at the time of Award, discounted at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the Award plus one percent,
of the amount by which any unpaid portion of the Rent for the balance of the
Term exceeds the amount of loss of any unpaid portion of the Rent which Tenant
proves could have reasonably been avoided, and (iv) any and all other amounts
necessary to compensate Landlord for all detriment proximately caused by such
Default or which in the ordinary course of business would be likely to result
therefrom, including, without limitation, any costs or expenses incurred by
Landlord in maintaining or preserving the Premises after such Default, preparing
the Premises for reletting to a new tenant, accomplishing any repairs or
alterations to the Premises for purposes of such reletting, rectifying any
damage thereto occasioned by the act or omission of Tenant and any other costs
necessary or appropriate to relet the Premises.
11.2.2 CONTINUATION. Continue this Lease in full force and
effect, but enforce any of its other rights and remedies hereunder, including,
without limitation, the right to recover all of the Rent as it becomes due
under this Lease, in which event the rights of Tenant to possession of the
Premises under this Lease and the right of Tenant to assignment and sublease,
if any, pursuant to the provision of Section 9 of this Lease shall continue,
provided, however, that any acts of maintenance or preservation or efforts to
relet the Premises by Landlord or the appointment of a receiver by Landlord to
protect its right, title and interest in and to the Premises or any portion
thereof or this Lease, shall neither constitute termination of this Lease nor
interference with such rights of Tenant to possession, assignment and sublease.
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11.2.3 ADDITIONAL RIGHTS. Pursue all rights and remedies of
Landlord, which shall in any event be cumulative and not alternative, and shall
be in addition to any and all rights provided by law or equity, in connection
with which Tenant does hereby agree that (i) the waiver of any Default by
Landlord shall be effective only if in writing signed and dated by Landlord and
shall not in any event by continuing in nature or otherwise a waiver of any
subsequent Default, (ii) the acceptance of any unpaid but due portion of the
Rent shall be in mitigation of Landlord's damages and shall not, unless in
writing signed and dated by Landlord, (a) constitute a waiver of any Default, or
any of the rights and remedies of Landlord hereunder, at law or at equity or (b)
invalidate or compromise any notice of a Default provided before such
acceptance, or any deadline specified in such notice, and (iii) Landlord, in its
discretion, without prejudice to any other remedies Landlord may have, may,
following the continued failure of Tenant to cure any Default after receipt of
written notice thereof, elect to cure any Default, in which event Tenant shall,
within 10 days after Landlord provides Tenant with written notice to do so, pay
to Landlord any and all costs and expenses incurred by Landlord in connection
therewith.
11.3 LATE CHARGE AND INTEREST.
11.3.1 LATE CHARGE. In the event that any installment of Rent or
any other sum payable by Tenant hereunder is not received by Landlord within
five days of the date when due, a late charge of ten percent of such overdue
installment or other payment shall be immediately and automatically payable by
Tenant to Landlord, without the necessity of delivery of any notice.
11.3.2 INTEREST. In addition to the late charge payable pursuant
to Section 11.3.1, any and all unpaid but due portion of the Rent and other
payments by Tenant hereunder not received by Landlord within thirty days of the
date when due shall bear interest at an annual rate equal to the lesser of (i)
four percent in excess of the discount rate being charged by the Federal Reserve
Bank of San Francisco on advances to member banks pursuant to Sections 13 and
13(a) of the Federal Reserve Act, as amended, as of the 25th day of the month
preceding the date of execution of this Lease and (ii) the maximum rate
permitted by applicable law.
12. MISCELLANEOUS
12.1 DEFAULT BY LANDLORD.
12.1.1 DEFAULT. Landlord shall not be in default under this Lease
unless Landlord has failed to perform the obligations required of Landlord
hereunder for more than 20 days after Xxxxxx delivers written notice to
Landlord; provided, however, that in the event the nature of Landlord's
obligation is such that more than 20 days is required for complete performance,
Landlord shall not be in default pursuant to this Section 12 if Landlord
commences performance within such 20 day period and thereafter diligently
prosecutes such performance to completion.
12.1.2 REMEDIES OF TENANT. Tenant's sole remedies for default by
Landlord under this Lease shall be the right to damages and/or injunctive relief
and in no event shall Tenant have the right to terminate this Lease or abatement
hereunder as the result of Xxxxxxxx's default.
12.2 ESTOPPEL CERTIFICATES. Tenant, for itself and its subtenants,
hereby covenants and agrees (i) to execute, acknowledge and deliver to Landlord,
from time to time during the Term within 10 days after Landlord provides Tenant
with written notice to do so, an estoppel certificate substantially in the form
attached hereto as Exhibit "I" certifying in writing (a) that this Lease is in
full force and effect, unmodified or modified solely as set forth in such
estoppel certificate, including, without limitation, confirmation of the
Commencement Date, and the date of expiration of the Lease, (b) the dates to
which Rent has been
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paid, and (c) that Landlord has, as of the date of such estoppel certificate,
fully and completely performed and complied with each and all of its covenants,
agreements, terms and conditions under this Lease, without exception or except
only as set forth in such estoppel certificate, (ii) that any such estoppel
certificate may be conclusively relied upon by a prospective purchaser or
encumbrancer of the Premises, and (iii) that the failure of Tenant to so deliver
such estoppel certificate in such period of time shall be conclusive upon Tenant
(a) that this Lease is in full force and effect, without modification except as
may be represented by Landlord, (b) that the Rent has not been prepaid under
this Lease except as required pursuant to the provisions of Section 2 of this
Lease, and (c) that Landlord has, as of the date on which Tenant failed to
deliver such estoppel certificate, fully and completely performed and complied
with each and all of its covenants, agreements, terms and conditions under this
Lease, without exception. At Landlord's option, the failure to deliver such
statement within such time shall be a material default of this Lease by Tenant.
12.3 HOLDING OVER. If Xxxxxx holds over in the Premises after the
expiration of the Term or any extension thereof, with the express or implied
consent of Landlord, such holding over, in the absence of written agreement on
the subject, shall be deemed to have created a tenancy from month to month
terminable upon 30 days' written notice given at any time by either party to the
other, and otherwise subject to all the terms and provisions of this Lease. Rent
shall be paid monthly and shall be computed on the basis of one-twelfth of the
total Rent estimated by Landlord to be payable by Tenant to Landlord for the
next succeeding twelve-month period. Notwithstanding the foregoing, in the event
Tenant fails to surrender the Premises on the expiration of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
indemnify, defend and hold Landlord harmless from and against any damages, loss
and liability resulting from such failure to surrender, including, without
limitation, any claims of any succeeding Tenant founded upon such failure to
surrender.
