EXHIBIT 10.19
LEASE AGREEMENT
(NNN)
Basic Lease Information
Lease Date: July 8, 1999
Landlord LINCOLN-RECP FULLERTON OPCO, LLC, a
Delaware limited liability company
Landlord's Address: c/o Legacy Partners Commercial, Inc.
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Tenant: XXXXXXXXXX.XXX, INC.,
a Delaware corporation
Tenant's Address: The Plaza At Yarrow Bay
00000 X.X. Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Premises: Approximately 98,600 rentable square
feet as shown on Exhibit A
Premises Address: 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000
Building: Approximately 98,600 rentable square
feet
Fullerton Crossroads ("Park"): Approximately 1,247,323 rentable square
feet
Term: October 1, 1999 ("Commencement Date"),
through September 30, 2009 ("Expiration
Date")
Base Rent: Forty Two Thousand Three Hundred Ninety
Eight and 00/100 Dollars ($42,398.00)
per month
Adjustments to Base Rent: April 1, 2002--September 30, 2004 at
$45,356.00 per month
October 1, 2004--March 31, 2007 at
$49,300.00 per month
April 1, 2007--September 30, 2009 at
$53,244.00 per month
Security Deposit ((P)4): Eight-four Thousand Seven Hundred
Ninety-six and 00/100 Dollars
($84,796.00)
*Tenant's Share of Tax Expenses ((P)6.1): 7.9% of the Park
*Tenant's Share of Tax Expenses ((P)6.2): 100% of the Lot
*Tenant's Share of Common Area Utility Costs ((P)7): 7.9% of the Park
*Tenant's Share of Utility Expenses ((P)7): 100% of the Building
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.
Permitted Uses ((P)9): Food and related sundry items
distribution, related office support and
other comparable distribution uses, but
only to the extent permitted by the City
of Fullerton and all agencies and
governmental authorities having
jurisdiction thereof
Parking Spaces: One hundred seventy-one (171) spaces
Broker ((P)38): CB Xxxxxxx Xxxxx for Tenant Xxxxx &
Xxxxx for Landlord
Exhibits: Exhibit A - Premises, Building, Lot
and/or Park
Exhibit B - Tenant Improvements
Exhibit B-1- Approved Final Drawings
Exhibit C - Rules and Regulations
Exhibit D - Covenants, conditions and
Restrictions
Exhibit E - Hazardous Materials
Disclosure Certificate - Example
Exhibit F - Change of Commencement Date
Exhibit G - Tenant's Initial Hazardous
Materials Disclosure Ceritificate
Exhibit H - Sign Criteria
Exhibit I - Subordination, Non-
Disturbance and Attornment Agreement
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date set forth on
Page 1. The Basic Lease Information set forth on Page 1 and this Lease
are and shall be construed as a single instrument.
1. Premises
Landlord hereby leases the Premises to Tenant upon the terms and conditions
contained herein. Landlord hereby grants to Tenant a license for the right to
use, on a non-exclusive basis, parking areas and ancillary facilities located
within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1. Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all occupants of the Building and/or the Park
(for example an electrical room or telephone room). Tenant further agrees that
the number of rentable square feet of the Building, the Lot and the Park may
subsequently change after the Lease Date commensurate with any modifications to
any of the foregoing by Landlord, and Tenant's Share shall accordingly change.
Landlord shall use commercially reasonable efforts not to unreasonably interfere
with Tenant's use of the Premises in connection with any construction of or
alterations to the Common Areas of the Park.
2. Adjustment of Commencement Date; Condition of the Premises
2.1 If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the Lease Term and the obligation
to pay Rent shall commence on the date possession is tendered and the Expiration
Date shall be extended commensurately. In the event the commencement date and/or
the expiration date of this Lease is other than the Commencement Date and/or
Expiration Date specified in the Basic Lease Information, as the case may be,
Landlord and Tenant shall execute a written amendment to this Lease,
substantially in the form of Exhibit F hereto, wherein the parties shall specify
the actual commencement date, expiration date and the date on which Tenant is to
commence paying Rent. The word "Term" whenever used herein refers to the initial
term of this Lease and any extension thereof. By taking possession of the
Premises, subject to the provisions regarding corrections of defects or
deficiencies as set forth below, Tenant shall be deemed to have accepted the
Premises in good condition and state of repair. After receipt by Landlord of
written notice from Tenant of the existence of any patent deficiencies or
defects in the construction of the Tenant Improvements (which notice shall
specify in reasonable detail the nature and extent of such deficiencies or
defects), Landlord shall use commercially reasonable efforts to cause the
general contractor to promptly correct and/or repair any patent deficiencies or
defects which are not caused by the acts or omissions of Tenant or any of
Tenant's Representatives (hereafter defined), during the ninety (90) day period
following the Commencement Date of this Lease. If Tenant fails to timely
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deliver to Landlord such written notice of the aforementioned patent defects or
deficiencies within said 90-day period, Landlord shall have no obligation to
perform any such work thereafter, except as otherwise specifically provided in
Section 11 of this Lease. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives has made any representations
or warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose.
2.2 In the event Landlord permits Tenant to occupy the Premises prior to
the Commencement Date, such occupancy shall be at Tenant's sole risk and subject
to all the provisions of this Lease, including, but not limited to, the
requirement to pay Rent and the Security Deposit, and to obtain the insurance
required pursuant to this Lease and to deliver insurance certificates as
required herein. In addition to the foregoing, Landlord shall have the right to
impose such additional conditions on Tenant's early entry as Landlord shall deem
appropriate. If, at any time, Tenant is in default of any term, condition or
provision of this Lease, any such waiver by Landlord of Tenant's requirement to
pay rental payments shall be null and void and Tenant shall immediately pay to
Landlord all rental payments so waived by Landlord. Landlord and the general
contractor shall provide Tenant with a customary warranty for the Tenant
Improvements for one (1) year following Substantial Completion; provided,
however, any claim by Tenant under said warranty must be made by Tenant in
writing within said one (1) year period and must include the specific nature of
the problem. Tenant shall have the right, together with Landlord, to
concurrently enforce any warranties made by the general contractor or materials
suppliers in favor of Landlord with respect to the construction of the Tenant
Improvements.
3. Rent
On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent described in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of the Lease. In addition to
the Base Rent set forth in the Basic Lease Information, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, as well as the Administrative Expenses.
Tenant shall also pay to Landlord as Additional Rent hereunder, immediately on
Landlord's demand therefor, any and all costs and expenses incurred by Landlord
to enforce the provisions of this Lease, including, but not limited to, costs
associated with the delivery of notices, delivery and recordation of notice(s)
of default, attorneys' fees, expert fees, court costs and filing fees
(collectively, the "Enforcement Expenses"). The term "Rent" whenever used herein
refers to the aggregate of all these amounts. If Landlord permits Tenant to
occupy the Premises without requiring Tenant to pay rental payments for a period
of
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time, the waiver of the requirement to pay rental payments shall only apply to
waiver of the Base Rent and Tenant shall otherwise perform all other obligations
of Tenant required hereunder. The Rent for any fractional part of a calendar
month at the commencement or termination of the Lease term shall be a prorated
amount of the Rent for a full calendar month based upon a thirty (30) day month.
The prorated Rent shall be paid on the Commencement Date and the first day of
the calendar month in which the date of termination occurs, as the case may be.
4. Security Deposit
Upon Tenant's execution of this Lease, Tenant shall deliver to Landlord, as
a Security Deposit for the performance by Tenant of its obligations under this
Lease, the amount specified in the Basic Lease Information. If Tenant is in
default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. At any time after Tenant has defaulted hereunder, Landlord may
require an increase in the amount of the Security Deposit required hereunder (in
an amount not to exceed twelve (12) months' Rent) for the then balance of the
Lease Term and Tenant shall, immediately on demand, pay to Landlord additional
sums in the amount of such increase. As soon as practicable after the
termination of this Lease, Landlord shall return the Security Deposit to Tenant,
less such amounts as are reasonably necessary, as determined solely by Landlord,
to remedy Tenant's default(s) hereunder or to otherwise restore the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore the Premises exceeds the amount of the Security Deposit, Tenant shall
promptly deliver to Landlord any and all of such excess sums as reasonably
determined by Landlord. Landlord shall not be required to keep the Security
Deposit separate from other funds, and, unless otherwise required by law, Tenant
shall not be entitled to interest on the Security Deposit. In no event or
circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
5. Tenant Improvements
Tenant hereby accepts the Premises as suitable for Tenant's intended use
and as being in good operating order, condition and repair, "AS IS", except as
specified in Exhibit B attached hereto. Landlord or Tenant, as the case may be,
shall install and construct the Tenant Improvements (as such term is defined in
Exhibit B hereto) in accordance with the terms, conditions, criteria and
provisions set forth in Exhibit B. Landlord and Tenant hereby agree to and shall
be bound by the terms, conditions and provisions of Exhibit B. Tenant
acknowledges and agrees that neither Landlord nor any of Landlord's agents,
representatives or employees has made any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant's business or for
any other purpose, including without limitation, any storage
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incidental thereto. Any exception to the foregoing provisions must be made by
express written agreement by both parties.
6. Additional Rent
It is intended by Landlord and Tenant that this Lease be a "triple net
lease." The costs and expenses described in this Section 6 and all other sums,
charges, costs and expenses specified in this Lease other than Base Rent are to
be paid by Tenant to Landlord as additional rent (collectively, "Additional
Rent").
6.1 Operating Expenses: In addition to the Base Rent set forth in Section
3, Tenant shall pay Tenant's Share, which is specified in the Basic Lease
Information, of all Operating Expenses as Additional Rent. The term "Operating
Expenses" as used herein shall mean the total amounts paid or payable by
Landlord in connection with the ownership, maintenance, repair and operation of
the Premises, the Building and the Lot, and where applicable, of the Park
referred to in the Basic Lease Information. The amount of Tenant's Share of
Operating Expenses shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. These Operating Expenses
may include, but are not limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of the exterior
walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Areas"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leasable exclusively to other
tenants. The Common Areas include, but are not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads, sidewalks,
rail spurs, landscaped areas and similar areas and facilities;
6.1.3 Landlord's annual cost of insurance insuring against fire and
extended coverage (including, if Landlord elects, "all risk" or "special
purpose" coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building, the
Lot and the Park (including the Common Areas), rental value insurance
against loss of Rent in an amount equal to the amount of Rent for a period
of at least six (6) months commencing on the date of loss, and subject to
the provisions of Section 27 below, any deductible;
6.1.4 Landlord's cost of: (i) modifications and/or new improvements
to the Building, the Common Areas and/or the Park occasioned by any rules,
laws or regulations effective subsequent to the date on which the Building
was originally constructed; (ii) reasonably necessary replacement
improvements to the Building, the Common Areas and the Park after the Lease
Date (except any replacement improvements made by Landlord after Landlord
intentionally demolishes the Building, Common Areas or Park); and (iii) new
improvements to the Building, the Common Areas and/or the Park that reduce
operating costs or improve life/safety conditions, all as reasonably
determined
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by Landlord, in its sole discretion; provided, however, if any of the
foregoing are in the nature of capital improvements, then the cost of such
capital improvements shall be amortized on a straight-line basis over a
reasonable period, which shall be the estimated useful life of such
modifications, new improvements or replacement improvements in question (at
an interest rate as reasonably determined by Landlord), and Tenant shall
pay Tenant's Share of the monthly amortized portion of such costs
(including interest charges) as part of the Operating Expenses herein;
6.1.5 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not limited
to, contracts for elevator systems and heating, ventilation and air
conditioning systems, lifts for disabled persons, and trash or refuse
collection;
6.1.6 Landlord's cost of security and fire protection services for
the Building and/or the Park, as the case may be, if in Landlord's sole
discretion such services are provided;
6.1.7 If Tenant uses any such rail spur or rail crossing, Landlord's
cost for the maintenance and repair of any rail spur and rail crossing, and
for the creation and negotiation of, and pursuant to, any rail spur or
track agreements, licenses, easements or other similar undertakings;
6.1.8 Landlord's cost of supplies, equipment, rental equipment and
other similar items used in the operation and/or maintenance of the Park;
and
6.1.9 Landlord's cost for the repairs and maintenance items set forth
in Section 11.2 below.
