1
LEASE
WARLAND/CYPRESS BUSINESS CENTER
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A Project of WARLAND INVESTMENTS COMPANY
WARLAND INVESTMENTS COMPANY,
a California limited partnership
Landlord,
AND
UNIVERSAL ELECTRONICS INC.,
a Delaware Corporation
Tenant
2
LEASE
THIS LEASE (this "Lease") is made by WARLAND INVESTMENTS COMPANY, 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, the real
property and all improvements including the building constructed thereon (the
"Building"), all as described in Item 2(b) of the Fundamental Lease Provisions
and cross-hatched on that certain plot plan ("Plot Plan") attached hereto as
Exhibit "A" with the legal description set forth on attached Exhibit "B"
(collectively, the "Premises").
As conditions precedent for Landlord's benefit to a conveyance of a
leasehold by this Lease, (i) Tenant must have the right to occupy the Premises
as of midnight December 31, 1998, through that certain subleasehold of the
Premises as conveyed by Ikon Office Solutions, Inc. ("Ikon") to Tenant under
sublease dated January 10, 1997, attached hereto as Exhibit "I" (the "Ikon
Sublease") or pursuant to a direct lease with Landlord as provided in the
immediately following paragraph; and (ii) Tenant shall not be in default of the
Ikon Sublease as of the Commencement Date (as defined below). In the event (x)
the Ikon Sublease terminates at any time before December 31, 1998 through a
breach or default by Tenant, or (y) the Ikon Sublease terminates at any time
before December 31, 1998 through no fault of Tenant but a direct lease between
Tenant and Landlord does not arise because of the failure of the condition set
forth in clause (z) following, or (z) Tenant shall be in default of the Ikon
Sublease, then this Lease shall thereupon be automatically canceled without
further documentation or consideration; provided, however, Tenant shall deliver
to Landlord upon Landlord's request a duly executed quitclaim deed in a
recordable form conveying any interest of Tenant in the Premises to Landlord.
If for any reason (other than a default or breach by Tenant) the Ikon
Sublease terminates prior to the Commencement Date, (A) the Commencement Date
shall be accelerated to the date of the termination of the Ikon Sublease, (B)
the time period calculated from the date of such termination through the
Commencement Date shall be added to the end of the Initial Term under this Lease
(such that the first rental adjustment under Paragraph 5 of the Fundamental
Lease Provisions, below continues to occur on the first day of the 25th month of
the Initial Term), and (C) Tenant shall lease the Premises from Landlord upon
and subject to all the terms and conditions of this Lease. The foregoing
acceleration and the continuing effectiveness of this Lease as a direct lease
between Tenant and Landlord shall continue to be subject to the conditions for
Landlord's benefit set forth in clauses (x), (y) and (z) of the immediately
preceding paragraph.
The Premises are a part of the Warland/Cypress Business Center (the
"Business Center").
FUNDAMENTAL LEASE PROVISIONS
1. Tenant: UNIVERSAL ELECTRONICS INC., a Delaware corporation
2. Premises:
(a) Premises Address: 0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
(b) Land Area: 2.45 acres
(c) Square Feet in Building: 30,768 square feet
(d) Premises Parking Spaces: 120 passenger automobile
spaces
3. Term: Forty-Eight (48) months (See Section 1)
4. Option to Renew: One Five-Year Option (See Section 13.1)
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5. INITIAL BASIC MONTHLY RENT: $19,845.36
FIRST MONTH'S RENT (payable upon execution): $19,845.36
RENTAL ADJUSTMENT SCHEDULE:
Months 1 through 24: $19,845.36
Months 25 through 48: $21,432.99
6. SECURITY DEPOSIT (payable upon execution): $19,845.36
7. PERMITTED USE: General and administrative offices, warehousing
and distribution of computer chips and remote controls,
engineering and sales for related hardware and software
products. (See Section 4.1)
8. COMMENCEMENT DATE: January 1, 1999
9. BROKER(S) FOR LANDLORD:
CB Commercial Real Estate Group, Inc.
0000 Xxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
BROKER(S) FOR TENANT:
Xxxxx & Xxxxx Company
000 X. Xxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
10. ADDRESSES FOR NOTICE:
LANDLORD:
WARLAND INVESTMENTS COMPANY
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Co-Managing Director
TENANT:
UNIVERSAL ELECTRONICS INC.
0000 Xxxxxxxxxx Xxxxxxx, Xxxx
Xxxxxxxxx, XX 00000; and
Attn: Vice President & General Counsel
The Premises herein.
11. CONTENTS OF LEASE: Pages 1-27
Standard Lease Provisions (Sections 1 through 13)
Exhibits "A" Plot Plan of the Premises
"B" Legal Description of the Premises
"C" Tenant's Certificate
"D" Sign Criteria
"E" Landscape Maintenance Specifications
"F" Architect's Certificate
"G" Subordination, Non-Disturbance Agreement
"H" Estoppel Certificate
"I" Ikon Sublease
12. REFERENCE DATE OF THIS LEASE: November 1, 1997
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 Provisiohs
appear. Each reference in this Lease to
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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 COMPANY,
a California limited partnership
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxx
----------------------------------
Title: Co-Managing Director
By: /s/ Xxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxxx
---------------------------------
Title: Co-Managing Director
"LANDLORD"
UNIVERSAL ELECTRONICS INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxx
------------------------------------------
Name: Xxxx Xxxxxx,
Title: Chief Financial Officer
"TENANT"
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TABLE OF CONTENTS
Page
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1 Term ............................................................. 1
1.1 Term ......................................................... 1
1.2 Commencement Date ............................................ 1
1.3 Tenant's Certificate and Certificate of Occupancy ............ 1
1.4 Lease Year ................................................... 1
2 Rent 1
2.1 Rent ......................................................... 1
2.2 Additional Rent .............................................. 1
2.3 Security Deposit ............................................. 1
3 Taxes and Utilities .............................................. 2
3.1 Real Property Taxes .......................................... 2
3.1.1 Real Estate Taxes Defined .............................. 2
3.1.2 Payment ................................................ 2
3.1.3 Separate Assessment .................................... 2
3.2 Personal Property Taxes ...................................... 2
3.3 Utility Charges .............................................. 3
3.4 Right to Contest Real Property Taxes ......................... 3
4. Operation ........................................................ 3
4.1 Use .......................................................... 3
4.2 General ...................................................... 3
4.3 Signs ........................................................ 4
4.4 Parking ...................................................... 4
4.5 Hazardous Materials .......................................... 4
5. Maintenance, Repairs, and Alterations ............................ 6
5.1 Tenant Maintenance, Repair and Restoration Obligations ....... 6
5.2 Landlord Maintenance and Repair .............................. 6
5.3 Alterations and Additions .................................... 7
5.4 Mechanics' and Other Liens ................................... 8
5.5 Failure ...................................................... 8
5.6 Title ........................................................ 8
5.7 Surrender .................................................... 8
6. Insurance and Liability .......................................... 8
6.1 Insurance .................................................... 8
6.1.1 Liability Insurance .................................... 8
6.1.2 All Risk Insurance ..................................... 9
6 1.3 Business Interruption Insurance ........................ 9
6.1.4 Plate Glass Insurance .................................. 9
6.1.5 Workers' Compensation Insurance ........................ 9
6.2 Insurer and Policy Form ...................................... 9
6.3 Waiver of Subrogation ........................................ 9
6.4 Indemnification .............................................. 10
6.5 Failure to Obtain Insurance .................................. 10
6.6 Landlord's Insurance ......................................... 10
7. Damage or Destruction ............................................. 10
7.1 Determination of Extent of Damage ............................ 10
7.2 Rights to Terminate Following Major Damage or Damage Near End
of Term ...................................................... 10
7.3 Restoration of Damage ........................................ 11
7.3.1 Insured Losses ......................................... 11
7.3.2 Uninsured Losses ....................................... 11
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Page
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7.4 Outside Date for Completion ................................... 11
7.5 Termination ................................................... 11
7.6 Abatement of Rent ............................................. 12
7.7 Waivers ....................................................... 12
7.8 Insurance Deficiency .......................................... 12
7.9 Delays ........................................................ 12
8. Condemnation ...................................................... 12
8.1 Definitions .............................................. 12
8.1.1 Condemnation ....................................... 12
8.1.2 Total Condemnation ................................. 13
8.1.3 Partial Condemnation ............................... 13
8.1.4 Condemnation Date .................................. 13
8.1.5 Award .............................................. 13
8.2 Total Condemnation ....................................... 13
8.3 Partial Condemnation ..................................... 13
8.3.1 Termination ........................................ 13
8.3.2 Abatement of Rent .................................. 13
8.3.3 Restoration ........................................ 13
8.4 Allocation of Award ...................................... 13
8.5 Waiver of Code of Civil Procedure Section ................ 14
9. Assignment and Subletting ......................................... 14
9.1 Assignment and Subletting ................................ 14
9.2 Notice ................................................... 14
9.3 Standards for Consent .................................... 14
9.4 Consent ................................................. 15
9.5 Additional Transactions .................................. 15
9.6 Limitation ............................................... 16
9.7 Assignment and Subletting Profit Recapture ............... 16
9.8 Permitted Transfers ...................................... 16
10. Protection of Lenders .............................................. 17
10.1 Subordination ............................................ 17
10.2 Attornment ............................................... 17
10.3 Signing of Documents ..................................... 17
11. Default and Remedies ............................................... 17
11.1 Default .................................................. 17
11.1.1 Failure to Pay Rent ............................... 17
11.1.2 Abandonment ....................................... 17
11.1.3 Bankruptcy ........................................ 17
11.1.4 Default of Guarantor .............................. 18
11.1.5 Specific Tenant Obligations ....................... 18
11.1.6 Other ............................................. 18
11.2 Remedies ................................................. 18
11.2.1 Termination ....................................... 18
11.2.2 Continuation ...................................... 18
11.2.3 Additional Rights ................................. 19
11.3 Late Charge and Interest ................................. 19
11.3.1 Late Charge ....................................... 19
11.3.2 Interest .......................................... 19
11.4 Waiver of Right of Redemption ............................ 19
12. Miscellaneous ...................................................... 19
12.1 Default by Landlord ...................................... 19
12.1.1 Default .......................................... 19
12.1.2 Remedies of Tenant ................................ 19
12.1.3 Right to Make Repairs ............................. 20
12.2 Estoppel Certificates .................................... 20
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12.3 Holding Over ........................................................................................... 20
12.4 Quiet Enjoyment ........................................................................................ 21
12.5 Sale of the Premises ................................................................................... 21
12.6 No Recording ........................................................................................... 21
12.7 Financial Statements ................................................................................... 21
12.8 Access by Landlord ..................................................................................... 21
12.9 Notices ................................................................................................ 21
12.10 Time ................................................................................................... 22
12.11 Entire Agreement ....................................................................................... 22
12.12 Further Assurances ..................................................................................... 22
12.13 Financing .............................................................................................. 22
12.14 Applicable Law and Severability ........................................................................ 22
12.15 Controversy ............................................................................................ 22
12.16 Headings and Gender .................................................................................... 22
12.17 Successors ............................................................................................. 22
12.18 Tenant as Corporation or Partnership ................................................................... 22
12.19 No offer ............................................................................................... 23
12.20 Non-Liability of Landlord .............................................................................. 23
12.21 Waiver of Trial by Jury and Filing of Lis Pendens ...................................................... 23
12.22 Brokers ................................................................................................ 23
12.23 Force Majeure .......................................................................................... 23
13 Addendum ...................................................................................................... 24
13.1 Option to Renew ........................................................................................ 24
13.1.1 Calculation of Rent During Option Period ........................................................ 24
13.1.2 Adjustment to Rental Rate During Option Period .................................................. 25
13.1.3 Non-Assignable .................................................................................. 25
EXHIBIT "A" Plot Plan
EXHIBIT "B Legal Description of the Property
EXHIBIT "C" Tenant's Certificate
EXHIBIT "D" Sign Criteria
EXHIBIT "E" Landscape Maintenance Specifications
EXHIBIT "F" Architect's Certificate
EXHIBIT "G" Subordination, Nondisturbance, & Attornment Agreement
EXHIBIT "H" Estoppel Certificate
EXHIBIT "I" Ikon Sublease
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STANDARD LEASE PROVISIONS
1. TERM.
1.1 TERM. The term of this Lease ("Term") shall be as specified in Item
3 of the Fundamental Lease Provisions, commencing as of the Commencement Date
defined in Section 1.2 and, unless sooner terminated in accordance with the
provisions hereof, and expiring by its terms as set forth in Section 3 of the
Fundamental Lease Provisions. The term "Term" unless otherwise indicated shall
mean the initial Lease term (the "Initial Term") and any extensions thereof.
1.2 COMMENCEMENT DATE. Subject to the conditions precedent set forth on
page 2 of the Lease, the Commencement Date shall be January 1, 1999. Tenant
acknowledges that it has inspected the Premises and shall accept them in their
"as-is" condition as of the Term Commencement Date, without any representations
or warranties express or implied.
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 "C" (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 "C" are true and correct, without exception.
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.
2.1 RENT. Tenant shall pay to Landlord as rent 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.
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 to 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 that partial 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. Tenant agrees to deposit with Landlord
simultaneously with the execution of this Lease a security deposit (the
"Security Deposit") securing Tenant'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 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
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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 Tenant's
interest hereunder) within thirty (30) days following expiration of the Term. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer the Security Deposit to Landlord's successor in interest.
3. TAXES AND UTILITIES.
3.1 REAL PROPERTY TAXES.
3.1.1 REAL ESTATE 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 Business
Center, the Building, the Premises, and 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 Taxes in substitution, partially or
totally, of any Taxes 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, 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, (iv) any Taxes on the transfer or transaction
directly or indirectly represented by this Lease, by any subleases or
assignments hereunder, 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, and (v) an increase in the tax increment or assessment upon the
Business Center or the Premises as a result of any transaction creating or
transferring any interest or estate in the Premises, the Business Center or
Landlord, or (vi) any assessment, tax, fee, levy or charge any governmental
agency related to any transportation plan, fund or system (including assessment
districts) instituted within the geographic area of which the Premises are a
part. Real Property Taxes shall not include any general franchise, income,
estate or inheritance tax imposed on Landlord, or taxes on Tenant's personal
property (provided, however, Tenant shall be responsible for all payments of any
personal property taxes as provided in Section 3.2, below).
3.1.2 PAYMENT. Tenant shall pay all Real Property Taxes applicable to
the Premises during the Term not less than 10 days prior to 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 Tenant 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 the 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
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levied or assessed during the Term upon all of Tenant's Alterations (as defined
below), 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
Premises, 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 within the
Business Center. If as a result of the negligence or willful misconduct of
Landlord, it agents, contractors or employees there is an interruption of HVAC,
electricity or water to the Premises resulting in the interruption of Tenant's
ordinary business use of the Premises for more than five (5) consecutive
business days following written notice of such event to Landlord (the
"Eligibility Period"), then, provided Tenant does not in fact use the Premises
during such Eligibility Period as a direct result of such utilities
interruption, Tenant's Monthly Basic Rent shall be abated after expiration of
the Eligibility Period for such time and to such extent as Tenant is so
prevented from using and does not use the Premises. The immediately preceding
sentence shall not apply to damage or destruction to the Premise, which shall be
controlled by Article 7, below.