12.4 QUIET ENJOYMENT. So long as Tenant continues to perform and comply
with each and all of the terms and conditions to be performed and complied with
under this Lease, and subject to (i) all federal, state, county and municipal
statutes, laws, ordinances, rules, regulations and orders and (ii) all of the
provisions of (a) this Lease, (b) any encumbrance now or in the future affecting
the Premises, (c) any reciprocal easement agreement conditions, covenants or
restrictions now or in the future affecting the Premises and (d) any policy of
insurance now or in the future affecting the Premises, Landlord does hereby
covenant and agree that Tenant shall lawfully, peaceably and quietly have, hold,
occupy and enjoy the Premises during the Term or any extension thereof, without
hindrance or interference with its quiet enjoyment and possession by any persons
lawfully claiming under Landlord.
12.5 FORCE MAJEURE. In the event that either party is delayed or
hindered from the performance of any act required hereunder by reason of
strikes, lock-outs, labor troubles, inability to procure materials not related
to the price thereof, failure of power, restrictive governmental laws and
regulations, riots, insurrection, war or other reasons of a like nature not the
fault of such party, then performance of such acts shall be excused for the
period of the delay, and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay. The provisions of
this Section 12.5 shall not, however, operate to excuse Tenant from prompt
payment of Rent or any other payment of money required under the terms of this
Lease.
12.6 SALE OF THE PREMISES. In the event of any sale or exchange of the
Premises by Landlord or an assignment by Landlord of this Lease (including,
without limitation, any so-called "sale-leaseback" transaction), Landlord shall
automatically be relived of any and all obligations on the part of Landlord
accruing from and after the date of such sale, exchange, or assignment,
including, without limitation, any obligation to Tenant with respect to the
Security Deposit upon assignment
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of the same to the transferee; provided, however, that (i) the interest of the
transferor, as Landlord, and any funds then in the hands of Landlord in which
Tenant has an interest shall be turned over, subject to such interest, to the
transferee, and (ii) notice of such sale, transfer, exchange or lease shall be
delivered to Tenant as required by law. No holder of a mortgage, deed of trust
or other encumbrance to which this Lease is or may be subordinate shall be
responsible in connection with the transfer of said security deposit hereunder,
unless such mortgagee or holder of such deed of trust or lessor shall have
actually received such security deposit.
12.7 CONSTRUCTION WARRANTIES. Following delivery of the Premises,
following request by Xxxxxx, assign to Tenant the right to enforce any
warranties or guaranties held by Landlord (and which are assignable) with
respect to portions or components of the Premises which Tenant is required to
maintain and repair pursuant to Section 5.1; provided, however, that any
expiration or sooner termination of this Lease shall automatically be deemed an
assignment of the same by Tenant to Landlord and following request by Landlord,
Tenant shall execute and deliver all instruments requested of it to confirm such
assignment.
12.8 RECORDING. Tenant shall not under any circumstances record this
Lease. Should either party desire to evidence this Lease of record, Landlord and
Xxxxxx agree to execute and acknowledge a Memorandum of Lease and the party
requesting recordation shall pay for all costs of recordation and any
documentary transfer tax.
12.9 FINANCIAL STATEMENTS. Upon Xxxxxxxx's written request, Tenant
shall promptly furnish Landlord, from time to time, with certified financial
statements also certified by Tenant to be true and correct reflecting Xxxxxx's
then current financial condition.
12.10 ACCESS BY LANDLORD. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times upon reasonable prior notice
(which notice shall not be necessary in the case of emergency) and in such a
manner so as to not interfere with Xxxxxx's business to examine the Premises and
to show the same to prospective purchasers or tenants of the Premises, to make
such repairs, alterations, improvements or additions as may be required in
connection with the development or maintenance of the Premises, without the same
constituting an eviction of Tenant, in whole or in part, or a trespass;
provided, however, that in no event shall Tenant be entitled to injunctive
relief to enforce any or all of its rights under this Section 12.10, and the
Rent shall not xxxxx while said repairs, alterations, improvements or additions
are being made, by reason of loss or interruption of business of Tenant or
otherwise. During the six months prior to the expiration of the Term, Landlord
may place upon the Premises "to let" or "for sale" notices or signs which Tenant
shall permit to remain thereon. Nothing herein contained shall be deemed or
construed to impose upon Landlord any obligation, responsibility or liability
whatsoever for the care and maintenance or repair of the Premises, or any part
thereof except as is specifically provided in this Lease.
12.11 NOTICES. All notices and other communications pertaining to this
Lease shall be in writing and shall be deemed to have been given only when
delivered personally or 48 hours after being mailed, certified or registered
mail, return receipt requested, postage prepaid, to the respective addresses set
forth in Item 10 of the Fundamental Lease Provisions or to such other addresses
as any of the parties hereto may from time to time in writing designate to the
other parties hereto.
12.12 TIME. Time is of the essence of this Lease with respect to each
and every provision of this Lease in which time is a factor.
12.13 ENTIRE AGREEMENT. This Lease, including, but not by way of
limitation, the exhibits attached hereto and made parts hereof, sets forth the
entire agreement between the parties hereto, fully
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supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof and no change in, modification of
or addition, amendment or supplement to this Lease shall be valid unless set
forth in writing and signed and dated by each and all of the parties hereto
subsequent to the execution of this Lease.
12.14 FURTHER ASSURANCES. Each of the parties hereto, without further
consideration, agrees to execute and deliver such other documents and take such
other action as may be necessary to more effectively consummate the purposes and
subject matter of this Lease.
12.15 APPLICABLE LAW. The existence, validity, construction and
operational effect of this Lease, all of its covenants, agreements, terms and
conditions and the rights and obligations hereunder of each of the parties
hereto shall be determined in accordance with the laws of the State of
California, provided, however, that any provision of this Lease which may be
prohibited by law or otherwise held invalid shall be ineffective only to the
extent of such prohibition or invalidity and shall not invalidate or otherwise
render ineffective any or all of the remaining provisions of this Lease and
under no circumstances whatsoever shall this Lease be construed as creating
either a partnership, an agency or an employment relationship between the
parties hereto.
12.16 CONTROVERSY. In the event of any controversy, claim or dispute
between the parties hereto arising out of or relating to this Lease, the
prevailing party shall be entitled to recover from the nonprevailing party,
reasonable expense, including without limitation, reasonable accountants' and
attorneys' fees.
12.17 HEADINGS AND GENDER. The section headings used in this Lease are
intended solely for convenience of reference and shall not in any way or manner
amplify, limit, modify or otherwise be used in the interpretation of any of the
provisions of this Lease and the masculine, feminine or neuter gender and the
singular or plural number shall be deemed to include the others whenever the
context so indicates or requires.
12.18 SUCCESSORS. Subject to the provisions of Section 9 of this Lease,
the covenants, agreements, terms and conditions contained in this Lease shall be
binding upon and inure to the benefit of the successors and assigns of the
parties hereto.
12.19 CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
13. ADDENDUM
The provisions of this Section 13 shall supersede and override any other
provisions in this lease to the extent the same are inconsistent:
13.1 RENTAL ADJUSTMENTS. Commencing with the first day of the 31st full
calendar month of the Initial Term and effective for each month of the
remainder of the Initial Term, Basic Monthly Rent shall be increased by 12.5%.
