EXHIBIT 10.28
STANDARD INDUSTRIAL LEASE AGREEMENT
between
VANOWEN INVESTMENT COMPANY, a California general partnership
as Landlord
and
JILL KELLY PRODUCTIONS, INC., a Delaware corporation
as Tenant
Premises Location: 11151 Vanowen Street
North Hollywood, California
STANDARD INDUSTRIAL LEASE AGREEMENT
THIS STANDARD INDUSTRIAL LEASE AGREEMENT (this "Lease") is made and
entered into as of June 1, 2004, (the "Execution Date") by and between VANOWEN
INVESTMENT COMPANY, a California general partnership, hereinafter referred to as
"Landlord", and JILL KELLY PRODUCTIONS, INC., a Delaware corporation,
hereinafter referred to as "Tenant".
BASIC LEASE PROVISIONS
1. Area of Premises: Approximately 55,088 rentable square
feet. (Paragraph 1.1)
2. Building Address: 11151 Vanowen Street
North Hollywood, California
(Paragraph 1.1)
3. Commencement Date: September 1, 2004.(Paragraph 1.3)
4. Term: One hundred twenty (120) months.
(Paragraph 1.2)
5. The amount of the First Month's Rent is as follows: (Paragraph 2.1)
(a) Base Rent (See Paragraph 2.2 $28,094.88
for adjustments thereto)
(b) Taxes $ 2,530.00
(c) Insurance $ 1,130.00
(d) Operating Expenses $ 1,750.00
FIRST MONTH'S RENT TOTAL $33,504.88
6. Security Deposit: $28,094.88 (Paragraph 2.3)
7. Building Area and Tenant's Proportionate Share: The Building contains
approximately 77,788 rentable square feet. The Premises comprise seventy
and eight-tenths percent (70.8%) of the Building (such percentage shall be
Tenant's Proportionate Share). (Paragraph 2.4)
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8. Use of Premises: Warehousing and distribution of video
tapes, cd's and related merchandise and
general office purposes incidental
thereto. (Paragraph 3.3)
9. Parking: Spaces Designated as Tenant Parking on
Exhibit A (Paragraph 3.3)
10. Liability insurance amount: $2,000,000.00. (Paragraph 12.3.1)
11. Tenant's Address for Notices
Until Commencement Date: 8923 Sunset Boulevard
Los Angeles, California 90069
Attn: Ron Stone
(Paragraph 22.21)
12. Landlord's Address for
Payments and Notices: c/o G & K Management Company
5150 Overland Avenue
Culver City, CA 90230
(Paragraph 22.21)
13. Tenant's broker: CB Richard Ellis, Inc.
(Paragraph 22.24)
14. Exhibits: "A" Site Plan of Project
"B" Additional Provisions
"C" Environmental Questionnaire
The paragraphs of the Lease identified above in parentheses are those provisions
where references to particular items from the Basic Lease Provisions appear, and
such items are incorporated into the Lease as part thereof. In the event of any
conflict between any Basic Lease Provision and the Lease, the former shall
control.
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1. PREMISES AND TERM.
1.1 LEASE OF PREMISES. Landlord leases to Tenant, and Tenant hires from
Landlord, certain premises (the "Premises") consisting of the rentable area
shown in Item 1 of the Basic Lease Provisions within a building (the "Building")
described in Item 2 of the Basic Lease Provisions. The location of the Building
and Premises are shown on the site plan attached hereto as "Exhibit A" and
incorporated herein. The "Project" shall refer to the land shown on the site
plan (the "Land") together with such additions and deletions to the Land as
Landlord may from time to time designate, plus all buildings and improvements
located thereon. Landlord and Tenant hereby agree that the rentable square
footage of the Premises set forth in Item 1 of the Basic Lease Provisions shall
be conclusive and binding on the parties.
1.2 TERM. The term of this Lease shall commence on the "Commencement Date"
specified in or established pursuant to Item 3 of the Basic Lease Provisions,
and except as otherwise provided herein, shall continue in full force and effect
through the number of months provided in Item 4 of the Basic Lease Provisions
(the "Term"), provided, however, that if the Commencement Date is a date other
than the first day of a calendar month, the Term shall consist of the remainder
of the calendar month including and following the Commencement Date, plus said
number of full calendar months.
1.3 DELAY IN POSSESSION. If Landlord is unable to deliver possession of
the Premises to Tenant on or before the Commencement Date, this Lease shall not
be void or voidable and Landlord shall not be subject to any liability to Tenant
for any loss or damage directly or indirectly arising out of or resulting from
such delay.
1.4 EARLY POSSESSION OF PREMISES. Tenant shall have the right to enter
into the Premises commencing upon the date of this Lease for purposes of
installing its furniture, fixtures and equipment, and to commence its business
operations from the Premises. Such early possession will not advance the
Commencement Date. All of the provisions of this Lease shall apply to Tenant
during any early possession, other than the obligation to pay Base Rent. If
Tenant takes early possession of the Premises, Landlord shall not be responsible
for any loss, including theft, damage or destruction to any work or material
installed or stored by Tenant at the Premises or for any injury to Tenant or its
agents, employees, contractors, subcontractors, subtenants, assigns or invitees
(collectively "Tenant's Parties"). Landlord shall have the right to post
appropriate notices of non-responsibility and to require Tenant to provide
Landlord with evidence that Tenant has fulfilled its obligation to provide
insurance pursuant to paragraphs 7(d) and 12.3 of this Lease.
1.5 CONDITION OF PREMISES. Tenant acknowledges that no representations as
to the repair or condition of the Premises have been made by Landlord except as
may be expressly set forth in this Lease. Landlord shall use its reasonable best
efforts, subject to the occurrence of any Force Majuere Event, to complete as
soon as reasonably possible following the date of this Lease and prior to the
Commencement Date, the removal of all sprinkler heads hanging from the warehouse
ceiling. In no event shall any delay by Landlord in completing such removal
cause any delay in, or otherwise affect, the Commencement Date under this Lease.
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2. RENT AND SECURITY DEPOSIT.
2.1 RENT. Rent (as defined below) shall accrue hereunder from the
Commencement Date. The amounts per month provided in Item 5(a) of the Basic
Lease Provisions, as adjusted pursuant to Paragraph 2.2 ("Base Rent"), plus the
"Additional Rent" (as defined in Paragraph 2.5 below) together with any other
sums payable by Tenant under this Lease shall collectively constitute the
"Rent". Base Rent for the first, ninth and fifteenth full calendar months of the
Term shall be due and payable upon execution of this Lease together with the
Estimated Taxes, Insurance and Operating Expenses for the first month of the
Term as shown in item 5 of the Basic Lease Provisions. Monthly installments of
Rent, subject to the adjustments described herein, shall be due and payable
without demand on or before the first day of each calendar month succeeding the
Commencement Date during the Term, except that Rent for any fractional calendar
month at the commencement or end of the Term shall be prorated on a daily basis.
2.2 ADJUSTMENT OF BASE RENT. Commencing upon the first day of thirty-first
(31st) full calendar month of the Term, and every thirty (30) months thereafter
during the Term or any extension thereof (each, an "Adjustment Date"), the Base
Rent shall be increased by the same percentage as the percentage increase in the
Consumer Price Index - All Urban Consumers, All Items (1982-84 = 100) Los
Angeles-Riverside-Orange County as published by the U.S. Department of Labor,
Bureau of Labor Statistics ("CPI") by multiplying the Base Rent in effect
immediately preceding the applicable Adjustment Date by a fraction, the
numerator of which shall be the CPI for the month which is three (3) months
prior to the month in which such Adjustment Date occurs, and the denominator of
which shall be the CPI for the month which is three (3) months prior to the
month in which the preceding Adjustment Date occurred, or, in the case of the
first Adjustment Date, three (3) months prior to the month in which the
Commencement Date occurred, provided, however, that in no event shall the Base
Rent be increased on any Adjustment Date at a rate of less than two percent (2%)
per annum, compounded annually, or more than four percent (4%) per annum,
compounded annually. Should the CPI no longer be published by the U.S.
Department of Labor, Landlord shall select, as a substitute for purposes of
making adjustments to Base Rent as provided for in this Section 2.2, the most
nearly comparable index published from time to time thereafter.
2.3 SECURITY DEPOSIT. Tenant shall deposit with Landlord upon execution of
this Lease the sum provided in Item 6 of the Basic Lease Provisions ("Security
Deposit"), which sum shall be held by Landlord in its general fund, without
obligation for interest, as security for the performance of Tenant's covenants
and obligations under this Lease, it being expressly understood and agreed that
the Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon the occurrence of any event of default
by Tenant, Landlord may, without prejudice to any other remedy provided herein
or provided by law, use the Security Deposit to the extent necessary to make
good any arrears of Rent or other payments due Landlord hereunder, all of which
shall be deemed to be Rent, and any other damage, injury, expense or liability
caused by such event of default; and Tenant shall pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount. Any remaining balance of the Security Deposit shall be returned by
Landlord to Tenant within fourteen (14) days after termination of this Lease,
provided all of Tenant's obligations under this Lease have been fulfilled.
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2.4 TENANT'S PROPORTIONATE SHARE. "Tenant's Proportionate Share", as used
in this Lease, shall mean (a) with respect to the cost of an item attributable
to the Building, that portion of the cost of the applicable item that is
obtained by multiplying such cost of the applicable item by a fraction, the
numerator of which is the rentable square footage of the Premises and the
denominator of which is the rentable square footage of the Building, which
fraction is set forth as a percentage figure in Item 7 of the Basic Lease
Provisions, and (b) with respect to the cost of an item attributable to the
common areas or Land in the Project (but not any buildings in the Project), that
portion of such cost of the applicable item that is obtained by multiplying the
fraction described in clause (a) above by the portion of the cost of the
applicable item that is allocated to the Building by Landlord in a reasonably
consistent manner which reflects the size of the Building and other buildings,
the types of uses to which the Building and other buildings are primarily suited
and the relative demands and burdens that such uses place on the Project.
2.5 ADDITIONAL RENT.
2.5.1. DEFINITION. In addition to the Base Rent set forth in
Paragraph 2.1, Tenant agrees to pay Tenant's Proportionate Share of (a) "Taxes"
as defined in and payable by Landlord pursuant to Paragraph 4.1 below, (b)
Landlord's costs of providing insurance on the Project pursuant to Paragraph
12.2 below, and (c) "Operating Expenses" as defined in and incurred pursuant to
Paragraph 5.1 below (collectively, "Additional Rent").
