Exhibit 10.11
SUBLEASE
THIS SUBLEASE ("Sublease") dated as of October 8, 1993, is entered into by
and between TELEDYNE, INC., a Delaware corporation ("Sublandlord") and LEINER
HEALTH PRODUCTS INC., a Delaware corporation ("Subtenant").
W I T N E S S E T H
WHEREAS by that certain lease dated as of July 17, 1991 (the "Lease"), by
and between Watson Land Company, as Landlord, and Sublandlord, as Tenant,
Landlord leased to Sublandlord a portion of that certain building located at 901
East 233rd Street, Carson, California 90745 ("Building"), which portion is
referred to herein as the "Subleased Premises"; and
WHEREAS, a copy of the Lease is attached hereto as EXHIBIT "A" and
incorporated herein by this reference; and
WHEREAS, by that certain Lease of even date herewith (the "Direct Lease")
Subtenant is directly leasing from Landlord the balance of the Building (the
"Direct Premises") for a term which will commence on January 1, 1994 (or such
earlier date as the term of this Sublease commences as set forth in Paragraph 1
below) and shall end on March 31, 2004; and
WHEREAS, a copy of Article VIII, Article XIV, Paragraph 26.10 and
Paragraphs 5, 6 and 7 of Rider No. 1 of the Direct Lease, and a copy of
Paragraph 7 of the "810 Lease" described in Paragraph 2(b) below, are attached
hereto as EXHIBIT "B" and incorporated herein by reference; and
WHEREAS, Subtenant desires to sublease from Sublandlord and Sublandlord
desires to sublease to Subtenant the Subleased Premises for a term, at a rent,
and upon and subject to the covenants, agreements, terms, conditions,
limitations, exceptions and reservations herein contained;
NOW THEREFORE, in consideration of the premises subleased herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. SUBLEASE. Sublandlord hereby subleases to Subtenant, and
Subtenant hereby subleases from Sublandlord, the Subleased Premises, upon and
subject to the covenants, agreements, limitations, reservations, exceptions,
terms and conditions herein contained, and for a term commencing on January 1,
1994 or such earlier date as Subtenant commences the packaging of product of
Subtenant within the Subleased Premises for resale, (the "Sublease Commencement
Date") and ending at midnight on September 30, 2001 (the "Sublease Expiration
Date") or on such earlier date upon which said term may expire or be canceled or
terminated pursuant to any of the provisions of this Sublease. The Subleased
Premises are subleased together with the appurtenances thereto, including,
without limitation, the right to use in common with others the common areas of
the Building to the extent permitted under the Lease. However, inasmuch as
Subtenant is directly leasing the Direct Premises from Landlord, there shall be
no "common area" during such time as Subtenant concurrently leases from Landlord
the Direct Premises and leases from Sublandlord the Subleased Premises, it being
the intent of Subtenant to occupy the entire Building during the term of this
Sublease. As a result of Subtenant's leasing of the entire Building, as
aforesaid, several provisions of this Sublease shall be controlled by the
provisions of the Direct Lease during the "Concurrent Terms", which in this
Sublease shall mean and refer to the time period during which Subtenant is
concurrently subleasing from Sublandlord the Subleased Premises and directly
leasing from Landlord the Direct Premises.
2. CONDITIONS.
(a) The parties' obligations hereunder are expressly conditioned upon
Landlord's execution of the written consent attached to this Sublease, and,
as a matter of information between Sublandlord and Subtenant, and not as a
condition to this Agreement, it is noted herein that such consent shall
provide, among other things, for Landlord's agreement that in the event of
and upon the termination or cancellation of the
Lease pursuant to the terms and provisions thereof, this Sublease shall
automatically terminate and Landlord and Subtenant will concurrently enter
into an amendment to the Direct Lease which shall include the Subleased
Premises into the Premises demised under the Direct Lease, but at the
rental payable under this Sublease for the remaining scheduled term of this
Sublease, and thereafter at the Minimum Rent in the same amount per square
foot of the Subleased Premises which is payable per square foot for the
Premises under the Direct Lease. If Landlord does not execute such consent
by close of business on October 14, 1993, and such date is not extended
by written agreement of the parties, then this Sublease shall automatically
terminate and neither Sublandlord nor Subtenant shall have any further
obligations hereunder after the date of termination.
(b) The parties' obligations hereunder are expressly conditioned upon
(i) Subtenant entering into the Direct Lease with Landlord for the balance
of the Building until March 31, 2004 and for the Subleased Premises for a
term commencing as of the expiration of the term of the Sublease until
March 31, 2004 on terms and conditions satisfactory to Subtenant in its
sole discretion and (ii) Subtenant entering into a lease with Landlord for
a 204,000 square foot building located directly to the south of the
Building at 810 East 233rd Street, Carson, California (the "810 Lease"). If
Landlord and Subtenant have not entered into the Direct Lease and the 810
Lease by close of business on October 14, 1993, then Subtenant may, upon
notice to Sublandlord delivered not later than October 21, 1993, terminate
this Sublease whereupon neither Sublandlord nor Subtenant shall have any
further obligations hereunder after the date of termination.
3. SUBLEASE FIXED RENT. The fixed monthly rent for the
Subleased Premises shall be as set forth in the following table:
Monthly Annual
Year Rate Months Rate
---- ------- ------ ------
Year 1 (Months 1 $41,861.30* x 10 = $418,613.00
through 10):
Year 1 (Months 11 $57,848.96 x 2 = $115,697.92
and 12
Year 2: $57,848.96 x 12 = $694,187.52
Year 3: $57,848.96 x 12 = $694,187.52
Year 4: $57,848.96 x 12 = $694,187.52
Year 5: $65,636.32 x 12 = $787,635.84
Year 6: $65,636.32 x 12 = $787,635.84
Year 7: $65,636.32 x 12 = $787,635.84
Year 8: $65,636.32 x 9** = $590,726.88
-------------
Total $5,570,507.88
*Rent for the office space portion of the Subleased Premises is abated for
the first ten (10) months of the term.
** Year 8 is only 9 months since the expiration date is September 30, 2001.
Subtenant covenants and agrees to pay such monthly rent, in advance, on the
first day of each and every calendar month during the term of this Sublease
commencing on the Sublease Commencement Date, provided, however, that such date
shall be extended on a day-for-day basis for each day that Subtenant is delayed
in the completion of its initial tenant improvement work in the Subleased
Premises due to any unreasonable act or omission on the part of Sublandlord. The
fixed monthly rent for the third (3rd) month of the term of this Sublease shall
be paid by
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Subtenant to Sublandlord upon the full execution and delivery of this Sublease.