At the commencement of the 61st and 91st months of the Term, the Basic Monthly
Rent in effect at the time of adjustment shall be similarly increased by 12.5%.
13.2 OPTION TO RENEW. Tenant shall have the option to extend the
Initial Term (the "Option") on the basis of each and all of the terms and
conditions contained in this Lease, as then amended, for one period of ten (10)
years (the "Optional Period") commencing the day after the expiration of the
Initial Term, and unless sooner terminated in accordance with the terms and
conditions hereof, ending on the last day of the tenth consecutive Lease Year
thereafter. Such option shall be exercised by Tenant by giving written notice
("Option Notice") of exercise to Landlord at least 12 months prior to the
expiration of the Initial Term.
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Notwithstanding the foregoing, in the event (1) Tenant is in default on the date
the Option Notice is given or (ii) should Landlord have given to Tenant three or
more notices regarding Tenant's failure to pay rent when due during the Initial
Term, or (iii) should Tenant be in default on the date the Initial Term expires,
then in each event Tenant's Option shall be deemed automatically terminated.
13.3 CALCULATION OF RENT DURING OPTION PERIOD. The initial monthly
installments of Rent for the Option Period shall be the greater of (i) the Rent
payable for the month immediately preceding the Option Period or (ii) the fair
market rental rate prevailing for monthly rent for the lease of an equivalent
amount of comparable space in a building of like quality, use and location
within an area of 10 miles of the Premises with improvements similar to and of
quality comparable with that of the improvements contained within the Premises
(including all such improvements made pursuant to the Construction Provisions)
(the "Fair Market Rental Rate").
13.3.1 CALCULATION OF FAIR MARKET RENTAL RATE. Within thirty (30)
days of Tenant's Option Notice, Landlord shall notify Tenant of the Rent (the
"Proposed Rent") for the Option Period. In the event Landlord and Tenant are
unable to agree upon the fair market rental rate for the Premises within the
30-day period (the "Negotiation Period") following the date Tenant exercises the
Option, the Option shall terminate and be of no further force or effect unless
within fourteen (14) days following the expiration of the Negotiation Period
Tenant delivers to Landlord written notice (the "Appraisal Notice") of its
desire to determine the fair market rental rate for the Premises by the
appraisal method set forth below. In the event Tenant elects for appraisal,
Tenant shall, at Tenant's sole expense, with thirty (30) days from the date of
delivery of the Appraisal Notice, deliver to Landlord a written appraisal
report, prepared by an MAI appraiser of Tenant's choice, which shall state the
appraiser's estimate of the fair market rental rate for the Premises. If
Landlord objects to such appraisal report, Landlord shall, within (30) days of
receipt of such appraisal report, obtain at Landlord's sole expense, an
appraisal of the market rental rate for the Premises from an appraiser of
Landlord's choice. If Landlord and Tenant are unable to agree upon the fair
market rental rate for the Premises after reviewing the two appraisal reports,
the two appraisers shall select a third MAI appraiser, whose expense shall be
borne equally by the parties, and who shall appraise the fair market rental
rate for the Premises. The three appraisers shall then calculate the average of
the two appraisals which are closest in valuation, which average shall be
deemed to be the Fair Market Rental Rate.
13.4 ADJUSTMENTS TO RENTAL RATE DURING OPTION PERIOD. In the event
Tenant exercises the Option as set forth hereinabove, the rent during the Option
Period shall be adjusted at the 31st, 61st and 91st months of the Option Period
in the manner and in the same amount as set forth in Section 13.1 herein.
13.5 RENT RELIEF. Landlord acknowledges that Tenant is presently under
lease at another location in the area of the Premises, said location being 00000
Xxxxxxx Xxxxxx, Xxx Xxxxxxxx, Xxxxxxxxxx, and has a rent obligation under the
terms of that lease that is not due to terminate until December 31, 1989.
Landlord hereby agrees that from the Rent Commencement Date herein to such time
as Tenant is relieved of this other rent obligation, but, in any event not
beyond December 31, 1989, Xxxxxx's shall be granted an abatement of its Basic
Monthly Rent herein by an amount equal to fifty percent (50%) or Tenant's base
monthly rental obligation at the other location; provided, however, shall in
no event shall said rent abatement be greater than $2,500.00 per month.
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EXHIBIT "A"
PLOT PLAN OF PREMISES
[GRAPHIC SHOWING PLOT PLAN OF LEASED PREMISES]
39
EXHIBIT "B-1"
LEGAL DESCRIPTION OF THE PREMISES
That certain parcel located on Gateway Drive, Cypress, California, more
specifically described as follows:
Parcel 2 of Parcel Map 85-425, as recorded in Book 211, Pages 42
through 45 of Parcel Maps, Records of Orange County, California
40
EXHIBIT "B-2"
LEGAL DESCRIPTION OF THE BUSINESS CENTER
Parcel 1
--------
Parcels 1 through 21 inclusive in the City of Cypress, County of
Orange, State of California, as shown on a Parcel Map, filed in Book 124, Pages
5 and 6 of Parcel Maps, in the Office of the County Recorder of said County.
Parcel 2
--------
That portion of the north half of the south half of section 22,
Township 4 South, Range 11 west in the Rancho Los Alamitos, in the City of
Cypress, County of Orange, State of California, as section is shown on Map No. 2
attached to the final decree of partition entered in the Superior Court of Los
Angeles County, Case No. 13527, a certified copy of said final decree having
been recorded February 2, 1891 in Book 14 page 31 of Deeds of said Orange County
described as follows:
Beginning at the intersection of the westerly line of said south half
of Section 22 with the northeasterly line of said Rancho Los Alamitos,
as shown on a map filed in Book 37 Page 17 of record of surveys,
records of said Orange County; thence along said Rancho line
southeasterly 689.27 feet to the southwesterly corner of Tract No. 4670
as shown on a map recorded in Book 163 pages 48 to 50 inclusive of
miscellaneous maps, records of said Orange County; thence continuing
along said Rancho line and along the southwesterly line of said Tract
No. 4670 and along the southwesterly line of Tract No. 4399 as shown on
a map recorded in Book 175 pages 46 and 47 of miscellaneous maps,
records of said Orange County, southeasterly 1471.10 feet to an angle
point in said Tract No. 4399; thence continuing along said Rancho line
as shown on said map of Tract No. 4399, southeasterly 728.52 feet to
the center line of Holder Street as shown on said map of Tract No.
4399; thence along said center line of Holder Street, South 00 degrees
45 minutes 02 seconds east 34.50 feet to a point in the northerly line
of that 60.00 foot wide strip of land described in the Deed to the
Southern Pacific Railroad Company recorded January 13, 1897 in Book 29
page 328 of Deeds, records of said Orange County, said line being a
curve concave southerly and having a radium of 5759.60 feet, a radial
line to said point bears north 04 degrees 26 minutes 13 seconds east;
thence westerly along said curve through a central angle of 04 degree
24 minutes 00 seconds an arc distance of 442.31 feet and north 89
degrees 57 minutes 47 seconds west 2285.96 feet to said westerly line
of the south half of Section 22; thence along said westerly line north
00 degrees 00 minutes 14 seconds east 968.40 feet to the point of
beginning.