2.5.2. MONTHLY PAYMENTS AND ANNUAL RECONCILIATION. On the first day
of each month of the Term, Tenant shall pay Landlord a sum equal to 1/12 of the
estimated amount of Additional Rent for that particular year based on Landlord's
reasonable estimate thereof, to be delivered to Tenant in or about April of each
year during the Term. The monthly payments are subject to increase or decrease
as determined by Landlord to reflect revised estimates of such costs. Tenant
shall pay within ten (10) days following demand therefor by Landlord any
increases in estimated Additional Rent upon receipt of any initial or revised
estimate retroactive to January of that calendar year. The payments made by
Tenant shall be reconciled annually. If Tenant's total payments of Additional
Rent are less than the actual Additional Rent due under Paragraph 2.5.1, Tenant
shall pay the difference within ten (10) days following demand therefor by
Landlord; if the total payments of Additional Rent made by Tenant are more than
the actual Additional Rent due under Paragraph 2.5.1. Landlord shall retain such
excess and credit it to Tenant's next accruing Additional Rent payments, except
at the end of the Term, when any excess will be refunded. Any failure or delay
by Landlord in delivering any estimate, demand or reconciliation shall not
affect the rights and obligations of the parties hereunder.
2.6 PAYMENT. Tenant shall pay Landlord all amounts due from Tenant to
Landlord hereunder, whether for Rent or otherwise, in lawful money of the United
States, at the place designated for the delivery of notices to Landlord pursuant
to Paragraph 22.21, without any deduction or offset whatsoever.
2.7 LATE CHARGES. Tenant acknowledges that late payment by Tenant of any
sum owed to Landlord under this Lease will cause Landlord to incur costs not
contemplated by this Lease, the exact amounts of which are extremely difficult
and impracticable to fix. Such costs include, without limitation, processing and
accounting charges, time spent addressing the issue with Tenant, and late
charges that may be imposed on Landlord by the terms of any obligation or
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note secured by any encumbrance covering the Premises. Therefore, if any
installment of rent or other payment due from Tenant is not received by Landlord
within five (5) business days from when due, Tenant shall pay to Landlord an
additional sum equal to ten percent (10%) of the overdue rent or other payment
as a late charge. Late charges shall be deemed Additional Rent. The parties
agree that this late charge represents a fair and reasonable estimate of the
administrative and other costs that Landlord will incur by reason of a late
payment by Tenant. Acceptance of any late payment charge shall not constitute a
waiver of Tenant's default with respect to the overdue payment, nor prevent
Landlord from exercising any of the other rights and remedies available to
Landlord under this Lease, at law or in equity, including, but not limited to,
the interest charge imposed pursuant to Paragraph 22.2.
3. USE.
3.1 USE OF PREMISES. Subject to any additional uses or limitations on use
contained in Item 8 of the Basic Lease Provisions, the Premises shall be used
only for the purpose of receiving, storing and shipping products, materials and
merchandise, and for such other lawful purposes as may be directly incidental
thereto, and for no other use or purpose. Tenant acknowledges that Landlord has
not made any representations or warranties with respect to the suitability of
the Premises for Tenant's uses. Tenant and Tenant's Parties shall at all times
comply with all rules and regulations regarding the Premises, the Building
and/or the Project as Landlord may establish from time to time. Landlord shall
not be responsible for nor liable to Tenant for any violation and/or enforcement
of such rules and regulations by any other tenant of the Project.
Tenant shall be responsible for and shall at its own cost and
expense obtain any and all licenses and permits necessary for any such use.
Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the Premises, including, without limitation, the
Americans with Disabilities Act of 1990 triggered subsequent to the Commencement
Date as a result of Tenant's alterations or use of the Premises. Without
limiting the generality of the foregoing, and subject to Paragraph 7 below,
Tenant shall at its own cost and expense install and construct all physical
improvements to or needed to serve the Premises (i) required by any federal,
state or local building code or other law or regulation enacted or becoming
effective after the Commencement Date, including, but not limited to, special
plumbing, railings, ramps and other improvements for use by the handicapped, or
(ii) made necessary by the nature of Tenant's use of the Premises; provided,
however, that Landlord shall have the option to install and construct such
improvements, in which case the cost thereof shall be equitably allocated by
Landlord in its reasonable discretion among the benefitted premises, and Tenant,
upon demand, shall pay to Landlord, as Additional Rent, such portion of the cost
thereof as may be allocated equitably, in Landlord's reasonable discretion, to
the Premises. Tenant shall not place a load upon the floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Tenant shall promptly comply with all governmental
orders and directives for the correction, prevention and abatement of nuisances
in or upon, or connected with, the Premises, all at Tenant's sole expense.
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
noise or vibrations to emanate from the Premises, nor take any other action
which would constitute a nuisance or would disturb or endanger any other tenants
of the Project or unreasonably interfere with their use of their respective
premises.
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Tenant shall not permit the Premises to be used for any purpose or
in any manner (including without limitation any method of storage) which would
render the insurance thereon void or the insurance risk more hazardous or cause
the state insurance authority to disallow any sprinkler credits. If any increase
in the fire and extended coverage insurance premiums paid by Landlord or other
tenants for the Project is caused by Tenant's use and occupancy of the Premises,
or if Tenant vacates the Premises and causes any increase in such premiums, then
Tenant shall pay as additional Rent the amount of such increase to Landlord,
and, upon demand by Landlord, correct at Tenant's expense the cause of such
disallowance, increased cost, penalty or surcharge to the satisfaction of the
particular insurance provider or authority, as applicable.
3.2 HAZARDOUS MATERIALS. Except for the incidental use of certain products
for routine cleaning and maintenance of floors, bathrooms, windows, kitchens,
and administrative offices on the Premises or Project, which products have been
disclosed by Tenant to Landlord in the Environmental Questionnaire (as defined
below), Tenant hereby represents, warrants and covenants that Tenant will not
produce, use, store or generate any "Hazardous Materials" (as defined below) on,
under or about the Premises and/or Project. Tenant has fully and accurately
completed Landlord's Pre-Leasing Environmental Exposure Questionnaire
("Environmental Questionnaire") attached hereto as Exhibit "C" incorporated
herein by reference. If Tenant's Environmental Questionnaire indicates that
Tenant will be utilizing Hazardous Materials, in addition to all other rights
and remedies Landlord may have under this Lease, including, without limitation,
declaring a default hereunder by Tenant for breach of representation, Landlord
may require Tenant to execute an amendment to this Lease relating to such
Hazardous Materials use and Tenant's failure to execute any such amendment
within ten (10) days of Landlord's delivery thereof to Tenant shall constitute a
default hereunder by Tenant. Tenant shall not cause or permit any Hazardous
Material to be brought upon, placed, stored, manufactured, generated, blended,
handled, recycled, disposed of, used or released on, in, under or about the
Premises and/or Project by Tenant or Tenant's Parties. Tenant shall not
excavate, disturb or conduct any testing of any soils on or about the Project
without obtaining Landlord's prior written consent, and any investigation or
remediation on or about the Project shall be conducted only by a consultant
approved in writing by Landlord and pursuant to a work letter approved in
writing by Landlord. Tenant shall keep, operate and maintain the Premises in
full compliance with all federal, state and local environmental, health and/or
safety laws, ordinances, rules, regulations, codes, orders, directives,
guidelines, permits or permit conditions currently existing and as amended,
enacted, issued or adopted in the future which are applicable to the Premises
(collectively, "Environmental Laws").
Landlord shall have the right (but not the obligation) to enter upon
the Premises and cure any non-compliance by Tenant with the terms of this
Paragraph 3.2 or any Environmental Laws or any release, discharge, spill,
improper use, storage, handling or disposal of Hazardous Materials on, under,
from, or about the Premises or Project. regardless of the quantity of any such
release, discharge, spill, improper use, storage, handling or disposal of
Hazardous Materials on or about the Premises or Project, the full cost of which
shall be deemed to be Rent and shall be due and payable by Tenant to Landlord
immediately upon demand. If Landlord elects to enter upon the Premises and cure
any such non-compliance or release, discharge, spill, improper use, storage,
handling or disposal of Hazardous Materials on, under, from, or about the
Premises or Project, Tenant shall not be entitled to participate in Landlord's
activities on the Premises.
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If any information provided to Landlord by Tenant in the
Environmental Questionnaire, or otherwise relating to information concerning
Hazardous Materials is false, incomplete, or misleading in any material respect,
the same shall be deemed an event of default by Tenant under this Lease.
Without limiting in any way Tenant's obligations under any other
provision of this Lease, Tenant and its successors and assigns shall indemnify,
protect, defend and hold Landlord, its affiliates, subsidiary and parent
entities, and their respective partners, officers, directors, shareholders,
employees, agents, lenders, contractors and each of their respective successors
and assigns (collectively, the "Indemnified Parties") harmless from any and all
claims, judgments, damages, penalties, enforcement actions, taxes, fines,
remedial actions, liabilities, losses, costs and expenses (including, without
limitation, actual attorneys' fees, litigation, arbitration and administrative
proceeding costs, expert and consultant fees and laboratory costs) including,
without limitation, damages arising out of the diminution in the value of the
Premises or Project or any portion thereof, damages for the loss of the Premises
or Project, damages arising from any adverse impact on the marketing of space in
the Premises or Project, and sums paid in settlement of claims, which arise
during or after the Term in whole or in part as a result of the presence or
suspected presence of any Hazardous Materials, in, on, under, from or about the
Premises or the Project and/or other adjacent properties due to Tenant's or
Tenant's Parties' activities, or failures to act (including, without limitation,
Tenant's failure to report any spill or release to the appropriate regulatory
agencies), on or about the Premises or Project.
For purposes of this Lease, the term "Hazardous Material" means any
chemical, substance, material, controlled substance, object, waste or any
combination thereof, which is or may be hazardous to human health, safety or to
the environment due to its radioactivity, ignitability, corrosiveness,
reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other
harmful or potentially harmful properties or effects, including, without
limitation, petroleum and petroleum products, benzene, toluene, ethyl benzene,
xylenes. waste oil, asbestos, radon, polychlorinated biphenyls (PCBs),
degreasers, solvents, and any and all of those chemicals, substances, materials,
controlled substances, objects, wastes or combinations thereof which are now or
may become in the future listed, defined or regulated in any manner as
"hazardous substances", "hazardous wastes", "toxic substances", "solid wastes,"
or bearing similar or analogous definitions pursuant to any and all
Environmental Laws.