Notwithstanding the foregoing, for purposes of this Lease, the term
"Operating Expenses" shall not include the following:
(i) Costs attributable to seeking and obtaining new tenants in the Park,
including construction of improvements for other occupants of the Park as well
as retaining existing tenants in the Park (other than Tenant), such as
advertising, promotion, brokerage commissions, architectural, engineering and
attorneys' fees;
(ii) Other than any interest charges for capital improvements referred to
in Section 6.1.4 hereinabove, any interest or payments on any financing for the
Building or the Park, and any bad debt loss, rent loss or reserves for same;
(iii) Any cost or expense which is actually reimbursed to Landlord through
insurance or otherwise;
(iv) Costs associated with the investigation and/or remediation of
Hazardous Materials (hereinafter defined) present in, on or about the Premises
or the Park, unless such costs and expenses are the responsibility of Tenant as
provided in Section 29 of this Lease, in which event
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such costs and expenses shall be paid solely by Tenant in accordance with the
provisions of Section 29 of this Lease;
(v) Any costs, fines or penalties incurred solely and directly
resulting from actual violations by Landlord of any governmental rule or
authority for which Landlord is responsible hereunder;
(vi) Costs of repairs or other work necessitated by fire, windstorm or
other casualty (excluding any commercially reasonable deductibles) and/or costs
of repair or other work necessitated by the exercise of the right of eminent
domain to the extent insurance proceeds or a condemnation award, as applicable,
is actually received by Landlord for such purposes; provided such costs for
repairs or other work shall be paid by the parties in accordance with the
provisions of Sections 27 and 28 below;
(vii) costs of purchasing, installing and replacing artwork, excluding
repair and maintenance required as a result of normal wear and tear, to the
extent properly capitalized under generally accepted accounting and management
practices; and
(viii) The cost to repair or replace any construction defect in the
Building to the extent actually (not constructively) known to Landlord prior to
the Commencement Date.
(ix) Depreciation of the Buildings or any other improvements situated
within the Park;
(x) Overhead and profit paid to subsidiaries or affiliates of Landlord
for management services to the extent that the cost of those items would not
have been paid had the services been provided by unaffiliated parties on a
competitive basis; and
(xi) Other than any interest charges for capital improvements referred
to in Section 6.1.4 hereinabove, any interest or payment on any financing for
the Building or the Park, and any bad debt loss, rent loss or reserves for same.
6.2 Tax Expenses: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is specified in the Basic Lease Information,
of all real property taxes applicable to the land and improvements included
within the Lot on which the Premises are situated and one hundred percent (100%)
of all personal property taxes now or hereafter assessed or levied against the
Premises or Tenant's personal property. The amount of Tenant's Share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage of
the Premises, the Building and/or the Park. Tenant shall also pay one hundred
percent (100%) of any increase in real property taxes attributable, in
Landlord's sole discretion, to any and all alterations, Tenant Improvements or
other improvements of any kind, which are above standard improvements
customarily installed for similar buildings located within the Building or the
Park (as applicable), whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. The term "Tax Expenses" shall mean
and include, without limitation, any form of tax and assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license fees, license tax,
business license fee,
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rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, the Lot or the Park, as against Landlord's right to rent
or as against Landlord's business of leasing the Premises or the occupancy of
Tenant or any other tax, fee, or excise, however described, including, but not
limited to, any value added tax, or any tax imposed in substitution (partially
or totally) of any tax previously included within the definition of real
property taxes, or any additional tax the nature of which was previously
included within the definition of real property taxes. The term "Tax Expenses"
shall not include any franchise, estate, inheritance, net income, or excess
profits tax imposed upon Landlord.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter affecting the Premises or any portion thereof, Tenant
shall have the right, after delivering written notice thereof to Landlord, to
contest or review the amount or validity of any real property taxes and
assessments applicable to the Premises by appropriate legal proceedings, subject
to the following terms and provisions. Such right is not to be deemed or
construed in any way as relieving, modifying, or extending Tenant's covenant to
pay such Tax Expenses or Tenant's Pro Rata Share of Tax Expenses at the time and
in the manner provided in this Lease. As a condition to Tenant's right to
contest, (i) Tenant shall first give Landlord the opportunity to so contest such
Tax Expenses, and (ii) such contested Tax Expenses or Tenant's Pro Rata Share of
Tax Expenses shall be paid before delinquency. The foregoing notwithstanding, if
Landlord is not successful in its contest of such Tax Expenses or if Landlord
does not elect to so contest the Tax Expenses then Tenant may contest such Tax
Expenses in accordance with the following provisions. If payment of the Tax
Expenses or Tenant's Pro Rata Share of Tax Expenses would prejudice Tenant's
ability to contest such taxes and assessments, then as a condition to obtaining
Landlord's consent to Tenant's ability to bring such contest without prior
payment (if the legal proceeding shall not operate to prevent or stay the
collection of the tax so contested), Tenant shall, before instituting any such
proceeding, protect the Premises and the interest of Landlord and of the
beneficiary of a deed of trust or the mortgagee of a mortgage affecting the
Premises or any portion thereof against any lien upon all of any portion of the
Premises by a surety bond, issued by an insurance company acceptable to
Landlord, in an amount equal to the greater of one and one-half (1/2) times the
amount contested or the amount of the contested tax and the interest and
penalties in connection therewith. Any contest as to the validity or amount of
any tax shall be made by Tenant in Tenant's own name, or, if required by law, in
the name of Landlord or both Landlord and Tenant. Tenant shall indemnify,
defend, and hold the Indemnitees (hereafter defined) harmless from and against
any and all losses, liabilities, penalties, judgments, costs and expenses,
including without limitation, attorneys' fees, arising as a result of or in
connection with any such proceedings brought by Tenant whether in its own name
or not. Tenant shall be entitled to retain any refund of any such contested tax,
or Tenant's Pro Rata Share thereof, and penalties or interest thereon which have
been paid by Tenant. Nothing contained herein shall be construed as affecting or
limiting Landlord's right to contest any Tax Expenses.
6.3 Administrative Expenses: The Administrative Expenses set forth in
this Section 6.3 are considered part of Additional Rent. In addition to the Base
Rent set forth in Section 3 hereof, Tenant shall pay Landlord, without prior
notice or demand, commencing on the
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Commencement Date and continuing thereafter on the first (1st) day of each month
throughout the balance of the Term of this Lease, as compensation to Landlord
for accounting and management services rendered on behalf of the Building and/or
the Park, one-twelfth (1/12th) of an amount equal to ten percent (10%) of the
estimated amount of the aggregate of the Tenant's Share of (i) the total
Operating Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and Utility
Expenses for the Premises as described in Section 7 below (collectively, the
"Administrative Expenses"). Any reconciliation of the Administrative Expenses
shall be substantially in the same manner as specified in Section 6.5 below, to
the extent such provisions are applicable. Tenant's obligation to pay such
Administrative Expenses shall survive the expiration or earlier termination of
this Lease.
6.4 Payment of Expenses: Landlord shall estimate Tenant's Share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day Of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant's obligation to
pay Tenant's Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.
6.5 Annual Reconciliation: By June 30th of each calendar year, or as soon
thereafter as reasonably possible Landlord shall endeavor to furnish Tenant with
an accounting of actual Operating Expenses and Tax Expenses. Within thirty (30)
days of Landlord's delivery of such accounting, Tenant shall pay to Landlord the
amount of any underpayment. Notwithstanding the foregoing, failure by Landlord
to give such accounting by such date shall not constitute a waiver by Landlord
of its right to collect any of Tenant's underpayment at any time. Landlord shall
credit the amount of any overpayment by Tenant toward the next estimated monthly
installment(s) falling due, or where the Term of the Lease has expired, refund
the amount of overpayment to Tenant. If the Term of the Lease expires prior to
the annual reconciliation of expenses Landlord shall have the right to
reasonably estimate Tenant's Share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees that Landlord shall be
entitled to deduct such underpayment from Tenant's Security Deposit.
Notwithstanding the foregoing, failure of Landlord to accurately estimate
Tenant's Share of such expenses or to otherwise perform such reconciliation of
expenses, including without limitation, Landlord's failure to deduct any portion
of any underpayment from Tenant's Security Deposit, shall not constitute a
waiver of Landlord's right to collect any of Tenant's underpayment at any time
during the Term of the Lease or at any time after the expiration or earlier
termination of this Lease.
6.6 Audit: After delivery to Landlord of at least thirty (30) days prior
written notice, Tenant, by itself or at its sole cost and expense through any
accountant designated by it, shall have the right to examine and/or audit the
books and records evidencing such costs and expenses
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for the previous one (1) calendar year, during Landlord's reasonable business
hours but not more frequently than once during any calendar year. Any such
accounting firm designated by Tenant may not be compensated on a contingency fee
basis. The results of any such audit (and any negotiations between the parties
related thereto) shall be maintained strictly confidential by Tenant and its
accounting firm and shall not be disclosed, published or otherwise disseminated
to any other party other than to Landlord and its authorized agents. Landlord
and Tenant shall use their best efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant in the accounting
of such costs and expenses.
7. Utilities
Utility Expenses, Common Area Utility Costs and all other sums or charges
set forth in this Section 7 are considered part of Additional Rent. In addition
to the Base Rent set forth in Section 3 hereof, Tenant shall pay the cost of all
water, sewer use, sewer discharge fees and sewer connection fees, gas, heat,
electricity, refuse pickup, janitorial service, telephone and other utilities
billed or metered separately to the Premises and/or Tenant. Tenant shall also
pay Tenant's Share of any assessments or charges for utility or similar purposes
included within any tax xxxx for the Lot on which the Premises are situated,
including, without limitation, entitlement fees related to Tenant's particular
use of the Premises, allocation unit fees, and/or any similar fees or charges,
and any penalties related thereto. For any such utility fees or use charges that
are not billed or metered separately to Tenant, including without limitation,
water and refuse pick up charges, Tenant shall pay to Landlord, as Additional
Rent, without prior notice or demand, on the Commencement Date and thereafter on
the first (1st) day of each month throughout the balance of the Term of this
Lease the amount which is attributable to Tenant's use of the utilities or
similar services, as reasonably estimated and determined by Landlord based upon
factors such as size of the Premises and intensity of use of such utilities by
Tenant such that Tenant shall pay the portion of such charges reasonably
consistent with Tenant's use of such utilities and similar services ("Utility
Expenses"). If Tenant disputes any such estimate or determination, then Tenant
shall either pay the estimated amount or cause the Premises to be separately
metered at Tenant's sole expense. In addition, Tenant shall pay to Landlord
Tenant's Share of any Common Area utility costs, fees, charges or expenses
("Common Area Utility Costs"). Tenant shall pay to Landlord one-twelfth (1/12th)
of the estimated amount of Tenant's Share of the Common Area Utility Costs on
the Commencement Date and thereafter on the first (1st) day of each month
throughout the balance of the Term of this Lease and any reconciliation thereof
shall be substantially in the same manner as specified in Section 6.5 above. The
amount of Tenant's Share of Common Area Utility Costs shall be reviewed from
time to time by Landlord and shall be subject to modification by Landlord if
there is a change in the rentable square footage of the Premises, the Building
and/or the Park. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on use
of any such utility services, Tenant acknowledges and agrees that its tenancy
and occupancy hereunder shall be subject to such rationing restrictions as may
be imposed upon Landlord, Tenant, the Premises, the Building or the Park, and
Tenant shall in no event be excused or relieved from any covenant or obligation
to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further
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agrees to timely and faithfully pay, prior to delinquency, any amount, tax,
charge, surcharge, assessment or imposition levied, assessed or imposed upon the
Premises, or Tenant's use and occupancy thereof. Notwithstanding anything to the
contrary contained herein, if permitted by applicable Laws, Landlord shall have
the right at any time and from time to time during the Term of this Lease to
either contract for service from a different company or companies (each such
company shall be referred to herein as an "Alternate Service Provider") other
than the company or companies presently providing electricity service for the
Building or the Park (the "Electric Service Provider") or continue to contract
for service from the Electric Service Provider, at Landlord's sole discretion.