Except therefrom that portion of said land included within the lines of
the land described in Parcel 1 of the Deed to the City of Cypress
recorded July 27, 1967 in Book 8323 page 979 of Official Records,
records of said Orange County.
Also except therefrom that portion of said land included within the
lines of the land described in the deed to the Orange County Flood
Control District recorded
41
December 4, 1959 in Book 4999 page 460 of Official Records, Records of
said Orange County.
Also except all coal, chemicals, petroleum, oil, gas, asphaltum and
other hydrocarbons, and all minerals, metals and mineral ores,
whether similar to those herein specified or not, of every kind and
character now know to exist or hereafter discovered upon, within or
underlying said land, together with the exclusive and perpetual right
of the grantee, its successors and assigns, of ingress and egress
beneath the surface of said land to explore for, extract, mine and
remove the same and to make such use of said land beneath the surface
as is necessary or useful in connection therewith, which use may
include lateral or slant drilling, digging, boring or sinking or
xxxxx, shafts, tunnels or other methods, together with the further
exclusive and perpetual right of the grantee, its successors and
assigns, to make such use of said land as may be necessary to store,
keep, deposit and/or remove all coal, chemicals, petroleum, oil gas,
asphaltum and other hydrocarbons and all minerals, metals and mineral
ores, whether similar to those herein specified or not, of every kind
and character now known to exist or hereafter discovered; provided,
however, that the grantee, its successors or assigns, shall not use
the surface of said land above a five hundred foot depth in the
exercise of any of said rights as granted to Consolidated Pacific
Investment Company, by deed recorded January 29, 1959 in Book 4567
page 496 of Official Records.
Said land is included within the area shown on a map filed in Book 37 page 17 of
Record of Surveys in the Office of the County Recorder of said Orange County.
42
EXHIBIT "C"
CONSTRUCTION PROVISIONS
Landlord shall provide improvements to the Premises, subject to the
terms and conditions set forth below:
1. SUBMISSION AND APPROVAL OF PLANS. Landlord and Tenant acknowledge
that preliminary space plans dated May 26, 1988, (the "Preliminary Plans"),
showing the layout of all partitions and doors and specifications for the works
to be performed in the Premises (the "Tenant Improvements"), have been prepared
by Xxxxxx X. Xxxxxxxx & Associates (the "Project Architect") and have been
approved by both parties, are attached hereto as Attachment 1 and are
incorporated herein by reference. Within thirty (30) days following execution of
this Lease, Tenant shall cause the Project Architect, at Xxxxxx's sole cost and
expense, to prepare and deliver to Landlord working drawings (the "Working
Drawings"). The expense of the Working Drawings may be credited against the
Tenant Improvement Allowance (see Section 6 below). The Working Drawings shall
include mechanical, electrical and structural engineering drawings showing in
detail all Tenant Improvements, including all ducting for heating, ventilation
and air conditioning ("HVAC"). Within 3 days following Landlord's approval of
the Working Drawings, Tenant shall have prepared and delivered to Landlord
complete and final plans (the "Final Plans") which incorporate the information
detailed in the Preliminary Plans, Working Drawings and Landlord's comments
thereto, and which shall include the final space plan for the layout of all
partitions, doors, light fixtures, electrical and telephone outlets, wall,
floor, window and door finishes, hardware, material and coverings, reflected
ceiling plans and all other Tenant Improvements.
2. REVIEW AND APPROVAL PROCESS. Tenant shall submit the Working
Drawings to Landlord for its approval. Within 5 business days of receipt of said
drawings, Landlord shall return them to Tenant marked either "approved" or
"disapproved" (in the latter case modifications and revisions will be noted).
Upon receipt of any such disapproval, Tenant shall (i) promptly revise the
particular plans or drawings to incorporate and satisfy all of Landlord's
objections and take such action as may be reasonably required to provide for
full and final approval of such plans or drawings. Tenant shall not deviate from
the final Plans, once approved by Landlord, unless done so in strict accordance
with the procedures set forth in Paragraph 7 regarding requests for a Change
order, except to the extent such changes are required for permit approval and
issuance. Approval of the Working Drawings or Final Plans by Landlord shall not
constitute the assumption of any responsibility by Landlord for their accuracy,
efficacy or sufficiency, and Tenant shall be solely responsible for such items.
3. COMPLETION OF IMPROVEMENTS. Following approval of the Final Plans
for Tenant Improvements by Landlord and the appropriate governmental
authorities, Landlord shall proceed with due diligence to construct the Tenant
Improvements in a workmanlike manner. Subject to the provisions of these
Construction Provisions, Landlord shall use its best efforts to have the Tenant
Improvements substantially completed (as defined in Paragraph 8) by November 1,
1988; provided, however, in no event shall Landlord be liable to Tenant in the
event such work is not completed by such date.
4. TENANT DELAY. Tenant Delay shall include, but shall not be limited
to, any delay in the occurrence of the Commencement Date or in the completion of
the Tenant Improvements resulting from (i) Tenant's failure to comply with the
provisions of these Construction Provisions, (ii) submission by Tenant of a
request for any Change Order as specified in Paragraph 7, or (iii) any
additional time, as reasonably determined by Landlord, required for
implementation of any Change Order with respect to the Tenant Improvements.
43
5. CONTRACTOR. The General Contractor for the construction of the
Tenant Improvements shall be selected by Landlord after reasonable consultation
with Tenant. The General Contractor shall bid out all major construction
disciplines to a minimum of three subcontractors.
6. COSTS. Landlord shall pay for the costs associated with
construction the Tenant Improvements (the "Tenant Improvement Costs") up to a
maximum amount of $450,000.00, subject to the following conditions:
6.1 If the total Tenant Improvement Costs are less than
$375,000.00, the Base Rental set forth in the Lease shall be reduced by a factor
of 1.075% multiplied by the amount by which the actual Tenant Improvement Costs
are less than $375,000.00.
6.2 If the total Tenant Improvement Costs are greater than
$375,000.00, the Base Rental set forth in the Lease shall be increased by a
factor of 1.075% multiplied by the amount by which the actual Tenant Improvement
Costs exceed $375,000.00; provided that subparagraph 6.2 shall not apply to any
Tenant Improvement Costs to the extent they exceed $450,000.00.