If the term shall end on a day other than the first or last day of a calendar
month, all amounts hereunder shall be apportioned based on a thirty (30) day
month during the applicable month during which the term of this Sublease shall
be in effect.
4. ADDITIONAL RENT.
(a) In addition to the fixed monthly rent provided for in
Paragraph 3 hereof, Subtenant shall pay to Sublandlord, as additional
rent hereunder, within a period that is three (3) business days less
than the date such payment is due under the Lease, in each case after
written notice and demand, any other payments for which Sublandlord
shall become responsible to Landlord under Paragraph 4.2 of the Lease,
including payments arising (A) by reason of any act or omission of
Subtenant, including without limitation, payments accruing as a result
of any preparation of, or alterations to, the Subleased Premises
undertaken by Subtenant, or (B) as a result of Subtenant's default
hereunder or by such default causing Sublandlord to be in default
under the Lease. Subtenant covenants to pay the additional rent when
due, and in lawful money of the United States. Any delay by
Sublandlord in billing any sum set forth in this Paragraph 4 or in
Paragraph 3 hereinabove shall not constitute a waiver of or in any way
impair Subtenant's obligation to pay the same in accordance with the
terms of this Sublease.
(b) The fixed monthly rent, additional rent and other payments
herein reserved or payable shall be paid to Sublandlord at:
Teledyne, Inc.
1901 Avenue of the Stars, 18th Floor
Los Angeles, California 90067
Attention: Real Estate Department
and/or at such other place as Sublandlord may designate from time to
time in writing, in lawful money of the United States of America, as
and when the same becomes due and payable, without demand therefor and
without any deduction, set-off or abatement whatsoever, except as
expressly permitted herein or permitted of Sublandlord under the
Lease, and applicable on a pro-rated basis under this Sublease, as
referenced in the last sentence of Subparagraph 12(b) below.
(c) All adjustments of rent, costs, charges and expenses which
Subtenant assumes, agrees or is obligated to pay to Sublandlord
pursuant to this Sublease shall be deemed additional rent, and in the
event of nonpayment, Sublandlord shall have the rights and remedies
with respect thereto as are herein provided for in case of nonpayment
of the fixed monthly rent reserved hereunder.
5. CONDITION OF SUBLEASED PREMISES. Subtenant represents that
it has made a thorough inspection of the Subleased Premises and is familiar with
the condition of every part thereof. Subtenant further represents that it has
made a thorough examination of the Lease and that it is familiar with all the
terms, conditions and covenants, contained therein. Sublandlord shall improve
the Subleased Premises to the condition described in Paragraph 6 below.
Sublandlord represents and warrants that the copy of the Lease attached hereto
as EXHIBIT "A" is a true and complete copy of the Lease and, except as set forth
therein, and except for that certain Estoppel Certificate entered into by and
between Subtenant, Landlord and The Prudential Insurance Company of America,
there are no additional agreements between Sublandlord and Landlord with respect
to the Subleased Premises.
6. TENANT IMPROVEMENTS.
(a) Prior to the Commencement Date, and, as to certain portions
of the Subleased Premises, at such earlier date as Subtenant and
Sublandlord reasonably agree upon in order to accommodate Subtenant's
commencement of its work of improvements in the Subleased Premises
which work shall begin in the Subleased Premises immediately following
the full execution and delivery of this Sublease, Sublandlord shall
perform the following works of improvement, and only the following
works of improvement, within the Subleased Premises, it being
understood and agreed between the parties that, except as
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expressly set forth in this Sublease, Subtenant is leasing the
Subleased Premises on an "as is" basis, subject to Sublandlord's
assignment to Subtenant of all of Sublandlord's rights to require
Landlord to comply with the provisions of the Lease regarding the
condition of the Subleased Premises on delivery thereof to
Sublandlord:
(i) Sublandlord shall cause the inspection of the roof and
underlying membrane to be undertaken by a licensed roofing
contractor and shall cause those repairs which may be necessary
for the safe occupancy of the Subleased Premises. In connection
with such inspection, Sublandlord shall provide a roofing report
to verify the water tight condition of the existing roof of the
Building, including specific assurance that the cause of certain
leaks which the parties have reviewed and which are occurring
over portions of the office area of the Subleased Premises have
been repaired.
(ii) Sublandlord shall cause to be placed in good working
order, condition and state of repair, all mechanical systems in
the Subleased Premises, including, but not limited to, the
heating ventilating and air conditioning systems, all electrical,
lighting, plumbing, office intercom system and security systems.
With respect to the heating, ventilating and air conditioning
systems serving the office portion of the Subleased Premises,
Sublandlord shall provide a one year warranty for service, repair
and replacement to the extent such systems are not modified by
Subtenant. Further, Sublandlord specifically assigns and
transfers to Subtenant all of the benefits set forth in EXHIBIT
"G" to the Lease, and in particular Subparagraph B of said
EXHIBIT "G" which sets forth certain major components which will
be paid for by Landlord if such heating, ventilating and air
conditioning component replacements are required due to wear and
tear.
(iii) Sublandlord shall cause the repair of all broken
exterior glass at the Subleased Premises, and shall reseal to a
weather tight condition all exterior windows in the office
portion of the Building.
(iv) Sublandlord shall have prepared and shall provide a
current termite and pest control inspection report for the
Subleased Premises and shall provide evidence that the termite
and pest abatement work specified in such report has been
completed. Sublandlord shall also provide evidence that repairs
of any termite damage to the overhead gluelam beams within the
Subleased Premises has been completed as specified by such
report.
(b) Subtenant shall contract with Landlord in order to cause the
remediation by removal of all of the asbestos in the Subleased
Premises identified in the attachments to that certain cover letter
dated September 29, 1993 from Mr. Burr Baldwin, Jr. to Mr. Giffen
Ott, a copy of which letter is attached hereto as Exhibit "C" and
incorporated herein, and the return of the affected area, following
such work of removal, to a condition ready to receive surface
materials, such as floor covering or wall covering. The cost of such
work of remediation, removal and restoration shall be divided equally
between Sublandlord and Subtenant up to a total cost of $4,000, and
with any excess cost over $4,000 to be paid for by Sublandlord, so
that the maximum cost to Subtenant for such work shall be $2,000.