Tenant hereby agrees to cooperate with Landlord, the Electric Service Provider,
and any Alternate Service Provider at all times and, as reasonably necessary,
shall allow Landlord, the Electric Service Provider, and any Alternate Service
Provider reasonable access to the Building's electric lines, feeders, risers,
wiring, and any other machinery within the Premises.
8. Late Charges
Any and all sums or charges set forth in this Section 8 are considered part
of Additional Rent. Tenant acknowledges that late payment (the fifth (5th) day
of each month or any time thereafter) by Tenant to Landlord of Base Rent,
Tenant's Share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
and Utility Expenses, Administrative Expenses or other sums due hereunder, will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of such costs being extremely difficult and impracticable to fix. Such costs
include, without limitation, processing and accounting charges, and late charges
that may be imposed on Landlord by the terms of any note secured by any
encumbrance against the Premises, and late charges and penalties due to the late
payment of real property taxes on the Premises. Therefore, if any installment of
Rent or any other sum due from Tenant is not received by Landlord within four
(4) days after the date when otherwise due, Tenant shall promptly pay to
Landlord an additional sum equal to ten percent (10%) of such delinquent amount.
If Tenant delivers to Landlord a check for which there are not sufficient funds,
Landlord may, at its sole option, require Tenant to replace such check with a
cashier's check for the amount of such check and all other charges payable
hereunder. The parties agree that this late charge and the other charges
referenced above represent a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant. Acceptance of any late
charge or other charges shall not constitute a waiver by Landlord of Tenant's
default with respect to the delinquent amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord for any
other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.
9. Use of Premises
9.1 Compliance with Laws, Recorded Matters, and Rules and Regulations:
The Premises are to be used solely for the purposes and uses specified in the
Basic Lease Information and for no other uses or purposes without Landlord's
prior written consent, which consent shall
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not be unreasonably withheld or delayed so long as the proposed use (i) does not
involve the use of Hazardous Materials other than as expressly permitted under
the provisions of Xxxxxxx 00 xxxxx, (xx) does not require any additional parking
in excess of the parking spaces already licensed to Tenant pursuant to the
provisions of Section 24 of this Lease, and (iii) is compatible and consistent
with the other uses then being made in the Park and in other similar types of
buildings in the vicinity of the Park, as reasonably determined by Landlord. The
use of the Premises by Tenant and its employees, representatives, agents,
invitees, licensees, subtenants, customers or contractors (collectively,
"Tenant's Representatives") shall be subject to, and at all times in compliance
with, (a) any and all applicable laws, ordinances, statutes, orders and
regulations as same exist from time to time (collectively, the "Laws"), (b) any
and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has been or hereafter is recorded in any official or
public records with respect to the Premises, the Building, the Lot and/or the
Park, or any portion thereof (collectively, the "Recorded Matters"), and (c) any
and all rules and regulations set forth in Exhibit C, attached to and made a
part of this Lease, and any other reasonable rules and regulations promulgated
by Landlord now or hereafter enacted relating to parking and the operation of
the Premises, the Building and the Park provided same are enforced on a non-
discriminatory basis, and do not materially and adversely affect Tenant's
operation in and from the Premises (collectively, the "Rules and Regulations").
Tenant agrees to, and does hereby, assume full and complete responsibility to
ensure that the Premises are adequate to fully meet the needs and requirements
of Tenant's intended operations of its business within the Premises, and
Tenant's use of the Premises and that same are in compliance with all applicable
Laws throughout the Term of this Lease. Additionally, Tenant shall be solely
responsible for the payment of all costs, fees and expenses associated with any
modifications, improvements or alterations to the Premises, Building, the Common
Areas and/or the Park occasioned by the enactment of, or changes to, any Laws
arising from Tenant's particular use of the Premises or alterations,
improvements or additions made to the Premises regardless of when such Laws
became effective.
9.2 Prohibition on Use: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord amid all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Areas, including, but not limited to, any offensive odors, noises, fumes or
vibrations.
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Tenant shall not damage or deface or otherwise commit or suffer to be committed
any waste in, upon or about the Premises. Tenant shall not place or store, nor
permit any other person or entity to place or store, any property, equipment,
materials, supplies, personal property or any other items or goods outside of
the Premises for any period of time. Tenant shall not permit any animals,
including, but not limited to, any household pets, to be brought or kept in or
about the Premises. Tenant shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside areas; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such to remain outside the
Building area, except for any non-hazardous or non-harmful materials which may
be stored in refuse dumpsters or in any enclosed trash areas provided. Tenant
shall honor the terms of all Recorded Matters relating to the Premises, the
Building, the Lot and/or the Park. Tenant shall honor the Rules and Regulations.
If Tenant fails to comply with such Laws, Recorded Matters, Rules and
Regulations or the provisions of this Lease, Landlord shall have the right to
collect from Tenant a reasonable sum as a penalty, in addition to all rights and
remedies of Landlord hereunder including, but not limited to, the payment by
Tenant to Landlord of all Enforcement Expenses and Landlord's costs and
expenses, if any, to cum-e any of such failures of Tenant, if Landlord, at its
sole option, elects to undertake such cure.
10. Alterations and Additions; and Surrender of Premises
10.1 Alterations and Additions: Tenant shall be permitted to make, at its
sole cost and expense, non-structural alterations and additions to the Premises
without obtaining Landlord's prior written consent, provided the cost of the
same does not exceed $15,000 (the "Permitted Improvements"). Tenant, however,
shall first notify Landlord of such alterations or additions so that Landlord
may post a Notice of Non-Responsibility on the Premises. Within twenty (20) days
of Landlord's receipt of Tenant's written notice of any item comprising the
Permitted Improvements, Landlord shall notify Tenant, in writing, whether or not
Landlord will require Tenant to remove such item from the Premises upon the
expiration or earlier termination of this Lease. Except for the Permitted
Improvements, Tenant shall not install any signs, fixtures, improvements, nor
make or permit any other alterations or additions to the Premises without the
prior written consent of Landlord; provided, however, in no event may Tenant
make any penetrations to the roof which will affect the structural integrity of
the Building without first obtaining Landlord's prior written consent, which
consent may be given or withheld in Landlord's sole discretion. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least twenty (20) days prior notice to Landlord, from the date Tenant intends
to commence construction, sufficient to enable Landlord to post a Notice of Non-
Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements,
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Landlord may require Tenant to post and obtain a completion and indemnity bond
for up to one hundred fifty percent (150%) of the cost of the work.
10.2 Surrender of Premises: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in good condition and
repair (including, but not limited to, replacing all light bulbs and ballasts
not in good working condition) and in the condition in which the Premises
existed as of the Commencement Date, except for reasonable wear and tear.
Reasonable wear and tear shall not include any damage or deterioration to the
floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all the Permitted Improvements (to the extent Landlord has notified
Tenant in writing, at the time set forth in Section 10.1, that it will require
such removal), tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such fixtures (other than trade
fixtures), additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures (other than trade fixtures ) and the Permitted Improvements),
alterations, additions and other improvements which Landlord shall require
Tenant not to remove from the Premises. Tenant shall repair any damage caused by
the installation or removal of such signs, trade fixtures, furniture,
furnishings, fixtures, additions and improvements which are to be removed from
the Premises by Tenant hereunder. If Landlord fails to so notify Tenant at least
twenty (20) days prior to such termination of this Lease, then Tenant shall
remove all tenant signage, alterations, furniture, furnishings, trade fixtures,
additions and other improvements (other than the Tenant Improvements) installed
in or about the Premises by, or on behalf of Tenant. Tenant shall ensure that
the removal of such items and the repair of the Premises will be completed prior
to such termination of this Lease.
11. Repairs and Maintenance
11.1 Tenant's Repairs and Maintenance Obligations: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises and the adjacent dock and staging areas in good, clean and
safe condition and repair to the reasonable satisfaction of Landlord including
reasonable wear and tear, casualty and condemnation excepted, but not limited
to, repairing any damage caused by Tenant or Tenant's Representatives and
replacing any property so damaged by Tenant or Tenant's Representatives. Without
limiting the generality of the foregoing, Tenant shall be solely responsible for
maintaining, repairing and replacing (a) all mechanical systems, heating,
ventilation and air conditioning systems exclusively serving the Premises,
including, without limitation, Tenant's HVAC units, (b) all plumbing, electrical
wiring
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and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment, including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises); (j)
the roof and the roof membrane, including, without limitation, the structural
portions of the roof.
11.2 Reimbursable Repairs and Maintenance Obligations: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, (ii) the obligations of Landlord set
forth in Section 11.3 below, and (iii) the repairs rendered necessary by the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, exterior walls of the Building, signage (exclusive of tenant signage),
and exterior electrical wiring and equipment, exterior lighting, exterior glass,
exterior doors/entrances and door closers, exterior window casements, exterior
painting of the Building (exclusive of the Premises), and underground utility
and sewer pipes outside the exterior walls of the Building. For purposes of this
Section 11.2, the term "exterior" shall mean outside of and not exclusively
serving the Premises. Unless otherwise notified by Landlord, in writing, that
Landlord has elected to procure and maintain the following described
contract(s), Tenant shall procure and maintain (a) the heating, ventilation and
air conditioning systems preventative maintenance and repair contract(s); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord, and (b) the fire and sprinkler protection services and preventative
maintenance and repair contract(s) (including, without limitation, monitoring
services); such contract(s) to be on a bi-monthly or quarterly basis, as
reasonably determined by Landlord. Landlord reserves the right, but without the
obligation to do so, to procure and maintain (i) the heating, ventilation and
air conditioning systems preventative maintenance and repair contract(s), and/or
(ii) the fire and sprinkler protection services and preventative maintenance and
repair contract(s) (including, without limitation, monitoring services). If
Landlord so elects to procure and maintain any such contract(s), Tenant will
reimburse Landlord for the cost thereof in accordance with the provisions of
Section 6 above. If Tenant procures and maintains any of such contract(s),
Tenant will promptly deliver to Landlord a true and complete copy of each such
contract and any and all renewals or extensions thereof, and each service report
or other summary received by Tenant pursuant to or in connection with such
contract(s).
11.3 Landlord's Repairs and Maintenance Obligations: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or any of Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building
-15-
(exclusive of glass and exterior doors), as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.
11.4 Tenant's Failure to Perform Repairs amid Maintenance Obligations:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord. If Tenant refuses or neglects to
repair and maintain the Premises and the adjacent areas properly as required
herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs and/or maintenance without
Landlord having any liability to Tenant for any loss or damage that may accrue
to Tenant's merchandise, fixtures or other property, or to Tenant's business by
reason thereof, except to the extent any damage is caused by the willful
misconduct or gross negligence of Landlord or its authorized agents and
representatives. In the event Landlord makes such repairs and/or maintenance,
upon completion thereof Tenant shall pay to Landlord, as additional rent, the
Landlord's costs for making such repairs and/or maintenance, plus twenty percent
(20%) for overhead, upon presentation of a xxxx therefor, plus any Enforcement
Expenses. The obligations of Tenant hereunder shall survive the expiration of
the Term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or
hereafter in effect respecting the Premises.