6.3 Tenant (not Landlord) shall be responsible for all Tenant
Improvement Costs in excess of $450,000.00. If at any time prior to completion
of the Tenant Improvements, the General Contractor determines, in the exercise
of its reasonable business judgment, that the Tenant Improvement Costs will
exceed $450,000.00 (the "Excess Tenant Improvement Costs"), then Landlord shall
give Tenant a written statement setting forth the General Contractor's estimate
of the Excess Tenant Improvement Costs necessary to complete the Tenant
Improvements. Tenant shall pay to Landlord, in cash, an amount equal to the
Excess Tenant Improvement Costs set forth therein, as such costs are incurred by
Landlord. If the total amount of actual Excess Tenant Improvement Costs
necessary to complete the Tenant Improvements is greater than the amount of
Excess Tenant Improvement Costs paid by Tenant, then Tenant shall pay to
Landlord, in cash, such difference on or before occupancy of the Premises by
Tenant. If the total amount of actual Excess Tenant Improvement Costs necessary
to complete the Tenant Improvements is less than the amount of Excess Tenant
Improvement Costs paid by Tenant, then Landlord, at its option, may either
reimburse Tenant for this difference or apply such difference to Tenant's first
month's rental payment.
6.4 The Tenant Improvement Costs shall include all costs incurred
by Landlord for the construction of the Tenant Improvements, including, but not
limited to governmental fees and permits, structural engineering review, and out
of pocket architectural fees and costs incurred in reviewing all plans. In
addition, at Tenant's option, the Tenant Improvement Costs may include the out
of pocket costs incurred by Tenant in the preparation of the Preliminary Plans,
Working Drawings and Final Plans prepared in connection with the Tenant
Improvements.
7. PROCEDURE FOR CHANGE ORDERS. Tenant may request any change, addition
or alteration in the Improvements as shown on the Final Plans (a "Change Order")
following preparation and approval thereof, by delivery of a written request
therefor and complete working drawings showing the change, addition or
alteration provided that such change, addition or alteration does not (i) affect
the scheduled completion date of the Improvements or (ii) increase Landlord's
costs. Landlord shall promptly, following receipt of such request, give Tenant a
written description of (i) modifications or revisions required by Landlord in
order to approve such Change Order, (ii) the Tenant Delay expected because of
such Change Order, and (ii) an itemized nonbinding estimate of the cost of
implementing the Change Order. The standards of Landlord's approval for the
Improvements shall also apply to Change Orders. Following receipt of such
description and estimate, Tenant shall deliver to Landlord written notice either
granting or withholding authorization to proceed with the performance of the
work shown on the Change Order. If no such authorization is received by Landlord
within five business days thereafter, Tenant shall be deemed to have withheld
authorization to proceed with the performance of the work shown on the Change
Order.
44
8. SUBSTANTIAL COMPLETION AND PUNCH LIST ITEMS.
(a) For purposes of this Lease, substantial completion of the Tenant
Improvements shall be defined as the date on which the Project Architect
certifies that the Tenant Improvements have been substantially completed in
accordance with the Final Working Drawings such that Tenant could reasonably
occupy or otherwise utilize the Building for the use which it is intended (the
"Tenant Improvements Certificate").
(b) Within 7 business days after receipt of the Tenant Improvements
Certificate, Tenant shall supply to Landlord a written punch list ("Punch List")
setting forth the additional corrective work with respect to the Tenant
Improvements which Xxxxxx believes is required to be performed pursuant to the
Final Working Drawings. In the event that no such punch list is provided by
Tenant within said 7-day period, Tenant shall be deemed to have accepted the
Premises in their entirety and Landlord shall have no further obligation with
respect to completion of the Premises or of the Improvements. Landlord shall use
all reasonable efforts to complete all of the items on the Punch List within 15
business days of receipt of the Punch List from Tenant.
9. ACCEPTANCE OF THE BUILDING. Other than changes to the Building
contemplated by the Tenant Improvements, Tenant hereby accepts the condition of
the Building as of the date hereof and subject to all existing building codes,
zoning ordinances and other municipal, county and state laws, ordinances, and
regulations governing and regulating the Building. Landlord hereby represents
and warrants to Tenant, during the course of construction of the Tenant
Improvements, that the concrete slab on which the Building sits is suitable for
construction thereon of the Tenant Improvements contemplated in these
Construction Provisions. Xxxxxx acknowledges and agrees that neither Landlord
nor Landlord's agents has made any representation or warranty as to the present
or future suitability of the Building for the conduct of Xxxxxx's business.
45
EXHIBIT "D"
TENANT'S CERTIFICATE
To: WARLAND INVESTMENTS, LTD.
Date: _________________________________, 198___
Building Address:
The undersigned as the Tenant under that certain Lease (the "Lease") dated
_____________________, 198___ made and entered into between Warland
Investments, Ltd., as Landlord, and the undersigned, as Tenant, hereby
certifies that:
1. The Commencement Date of the Lease was ____________________, 198___.
2. The expiration date of the Lease is _____________________, 198___.
3. The Lease is in full force and effect and has not been modified or
amended.
Very truly yours,
_____________________________________________________
a____________________________________________________
By___________________________________________________
Its__________________________________________________
Tenant
46
EXHIBIT "E"
SITE SIGNAGE FOR WARLAND/CYPRESS BUSINESS CENTER
The intent of this signage guideline is to provide the regulations and
parameters necessary to achieve a visually coordinated, balanced and appealing
signage system throughout the Warland/Cypress Business Center. A system that
promotes compatibility with the building and landscape design of present and
planned facilities.
A. PROJECT IDENTIFICATION SIGN
Each tenant that occupies an entire building is permitted signage on an exterior
monument sign as outlined in Exhibit A. The sign shall be installed behind any
existing property lines and is subject to any regulations established by the
City of Cypress. The concrete base shall remain unpainted and match all other
monument signs, promoting a visual consistency for all projects in
Warland/Cypress Business Center. The fabricated aluminum cabinet shall be
internally illuminated with all sign copy, colors and graphics subject to
approval by Warland Investments, Ltd. The tenant is responsible for the design
of the sign face, required permits, construction, and installation of all
monument and site signs.
B. PROJECT SITE SIGNS
Each project will require adequate vehicular information signs at each parking
area entry. The signs shall consist of fabricated, non-illuminated, cabinets
with 3M white vinyl copy and unpainted concrete bases. Sizes and specifications
are noted in Exhibit B. All site signs will require permits from the City of
Cypress.
47
[GRAPHIC DEPICTION OF FRONT AND END ELEVATION, INCLUDING SIZES AND
SPECIFICATIONS OF PERMISSIBLE SIGNAGE]
Exhibit A
48
[GRAPHIC DEPICTION OF FRONT AND END ELEVATION, INCLUDING APPLICABLE SIZES
AND SPECIFICATIONS, FOR VEHICULAR INFORMATION SIGNS]
Exhibit B
49
EXHIBIT "F"
-----------
LANDSCAPE MAINTENANCE
SPECIFICATIONS
FOR
WARLAND CYPRESS BUSINESS PARK
50
LANDSCAPE MAINTENANCE SPECIFICATIONS
--------- ----------- --------------
The work involved which shall be performed includes, but is not limited to, any
ground cover areas, lawns, flower beds, pathways and parking lots. Contractor
shall furnish all necessary labor, supervisions, equipment tools, materials,
transportation, permits, insurance, and taxes in his performance of these
specifications. He shall perform maintenance in accordance with the highest
horticultural standards keeping the premises/site in first class condition. All
landscaping debris shall be removed from premises by the contractor.