3.4 RIGHT TO CONTEST REAL PROPERTY TAXES. If Tenant reasonably believes
that the amount of any Real Property Tax is improper for any reason, Tenant may
notify Landlord in writing of Tenant's desire that such assessment be contested
or challenged by Landlord and the reason for such opinion, in which event
Landlord shall submit such request to Landlord's real property tax assessment
counsel or consultant. If such counsel or consultant agrees that there is a
reasonable likelihood of prevailing on such contest or challenge as presented by
Tenant and provided the position advocated by Tenant is not inconsistent with
legal positions advocated or being advocated by Landlord for its surrounding
properties, then Landlord shall initiate and prosecute such challenge, provided
all costs for pursuing such contest shall be Additional Rent hereunder. Landlord
shall have no obligation to prosecute such challenge beyond a decision by the
Tax Assessment Appeals Board. As a condition to commencing such challenge or
contest, Landlord may require that Tenant advance any estimated costs or fees
for such challenge. Any Real Property Tax savings or rebate prorated for the
Term until the date of payment shall inure to the benefit of Tenant and be paid
to Tenant to the extent of any overpayment by Tenant.
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 without Landlord's consent, which may be withheld in Landlord's sole
and absolute discretion. Tenant shall keep the Premises and every part thereof,
in a clean and wholesome condition, and shall comply with all health, safety and
police regulations applicable thereto in all respects. Tenant 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 to
cause 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 at Tenant's cost with (i) any and all federal, state, county and
municipal statutes, laws, ordinances, rules, regulations and orders
(collectively, "Laws") at any time, now or in the future affecting the Premises,
including, without limitation, any Laws requiring improvements to or alteration
of the Premises, such as The Americans with Disabilities Act of
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1991, Title 24 of the California Code of Regulations, and any amendments
thereto, (ii) any and all existing covenants, conditions, restrictions or
easements affecting the Premises or the Business Center 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 (A) 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 (B) 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. To the
extent compliance is required, Landlord shall provide Tenant with copies of the
documentation described in clauses (ii) and (iii) of the immediately preceding
sentence. Notwithstanding any circumstantial factors judicially developed as a
means of allocating the obligation to make alterations to the Premises in order
to comply with present or future laws, it is the intention of the parties that
such obligations are those of the Tenant and are accordingly reflected in rental
payments and other consideration under this Lease.
4.3 SIGNS. Tenant shall be permitted to construct and maintain on or
about the Premises one free-standing monument sign identifying Tenant. The type,
design, color, location, site configurations and materials of such signage shall
be (a) consistent with the sign criteria of the Warland/Cypress Business Center
("Sign Criteria") attached hereto as Exhibit "D", (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. Landlord hereby approves Tenant's existing monument
sign.
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 in violation of any ordinances or postings by any
public authorities having jurisdiction.
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 or transported to or from
the Premises by Tenant, its agents, employees, contractors or invitees (for
purposes of this Section 4.5, "Tenant"), 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, stored and
transported 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, transportation or release of Hazardous Material
on, to or from the Premises caused or permitted by or through Tenant (whether
affirmatively or through Tenant's active or passive negligence) results in
contamination or alleged contamination of the Premises or any surrounding
property, or if contamination of the Premises or any surrounding property 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, Landlord's constituent partners, managing director, agents,
employees, successor and assigns (collectively, the "Indemnified Parties")
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 rentable or usable space
or of any amenity of the Premises, damages arising from any adverse impact on
marketing of space in the Building, and sums paid in settlement of claims,
attorneys's fees, consultant fees and expert fees) which arise during or after
the Term as a result of such contamination. This indemnification of the
Indemnified Parties by Tenant includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup, remedial,
removal or restoration work required by any federal, state or local governmental
agency or political subdivision because of Hazardous Material present or alleged
to be present in the soil or ground water on or under the Premises. Without
limiting the foregoing, if the presence or alleged presence, release or
transportation of any Hazardous Material on the Premises caused or permitted by
Tenant results in any contamination of the Premises or surrounding property,
Tenant shall promptly take all actions at its sole expense as are necessary to
return the Premises or surrounding property to the condition existing prior to
the introduction of any such Hazardous
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Material to the Premises or surrounding Property; provided that (i) Landlord's
approval of the proposed remedial actions shall first be obtained, which
approval shall not be unreasonably withheld so long as the proposed remedial
actions would not potentially have any 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. The provisions of this Section 4.5.1 shall
survive the expiration or earlier termination of this Lease.
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 or transfer of the Premises or this Lease if (i) the
proposed transferee's anticipated use of the Premises involves the generation,
storage, use, treatment, disposal or transportation of Hazardous Material in
excess of Tenant's ordinary usage as of the Reference Date; (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, transportation or storage of a Hazardous
Material.
4.5.3 As used in this Lease, the term "Hazardous Material" means any
flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes", "hazardous materials," or "toxic substances" now or subsequently
regulated under any applicable federal, state or local laws, ordinances or
regulations, including without limitation, petroleum-based products and
materials, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, petroleum
(or fractions thereof), PCB's and similar compounds, and including any different
products and materials which are subsequently found to have adverse effects on
the environment or the health or safety of persons.
4.5.4 Without limiting the foregoing provisions of Section 4.5, to
prevent the generation, growth, or deposit of any mold, mildew, bacillus, virus,
pollen or other micro-organism (collectively, "Biologicals") and the deposit,
release or circulation of any indoor contaminants, including emissions from
paint, carpet and drapery treatments, cleaning, maintenance and construction
materials and supplies, pesticides, pressed wood products, insulation, and other
materials and products (collectively with Biologicals, "Contaminants"), that
could adversely affect the health, safety or welfare of any tenant, employee, or
other occupant of the Building or their invitees (each, an "Occupant"), Tenant
shall, at Tenant's sole cost and expense, at all times during the Term (i)
maintain, operate and repair the HVAC system servicing the Premises in a manner
consistent with preventing or minimizing the generation, growth, circulation,
release or deposit of any Contaminants, (ii) maintain the humidity level and the
air exchange rate within the Premises at a level recommended to prevent or
minimize the growth of any Biologicals and the circulation of any other
Contaminants, and (iii) maintain, operate and repair the Premises in such a
manner to prevent or minimize the accumulation of stagnant water and moisture in
planters, kitchen appliances and vessels, carpeting, insulation, water coolers
and any other locations where stagnant water and moisture could accumulate, and
(iv) otherwise maintain, operate and repair the Premises to prevent the
generation, growth, deposit, release or circulation of any Contaminants. If any
governmental entity or any Occupant alleges that health, safety or welfare has
or could be adversely affected by any such Contaminants, Tenant shall notify
Landlord in writing within twenty-four (24) hours of the time the allegation is
made. Landlord may then elect to engage the services of an industrial hygiene
testing laboratory (or alternatively or concurrently require Tenant to do the
same) to determine whether the cause of any alleged adverse health effect is or
could be attributable to any Contaminants present within the Premises. Tenant
shall be responsible for all such testing costs and for any consequential
damages and costs (including, without limitation, any third-party claims, loss
of rental, remediation, removal and/or abatement costs, and increase in
insurance premiums) resulting from Tenant's failure to comply in whole or in
part with the terms of this Section 4.5.4.
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5. MAINTENANCE, REPAIRS, AND ALTERATIONS.
5.1 TENANT MAINTENANCE, REPAIR AND RESTORATION OBLIGATIONS. Subject to
the provisions of Sections 5.2, 7.3, 7.4, 7.5 and 8.3, Tenant shall, 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, all equipment or facilities serving
the Premises, such as water and plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, including all underground water,
sewer, electrical and gas conduits, lines and pipes, boilers, fired or unfired
pressure vessels, fire sprinkler and/or stand pipe and hose or other automatic
fire extinguishing system, including fire alarm and/or smoke detection systems
and equipment or other life-safety systems, fire hydrants, fixtures, non-bearing
walls, ceiling and roof membrane (which consists of everything above the roof
decking, including, without limitation, plys plus cap sheets), roof drains with
grates, skylights, roof equipment screens, pitch pockets, any curbs for HVAC or
other roof equipment and metal flashings), floor slab (which shall include the
periodic patching or section replacement of the floor slab to repair cracking or
spalling), windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, signs, sidewalks and parkways located in, on, about, or
adjacent to 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 "E". Furthermore, Tenant shall, at
Tenant's cost, contract with R&D Landscaping & Irrigation for the on-going
maintenance of the landscaping, or with such other reputable landscaping
maintenance firm as shall be approved by Landlord. Tenant shall, at Tenant's
cost, obtain service contracts for repairs and maintenance of the HVAC system
and the roof membrane from reputable service providers approved in advance by
Landlord, with a copy of each service contract to be furnished to Landlord
within 30 days of execution of this Lease. Landlord shall not unreasonably
withhold its approval of any maintenance contracts or licensed contractors
selected by Tenant with respect to Tenant's maintenance and repair obligations.
In addition to the landscape maintenance contract specified above,
Tenant shall, at Tenant's sole cost, procure and maintain contracts, with copies
to Landlord, in customary form and substance for, and with contractors
specializing and experienced in, the inspection, maintenance and service of the
following equipment and improvements to the extent located on the Premises: (i)
heating, ventilation and air conditioning equipment, (ii) boiler, fired or
unfired pressure vessels, (iii) fire sprinkler and/or standpipe and hose or
other automatic fire extinguishing systems, including fire alarm and/or smoke
detection systems, (v) roof covering and drain maintenance and (vi) asphalt and
parking lot maintenance. A copy of each of the foregoing contracts shall also be
forwarded to Landlord within thirty (30) days of the execution of this Lease.
Landlord may require Tenant to repaint the exterior of the Building, at
Tenant's sole cost, as reasonably required, but not more frequently than once
every five (5) years. Such repainting shall be accomplished using paint of
similar quality used in the original painting of the Building.
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 or in Sections 7.3 and 8.3.3, Landlord shall have no obligation
to maintain or repair the Premises. Landlord shall be responsible only for the
Structural Components of the Building, except to the extent repairs to such
Structural Components are necessitated by the acts or omissions of Tenant, its
agents, employees, representatives, licensees, business invitees, subtenants or
anyone else on the Premises (other than Landlord, its agents, employees or
representatives) at any time (in which case Tenant shall perform such repairs at
Tenant's cost in accordance with Section 5.1, above). The "Structural
Components" shall mean Building foundation (excluding the floor slab, which
shall be the responsibility of Lessee pursuant to Section 5.1, above), footings,
exterior bearing walls, the roof structure (which consists only of
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the steel trusses, purlins, subpurlins and either plywood or OSB sheathing roof
decking). All costs incurred by Landlord, including capital expenditures, shall
be charged to Tenant as Additional Rent and shall be due and payable within ten
(10) days after demand; provided, however, all capital expenditures shall be
amortized over the useful life of the capital improvement in accordance with
generally accepted accounting principles consistently applied not to exceed ten
(10) years at an interest rate equal to the maximum rate permitted to be charged
by a non-usurious exempt lender. 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 any injury or
damage (unless such injury is directly caused by Landlord's gross negligence or
willful misconduct) 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.
5.3 ALTERATIONS AND ADDITIONS. Tenant shall not, without Landlord's
prior written consent, which consent may be withheld in Landlord's sole and
absolute discretion, make any structural or exterior alterations, additions,
improvements or utility installations ("Structural Alterations") in, on or about
the Premises. Any request for additions, alterations, or improvements to the
Premises which are not Structural Alterations ("Non-Structural Alterations")
shall not be unreasonably withheld or delayed, (Structural Alterations and
Non-Structural Alterations are collectively referred to herein as
"Alterations"). Landlord hereby consents to all Nonstructural Alterations during
the Term, the cost of which does not exceed Fifty Thousand and 00/100 Dollars
($50,000.00) in the aggregate in any one Lease Year, provided Landlord receives
at least ten (10) business days' prior written notice of such Non-Structural
Alterations together with reasonably detailed documentation showing that such
Alterations are Non-Structural Alterations. However, any Alterations to be made
by Tenant before the commencement of the Initial Term shall be submitted to
Landlord for prior approval. As a condition to its consent, Landlord may require
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. 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. At the time Tenant requests consent to any Alterations, Tenant may
request of Landlord that Landlord inform Tenant at the time of granting such
consent, if consent is to be granted, whether or not Landlord will require
removal of the proposed Alteration upon the expiration or earlier termination of
this Lease (a "Removal Determination"). If Landlord fails to respond to a
request for a Removal Determination within fifteen (15) business days after such
request, Landlord shall be deemed to have determined that Landlord will withhold
its decision regarding such removal until surrender of the Premises. Upon
completion of any Alterations, Tenant agrees to (i) cause a Notice of Completion
to be 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 "F". 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 now in effect or
hereinafter enacted, including, without limitation, the State of California
Title 24 Energy Regulations, The Americans with Disabilities Act of 1990, and
any amendments thereto. 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.
Notwithstanding the foregoing but subject to the last three sentences of
the immediately preceding paragraph, Tenant shall have the right, at Tenant's
sole cost, expense and liability, to expand the mezzanine of the Building in
accordance with preliminary plans prepared by Xxxxxx X. Xxxxxxxx & Associates
dated October 7, 1997, Sheet Nos. A-1.1 and A-2.1 (the "Mezzanine Preliminary
Plans"), provided: (i) Tenant shall prepare and submit to Landlord for approval,
which approval shall not be unreasonably withheld, final working drawings
(including structural engineering drawings and specifications) based on the
Mezzanine Preliminary Plans (the "Mezzanine Working Drawings"), (ii) Landlord
shall have approved the Mezzanine Working Drawings, and (iii) construction of
the expanded mezzanine shall be in accordance with the approved Mezzanine
Working Drawings and, if elected by Landlord, under supervision of an architect
or other construction supervisor selected by Landlord (provided that any such
supervision shall be solely for Landlord's benefit and shall not be relied upon
by Tenant).
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5.4 MECHANICS' AND OTHER 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 be 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, obtain a release bond in the
statutory amount, and issued by a surety approved by Landlord, within ten (10)
days after written request to do so from Landlord. Tenant's failure to obtain
and file such a release bond within this 10-day period shall entitle (but not
obligate) Landlord, without waiving any other remedies of Landlord under this
Lease, to obtain such a release bond, and the reasonable costs so incurred by
Landlord shall be paid by Tenant as Additional Rent.
5.5 FAILURE. Without waiving any of Landlord's remedies under Section
11.2, if Tenant fails, refuses or neglects to commence and complete repairs
promptly and adequately, as required under Section 5.1 or complete any
Alterations as required by Section 5.3, to remove any liens, pay any costs,
expenses, reimburse Landlord or to otherwise perform any act or fulfill any
obligation required of Tenant pursuant to Section 5.1, 5.3 or 5.4, Landlord may,
at its option, make or complete any such repairs or Alterations, remove such
lien, pay such costs, or perform such acts, or the like, with prior notice to do
so but at the sole cost and expense of Tenant. Tenant agrees to reimburse
Landlord for all costs and expenses of Landlord thereby reasonably incurred
within ten (10) days after receipt by Tenant 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.
Landlord'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. Subject to Section 5.7, all right, title and interest in and
to the Premises and any Alterations thereto including, without limitation, all
improvements constructed pursuant to the Work Letter Agreement, 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.
5.7 SURRENDER. Upon expiration or any sooner termination of this Lease,
Tenant shall, at its sole cost and expense, subject to reasonable wear and tear
not resulting from the failure of Tenant to perform its obligations under this
Lease, 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, assigns, 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, slab, 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. Notwithstanding the foregoing: (i) Landlord shall not have
the right to require Tenant to remove (A) any improvements existing in the
Premises as of the Reference Date or (B) any Alterations for which Landlord
informs Tenant, pursuant to a request for a Removal Determination, that Landlord
will not require Tenant to remove such proposed Alterations on surrender of the
Premises, and (ii) Tenant shall have the right to remove all phone systems,
furniture, fixtures and other personal property owned by Tenant and not affixed
to the Premises or which may be removed without any material damage to the
Premises (such as floor coverings, draperies, and/or removable shelves),
provided, however, Tenant shall, at is sole cost, repair any damage caused by
such removal, ordinary wear and tear excepted.