12. Insurance
12.1 Types of Insurance: Tenant shall maintain in full force and effect at
all times during the Term of this Lease, at Tenant's sole cost and expense, for
the protection of Tenant and Landlord, as their interests may appear, policies
of insurance issued by a carrier or carriers reasonably acceptable to Landlord
and its lender(s) which afford the following coverages: (i) worker's
compensation: statutory limits; (ii) employer's liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
on or about the Premises arising out of Tenant's and Tenant's Representatives'
use and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights. Such insurance shall have a combined single limit
of not less than One Million Dollars ($1,000,000) per occurrence with a Two
Million Dollar ($2,000,000) aggregate limit and excess/umbrella insurance in the
amount of Two Million Dollars ($2,000,000). If Tenant has other locations which
it owns or leases, the policy shall include an aggregate limit per location
endorsement. If necessary, as reasonably determined by Landlord, Tenant shall
provide for restoration of the aggregate limit; (iv) comprehensive automobile
liability insurance: a combined single limit of not less than $2,000,000 per
occurrence and insuring Tenant against liability for claims arising out of the
ownership, maintenance, or use of any owned, hired or non-owned automobiles; (v)
"all risk" or "special purpose" property insurance, including without
limitation, sprinkler leakage, boiler and machinery comprehensive form, if
applicable, covering damage to or loss of
-16-
any personal property, trade fixtures, inventory, fixtures and equipment located
in, on or about the Premises, and in addition, coverage for flood, earthquake,
and business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord deems necessary and prudent or as may otherwise be required by any of
Landlord's lenders or joint venture partners.
12.2 Insurance Policies: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder shall not exceed One Thousand
Dollars ($1,000). Tenant shall deliver to Landlord certificates of insurance and
true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant: Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to the parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this
Lease under a blanket insurance policy, provided such blanket policy expressly
affords coverage for the Premises and for Landlord as required by this Lease.
12.3 Additional Insureds and Coverage: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, and any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park shall be named as additional insureds under all of
the policies required in Section l2.1(iii) above. Additionally, such policies
shall provide for severability of interest. All insurance to be maintained by
Tenant shall, except for workers' compensation and employer's liability
insurance, be primary, without right of contribution from insurance maintained
by Landlord. Any umbrella/excess liability policy (which shall be in "following
form") shall provide that if the underlying aggregate is exhausted, the excess
coverage will drop down as primary insurance. The limits of insurance maintained
by Tenant shall not limit Tenant's liability under this Lease. It is the
parties' intention that the insurance to be procured and maintained by Tenant as
required herein shall provide coverage for any and all damage or injury arising
from or related to Tenant's operations of its business and/or Tenant's or
Tenant's Representatives' use of the Premises and/or any of the areas within the
Park, whether such events occur within the Premises (as described in Exhibit A
hereto) or in any other areas of the Park. It is not contemplated or anticipated
by the parties that the aforementioned risks of loss be borne by Landlord's
insurance carriers, rather it is contemplated and anticipated by Landlord and
Tenant that such risks of loss
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be borne by Tenant's insurance carriers pursuant to the insurance policies
procured and maintained by Tenant as required herein.
12.4 Failure of Tenant to Purchase and Maintain Insurance: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the Term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall promptly pay to Landlord as Additional
Rent, the amount so paid by Landlord, upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.
13. Waiver of Subrogation
Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss of, or damage to, either parties'
property to the extent that such loss or damage is insured by an insurance
policy required to be in effect at the time of such loss or damage. Each party
shall obtain any special endorsements, if required by its insurer whereby the
insurer waives its rights of subrogation against the other party. This provision
is intended to waive fully, and for the benefit of the parties hereto, any
rights and/or claims which might give rise to a right of subrogation in favor of
any insurance carrier. The coverage obtained by Tenant pursuant to Section 12 of
this Lease shall include, without limitation, a waiver of subrogation
endorsement attached to the certificate of insurance. The provisions of this
Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. Limitation of Liability and Indemnity
Except to the extent of damage resulting from the sole active gross
negligence or willful misconduct of Landlord or its authorized representatives,
Tenant agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, members, property management company
(if other than Landlord), agents, directors, officers, employees,
representatives, contractors, shareholders, successors and assigns and each of
their respective partners, members, directors, employees, representatives,
agents, contractors, shareholders, successors and assigns (collectively, the
"Indemnitees") harmless and indemnify the Indemnitees from and against all
liabilities, damages, claims, losses, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly, (i)
Tenant's or Tenant's Representatives' use of the Premises, Building and/or the
Park, (ii) time conduct of Tenant's business, (iii) from any activity, work or
thing done, permitted or suffered by Tenant in or about the Premises, (iv) in
any way connected with the Premises or with the improvements or personal
property therein, including, but not
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limited to, any liability for injury to person or property of Tenant, Tenant's
Representatives, or third party persons, and/or (v) Tenant's failure to perform
any covenant or obligation of Tenant under this Lease. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease.
Except to the extent of damage resulting from the sole active gross
negligence or willful misconduct of Landlord or its authorized representatives,
to the fullest extent permitted by law, Tenant agrees that neither Landlord nor
any of Landlord's lender(s), partners, members, employees, representatives,
legal representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or the Park. Tenant shall
not, in any event or circumstance, be permitted to offset or otherwise credit
against any payments of Rent required herein for matters for which Landlord may
be liable hereunder. Landlord and its authorized representatives shall not be
liable for any interference with light or air, or for any latent defect in the
Premises or the Building.
15. Assignment and Subleasing
15.1 Prohibition: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least thirty (30)
days prior to the proposed commencement of the sublease or assignment (the
"Proposed Effective Date") the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee's or sublessee's
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord's receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of the Premises, Landlord shall deliver to
Tenant a copy of Landlord's standard form of sublease or assignment agreement
(as applicable), which instrument shall be utilized for each proposed sublease
or assignment (as applicable), and such instrument shall include a provision
whereby the assignee or sublessee assumes all of Tenant's obligations hereunder
and agrees to be bound by the terms hereof. As Additional Rent hereunder, Tenant
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shall pay to Landlord a fee in the amount of five hundred dollars ($500) plus
Tenant shall reimburse Landlord for actual legal and other expenses incurred by
Landlord in connection with any actual or proposed assignment or subletting. In
the event the sublease or assignment (1) by itself or taken together with prior
sublease(s) or partial assignment(s) covers or totals, as the case may be, more
than twenty-five percent (25%) of the rentable square feet of the Premises or
(2) is for a term which by itself or taken together with prior or other
subleases or partial assignments is greater than fifty percent (50%) of the
period remaining in the Term of this Lease as of the time of the Proposed
Effective Date, then Landlord shall have the right, to be exercised by giving
written notice to Tenant, to recapture the space described in the sublease or
assignment. If such recapture notice is given, it shall serve to terminate this
Lease with respect to the proposed sublease or assignment space, or, if the
proposed sublease or assignment space covers all the Premises, it shall serve to
terminate the entire term of this Lease in either case, as of the Proposed
Effective Date. However, no termination of this Lease with respect to part or
all of the Premises shall become effective without the prior written consent,
where necessary, of the holder of each deed of trust encumbering the Premises or
any part thereof. If this Lease is terminated pursuant to the foregoing with
respect to less than the entire Premises, the Rent shall be adjusted on the
basis of the proportion of square feet retained by Tenant to the square feet
originally demised and this Lease as so amended shall continue thereafter in
full force and effect. Each permitted assignee or sublessee shall assume and be
deemed to assume this Lease and shall be and remain liable jointly and severally
with Tenant for payment of Rent and for the due performance of, and compliance
with all the terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed or complied with, for the term of this Lease. No
assignment or subletting shall affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), and
Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease. Tenant hereby acknowledges and agrees that it
understands that Landlord's accounting department may process and accept Rent
payments without verifying that such payments are being made by Tenant, a
permitted sublessee or a permitted assignee in accordance with the provisions of
this Lease. Although such payments may be processed and accepted by such
accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. For purposes hereof, in the event Tenant
is a corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers) which results in a change of more
than fifty percent (50%) in the direct or indirect ownership of Tenant shall be
deemed to be an assignment within the meaning of this Section 15 and shall be
subject to all the provisions hereof. Any and all options, first rights of
refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord.
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15.2 Excess Sublease Rental or Assignment Consideration: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, seventy-five
percent (75%) of the excess of each such payment of rent or other consideration
in excess of the Rent called for hereunder.
15.3 Waiver: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall .have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.
15.4 Related Entities: Notwithstanding anything to the contrary contained
in this Section 15, so long as Tenant delivers to Landlord (1) at least fifteen
(15) business days prior written notice of its intention to assign or sublease
the Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as (i) any change in the proposed use of the subject
portion of the Premises is in conformance with the uses permitted to be made.
under this Lease and do not involve the use or storage of any Hazardous
Materials (other than nominal amounts of ordinary household cleaners, office
supplies and janitorial supplies which are not regulated by any Environmental
Laws), and (ii) at the time of the proposed assignment or sublease, the net
profits and financial condition of the Related Entity is reasonably adequate and
sufficient in relation to the then remaining obligations of Tenant under this
Lease, then Tenant may assign this Lease or sublease any portion of the Premises
(X) to any Related Entity, or (Y) in connection with any merger, consolidation,
sale of shares of Tenant's corporate stock, or sale of substantially all of the
assets of Tenant, without having to obtain the prior written consent of Landlord
thereto. For purposes of this Lease the term "Related Entity" shall mean and
refer to any corporation or entity which controls, is controlled by or is under
common control with Tenant, as all of such terms are customarily used in the
industry.
16. Ad Valorem Taxes
Prior to delinquency, Tenant shall pay all taxes and assessments levied
upon trade fixtures, alterations, additions, improvements, inventories and
personal property located and/or installed on or in the Premises by, or on
behalf of, Tenant; and if requested by Landlord, Tenant shall promptly deliver
to Landlord copies of receipts for payment of all such taxes and
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assessments. To the extent any such taxes are not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. Subordination
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, and at the election of Landlord or
any bona fide mortgagee or deed of trust beneficiary with a lien on all or any
portion of the Premises or any ground lessor with respect to the land of which
the Premises are a part, the rights of Tenant under this Lease and this Lease
shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, the Lot, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any, act
or omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof, then not more than three months' Rent; or
(d) liable to Tenant for any Security Deposit not actually received by such
successor in interest to the extent any portion or all of such Security Deposit
has not already been forfeited by, or refunded to, Tenant. Landlord shall be
liable to Tenant for all or any portion of the Security Deposit not forfeited
by, or refunded to Tenant, until and unless Landlord transfers such Security
Deposit to the successor in interest. Tenant covenants and agrees to execute
(and acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within five (5) days of a demand or request by Landlord and in the form
requested by Landlord, ground lessor, mortgagee or beneficiary, any additional
documents evidencing the priority or subordination of this Lease with respect to
any such ground leases or underlying leases or the lien of any such mortgage or
deed of trust. Tenant's failure to timely execute and deliver such additional
documents shall, at Landlord's option, constitute a material default hereunder.
It is further agreed that Tenant shall be liable to Landlord, and shall
indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.
Tenant hereby acknowledges that as of the date on which Landlord and Tenant
execute this Lease there is a deed of trust encumbering, and in force against,
the Premises and the Lot in favor of _Guaranty Bank_ (the "Current Lender").