A. GENERAL MAINTENANCE
------- -----------
1. All lawns shall be mowed and edged weekly or more, if necessary.
2. All cuttings shall promptly be collected and disposed off site and on
the same day.
3. All landscape shall be cleaned of grass cuttings, etc. on the same day
as mowing.
4. The height of grass shall be kept at 2 inches in winter and 2-1/2
inches to 3 inches in summer. This applies to cool season blade grass.
5. Complete chemical weed, fungus, insect control and rodent, as necessary
including materials, labor and permits, if necessary.
6. Complete fertilization of all lawns not less than four times per year
in accordance with subsequent fertilization specifications. Fertilizer
to be purchased and applied by contractor at no additional expense to
the tenant.
7. Adequate watering of all lawn areas unless unnecessary due to rainfall
at least 1/2 inch or more after all fertilization.
B. TREES, SHRUBS, AND PLANTER BEDS
----- ------ --- ------- ----
1. Shrubbery, plants and trees shall be manicured/pruned regularly to
contain their size in respect to specifications, size of planter or
relative to surroundings and to the best health of the plant. NOTE:
"LOLLY-POP" pruning of shrubs is not acceptable. Prune by removing
branches. Shearing is only permitted with xxxxxx. Clarify xxxxxx with
Landscape Architect.
51
See graphic examples for more detail information on shrub pruning.
2. All trees over 10 ft. in height will have a tree pruning service
handle pruning at the tenants company's expense. Pruning of trees will
include a minimum annual pruning. Coral trees will be thinned by
removing whole branches and not topped unless direct to by the
Landscape Architect. Seal all pruned limbs 1-1/4" or larger with proper
seal. Coordinate all pruning with the Landscape Architect. Refer to
graphic examples for specific tree pruning techniques.
3. All cuttings shall be disposed of off-site (the same day).
4. Complete insect and disease control of all trees and shrubs, including
labor and materials.
5. Minor tree surgery as necessary.
6. Adequate watering of all trees, shrubs and planting beds unless
unnecessary due to adequate rainfall.
7. Monthly cultivation of water basin repair of all shrub and tree areas.
8. Deep root feeding of all trees twice per year and during the spring
and late summer months. This is on a "need" basis and will be billed
as an addition to the tenant.
9. Complete fertilization of trees and shrubs not less than twice per year,
by the use of deep root watering applications. Formula to be specified
by Landscape Architect for each site.
C. FLOWER BEDS AND/OR GROUND COVER
------ ---- ------ ------ -----
1. Complete trimming, edging of all flower beds and ground covers, monthly.
Note: Weed whip at base of trees in lawn areas is not allowed due to
damage to cambium at base of tree. Hand pruning is required.
2. Monthly cultivation of all ground cover and flower bed areas.
3. Weeding shall be performed regularly to avoid establishment and seeding.
It will be unsatisfactory to allow weeds to grow unabated for more than
two weeks.
4. Complete insect and disease on all flower and ground cover beds
including labor and materials.
52
5. Adequate watering of all beds unless unnecessary due to rain.
6. Routine repairs of erosion and other damages to beds and slopes due to
normal maintenance conditions.
7. Replacement of ALL damaged or destroyed plants, flowers or ground cover,
in accordance with original planting plan* including only labor.
Materials to be paid for by tenant. Damage caused by vandalism or winds
not covered by this section.
*Contractor to get copies of as-built irrigation and planting plans from
tenant or owner.
8. Complete fertilization not less than four times per year with 16-8-8 in
accordance with subsequent fertilization specifications. Formula to be
verified by Landscape Architect.
D. IRRIGATION SYSTEM
---------- ------
1. Contractor shall continually inspect and repair, as necessary, all
sprinkler heads for full coverage and adjustment. Adjust heads to reduce
spray on buildings, sidewalks or other non-landscaped areas. Should poor
coverage of localized areas become evident, contractor shall rectify
the problem by adding new sprinklers or lines. To be verified by
Landscape Architect, Owner, or representative.
NOTE: The maintenance contractor is required to be aware of all site
conditions such as poor soil, poor drainage, high water table and shade
vs. sun irrigation areas.
2. Contractor shall provide all necessary repairs to maintain system in
effective operating conditions.
3. Contractor shall adjust controllers and clocks for seasonal conditions.
4. Repairs to system shall be made with originally specified materials.
Such materials may be charged extra at contractor's expense.
5. The labor for repairing the irrigation system shall be formulated by
the contractor at no additional charge to the tenant. However, labor
for major repairs such as controllers, valves and mainlines, or
installation on items may be charged extra at current agreed rates.
53
E. FERTILIZATION
-------------
1. Contractor shall fertilize all landscape areas at least four times
annually to keep landscaping in a healthy state and green color.
2. All lawns, trees, shrubs, shrub beds, flower beds and ground covers will
be fertilized not less than four times annually utilizing fertilizer
type 16-8-8 analysis at recommended rates, or if available, revise to
Soil & Plant Lab recommended analysis. Contact Landscape Architect for
a copy of the soils report.
3. All fertilizer materials shall be included at contractors cost.
F. ANNUAL COLOR PLANTING
------ ----- --------
A minimum amount of annual color plants will seasonally be added to the
project. All materials and labor for installation will be provided by the
contractor. Coordination for type and color of plantings will be by
Landscape Architect. In most situations, Begonia richmondesis and Begonia
Indian Maid, 4" pots, 10" O.C. is the theme street color to be used.
G. EXTRA SERVICES
----- --------
1. All plant, shrub, flower beds, ground cover and tree removal or
replacement shall be accomplished only with approval of the tenant or
Landscape Architect.
2. Contractor shall furnish Landscape Architect or tenant with itemized
estimate for any extra work required. He shall not proceed without
authorization from the proper representative.
3. A specified amount of man hours should be provided per week, per project
to comply with adequate maintenance practices.
H. SITE INSPECTION AND REVIEW
---- ---------- --- ------
1. Contractor or representative will inspect entire project at least ONCE
A MONTH and a supervisor will spot check each site at least ONCE A
MONTH.
2. Contractor will communicate with property Owner and tenant every six
months (either verbally or written report).
3. Landscape Architect shall review site at six month intervals, or more
often if warranted.
54
PRUNING
55
GENERAL PRUNING GUIDELINES (Refer to drawings following this text for more
specific information)
The basic reasons for pruning are to maintain plant health by removing dead,
diseased or damaged wood. Proper pruning is both a skill and an art. The skill
is making proper cuts that will heal well. The art is making cuts in the right
places so the plant will develop to its full potential of beauty.
The terminal bud develops at the end of a stem or branch. This causes the stem
to grown in length. In some plants there may be latent buds. These buds lie
dormant but will grown after pruning or injury removes the actively growing
parts of the stem. During the season of active growth, terminal buds draw plant
energy to themselves in order to grow and add length to the stems. Therefore,
when you cut off a branch, it does not mean that there will be a void where the
plant/tree was pruned. In time, the terminal bud will produce a stem to replace
the missing branch or stem. keeping this principal in mind, it makes sense when
pruning a plant. If you want side growth, prune the top of the tree/ shrub
forcing the side buds to elongate and by trimming the side growth, the top will
elongate and grow.