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 on an occurrence basis against any liability arising out of
the ownership, use, occupancy or maintenance of the Premises, all areas
appurtenant thereto, contractual indemnity
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insurance insuring Tenant's obligations under Sections 4.5.1 and 6.4, with an
"Additional Insured-Manager of Lessors of Premises" endorsement and contain the
"Amendment of Pollution Exclusion" for damage caused by heat, smoke, or fumes
from hostile fire (collectively, "Liability Insurance"). Such Liability
Insurance shall have limits of not less than $5,000,000 for combined single
limit for injury, death of 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, flood, earthquake and
special extended perils in an amount equal to their full new Replacement Cost
(as defined below). The All Risk Insurance shall include coverage for any
additional costs resulting from debris removal and coverage for the enforcement
of any ordinance or law regulating the reconstruction or replacement of any
undamaged section of the Premises required to be demolished or removed by reason
of the enforcement of any building, zoning safety or land use laws as a result
of the covered loss. The policy shall also contain an agreed valuation provision
in lieu of any coinsurance clause, waiver of subrogation, and an inflation guard
protection causing an increase in the annual property insurance coverage amount
by a factor of not less than the adjusted U.S. Department of Labor Consumer
Price Index for All Urban Consumers (Los Angeles-Long Beach Riverside). If such
insurance has a deductible clause, the deductible amount shall not exceed
$5,000.00 per occurrence (except for the deductible for earthquake insurance
which shall be a maximum of ten percent (10%) of the Replacement Cost of the
Premises, and Tenant shall be liable for such deductible amount in the event of
an insured loss.
6.1.3 BUSINESS INTERRUPTION INSURANCE. Tenant shall maintain loss of
income and business interruption insurance in such amounts as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
insured against under the policy of All Risk Insurance and in no event in an
amount less than Rent and any Additional Rent payable under this Lease for a
period of one (1) year ("Business Interruption Insurance").
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:12 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, the primary lender having a
secured lien against the Premises, and any other parties designated by Landlord
as additional insureds, and (iv) shall contain language or bear endorsements
that such policy or policies shall not lapse, be cancelable 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 permitted 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 in effect in a form consistent with the requirements
of this Section 6.
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. Landlord and Tenant waive any rights of recovery against
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the other for injury or loss due to hazards covered by policies of insurance
containing such a waiver of subrogation clause of endorsement to the extent of
the injury or loss covered thereby.
6.4 INDEMNIFICATION. From and after the date of execution hereof by
Landlord, Tenant shall indemnify, defend and hold the Indemnified Parties
against and from all claims, demands, actions, causes of actions, damages,
liabilities, obligations, costs and expenses, including, without limitation,
attorneys' and consultants' (collectively, "Claims") 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 Tenant, (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 Landlord, or any of
their respective officers, agents, representatives, employees, guest or invitee
of Tenant in or about the Premises. Tenant's indemnification obligations of
Landlord as set forth in the immediately preceding sentence shall not, however,
extend to Claims resulting from the willful misconduct or grossly and actively
negligent acts or omissions of Landlord that are not risks required to be
insured by Tenant pursuant to Section 6.1.
6.5 FAILURE TO OBTAIN INSURANCE. If Tenant at any time during the Term
fails in whole or in part to obtain the insurance coverage required to be
obtained by Tenant under this Lease, Landlord shall have the right, but not the
obligation and without waiving any other remedies Landlord may have under this
Lease, to procure such insurance coverage not so procured by Tenant, and the
costs so incurred by Landlord, together with interest at the maximum legal rate,
shall be paid by Tenant as Additional Rent.
6.6 LANDLORD'S INSURANCE. During the Term, Landlord shall have the right
to procure, at Tenant's cost as Additional Rent, liability and/or casualty
insurance, rental abatement insurance and/or such other insurance as may be
reasonably required by Landlord or required by a secured lender, which shall be
in addition to and not in lieu of the insurance required to be maintained by
Lessee. Tenant shall not be named as an additional insured thereunder, and
Tenant shall under no circumstances have any right to any such insurance
proceeds.
7. DAMAGE OR DESTRUCTION. If any portion of the Premises is rendered
untenantable by damage or destruction from any cause (including any casualty to
parking areas or driveways) or if such damage or destruction materially impairs
Tenant's use of the Premises ("DAMAGE"), the following shall apply:
7.1 DETERMINATION OF EXTENT OF DAMAGE. Landlord shall promptly (in any
event, within thirty (30) days following the date Landlord receives actual
notice from Tenant of the casualty (the "NOTICE DATE")) notify Tenant in writing
as to how long, in Landlord's reasonable judgment, it will take to substantially
restore the Damage following Landlord's receipt of insurance or other required
proceeds. Landlord's failure to so notify Tenant within such 30-day period
shall be deemed to be Landlord's determination that such restoration will take
longer than twelve (12) months (as measured from the Notice Date).
7.2 RIGHTS TO TERMINATE FOLLOWING MAJOR DAMAGE OR DAMAGE NEAR END OF
TERM. In the event that Landlord determines or is deemed to have determined that
(a) such restoration will take longer than twelve (12) months (as measured from
the Notice Date) or (b) the Damage is restorable within a shorter period but the
remaining Term of this Lease following such restoration period is less than nine
(9) months, then either Landlord or Tenant may terminate this Lease by
delivering written notice to Tenant within thirty (30) days following the Notice
Date. In the event both parties elect to keep the Lease in effect, Landlord
shall repair such Damage, subject to the remaining provisions of this Section 7.
Tenant's failure to deliver to Landlord such written election within thirty (30)
days after the Notice Date shall be deemed to be Tenant's determination to keep
the Lease in effect. Any termination by Landlord in connection with a casualty
near the end of the Term as set forth above shall not be effective in the event
that (a) Tenant then has, or would with the passage of time have, the right to
extend this Lease pursuant to an Option (as defined in Section 13.3, below) and
(b) Tenant notifies Landlord in writing, within ten (10) business days following
Tenant's receipt of Landlord's termination notice that Tenant is exercising such
Option, provided that the applicable Option Period (as also defined in Paragraph
13.1) shall not commence until the applicable commencement date set forth in
Section 13.1, below.
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7.3 RESTORATION OF DAMAGE.
7.3.1 INSURED LOSSES. In the event that any Damage occurs which was
caused by an event required to be covered by the insurance (irrespective of any
deductible amounts or coverage limits involved) set forth in Paragraph 6.1.2. or
6.1.4, above (an "INSURED LOSS") and this Lease is not terminated pursuant to
Paragraph 7.2, above, Landlord shall promptly commence and diligently proceed to
restore the Damage (except to the extent that the Damage is to Tenant's trade
fixtures, equipment or other personal property, which shall be restored by
Tenant at Tenant's sole cost) as soon as reasonably possible after receipt of
the insurance proceeds, any applicable deductible amount from Tenant or Tenant's
insurance company, and any Insurance Deficiency (as defined in Paragraph 7.8
below), as applicable. Tenant shall promptly pay the Insurance Deficiency and
all deductibles to the extent that such proceeds and deductibles relate to
Damage which Landlord is obligated to restore hereunder.
7.3.2 UNINSURED LOSSES. If, however, the Damage is not an Insured Loss
and is above the amount of a De Minimis Uninsured Casualty (as defined below)
and this Lease is not terminated pursuant to Paragraph 7.2, above, then,
Landlord may, at Landlord's option, either: (i) repair such Damage as soon as
reasonably possible at Landlord's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Tenant within
thirty (30) days after the Notice Date to terminate this Lease as of the date of
the Damage. In either case, Landlord shall make its election and notify Tenant
thereof in writing within thirty (30) days after the Notice Date, and, in the
event that Landlord elects to restore, then such notice shall contain a time
estimate for completion of restoration. If Landlord's reasonable estimate of the
time necessary to restore the Premises exceeds twelve (12) months from the
Notice Date, then Tenant shall have the right to terminate this Lease upon
delivery of written notice thereof to Landlord within fifteen (15) business days
after Tenant's receipt of Landlord's notice. Tenant's failure to deliver such
notice within said 15-day period shall be deemed acceptance of Landlord's
election to restore. In the event Landlord elects instead to terminate this
Lease, Tenant shall have the right within fifteen (15) business days after the
receipt of such notice to give written notice to Landlord of Tenant's commitment
to pay for the restoration of such Damage solely at Tenant's expense and without
reimbursement from Landlord. Tenant shall provide Landlord with the required
funds within thirty (30) days following Tenant's commitment. In such event this
Lease shall continue in full force and effect, and Landlord shall proceed with
the restoration as soon as reasonably possible after the required funds have
been delivered to Landlord. If Tenant does not give such notice and provide the
funds in the manner and within the times specified above, then this Lease shall
terminate as of the date of the uninsured loss. Notwithstanding the foregoing,
in the event Landlord's reasonable estimate for restoration of the uninsured
loss is less than Three Hundred Thousand Dollars ($300,000.00), which amount
shall be increased annually from the Commencement Date by the increase, if any,
in the Consumer Price Index (a "DE MINIMIS UNINSURED CASUALTY"), this Lease
shall remain in effect, the parties shall equally share the restoration costs,
and Landlord shall restore such Damage as soon as reasonably possible after
receipt of Tenant's share of the restoration costs.
7.4 OUTSIDE DATE FOR COMPLETION. If Landlord is obligated to restore any
Damage pursuant to this Paragraph 7 and such restoration is not substantially
completed within twelve (12) months after the Notice Date or such additional
restoration time as may be set forth in Landlord's notice (provided that such
restoration period shall be extended by one (1) business day for each business
day of delay in the substantial completion of the restoration that is caused by
any Force Majeure Delay or Tenant Delay (as those terms are defined below)),
Tenant shall have the right, at any time after expiration of such period, to
deliver to Landlord written notice that Tenant intends to terminate this Lease
if the repair or restoration is not substantially completed within thirty (30)
days after written notice thereof to Landlord. If the restoration of the Damage
is not substantially completed within such additional 30-day period (which
additional period shall be extended by one (1) business day for each business
day of delay in the substantial completion of the restoration that is caused by
any Force Majeure Delay or Tenant Delay), this Lease shall terminate.
7.5 TERMINATION. Upon any termination of this Lease under any of the
provisions of this Section 7, the parties shall be released without further
obligation to the other from the date possession of the Premises is surrendered
to Landlord, except for items which have previously accrued and are then unpaid.
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7.6 ABATEMENT OF RENT. In the event of repair, reconstruction or
restoration by Landlord as provided in this Section 7, the Rent shall only be
abated (i) to the extent Landlord receives Tenant's proceeds, if any, of
Business Interruption Insurance and (ii) proportionately with the degree to
which Tenant's use of the Premises is impaired during the period of such repair,
reconstruction or restoration.
7.7 WAIVERS. The provisions of Civil Code 1932, Subsection 2, and
Section 1933, Subsection 4, which permit termination of a lease upon
destruction of the leased premises, are hereby waived by Tenant; and the
provisions of this Lease shall govern in case of such destruction. Except as
expressly herein provided, Tenant shall not be released from any of its
obligations under this Lease, the Rent and other expenses payable by Tenant
under this Lease shall not xxxxx, and Landlord shall have no liability to Tenant
for any damage or destruction to the Premises or any inconvenience or injury to
Tenant by reason of any maintenance, repairs, alterations, decoration, additions
or improvements to the Premises.
7.8 INSURANCE DEFICIENCY. In the event of any damage to the Premises by
any 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 , 6.1.3 and 6.1.4 will be sufficient to cover the full
Replacement Cost of the Premises by Landlord under Section 7.1 and any abatement
of Basic Monthly Rent under Section 7.6 and (ii) Tenant shall be solely
responsible for the payment of the cost of any deficiency thereof (the
"Deficiency Payment"). Following adjustment of the loss, 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 Deficiency Payment was insufficient, Tenant shall pay the
cost of the remaining deficiency; if the Deficiency Payment was excessive,
Landlord shall return the excess to Tenant. Landlord shall not be required to
commence the repair and restoration until it has received such Deficiency
Payment, and Tenant shall bear all costs and liability resulting from any delay
in the delivery of the Deficiency Payment. "Replacement Cost" shall mean the
cost to repair or rebuild the Premises at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building codes,
ordinances or laws, and without deduction for depreciation.
7.9 DELAYS. The time for Landlord to substantially complete repairs
shall be extended by Force Majeure Delays and/or Tenant Delays that occur after
the date of damage or destruction as those terms are defined below:
"Force Majeure Delays" shall be any delays due to strikes, lockouts, or
other labor disturbance, civil disturbance, riot, sabotage, blockage,
embargo, inability to secure materials, supplies, or labor through
ordinary sources by reason of regulation or order of any government
or regulatory body, delays in the procurement of required governmental
permits and/or licenses, delays caused by the insurance adjuster's
determination of loss and issuance of insurance proceeds (which shall
be a condition to commencing construction), lightning, rain,
earthquake, fire, storm, hurricane, tornado, flood, washout, explosion,
or any other cause outside of Landlord's reasonable control, whether
similar or dissimilar to the foregoing.
"Tenant Delays" shall mean any delays caused in whole or in part by or
through Tenant and/or Tenant's representatives or contractors,
including, without limitation, Tenant's failure to promptly deliver to
Landlord any Deficiency Payment, as set forth in Section 7.9, above,
failure to cooperate with Landlord in the procurement of required
licenses and permits, and/or failure to approve any plans and
specifications to the extent Tenant's approval is required,
commercially advisable, or desired by Landlord. Tenant shall pay all
costs and expenses incurred by Landlord which result from Tenant
Delays, including, without limitation, any costs of and expenses
attributable to increases in the cost of labor or materials.
8. CONDEMNATION.
8.1 DEFINITIONS.
8.1.1 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
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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. In the event of the taking of any
significant portion of the parking areas servicing the Building such that the
remaining available parking is less than the parking required by the City of
Cypress for Tenant's permitted use, then Tenant shall have the same rights with
regard to such taking as with regard to the taking of any portion of the
Building as set forth in this Section 8.
8.1.2 TOTAL CONDEMNATION. "Total Condemnation" shall be defined as the
Condemnation of the entire Premises.
8.1.3 PARTIAL CONDEMNATION. "Partial Condemnation" shall be defined as
any Condemnation that does not constitute a Total Condemnation.
8.1.4 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" for purposes of this Section 8 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.
8.3 PARTIAL CONDEMNATION.
8.3.1 Termination. In the event of any Partial Condemnation of the
Premises which substantially and materially 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,
Landlord's obligation to restore the Premises shall be limited to that
portion of the Award received by Landlord attributable to severance
damages. To the extent the Award is not sufficient to restore the
Premises as set forth in the preceding sentence, any deficiency shall
be contributed by Tenant, and Landlord's receipt of such funds shall be
a condition precedent to Landlord's obligation to commence restoration.
8.4 ALLOCATION OF AWARD. 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 and
moving expenses specifically allocated to Tenant. Tenant does hereby covenant
and agree, upon the request of Landlord, to execute an assignment of any Award
in substance consistent with the provisions of this Section 8.4.
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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
any amendments or successor statutes thereto.
9. ASSIGNMENT AND SUBLETTING.
9.1 ASSIGNMENT AND SUBLETTING. 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
(collectively, a "Transfer"), without the prior written consent of Landlord,
which consent shall not be unreasonably withheld subject to the standards set
forth in Sections 9.2 through 9.4, below (which standards the parties hereby
agree are reasonable). Any attempt to do otherwise shall be absolutely and
unconditionally null and void and of no force or effect whatsoever and, at
Landlord's election, shall be a material default under this Lease. Tenant waives
any right it may have to terminate this Lease pursuant to California Civil Code
Section 1995.310(b).