3.3 USE OF COMMON AREAS. Tenant and Tenant's Parties shall have the
non-exclusive right, in common with the other parties occupying the Project, to
use the grounds, sidewalks, driveways, rail spur and alleys of the Project,
subject to such reasonable rules and regulations as Landlord may from time to
time prescribe. Tenant and Tenant's Parties may park only in the areas shown as
Tenant Parking on Exhibit A attached hereto, during normal business hours and
not in any other parking areas within the Project. Outside storage, including
without limitation, trucks and other vehicles, is prohibited without Landlord's
prior written consent, which may be withheld in Landlord's sole and absolute
discretion. Tenant shall not succeed to any of Landlord's easement rights over
and relating to the Project, nor shall Tenant obtain any rights to common areas,
as designated by Landlord, other than those rights specifically granted to
Tenant in this Lease. Landlord shall have the sole right of control over the
use, maintenance, configuration, repair and improvement of the common area.
Landlord may make such changes to the use or
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configuration of, or improvements comprising, the common area as Landlord may
elect without liability to Tenant (including the right to add or eliminate
buildings and/or land from the Project).
4. TAXES.
4.1. PAYMENT OF REAL PROPERTY TAXES. Landlord agrees to pay, before they
become delinquent, all real property taxes, current installments of any general
or special assessments; license fees, commercial rental taxes, in lieu taxes,
levies, charges, penalties or similar impositions imposed by any authority
having the direct power to tax, and paid or incurred by Landlord, including but
not limited to, the following: (a) any tax on or measured by Rent received by
Landlord from the Project or as against Landlord's business of leasing any of
the Project, (b) any assessment, tax, fee, levy or charge imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, transportation, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants, (c)
assessments due to deed restrictions and/or owner associations; and (d) costs of
determining, filing. contesting and appealing any such tax, assessment or
charge, including accountants', attorneys' and consultants' fees, but excluding
any income, inheritance, estate or corporate franchise taxes of Landlord
(collectively, "Taxes").
Taxes shall also include any assessment, tax, fee, levy or charge in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of Taxes. It is hereby acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of California
in June 1918 and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, transportation, refuse removal and other
governmental services formerly provided without charge to property owners or
occupants. It is the intention of Tenant and Landlord that all such new and
increased assessments, taxes, fees, levies and charges, and all similar
assessments, taxes, fees, levies and charges be included within the definition
of Taxes for purposes of this Lease.
4.2. LIABILITY FOR ALL PERSONAL PROPERTY TAXES. Tenant shall be liable for
all taxes levied or assessed against personal property, furniture, fixtures,
above-standard Tenant Improvements and alterations, additions or improvements
placed by or for Tenant in the Premises. If any such taxes for which Tenant is
liable are levied or assessed against Landlord or Landlord's property and if
Landlord elects to pay the same or if the assessed value of Landlord's property
is increased by inclusion of personal property, furniture, fixtures,
above-standard Tenant Improvements or alterations, additions or improvements
placed by or for Tenant in the Premises, and Landlord elects to pay the Taxes
based on such increase, Tenant shall pay to Landlord upon demand that portion of
the Taxes.
5. LANDLORD'S MAINTENANCE AND REPAIR.
5.1. LANDLORD'S MAINTENANCE. Landlord shall, at its sole cost and expense,
maintain and repair only the exterior portions of the roof, and the foundation
and the structural soundness of the exterior walls of the Building and utility
facilities stubbed to the Premises in good condition, reasonable wear and tear
excepted. The term "walls" as used herein shall not include windows, glass or
plate glass, doors, roll-up dock doors, special store fronts or office entries,
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unless otherwise specified by Landlord in writing. Landlord shall maintain,
repair and repaint the exterior walls, canopies, entries, handrails, gutters and
other exposed parts of the Building as deemed necessary by Landlord to maintain
safety and aesthetic standards. Landlord shall maintain, repair, replace and
operate the common areas of the Project, including but not limited to, mowing
grass and general landscaping, maintenance of parking areas, driveways and
alleys, parking lot sweeping, paving and restriping, exterior lighting,
painting, pest control and window washing. The cost of all of the foregoing,
including the cost of all supplies, uniforms, equipment, tools and materials,
together with utility costs not otherwise charged directly to Tenant or other
tenants, all wages and benefits of employees and independent contractors engaged
in the operation, maintenance and repair of the Project, all expenses for
security and safety services and equipment, any license, permit and inspection
fees required in connection with the operation, maintenance, repair and
replacement of the Project or any portions thereof (but not related to
improvements to tenant space), management, consulting, legal and accounting fees
of independent contractors engaged by Landlord (but not related to the
negotiation or enforcement of leases), other costs and expenses actually
incurred by Landlord in connection with the ownership, operation, leasing and
management of the Project, and other usual costs and expenses which are
typically paid by other landlords to provide on-site operation of industrial;
warehouse and service center projects, are collectively referred to herein as
"Operating Expenses". To the extent that an Operating Expense consists of a
maintenance, repair or replacement (including renovation and refurbishment)
expense that is not properly fully deductible as an expense in the year incurred
in accordance with generally accepted accounting principles, such expense shall
be amortized over its useful life. Any amounts which are amortized, together
with Landlord's actual cost of funds, shall result in equal payments being
included in Operating Expenses for the year of expenditure and succeeding years
during the amortization period.
5.2. PROCEDURE AND LIABILITY. Tenant shall immediately give Landlord
written notice of any defect or the need for repair of the items for which
Landlord is responsible, after which Landlord shall have reasonable opportunity
to repair the same or cure such defect. Landlord's liability with respect to any
defects, repairs or maintenance for which Landlord is responsible under any of
the provisions of this Lease shall be limited to the cost of such repairs or
maintenance or the curing of such defect. If Tenant or Tenant's Parties caused
any damage necessitating such repair, then Tenant shall pay the cost thereof,
upon demand. Tenant hereby waives the benefit of California Civil Code Sections
1941 and 1942, and any other statute providing a right to make repairs and
deduct the cost thereof from the Rent. Tenant waives any right to terminate this
Lease or offset or abate Rent by reason of any failure of Landlord to maintain
or make repairs to the Premises.
6. TENANT'S MAINTENANCE AND REPAIR.
6.1. TENANT'S MAINTENANCE. Tenant shall, at its own cost and expense, keep
and maintain all parts of the Premises (except those listed as Landlord's
responsibility in Paragraph 5.1 above) in good and sanitary condition, promptly
making all necessary repairs and replacements, including but not limited to,
windows, glass and plate glass, doors, roll-up dock doors, any special store
front or office entry, interior walls and finish work, floors and floor
covering, heating, ventilating and air conditioning systems, fire and life
safety systems, dock boards, truck doors, dock bumpers, plumbing work and
fixtures, termite and pest extermination, and regular removal of trash and
debris. If Tenant shall fail to make any repair for which Tenant
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is responsible within ten (10) days following notice from Landlord requiring the
same. Landlord and its agents and contractors shall have the right, but not the
obligation, to enter upon the Premises and perform such repairs. the full cost
of which shall be deemed to be Rent and shall be due and payable by Tenant to
Landlord immediately upon demand. In the case of emergency, Landlord, its agents
and contractors may enter upon the Premises to perform such repairs without the
necessity of prior notice to Tenant. Tenant shall maintain its trash receptacles
within the Premises. Repairs shall he made in accordance with all applicable
laws, including without limitation, the Americans with Disabilities Act of 1990.
The cost of maintenance and repair of any common party wall (any wall, divider,
partition or any other structure separating the Premises from any adjacent
premises occupied by other tenants) shall be shared equally by Tenant and the
tenant(s) occupying such adjacent premises. Tenant shall not damage any party
wall or disturb the integrity and support provided by any party wall and shall,
at its sole cost and expense. promptly repair any damage or injury to any party
wall caused by Tenant or Tenant's Parties.
6.2. MAINTENANCE/SERVICE CONTRACTS. Tenant shall, at its own cost and
expense, enter into a regularly scheduled preventive maintenance/service
contract with a maintenance contractor for serving all hot water, fire and life
safety and heating, ventilating and air conditioning systems and equipment
within the Premises. The maintenance contractor and the contract must be
approved in writing by Landlord in advance. The service contract shall include
all services recommended by the equipment manufacturer within the
operation/maintenance manual and shall become effective (and a copy thereof
delivered to Landlord) within thirty (30) days following the date Tenant takes
possession of the Premises.
7. ALTERATIONS.
Tenant shall make no alterations, additions or improvements to the
Premises (including, without limitation, roof and wall penetrations) or any part
thereof without obtaining the prior written consent of Landlord in each
instance. Such consent may be granted or withheld in Landlord's sole and
absolute discretion. Landlord may impose as a condition to such consent such
requirements as Landlord may deem necessary, in its sole and absolute
discretion, including, without limitation that: (a) Landlord be furnished with
working drawings before work commences; (b) performance and labor and material
payment bonds in form and amount and issued by a company satisfactory to
Landlord be furnished; (c) Landlord approve the contractor by whom the work is
to be performed; (d) adequate course of construction and general liability
insurance be in place and Landlord be named as an additional insured under the
contractor's liability and property insurance policies; (e) Landlord's
instructions relating the manner in which the work is to be performed and the
times during which it is to be accomplished shall be complied with. Tenant shall
pay to Landlord all costs incurred by Landlord for any architectural,
engineering, supervisory or legal services in connection with any alterations,
including, without limitation, Landlord's review of the plans, specifications
and budget for purposes of determining whether to consent. All such alterations,
additions or improvements must be performed in a good and workmanlike manner in
compliance with all laws, rules and regulations, including, without limitation,
the Americans with Disabilities Act of 1990, and diligently prosecuted to
completion. Tenant shall deliver to Landlord upon commencement of such work, a
copy of the building permit with respect thereto, and a certificate of
occupancy, if applicable, immediately upon completion of the work. All such work
shall be performed so as not to obstruct the access to the
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premises of any other tenant in the Building or Project. Should Tenant make any
alterations without Landlord's prior written consent, or without satisfaction of
any of the conditions established by Landlord in conjunction with granting such
consent, Landlord shall have the right, in addition to and without limitation of
any right or remedy Landlord may have under this Lease, at law or in equity, to
require Tenant to remove all or some of the alterations, additions or
improvements at Tenant's sole cost and restore the Premises to the same
condition as existed prior to undertaking the alterations, or if Tenant shall
fail to do so, Landlord may cause such removal or restoration to be performed at
Tenant's expense and the cost thereof shall be Additional Rent to be paid by
Tenant immediately upon demand. Landlord shall have the right to require Tenant,
at Tenant's expense, to remove any and all alterations, additions or
improvements and to restore the Premises to its prior condition upon the
expiration or sooner termination of this Lease. Tenant shall notify Landlord in
writing at least ten (10) days prior to the commencement of any such work in or
about the Premises, and Landlord shall have the right at any time and from time
to time to post and maintain notices of nonresponsibility in or about the
Premises.