Simultaneously with Tenant's
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execution and delivery of this Lease, Tenant shall sign, notarize and deliver a
subordination, non-disturbance and attornment agreement substantially in the
form of Exhibit I attached hereto, entitled "Subordination, Non-Disturbance and
Attornment Agreement." Within twenty (20) business days after both parties have
executed this Lease, Landlord shall deliver to Tenant a copy of the fully
executed Subordination, Non-Disturbance and Attornment Agreement, or if the
Current Lender records said agreement, an endorsed copy of said agreement. If
Landlord at any time during the Term of the Lease causes the Premises and the
Lot to be encumbered by a new deed of trust or mortgage pursuant to which the
beneficiary of such deed of trust or mortgage is a party or entity other than
the Current Lender, the parties acknowledge and agree that the form of any non-
disturbance and attornment agreement that, may be requested to be executed and
delivered by Tenant in connection therewith will not be the "Non-Disturbance and
Attornment Agreement" attached to the Lease as Exhibit I, but will be in
substantially the same form as Exhibit I hereto. If the foregoing occurs and/or
if any party which acquires, or otherwise succeeds to, Landlord's interest in
the Premises or the Lot (including without limitation, any ground lessee)
encumbers or places a lien against the Premises, the Building or the Lot with a
mortgage, deed of trust or similar security instrument and the beneficiary
thereof requires this Lease to be subordinated to such encumbrance or lien,
Landlord or the successor of Landlord will use commercially reasonable efforts
to provide to Tenant a subordination, non-disturbance and attornment agreement
in form reasonably acceptable to Landlord or such successor of Landlord, the
subject beneficiary and Tenant. If said subordination, non-disturbance and
attornment agreement is required and agreed upon by the aforesaid parties,
Landlord or the successor of Landlord, the subject beneficiary and Tenant shall
cause any such subordination, non-disturbance and attornment agreement to be
executed, acknowledged and recorded concurrently with, or as soon as practicable
after, the execution and recordation of any such lien, deed of trust or
mortgage. In addition to the foregoing, if Landlord enters into a ground lease
with regard to the Building and/or the Lot and such ground lessee requires this
Lease to be subordinated to such ground lease, the ground lessee and ground
lessor will use commercially reasonable efforts to provide to Tenant a
subordination, non-disturbance and attornment agreement in form reasonably
acceptable to such ground lessee, ground lessor, any beneficiary of ground
lessee, and to Tenant.
18. Right of Entry
Tenant grants Landlord or its agents the right to enter the Premises at all
reasonable times for purposes of inspection, exhibition, posting of notices,
repair or alteration. It is further agreed that Landlord shall have the right to
use any and all means Landlord deems necessary to enter the Premises in an
emergency. Landlord shall have the right to place "for rent" or "for lease"
signs on the outside of the Premises, the Building and in the Common Areas
during the last nine (9) months of the Lease Term. Landlord shall also have the
right to place "for sale" signs on the outside of the Building and in the Common
Areas at any time during the Lease Term. Tenant hereby waives any claim from
damages or for any injury or inconvenience to or interference with Tenant's
business, or any other loss occasioned thereby except for any claim for any of
the foregoing arising out of the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives.
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19. Estoppel Certificate
Tenant shall execute (and acknowledge if required by any lender or ground
lessor) and deliver to Landlord, within ten (10) days after Landlord provides
such to Tenant, a statement in writing certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification), the date to which the Rent and other charges are paid in advance,
if any, acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder or specifying such defaults as are
claimed, and such other matters as Landlord may reasonably require. Any such
statement may be conclusively relied upon by Landlord and any prospective
purchaser or encumbrancer of the Premises. Tenant's failure to deliver such
statement within such time shall be conclusive upon the Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's
performance; and (c) not more than one month's Rent has been paid in advance,
except in those instances when Tenant pays Rent quarterly in advance pursuant to
Section 8 hereof, then not more than three month's Rent has been paid in
advance. Failure by Tenant to so deliver such certified estoppel certificate
within three (3) business days after written notice to Tenant that the above
referenced ten (10) day notice period has expired shall be a material default of
the provisions of this Lease. Tenant shall be liable to Landlord, and shall
indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such certified estoppel certificate, together with any and all Enforcement
Expenses.
20. Tenant's Default
The occurrence of any one or more of the following events shall, at
Landlord's option, constitute a material default by Tenant of the provisions of
this Lease:
20.1 The abandonment of the Premises by Tenant or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent or
any other payment required hereunder on the date said payment is due. Tenant
agrees to notice and service of notice as provided for in this Lease and waives
any right to any other or further notice or service of notice which Tenant may
have under any statute or law now or hereafter in effect;
20.3 The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within the
time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such
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failure as may be delivered to Tenant by Landlord. In no event or circumstance
shall Tenant have more than fifteen (15) days to complete any such cure, unless
otherwise expressly agreed to in writing by Landlord (in Landlord's sole
discretion);
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding tip of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or
20.6 The making of any material misrepresentation or omission by Tenant in
any materials delivered by or on behalf of Tenant to Landlord pursuant to this
Lease.
21. Remedies for Tenant's Default
21.1 Landlord's Rights: In the event of Tenant's material default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, broker's commissions, expenses of
cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from such reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, and Utility
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Expenses; second, all costs including maintenance, incurred by Landlord in
reletting; and, third, Base Rent, Operating Expenses, Tax Expenses,
Administrative Expenses, Common Area Utility Costs, Utility Expenses, and all
other sums due under this Lease. Any and all of the Reletting Costs shall be
fully chargeable to Tenant and shall not be prorated or otherwise amortized in
relation to any new lease for the Premises or any portion thereof. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 Damages Recoverable: If Tenant breaches this Lease and abandons the
Premises before the end of the Term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default under this Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any Tenant Improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the Term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease Term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
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21.3 Rights and Remedies Cumulative: The foregoing rights and remedies of
Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under
this Lease, any and all Base Rent waived by Landlord under Section 3 above shall
be immediately due and payable to Landlord and all options granted to Tenant
hereunder shall automatically terminate, unless otherwise expressly agreed to in
writing by Landlord.
21.4 Waiver of a Default: The waiver by Landlord of any default of any
provision of this Lease shall not be deemed or construed a waiver of any other
default by Tenant hereunder or of any subsequent default of this Lease, except
for the default specified in the waiver.
22. Holding Over
If Tenant holds possession of the Premises after the expiration of the Term
of this Lease with Landlord's consent, Tenant shall become a tenant from month-
to-month upon the terms and provisions of this Lease, provided the monthly Base
Rent during such hold over period shall be 150% of the Base Rent due on the last
month of the Lease Term, payable in advance on or before the first day of each
month. Acceptance by Landlord of the monthly Base Rent without the additional
fifty percent (50%) increase of Base Rent shall not be deemed or construed as a
waiver by Landlord of any of its rights to collect the increased amount of the
Base Rent as provided herein at any time. Such month-to-month tenancy shall not
constitute a renewal or extension for any further term. All options, if any,
granted under the terms of this Lease shall be deemed automatically terminated
and be of no force or effect during said month-to-month tenancy. Tenant shall
continue in possession until such tenancy shall be terminated by either Landlord
or Tenant giving written notice of termination to the other party at least
thirty (30) days prior to the effective date of termination. This paragraph
shall not be construed as Landlord's permission for Tenant to hold over.
Acceptance of Base Rent by Landlord following expiration or termination of this
Lease shall not constitute a renewal of this Lease.
23. Landlord's Default
Landlord shall not be deemed in breach or default of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be
performed by Landlord hereunder. For purposes of this provision, a reasonable
time shall not be less than thirty (30) days after receipt by Landlord of
written notice specifying the nature of the obligation Landlord has not
performed; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days, after receipt of written notice, is
reasonably necessary for its performance, then Landlord shall not be in breach
or default of this Lease if performance of such obligation is commenced within
such thirty (30) day period and thereafter diligently pursued to completion.
24. Parking
Tenant shall have a license to use the number of parking spaces specified
in the Basic Lease Information. Landlord shall exercise reasonable efforts to
insure that such spaces are
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available to Tenant for its use, but Landlord shall not be required to enforce
Tenant's right to use the same.
25. Sale of Premises
In the event of any sale of the Premises by Landlord or the cessation
otherwise of Landlord's interest therein, Landlord shall be and is hereby
entirely released from any and all of its obligations to perform or further
perform under this Lease and from all liability hereunder accruing from or after
the date of such sale; and the purchaser, at such sale or any subsequent sale of
the Premises shall be deemed, without any further agreement between the parties
or their successors in interest or between the parties and any such purchaser,
to have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease. For purposes of this Section 25,
the term "Landlord" means only the owner and/or agent of the owner as such
parties exist as of the date on which Tenant executes this Lease. A ground lease
or similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of any of the provisions of this Lease.
26. Waiver
No delay or omission in the exercise of any right or remedy of Landlord on
any default by Tenant shall impair such a right or remedy or be construed as a
waiver. The subsequent acceptance of Rent by Landlord after default by Tenant of
any covenant or term of this Lease shall not be deemed a waiver of such default,
other than a waiver of timely payment for the particular Rent payment involved,
and shall not prevent Landlord from maintaining an unlawful detainer or other
action based on such breach. No payment by Tenant or receipt by Landlord of a
lesser amount than the monthly Rent and other sums due hereunder shall be deemed
to be other than on account of the earliest Rent or other sums due, nor shall
any endorsement or statement on any check or accompanying any check or payment
be deemed an accord and satisfaction; and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Rent or other sum or pursue any other remedy provided in this Lease. No failure,
partial exercise or delay on the part of the Landlord in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.
27. Casualty Damage
27.1 Casualty. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant, including
without limitation, the Tenant Improvements) shall be damaged or destroyed by
fire or other casualty, Tenant shall give immediate written notice thereof to
Landlord. Within sixty (60) days after receipt by Landlord of such notice,
Landlord shall notify Tenant, in writing, whether the necessary repairs can
reasonably be made, as reasonably determined by Landlord: (a) within ninety (90)
days; (b) in more than ninety (90) days but in less than one hundred eighty
(180) days; or (c) in more than one hundred eighty (180) days, from the date of
such notice.
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27.1.1 Minor Insured Damage. If the Premises are damaged only to
such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage and/or Tenant
otherwise contributes any shortfall thereof to Landlord, Landlord shall repair
the Premises to substantially the same condition that existed prior to the
occurrence of such casualty, except Landlord shall not be required to rebuild,
repair, or replace any alterations or improvements installed by or for the
benefit of Tenant (other than the Tenant Improvements) or any part of Tenant's
Property, including without limitation, Tenant's furniture, furnishings, trade
fixtures and/or equipment removable by Tenant. The Rent payable hereunder shall
be abated proportionately from the date of the occurrence of such insured damage
until any and all repairs are substantially completed to the extent of the
portion of the Premises which are rendered unusable and unfit for occupancy.