9.2 NOTICE. If Tenant desires to undertake any proposed Transfer, at
least sixty (60) days before the effective date of the proposed Transfer, Tenant
shall provide Landlord with written notice of Tenant's intent to Transfer
("Tenant's Notice") which shall include (i) the name and identity of the
proposed assignee or sublessee (either, a "Transferee"), (ii) the Transferee's
certified financial statements for the immediately preceding three (3) fiscal
years prepared in accordance with generally accepted accounting principles,
(iii) a certified statement of the business history and experience of the
individuals and entities who are the owners of the equity interests in the
proposed Transferee, (iv) all terms and conditions of the proposed Transfer,
including a copy of the documentation to effect the proposed Transfer, (v) a
bank reference, and (vi) if a guarantee is to be provided, the form of the
guaranty which shall be in a form and substance satisfactory to Landlord's legal
counsel, and certified financial statements of the proposed guarantors for the
immediately preceding three (3) fiscal years prepared in accordance with
generally accepted accounting principles.
9.3 STANDARDS FOR CONSENT. Upon receiving Tenant's Notice with all
information required pursuant to Section 9.2 above, Landlord shall provide or
withhold its consent as follows:
Landlord may refuse to consent on any commercially reasonable
grounds, but shall only consent if the proposed Transfer meets all the
following conditions:
(A) The Transfer shall be on the same terms and conditions set forth
in Tenant's Notice given to Landlord;
(B) No Transfer shall be valid, and no Transferee shall take
possession of any of the Premises until an original of the duly executed
counterpart of the Transfer documentation (signed by authorized signatories of
both Tenant and Transferee) has been delivered to Landlord;
(C) No Transferee shall have the right to further assign or sublet
except on the terms and conditions of this Section 9;
(D) Any proposed subletting will not result in more than two
subleases of portions of the Building being in effect at any one time during the
Term;
(E) No proposed Transferee shall be an existing tenant of the
Business Center nor have been negotiating with Landlord in the last six (6)
months for space in the Business Center;
(F) No Transferee shall be a governmental entity;
(G) The portion of the Building to be sublet or assigned shall be
regular in shape with appropriate means of ingress and egress;
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(H) The proposed use of the Premises by the Transferee shall be
permitted by the use provisions of this Lease.
(I) No proposed Transfer would result in more people working at or
visiting the Premises than permitted by ordinances (including the parking
ordinances) of the City of Cypress;
(J) The Transferee has the financial capability to fulfill the
obligations imposed by the Transfer;
(K) The proposed use of the Premises by the proposed Transferee does
not violate an "exclusive" granted by Landlord to another tenant;
(L) The Transferee is not a real estate developer or landlord and/or
is not acting directly or indirectly on behalf of a real estate developer or a
landlord;
(M) The Transferee has a reputation in the community for financial
reliability and the bank or other financial references support in full the
financial statements delivered to Landlord on behalf of the Transferee;
(N) The transferee demonstrates, in Landlord's business judgment,
that it is able to perform the obligations on Transferee's part to be performed
under the Lease; and
(O) The Transferee shall not have been involved in any civil,
criminal or administrative litigation or proceedings with its prior landlord or
landlords or is otherwise involved in any civil, criminal or administrative
litigation or proceedings which is unsatisfactory in the reasonable opinion of
Landlord.
Tenant acknowledges that the foregoing conditions to a requested
Transfer are reasonable.
9.4 CONSENT. Subject to the provisions of Section 9.5, Tenant 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.
In addition, in each such case (a) Tenant shall pay to Landlord all reasonable
and verifiable expenses, including reasonable attorneys' fees, accountants'
fees, incurred by Landlord, (b) Tenant and the Transferee 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 Transfer, (d)
the consent to any Transfer shall not be deemed a consent to any other Transfer
and (e) the consent to any Transfer shall not in any way whatsoever relieve
Tenant of any of its primary obligations and liabilities under this Lease,
whether arising before or after such consent.
9.5 ADDITIONAL TRANSACTIONS. The occurrence of any of the following
shall be deemed a Transfer under this Lease, and shall, at the election of
Landlord, constitute a material default under this Lease:
(a) The involvement of Tenant or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-outs or otherwise), which results or will
result in a reduction of the Net Worth of Tenant (as hereinafter defined) by an
amount equal or greater than twenty-five percent (25%) of the Net Worth of
Tenant as of the Reference Date. Tenant hereby represents and warrants to
Landlord that the Net Worth of Tenant as of the Reference Date is Forty-Five
Million Dollars ($45,000,000). "Net Worth of Tenant" for purposes of this Lease
shall be the unconsolidated, tangible net worth of Tenant (excluding any
guarantors) established under generally accepted accounting principles
consistently applied; and/or
(b) Any of the following acts (collectively, "Acts of Insolvency"):
(i) if Tenant becomes a bankrupt or insolvent, makes an assignment for the
benefit of creditors, or institutes proceeds under the Bankruptcy Act in which
Tenant is a bankrupt; or, if Tenant is a
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partnership or consists of more than one person or entity, if any partner of the
partnership or such other person or entity becomes a bankrupt or insolvent, or
makes an assignment for the benefit of creditors; or (ii) if a writ of
attachment or execution is levied on this Lease; or (iii) if in any proceeding
to which Tenant is party, a receiver is appointed with the authority to take
possession of the Premises.
The occurrence of any of the transactions or events in subparagraphs
9.5(a) and/or (b) above, shall give Landlord the right (but not the obligation)
to require that the Security Deposit be increased to an amount equal to three
(3) times the then Base Monthly Rent.
9.6 LIMITATION. If Landlord consents to the proposed Transfer, then
Tenant may consummate the proposed Transfer, only at the price, and on the terms
and conditions, and with the parties, specified in Tenant's Notice. If the
proposed Transfer is not so consummated within sixty (60) days after delivery of
Landlord's consent, it shall again be subject to all of the provisions of this
Section 9.
9.7 ASSIGNMENT AND SUBLETTING PROFIT RECAPTURE. In the event that the
Tenant receives any net profits by virtue of any Transfer permitted hereunder,
whether in the form of rentals in excess of the Rent payable hereunder, periodic
payments, "key" money, lump-sum payments, or otherwise, Tenant shall deliver to
Landlord, as additional rent, an amount equal to fifty (50%) percent of the net
profits actually received by Tenant from any Transferee. Such amount shall be
due and payable within five (5) days after receipt by Tenant of the rent or
subrental from any Transferee. Each Transferee shall be responsible for
performance under this Section 9.7. "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 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 Transfer; 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.
9.8 PERMITTED TRANSFERS. Notwithstanding anything to the contrary in
this Lease, Tenant may, without the prior written consent of Landlord, at any
time assign this Lease or sublet the Premises to (a) any affiliate (as defined
below), (b) any corporation resulting from a consolidation or merger of Tenant
into or with any other entity where Tenant is not the surviving entity and where
the surviving corporation assumes all obligations of Tenant under this Lease as
a matter of law, or (c) to a corporation or other entity which has acquired
substantially all of Tenant's physical assets. As used herein, an "affiliate" of
Tenant shall be any person or entity which controls or is controlled by, or is
under common control with, Tenant. With respect to any of the permitted
Transfers under this Section 9.8, each of the following shall nevertheless apply
as a condition precedent to the effectiveness of such Transfer:
(1) There shall be no change in the use of the Premises;
(2) Except as to a Transfer described in clause (b), above, the
Transferee shall execute and deliver to Landlord a written assumption of the
obligations of Tenant pursuant to this Lease in form and substance reasonably
satisfactory to Landlord;
(3) Except as to a Transfer described in clause (a) above, the
Transferee or survivor shall have a Net Worth immediately following the
effectiveness of such Transfer equal to or greater than the Net Worth of Tenant
as of the Reference Date; and
(4) Except in the case of an event described in clause (b) above,
Tenant shall not be released from any of its obligations pursuant to this Lease.
To the extent permitted by Law, within thirty (30) days prior to the
effective date of the Transfer, Tenant shall deliver to Landlord a written
notice of the Transfer identifying the Transferee, the effective date of the
Transfer, the facts which bring such Transfer within the scope of this Section
and any changes in the address for notices and xxxxxxxx to the Tenant pursuant
to this Lease.
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10. PROTECTION OF LENDERS.
10.1 SUBORDINATION. Provided Tenant receives a non-disturbance agreement
in the form of attached Exhibit "G" or such other form required by an entity
with the interest that is or is to be superior to this Lease, this Lease is and
at all times shall be subordinate to any existing or future ground lease, deed
of trust or mortgage, covenants, conditions and restrictions (which may now
exist or hereafter be executed) encumbering the Property, to any advances made
on the security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded. Tenant shall
cooperate with Landlord and any lender which is acquiring a security interest in
the Property or the Lease. Tenant shall execute such further documents and
assurances as such lender may require (including, without limitation, a
subordination, non-disturbance and attornment agreement in the form of attached
Exhibit "G" or such other form required by the lender), provided that Tenant's
obligations under this Lease shall not be increased in any material way (the
performance of ministerial acts shall not be deemed material). Subject to the
foregoing, Tenant's right to quiet possession of the Property during the term of
the Leases shall not be disturbed if Tenant pays the rent and performs all of
Tenant's obligations under this Lease and is not otherwise in default. If any
ground lessor, beneficiary or mortgagee elects to have this Lease prior to the
lien of its ground lease, deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed prior to such ground lease, deed
of trust or mortgage where the Lease is dated prior or subsequent to the date of
said ground lease, deed of trust or mortgage or the date of recording thereof.
Under no circumstances shall any such lender be liable to Tenant (i) under any
indemnification provisions set forth in this Lease, including any environmental
indemnifications, or (ii) for any damages Tenant may suffer as a result of any
representation or warranty set forth in this Lease, or any act or failure to act
by any party other than such lender, and its agents, officers, and employees.
10.2 ATTORNMENT. If Landlord's interest in the Property or any portion
thereof is acquired by any ground lessor, beneficiary under a deed of trust,
mortgagee, or purchaser at a foreclosure sale, Tenant shall attorn to the
transferee of or successor to Landlord's interest in the Property and recognize
such transferee or successor as Landlord under the Lease. Tenant waives the
protection of any statute or rule of law which gives or purports to give Tenant
any right to terminate the Lease or surrender possession of the Property or any
portion thereof upon the transfer of Landlord's interest.
10.3 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any further
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. Tenant's failure to sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination within such ten (10) day period shall constitute a material
default under this Lease, and Landlord may, at Landlord's option (i) terminate
the Lease upon written notice to Tenant, or (ii) bring any action for an order
directing Tenant to comply with its obligations under this paragraph.
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
Tenant:
11.1.1 FAILURE TO PAY RENT. The 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 three (3) business 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 of the Premises by Tenant.
Notwithstanding the provisions of Civil Code section 1951.3, "abandonment" means
any absence by Tenant from the Premises for ten (10) days or longer while in
default of any provision of this Lease.
11.1.3 BANKRUPTCY. An Act of Insolvency that is not discharged within
thirty (30) days.
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11.1.4 DEFAULT OF GUARANTOR. If the performance of Tenant's obligations
under this Lease is guaranteed: (i) the death of a guarantor, (ii) the
termination of a guarantor's liability with respect to this Lease other than in
accordance with the terms of such guaranty, (iii) a guarantor becoming insolvent
or the subject of a bankruptcy filing, or (iv) a guarantor's refusal to honor
the guaranty.
11.1.5 SPECIFIC TENANT OBLIGATIONS. The failure by Tenant to provide
Lessor with (i) an estoppel certificate per Section 12.2, (ii) the subordination
or non-subordination of this Lease per Section 10.1 or the signing of related
documents per Section 10.3, (iii) the delivery of any document requested under
Section 12.7, (iv) the execution or delivery of any documents requested under
Section 12.13, or (v) evidence of insurance as required under Sections 6.1 and
6.2, where any such failure under preceding clauses (i), (ii), (iii), (iv) or
(v) continues for a period of ten (10) business days following written notice by
or on behalf of Landlord to Tenant.
11.1.6 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. Additionally, following any two consecutive late payments of Rent,
Landlord shall have the option (i) to require that Basic Monthly Rent be paid
quarterly rather than monthly, or (ii) to require that Tenant increase the
Security Deposit by one-hundred percent (100%). Furthermore, if any payment due
from Tenant is by a check which is returned unpaid from the bank or financial
institution on which it is drawn, Landlord shall have the right at any time
thereafter to insist that all further payments due from Tenant be made by
certified or bank cashier's check.
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, (as described in California Civil Code Section 1951.4), in which event
the rights of Tenant to possession of the Premises under
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this Lease and the right of Tenant to accomplish a Transfer pursuant and subject
to the provisions 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.
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 be 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 as
Additional Rent any and all costs and expenses incurred by Landlord in
connection therewith.
11.3 LATE CHARGE AND INTEREST.
11.3.1 LATE CHARGE. Tenant acknowledges that late payment by Tenant to
Landlord of Rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Accordingly, any installment of Rent which is not received by Landlord within
five (5) business days of the date when due, a late charge of six percent (6%)
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 when due shall bear
interest at lesser of the prime rate of interest as reflected in the Wall Street
Journal as of the due date, or the maximum rate permitted by applicable law.
11.4 WAIVER OF RIGHT OF REDEMPTION. Tenant hereby waives any and all
rights of redemption granted by or under any present or future law to Tenant in
connection with the eviction or dispossession of Tenant for any cause or on
account of Default.
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 30 days after Tenant delivers written notice to Landlord;
provided, however, that in the event the nature of Landlord's obligation is such
that more than 30 days is required for complete performance, Landlord shall not
be in default pursuant to this Section 12 if Landlord commences performance
within such 30 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
to Rent abatement hereunder as the result of Landlord's default, except that (i)
Tenant's only right to terminate this Lease shall be strictly pursuant to
Sections 7.2, 7.4, 8.2 and 8.3.1, and (ii) Tenant's only right to rent abatement
shall be strictly pursuant to Sections 7.6 and 8.3.2.
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12.1.3 RIGHT TO MAKE REPAIRS. Except in emergency situations, Landlord
agrees to provide Tenant with at least twenty four (24) hours prior notice
before commencing any repairs to the Structural Components as may be required of
Landlord pursuant to Section 5.2 ("Required Structural Repairs"). If Tenant
provides written notice to Landlord of an event or circumstance which requires
Required Structural Repairs, and Landlord fails to perform such Required
Structural Repairs within thirty (30) days after receipt of such notice or such
longer period of time as may be reasonably required, provided Landlord commences
such Required Structural Repair within such period, then Tenant may proceed to
undertake the Required Structural Repairs upon delivery of an additional ten
(10) business days' notice to Landlord specifying that Tenant is undertaking
such Required Structural Repairs. In the event Tenant undertakes such Required
Structural Repairs as permitted under this Section, Tenant shall use only
qualified contractors that normally and regularly perform similar work on
industrial concrete tilt-up construction with the same or similar components of
the Building's Structural Components. If Landlord does not deliver a detailed
written objection to Tenant within thirty (30) days after receipt of an invoice
by Tenant of Tenant's costs of performing such Required Structural Repairs, and
if such invoice from Tenant sets forth a reasonably particularized breakdown of
its costs and expenses in connection with taking such action on behalf of
Landlord, then Tenant shall be entitled to reimbursement from Landlord for the
amount set forth in such invoice. Under no circumstances shall Tenant have the
right to offset any such amount from Rent. If, however, Landlord delivers to
Tenant within thirty (30) days after receipt of Tenant's invoice, a written
objection to the payment of such invoice, setting forth with reasonable
particularity Landlord's reasons for its claim that such Required Structural
Repairs did not have to be taken by Landlord pursuant to the terms of the Lease
or that the charges are excessive (in which case Landlord shall pay the amount
it contends would not have been excessive), then Tenant shall not be entitled to
such reimbursement, but as Tenant's sole remedy, the matter shall proceed to
resolution by the selection of an arbitrator to resolve the dispute pursuant to
the arbitration rules of the Judicial Arbitration & Mediation Service/Endispute,
Inc ("JAMS"), unless JAMS is no longer available, in which event Landlord shall
select another equally qualified arbitration service, and whose costs shall be
paid for by the losing party, unless it is not clear that there is a "losing
party," in which event the costs of arbitration shall be shared equally. Tenant
shall be responsible for obtaining any necessary governmental permits before
commencing such Required Structural Repairs, and Tenant shall assume the risk of
any damage, loss or injury resulting from such work.