8. LIENS.
Tenant shall have no authority, express or implied, to create or place any
lien or encumbrance of any kind or nature whatsoever upon, or in any manner to
bind, the interest of Landlord or Tenant in the Premises or to charge the Rent
payable hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any construction
or repairs. Tenant shall pay or cause to be paid all sums legally due and
payable by it on account of any labor performed or materials furnished in
connection with any work performed by Tenant on the Premises. Tenant shall
discharge of record by payment, bonding or otherwise any lien filed against the
Premises on account of any labor performed or materials furnished in connection
with any work performed by Tenant on the Premises immediately upon the filing of
any claim of lien. Tenant shall indemnify, defend and hold Landlord harmless
from any and all liability, loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of Landlord in the Project or this Lease arising from the act
or agreement of Tenant. Tenant agrees to give Landlord immediate written notice
of the placing of any lien or encumbrance against the Premises. Landlord shall
have the right, at Landlord's option, of paying and discharging the same or any
portion thereof without inquiry as to the validity thereof, and any amounts so
paid, including expenses and applicable late charge, shall be Additional Rent
immediately due and payable by Tenant upon rendition of a bill therefor.
9. SIGNS.
9.1. LANDLORD'S SIGNAGE PROGRAM. Tenant shall have the right to install a
sign on the building identifying Tenant by its name and/or logo, provided that
such sign shall be subject to Landlord's approval in accordance with Section
9.2, below. Upon vacation of the Premises or the removal or alteration of its
sign for any reason, Tenant shall be responsible, at its sole cost, for the
removal of its sign and the repair, painting and/or replacement of the structure
to which signs are attached to its original condition. If Tenant fails to
perform such work, Landlord may cause the same to be performed, and the cost
thereof shall be Additional Rent immediately due and payable upon rendition of a
bill therefor.
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9.2. CRITERIA FOR CHANGES. Tenant shall not, without Landlord's prior
written consent, which may be withheld in Landlord's sole and absolute
discretion: (a) make any changes to or paint the exterior of the Building; (b)
install any exterior lights, decorations or paintings; or (c) erect or install
any signs, window or door lettering, placards, decorations or advertising media
of any type (except as permitted under Section 9.1, above) which can be viewed
from the exterior of the Premises. All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to the prior
written approval of Landlord as to location, construction, method of attachment,
size, shape, height, design, lighting, color and general appearance. All signs
shall be in compliance with all applicable laws and regulations and all
covenants, conditions and restrictions relating to the Premises. All signs shall
be kept in good condition and in proper operating order at all times.
10. UTILITIES.
Tenant shall pay for all separately metered water, gas, heat, light,
telephone, sewer and sprinkler charges and for other utilities and services used
on or from the Premises, together with any taxes, penalties, surcharges or the
like pertaining thereto and any maintenance charges for utilities, and shall
furnish all electric light bulbs and tubes. If any utilities serving the
Premises are not separately metered, Tenant shall pay to Landlord its
proportionate share of the cost thereof as reasonably determined by Landlord.
Landlord shall in no event be liable for any damages directly or indirectly
resulting from or arising out of the interruption or failure of utility services
on the Premises. Tenant shall have no right to terminate this Lease nor shall
Tenant be entitled to any abatement in Rent as a result of any such interruption
or failure of utility services. No such interruption or failure of utility
services shall be deemed to constitute a constructive eviction of Tenant.
11. FIRE AND CASUALTY DAMAGE.
11.1. NOTICE OF DESTRUCTION. If the Premises are damaged or destroyed by
fire, earthquake or other casualty, Tenant shall give immediate written notice
thereof to Landlord.
11.2. LOSS COVERED BY INSURANCE. If at any time prior to the expiration or
termination of this Lease, the Premises or the Project are wholly or partially
damaged or destroyed, the loss to Landlord from which is fully covered by
proceeds of insurance maintained by Landlord or for Landlord's benefit, which
damage renders the Premises totally or partially inaccessible or unusable by
Tenant in the ordinary conduct of Tenant's business, then:
(a) If all repairs to the Premises or Project can, in Landlord's
judgment, be completed within two hundred (200) days following the date of
notice to Landlord of such damage or destruction without the payment of overtime
or other premiums, and if such damage or destruction is not the result of the
negligence or willful misconduct or omission of Tenant or Tenant's Parties (as
contemplated in Paragraph 11.4), Landlord shall, at Landlord's expense (provided
Landlord can obtain all necessary governmental permits and approvals therefor at
reasonable cost and on reasonable conditions), repair the same, and this Lease
shall remain in full force and effect and a proportionate reduction of Rent
shall be allowed Tenant for such portion of the Premises as shall be rendered
inaccessible or unusable to Tenant during the period of time that such portion
is unusable or inaccessible. There shall he no proportionate reduction of
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Rent by reason of any portion of the Premises being unusable or inaccessible for
a period equal to five (5) consecutive business days or less.
(b) If such damage or destruction is not the result of the
negligence or willful misconduct or omission of Tenant or Tenant's Parties, and
if all such repairs cannot, in Landlord's judgment, be completed within two
hundred (200) days following the date of notice to Landlord of such damage or
destruction without the payment of overtime or other premiums, either party may,
at its option, by written notice to the other, given within twenty (20) days
following the date of Landlord's notice to Tenant stating that all such repairs
cannot, in Landlord's judgment, be completed within two hundred (200) days,
terminate this Lease as of the date of the occurrence of such damage or
destruction; provided, however, if neither party elects to terminate this Lease
within said twenty (20) day period, then this Lease shall remain in full force
and effect.
Tenant shall pay to Landlord, within ten (10) days following
Landlord's demand therefor, the amount of Tenant's Proportionate Share of the
deductible under Landlord's insurance policy, which deductible shall not exceed
commercially reasonable levels. If the damage involves portions of the Project
other than the Premises, Tenant shall pay only a portion of the deductible based
on the ratio of the cost of repairing the damage in the Premises to the total
cost of repairing all of the damage in the Project.
11.3. LOSS NOT COVERED BY INSURANCE. If, at any time prior to the
expiration or termination of this Lease, the Premises or the Project are totally
or partially damaged or destroyed from a risk, the loss to Landlord from which
is not fully covered by insurance maintained by Landlord or for Landlord's
benefit, which damage renders the Premises inaccessible or unusable to Tenant in
the ordinary course of its business, and if such damage or destruction is not
the result of the negligence or willful misconduct or omission of Tenant or
Tenant's Parties, Landlord may, at its option, upon written notice to Tenant
within thirty (30) days after notice to Landlord of the occurrence of such
damage or destruction, elect to repair or restore such damage or destruction, or
Landlord may elect to terminate this Lease. If Landlord elects to repair or
restore such damage or destruction, this Lease shall continue in full force and
effect, but the Rent shall be proportionately reduced as provided in Paragraph
11.2(a). If Landlord elects to terminate this Lease, such termination shall he
effective as of the date of the occurrence of such damage or destruction.
11.4. LOSS CAUSED BY TENANT OR TENANT'S PARTIES. Notwithstanding the
foregoing, if the Premises or the Project are wholly or partially damaged or
destroyed as a result of the negligence or willful misconduct or omission of
Tenant or Tenant's Parties. Tenant shall forthwith diligently undertake to
repair or restore all such damage or destruction at Tenant's sole cost and
expense, or Landlord may at its option undertake such repair or restoration at
Tenant's sole cost and expense; provided, however, that Tenant shall he relieved
of its repair and payment obligations pursuant to this Paragraph 11.4 to the
extent that insurance proceeds are collected by Landlord to repair such damage,
although Tenant shall in all such events pay to Landlord the full amount of the
deductible under Landlord's insurance policy and any amounts not insured. In
such event, this Lease shall continue in full force and effect without any
abatement or reduction in Rent or other payments owed by Tenant.
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11.5. DESTRUCTION NEAR END OF TERM. Notwithstanding the foregoing, if the
Premises or the Project are wholly or partially damaged or destroyed within the
final six (6) months of the Term, Landlord may, at its option, elect to
terminate this Lease upon written notice given to Tenant within thirty (30) days
following such damage or destruction.
11.6. DESTRUCTION OF IMPROVEMENTS AND PERSONAL PROPERTY. In the event of
any damage to or destruction of the Premises or the Project, under no
circumstances shall Landlord be required to repair, replace or compensate
Tenant, Tenant's Parties or any other person for the personal property, trade
fixtures, machinery, equipment or furniture of Tenant or any of Tenant's
Parties, or any alterations, additions or improvements installed in the Premises
by Tenant, and Tenant shall promptly repair and replace all such personal
property and improvements at Tenant's sole cost and expense.
11.7. EXCLUSIVE REMEDY. The provisions of this Paragraph 11 shall
constitute Tenant's sole and exclusive remedy in the event of damage or
destruction to the Premises or the Project, and Tenant waives and releases all
statutory rights and remedies in favor of Tenant in the event of damage or
destruction, including without limitation those available under California Civil
Code Sections 1932 and 1933(4). No damages, compensation or claim shall be
payable by Landlord for any inconvenience, any interruption or cessation of
Tenant's business, or any annoyance, arising from any damage or destruction of
all or any portion of the Premises or the Project.
11.8. LENDER DISCRETION. Notwithstanding anything herein to the contrary,
in the event the holder of any indebtedness secured by a mortgage or deed of
trust covering the Premises requires that the insurance proceeds from insurance
held by Landlord be applied to such indebtedness, then Landlord shall have the
right to deliver written notice to Tenant terminating this Lease.
12. INDEMNITY AND INSURANCE.
12.1. INDEMNITY. Tenant hereby releases all Indemnified Parties, and shall
indemnify, protect, defend and hold the Indemnified Parties harmless from any
and all claims, judgments, damages, liabilities, losses, sums paid in settlement
of claims, costs and expenses (including, but not limited to, reasonable
attorneys' fees-and litigation costs), obligations, liens and causes of action,
whether threatened or actual, direct or indirect (collectively, "Claims"), which
arise in any way, directly or indirectly, resulting from or in connection with,
in whole or in part, Tenant's or Tenant's Parties' activities in, on or about
the Premises or Project, including, without limitation, Tenant's breach or
default of any obligation of Tenant to be performed under the terms of this
Lease, the conduct of Tenant's business, the nonobservance or nonperformance of
any law, ordinance or regulation or the negligence or misconduct of Tenant or
Tenant's Parties, the buildings and improvements located on the Project becoming
out of repair, the leakage of gas, oil, water, steam or electricity emanating
from their usual conduits, or due to any cause whatsoever; except injury to
persons or damage to property the sole cause of which is the active, gross
negligence or willful misconduct of Landlord. Landlord shall not be liable to
Tenant for any damages arising from any act, omission or neglect of any other
tenant in the Project.