Sublandlord shall reimburse Subtenant for Sublandlord's share of the
cost of such work within ten (10) business days following receipt by
Sublandlord of an invoice, together with any back-up information as
may be reasonably requested by Sublandlord. Prior to the commencement
of the work of remediation, removal and restoration by Landlord, a
description of the work and the estimated cost thereof shall be set
forth in a contract between Landlord and Subtenant, which contract
shall be reasonably approved by Sublandlord prior to the commencement
of such work within the Subleased Premises.
(c) Subtenant shall be responsible for causing the Subleased
Premises to be in compliance with the requirements of Title III of the
Americans With Disabilities Act which are applicable to the Subleased
Premises as of the Commencement Date.
(d) In no event shall Sublandlord be required to repair any
cosmetic damage to any furniture, furnishings, partitioning,
carpeting, wallpaper or other decorative
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finishing resulting from Sublandlord's work set forth in Subparagraph
6(a) above unless such damage is due to the willful misconduct or
gross negligence of Sublandlord.
(e) By the execution of the Consent and Agreement Concerning
Sublease by Landlord, Sublandlord and Subtenant, it is agreed and
understood by and among Sublandlord, Subtenant and Landlord that the
provisions of Paragraph A of Exhibit "G" to the Lease are hereby
amended to provide that Subtenant shall contract for a preventative
maintenance program with respect to the roof surface of the Subleased
Premises with either Landlord or with an entity approved in writing by
Landlord, which contract, in Landlord's reasonable judgment, will
require the performance by the contractor of a preventative
maintenance program which is in accordance with good property
management and roofing maintenance practice. So long as such program
is followed, Landlord will waive any requirement of roof replacement
which is otherwise required by the provisions of said Paragraph A of
Exhibit "G" or by any surrender provisions of the Lease. During the
term of this Sublease, Subtenant shall be responsible for assuring
that such preventative maintenance program is in full force and
effect. If, as a result of subtenant's failure to cause such
preventative maintenance program to be in effect during the term of
this Sublease, Landlord requires the replacement of the roof at the
end of the term of the Lease, such replacement responsibility shall
be that of Subtenant.
7. SUBTENANT'S ALTERATIONS.
(a) Sublandlord hereby consents to the installation in the
Subleased Premises of the following proposed modifications:
(i) the addition of a sound attenuation corridor between
the existing offices and the Subleased Premises and the proposed
production line to be installed in the Subleased Premises by
Sublandlord;
(ii) a 30,000 square foot ground level area to house ten
(10) production machines with a 30,000 square foot mezzanine,
including the installation of approximately 25 roof-mounted HVAC
units;
(iii) approximately 5,000 square feet of various office
pods;
(iv) the modification of the existing restrooms and the
addition of one employee locker area (men and women);
(v) exterior dust controller and air compressor pads and
enclosures;
(vi) wash areas for disassembly and cleaning and
pharmaceutical bottle filling and packaging devices;
(vii) two (2) structural openings at the second floor
office area for fork lift access;
(viii) structural openings for several new man-door exits
and one 14 wide access way in the existing concrete demising wall
in the Subleased Premises;
(ix) the relocation of the existing second floor office
stairs to accommodate Subtenant's new sound attenuation corridor
described in clause (i) hereinabove;
(x) maintenance areas and related office areas;
(xi) construction of the bridge between the Subleased
Premises and the 810 Premises as described in Paragraph 7 of
Lease Rider No. 1 to the 810 Lease, which Paragraph 7 is part of
EXHIBIT "B" to this Sublease; and
(xii) the refurbishment of the existing offices in the
Subleased Premises.
During the term of the Lease, Subtenant may not make any alterations
or installations unless Subtenant first agrees to remove the same and
repair any damage caused by such
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removal, or Sublandlord and Landlord have agreed in writing that such
alterations or installations shall not be required to be removed upon
expiration or termination of this Sublease, it being agreed and
understood that, so long as Landlord does not require the removal
thereof, Sublandlord shall not require any such removal. Sublandlord
agrees not to unreasonably withhold its consent to any proposed
alterations or additions, provided, however, that Sublandlord's
failure to consent shall be deemed reasonable if Landlord's consent
has been requested and Landlord fails, within a reasonable time, to
give such consent. It shall be unreasonable for Sublandlord to
withhold its consent to an alteration if Landlord has provided its
unconditioned written approval of such alteration or, if Landlord
provides conditional written approval of such alteration, then it
shall be unreasonable for Sublandlord to condition its consent to such
alteration other than to the same conditions as set forth by Landlord.
Subtenant, in making any alterations or installations in or to the
Subleased Premises, shall comply with all of the terms, covenants and
conditions of the Lease and with all requirements of governmental
bodies having jurisdiction thereover. Prior to making such alterations
or installations, Subtenant shall first obtain Sublandlord's and
Landlord's written approval to the plans and specifications therefor
and shall furnish to Sublandlord and Landlord any permits,
authorizations, evidence of insurance and, if requested, insurance
provided for under the provisions of the Lease.
(b) Sublandlord shall (i) promptly submit to Landlord any extra
copy or copies of plans, specifications and other items submitted by
Subtenant for consent and approval, and (ii) promptly submit to
Subtenant, all responses or inquiries from Landlord with respect to
the foregoing.
(c) If this Sublease terminates prior to the Sublease Expiration
Date by virtue of any default by Subtenant under the terms of this
Sublease, then and in such event all alterations or installations made
by Subtenant, and all personal property left by Subtenant shall,
unless Sublandlord elects otherwise, become the property of
Sublandlord and shall remain upon and be surrendered under the
Subleased Premises as a part thereof. Further, in the event of such
early termination as a result of Subtenant's default, by Landlord's
consent to this Sublease, Landlord agrees that Sublandlord will be in
compliance with its surrender provisions under the Lease if
Sublandlord allows any alterations made by Subtenant which were
approved by Landlord. If this Sublease terminates on the Sublease
Expiration Date, then to the extent that Landlord does not require
that alterations or personal property become the property of Landlord
under the Lease, or if Subtenant has reached a direct agreement with
Landlord with respect thereto, Subtenant shall retain ownership
thereof. In the event of an early termination or cancellation of the
term of this Sublease, and if Sublandlord has the right hereunder to
elect to require the removal of alterations and/or personal property
and does in fact so elect, then Sublandlord shall give Subtenant
prompt notice of such election, and Subtenant shall restore that
portion of the Subleased Premises affected by such removal to
substantially their condition immediately prior to the installation of
the alteration or personal property being removed, reasonable wear and
tear excepted (i.e., substantially the condition existing immediately
prior to the date of installation), at Subtenant's own cost and
expense, prior to the expiration of the term of this Sublease.