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 "H" 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 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 Tenant 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 equal to 125% percent of the Rent charged in
the immediately preceding Lease year. 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
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therefrom, Tenant shall indemnify, defend (with counsel acceptable to Landlord)
and hold the Indemnified Parties 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. Unless such information is proprietary or confidential, Landlord
shall advise Tenant of any successor tenant that has executed a new lease for
the Premises.
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 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 relieved 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 and transfer 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.
12.6 NO RECORDING. Tenant shall not under any circumstances record this
Lease.
12.7 FINANCIAL STATEMENTS. Upon Landlord's written request (which may be
submitted not more after than once during any twelve (12) month period), Tenant
shall promptly furnish Landlord, from time to time, with certified financial
statements certified by Tenant to be true and correct in all material respects
reflecting Tenant's then current financial condition. Landlord shall use its
commercially reasonable efforts to keep such information confidential (provided
such financial information may be disclosed to Landlord's lenders, attorneys,
accountants and other consultants or as may be required by law).
12.8 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 unreasonably interfere with Tenant's business to examine the
Premises and to show the same to prospective purchasers, lenders, or tenants, to
make such repairs alterations, improvements or additions as may be required in
connection with the development or maintenance of the Premises or the Business
Center, without the same constituting an eviction of Tenant, in whole or in
part, or a trespass; 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. At any time during the Term,
Landlord shall be entitled to place "for sale" signs on the Premises, and at any
time during the six months prior to the expiration of the Term, Landlord may
place upon the Premises "to let" or "for rent" 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.
12.9 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
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other addresses as any of the parties hereto may from time to time in writing
designate to the other parties hereto.
12.10 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.
12.11 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 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. No person, firm or corporation has at any time any
authority from Landlord to make representations or promises on behalf of
Landlord and Tenant expressly agrees that if any such representations or
promises have been made, Tenant hereby waives all right to rely thereon, unless
they are specifically included in this lease agreement in writing. No verbal
agreement or implied covenant shall be held to vary the provisions hereof, any
statute, law or custom to the contrary notwithstanding.
12.12 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.
12.13 FINANCING. In the event any of Landlord's lenders require, as a
condition to financing, modifications to this Lease which do not materially
increase any of Tenant's obligations (when viewed cumulatively) or materially
diminish Tenant's rights hereunder, Landlord shall submit to Tenant such written
amendment with the required modifications. If Tenant fails to execute and return
the same within ten (10) days after the amendment has been submitted, Landlord
shall have the right (i) to treat such failure to execute and return the
amendment as a breach hereunder, and/or (ii) to act as Tenant's attorney-in-fact
(and Tenant hereby so irrevocably appoints Landlord) with full power and
authority to execute and deliver such amendment for and in the name of Tenant.
12.14 APPLICABLE LAW AND SEVERABILITY. 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. 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. Under no
circumstances whatsoever shall this Lease be construed as creating either a
partnership, an agency or an employment relationship between the parties hereto.
12.15 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 expenses, including without limitation, reasonable accountants',
consultants, and attorneys' fees.
12.16 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.
12.17 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.
12.18 TENANT AS CORPORATION OR PARTNERSHIP. If Tenant executes this
Lease as a corporation, then Tenant represents and warrants that the individuals
executing this Lease on Tenant's behalf are duly authorized to execute and
deliver this Lease on its behalf in accordance with a duly adopted resolution of
the board of directors of Tenant, a copy of which is to be
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delivered to Landlord on execution of this Lease, and in accordance with the
by-laws of Tenant and that this lease is binding upon Tenant in accordance with
its terms. If Tenant executes this Lease as a partnership, (a) each general
partner shall be jointly and severally liable for keeping, observing and
performing all the provisions of this lease to be kept, observed or performed by
Tenant and (b) the term "TENANT" shall mean and include each of them jointly and
severally and the act of or notice from, or notice or refund to, or the
signature of, any one or more of them, with respect to this Lease, shall be
binding upon Tenant and each and all of the general partners of Tenant with the
same effect as if each of them had so acted or so given or received such notice
or refund or so signed. Dissolution of any partnership which is a Tenant under
this Lease shall be deemed to be an assignment jointly to all of the partners,
who shall thereafter be subject to the terms of this Lease as if each such
former partners had initially signed this Lease as individuals.
12.19 NO OFFER. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of the Premises, offer, or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
12.20 NON-LIABILITY OF LANDLORD. In consideration of the benefits
accruing under this Lease, Tenant and all successors and assigns agree that, in
the event of any actual or alleged failure, breach or default under this Lease
by Landlord: (a) the sole and exclusive remedy shall be against the Landlord's
interest in the Building and sales and insurance proceeds derived therefrom; (b)
no partner of Landlord shall be named as a party in any suit or proceeding
(except as may be necessary to secure jurisdiction of the partnership, if
applicable); (c) no partner of Landlord shall be required to answer or otherwise
plead to any service of process; (d) no judgment will be taken against any
partner of Landlord; (e) no writ of execution will ever be levied against the
assets of any partner of Landlord; (f) the obligations of Landlord under this
Lease do not constitute personal obligations of the individual partners,
directors, officers or shareholders of Landlord, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or any of their personal assets for satisfaction of any liability in
respect to this Lease and, (g) any claim, defense, or other right of Tenant
arising in connection with this Lease or negotiations before this Lease was
signed, shall be barred unless Tenant files an action or interposes a defense
based thereon within the earlier of (i) the expiration of the applicable statute
of limitations or (ii) one hundred eighty (180) days following expiration or
earlier termination of this Lease.
12.21 WAIVER OF TRIAL BY JURY AND FILING OF LIS PENDENS. Landlord and
Tenant hereby waive their respective right to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action, proceeding and/or
hearing brought by either Landlord against Tenant or Tenant against Landlord on
any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant, Tenant's use or occupancy of the
Premises, or any claim of injury or damage, or the enforcement of any remedy
under any law, statute or regulation, emergency or otherwise, now or hereafter
in effect. As further material consideration to Landlord entering into this
Lease with Tenant, Tenant hereby waives all rights to record a lis pendens
against the Premises, the Building, the Business Center or any part thereof
under Section 409 of the California Code of Civil Procedure, or any other
provision of law, if a dispute arises concerning this Lease or Tenant's use or
occupancy of the Premises. The provisions of this Paragraph 12.21 shall survive
the expiration or earlier termination of this Lease.
12.22 BROKERS. Except for Landlord's Broker and Tenant's Broker set
forth in Section 10 of the Fundamental Lease Provisions, Landlord and Tenant
hereby represent and warrant to one another that they have had no dealings with
any brokers or finders in connection with this Lease and shall indemnify, defend
and hold the other harmless from and against any and all Claims arising from any
brokers' commissions or finders' fees claimed through the indemnifying party.
12.23 FORCE MAJEURE. In the event that either party is delayed or
hindered from the performance of any act required hereunder by reason of Force
Majeure Delays then performance of such acts shall be excused for the period of
the Force Majeure Delay, and the period for the performance of any such acts
shall be extended for a period equivalent to the period of such Force Majeure
Delay. The provisions of this Section 12.23, shall not, however,
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operate to excuse Tenant from prompt payment of Rent or any other payment of
money required under the terms of this Lease.
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 OPTION TO RENEW. Tenant shall have the one (1) option to extend the
Initial Term (the "Option") on the basis of each and all of the terms and
conditions contained in this Lease (excluding this paragraph), as then amended,
for the sole use and occupancy of Tenant, as opposed to any subtenant or
assignee of Tenant, for one period of five (5) years (the "Option 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 fifth consecutive Lease Year thereafter. Such Option shall be
exercised by Tenant by delivering written notice ("Option Notice") of exercise
to Landlord such that Landlord receives the Option Notice at least one year
prior to the expiration of the Initial Term. Notwithstanding the foregoing, in
the event (i) Tenant is in monetary or material non-monetary default on the date
the Option Notice is given or (ii) should Landlord have given to Tenant two or
more notices regarding Tenant's failure to pay rent when due during the Initial
Term or (iii) should Tenant be in monetary or material non-monetary default on
the date the Initial Term expires, then in each event Tenant's Option shall be
deemed automatically terminated.
Tenant's election to exercise the right to extend the Initial Term of
this Lease shall be deemed an acceptance of the Building and the Premises in
their then existing condition.
13.1.1 CALCULATION OF RENT DURING OPTION PERIOD. Within thirty (30)
days of receipt of notice from Tenant of its election to exercise the Option,
Landlord shall notify Tenant in writing of Landlord's opinion of the fair market
Basic Monthly Rent of the Premises as of the date the Option Period will
commence. If said Basic Monthly Rent value as determined by Landlord exceeds the
Base Monthly Rent for the last full calendar month of the Initial Term, Tenant
shall have thirty (30) days from the date of such notice from Landlord to reject
the Basic Monthly Rent as determined by Landlord by notice delivered in writing
to Landlord electing instead to submit the issue of the fair market Basic
Monthly Rent to binding arbitration in accordance with the procedures in the
immediately following paragraph. If Tenant does not elect to submit the issue of
the fair market Basic Monthly Rent to binding arbitration within this 30-day
period, then Landlord's determination shall be binding on the parties, and this
Lease shall be extended in accordance with this Section 13. In no event shall
the Base Monthly Rent for the Option Period be less than the Base Monthly Rent
for the last month of the Initial Term.
If Tenant timely exercises its right to submit the issue of the fair
market Basic Monthly Rent to arbitration within the above 30-day period, then
the parties shall, within thirty (30) days after Landlord's receipt of Tenant
written election to proceed with arbitration, mutually select an independent MAI
real estate appraiser with at least five (5) years continuous experience in
appraising industrial real property in the Cypress, California area, and who
shall determine the then-existing fair market Basic Monthly Rent of the Premises
as of the first month of the Option Period. If Landlord and Tenant are unable to
timely select an MAI appraiser, each party shall select such a qualified
appraiser within ten (10) business days of the failure of Landlord and Tenant to
agree upon a single appraiser, and the two (2) appraisers so selected shall,
within ten (10) business days after the selection of the second appraiser,
select a third appraiser. If the two (2) appraisers are unable to timely select
such third appraiser, either party may petition the presiding judge of the
Orange County Superior Court to appoint an appraiser to act hereunder. The cost
of such a petition shall be borne equally by the parties. The three (3)
appraisers so selected shall independently determine the then-existing fair
market Basic Monthly Rent for the Premises and shall inform the parties of such
determination no later than thirty (30) days before the expiration date of the
Initial Term. The Basic Monthly Rent payable by Tenant to Landlord at the
commencement of the Option Period shall equal the average of the two (2)
appraisals nearer in value. Notwithstanding anything to the contrary above, if
the difference between the highest appraisal and the median appraisal is the
same as the difference between the median appraisal and the lowest appraisal,
the monthly rent payable by Tenant to Landlord at the commencement of the Option
Period shall equal the median appraisal.
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Notwithstanding the foregoing, in no event shall the Basic Monthly Rent after
adjustment be less than the Basic Monthly Rent in effect immediately before such
adjustment. If only one (1) appraiser is utilized in the procedure set forth
above, the cost of that appraiser shall be shared equally by Landlord and
Tenant. If three (3) appraisers are utilized, each party shall bear the cost of
its own appraiser and one-half (1/2) of the cost of the third appraiser.
13.1.2 ADJUSTMENT 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 increased at the commencement of the twenty-fifth (25th) and
forty-ninth (49th) month of the Option Period based on an eight percent (8%)
increase over the previous 24-month period, calculated by multiplying the then
base monthly rent times 1.08.
13.1.3 NON-ASSIGNABLE. The Option is personal to Tenant and its
affiliates (as defined in Section 9.8, above) and, except as set forth in
Section 9.8, may not be assigned to any third party.
13.2 CYPRESS ECONOMIC DEVELOPMENT COUNCIL. During the Term, Tenant
shall, at Tenant's sole cost, maintain membership in good standing in the
Cypress Economic Development Council.
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EXHIBIT "A"
------------
PLOT PLAN OF THE PREMISES
[GRAPHIC]
19.485 S F 1st STORY
11.283 S F 2nd STORY
---------------------
30.768 S F TOTAL XXXX
00
XXXXXXX "X"
----------
LEGAL DESCRIPTION OF THE PREMISES
That certain parcel located at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx,
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.
35
TENANT'S CERTIFICATE
Subject: Lease Dated: November 1, 1997
Between: Warland Investments Company
("Landlord")
and
Universal Electronics, Inc.,
a Delaware corporation ("Tenant")
On Premises Located at:
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
This letter confirms:
1. That Tenant 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 Landlord 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 the Commencement Date of this Lease is __________________ and
the obligation to pay Rent has commenced on such date.
6. That this Lease expires on ______________________.
7. That the Initial Basic Monthly Rent is $__________.
Date: _______________ Universal Electronics, Inc., a
Delaware corporation
By:
------------------------------------
Title:
---------------------------------
By:
------------------------------------
Title:
---------------------------------
EXHIBIT C
---------
36
EXHIBIT "D"
-----------
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 consistancy 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.
37
EXHIBIT A
[GRAPHIC]
FRONT ELEVATION
END ELEVATION
38
EXHIBIT B
[GRAPHIC]
FRONT ELEVATION
SIDE ELEVATION
FABRICATED ALUMINUM CABINET WITH DIE CUT
VINYL LEGENDS APPLIED-HELVETICA MED.U/LC.
DEBOSSED CONCRETE BASE WITH EXPOSED
AGGREGATE FINISH-UNPAINTED FINISH
39
EXHIBIT "E"
-----------
WARLAND INVESTMENTS COMPANY
LANDSCAPE MAINTENANCE SPECIFICATIONS
SCOPE OF WORK
The Contractor shall be provided without limitation all labor, material,
equipment, tools, taxes, licenses, permits, supervision, and special skills
required to perform all work as specified by the owner under the terms of this
contract and in accordance with the codes of the City of Cypress and all
applicable governing agencies. The Contractor shall be responsible to maintain
the outlined area indicated by "Exhibit-A". Warland Investments shall maintain
final approval for all landscape improvements and maintenance.
No equipment maintenance or work will be performed within a half mile of any
residence between the hours of 8:00 p.m. and 7:00 a.m.
Section I - Turf Maintenance
Lawns shall be maintained in a healthy growing condition by furnishing
necessary services, including the following:
A. Mowing and edging: Lawn shall be mowed to a minimum height of two
inches. Mowing shall be done at least every seven days during the
spring and fall seasons, and as needed at other seasons. Remove and
dispose of all cuttings off-site. The Contractor shall replace and/or
reseed all bare spots or weak areas as necessary. The Contractor shall
notify the Owner or Owner's Representative where any excessive wear is
occurring due to foot traffic, vandalism or any other problem
resulting in damaged turf area.