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12.2. LANDLORD'S INSURANCE. Landlord shall maintain standard fire and
extended coverage "all risk" insurance (except deductibles) covering the
Building in an amount equal to the "replacement cost" thereof, and such other
types and amounts of insurance as it deems necessary or desirable in its sole
discretion, which may (but need not) include, without limitation, liability,
property damage, earthquake and/or loss of rental income coverage. Such
insurance shall be for the sole benefit of Landlord and under its sole control.
The premiums for any such insurance shall be charged to Tenant as Additional
Rent.
12.3. TENANT'S INSURANCE OBLIGATIONS. Tenant agrees that at all times from
and after the date Tenant is given access to the Premises for any reason, Tenant
shall carry and maintain, at its sole cost and expense, the following types,
amounts and forms of insurance:
12.3.1. GENERAL LIABILITY INSURANCE. A broad form comprehensive
general liability or commercial general liability policy covering property
damage, personal injury, advertising injury and bodily injury, and including
blanket contractual liability coverage for obligations under this Lease,
covering the Project in an amount of not less than the amount per occurrence
specified in Item 10 of the Basic Lease Provisions. Such policy shall be in the
occurrence form with a per location general aggregate. Each policy shall name
Landlord and any management agent from time to time designated by Landlord and
any lender of Landlord as additional insureds, and shall provide that any
coverage to additional insureds shall be primary; when any policy issued to
Landlord provides duplicate coverage or is similar in coverage, Landlord's
policy will be excess over Tenant's policies. No deductibles in excess of Five
Thousand Dollars ($5,000) per occurrence shall be permitted. Tenant shall pay
any deductibles. The amounts of such insurance required hereunder shall be
subject to adjustment from time to time as required by Landlord based upon
Landlord's determination as to (a) the amounts of such insurance generally
required at such time for comparable tenants, premises and buildings in the
general geographical location of the Building: (b) as requested by any lender
with an interest in the Building or Project; (c) Tenant's activities; (d)
increases in recovered liability claims; (e) increased claims consciousness by
the public; or (f) any combination of the foregoing.
12.3.2. PROPERTY INSURANCE. A policy or policies, including the
Boiler and Machinery Perils and the Special Causes of Loss form of coverage
("All Risks"), including vandalism and malicious mischief, theft, sprinkler
leakage (including earthquake sprinkler leakage) and water damage coverage in an
amount equal to the full replacement value, new without deduction for
depreciation, on an agreed amount basis (no co-insurance requirement), of all
trade fixtures, furniture and equipment in the Premises, and all alterations,
additions and improvements to the Premises installed by or for Tenant or
provided to Tenant. Such insurance shall also include business interruption and
extra expense coverage for Tenant's operations and debris removal coverage for
removal of property of Tenant and Tenant's Parties which may be damaged within
the Premises. Such coverage shall name the Landlord and any management agent
from time to time designated by Landlord and any lender of Landlord as
additional insureds and/or loss payees as its interest may appear. No
deductibles in excess of Five Thousand Dollars ($5,000) shall be permitted.
Tenant shall pay any deductibles.
12.3.3. WORKERS' COMPENSATION INSURANCE. Workers' compensation
insurance, including employers' liability coverage, shall comply with applicable
California law. Such insurance shall include a waiver of subrogation in favor of
Landlord, if available.
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12.4. EVIDENCE OF COVERAGE. All of the policies required to be obtained by
Tenant pursuant to Paragraph 12.3 shall be with companies and in form
satisfactory to Landlord. Each insurance company providing coverage shall have a
current Best's Rating of "A-XII" or better. Upon notice from Landlord, Tenant
shall add Landlord and any management agent from time to time designated by
Landlord and any lender of Landlord as an additional insured or loss payee, as
applicable. Tenant shall provide Landlord with certificates and copies of
endorsements (and upon request, policies) of insurance acceptable to Landlord
issued by each of the insurance companies issuing any of the policies required
pursuant to the provisions of Paragraph 12.3, and said certificates and
endorsements shall provide that the insurance issued thereunder shall not be
altered, canceled or non-renewed until after thirty (30) days' written notice to
Landlord. "Claims made" policies shall not be permitted. Each policy shall
permit the waiver in Section 12.5 below. Evidence of insurance coverage shall be
furnished to Landlord prior to Tenant's possession of the Premises and
thereafter not fewer than fifteen (15) days prior to the expiration date of any
required policy. Tenant may satisfy its insurance obligations hereunder by
carrying such insurance under a so-called blanket policy or policies of
insurance which are acceptable to Landlord. If Tenant fails to obtain any
insurance required hereby or provide evidence thereof to Landlord, Landlord may,
but shall not be obligated to, and Tenant hereby appoints Landlord as its agent
to, procure such insurance and bill the cost of the insurance plus a twenty
percent (20%) handling charge to Tenant. Tenant shall pay such costs to Landlord
as Additional Rent with the next monthly payment of Rent.
12.5. WAIVERS OF SUBROGATION. Landlord waives any and all rights of
recovery against Tenant for or arising out of damage to, or destruction of the
Building or the Premises to the extent that Landlord's insurance policies then
in force insure against such damage or destruction and permit such waiver and
only to the extent of insurance proceeds actually received by Landlord for such
damage or destruction. Tenant waives any and all rights of recovery against
Landlord for or arising out of damage to or destruction of any property of
Tenant to the extent that Tenant's insurance policies then in force or the
policies required by this Lease, whichever is broader, insure against such
damage or destruction.
13. LANDLORD'S RIGHT OF ACCESS.
Tenant shall permit Landlord and its employees and agents, at all
reasonable times and at any time in case of emergency, in such manner as to
cause as little disturbance to Tenant as reasonably practicable (a) to enter
into and upon the Premises to inspect them, to protect the Landlord's interest
therein, or to post notices of non-responsibility, (b) to take all necessary
materials and equipment into the Premises, and perform necessary work therein,
and (c) to perform periodic environmental audits, inspections, investigations,
testing and sampling of the Premises and/or the Project, and to review and copy
any documents, materials, data, inventories, financial data, notices or
correspondence to or from private parties or governmental authorities in
connection therewith. No such work shall cause or permit any rebate of Rent to
Tenant for any loss of occupancy or quiet enjoyment of the Premises, or damage,
injury or inconvenience thereby occasioned, or constitute constructive eviction.
Landlord may at any time place on or about the Building any ordinary "for sale"
and "for lease" signs. Tenant shall also permit Landlord and its employees and
agents, upon request, to enter the Premises or any part thereof, at reasonable
times during normal business hours, to show the Premises to any fee owners,
lessors of superior leases, holders of encumbrances on the interest of Landlord
under the Lease, or
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prospective purchasers, mortgagees or lessees of the Project or Building as an
entirety. During the period of six (6) months prior to the expiration date of
this Lease, Landlord may exhibit the Premises to prospective tenants.
14. ASSIGNMENT AND SUBLETTING.
14.1. LANDLORD'S CONSENT. Tenant shall not assign all or any portion of
its interest in this Lease, whether voluntarily, by operation of law or
otherwise, and shall not sublet all or any portion of the Premises, including,
but not limited to, sharing them, permitting another party to occupy them or
granting concessions or licenses to another party, except with the prior written
consent of Landlord, which Landlord may withhold for any reasonable condition,
including, but not limited to: (a) Tenant is in default of this Lease; (b) the
assignee or subtenant is unwilling to assume in writing all of Tenant's
obligations hereunder; (c) the assignee or subtenant has a financial condition
which is reasonably unsatisfactory to Landlord or Landlord's mortgagee; (d) the
Premises will be used for different purposes than those set forth in Paragraph 3
or for a use requiring or generating increased or different Hazardous Materials;
(e) the proposed assignee or subtenant or its business is subject to compliance
with additional requirements of the law (including related resolutions) commonly
known as the Americans with Disabilities Act of 1990 beyond those requirements
applicable to Tenant; (f) Tenant proposes to assign less than all of its
interest in this Lease or to sublet the Premises in units that are unusually
small for the Project; (g) the assignee or subtenant requires extensive
alterations to the Premises; and (h) the proposed assignee or subtenant or an
affiliate thereof is an existing tenant in the Project or is or has been in
discussions with Landlord regarding space within the Project.
14.2. FEES. Tenant shall pay Landlord's reasonable attorneys' fees
incurred in evaluating any proposed assignment or sublease and documenting
Landlord's consent.
14.3. PROCEDURE. Whenever Tenant has obtained an offer to assign any
interest in this Lease or to sublease all or any portion of the Premises, Tenant
shall provide to Landlord the name and address of said proposed assignee or
sublessee, the base rent and all other compensation to be paid to Tenant, the
proposed use by the proposed assignee or sublessee, the proposed effective date
of the assignment or subletting, and any other business terms which are material
to the offer and/or which differ from the provisions of this Lease ("Notice of
Offer"). Tenant shall also provide to Landlord the nature of business, financial
statement and business experience resume for the immediately preceding five (5)
years of the proposed assignee or sublessee and such other information
concerning such proposed assignee or sublessee as Landlord may require. The
foregoing information shall be in writing and shall be received by Landlord no
less than sixty (60) days prior to the effective date of the proposed assignment
or sublease.
Within thirty (30) days following its receipt of a Notice of Offer
for the proposed assignment or subletting, Landlord shall be entitled to
terminate this Lease as to all of the Premises (unless Tenant proposes a
sublease of a portion of the Premises, in which event Landlord may terminate
this Lease as to such portion) by written notice to Tenant ("Termination
Notice"), and such termination shall be effective as of the proposed effective
date of the proposed assignment or sublease. If Landlord does not elect to
terminate this Lease, Landlord shall either notify Tenant that Landlord consents
to the proposed assignment or subletting or
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withholds its consent for reasons to be specified in the notice. If Landlord
does not provide a Termination Notice or a notice withholding its consent to
Tenant within thirty (30) days following its receipt of a Notice of Offer,
Landlord shall be deemed to have consented to the proposed assignment or
subletting.