Subtenant shall also pay the cost of repairing all damage to the
Subleased Premises, the Building and the land occasioned by any such
removal. If Subtenant shall not have removed any alterations and/or
personal property which it is required hereby to remove in the event
of an early expiration of this Sublease, then Sublandlord shall have
the right to remove the same at the sole cost and expense of
Subtenant. The provisions of this Paragraph 7(c) shall survive an
early termination of this Sublease. If this Sublease expires on the
Sublease Expiration Date, then the provisions of this Paragraph 7(c)
shall be of no force and effect and Subtenant's obligations shall be
as provided under the terms of the direct lease relative to the
removal of alterations at the end of the Lease Term.
8. PERMITTED USES. Subtenant shall use and occupy the
Subleased Premises for the manufacturing, packaging and distributing of
vitamins, over the counter and prescription drugs, and other related products,
including related office functions, and for any other legal purposes in
connection with the conduct of its business, subject to the physical limitations
of the specifications of the Building. Subtenant's use shall be subject to the
provisions of the Lease. If any governmental license or permit shall be required
for the proper and lawful conduct of Subtenant's business in the Subleased
Premises or any part thereof, and if failure to secure such
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license or permit would in any way affect Landlord, Sublandlord or the Building
or any part thereof or create a default under the Lease, then Subtenant shall,
at Subtenant's expense, procure and thereafter maintain such license or permit.
Subtenant shall at all times during the term of this Sublease comply with the
terms and conditions of each such license or permit.
9. ASSIGNMENT AND SUBLEASE. So long as Subtenant is a direct
tenant of Landlord under the Direct Lease, the provisions of Article XIV of the
Direct Lease shall contain all of the rights and obligations of Subtenant with
respect to the issue of assignment and subletting pursuant to the terms of this
Sublease. In the event that the Direct Lease is terminated prior to the
termination of this Sublease, then, as between Sublandlord and Subtenant, the
provisions of Article XIV of the Lease shall contain all of the rights and
obligations of Subtenant with respect to the issue of assignment and subletting
pursuant to the terms of this Sublease.
10. APPROVALS UNDER THE LEASE AND SUBLEASE.
(a) Whenever in this Sublease (whether by the express terms
hereof, by incorporation by reference of the terms of the Lease or
otherwise) Sublandlord is granted the right to prescribe, approve or
require certain acts, standards or performances by Subtenant, Landlord
shall also be deemed to have such right. Whenever under the Lease,
Sublandlord must comply with particular requirements (such as
obtaining insurance) or act or perform (to indemnify, hold harmless or
reimburse) for the benefit of Landlord, Subtenant shall also comply or
act for the benefit of Sublandlord and Landlord to the extent that
obligation is attributable to the Subleased Premises. Wherever in this
Sublease (whether by the express terms of this Sublease, by
incorporation by reference of the terms of the Lease or otherwise) the
consent or approval by Sublandlord is required for any act or thing,
which consent or approval Sublandlord has agreed not to unreasonably
withhold or delay, and the consent or approval Sublandlord has agreed
not to unreasonably withhold or delay, and the consent or approval of
Landlord either is required under the Lease for the same act or thing
or would be required under the Lease for the same act or thing if
performed or desired by Sublandlord (as Tenant under the Lease), then:
(i) Sublandlord's refusal to give such approval or consent shall be
deemed reasonable if inter alia, Landlord shall have refused to give
such approval or consent, whether or not Landlord shall be obligated
to act reasonably and whether or not Landlord shall be acting
reasonably, it being understood and agreed that Sublandlord shall have
no obligation or liability during the term of this Sublease for
Landlord's failure to act reasonably; (ii) if Subtenant requests such
consent or approval from Sublandlord, Sublandlord shall promptly
forward to Landlord a copy of any request of Subtenant for consent or
approval from Landlord; and (iii) if Landlord grants, denies or
conditions its consent or approval, Sublandlord shall promptly notify
Subtenant of such fact and forward to Subtenant a copy of any such
grant, denial or condition if the same shall be in writing. Nothing
contained in the preceding sentence shall be deemed to require
Sublandlord to give any consent or approval because Landlord has given
such consent or approval.
(b) All references in this Paragraph 10 (whether in the text
itself or by incorporation from the Lease) to the consent or approval
of Landlord or Sublandlord shall be deemed to mean the written consent
or approval of Landlord or Sublandlord, as the case may be, and no
consent or approval of Landlord or Sublandlord, as the case may be,
shall be effective for any purpose unless such consent or approval is
set forth in a written instrument executed by Landlord or Sublandlord,
as the case may be. If any request or demand is made by Landlord
(whether requiring and act, restraint or payment) directly to
Subtenant pursuant to the Lease in respect of a corresponding
obligation under the Lease, then such request or demand shall be
honored and performed or adhered to as if the request or demand was
made directly by Sublandlord. In all provisions of this Sublease
requiring the satisfactory approval or consent of Sublandlord,
Subtenant first shall be required, if Sublandlord under similar
circumstances would be required under the terms of the Lease, to
obtain the approval or consent of Landlord and then to obtain the like
approval or consent of Sublandlord. Sublandlord shall forward to
Landlord such requests as Subtenant may submit for approval or consent
from Landlord. Whenever, pursuant to this Sublease, Landlord or
Sublandlord's consent or approval, or the review or consideration by
Landlord or Sublandlord of any matter, is permitted, solicited or
required prior to or in connection with any activity planned or
undertaken on behalf of Subtenant, Subtenant shall reimburse Landlord
and Sublandlord for all actual reasonable and
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documented out-of-pocket expenses (including, without limitation, the
reasonable fees and disbursements of attorneys and other professional
consultants), incurred by Landlord and Sublandlord, as the case may
be, in connection with such consideration, review, consent or
approval. Such reimbursement shall be made by Subtenant on demand.
Expenses incurred by Sublandlord shall be deemed to include any
expenses payable to Landlord under the Lease.