27.1.2 Insured Damage Requiring More Than 90 Days To Repair. If the
Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date of the occurrence of such damage,
provided Tenant diligently proceeds to vacate the Premises; or (b) electing to
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, provided insurance proceeds are available to
fully repair the damage (except that Landlord shall not be required to rebuild,
repair, or replace any alterations or improvements installed by or for the
benefit of Tenant (other than the Tenant Improvements) or any part of Tenant's
Property, including without limitation, Tenant's furniture, furnishings, trade
fixtures and/or equipment removable by Tenant). The Rent payable hereunder shall
be abated proportionately from the date of the occurrence of such insured damage
until any and all repairs are substantially completed, to the extent of the
portion of the Premises which are rendered unusable and unfit for occupancy. If
Landlord should fail to substantially complete such repairs within one hundred
eighty (180) days after the date on which Landlord is notified by Tenant of the
occurrence of such casualty (such 180-day period to be extended for delays
caused by Tenant or any force majeure events, which events shall include, but
not be limited to, acts or events beyond Landlord's and/or its contractors'
control, acts of God, earthquakes, strikes, lockouts, riots, boycotts,
casualties not caused by Landlord or Tenant, discontinuance of any utility or
other service required for performance of the work, moratoriums, governmental
agencies and weather, and the lack of availability or shortage of materials),
Tenant may within thirty (30) days after expiration of such one hundred eighty
(180) day period (as same may be extended), terminate this Lease by delivering
written notice to Landlord as Tenant's exclusive remedy, whereupon all rights of
Tenant hereunder shall cease and terminate thirty (30) days after Landlord's
receipt of such notice.
27.1.3 Major Insured Damage. If the Premises are damaged to such
extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate
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and the Rent shall be abated from the date of the occurrence of such damage,
provided Tenant diligently proceeds to vacate the Premises. If neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Premises, provided insurance proceeds
are available to fully repair the damage and/or Tenant contributes any shortfall
thereof to Landlord (except that Landlord shall not be required to rebuild,
repair, or replace any alterations or improvements installed by or for the
benefit of Tenant (other than the Tenant Improvements) or any part of Tenant's
property, including without limitation, Tenant's furniture, furnishings, trade
fixtures and/or equipment removable by Tenant). During the time when Landlord is
prosecuting such repairs to completion, the Rent payable hereunder shall be
abated proportionately from the date of the occurrence of such insured damage
until any and all repairs are substantially completed, to the extent of the
portion of the Premises which are rendered unusable and are unfit for occupancy.
Notwithstanding anything to the contrary contained herein, if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within thirty
(30) days after the date of notice to Tenant of any such event, whereupon all
rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.1.4 Damage Near End of Term. Notwithstanding anything to the
contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are substantially damaged or destroyed during the last
year of then applicable term of this Lease, Landlord or Tenant may, at their
option, cancel and terminate this Lease by giving written notice to the other
party of its election to do so within thirty (30) days after receipt by Landlord
of notice from Tenant of the occurrence of such casualty. If either party so
elects to terminate this Lease, all rights of Tenant hereunder shall cease and
terminate ten (10) days after Tenant's receipt or delivery of such notice, as
applicable.
27.2 Tenant's or Tenant's Representative's Fault. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage to the extent
Landlord does not receive rental abatement insurance proceeds, and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 Uninsured Casualty. Tenant shall be responsible for, and shall pay
to Landlord, as Additional Rent and as part of Operating Expenses, Tenant's
share of any deductible amounts under the property insurance carried by Landlord
for the Premises and/or the Building. Tenant shall be solely responsible for the
payment of all deductibles under the insurance carried by Tenant pursuant to the
provisions of Section 12 above. If any portion of the Premises is damaged and is
not fully covered by insurance proceeds received by Landlord (and Tenant elects
not to pay any such difference) or if the holder of any indebtedness secured by
the Premises requires that the insurance proceeds be applied to such
indebtedness, then either party shall have the right to terminate this Lease by
delivering written notice of termination to the other party within thirty (30)
days after the date of notice to Tenant of any such event, whereupon all rights
and
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obligations shall cease and terminate hereunder except for those obligations
expressly intended to survive any such termination of this Lease. Except as
otherwise provided in this Section 27, Tenant hereby waives the provisions of
Sections 1932(2.), 1933(4.), 1941 and 1942 of the California Civil Code.
27.4 Tenant's Waiver. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unusable and unfit for occupancy as specifically
provided above in this Section 27. With respect to any damage or destruction
which Landlord is obligated to repair or may elect to repair, except as
expressly set forth herein, Tenant hereby waives all rights to terminate this
Lease or offset any amounts against Rent pursuant to rights accorded Tenant by
any law currently existing or hereafter enacted, including but not limited to,
all rights pursuant to the provisions of Sections 1932(2.), 1933(4.), 1941 and
1942 of the California Civil Code, as the same may be amended or supplemented
from time to time.
28. Condemnation
If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose ("Condemned"), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation assert
any claim against Landlord or the condemning authority for any compensation
because of such condemnation, and Landlord shall be entitled to receive the
entire amount of any award without deduction for any estate of interest or other
interest of Tenant. If neither party elects to terminate this Lease, Landlord
shall, if necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemnation and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.
29. Environmental Matters/Hazardous Materials
29.1 Hazardous Materials Disclosure Certificate: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord Tenant's initial
Hazardous Materials Disclosure Certificate (the "Initial HazMat Certificate"), a
copy of which is attached hereto as Exhibit G and incorporated herein by this
reference. Tenant covenants, represents and warrants to Landlord that the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous
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Materials Disclosure Certificate ("the "HazMat Certificate") describing Tenant's
present use of Hazardous Materials on the Premises, and any other reasonably
necessary documents as requested by Landlord. The HazMat Certificate required
hereunder shall be in substantially the form as that which is attached hereto as
Exhibit E.
29.2 Definition of Hazardous Materials: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof (c) asbestos
and, asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (1) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.
29.3 Prohibition; Environmental Laws: Tenant shall not be entitled to use
nor store any Hazardous Materials on, in, or about the Premises, the Building,
the Lot and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord's prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant's
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,
statutes, orders, standards, courts' decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
"Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion. Tenant
shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. Landlord shall have the right at all times during the Term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about any portion of the Premises and/or the Common Areas.
The cost of all such inspections, tests and investigations shall be borne solely
by Tenant, if Landlord reasonably determines that Tenant or any of Tenant's
Representatives are directly or indirectly responsible in any manner for any
contamination revealed by such inspections, tests and investigations. The
aforementioned rights
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granted herein to Landlord and its representatives shall not create (a) a duty
on Landlord's part to inspect, test, investigate, monitor or otherwise observe
the Premises or the activities of Tenant and Tenant's Representatives with
respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith.
29.4 Tenant's Environmental Obligations: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord's prior written consent, which consent shall
not be unreasonably withheld so long as such actions would not potentially have
a material adverse long-term or short-term effect on any portion of the
Premises, the Building, the Lot or the Park. Notwithstanding the foregoing,
Tenant shall be entitled to respond immediately to an emergency without first
obtaining Landlord's prior written consent. Tenant, at its sole cost and
expense, shall conduct and perform, or cause to be conducted and performed, all
closures as required by any Environmental Laws or any agencies or other
governmental authorities having jurisdiction thereof. If Tenant fails to so
promptly investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
29.5 Environmental Indemnity: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless from and against any and all claims,
judgments, damages, penalties, fines, liabilities, losses (including, without
limitation, diminution in value of any portion of the Premises, the Building,
the Lot or the Park, damages for the loss of or restriction on the use of
rentable or usable space, and from any adverse impact of Landlord's marketing of
any space within the Building and/or Park), suits, administrative proceedings
and costs (including, but not limited to, attorneys' and consultant fees and
court costs) arising at any time during or after the Term of this Lease in
connection with or related to, directly or indirectly, the use, presence,
transportation,
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storage, disposal, migration, removal, spill, release or discharge of Hazardous
Materials on, in or about any portion of the Premises, the Common Areas, the
Building, the Lot or the Park as a result (directly or indirectly) of the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives. Neither the written consent of Landlord to the presence, use or
storage of Hazardous Materials in, on, under or about any portion of the
Premises, the Building, the Lot and/or the Park, nor the strict compliance by
Tenant with all Environmental Laws shall excuse Tenant and Tenant's officers and
directors from its obligations of indemnification pursuant hereto. Tenant shall
not be relieved of its indemnification obligations under the provisions of this
Section 29.5 due to Landlord's status as either an "owner" or "operator" under
any Environmental Laws.
29.6 Survival: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord's sole discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.
29.7 Tenant's Exculpation: Tenant shall not be liable for nor otherwise
obligated to Landlord under any provision of the Lease with respect to (i) any
claim, remediation obligation, investigation obligation, liability, cause of
action, attorney's fees, consultants' cost, expense or damage resulting from any
Hazardous Material present in, on or about the Premises or any of the Buildings
in the Park to the extent not caused nor otherwise permitted, directly or
indirectly, by Tenant or Tenant's Representatives; or (ii) the removal,
investigation, monitoring or remediation of any Hazardous Material present in,
on or about the Premises, the Building or the Park caused by any source,
including third parties other than Tenant and Tenant's Representatives, as a
result of or in connection with the acts or omissions of persons other than
Tenant or Tenant's Representatives; provided, however, Tenant shall be fully
liable for and otherwise obligated to Landlord under the provisions of this
Lease for all liabilities, costs, damages, penalties, claims, judgments,
expenses (including without limitation, attorneys' and experts' fees and costs)
and losses to the extent (a) Tenant or any of Tenant's Representatives
contributes to the presence of such Hazardous Materials or Tenant and/or any of
Tenant's Representatives exacerbates the conditions caused by such Hazardous
Materials, or (b) Tenant and/or Tenant's Representatives allows or permits
persons over which Tenant or any of Tenant's Representatives has control and/or
for which Tenant or any of Tenant's Representatives are legally responsible for,
to cause
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such Hazardous Materials to be present in, on, under, through or about any
portion of the Premises, the Building or the Park, or does not take all
reasonably appropriate actions to prevent such persons over which Tenant or any
of Tenant's Representatives has control and/or for which Tenant or any of
Tenant's Representatives are legally responsible from causing the presence of
Hazardous Materials in, on, under, through or about any portion of the Premises,
the Building or the Park.
29.8 Disclosure: Pursuant to the provisions of California Health & Safety
Code 25359.7, Landlord hereby discloses to Tenant that as of the Lease Date the
Lot contains certain Hazardous Materials as such Hazardous Materials are more
particularly described and set forth in those certain reports prepared by
Xxxxxxxxxxx, Inc., entitled Environmental Site Assessment, dated May 29, 1998
and Phase II Environmental Site Assessment dated June 8, 1998 (collectively the
"Environmental Report"). Landlord acknowledges and agrees that none of the
environmental conditions or presence of Hazardous Materials on, in or under the
Lot as described in the Environmental Report have been in any way caused by
Tenant or any of Tenant's Representatives. Tenant hereby acknowledges and agrees
that Landlord has delivered to Tenant a copy of the Environmental Report prior
to Tenant entering into this Lease.
30. Financial Statements
Tenant, for the reliance of Landlord, any lender holding or anticipated to
acquire a lien upon the Premises, the Building or the Park or any portion
thereof, or any prospective purchaser of the Building or the Park or any portion
thereof, within ten (10) days after Landlord's request therefor, but not more
often than once annually so long as Tenant is not in default of this Lease,
shall deliver to Landlord the then current audited financial statements of
Tenant (including interim periods following the end of the last fiscal year for
which annual statements are available) which statements shall be prepared or
compiled by a certified public accountant and shall present fairly the financial
condition of Tenant at such dates and the result of its operations and changes
in its financial positions for the periods ended on such dates. If an audited
financial statement has not been prepared, Tenant shall provide Landlord with an
unaudited financial statement and/or such other information, the type and form
of which are acceptable to Landlord in Landlord's reasonable discretion, which
reflects the financial condition of Tenant. If Landlord so requests, Tenant
shall deliver to Landlord an opinion of a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied. Any and all options granted to Tenant hereunder shall be
subject to and conditioned upon Landlord's reasonable approval of Tenant's
financial condition at the time of Tenant's exercise of any such option.