14.4. BONUS RENT. If any interest in this Lease is assigned or all or any
portion of the Premises is subleased, Landlord shall receive all of the "bonus
rent" to be realized from such assignment or subletting. The bonus rent shall
mean any lump sum payment or other value received by Tenant, plus any base rent,
percentage rent or periodic compensation received by Tenant from or for the
benefit of an assignee or sublessee in excess of (a) all amounts owed for Rent
and other charges pursuant to this Lease, and (b) all reasonable commissions and
fees paid to any real estate broker or finder who is unaffiliated with Tenant in
connection with the assignment or subletting. If a portion of the Premises is
subleased, the amount in clause (a) shall be prorated based on the portion of
the Premises' rentable area to be subleased. The bonus rent shall be paid on the
first (1st) day of each calendar month next following tenant's receipt of each
payment from its assignee or sublessee, after reduction for all amounts
described in clauses (a) and (b) above, amortized over the full term of the
assignment or sublease.
14.5. CONTINUING TENANT OBLIGATIONS. No subleasing or assignment shall
relieve Tenant from liability for payment of all forms of Rent and other charges
herein provided or from Tenant's obligations to keep and be bound by the terms,
conditions and covenants of this Lease.
14.6. WAIVER, DEFAULT AND CONSENT. The acceptance of Rent from any other
person shall not be deemed to be a waiver of any of the provisions of this Lease
or a consent to the assignment or subletting of the Premises. Any assignment or
sublease without the Landlord's prior written consent shall be voidable, at
Landlord's election, and shall constitute a noncurable event of default under
this Lease. Consent to any assignment or subletting shall not be deemed a
consent to any future assignment or subletting.
14.7. RESTRUCTURING OF BUSINESS ORGANIZATIONS. Any transfer of corporate
shares or partnership interests of Tenant, so as to result in a change in the
present voting control of Tenant by the person or persons owning a majority of
said corporate shares or partnership interests on the date of this Lease (except
for trading on an exchange), shall constitute an assignment and shall be subject
to the provisions of this Paragraph 14.
14.8. ASSIGNMENT OF SUBLEASE RENT. Tenant immediately and irrevocably
assigns to Landlord, as security for Tenant's obligations under this Lease, all
rents from any subletting of all or any part of the Premises, and Landlord, as
assignee and as attorney-in-fact for Tenant for purposes hereof, or a receiver
for Tenant appointed on Landlord's application, may collect such rents and apply
same toward Tenant's obligations under this Lease, except that, until the
occurrence of an event of default by Tenant, Tenant shall have the right and
license to collect such rents.
14.9. ASSIGNMENT IN BANKRUPTCY. If this Lease is assigned to any person or
entity pursuant to the provisions of the United States Bankruptcy Code, 11
U.S.C. Section 101 et seq., or such similar laws or amendments thereto which may
be enacted from time to time (the "Bankruptcy Code"), any and all monies or
other considerations payable or otherwise to be delivered in
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connection with such assignment shall be paid or delivered to Landlord, shall be
and remain the exclusive property of Landlord and shall not constitute property
of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code.
Any and all monies or other considerations constituting Landlord's property
under the preceding sentence not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and be promptly paid or delivered to Landlord.
14.10. ASSUMPTION OF OBLIGATIONS. Any person or entity to which this Lease
is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed,
without further act or deed, to have assumed all of the obligations arising
under this Lease on and after the date of such assignment. Any such assignee
shall upon demand execute and deliver to Landlord an instrument confirming such
assumption.
15. CONDEMNATION.
15.1. TOTAL TAKING. If the whole or any substantial part of the Premises
or the Project shall be taken or damaged because of the exercise of the power of
eminent domain, whether by condemnation proceedings or otherwise, including acts
or omissions constituting inverse condemnation, or any transfer of the Premises
or Project or portion thereof in avoidance of the exercise of the power of
eminent domain (collectively, a "Taking"), and the Taking would prevent or
materially interfere with the use of the Premises for the purpose for which they
are being used, this Lease shall terminate effective when the physical Taking of
the Premises shall occur.
15.2. PARTIAL TAKING. If part of the Premises shall be subject to a Taking
and this Lease is not terminated as provided in the Paragraph 15.1 above, this
Lease shall not terminate but the Rent payable hereunder during the unexpired
portion of this Lease shall be reduced in proportion to the area of the Premises
rendered unusable by Tenant.
15.3. CONDEMNATION AWARD. The entire award or compensation for any Taking
of the Project and/or the Premises, or any part thereof, or for diminution in
value, shall be the property of Landlord, and Tenant hereby assigns its interest
in any such award to Landlord; provided, however, Landlord shall have no
interest in any separate award made to Tenant for loss of business, for
relocation purposes, or for the taking of Tenant's fixtures and improvements.
15.4. EXCLUSIVE REMEDY. This Paragraph 15 shall be Tenant's sole and
exclusive remedy in the event of any Taking. Tenant hereby waives the benefits
of California Code of Civil Procedure Section 1265.130 or any other statute
granting Tenant specific rights in the event of a Taking which are contrary to
the provisions of this Paragraph 15.
16. SURRENDER AND HOLDING OVER.
16.1. SURRENDER. Upon the expiration or sooner termination of this Lease,
Tenant shall surrender the Premises in as good condition as when received,
reasonable wear and tear excepted, broom clean and free of trash and rubbish,
and free from all tenancies or occupancies by any person. Tenant shall remove
all trade fixtures, furniture, equipment and other personal property installed
in the Premises prior to the expiration or earlier termination of this Lease.
Unless otherwise provided in Paragraph 7 or waived by Landlord in writing prior
to the expiration or earlier termination of this Lease, Tenant shall remove at
its sole cost all alterations,
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additions and improvements made by Tenant to the Premises; provided, however, at
the election of Landlord, all (or such portion as Landlord shall designate)
alterations, additions and improvements to the Premises including, without
limitation, all wall coverings, floor coverings, built-in cabinets, paneling and
the like, shall become the property of Landlord and remain on the Premises at
the end of the Term. Tenant shall, at its own cost, completely repair any and
all damage to the Premises and the Building resulting from or caused by such
removal. The provisions of Paragraph 7 shall apply to such removal and repair
work..
16.2. HOLDING OVER. If Landlord agrees in writing that Tenant may hold
over after the expiration or earlier termination of this Lease, unless the
parties hereto otherwise agree in writing as to the terms of such holding over,
the holdover tenancy shall be subject to termination by Landlord or Tenant at
any time upon not less than thirty (30) days' prior written notice. If Tenant
holds over without the consent of Landlord, the same shall be a tenancy at will
terminable at any time, and Tenant shall be liable to Landlord for, and Tenant
shall indemnify, protect, defend and hold Landlord harmless from and against,
any damages, liabilities, losses, costs, expenses or claims suffered or caused
by such holdover, including damages and costs related to any successor tenant of
the Premises to whom Landlord could not deliver possession of the Premises when
promised. All of the other terms and provisions of this Lease shall be
applicable during any holdover period, with or without consent, except that
Tenant shall pay to Landlord from time to time upon demand, as Rent for the
period of any holdover, an amount equal to two hundred percent (200%) of the
then applicable Base Rent in effect immediately preceding such holdover period,
plus all Additional Rent in effect on the termination date, computed on a daily
basis for each day of the holdover period. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease. The
preceding provisions of this Paragraph 16.2 shall not be construed as Landlord's
consent to any holding over by Tenant.
16.3. ENTRY AT END OF TERM. If during the last month of the Term, Tenant
shall have removed substantially all of Tenant's property and personnel from the
Premises, Landlord may enter the Premises and repair, alter and redecorate the
same, without abatement of Rent and without liability to Tenant, and such acts
shall have no effect on this Lease. Tenant shall give written notice to Landlord
at least thirty (30) days prior to vacating the Premises and shall arrange to
meet with Landlord for a joint inspection of the Premises prior to vacating. In
the event of Tenant's failure to give such notice or arrange such joint
inspection, Landlord's inspection at or after Tenant's vacation of the Premises
shall be conclusively deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration.
17. QUIET ENJOYMENT.
Landlord represents and warrants that it has full rights and authority to
enter into this Lease and that Tenant, upon paying the Rent and performing its
other covenants and agreements herein set forth, shall peaceably and quietly
have, hold and enjoy the Premises for the Term without hindrance or molestation
from Landlord, subject to the terms and provisions of this Lease, any ground
lease, any mortgage or deed of trust now or hereafter encumbering the Premises
or the Project, and all matters of record.
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18. EVENTS OF DEFAULT.
The following events shall be deemed to be events of default by Tenant
under this Lease:
18.1. FAILURE TO PAY RENT. Tenant shall fail to pay any installment of the
Rent herein reserved within five (5) days from when due, or any other payment or
reimbursement to Landlord required herein when due.
18.2. INSOLVENCY. Tenant or any guarantor of Tenant's obligations
hereunder shall generally not pay its debts as they become due or shall admit in
writing the inability to pay its debts or shall make a general assignment for
the benefit of creditors.
18.3. APPOINTMENT OF RECEIVER. A receiver or trustee (or similar official)
shall be appointed for all or substantially all of the assets of Tenant.
18.4. BANKRUPTCY. The filing of any voluntary petition by Tenant under the
Bankruptcy Code, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of forty-five (45)
days.
18.5. ATTACHMENT. The attachment, execution or other judicial seizure or
non-judicial seizure of all or substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
ten (10) business days after the levy thereof.
18.6. VACATION OF PREMISES. Tenant shall vacate all or a substantial
portion of the Premises, whether or not Tenant is in default of the Rent or
other charges due under this Lease.
18.7. CERTIFICATES. Tenant shall fail to deliver to Landlord any
subordination agreement within the time limit prescribed in Paragraph 21 below,
or a Certificate of Occupancy, all financial statements or an estoppel
certificate within the time limits prescribed in Paragraph 22.7 below.
18.8. FAILURE TO DISCHARGE LIENS. Tenant shall fail to discharge any lien
placed upon the Premises in violation of Paragraph 8 hereof.
18.9. FALSE FINANCIAL STATEMENT. Landlord discovers that any financial
statement given to Landlord by Tenant, any assignee, subtenant or successor in
interest of Tenant, or any guarantor of Tenant's obligations hereunder. or any
of them, was materially false when given to Landlord.
18.10. FAILURE TO COMPLY WITH LEASE TERMS. Tenant shall fail to comply
with any other term, provision or covenant of this Lease, and shall not cure
such failure within twenty (20) days after written notice thereof to Tenant;
provided, however, that if the nature of Tenant's obligation is such that it is
not susceptible to cure within twenty (20) days, then Tenant shall not be in
default if Tenant commences performance within such twenty (20) day period and
thereafter diligently prosecutes the same to completion.
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18.11. GUARANTOR DEFAULT. Any guarantor of Tenant's obligations hereunder
shall be in default under the terms of its guaranty.
18.12. ASSIGNMENT OR SUBLETTING WITHOUT CONSENT. Any assignment,
subletting or other transfer for which the prior consent of Landlord is required
under this Lease and has not been obtained.