Edges shall be trimmed at least twice monthly or as needed for
appearance. Clipping shall either be vacuumed or blown off all areas
and disposed of off site. Chemical edging by owner approval only and
is discouraged. The Contractor shall maintain all irrigation heads to
provide maximum coverage.
All sidewalks shall be cleaned of grass cuttings, etc. on the same day
as mowing.
B. Watering: Lawn shall be watered at such frequency as weather
conditions require to replenish soil moisture below the root zone.
Watering shall always be done at night. Normally, a total of one and
one half inches of water are needed weekly in hot weather but only
during extreme heat.
C. Fertilization: Complete fertilization of all lawns a minimum of 12
times per year. Fertilize per soil test reports, updated every six (6)
months. Lawns shall be fertilized with a total of four (4) to six (6)
pounds of actual nitrogen per 1000 square feet per year. The number of
applications will be as follow; one application for readily soluble
fertilizers such as ammonium nitrate I (33-0-0), calcium nitrate
(15-5-9), ammonium sulfate (21-0-0).
D. Contractor shall exercise care to avoid hitting trees and shrubs
during the mowing cycle. (including weed wiping) Contractor will be
responsible for replacement of all damaged trees and shrubs due to the
maintenance process by their crew.
40
E. Weed Control: If needed, control of broadleaf weed with selective
herbicides shall be required. In areas where broadleaf, crabgrass,
nutgrass, bermuda, or any other invasive grass has infested the lawn
supply a selective post emergent herbicide shall be applied as soon as
possible.
F. Insect and Disease Control: If necessary, the Contractor with a
licensed pest control personal shall apply a approved insecticide or
fungicide when needed.
G. Renovating: If verticutting is required, first apply nitrogen three
(3) weeks before actually doing the process. Removal of all thatch by
verticutting shall be required to be removed from site. Verticutting
should be done during the fall, but overseeding/ and pre-emergent
herbicides should be at least four (4) to six (6) weeks in advance.
Normally this means that lawns which have been invaded by invasive
type grasses should be renovated and overseeded in the fall and
treated for weed control in the following late winter. Aeration of
lawn areas should be done on a annual basis based on a Horticulturist
recommendation.
II - Tree and Shrub Care
Maintain trees and shrubs in a healthy, growing condition by performing all
necessary operations, including the following:
A. Pruning: Prune trees to select and develop permanent scaffold branches
that are smaller in diameter than the trunk or branch to which they
are attached as follows: that have a vertical spacing of 18 to 36
inches and radial orientation so as not to overlap on another; to
eliminate narrow V-shaped branch forks that lack strength; to reduce
toppling and wind damage by thinning out the crowns; to maintain
growth within space limitations; to maintain a natural appearance; and
to balance the crown with the root system. Pruning of trees that do
not exceed twenty (20) feet in height shall be done on a semi-annual
basis to maintain a neat and well groomed mature appearance. All trees
over twenty (20) feet in height shall be trimmed by a licensed tree
trimming Contractor. The Contractor shall not 'top' of severely remove
the crown of leader branch with consulting a Horticulturist. All
branches and tree trimmings shall be disposed of off-site. (See
pruning guideline exhibits.)
Evergreen trees shall be thinned out once a year as necessary to
prevent wind and storm damage. The primary pruning of deciduous trees
shall be done during the dormant season. Damaged trees of those that
constitute health or safety hazards shall be pruned at any time of the
year as required and by the recommendations of a Horticulturist.
B. Cutting Branches: When removing a branch, make the cut flush with the
branch. Cut close to a bud when cutting back a branch. Cut close to a
bud when cutting back a branch, so as to not leave a stub. all pruning
wounds over 1 inch in diameter should be painted with a tree wound
compound to retard checking and decay of exposed wood.
C. Cutting Leaders: When pruning do not cut back Central leaders (main
trunks). Cutting back the leader always xxxxxx upright growth and
stunts the growth pattern of the tree.
D. Fertilization: Complete fertilization of a minimum of 4 times per
year. Fertilize per soil test reports, which should be updated every
six months. Avoid applying fertilizer to the root ball and base of the
main stem; rather, spread evenly under plant canopy to the drip line.
Rates will vary from about a
41
cup of nitrate fertilizer (depending upon nitrogen percentage) around
a newly installed small plant to about one half (1/2) of actual
nitrogen per inch of truck diameter measured four feet from the ground
for mature trees. When plants have been planted in subsoil some
jetting of the rootball with soluble N-P fertilizer may be used. The
Contractor shall consult their soil and plant report for the
appropriate quantity, and application of fertilizer.
E. Replacement of Plants: Dead plants and those in a state of decline (by
definition showing greater than 30% loss of leaves or growth) shall be
brought to the Owner's attention immediately. Replacement plants shall
be of a size, condition and variety acceptable to the Owner or the
Owner's representative. The Contractor shall be reimbursed for said
cost by the Owner unless the plant decline is due to negligence of the
Contractor or due maintenance deficiencies.
F. Thinning: While thinning, take care not to disturb surrounding
landscape. Trim and edge as necessary to restrict growth from
encroaching on to sidewalks, curb or where pedestrian traffic may
occur. Not all shrub or groundcover is intended to be trimmed on a
weekly basis. The Contractor is responsible to review the
aforementioned plant specifications as to the nature of how individual
plant groups shall be maintain. In addition, a pre-conference meeting
with the Owner and the Owner's representative shall describe in detail
any special circumstances relative to the site.
G. Staking or ties: The Contractor will re-stake and re-tie trees as
needed according to tree growth. All trees shall be re-tied in the
same method of the originally installed tie to allow for movement of
the tree trunk. the Contractor will inspect ties regularly and adjust
ties so that they do not become tight around the trunk. All trees
which reaches a mature growth capable of standing without the aid of a
tree stake shall remove the stake. Prior to removing the stake the
Contractor shall consult the Owner or Owner's Representative for the
final decision. The Contractor in special conditions will be required
to stake groundcover with U-shaped hooks to encourage groundcover to
grow horizontally. Vines shall be encouraged to grow by reviewing the
growth of the vine on a monthly basis. Any vine found to have reached
its outer limits should receive additional vine ties or wire to
continue their growth. Wall cling type vines shall be trimmed on a
monthly basis. The Contractor shall submit for approval the extra
material cost prior to commencing work.
III- Slope and Groundcover Care
Maintain slopes in a healthy, growing condition by performing all necessary
operations, including the following:
A. Weed-whip, hand-pull or chemically treat weeds at any time they appear
on the slope. The Contractor shall be responsible to identify the
intended original landscape planting scheme and maintain said scheme.
If necessary a color Xerox or photograph of the intended plant
material shall be available to the maintenance crew for their review
if questions arise. The Contractor will be discourage in using
chemical treatment of the slope areas. Notification of the Owner or
Owner's Representative shall be required prior to spraying. All
Chemical application shall be performed by a licensed
pestiscite/herbicite operator.
B. The Contractor shall exercise care in weeding of the slope area so as
not to damage other trees and shrubs within the plant mix. All shrub
or groundcover adjacent to sidewalks, curbs, or where foot traffic may
occur shall be trimmed back to twelve (12) inches from the area. The
maintenance
42
crew shall use either the top of slope or bottom of slope for foot
traffic. Any damage due to neglect due of the maintenance crew shall
be the sole responsibility of the Contractor to repair. All weeds
shall be remove and dispensed off site.
C. Shrub and groundcover shall be maintain in a natural condition.
Trimming or thinning shall occur only due to damage or severe
conditions. Provide routine repairs of erosion and other damage to
slopes due to normal maintenance conditions.
D. Fertilization of all slope areas shall be required a minimum of two
(2) times a year. Fertilization shall be performed based on the
recommendations of the soils and plant report. The Contractor shall
submit for approval the extra material cost prior to commencing work.
IV - Flower bed and/or Herbaceous ground cover
Maintain the flower and groundcover areas in a healthy, growing condition
by performing all necessary operations, including the following:
A. Provide complete trimming, edging of flower beds and groundcover areas
monthly.
B. Weeding shall be performed regularly to avoid establishment and
seeding of unwanted weeds. It will be considered unsatisfactory to
allow weeds to grow unabated for more than one week. The Contractor
will also be responsible to remove all trash and debris on a weekly
basis.
C. Provide complete insect and disease control on all flower and
groundcover beds, including labor and materials.
D. Adequate watering of all groundcover and flower beds shall be
monitored to avoid over watering. All irrigation water shall be turned
off during substantial rainfall.
E. Provide routine repairs of erosion and other damage to groundcover
area due to normal maintenance conditions.
F. Complete fertilization not less than six (6) times per year in
accordance with soil and plant recommendations.
G. The Contractor shall include labor and materials to change all annual
color beds two (2) times per year. Soils shall be thoroughly prepared
prior to planting by incorporating slow-release fertilizers and to
inhibit excessive vegetative growth, thus reduces flowering and
encourages insect and disease infestations. Nitrified redwood soil
conditioners or similar materials may be added for improving soil
conditions. Color shall be selected by the Owner or Owner's
Representative.
V - Specific Requirements for Plant Material
(Too be provided based on final plant list for each individual project)
Maintain plant material in a healthy and vigorous growing condition by
performing all necessary operations specified in the aforementioned
specifications:
43
VI - Irrigation System
A. Any damage to system caused by Contractors operations shall be
repaired without charge. Repairs shall be made within one watering
period or two (2) days.
B. Accidental damage not resulting from Contractors negligence or
operations shall be reported promptly to the Owner or Owner's
Representative. This applies to changes to faulty electrical
controllers or valves. The Contractor shall submit for approval the
extra material and labor cost prior to commencing work.
C. In late winter, the Contractor shall check all Systems for proper
operation. Lateral lines shall be flushed out after removing the last
sprinkler head or two at each valve. All heads are to be adjusted for
unimpeded coverage.
D. Maintain the irrigation system in an operable condition at all times.
The Contractor will be responsible to check the system at least once a
week.
E. Maintain all sprinkler heads in a good working order including
adjustments for the proper coverage. All sprinkler heads will be
adjusted to prevent water from spraying sidewalks, automobiles in
parking spaces, building windows or wherever pedestrian traffic may
occur. The Contractor will maintain on site, an adequate stock of
replacement sprinkler heads and valves. Replace or repair as needed.
F. Inspect all irrigation systems on a daily basis for overspray or
runoff. Adjust the irrigation system or irrigation controller station
time as needed.
G. Maintain all automatic irrigation controllers in accordance with the
manufacturers recommendations. Maintenance recommendations include
periodic inspection for loose wiring, insect debris, and spray clean
of the contact wafer switch assemblies. Report any malfunction or
necessary repairs to the Owner or Owner's Representative. The
Contractor shall replace all back-up batteries once (1) a year.
H. Keep the irrigation control valves free of siltation and debris.
Inspect all wire connection and solenoids at least once (1) a month.
I. Repair or replace all equipment damaged as a result of the
Contractor's negligence. Work shall be performed at the Contractor's
expense, within one watering period or two (2) days.
J. Report all damage not resulting from the Contractor's negligence
promptly to the Owner or Owner's representative. The Contractor shall
submit for approval the extra material and labor cost prior to
commencing work.
K. Adjust water application to compensate for changes in weather. The
Contractor shall be responsible for damages occurring from
over-watering or under-watering. The Contractor shall be responsible
to monitor and maintain the irrigation controller watering cycles.
44
L. The Contractor shall be responsible to operate the irrigation system
to comply with all rules and regulations within the governing water
districts.
M. The Contractor shall set and program automatic controllers for
seasonal water requirements. Use of repeat cycle to ensure maximum
penetration with minimum run-off is require to conserve water. The
Contractor will note all irrigation zone, main shut off valve
locations, and areas covered for each zone on a Owner supplied site
plan. Any required key, the site plan, and instructions on how to turn
off the irrigation system in case of emergency shall be given to the
Owner or Owner's Representative.
N. Maintain all identification markings including lettering, numbering
and color coding on the valve boxes and controllers in a readable
fashion at all times. Correctly xxxx all replacement valve cover boxes
as to the proper coding on or before placement. Maintain all existing
controller charts in a readable condition at all times. Valve cover
tops are to be in place with the proper side up at all times.
O. Maintain irrigation control valve "bleedoff" petcocks in a workable
manner. Petcocks or valve stem are to be tightened "finger-tight".
P. Additional compensation for manual or hand watering must be approved
in advance. The Contractor shall meet with the Owner or Owner's
Representative to review any pre-existing conditions.
Q. All replacement parts, including heads and valves must be as per plan,
and original installation. Any modification or deviation from the
original plans shall be approved by the Owner or Owner's
Representative. Any modification not approved will be replace at the
Contractors cost.
R. Operation of the irrigation system between the hours of 6:00 PM and
6:00 am.
V - Clean-up
A. The Contractor will remove all debris resulting from the landscape
maintenance operations and dispose of off-site.
B. All debris resulting from the Contractor's operation will be removed
and disposed of properly. No debris will be allowed to remain at the
end of each work day.
C. Debris, leaves and rubbish in landscape or hardscape area will be
removed each scheduled maintenance visit.
D. All landscape areas will be patrolled whenever crews are on-site to
check for vandalism, broken tree branches, rodents, insects, snails,
diseases, etc., and the crew will be responsible of notifying the
Owner or Owner's Representative for the appropriate action.
E. No debris will be allowed to be blown onto public or adjacent
properties.
VI - General Maintenance
45
A. Remove all leaves, paper, weeds and all other debris from the parking
lots, stairways, walkways, curbs, entrance and drainage gutters, and
dispose off-site.
B. Hose or sweep clean all above mentioned areas after completion of
mowing, trimming, edging, weeding, etc.
C. The Contractor shall maintain a full time personnel on the project at
all times during normal working hours.
D. Inspect all landscape areas on a continuous basis for pest and disease
problems. Spray all areas as needed to control damage from fungus and
insect infestation. Prior to the application of any pesticides, the
Contractor must obtain a written recommendation from a licensed Pest
Control Advisor. All pesticide applicants are to be made by a
Certified Pest control Operator.
E. Control all rodents by using an approved sub-soil probe and bait,
wager in bait box, or other approved methods. Approval of method by
the Owner or Owner's Representative is required prior to application.
A written Pest Control Advisor's recommendations is to be available to
the owner at any time pest control operations are facilitated on site.
Flatten gopher mounds and fill burrowing rodent holes after treatment.
F. Prune or trim all vegetation, either new or existing to prevent
overhanging sidewalks that are less than seven (7) feet in height.
G. Prune all plant materials adjacent to roadway intersections to provide
adequate site distance for vehicles entering the site.
H. Prune all plant materials so that all traffic control or other signs
are clearly visible. The Contractor shall meet with the Owner or
Owner's Representative to verify location of signage.
I. Maintain all slope terrace bench drains, head walls, rip-rap areas,
and down drains free of siltation, litter or other collected debris at
all times. The Contractor shall report any non-functional terrace
drains immediately.
J. Notify the Owner 24 hours in advance of all "specialty type"
maintenance operations to be performed. "Specialty type" maintenance
operations would include but not limited to fertilization, turf
de-thatching and chemical application.
K. The Contractor shall, as part of this Agreement, furnish all materials
necessary to accomplish a satisfactory maintenance in accordance with
the aforementioned outlined specifications. The Contractor will be
reimbursed for wholesale cost of vandalized materials and parts upon
presentation of a properly itemized list of damaged materials and/or
equipment. This does not include items vandalized or stolen due to the
negligence of the Contractor.
L. The Contractor shall maintain an office in Orange County and provide
the Owner or Owners Representative with the office phone number during
normal working hours. If a telephone answering service is utilized,
the answering service shall be capable of contacting the Contractor by
radio, car phone or pager. The contractor is further required to
provide the Owner with an emergency number for contact outside normal
working hours.