31. General Provisions
31.1 Time. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
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31.2 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 Recordation. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
31.4 Landlord's Personal Liability. The liability of Landlord (which, for
purposes of this Lease, shall include Landlord and the owner of the Building if
other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Premises or the Building, and Tenant agrees
to look solely to the Premises for satisfaction of any liability and shall not
look to other assets of Landlord nor seek any recourse against the assets of
time individual partners, members, directors, officers, shareholders, agents or
employees of Landlord (including without limitation, any property management
company of Landlord); it being intended that Landlord and the individual
partners, members, directors, officers, shareholders, agents and employees of
Landlord (including without limitation, any property management company of
Landlord) shall not be personally liable in any manner whatsoever for any
judgment or deficiency. The liability of Landlord under this Lease is limited to
its actual period of ownership of title to the Building, and Landlord shall be
automatically released from further performance under this Lease upon transfer
of Landlord's interest in the Premises or the Building.
31.5 Separability. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 Choice of Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
31.7 Attorneys' Fees. In the event any dispute between the parties results
in litigation or other proceeding, the prevailing party shall be reimbursed by
the party not prevailing for all reasonable costs and expenses, including,
without limitation, reasonable attorneys' and experts' fees and costs incurred
by the prevailing party in connection with such litigation or other proceeding,
and any appeal thereof. Such costs, expenses and fees shall be included in and
made a part of the judgment recovered by the prevailing party, if any.
31.8 Entire Agreement. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.
31.9 Warranty of Authority. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf
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of a party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. Tenant hereby warrants that this Lease
is valid and binding upon Tenant and enforceable against Tenant in accordance
with its terms.
31.10 Notices. Any and all notices and demands required or permitted to be
given hereunder to Landlord shall be in writing and shall be sent: (a) by United
States mail, certified and postage prepaid; or (b) by personal delivery; or (c)
by overnight courier, addressed to Landlord at 00 Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000. Any and all notices and demands required or permitted
to be given hereunder to Tenant shall be in writing and shall be sent: (1) by
United States mail, certified and postage prepaid; or (ii) by personal delivery
to any employee or agent of Tenant over the age of eighteen (18) years of age;
or (iii) by overnight courier, all of which shall be addressed to Tenant at the
Premises. Notice and/or demand shall be deemed given upon the earlier of actual
receipt or the third day following deposit in the United States mail. Any notice
or requirement of service required by any statute or law now or hereafter in
effect, including, but not limited to, California Code of Civil Procedure
Sections 1161, 1161.1, and 1162 (including any amendments, supplements or
substitutions thereof), is hereby waived by Tenant.
31.11 Joint and Several. If Tenant consists of more than one person
or entity, the obligations of all such persons or entities shall be joint and
several.
31.12 Covenants and Conditions. Each provision to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.
31.13 Waiver of Jury Trial. The parties hereto shall and they
hereby do waive trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matters whatsoever
arising out of or in any way related to this Lease, the relationship of Landlord
and Tenant, Tenant's use or occupancy of the Premises, the Building or the Park,
and/or any claim of injury, loss or damage.
31.14 Counterclaims. In the event Landlord commences any
proceedings for nonpayment of Rent, Additional Rent, or any other sums or
amounts due hereunder, Tenant shall not interpose any counterclaim of whatever
nature or description in any such proceedings, provided, however, nothing
contained herein shall be deemed or construed as a waiver of the Tenant's right
to assert such claims in any separate action brought by Tenant or the right to
offset the amount of any final judgment owed by Landlord to Tenant.
31.15 Underlining. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
31.16 Merger. The voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof by Landlord and Tenant, or
a termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole
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option of Landlord, (i) shall terminate all or any existing subleases or
subtenancies, or (ii) may operate as an assignment to Landlord of any or all of
such subleases or subtenancies. Landlord's election of either or both of the
foregoing options shall be exercised by delivery by Landlord of written notice
thereof to Tenant and all known subtenants under any sublease.
32. Signs
All signs and graphics of every kind visible in or from public view or
corridors or the exterior of the Premises shall be subject to Landlord's prior
written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's sign criteria as
same may exist from time to time or as set forth in Exhibit H hereto and made a
part hereof. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in a
manner as to avoid damage or defacement of the Premises; and Tenant shall repair
any damage or defacement, including without limitation, discoloration caused by
such installation or removal. Landlord shall have the right, at its option, to
deduct from the Security Deposit such sums as are reasonably necessary to remove
such signs, including, but not limited to, the costs and expenses associated
with any repairs necessitated by such removal. Notwithstanding the foregoing, in
no event shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which
shall interfere with the visibility of any sign, awning, canopy, advertising
matter, or decoration of any kind of any other business or occupant of the
Building or the Park be permitted hereunder. Tenant further agrees to maintain
any such sign, awning, canopy, advertising matter, lettering, decoration or
other thing as may be approved in good condition and repair at all times.
33. Mortgagee Protection
Upon any default on the part of Landlord, Tenant will give written notice
by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has provided Tenant with
notice of their interest together with an address for receiving notice, and
shall offer such beneficiary or mortgagee a reasonable opportunity to cure the
default (which, in no event shall be less than ninety (90) days), including time
to obtain possession of the Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure. If such default cannot be cured
within such time period, then such additional time as may be necessary will be
given to such beneficiary or mortgagee to effect such cure so long as such
beneficiary or mortgagee has commenced the cure within the original time period
and thereafter diligently pursues such cure to completion, in which event this
Lease shall not be terminated while such cure is being diligently pursued.
Tenant agrees that each lender to whom this Lease has been assigned by Landlord
is an express third party beneficiary hereof. Tenant shall not make any
prepayment of Rent more than one (1) month in advance without the prior written
consent of each such lender, except if Tenant is required to make quarterly
payments of Rent in advance pursuant to the provisions of Section 8 above.
Tenant waives the collection of any deposit from such lender(s) or any purchaser
at a foreclosure sale of such lender(s)' deed of trust unless the lender(s) or
such purchaser shall have actually received and not refunded the deposit. Tenant
agrees to make all payments under this Lease to the lender with the most senior
encumbrance upon receiving a direction, in writing, to pay said amounts to such
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lender. Tenant shall comply with such written direction to pay without
determining whether an event of default exists under such lender's loan to
Landlord.
34. Quitclaim
Upon any termination of this Lease, Tenant shall, at Landlord's request,
execute, have acknowledged and deliver to Landlord a quitclaim deed of Tenant's
interest in and to the Premises. If Tenant fails to so deliver to Landlord such
a quitclaim deed, Tenant hereby agrees that Landlord shall have the full
authority and right to record such a quitclaim deed signed only by Landlord and
such quitclaim deed shall be deemed conclusive and binding upon Tenant.
35. Modifications for Lender
If, in connection with obtaining financing for the Premises or any portion
thereof, Landlord's lender shall request reasonable modification(s) to this
Lease as a condition to such financing, Tenant shall not unreasonably withhold,
delay or defer its consent thereto, provided such modifications do not
materially adversely affect Tenant's rights hereunder or the use, occupancy or
quiet enjoyment of Tenant hereunder.
36. Warranties of Tenant
Tenant hereby warrants and represents to Landlord, for the express benefit
of Landlord, that Tenant has undertaken a complete and independent evaluation of
the risks inherent in the execution of this Lease and the operation of the
Premises for the use permitted hereby, and that, based upon said independent
evaluation, Tenant has elected to enter into this Lease and hereby assumes all
risks with respect thereto. Tenant hereby further warrants and represents to
Landlord, for the express benefit of Landlord, that in entering into this Lease,
Tenant has not relied upon any statement, fact, promise or representation
(whether express or implied, written or oral) not specifically set forth herein
in writing and that any statement, fact, promise or representation (whether
express or implied, written or oral) made at any time to Tenant, which is not
expressly incorporated herein in writing, is hereby waived by Tenant.
37. Compliance with Americans with Disabilities Act
Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq.,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly comply with all
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requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Areas or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys' fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' violation or alleged
violation of the ADA. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.
38. Brokerage Commission
Landlord and Tenant each represents and warrants for the benefit of the
other that it has had no dealings with any real estate broker, agent or finder
in connection with the Premises and/or the negotiation of this Lease, except for
the Broker(s) (as set forth on Page 1), and that it knows of no other real
estate broker, agent or finder who is or might be entitled to a real estate
brokerage commission or finder's fee in connection with this Lease or otherwise
based upon contacts between the claimant and Tenant. Each party shall indemnify
and hold harmless the other from and against any and all liabilities or expenses
arising out of claims made for a fee or commission by any real estate broker,
agent or finder in connection with the Premises and this Lease other than
Broker(s), if any, resulting from the actions of the indemnifying party. Any
real estate brokerage commission or finder's fee payable to the Broker(s) in
connection with this Lease shall only be payable and applicable to the extent of
the initial Term of the Lease and to the extent of the Premises as same exist as
of the date on which Tenant executes this Lease. Unless expressly agreed to in
writing by Landlord and Broker(s), no real estate brokerage commission or
finder's fee shall be owed to, or otherwise payable to, the Broker(s) for any
renewals or other extensions of the initial Term of this Lease or for any
additional space leased by Tenant other than the Premises as same exists as of
the date on which Tenant executes this Lease. Tenant further represents and
warrants to Landlord that Tenant will not receive (i) any portion of any
brokerage commission or finder's fee payable to the Broker(s) in connection with
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this Lease or (ii) any other form of compensation or incentive from the
Broker(s) with respect to this Lease.
39. Quiet Enjoyment
Landlord covenants with Tenant, upon the paying of Rent and observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, and during the periods that Tenant is not otherwise in default of any of
the terms or provisions of this Lease, and subject to the rights of any of
Landlord's lenders, (i) that Tenant shall and may peaceably and quietly hold,
occupy and enjoy the Premises and the Common Areas during the Term of this
Lease, and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant's occupancy or enjoyment of the Premises and the Common Areas.
40. Landlord's Ability to Perform Tenant's Unperformed Obligations
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.
41. Options to Extend
Grant of Extension Options: Subject to the provisions, limitations and
conditions set forth in Section 41.4 below, Tenant shall have an Option
(individually, an "Option" and collectively, the "Options") to extend the term
of the Lease for two (2) successive five (5) year terms (individually, an
"Extended Term" and collectively, the "Extended Terms").
41.1 Tenant's Option Notice. If Landlord does not receive written notice
from Tenant of its exercise of this Option on a date which is not more than
three hundred sixty-five (365) days nor less than one hundred eighty (180) days
prior to the end of, with respect to the initial Extended Term, the initial term
of the Lease or, with respect to future Extended Terms, the previous Extended
Term (the "Option Notice"), all rights under this Section 41 shall automatically
terminate and shall be of no further force or effect.
41.2 Establishing the Initial Monthly Base Rent for the Extended Terms.
The initial monthly Base Rent for an Extended Term shall be the then current
market rent for similar
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space within the competitive market area of the Premises (the "Fair Rental
Value"). "Fair Rental Value" of the Premises means the fair market rental value
of the Premises as of the commencement of an Extended Term, taking into
consideration all relevant factors, including length of term, the uses permitted
under the Lease, the quality, size, location of the Premises, including the
condition and value of existing tenant improvements, and the monthly base rent
paid by tenants for premises comparable to the Premises, and located within the
competitive market area of the Premises.