11. SUBORDINATION; SUBTENANT'S COVENANTS AND INDEMNITY.
(a) This Sublease is subject and subordinate to all of the
terms, covenants, provisions, conditions and agreements contained in
the Lease and in any amendments or supplements thereto and to the
matters to which the Lease is subject and subordinate; provided,
however, that Sublandlord shall not enter into any amendment or
supplement to the Lease which increases Subtenant's obligations
hereunder or decreases its rights hereunder without the prior written
consent of Subtenant which Subtenant may withhold in its sole and
absolute discretion. Subtenant covenants and agrees (i) to perform and
to observe all of the terms, covenants, provisions, conditions and
agreements of the Lease on Sublandlord's part to be performed and
observed to the extent the same are attributable to the Subleased
Premises; (ii) that Subtenant will not do or cause to be done or
suffer or permit any act or thing to be done which would or might
cause the Lease or the rights of Sublandlord as Tenant thereunder to
be canceled, terminated or forfeited or which would make Sublandlord
liable for any damages, claims or penalties; and (iii) except for any
liabilities arising from Sublandlord's willful misconduct or gross
negligence or that of its agents, employees or contractors, to
indemnify and hold harmless Sublandlord from and against any and all
liability, loss, damages, suits, penalties, claims and demands of
every kind or nature (including, without limitation, reasonable
attorneys' fees and expenses of defense) by reason of Subtenant's
failure to comply with the forgoing or arising from the use, occupancy
or manner of use and/or occupancy of the Subleased Premises or of any
business conducted therein, or from any work or thing whatsoever done
or any condition created by or any other act or omission of Subtenant,
its assignees or subtenants, or their respective employees, agents,
servants, contractors, invitees, visitors or licensees, in or about
the Subleased Premises or any other part of the Building.
(b) In the event of any default on the part of Subtenant under
any of the terms, covenants, conditions, provisions or agreements of
the Lease or of this Sublease, Sublandlord shall have the same rights
and remedies against Subtenant under this Sublease as are available to
the Landlord against Sublandlord under the provisions of the Lease.
(c) The provisions of this Paragraph 11 shall survive the
expiration or sooner termination of the Sublease.
12. RIGHTS AND OBLIGATIONS UNDER SUBLEASE.
(a) Except as otherwise provided herein, including Paragraphs
12(b) and (d) below, the provisions of the Lease are hereby
incorporated by reference with the same force and effect as if set
forth in length herein and shall apply to the Subleased Premises and
to the Building to the extent that the same are applicable, except as
modified and amended by this Sublease. References in the Lease to
"Landlord", "Tenant", "Premises", "Lease", "Minimum Rent" and
"additional rent" shall be deemed to refer to Sublandlord, Subtenant,
Subleased Premises, this Sublease, fixed monthly rent hereunder, and
additional rent hereunder, respectively. To the extent that any
provisions of the Lease may conflict or be inconsistent with the
provisions of this Sublease, whether or not such inconsistency is
expressly noted herein, the provisions of this Sublease shall govern.
(b) Notwithstanding the foregoing provisions of this Sublease to
the contrary, it is understood and agreed that all services, repairs,
restorations, consents, equipment and access which, and the manner in
which the same are required or authorized to be provided and made by
Sublandlord or its agents hereunder or in accordance with the
provisions of the Lease, will, in fact, be provided by Landlord to the
extent required by the Lease, and Sublandlord shall have no obligation
or liability during the term of this Sublease (i) to provide any such
services, or make any such repairs or restorations, or (ii) for the
manner in which the same are provided. If Landlord shall be entitled
to any payment or
-8-
remuneration by reason of additional services provided at the request
of Subtenant with respect to the Subleased Premises, Subtenant shall
pay the same promptly on demand as additional rent hereunder.
Subtenant agrees to look solely to Landlord for the furnishing of such
services, in accordance with the terms of the Lease and for any
indemnity for any losses or claims arising by reason of any failure,
breach or delay in performing or furnishing the same which may be
available. Sublandlord shall in no event be liable to Subtenant nor
shall the obligations of Subtenant hereunder be impaired or the
performance thereof excused because of any failure or delay on
Landlord's part in furnishing such services, or making such
restorations or repairs, except that to the extent that Sublandlord
shall be entitled to any abatement of any rent that Sublandlord is
obligated to pay under the Lease in respect of any particular portion
of the Subleased Premises, Subtenant shall have a corresponding
abatement.
(c) If Landlord shall default in any of its obligations to
Sublandlord with respect to the Subleased Premises, Subtenant shall be
entitled to enforce Sublandlord's rights against Landlord under the
Lease with respect to the Subleased Premises, at no cost or expense to
Sublandlord, and Subtenant shall protect and hold Sublandlord harmless
from and against any and all claims, costs and expenses related to any
such enforcement. If, after written request from Subtenant,
Sublandlord shall fail or refuse to take appropriate action of the
enforcement of Sublandlord's rights against Landlord with respect to
the Subleased Premises within a reasonable period of time considering
the nature of Landlord's default, Subtenant shall, if the same right
would be permissible by Sublandlord under the Lease, have the right to
pursue a claim, action, proceeding or arbitration, for injunction,
damages or other remedy in its own name, and for that purpose and only
to such extent all of the rights of Sublandlord under the Lease hereby
are conferred upon and assigned to Subtenant and Subtenant hereby is
subrogated to such rights to the extent that the same shall apply to
the Subleased Premises; provided, further, that notwithstanding
anything herein to the contrary, in no event shall Subtenant have the
right to take any action which may result in a default under the Lease
or in a surrender of all or any portion of the Subleased Premises
except as a result of Landlord's recapture termination rights under
Paragraph 14.6 of the Lease. If any such action against Landlord in
Subtenant's name shall be barred by reason of lack of privity,
nonassignability or otherwise, Subtenant may take such action in
Sublandlord's name, provided that (i) Subtenant has given Sublandlord
at least five (5) business days prior written notice of Subtenant's
intention to take such action (except in the case of an emergency, in
which event only that notice which is reasonable under the
circumstances will be required), (ii) Sublandlord shall, to the extent
reasonably practicable, and at Subtenant's sole cost and expense,
cooperate with Subtenant in taking such action, and (iii) Subtenant
shall indemnify, defend, protect and hold Sublandlord harmless from
and against all liability, loss or damage which Sublandlord shall
suffer by reason of such action. Notwithstanding the foregoing,
Sublandlord agrees and covenants to use its reasonable efforts to
obtain performance by Landlord of its obligations under the Lease with
respect to the Subleased Premises.