46
M. The Contractor shall remove weeds from cracks in sidewalks and parking
lots on a monthly basis.
N. Due care will be exercised in protecting from damage all existing
facilities, structures and utilities, both above and below ground.
O. The Contractor will provide the Owner with an annual holiday work
schedule. The Owner will not accept any four-day extended holidays
without any trash pickup of key areas.
P. All employees shall wear a clean company uniform daily. Employees
shall have some method of employee identification such as company
shirts or hats at all times while on the Owners property.
Q. A competent supervisor, able to communicate in English shall be on the
project grounds during all maintenance activities.
R. The Contractor's representative with landscape knowledge will perform
a job walk with the Owner or Owner's Representative on a regular basis
or as requested by the Owner.
VII - Pesticides.
A. All materials will be in strict accordance with the California Food
and Agriculture Code.
B. The Owner will be notified prior to every chemical application
especially in areas where there is a potential for chemicals to enter
air intakes to the buildings.
C. Pesticides will be applied at times which limit possibility of
contamination from climatic factors. Applicator will avoid making
application immediately prior to inclement weather to eliminate
potential runoff to treated areas. Where water is required to increase
pesticide efficiency it will be applied only in quantities of which
each area is capable of receiving without runoff.
D. Care will be taken in transferring and mixing pesticides to prevent
contamination areas outside the target area. Application methods will
be confined to the target area. Disposal of pesticides will be within
the guidelines established in California Food and Agriculture code or
any state or local governing agencies.
E. The Contractor will maintain chemical application records required by
the State guidelines.
XIII- Exclusions to this Contractor's Agreement
A. Materials only to replace broken tree stakes.
B. Materials only to replace sprinkler equipment due to theft or
vandalism.
C. Materials only to replace plant material due to theft.
D. Materials only to replace annual color as specified.
Xl - Equal Employment Opportunity
47
The Contractor will, at his own expense, conform to the equal employment
opportunity policies of the Owner and, in addition, will comply with all
equal employment requirements promulgated by any governmental authority,
including, without limitation, the requirements of the Civil Rights Act of
1964, 42 United States Code, Section 1983, Executive Order 11246, 11375,
and 11478, the California Fair Employment Practices Act, the California
Plan, and all other applicable statute or ordinances, plans or programs,
inclusive, and all successors and amendments thereto, and all standards,
and regulations which have been or shall be promulgated or approved by the
parties or agencies which administer said Acts or Orders (hereinafter
collectively referred to as EEO laws). The Contractor will have an exercise
full responsibility for compliance hereunder by itself, its agents,
employees, materials, and subcontractors with respect of its portion of
work on this project.
XII - INS
The Contractor shall adhere to all the rules and regulations governing
current INS Codes. The Contractor shall be responsible for having a
completed form I9 for each employee hired after July 1, 1987.
XIII - Safety Provisions
The Contractor shall comply with the provisions of all state and local
safety laws and regulations issued pursuant thereto and shall comply with
the provisions of the Federal Occupational Safety and Health Act of 1970,
CAL-OSHA, and regulations issued by any governmental agency in connection
therewith and hold the Owner free and harmless from any and all claims by
reason of the Contractor's failure to comply with said laws, acts, or
regulations.
The Contractor shall comply with the Air Quality Management district or a
substitute governing body in the event of termination of construction
activities during the Third Stage Alert. Any regulations issued by the
governing agency in connection therewith shall hold the Owner free and
harmless from any and all claims from loss of construction during this
period.
At no time will alcoholic beverages of any kind be consumed by the
Contractor's employees or sub-contractors while on the job-site or prior
to returning to their base of operations. The Contractor agrees to impose
and strictly enforce a regulation to this effect and to inform the
employees that such a regulation will be strictly enforced. Any employee
found to have violated said regulation is to be immediately replaced. Any
breach of this provision will be grounds for immediate termination of this
contract by the Owner.
IX - Extra Services
A. All plant, shrub, flower beds, ground cover, and tree removal or
replacement shall be accomplished only with the approval of the Owner
or Owner's Representative.
B. The Contractor shall furnish the Owner with an itemized estimate for
any extra work required. The Contractor shall not proceed without
written authorization.
48
C. Additional planting, removal or replacement of planting shall be
charged per hour plus materials at the Contractor's cost.
D. Hourly rate for miscellaneous extra services shall be per hour.
E. Major sprinkler servicing for damage caused by the acts of God, theft
or vandalism, shall be charged per hour, plus materials at the
Contractor's cost.
F. The Contractor shall provide additional flats of annual color (4"
pots), to be planted two (2) times per year, as requested by Owner's
Representative.
49
[SCHEMATIC]
Specific Project
Landscape Reference Plan
WARLAND/CYPRESS BUSINESS CENTER
50
[GRAPHIC]
DO NOT TOP TREE.
DO NOT SHEAR OUTLINE OF TREE.
PRUNE LATERAL GROWTH ANNUALLY BY SELECTIVELY REMOVING BRANCHES TO OPEN INTERIOR
OF THE TREE IN ORDER TO PREVENT WIND DAMAGE.
PRUNE UP LOWER GROWTH TO 1/4 OF OVERALL TREE HEIGHT BUT NO HIGHER THAN 7 FEET
MAX. FROM FINISH GRADE.
NOTE: TRISTANIA TREES WHICH ALREADY HAVE BEEN PRUNED BRANCHES HIGHER THAN 7 FEET
HEIGHT FROM THE FINISH GRADE SHALL BE REMOCED AND REPLACED WITH NEW 15 GALLON
SIZE TREES.
[1/4 OF OVERALL HT. (7' MAX.)
TRISTANIA/EUCALYPTUS
--------------------
PRUNING
-------
51
[GRAPHIC]
DO NOT TREE TREE.
DO NOT SHEAR TREE OUTLINE INTO BALL FORM.
PRUNE LATERAL GROWTH ANNUALLY BY SELECTIVELY REMOVING BRANCHES TO OPEN INTERIOR
IN ORDER TO PREVENT WIND DAMAGE AND ENHANCE THE NATURAL STRUCTURE OF THE TREE.
MAKE LATERAL PRUNING CUT AT TRUNK.
PRUNE LOWER BRANCHES UP TO MAXIMUM OF 7 FEET HIGH FROM FINISH GRADE TO ALLOW FOR
VEHICULAR AND PEDESTRIAN TRAFFIC.
[GRAPHIC DISPLAYING TYPICAL CUT]
CUPANIOPSIS PRUNING
-------------------
52
[GRAPHIC]
DO NOT TOP TREE
CENTRAL LEADER (MAIN TRUNK) OF TREE MUST REMAIN INTACT IN ORDER FOR TREE
TO DEVELOP INTO ITS NATURAL FORM
PROPER LOCATION OF PRUNING CUTS
DO NOT TRIM OR 'HEAD BACK' LATERAL GROWTH.
THIN OUT ANNUALLY BY SELECTIVELY REMOVING 10 - 15% OF LATERAL BRANCHES AT
TRUNK OF THE TREE.
PRUNE LOWER BRANCHES UP TO 1/4 OF OVERALL HEIGHT OF THE TREE, BUT NO HIGHER THAN
6 FEET FROM THE FINISH GRADE.
[GRAPHIC] DISPLAYING 1/4 OF OVERALL TREE HEIGHT OR 6' MAX. FROM FINISH GRADE
LIQUIDAMBAR PRUNING
-------------------
53
[GRAPHIC]
DO NOT XXXXXXX; DO NOT REPEATEDLY PRUNE PRIMARY BRANCHES AT A SAME POINT SINCE
THIS WILL RESULT IN DEVELOPING KNOBBY ENDS. SEE NOTE BELOW.
SELECTIVELY 'HEAD BACK' BRANCHES THAT PROTRUDE THE OUTLINE OF THE TREE.
SELECTIVELY THIN-OUT BRANCHES TO OPEN UP TREE INTERIOR IN ORDER TO PREVENT WIND
DAMAGE.
PRUNE LOWER BRANCHES UP TO 1/4 OF OVERALL HEIGHT OF THE TREE, BUT NO HIGHER THAN
6 FEET FROM THE FINISH GRADE.
REVIEW PRUNING OF TREE TWICE ANNUALLY. PRUNE PREDOMINANTLY IN WINTER.
[GRAPHIC DISPLAYING SYCAMORE PRUNING]
[CAPTION] SYCAMORE PRUNING
----------------
--------------------------------------------------------------------------------
NOTE: FOR TREES WHICH HAVE ALREADY INCORRECTLY PRUNED BY SEVERELY CUTTING BACK
PRIMARY LATERAL BRANCHES, PRUNE OUT 60% OF NEW GROWTH.
[GRAPHIC] DISPLAYING AN EXAMPLE OF MAIN TRUNK, INCORRECTLY PRUNED LATERAL BRANCH
AND A TYPICAL CUT
54
[GRAPHIC]
DO NOT TOP TREE
DO NOT SHEAR OUTLINE OF TREE; KEEP ITS NATURAL FORM.
LIGHTLY THIN-OUT TREE BY REMOVING ONLY SECONDARY BRANCHES WHEN FOLIAGE GROWTH
BECOMES VERY DENSE.
PRUNE UP LOWER FOLIAGE TO THE HEIGHT OF 3 - 4' FOR MATURE TREES, LOWER FOR
YOUNGER TREES.
[GRAPHIC] DISPLAYING 3 - 4' (FOR MATURE TREES)
[CAPTION] MELALEUCA CLUMPS
----------------
PRUNING
-------
55
[GRAPHIC]
DO NOT TOP TREE
DO NOT PRUNE BACK LATERAL BRANCHES.
MINIMAL PRUNING REQUIRED
LIGHTLY THIN OUT ONLY WHERE FOLIAGE IS VERY DENSE; PRUNE SECONDARY
GROWTH ON LATERAL BRANCHES AT ITS BASE.
[GRAPHIC] PRUNE UP LOWER GROWTH TO 1/4 OF OVERALL HEIGHT, BUT NO HIGHER THAN 6'
FROM FINISH GRADE.
[CAPTION] CANARY ISLAND PINE
------------------
PRUNING
-------
56
INFORMAL HEDGE
--------------
(SUCH AS XYLOSMA, ESCALLONIA, RAPHIOLEPIS, PITTOSPORUM, MORAEA, PHORMIUM)
DO NOT USE HEDGING HEARS ON INFORMAL SHRUB PLANTING.
DO NOT SHAPE SHRUBS INTO BALLED FORMS.
SELECTIVELY REMOVE INDIVIDUAL BRANCHES WITH HAND CLIPPERS TO
OPEN UP AND ENHANCE THE NATURAL STRUCTURE OF THE SHRUB.
NOTE: ALLOW GROUNDCOVER TO FILL IN UNDER SHRUBS.
[GRAPHIC]
[CAPTION] SECTION ELEVATION
------- ---------
--------------------------------------------------------------------------------
FORMAL HEDGE
-------------
(SUCH AS LIGUSTRUM)
PRUNE BY HEARING WITH HEDGING HEARS INTO 'BOX' FORM.
NOTE: ALLOW GROUNDCOVER TO FILL IN UNDER SHRUBS.
[GRAPHIC]
[CAPTION] SECTION ELEVATION
------- ---------
57
EXHIBIT "F"
-----------
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: __________________
58
EXHIBIT "G"
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
SUBORDINATION, NON-DISTURBANCE
------------------------------
AND ATTORNMENT AGREEMENT
------------------------
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
("Agreement") is entered into as of ______________________, 19__, between
___________________ ("Tenant"), WARLAND INVESTMENTS COMPANY, a California
limited partnership ("Borrower"), 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000 and __________________________________ ("Lender"), whose
address is __________________________________________________________________
RECITALS:
---------
A. Tenant is the lessee or successor to the lessee and Borrower is the
lessor or successor to the lessor of a certain lease dated ________________,
19__ (the "Lease").
B. Lender has made, or will make, to Borrower a mortgage loan to be
secured by a Mortgage, Deed to Secure a Debt, or Deed of Trust and Security
Agreement from Borrower to Lender (the "Mortgage") on the fee title and/or
leasehold interest in the real estate, wherein the premises covered by the Lease
are located, as described in EXHIBIT A attached hereto.
C. Borrower and Lender have executed, or will execute, an Absolute
Assignment of Leases and Rents (the "Assignment") pursuant to which the Lease is
assigned to Lender.
D. Lender has required the execution of this Agreement by Borrower and
Tenant as a condition to Lender making the requested mortgage loan or consenting
to the Lease.
E. Tenant acknowledges as its consideration for entering into this
Agreement that Tenant will benefit by entering into an agreement with Lender
concerning their relationship in the event of foreclosure of the Mortgage by
Lender.
AGREEMENT:
----------
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce Lender to
make the requested mortgage loan or consent to the Lease, Tenant, Borrower, and
Lender hereby agree and covenant as follows:
l. Assignment of Rents.
-------------------
Borrower hereby acknowledges, confirms, and agrees that the Lease has
been, or will be, assigned to Lender pursuant to the Assignment, and Lender
acknowledges that the Assignment contains a license back to Borrower permitting
Borrower to collect all rents, income, and other sums payable under the Lease.
Exhibit "G"
59
2. Revocation of License-Back.
--------------------------
Upon revocation, pursuant to the Assignment, of the license back,
Borrower acknowledges that all rents, income, and other sums payable under the
Lease shall be paid to Lender.
3. Covenants for Benefit of Lender.
-------------------------------
Tenant and Borrower agree for the benefit of Lender that:
(a) Tenant shall not pay and Borrower shall not accept, any rent
or additional rent more than one month advance; and
(b) Tenant and Borrower will not enter into any agreement for the
cancellation, surrender, amendment, or modification of the
Lease without Lender's prior written consent. Tenant will not
terminate the Lease because of a default thereunder by
Borrower unless Tenant shall have first given Lender notice
and a reasonable opportunity to cure such default.
4. Subordination.
--------------
Tenant and Lender hereby agree that the Lease is and shall at all times
be subject and subordinate in all respects to the Mortgage and to all renewals,
modifications, and extensions thereof, subject to the terms and conditions
hereinafter set forth in this Agreement.
5. Non-Merger.
-----------
Borrower, Tenant, and Lender agree that unless Lender shall otherwise
consent in writing, the fee title to, or any leasehold interest in, the real
estate and the leasehold estate created by the Lease shall not merge but shall
remain separate and distinct, notwithstanding the union of said estates either
in the Borrower or the Tenant or any third party by purchase, assignment, or
otherwise.
6. Non-Disturbance and Attornment.
------------------------------
If the interests of Borrower in the real estate are acquired by Lender
by foreclosure, deed in lieu of foreclosure, or any other method:
(a) If Tenant shall not then be in default in the payment of rent
or other sums due under the Lease or be otherwise in material
default under the Lease, Lender agrees that the Lease and the
rights of Tenant thereunder shall continue in full force and
effect and shall not be terminated or disturbed except in
accordance with the terms of the Lease or this Agreement;
(b) Tenant agrees to attorn to Lender as its lessor; Tenant shall
be bound under all of the terms, covenant, and conditions of
the Lease for the balance of the term thereof remaining,
including any renewal options which are exercised in
accordance with the terms of the Lease;
(c) The interests so acquired shall not merge with any other
interests of Lender in the real estate if such merger would
result in the termination of the Lease; and
(d) If, notwithstanding any other provisions of this Agreement,
the acquisition by Lender of the interest of Borrower in the
real estate results, in whole or part, in the termination of
the Lease, there shall be
Exhibit "G"
60
deemed to have been created a lease between Lender and Tenant
on the same terms and conditions as the Lease for the
remainder of the term of the Lease, with renewal options, if
any.