TREE TOPPING
While with some trees (such as; Erythrina caffra or Coral trees), it is
necessary to shape or "head back" the top of the tree in order for it to develop
a good canopy, in general, we do not recommend topping. The life expectancy of a
topped tree declines - sometimes dramatically - in comparison to a tree that is
properly pruned. Excessive removal of mature branches reduces the tree's ability
to manufacture and store food and - very importantly - heal itself. Most people
are aware that a tree has the ability to "grow a new skin" over a wound, but if
a major branch is removed, the large cut can give diseases and insects a greater
opportunity to get a foothold before the slow natural process has a chance to
take place.
THINNING
Thinning or thinning out means removing some branches at the point of origin,
leaving more space between remaining branches. A special form of thinning on
larger trees is called drop crotch pruning in which a main branch is removed at
a large lateral branch, the cut being made at the crotch. It usually
accomplishes the opening up of a plant by simplification of its structure;
removal of old and unproductive growth, weak or excess growth, or limbs that are
growing in directions that detract from the plant's attractiveness.
Observations indicate that a thinned tree will usually take longer to grow back
to the critical height than a headed tree. The finest compliment an arborist can
receive after materially reducing the size or density of a tree is when
passers-by fail to notice its pruned condition. Thinning out requires greater
skill and time than heading, but in most situations, it is worth the effort. It
will retain the tree's characteristic form and will minimize the problems of
decay and regrowth.
56
PRUNING TO SHAPE
"To Shape" is another concept in which the artistic side of pruning comes
forward in determining your concept of what the right shape of a particular
plant should be. Every plant has a "natural" shape; its growth tends to conform
to a natural pattern, whether round, gumdrop shaped, wide spreading, vase
shaped, or arching. Observe what a plant's natural shape is and then prune the
plant in a manner that will allow the natural form to continue to develop.
Remove excess growth that obscures the basic pattern or any errant growth that
departs from the natural form. When pruning to shape, make your cuts above a bud
or side branch that points in the direction you'd like the new growth to take.
PRUNING CUTS
After you understand how to approach a pruning job, you need to know how to make
good pruning cuts. The first lesson is: Never leave a stub. Or to put it another
way, always make a cut just above some sort of growth. There is a right way to
make pruning cuts and several wrong ways. You want to avoid leaving stubs and
you also want to avoid undercutting the bud or branch. Best cuts, place the
lowest part of the cut directly opposite and slightly above the upper side of
the bud or branch to which you are cutting back. Large limbs are heavy, and if
you cut down through one with a single cut, it's likely to split or tear before
the cut is finished (possibly splitting farther back than you intended). Cut
heavy limbs in three stages. The first cut is under branch; make a second cut to
remove the limb, outward from the first cut. Final cut should bisect lower angle
branch forms with the tree trunk. (see illustration below)
[GRAPHIC ILLUSTRATION OF THREE STAGES OF PRUNING CUTS]
SEALER
Most people are aware that a tree has the ability to "grow a new skin" over a
wound, but if a major branch is removed, the large cut can give diseases and
insects a greater opportunity to get a foothold before the slow natural process
has a chance
57
to take place. When any branch over 1 1/2 inches in diameter is cut, ALWAYS use
a water base sealer to paint the wounds. This will hinder any possibility of
infection and stop the bore-type insect problems. This step in the pruning
method is very time consuming, but very important to the health of the tree.
SEASON AND SCHEDULE
For pruning decisions the criteria is for appearance and safety. Remove dead or
broken leaves for a neat appearance. For safety reasons, remove any part that
may become a hazard by falling.
Damaged or broken branches should be trimmed off below the points of injury. The
central "leader" or trunk should be left intact to build a high crown and the
side branches shortened by at least one-half of their length.
TIMING FOR PRUNING
December or January is the most effective and convenient time to prune.
Prune to thin outgrowth and eliminate from blocking wind with heavy foliage. It
can be pruned most any time of the year, although January/February is the best
time to prune before mid-winter/spring winds occur.
FERTILIZATION
Note: We recommend fertilizing the trees in the complex with a "root feeder" and
supplemental iron feedings. With this feeding system, you accomplish two
functions: (1) fertilizing and (2) deep watering. This exercise should be
performed in June, and if no rain by December, a light feeding should be
applied. A feeding of nitrogen once a year, injected into the root zone would be
a proper application for growth response. The best and easiest method would be
the root feeder system using the NITROGEN tab insert. With this injection
system, the deep watering will also be beneficial to the lower root zone. This
application should take place about one month before the hottest time of the
year.
58
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING TRISTANIA OR EUCALYPTUS TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: TRISTANIA OR EUCALYPTUS
------------------------------------------------
DO NOT TOP TREE
---
DO NOT SHEAR EDGES OF TREE
---
- PRUNE LATERAL GROWTH (ANNUALLY) BY SELECTIVELY REMOVING BRANCHES TO OPEN
INTERIOR SO WIND WON'T BE A PROBLEM.
- PRUNE UP LOWER GROWTH TO 1/4 OF OVERALL TREE HEIGHT. (6 TO 7 FEET MAX.)
NOTE: TREES WHICH HAVE ALREADY BEEN INCORRECTLY PRUNED BY REMOVING LOWER
BRANCHES TO A HEIGHT GREATER THAN 7 FEET ABOVE THE GROUND, SHALL BE REMOVED
AND REPLACED W/NEW 16 GALLON SIZE TREES. (TRISTANIAS ONLY)
59
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING CUPANIA TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: CUPANIA (CARROTWOOD)
---------------------------------------------
DO NOT TOP TREE
---
DO NOT SHEAR OUTSIDE OF TREE INTO BALL FORM
---
- PRUNE SELECTIVELY REMOVING LATERAL BRANCHES TO OPEN UP INTERIOR OF TREE
AND ENHANCE THE NATURAL STRUCTURE OF THE TREE
------- ---------
- PRUNE UP LOWER BRANCHES TO ALLOW FOR VEHICULAR & PEDESTRIAN TRAFFIC
60
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING LIQUIDAMBAR TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: LIQUIDAMBAR TREE
-----------------------------------------
DO NOT TOP THIS TREE
---
CENTRAL LEADER (MAIN TRUNK) OF TREE MUST REMAIN INTACT IN ORDER FOR TREE TO
DEVELOP INTO ITS NATURAL FORM.
DO NOT TRIM OR 'HEAD BACK' LATERAL GROWTH
---
PRUNING INSTRUCTIONS:
--------------------
- THIN OUT TREE ANNUALLY BY SELECTIVELY REMOVING 10-15% OF LATERAL BRANCHES,
ALL THE WAY BACK TO TRUNK OF TREE.