(d) Except as otherwise expressly provided in this Sublease, the
terms, covenants and conditions of Article III, Paragraph 4.1, and
Sublandlord's reimbursement obligations under Section 12.4 of the
Lease, are expressly excluded from Sublease. Further, Subtenant hereby
agrees that with respect to Paragraph 12.4 of the Lease, Subtenant
shall not request Sublandlord to exercise any right of termination
unless Landlord reasonably estimates that the repair and restoration
contemplated by said Paragraph 12.4 will take more than 270 days to
complete (measured from the date of issuance if necessary building
permits for the repair and restoration work). Further, during the
terms of this Sublease, the provisions of Paragraph 26.10 of the
Direct Lease shall supersede the provisions of Paragraph 25.10 of the
Lease.
(e) Sublandlord covenants and agrees with Subtenant that
Sublandlord will pay all fixed rent and additional rent payable by
Sublandlord pursuant to the Lease to the extent that failure to
perform same would adversely affect Subtenant's use or occupancy of
the Subleased Premises. Sublandlord agrees to indemnify Subtenant and
hold it harmless from and against any and all claims, damages, losses,
expenses and liabilities, including reasonable attorneys' fees
incurred as a result of the non-performance or non-observance
-9-
of any obligation of Sublandlord under the Lease which has not become
an obligation of Subtenant pursuant to this Sublease.
13. DAMAGE OR DESTRUCTION. If the Subleased Premises shall be
partially or totally damaged by fire or other cause, the consequences thereof
shall be governed by Article XII of the Lease. Subtenant's right to an
apportionment or abatement of rent and to repairs shall be dependent upon
whether or not Sublandlord has a right to apportionment or abatement of rents
and/or repairs under said Article XII in respect of the Subleased Premises.
Except as such rights are provided to Sublandlord by Landlord in the Lease, no
damage, compensation or claims shall be payable by Sublandlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Subleased Premises or of the Building.
Subtenant shall not have any right to terminate this Sublease pursuant to
Article XII, except to the extent that such right to terminate the lease
pursuant to paragraph 12.4; provided, however, that such right to terminate
shall mature after two hundred seventy (270) days rather than one hundred
eighty (180) days in this Sublease, based upon Subtenant's rights as set
forth in Paragraph 12.4 of the Direct Lease.
14. QUIET ENJOYMENT. If and so long as Subtenant pays the fixed
monthly rent, additional rent and other charges due and payable hereunder and
performs all of the other obligations of Subtenant to be performed hereunder,
Subtenant may peaceably and quietly have, hold and enjoy the Subleased Premises
subject, nevertheless, to the terms, covenants, conditions and provisions of
this Sublease and to the Lease and to the matters to which the Lease is subject
and subordinate.
15. NOTICES. Any notice, demand, request or other communication
which under the terms of this Sublease or under any provision of law or
governmental regulation must or may be given either by Sublandlord or Subtenant
to either Sublandlord or Subtenant shall be in writing and hand delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, or by a nationally recognized overnight courier service addressed as
follows to the person entitled to receive the same:
(a) If to Sublandlord:
Teledyne, Inc.
1901 Avenue of the Stars, 18th Floor
Los Angeles, California 90067
Attention: General Counsel
with a copy to:
Teledyne, Inc.
1901 Avenue of the Stars, 18th Floor
Los Angeles, California 90067
Attention: Real Estate Department
(b) If to Subtenant prior to April 1, 1994:
Leiner Health Products Inc.
1845 West 205th Street
P.O. Box 2010
Torrance, California 90501
(c) If to Subtenant after April 1, 1994:
Leiner Health Products Inc.
901 East 233rd Street
Carson, California 90745
Attention: Chief Financial Officer
Any notice shall be deemed to have been validly given four (4) business days
after being deposited in the mail, postage prepaid. Either party by notice as
aforesaid may change the addresses set forth above for notices, requests,
demands or communications to it.
16. BROKERS. Each party warrants and represents to the other
that such party has dealt with no broker or other person in connection with this
sublease transaction other than
-10-
The Klabin Company and CB Commercial Real Estate Group, Inc. Subtenant and
Sublandlord agree to indemnify and save harmless each other from any costs,
expenses, attorneys' fees or liability for compensation or charges which may be
claimed by any other broker or agent as a result of any conversations,
correspondence, other dealings or actions of the indemnifying party in
connection with this Sublease transaction.
17. ESTOPPEL CERTIFICATES. Subtenant shall, at any time and
from time to time, on not less than fourteen (14) days' prior written demand by
Sublandlord or Landlord, execute, acknowledge, and deliver to Sublandlord or
Landlord, as the case may be, a written statement certifying (a) that this
Sublease is unmodified and in full force and effect, or, in the alternative,
that this Sublease is in full force and effect as modified (the instruments of
modification being set forth in a schedule attached to and made a part of said
statement), (b) the dates to which the fixed monthly rent, additional rent and
other charges due under the Sublease have been paid, and (c) whether or not to
the best of Subtenant's knowledge, Sublandlord is in default hereunder, and, if
so, specifying the nature of the default. It is intended and Subtenant
understands that any such statement delivered pursuant to this Paragraph 17 may
be relied upon by others with whom Landlord and Sublandlord, as the case may be,
may be dealing. Sublandlord agrees to provide to Subtenant an estoppel
certificate signed by Sublandlord, containing the same types of information and
within the same periods of time, as are set forth above, except such changes as
are reasonably necessary to reflect that the estoppel certificate is being
granted and signed by Sublandlord to Subtenant or Subtenant's lender, assignee
or subsublessee, rather than from Subtenant to Sublandlord.
18. INSURANCE. So long as Subtenant is a direct tenant of
Landlord under the Direct Lease, the provisions of Article VIII of the Direct
Lease shall contain all of the rights and obligations of Subtenant with respect
to the issue of insurance pursuant to the terms of this Sublease. In the event
that the Direct Lease is terminated prior to the termination of this Sublease,
then, as between Sublandlord and Subtenant, the provisions of Article VIII of
the Lease shall contain all of the rights and obligations of Subtenant with
respect to the issue of insurance pursuant to the terms of this Sublease.