If Landlord and Tenant are unable to agree on the Fair Rental Value for an
Extended Term within ten (10) days of receipt by Landlord of the Option Notice
for an Extended Term, Landlord and Tenant each, at its cost and by giving to the
other party, shall appoint a competent and impartial commercial real estate
broker (hereinafter "broker") with at least ten (10) years' full-time commercial
real estate brokerage experience in the geographical area of the Premises to set
the Fair Rental Value for an Extended Term. If either Landlord or Tenant does
not appoint a broker within ten (10) days after the other party has given notice
of the name of its broker, the single broker appointed shall be the sole broker
and shall set the Fair Rental Value for an Extended Term. If two (2) brokers are
appointed by Landlord and Tenant as stated in this paragraph, they shall meet
promptly and attempt to set the Fair Rental Value. If the two (2) brokers are
unable to agree within ten (10) days after the second broker has been appointed,
they shall attempt to select a third broker, meeting the qualifications stated
in this paragraph within ten (10) days after the last day the two (2) brokers
are given to set the Fair Rental Value. If the two (2) brokers are unable to
agree on the third broker, either Landlord or Tenant by giving ten (10) days'
notice to the other party, can apply to the Presiding Judge of the Superior
Court of the county in which the Premises is located for the selection of a
third broker who meets the qualifications stated in this paragraph. Landlord and
Tenant each shall bear one half (1/2) of the cost of appointing the third broker
and of paying the third broker's fee. The third broker, however selected, shall
be a person who has not previously acted in any capacity for either Landlord or
Tenant. Within fifteen (15) days after the selection of the third broker, the
third broker shall select one of the two Fair Rental Values submitted by the
first two brokers as the Fair Rental Value for an Extended Term. If either of
the first two brokers fails to submit their opinion of the Fair Rental Value
within the time frames set forth above, then the single Fair Rental Value
submitted shall automatically be the initial monthly Base Rent for an Extended
Term.
Upon determination of the initial monthly Base Rent for an Extended Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute an amendment to this Lease. Such document shall set forth among other
things, the initial monthly Base Rent for an Extended Term and the actual
commencement date and expiration date of an Extended Term. Tenant shall have no
other right to extend the term of the Lease under this Section 41 unless
Landlord and Tenant otherwise agree in writing.
41.3 Condition of Premises for the Extended Terms. If Tenant timely and
properly exercises these Options, Tenant shall accept the Premises in its then
"As-Is" condition.
41.4 Limitations On, and Conditions To, Extension Options. These Options
are personal to Tenant and may not be assigned, voluntarily or involuntarily,
separate from or as part
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of the Lease. At Landlord's option, all rights of Tenant under these Options
shall terminate and be of no force or effect if any of the following individual
events occur or any combination thereof occur: (1) Tenant has been in material
default of the provisions of this Lease more than two (2) times in any twelve
(12) month period (a "Chronic Default") at any time during the initial term of
the Lease, or at the time of exercise of this Option is then currently in
default of any provision of the Lease beyond applicable cure periods; and/or (2)
other than to a Related Entity in accordance with the provisions of Section 15
hereof, Tenant has assigned its rights and obligations under all or part of the
Lease or Tenant has subleased all or part of the Premises; and/or (3) Tenant's
or the Related Entity's (as applicable) net worth or net income is less than
five hundred percent (500%) of Tenant's net worth or net income as of the Lease
Date at the time the Option Notice is delivered to Landlord; and or (4) Tenant
has failed to properly exercise this Option in a timely manner in strict
accordance with the provisions of this Section 41; and/or (5) Tenant or a
Related Entity, as the case may be, no longer has possession of all or any part
of the Premises under the Lease or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.
41.5 Time is of the Essence. Time is of the essence with respect to each
and every time period described in this Section 41.
42. Letter of Credit
Simultaneously with Tenant's delivery to Landlord of this Lease, the first
month's Base Rent and Security Deposit in accordance with the provisions of
Section 3 above, Tenant shall deliver to Landlord, as collateral for the full
and faithful performance by Tenant of all of its obligations under this Lease
and for all losses and damages Landlord may suffer as a result of any default by
Tenant under this Lease, an irrevocable and unconditional negotiable letter of
credit, in the form and containing the terms required herein, payable in the
City of Irvine, California running in favor of Landlord issued by a solvent bank
under the supervision of the Superintendent of Banks of the State of California,
or a National Banking Association (the "Issuer"), in the amount of Five Hundred
Fifty Thousand Dollars ($550,000.00), (the "Letter of Credit"). The Letter of
Credit shall be (a) at sight, irrevocable and unconditional, (b) maintained in
effect, whether through replacement, renewal or extension, until one (1) month
after the entire Lease Term or until such time as Tenant achieves three (3)
successive quarters of positive earnings before interest, taxes, depreciation
and amortization as reported in Tenant's audited 10Q (the "Letter of Credit
Expiration Date") and Tenant shall deliver a new Letter of Credit or certificate
of renewal or extension to Landlord at least thirty (30) days prior to the
expiration of the Letter of Credit, without any action whatsoever on the part of
Landlord, (c) subject to the Uniform Customs and Practices for Documentary
Credits (1993-Rev) International Chamber of Commerce Publication #500, (d)
acceptable to Landlord in its reasonable discretion, and (e) fully assignable by
Landlord by amendment thereto in accordance with customary letter of credit
practice and shall permit partial draws. In addition to the foregoing, the form
and terms of the Letter of Credit (and the bank issuing the same) shall be
acceptable to Landlord, in Landlord's reasonable discretion, and shall provide,
among other things, in effect that: (1) Landlord, or its then managing agent,
shall have the right to draw down an amount up to the face amount of the Letter
of Credit upon the presentation to the issuing bank of Landlord's (or Landlord's
then
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managing agent's) statement that such (A) amount is due to Landlord under the
terms and conditions of this Lease, it being understood that if Landlord or its
managing agent be a limited liability company, corporation, partnership or other
entity, then such statement shall be signed by a managing member (if a limited
liability company), an officer (if a corporation), a general partner (if a
partnership), or any authorized party (if another entity), and (b) an event of
default has occurred under this Lease and, all applicable notice and cure
periods have elapsed; (2) the Letter of Credit will be honored by the issuing
bank without inquiry as to the accuracy thereof and regardless of whether the
Tenant disputes the content of such statement; and (3) in the event of a
transfer of Landlord's interest in the Premises, Landlord shall transfer the
Letter of Credit, in whole or in part (or cause at Tenant's expense a substitute
letter of credit to be delivered, as applicable), to the transferee and
thereupon the Landlord shall, without any further agreement between the parties,
be released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole or
any portion of said Letter of Credit to a new Landlord. Tenant hereby
acknowledges and agrees that Landlord is entering into this Lease in material
reliance upon the ability of Landlord to draw upon the Letter of Credit upon the
occurrence of any default on the part of Tenant hereunder which continues beyond
any applicable notice and cure periods. Tenant further acknowledges and agrees
that if Landlord cannot draw upon the Letter of Credit within the times and in
the manner as anticipated by Landlord herein, Landlord shall suffer irreparable
damage, harm and injury. From time to time during the Term of this Lease,
including, but not limited to, the event whereby Tenant meets certain financial
condition criterion as set forth in this Section 42, it is anticipated by the
parties that the Letter of Credit will need to be amended, modified and,
possibly reissued. Landlord and Tenant hereby covenant and agree to cooperate
with one another to promptly effectuate any such amendments, modifications and
new issuance's, including without limitation, executing and submitting to the
Issuer any and all documents or instruments as may be reasonably required to
effectuate same. Each and every time during the Term of this Lease there is a
change in the identity or address of the parties, including without limitation,
any change in the identity of Landlord due to the sale, transfer or other
conveyance by Landlord of its rights and interest in, to and under this Lease to
any other party, person or entity, the Letter of Credit shall immediately be
amended or reissued to reflect such changes and the parties hereby agree to
execute and submit to the Issuer such further applications, documents and
instruments as may be necessary to effectuate same. It is the intention of the
parties that each and every successor and assign of both Landlord and Tenant be
bound by and subject to the terms and provisions of this Section 42. Landlord
may, at any time and without notice to Tenant and without first obtaining
Tenant's consent thereto, assign all or any portion of its interest in and to
the Letter of Credit to another party, person or entity, in connection with the
assignment by Landlord of its rights and interests in and to this Lease. If, as
a result of any such application of all or any part of the Letter of Credit, the
amount of the Letter of Credit shall be less than Five Hundred Fifty Thousand
dollars ($550,000.00), Tenant shall within five (5) business days thereafter
provide Landlord with additional letter(s) of credit in an amount equal to the
deficiency (or a replacement letter of credit in the total amount of Five
Hundred Fifty Thousand Dollars ($550,000.00) and each such additional (or
replacement) letter of credit shall comply with all of the provisions of this
Section 42, and if Tenant fails to do so, notwithstanding anything to the
contrary contained in Section 20 hereof, the same shall constitute an incurable
default by Tenant. Tenant further covenants and warrants that it will neither
assign nor encumber the Letter of Credit or any part thereof and that
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neither Landlord nor its successors or assigns will be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance. Without
limiting the generality of the foregoing, if the Letter of Credit expires
earlier than the Letter of Credit Expiration Date, Landlord will accept a
renewal thereof or substitute letter of credit (such renewal or substitute
letter of credit to be in effect not later than thirty (30) days prior to the
expiration thereof), which shall be irrevocable and automatically renewable as
above provided through the Letter of Credit Expiration Date upon the same terms
as the expiring letter of credit or such other terms as may be acceptable to
Landlord in its reasonable discretion. However, if the Letter of Credit is not
timely renewed or a substitute letter of credit is not timely received, or if
Tenant fails to maintain the Letter of Credit in the amount and terms set forth
in this Section 42, Landlord shall have the right to present such Letter of
Credit to the bank in accordance with the terms of this Section 42, and the
entire sum evidenced thereby shall be paid to and held by Landlord as collateral
for performance of all of Tenant's obligations under this Lease and for all
losses and damages Landlord may suffer as a result of any default by Tenant
under this Lease. If there shall occur a default under this Lease as set forth
in Section 20 of this Lease, Landlord may, but without obligation to do so, draw
upon the Letter of Credit, in part or in whole, to cure any default of Tenant
and/or to compensate Landlord for any and all damages of any kind or nature
sustained or which may be sustained by Landlord resulting from Tenant's default.
Tenant agrees not to interfere in any way with payment to Landlord of the
proceeds of the Letter of Credit, either prior to or following a "draw" by
Landlord of any portion of the Letter of Credit, regardless of whether any
dispute exists between Tenant and Landlord as to Landlord's right to draw from
the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional to justify the issuer of the Letter of
Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a "security deposit" within the
meaning of California Civil Code Section 1950.7 (as supplemented, amended,
replaced and substituted from time to time), (ii) subject to the terms of such
Section 1950.7 (as supplemented, amended, replaced and substituted from time to
time), or (iii) intended to serve as a "security deposit" within the meaning of
such Section 1950.7 (as supplemented, amended, replaced and substituted from
time to time). The parties hereto recite that, with respect to the Letter of
Credit, (x) the Letter of Credit is not intended to serve as a security deposit
and such Section 1950.7 (as supplemented, amended, replaced and substituted from
time to time) and any and all other laws, rules and regulations applicable to
security deposits in the commercial context ("Security Deposit Laws") shall have
no applicability or relevancy to the Letter of Credit and (y) Tenant waives any
and all rights, duties and obligations either party may now or, in the future,
will have relating to or arising from the Security Deposit Laws.
IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease
Date referenced on Page 1 of this Lease.
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LANDLORD:
RECP-FULLERTON OPCO, LLC, a Delaware limited liability company
Legacy Partners Commercial, Inc., as manager for LINCOLN
By: /s/ [ILLEGIBLE]
------------------------------------
____________________________________
____________________________________
TENANT:
XXXXXXXXXX.XXX, a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
------------------------------------
Title: President
-----------------------------------
Date: 7-12-99
-----------------------------------
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: President
-----------------------------------
Date: 7-12-99
------------------------------------
If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistant
secretary, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.
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