- PRUNE UP LOWER BRANCHES TO 1/4 OF OVERALL HEIGHT OF TREE (NOT TO EXCEED A
HEIGHT OF 6 FEET)
NOTE: SLASH THRU BRANCH SHOWS EXAMPLE OF PROPER LOCATION OF PRUNING CUTS.
----
61
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING MELALEUCA TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: MELALEUCA LEUCADENDRA
----------------------------------------------
DO NOT TOP TREE
---
DO NOT SHEAR OUTSIDE OF TREE (KEEP FORM NATURAL)
---
- LIGHTLY THIN-OUT TREE BY REMOVING SECONDARY BRANCHES ONLY WHEN FOLIAGE GROWTH
BECOMES VERY DENSE
- PRUNE UP LOWER FOLIAGE TO HEIGHT OF 3-4 FEET FOR MATURING TREES (LESS FOR
YOUNGER TREES)
62
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING CORAL TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: ERYTHRINA CAFFRA TREE
----------------------------------------------
- LIGHTLY "HEAD BACK" GROWTH WHERE NEEDED TO SHAPE OVERALL TREE CANOPY
- OPEN UP INTERIOR OF TREE BY REMOVING APPROXIMATELY 20-25% OF BRANCHES, WHILE
-------
RETAINING BALANCE TO THE STRUCTURE & ALLOWING WIND TO PASS THRU THE TREE.
-----------------------------------
ALLOW CLEARANCE UNDER BRANCHES FOR VEHICULAR & PEDESTRIAN TRAFFIC
NOTE: SLASH THRU BRANCH SHOWS EXAMPLE OF PROPER LOCATIONS FOR PRUNING CUTS
----
NOTE: ALTERNATE PRUNING OF LATERAL GROWTH EVERY (2) YEARS. PRUNE AFTER TREE
---- BLOOMS IN WINTER.
63
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING CANARY ISLAND PINE]
PRUNING INSTRUCTION FOR: PINUS CANARIENSIS
------------------------------------------
DO NOT TOP TREE
---
DO NOT PRUNE BACK LATERAL BRANCHES
---
THIS TREE REQUIRES VERY MINIMAL PRUNING
---------------
- LIGHTLY THIN OUT SECONDARY GROWTH ON LATERAL BRANCHES STARTING AT TRUNK AND
MOVING OUTWARD. DO THIS ONLY WHERE FOLIAGE IS VERY DENSE.
- PRUNE UP LOWER GROWTH TO 1/4 OF OVERALL HEIGHT. (6 FEET MAX)
64
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
PRUNING INSTRUCTION FOR: SHRUB PLANTINGS
----------------------------------------
[LINE DRAWING OF SECTION OF INFORMAL HEDGE]
[LINE DRAWING OF ELEVATION OF INFORMAL HEDGE]
INFORMAL HEDGE (SUCH AS: XYLOSMA, ESCALLONIA, RAPHIOLEPIS, PITTOSPORUM)
DO NOT USE HEDGING SHEARS ON INFORMAL SHRUB PLANTINGS
---
DO NOT SHAPE SHRUBS INTO BALL FORMS
---
- TO PRUNE, SELECTIVELY REMOVE INDIVIDUAL BRANCHES W/HAND CLIPPERS TO OPEN UP
AND ENHANCE THE NATURAL STRUCTURE OF THE SHRUB.
-----------------
NOTE: ALLOW GROUND COVER TO FILL IN BELOW SHRUBS
----
[LINE DRAWING OF SECTION OF FORMAL HEDGE]
[LINE DRAWING OF ELEVATION OF FORMAL HEDGE]
FORMAL HEDGE (SUCH AS: LIGUSTRUM TEXANUM)
- PRUNE BY SHEARING EDGES OF SHRUBS W/HEDGING SHEARS, INTO "BOX" FORM
NOTE: ALLOW GROUND COVER TO FILL IN BELOW SHRUBS
----
65
[LOGO - XXXXXXX XXXXX & ASSOCIATES LANDSCAPE ARCHITECTS/PLANNERS]
[LINE DRAWING DEPICTING SYCAMORE TREE AND ITS DIMENSIONS]
PRUNING INSTRUCTION FOR: PLATANUS (SYCAMORE) TREE
-------------------------------------------------
DO NOT XXXXXXX TREE (THIS IS WHEN MAJOR BRANCHES ARE PRUNED BACK SEVERELY TO
---
SAME POINT EACH TIME, IF THIS HAS ALREADY BEEN DONE, SEE NOTE BELOW)
- SELECTIVELY "HEAD BACK" BRANCHES THAT PROTRUDE OUTSIDE STRUCTURE OF TREE
- SELECTIVELY THIN-OUT LATERAL BRANCHES TO OPEN UP INTERIOR OF TREE
- REMOVE LOWER BRANCHES TO 6-7 FEET ABOVE GROUND
- REVIEW PRUNING OF TREE (2) TIMES A YEAR. PRUNING TO BE DONE PREDOMINANTLY IN
WINTER.
NOTE: FOR TREES WHICH HAVE ALREADY BEEN INCORRECTLY PRUNED BY SEVERELY CUTTING
---- BACK PRIMARY LATERAL BRANCHES, PRUNE OUT 60% OF NEW GROWTH (SEE EXAMPLE)
[LINE DRAWING DEPICTING EXAMPLE OF INCORRECTLY PRUNED LATERAL BRANCH]
66
EXHIBIT "G"
PAINTING SPECIFICATIONS
[To be provided by Landlord]
67
EXHIBIT "H"
ARCHITECT'S CERTIFICATE
Re: Alterations Completed On ______________________ [Date]
[Name of Tenant and Address of Premises]
Gentlemen:
We hereby declare based upon our professional opinion, that, to the
best of our knowledge, information and belief, the above referenced project is
in substantial compliance with the construction documents and applicable
building codes.
Very truly yours,
[Name and Address of
Architect]
By:______________________________________
Title:______________________________
68
EXHIBIT "I"
ESTOPPEL CERTIFICATE
SUBJECT: Lease Dated: ___________________________
Between: ___________________________, Lessor
___________________________, Lessee
On Premises located and addressed as:
___________________________
___________________________
___________________________
Gentlemen:
The undersigned as Lessee, hereby confirms to the best of its knowledge, the
following:
1. That is has accepted possession of the premises demised pursuant to the
terms of the aforesaid Lease.
2. That the improvements and space required to be furnished according to
the aforesaid lease have been completed in all respects.
3. That the Lessor has fulfilled all of its duties of an inducement nature.
4. That there are no off-sets or credits against rentals, nor, have rentals
been prepaid except as provided by the lease terms.
5. That said rentals commenced to accrue on the _____ day of ____________,
19_____, and are current. The primary lease term expires on __________________,
and there are no options to extend the term.
6. That we have no notice of a prior assignment, hypothecation or pledge of
rents or the lease.
7. That the aforesaid lease has not been modified, altered or amended.
This Estoppel Certificate shall in no way affect Xxxxxx's rights under the
subject lease.
By: ___________________________
Title: ____________________