19. EARLY OCCUPANCY. Subtenant, at Subtenant's option, shall be
permitted to enter the Subleased Premises upon the execution and delivery of
this Sublease by Sublandlord and Subtenant for the purpose of remodeling the
Subleased Premises and installing Subtenant's furniture and fixtures. From the
date of such occupancy until the Sublease Commencement Date, Subtenant shall
have no obligation to pay any fixed monthly rent or any other charge whatsoever
other than utilities and security costs. If legally permissible, Subtenant may
commence the operation of its business within the Subleased Premises during such
period of access, without causing any early commencement of the term of this
Sublease. If Subtenant elects to exercise the within right of early entry in
accordance with the provisions of this Paragraph, Subtenant further agrees to
(a) comply with the terms and conditions of the Sublease except with regard to
Subtenant's obligation to pay fixed monthly rent, rent adjustments and any other
charges whatsoever, (b) pay for and provide certificates evidencing the
existence and amounts of liability insurance carried by Subtenant, which
coverage shall be in compliance with Article VIII of the Lease, and (c) comply
with all applicable laws, regulations, permits and other approvals applicable to
such early entry work on the Subleased Premises. Subtenant understands that it
is undertaking a business risk by such early entry, which is that Landlord may
not provide its consent to this Sublease. If by the expiration of the period of
time provided under the Sublease for Sublandlord to deliver such consent,
Landlord has failed to give such consent, Subtenant shall be subject to a
potential notice of immediate vacation of the Premises by Landlord and/or
Sublandlord, in which event this Sublease shall terminate and Subtenant's sole
remedy shall be the right to remove all of its personal property from the
Subleased Premises, and to promptly repair any resulting damage, so long as such
removal occurs within fifteen (15) days of receipt of notice of the disapproval
of this Sublease, with the failure to so timely remove such personality creating
the rights in Landlord and Sublandlord to dispose of Subtenant's personal
property pursuant to the provisions of California Civil Code Sections 1980
through 1991.
20. DEFAULT.
(a) In the event that Subtenant shall default in the payment of
fixed monthly or additional rent hereunder, or default in the
performance or observance of any of the terms,
-11-
conditions and covenants of this Sublease, which default shall not be
cured within the grace periods set forth in the Lease, as modified by
Paragraph 12(d) of this Sublease, Sublandlord, in addition to and not
in limitation of any rights otherwise available to it, shall have the
same rights and remedies with respect to such default as are provided
to Landlord under the Lease with respect to defaults by tenant
thereunder, with the same force and effect as though all such
provisions relating to any such default or defaults were herein set
forth in full, and Subtenant shall have all of the obligations of the
tenant under the Lease with respect to such default.
(b) In the event of a default by Subtenant in the performance of
any of its obligations hereunder, Sublandlord may, at its option, and
without waiving any other remedies for such default herein or by law
or by incorporation by reference of the Lease provided, at any time
thereafter, give written notice to Subtenant that if such default is
not cured, or the cure not commenced within seven (7) days after such
notice is deemed given pursuant to the terms of this Sublease, and
thereafter pursued diligently to conclusion, Sublandlord may cure such
default for the account of Subtenant, coordinating with Subtenant to
the extent reasonably possible, and any amount paid or incurred by
Sublandlord in so doing shall be deemed paid or incurred for the
account of Subtenant, and Subtenant agrees to reimburse Sublandlord
therefor and save Sublandlord harmless therefrom; provided that
Sublandlord may cure any such default as aforesaid prior to the
expiration of any waiting period if reasonably necessary to protect
Sublandlord's interests under the Lease or to prevent injury or damage
to persons or property. If Subtenant shall fail to reimburse
Sublandlord upon demand for any amount paid for the account of
Subtenant hereunder, said amount shall be added to, and become due as
a part of, the next payment of fixed monthly rent due hereunder.
21. MISCELLANEOUS.
(a) This Sublease shall be binding upon and insure to the
benefit of the parties hereto and, subject to the limitations set
forth in Paragraph 9 hereof, their respective successors and assigns
(it being acknowledged by Sublandlord and Subtenant that for the
purposes of the Consent attached hereto, Landlord shall not be
considered to be such a successor or assign).
(b) This Sublease may be executed in counterpart originals and
delivered by facsimile and all such counterparts and facsimiles shall
constitute one original Sublease. If this Sublease is delivered by
facsimile, the party delivering the Sublease by facsimile shall
deliver to the other party the executed original by mail in accordance
with Paragraph 16 of this Sublease.
(c) Subtenant hereby warrants and represents to Sublandlord and
Landlord, as of the date of execution hereof, as follows:
(i) Subtenant is a Delaware corporation duly and validly
organized, existing and in good standing under the laws of
California;
(ii) Subtenant is duly authorized and fully qualified to
conduct is business in the State of California and is in good
standing in said state; and
((iii) The undersigned officer of Subtenant has been
authorized to sign this Sublease on behalf of Subtenant, and this
Sublease constitutes the valid and binding obligation of
Subtenant.
(d) EXTENSION OF TERM UNDER LEASE. Sublandlord acknowledges
that Subtenant is concurrently entering into the Direct Lease with the
Landlord for the Subleased Premises for a term commencing upon the
expiration of the term of this Sublease. Therefore, Sublandlord hereby
waives any right to extend the term of the Lease with respect to the
Subleased Premises.
22. TENANT IMPROVEMENTS. Sublandlord shall provide Subtenant
with a Tenant Improvement Allowance of Five Hundred Thousand Dollars
($500,000.00) to be used for Subtenant's refurbishment and/or installation of
the administrative offices, security and protective
-12-
devices selected by Subtenant for the Premises, including fencing, fire safety
devices such as draft curtains, sprinklers and the like. Sublandlord shall make
payments on a progress payment basis as set forth herein. Subtenant shall submit
to Sublandlord, from time to time, but not more frequently than once a month, a
written request, in a form to be approved by Sublandlord, for disbursement of
portions of the allowance set forth above (the "Allowance"). Each such request
shall include (i) a copy of the bill or invoice, approved by Subtenant, which
Subtenant is required to pay, and a certification from Subtenant's construction
representative that the amount set forth in such request is due and owing, (ii)
executed mechanic's lien releases from all of the contractors working on such
improvements, which shall comply with the appropriate provisions, as reasonably
determined by Sublandlord, of California Civil Code Section 3262(d), and (iii)
such additional information and evidence as Sublandlord may reasonably require.
Sublandlord shall pay to Subtenant within thirty (30) days after receipt of each
such request the amounts so requested by Subtenant in a check made jointly
payable to Subtenant's general contractor and to Subtenant, less a ten percent
(10%) retention (the aggregate amount of such retention is referred to herein as
the "Final Retention"), until such time as the Five Hundred Thousand Dollars
($500,000.00) Allowance has been depleted in its entirety. Sublandlord shall pay
to Subtenant by check jointly payable to Subtenant and its general contractor,
the Final Retention following the completion of construction of Subtenant's work
of improvement in the Premises, provided that Subtenant delivers to Sublandlord
properly executed mechanic lien releases in compliance with both California
Civil Code Section 3262(d)(2), and either Section 3262(d)(3) or Section
3262(d)(4).