Any notices to be provided by Landlord under this Paragraph 18 shall
be in lieu of, and not in addition to, any notice required under Section 1161 of
the California Code of Civil Procedure.
19. LANDLORD'S REMEDIES.
Upon the occurrence of any event of default. Landlord may, at its option
without further notice or demand and in addition to any other rights and
remedies hereunder or at law or in equity, do any or all of the following:
19.1. TERMINATION. Terminate Tenant's right to possession of the Premises
by any lawful means upon at least 3 days' written notice (which notice may be
satisfied by any notice which may be given by Landlord pursuant to Paragraph 18,
if applicable), in which case Tenant shall immediately surrender possession of
the Premises to Landlord and, in addition to any rights and remedies Landlord
may have at law or in equity, Landlord shall have the following rights:
(a) To re-enter the Premises then or at any time thereafter and
remove all persons and property and possess the Premises, without prejudice to
any other remedies Landlord may have by reason of Tenant's default or of such
termination, and Tenant shall have no further claim hereunder.
(b) To recover all damages incurred by Landlord by reason of the
default, including without limitation (1) the worth at the time of the award of
the payments owed by Tenant to Landlord under this Lease that were earned but
unpaid at the time of termination; (ii) the worth at the time of the award of
the amount by which the payments owed by Tenant to Landlord under the Lease that
would have been earned after the date of termination until the time of the award
exceeds the amount of the loss of payments owed by Tenant to Landlord under this
Lease for the same period that Tenant proves could have been reasonably avoided;
(iii) the worth at the time of the award of the amount by which the payments
owed by Tenant to Landlord for the balance of the Term after the time of the
award exceeds the amount of the loss of payments owed by Tenant for the same
period that Tenant proves could have been reasonably avoided; (iv) all costs
incurred by Landlord in retaking possession of the Premises and restoring them
to good order and condition; (v) all costs, including without limitation
brokerage commissions, advertising costs and restoration and remodeling costs,
incurred by Landlord in reletting the Premises; plus (vi) any other amount,
including without limitation attorneys' fees and audit expenses, necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom. "The worth at the time of the
award," as used in clauses (i) and (ii) of this paragraph, is to be determined
by computing interest as to each unpaid payment owed by Tenant to Landlord under
the Lease, at the highest interest rate permitted by law. "The
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worth at the time of the award," as referred to in clause (iii) of this
paragraph, is to be determined by discounting such amount, as of the time of
award, at the discount rate of the San Francisco Federal Reserve Bank, plus 1 %.
(c) To remove, at Tenant's sole risk, any and all personal property
in the Premises and place such in a public or private warehouse or elsewhere at
the sole cost and expense and in the name of Tenant. Any such warehouser shall
have all of the rights and remedies provided by law against Tenant as owner of
such property. If Tenant shall not pay the cost of such storage within thirty
(30) days following Landlord's demand, Landlord may, subject to the provisions
of applicable law, sell any or all such property at a public or private sale in
such manner and at such times and places as Landlord deems proper, without
notice to or demand upon Tenant. Tenant waives all claims for damages caused by
Landlord's removal, storage or sale of the property and shall indemnify and hold
Landlord free and harmless from and against any and all loss, cost and damage,
including without limitation court costs and attorneys' fees. Tenant hereby
irrevocably appoints Landlord as Tenant's attorney-in-fact, coupled with an
interest, with all rights and powers necessary to effectuate the provisions of
this subparagraph.
19.2. CONTINUATION OF LEASE. Maintain Tenant's right to possession. in
which case this Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event, Landlord may enforce all of Landlord's
rights and remedies under this Lease, including the right to recover rent as it
becomes due hereunder, and. at Landlord's election, to re-enter and relet the
Premises on such terms and conditions as Landlord deems appropriate. Without
limiting the generality of the foregoing, Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in
effect after lessee's breach and abandonment and recover rent as it becomes due,
if lessee has right to sublet or assign, subject only to reasonable
limitations). If Landlord relets the Premises or any portion thereof, any rent
collected shall be applied against amounts due from Tenant. Landlord may execute
any lease made pursuant hereto in its own name, and Tenant shall have no right
to collect any such rent or other proceeds. Landlord's re-entry and/or reletting
of the Premises, or any other acts, shall not be deemed an acceptance of
surrender of the Premises or Tenant's interest therein, a termination of this
Lease or a waiver or release of Tenant's obligations hereunder. Landlord shall
have the same rights with respect to Tenant's improvements and personal property
as under Paragraph 19.1 above, even though such re-entry and/or reletting do not
constitute acceptance of surrender of the Premises or termination of this Lease.
19.3. APPOINTMENT OF RECEIVER. Cause a receiver to be appointed in any
action against Tenant and to cause such receiver to take possession of the
Premises and to collect the rents or bonus rent derived therefrom. The foregoing
shall not constitute an election by Landlord to terminate this Lease unless
specific notice of such intent is given.
19.4. LATE CHARGE. Charge late charges as provided in Paragraph 2.7.
19.5. INTEREST. Charge interest on any amount not paid when due as
provided in Paragraph 22.2. Interest shall accrue from the date funds are first
due or, if the payment is for funds expended by Landlord on Tenant's behalf,
from the date Landlord expends such funds.
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19.6. ATTORNEYS' FEES. Collect, upon demand, all reasonable attorneys'
fees and expenses incurred by Landlord in enforcing its rights and remedies
hereunder.
19.7. INJUNCTION. To restrain by injunction or other equitable means any
breach or anticipated breach of this Lease,
20. TENANT'S REMEDIES.
20.1. LANDLORD'S DEFAULT. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
sixty (60) days after written notice is delivered by Tenant to Landlord and to
the holder of any mortgages or deeds of trust (collectively, "Lender") covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying the obligation which Landlord has failed to
perform; provided, however, that if the nature of Landlord's obligation is such
that more than sixty (60) days are required for performance, then Landlord shall
not be in default if Landlord or Lender commences performance within such sixty
(60) day period and thereafter diligently prosecutes the same to completion. All
obligations of Landlord hereunder shall be construed as covenants, not
conditions.
20.2. TENANT'S REMEDIES. In the event of any default, breach or violation
of Tenant's rights under this Lease by Landlord, Tenant's exclusive remedies
shall be an action for specific performance or action for actual damages. Tenant
hereby waives the benefit of any laws granting it the right to perform
Landlord's obligation, a lien upon the property of Landlord and/or upon Rent due
Landlord, or the right to terminate this Lease or withhold Rent on account of
any Landlord default.
20.3. NON-RECOURSE. Notwithstanding anything to the contrary in this
Lease, any judgment obtained by Tenant or any of Tenant's Parties against
Landlord or any Indemnified Parties shall be satisfied only out of Landlord's
equity interest in the Building and the legal parcel of land on which it sits.
Neither Landlord nor any Indemnified Parties shall have any personal liability
for any matter in connection with this Lease or its obligations as Landlord of
the Premises, except as provided above. Tenant shall not institute, seek or
enforce any personal or deficiency judgment against Landlord or any Indemnified
Parties, and none of their property shall be available to satisfy any judgment
hereunder, except as provided in this Paragraph 20.3.
20.4. SALE OF PREMISES. In the event of any sale or transfer of the
Premises by Landlord as seller, transferor or assignor (collectively, "Seller")
to any purchaser, transferee or assignee (collectively, "Purchaser"), the Seller
shall be and hereby is entirely freed and relieved of all agreements, covenants
and obligations of Landlord thereafter to be performed, except to the extent of
any security deposit which is not delivered by the Seller to the Purchaser, and
it shall be deemed and construed without further agreement between the parties
or their successors in interest or between the Seller and the Purchaser in any
such sale, transfer or assignment, that such Purchaser has assumed and agreed to
carry out any and all agreements, covenants and obligations of Landlord
hereunder.
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21. MORTGAGES.
At the election of Landlord, or the holder of any mortgage or deed of
trust affecting the Project or any ground lessor, this Lease and all of Tenant's
rights hereunder shall he subject and subordinate at all times to any deed of
trust, mortgage or ground lease which may now or hereafter affect the Project,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. If any such mortgage or deed of trust is foreclosed or any ground lease
terminated, at the election of Landlord's successor in interest, Tenant agrees,
for the benefit of such successor in interest, to attorn to such successor in
interest and become its tenant on the terms and conditions of this Lease for the
remainder of the Term, and if required, to enter into a new lease with such
successor in interest in the form of this Lease. Tenant's agreement to attorn
shall survive the termination of this Lease. At the request of Landlord, the
holder of such mortgage or deed of trust or any ground lessor, Tenant shall
execute, acknowledge and deliver promptly in recordable form any instrument or
subordination agreement that Landlord or such holder may request, provided,
however, that such instrument shall include provisions requiring the purchaser
at any foreclosure sale to continue this Lease in full force and effect in the
same manner as if such purchaser were the Landlord so long as Tenant is not
otherwise in default, and requiring Tenant to attorn to such purchaser. In
addition, at the request of Landlord, the holder of any mortgage or deed of
trust or any ground lessor, Tenant shall execute, acknowledge and deliver
promptly in recordable form any instrument that Landlord or such holder may
request to make this Lease superior to such mortgage, deed or trust or ground
lease. Tenant's failure to execute each instrument, release or document within
twenty (20) days after written demand shall constitute an event of default by
Tenant hereunder without further notice to Tenant, or at Landlord's option
Landlord shall execute such instrument, release or document on behalf of Tenant
as Tenant's attorney-in-fact. Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney-in-fact, coupled with an
interest, and in Tenant's name, place and stead, to execute such documents in
accordance with this Paragraph 21.
22. GENERAL PROVISIONS.
22.1. SINGULAR AND PLURAL. Words of any gender used in this Lease shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise requires.
22.2. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided to the contrary, any amount due to Landlord not paid when due shall
bear interest at the maximum rate then allowable by law from the date due.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
22.3. TIME OF ESSENCE. Time is of the essence.
22.4. BINDING EFFECT. The terms, provisions and covenants and conditions
contained in this Lease shall apply to, inure to the benefit of, and be binding
upon. the parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns. except as otherwise herein expressly provided.
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22.5. CHOICE OF LAW. This Lease shall be governed by the laws of the State
of California applicable to contracts made and to be performed in such state.
22.6. CAPTIONS. The captions inserted in this Lease are for convenience
only and in no way define, limit or otherwise describe the scope or intent of
this Lease, or any provision hereof, or in any way affect the interpretation of
this Lease.