The provisions of this paragraph shall be effective and self-operative
immediately upon Lender succeeding to the interests of Borrower without the
execution of any other instrument.
7. Liability of Lender as Landlord.
--------------------------------
If the interests of Borrower in the real estate are acquired by Lender
by foreclosure, deed in lieu of foreclosure or any other method, Lender shall be
bound to Tenant under all of the terms, covenants, and conditions of the Lease,
and Tenant shall, from and after Lender's acquisition of the interests of
Borrower in the real estate, have the same remedies against Lender for the
breach of the Lease that Tenant would have had under the Lease against Borrower
if Lender had not succeeded to the interests of Borrower, provided, however,
that Lender shall not be:
(a) Liable for any act or omission of any landlord (including
Borrower) prior to the date of Lender's acquisition of the
interests of Borrower in the real estate; or
(b) Subject to any offsets or defenses which Tenant might have
against any landlord (including Borrower) prior to the date of
Lender's acquisition of the interests of Borrower in the real
estate; or
(c) Liable for the return of any security deposit under the Lease
unless such security deposit shall have been actually
deposited with Lender; or
(d) Liable to Tenant, whether before or after Lender acquires
Borrower's interest in the real estate, (i) under any
indemnification provisions set forth in the Lease (including,
without limitation, any environmental indemnification) or (ii)
for any damages Tenant may suffer as a result of any
misrepresentation set forth in the Lease, the breach of any
warranty set forth in the Lease, or any act of, or failure to
act by any party other than Lender and its agents, officer,
and employees.
8. Miscellaneous.
--------------
This Agreement may not be modified orally or in any other manner except
by an agreement in writing signed by the parties hereto or their respective
successors-in-interest. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective heirs, successors, and
assigns. Upon recorded satisfaction of the Mortgage this Agreement shall become
null and void and be of no further effect.
Exhibit "G"
61
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
TENANT: ________________________________________
_____________________
By: ________________________________
Its:____________________________
BORROWER: WARLAND INVESTMENTS COMPANY, a
California limited partnership
By: ________________________________
Name:
Co-Managing Director
By: ________________________________
Name:
Co-Managing Director
________________________________________
_____________________
LENDER: __________________
By: _______________________________
Its:____________________________
Exhibit "G"
00
XXXXXXX "X"
XXXXXXXX CERTIFICATE
Subject: Lease Dated: November 1, 1997
Between: Warland Investments Company, Lessor, and
Universal Electronics, Inc., Lessee
On Premises Located and Addressed as:
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Gentlemen:
The undersigned as Lessee, hereby confirms to the best of its knowledge, the
following:
l. That it 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
___________, and are current. The Initial Basic Monthly Rent is $____________.
The primary lease term expires on _____________________.
6. That we have no notice of prior assignment, hypothecation or pledge
of rents or the lease.
7. That the aforesaid lease has not been modified, altered or amended,
except as follows:
8. That the Lease is in full force and effect, without default by
Lessor or Lessee.
Date:___________________ Lessee: Universal Electronics, Inc.,
a Delaware corporation
____________________________________
Name:
Title:
____________________________________
Name:
Title:
Exhibit "H"
63
[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 Promises leased to Sublessor under the
lease between Warland and Sublessor, dated May 31, 1998, 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 Warland's 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.
64
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. Warland's 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
65
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. Law
----------------------------------------
Xxxx X. Law
Co-Managing Director
AGREED TO AND ACCEPTED this
----------------------
25th 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
66
EXHIBIT "A"
-----------
THE SUBLEASE
------------
(See Attached)
67
[LOGO] COMMERCIAL REAL ESTATE GROUP INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
1. PARTIES.
This Sublease, dated January 10, 1997, is made between Edgemont Sales
Company, a division of IKON Office Solutions, Inc. ("Sublessor"). and
Universal Electronics, Inc., A Delaware Corporation ("Sublessee").
2. MASTER LEASE.
Sublessor is the lessee under a written lease dated May 31, 1988,
wherein Warland Investments, Ltd. ("Lessor") 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 building located at 0000 Xxxxxxx Xxxxx, situated on
lot AP# 000-000-00
("Master Premises"). Said lease has been amended by the following
amendments ____________________________________________________________
_______________________________________________________________________
said lease and amendments are herein 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.
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, 1997
("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, 1998 ("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. Notwithstanding 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 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 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 Subleasor's actual costs payable by Sublessor for Operating
Costs incurred during the Term. Such
1
68
????????????????????? 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 Eight Hundred forty-four and No/100ths
Dollars ($ 33,844.00) as security for Sublessee's faithful performance
of Sublessee'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 8.2 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.
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 peform 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
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
2
69
?????????????????????????????????????????????????????????????????????
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, 0000 Xxxxxxxxxx Xxxxxxx,
Xxxx, Xxxxxxxxx, XX 00000
15. CONSENT BY LESSOR.
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: ?????? By: ???????
------------------------------------- ----------------------------------
Title: CFO Title: EXC. V.P. C.O.O.
---------------------------------- --------------------------------
By: By: Xxxx X. ?????
------------------------------------- ----------------------------------
Title: Title: Plant Engineer
---------------------------------- --------------------------------
Date: 2/12/97 Date: 2-10-97
---------------------------------- --------------------------------
LESSOR'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 Lessor'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:
------------------------------------------
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
70
EXHIBIT "B"
-----------
THE MASTER LEASE
----------------
(See Attached)
--------------
71
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 INVESTMENTS, LTD.,
a California limited partnership ("Warland"); and EDGEMONT SALES COMPANY, INC.,
a California corporation ("Edgemont").
RECITALS
--------
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 Edgemont 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 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.
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 nay 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 reasonable 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
--------------------------------------
Xxxxxx Xxxxxxx, President
"Tenant"
72
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Second Amendment") is made and
entered into as of this ______ 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 Landlord and Tenant 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, TIlE 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 Tenant, 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
73
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"
74
LEASE
WARLAND/CYPRESS BUSINESS CENTER
-------------------------------
A Project of Warland Investments, Ltd.
WARLAND INVESTMENTS, LTD.
Landlord,
AND
EDGEMONT SALES COMPANY, INC.,
a California corporation,
Tenant
75
LEASE
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
76
9. Broker(s): Fremont Properties
000 Xxxx 000xx, Xxxxx 000
Xxxxxxxx, XX 00000
10. Addresses 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. Xxx 000
Xxx Xxxxxxxx, XX 00000
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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77
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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78
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 Waiver of 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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79
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 Sublessess ......................................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 to 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-1" 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" Architect'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
Landlord'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, 1998.
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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81
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 to 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. Tenant agrees to deposit with Landlord
simultaneously with the execution of this Lease by Landlord a security deposit
(the "Security Deposit") securing Tenant'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 each 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 Tenant's interest hereunder) within
10 days following expiration of the Term. In the event of termination of
Landlord'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 or 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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82
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 to 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 Tenant 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
-8-
83
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 nor 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 of 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 Hazardous Material on the
Premises caused or permitted by Tenant results in any contamination of the
Premises, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Premises to the condition existing prior to the
introduction of any such Hazardous Material to the Premises; provided that (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 or 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 Hazardous
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
26281 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, Tenant 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 waivers 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 Sections 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 Landlord's gross negligence
or wilful act) or interference with Tenant's business arising from the making
or 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 Landlord'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, Tenant 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 be 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 Tenant; Tenant agrees to reimburse
Landlord for all costs and expenses of Landlord thereby incurred within ten
(10) days after receipt by Tenant 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. Landlord'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 Tenant'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 in effect 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,
objections, 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 Tenant, (ii) any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease of (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 willful 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
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 be 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 the 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. Landlord'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
Tenant'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, Landlord's obligation to
Restore the Premises shall be limited to that portion of the Award 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. Tenant does hereby covenant and agree, upon the request of
Landlord, 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 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
Landlord'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 Tenant, 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 that portion of the Premises subleased or assigned. If Landlord
elects 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, tenant 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 Subject 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 transaction subject to
this Section 9, (d) the 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 Tenant in
writing of such a 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 Tenant's failure to comply with Landlord'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, provides Tenant with written notice to do so, such
documents and take such further action as Landlord, such transferee and 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 Tenant:
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 provisions 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 be 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 Tenant 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 Landlord'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 Tenant 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 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 relieved 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 Tenant, 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 Tenant 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 Landlord'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 Tenant'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 Tenant'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 willing
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 expenses, 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 calender 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 "Option 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 (i) 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 and 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 of the Premises by the
appraisal method set forth below. In the event Tenant elects for appraisal,
Tenant shall, at Tenant's sole expense, within 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, 19989, Tenant's shall be granted an abatement of
its Basic Monthly Rent herein by an amount equal to fifty percent (50%) of
Tenant's base monthly rental obligation at the other location; provided,
however, shall in no event shall said rent abatement be grater than $2,500.00
per month.
-25-
100
EXHIBIT "A"
PLOT PLAN OF PREMISES
[MAP]
101
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
102
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 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 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' 02" 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' 13" east; thence westerly
along said curve through a central angle of 04 degrees 24' 00" an arc
distance of 442.31 feet and north 89 degrees 57' 47" west 2285.96 feet
to said westerly line of the south half of Section 22; thence along
said westerly line north 00 degrees 00' 14" 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
103
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 known 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 of 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.
104
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 work
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 Tenant'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 deliver 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.
105
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
Improvements 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 government 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
Cost 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.
106
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 Tenant 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. Tenant 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 Tenant's business.
107
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
108
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 consistancy 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.
109
[DIAGRAM]
ALUMINUM SIGN CABINET
DEBOSSED CONCRETE BASE
FOOTINGS AS REQUIRED
FRONT ELEVATION END ELEVATION
EXHIBIT A
110
[DIAGRAM]
FRONT ELEVATION SIDE ELEVATION
FABRICATED ALUMINUM CABINET WITH DIE CUT VINYL LEGENDS APPLIED - HELVETICA
MED. U/LC.
DEBOSSED CONCRETE BASE WITH EXPOSED AGGREGATE FINISH - UNPAINTED FINISH.
EXHIBIT B
111
EXHIBIT "F"
-----------
LANDSCAPE MAINTENANCE
SPECIFICATIONS
FOR
WARLAND CYPRESS BUSINESS PARK
112
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" 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 a 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" prunning of shrubs is
not acceptable. Prune by removing branches. Shearing is only
permitted with xxxxxx. Clarify xxxxxx with landscape
Architect.
113
See graphic examples for more detail information on shrub
pruning.
2. All trees over 10 ft. in height will have a tree prunning
service handle prunning at the tenants company's expense.
Prunning of trees will include a minimum annual prunning.
Coral trees will be thinned by removing whole branches and not
topped unless direct to by the Landscape Architect. Seal all
prunned limbs 1-1/4" or larger with proper seal. Coordinate
all prunning 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 and water basin repair of all shrub and
tree areas.
8. Deep root feeding of all trees twice per year and during the
springs 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 thin 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 prunning 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.
114
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 wind is not covered by this
section.
* Contractor to get copies of as-built irrigation and planting
plans from tenant or owner. 9'
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.
115
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 PLANTlNG
----------------------
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 situation, 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 WEEK.
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.
116
PRUNING
117
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 grow in length. In some plants there may be latent buds. These buds lie
dormant but will grow 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 characteristic form and will minimize the problems of
decay and regrowth.
118
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 & 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 & 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]
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
119
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 feeing 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 lone. This application
should take place about one month before the hottest time of the year.
120
[DRAWING - TRISTANIA OR EUCALYPTUS]
1/4 OF OVERALL HT. (6-7' MAX.)
DO NOT TOP TREE
TO 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' MAX.)
NOTE: TREES WHICH HAVE ALREADY BEEN INCORRECTLY PRUNED BY REMOVING LOWER
BRANCHES TO A HEIGHT GREATER THAN 7' ABOVE THE GROUND, SHALL BE REMOVED &
REPLACED WITH NEW 15 GALLON SIZE TREES. (TRISTANIAS ONLY).
PRUNING INSTRUCTIONS FOR:
TRISTANIA & EUCALYPTUS
121
[DRAWING - CUPANIA (CARROTWOOD)]
DO NOT TOP TREE
DO NOT SHEAR OUTSIDE OF TREE INTO BALL FORM
- PRUNE BY 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
PRUNING INSTRUCTIONS FOR:
CUPANIOPSIS (CARROTWOOD)
122
[DRAWING - TYP. LIQUIDAMBAR TREE]
DO NOT TOP THIS TREE
CENTRAL LEADER (MAN 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).
[GRAPHIC] 1/4 OF OVERALL HEIGHT OF TREE (6 FEET MAX)
NOTE: SLASH THRU BRANCH SHOWS EXAMPLE OF PROPER LOCATION OF PRUNING CUTS.
PRUNING INSTRUCTIONS FOR LIQUIDAMBAR TREE
123
[DRAWING - MELALEUCA CLUMP]
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)
3-4' (FOR LARGER TREES)
PRUNING INSTRUCTIONS FOR
MELALEUCA LEUCADENDRA
124
NOTE: ALTERNATE PRUNING OF LATERAL GROWTH EVERY (2) YEARS. PRUNE AFTER TREE
BLOOMS IN WINTER
[DRAWING - CORAL TREE]
ALLOW CLEARANCE UNDER BRANCHES FOR VEHICULAR & PEDESTRIAN TRAFFIC
NOTE: SLASH THRU BRANCH SHOWS EXAMPLE OF PROPER LOCATIONS FOR PRUNING
CUTS
PRUNING INSTRUCTIONS:
--------------------
- 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
PRUNING INSTRUCTIONS FOR:
ERYTHRINA CAFFRA TREE
125
[DRAWING - CANARY ISLAND PINE]
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
& MOVING OUTWARD. DO THIS ONLY WHERE FOLIAGE IS VERY DENSE.
- PRUNE UP LOWER GROWTH TO 1/4 OF OVERALL HEIGHT. (6' MAX)
PRUNING INSTRUCTIONS FOR:
PINUS CANARIENSIS
126
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 & ENHANCE THE NATURAL STRUCTURE OF THE SHRUB.
[DRAWING-INFORMAL HEDGE (SUCH AS: XYLOSMA, ESCALLONIA, RAPHOLEPIS,
PITTOSPORUM)]
SECTION ELEVATION NOTE: ALLOW GROUND COVER TO FILL IN BELOW SHRUBS
- PRUNE BY SHEARING EDGES OF SHRUBS WITH HEDGING SHEARS, INTO "BOX" FORM.
SECTION ELEVATION NOTE: ALLOW GROUND COVER TO FILL IN BELOW
SHRUBS
[DRAWING-FORMAL HEDGE (SUCH AS: LIGUSTRUM TEXANUM)]
PRUNING INSTRUCTIONS FOR: SHRUB PLANTINGS
127
[DRAWING - 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 PREDOMINATELY
IN WINTER.
NOTE: FOR TREES WHICH HAVE ALREADY BEEN INCORRECTLY PRUNED BY SEVERLY CUTTING
BACK PRIMARILY LATERAL BRANCHES, PRUNE OUT 60% OF NEW GROWTH (SEE
EXAMPLE)
[DRAWING - EXAMPLE]
TYP. CUT
MAIN TRUNK
INCORRECTLY PRUNED LATERAL BRANCH
PRUNING INSTRUCTIONS FOR:
PLATAWS (SYCAMORE) TREE
128
EXHIBIT "G"
PAINTING SPECIFICATIONS
[To be provided by Landlord]
129
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: _________________
130
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 it 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 Lessee's
rights under the subject lease.
By:______________________
Title: _________________