22.7. CERTIFICATES. Tenant agrees from time to time within ten (10) days
after request of Landlord, to deliver to Landlord, or Landlord's designee, a
Certificate of Occupancy for work performed by Tenant or Tenant's Parties in the
Premises, annual financial statements or a reasonable equivalent for the
previous fiscal years of Tenant, and an estoppel certificate stating that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect), the date to which Rent has been paid, the unexpired
Term of this Lease and such other matters pertaining to this Lease as may be
requested by Landlord or Landlord's designee. Any such certificate may be
conclusively relied upon by Landlord or Landlord's designee. At Landlord's
option, Tenant's failure to timely deliver such certificate shall be an event of
default by Tenant, without further notice to Tenant, or it shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord, that there are no uncured defaults in
Landlord's performance, and that not more than one (1) month's rent has been
paid in advance.
22.8. AMENDMENTS. This Lease may not be altered, changed or amended except
by an instrument in writing signed and dated by both parties hereto. Tenant
agrees to make such reasonable modifications to this Lease as may be required by
any lender in connection with the obtaining of financing or refinancing of the
Project or any portion thereof.
22.9. ENTIRE AGREEMENT. This Lease constitutes the entire understanding
and agreement of Landlord and Tenant with respect to the subject matter of this
Lease, and contains all of the covenants and agreements of Landlord and Tenant
with respect thereto, and supersedes all prior agreements or understandings.
Landlord and Tenant each acknowledge that no representations, inducements,
promises or agreements, oral or written, have been made by Landlord or Tenant,
or anyone acting on behalf of Landlord or Tenant, which are not contained
herein, and any prior agreements, promises, negotiations, or representations not
expressly set forth in this Lease are of no force or effect.
22.10. WAIVERS. The waiver by Landlord of any term, covenant, agreement or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant, agreement or condition herein
contained, nor shall any custom or practice which may arise between the parties
in the administration of this Lease be construed to waive or lessen the right of
Landlord to insist upon the performance by Tenant in strict accordance with all
of the provisions of this Lease. The subsequent acceptance of Rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any provisions, covenant, agreement or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent.
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22.11. ATTORNEYS' FEES. If either Landlord or Tenant commences or engages
in, or threatens to commence or engage in, an action by or against the other
party arising out of or in connection with this Lease or the Premises. including
but not limited to any action for recovery of Rent due and unpaid, to recover
possession or for damages for breach of this Lease, the prevailing party shall
be entitled to have and recover from the losing party reasonable attorneys' fees
and other costs incurred in connection with the action, preparation for such
action, any appeals relating thereto and enforcing any judgments rendered in
connection therewith. If Landlord becomes involved in any action, threatened or
actual, by or against anyone not a party to this Lease, but arising by reason of
or related to any act or omission of Tenant or Tenant's Parties, Tenant agrees
to pay Landlord's reasonable attorneys' fees and other costs incurred in
connection with the action, preparation for such action, any appeals relating
thereto and enforcing any judgments rendered in connection therewith.
22.12. MERGER. The voluntary or other surrender of this Lease by Tenant or
a mutual cancellation hereof shall not constitute a merger. Such event shall, at
the option of Landlord, either terminate all or any existing subtenancies or
operate as an assignment to Landlord of any or all of such subtenancies.
22.13. SURVIVAL OF OBLIGATIONS. Paragraphs 2, 3.2, 4.2, 5.2, 8, 12.1,
12.5, 15.3, 16, 19, 20 and 22 and all obligations of Tenant hereunder not fully
performed as of the expiration or earlier termination of the Term shall survive
the expiration or earlier termination of the Term, including without limitation,
all payment obligations with respect to Rent and all obligations concerning the
condition of the Premises. Upon the expiration or earlier termination of the
Term, and prior to Tenant vacating the Premises, Tenant shall pay to Landlord
any amount reasonably estimated by Landlord (i) as necessary to perform Tenant's
duties under paragraphs 6.1 and 16.1 and put the Premises, including without
limitation, all heating and air conditioning systems and equipment therein, in
good condition and repair, and (ii) as sufficient to meet Tenant's obligation
hereunder for prorated Additional Rent for the year in which the Lease expires
or terminates. All such amounts shall be used and held by Landlord for payment
of such obligations, with Tenant being liable for any additional costs therefor
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied as the case may be. Any
Security Deposit held by Landlord shall be credited against the amounts payable
by Tenant under this Paragraph 22.13.
22.14. SEVERABILITY. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws effective during the Term,
the remainder of this Lease shall not be affected thereby, and in lieu of each
clause or provision of this Lease that is illegal, invalid or unenforceable,
there shall be added as a part of this Lease a clause or provision as similar in
terms to such illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.
22.15. SECURITY MEASURES. Tenant hereby acknowledges that the Rent payable
to Landlord hereunder does not include the cost of guard service or other
security measures, and that Landlord shall have no obligation whatsoever to
provide same. Tenant assumes all responsibility for the protection of Tenant,
Tenants' Parties and their properly from acts of third parties.
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22.16. EASEMENTS. Landlord reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of parcel maps, easement
agreements and covenants, conditions and restrictions, so long as such
easements, rights, dedications, maps and covenants, conditions and restrictions
do not unreasonably interfere with the permitted use of the Premises by Tenant.
Tenant shall sign any of the aforementioned documents upon request of Landlord
and failure to do so shall constitute a material breach of this Lease.
22.17. MULTIPLE PARTIES. If more than one person or entity is named as
Tenant herein, the obligations of Tenant hereunder shall be the joint and
several responsibility of all persons or entities so named.
22.18. CONFLICT. Any conflict between the printed provisions of this Lease
and any typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
22.19. NO THIRD PARTY BENEFICIARIES. This Lease is not intended by either
party to confer any benefit on any third party, including without limitations
any broker, finder, or brokerage firm.
22.20. EFFECTIVE DATE/NONBINDING OFFER. Submission of this Lease for
examination or signature by Tenant does not constitute an offer or option for
lease, and it is not effective as a lease or otherwise until executed and
delivered by both Landlord and Tenant.
22.21. NOTICES. Each provision of this Lease or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by one party to the other shall be deemed to be complied with when and if the
following steps are taken:
(a) All Rent and other payments required to be made hereunder shall
be payable to the applicable party hereto as follows: to Landlord at the address
set forth in Item 12 of the Basic Lease Provisions, and to Tenant at the
Premises, or at such other addresses as the parties may have hereafter specified
by written notice. All obligations to pay Rent and/or any other amounts under
the terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by the respective party.
(b) Wherever any notice is required or permitted hereunder, such
notice shall be in writing. Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered (i) upon personal delivery;
(ii) seventy-two (72) hours after deposit thereof in the United States mail,
postage prepaid, certified or registered mail, return receipt requested; (iii)
upon confirmation of delivery by Federal Express or other reputable overnight
delivery service; or (iv) upon written confirmation of delivery by telegraph,
telecopy or other electronic written transmission device; correctly addressed to
the parties hereto as follows: if to Tenant before the Commencement Date, then
at the address specified in Item 11 of the Basic Lease Provisions; if to Tenant
after the Commencement Date, then at the Premises; and if to Landlord, then at
the address specified in Item 12 of the Basic Lease Provisions; or at such other
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address (but no more than one (1) address at a time, except as provided in
Paragraph 20.1) as the recipient may theretofore have specified by written
notice.
22.22. WATER, OIL AND MINERAL RIGHTS. Landlord reserves all right, title
or interest in water, oil, gas or other hydrocarbons, other mineral rights and
air and development rights, together with the sole and exclusive right of
Landlord to sell, lease, assign or otherwise transfer the same, but without any
right of Landlord or any such transferee to enter upon the Premises during the
Term except as otherwise provided herein.
22.23. CONFIDENTIALITY. Tenant agrees to keep the Lease and its terms,
covenants, obligations and conditions strictly confidential and not to disclose
such matters to any other landlord, tenant, prospective tenant, or broker;
provided, however, Tenant may provide a copy of this Lease to its attorneys,
accountants and bankers, and to a non-party solely in conjunction with Tenant's
reasonable and good faith effort to secure an assignee or sublessee for the
Premises.
22.24. BROKER'S FEES. Tenant represents and warrants that it has dealt
with no broker, agent or other person in connection with this transaction and
that no broker, agent or other person brought about this transaction, other than
the brokerage firm specified in Item 13 of the Basic Lease Provisions, if any,
and Tenant shall indemnify, defend, protect and hold Landlord harmless from and
against any claims, losses, liabilities, demands, costs, expenses or causes of
action by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant with regard to this
leasing transaction.
22.25. REMEDIES CUMULATIVE. All rights, privileges and remedies of the
parties are cumulative and not alternative or exclusive to the extent permitted
by law, except as otherwise provided herein.
22.26. RETURN OF CHECK. If Tenant's check, given to Landlord in payment of
any sum, is returned by the bank for non-payment. Tenant shall pay to Landlord
immediately on demand, as Additional Rent, all expenses incurred by Landlord as
a result thereof.
22.27. NO RECORDATION OF LEASE. Neither this Lease nor any memorandum
hereof may be recorded.
22.28. AUTHORITY. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this Lease. Tenant
shall, within thirty (30) days following execution of this Lease, deliver to
Landlord evidence of such authority satisfactory to Landlord.
22.29. INTERPRETATION. This Lease shall be construed fairly according to
its terms without regard to which party, or which party's attorneys, prepared
its form.
22.30. LANDLORD'S APPROVALS. Except where the provisions of this Lease
expressly provide that Landlord's consent or approval must be reasonably given,
all consents or approvals of Landlord sought or required pursuant to the terms
of this Lease may be given or withheld in Landlord's sole and absolute
discretion.
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22.31. ADDITIONAL PROVISIONS. Those additional provisions set forth in
Exhibit "C", if any, are hereby incorporated by this reference as if fully set
forth herein.
22.32. WAIVER OF RIGHT TO TRIAL BY JURY. Tenant hereby waives the right to
trial by jury.
22.33. FORCE MAJEURE. The term "Force Majeure Event" means delay by reason
of fire, earthquake or other acts of God, strikes, boycotts, war, riot,
insurrection, embargos, shortages of equipment, labor or materials, delays in
issuance of governmental permits or approvals, weather delays or any other cause
beyond the reasonable control of Landlord.
LANDLORD: TENANT:
VANOWEN INVESTMENT COMPANY, JILL KELLY PRODUCTIONS, INC.,
a California general partnership a Delaware corporation
By: /s/ Warren L. Breslow By: /s/ Robert A. Friedland
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Its: Chief Executive Officer
By: /s/ Ronald C. Stone
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Its: Chief Financial Officer
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