23. BUILDING SIGN, SECURITY, AND ANTENNA. The provisions of
Paragraphs 5, 6 and 7 of Lease Rider No. 1 of the Direct Lease, pertaining to
building sign, security and antennas, respectively, are hereby incorporated in
this Sublease by reference.
24. CONFIDENTIALITY. Sublandlord and Subtenant, and by
executing the attached Consent and Agreement Concerning Sublease, Landlord, each
hereby agree not to disclose to any third party the fact that this Sublease, and
the Consent and Agreement Concerning Sublease attached hereto, have been fully
executed and delivered by the parties hereto and thereto until the later to
occur of October 31, 1993 or such date as Subtenant delivers written notice to
Landlord and Sublandlord that the level of confidentiality has been reduced to
the following level, i.e., that Landlord, Sublandlord and Subtenant each hereby
agree to use their respective commercially reasonable efforts to keep the terms
of this Sublease confidential and shall not disclose same to any other person
not a party hereto without the prior written consent of the other party;
however, Subtenant may disclose the terms hereof to Subtenant's real estate
broker, proposed assignees or sublessees, Affiliates (as defined in Paragraph
14.2 of the Direct Lease) and their real estate brokers, or Subtenant's
accountants, attorneys, managing employees, and others in privity with
Subtenant, to the extent reasonably necessary for Subtenant's business purpose.
Notwithstanding the foregoing, Sublandlord and Landlord shall be permitted to
disclose the terms of this Sublease to their respective attorneys, auditors,
accountants, employees, lenders and other persons having a legitimate need to
know the terms hereof for bona fide business purposes.
IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed
this Sublease as of the day and year first above written.
SUBLANDLORD: SUBTENANT:
TELEDYNE, INC, LEINER HEALTH PRODUCTS INC.,
a Delaware corporation a Delaware corporation
By: /s/ By: /s/ Giffen H. Ott
------------------------------- -----------------------
Its: Treasurer Giffen H. Ott
Its: Vice President,
Manufacturing
Development
-13-
EXHIBIT "A"
L E A S E
LANDLORD: WATSON LAND COMPANY,
a California corporation
TENANT: TELEDYNE, INC.,
a Delaware corporation
DATED: July 17, 1991
THE SUBMISSION OF THIS DOCUMENT FOR EXAMINATION AND NEGOTIATION DOES NOT
CONSTITUTE AN OFFER TO LEASE, OR A RESERVATION OF, OR OPTION FOR, THE PREMISES;
THIS DOCUMENT BECOMES EFFECTIVE AND BINDING ONLY UPON EXECUTION AND DELIVERY
HEREOF BY LANDLORD. NO ACT OR OMISSION OF ANY EMPLOYEE OR AGENT OF LANDLORD OR
OF LANDLORD'S BROKER SHALL ALTER, CHANGE OR MODIFY ANY OF THE PROVISIONS HEREOF.
INDEX
-----
ARTICLE PAGE
- ------- ----
ARTICLE I - Basic Lease Provisions . . . . . . . . . . . . . .1
ARTICLE II - Common Area, Parking and Condition of Premises. .2
ARTICLE III - Term of Lease. . . . . . . . . . . . . . . . . .4
ARTICLE IV - Rent. . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE V - Taxes and Assessment . . . . . . . . . . . . . . .6
ARTICLE VI - Utility Charges . . . . . . . . . . . . . . . . .7
ARTICLE VII - Hold Harmless. . . . . . . . . . . . . . . . . .8
ARTICLE VIII - Insurance . . . . . . . . . . . . . . . . . . .9
ARTICLE IX - Repairs, Maintenance, Alterations and Removal
of Equipment . . . . . . . . . . . . . . . . . 10
ARTICLE X - Inspection of Premises by Landlord . . . . . . . 16
ARTICLE XI - Mechanics' Liens. . . . . . . . . . . . . . . . 17
ARTICLE XII - Damage or Destruction of Premises. . . . . . . 18
ARTICLE XIII - Condemnation. . . . . . . . . . . . . . . . . 19
ARTICLE XIV - Use Of Premises - Assignments. . . . . . . . . 20
ARTICLE XV - Event of Default. . . . . . . . . . . . . . . . 24
ARTICLE XVI - Surrender of Premises. . . . . . . . . . . . . 26
ARTICLE XVII - Delays - Extensions of Time . . . . . . . . . 27
ARTICLE XVIII - Attorneys' Fees and Dispute Resolution . . . 27
ARTICLE XIX - Statement of Lease . . . . . . . . . . . . . . 29
ARTICLE XX - Rights Reserved by Landlord . . . . . . . . . . 29
ARTICLE XXI - Covenant of Quiet Enjoyment. . . . . . . . . . 29
ARTICLE XXII - Recordation . . . . . . . . . . . . . . . . . 30
ARTICLE XXIII - Subordination. . . . . . . . . . . . . . . . 30
ARTICLE XXIV - Holding Over. . . . . . . . . . . . . . . . . 31
ARTICLE XXV - General. . . . . . . . . . . . . . . . . . . . 31
25.1 Remedies Cumulative . . . . . . . . . . . . . . . 31
25.2 Successors and Assigns. . . . . . . . . . . . . . 32
25.3 Payments and Interest . . . . . . . . . . . . . . 32
25.4 Late Charge . . . . . . . . . . . . . . . . . . . 32
25.5 Late Payments and Impounds. . . . . . . . . . . . 32
25.6 Notices . . . . . . . . . . . . . . . . . . . . . 32
25.7 Captions. . . . . . . . . . . . . . . . . . . . . 32
25.8 Pronouns and Singular/Plural. . . . . . . . . . . 32
25.9 Time of Essence . . . . . . . . . . . . . . . . . 32
25.10 Reasonable Consent. . . . . . . . . . . . . . . . 33
25.11 Fair Meaning. . . . . . . . . . . . . . . . . . . 33
25.12 Entire Agreement. . . . . . . . . . . . . . . . . 33
25.13 No Accord and Satisfaction. . . . . . . . . . . . 33
25.14 Choice of Law . . . . . . . . . . . . . . . . . . 33
15.15 Non-Discrimination. . . . . . . . . . . . . . . . 33
25.16 Counterparts. . . . . . . . . . . . . . . . . . . 33
25.17 Corporate Resolution. . . . . . . . . . . . . . . 33
25.18 Reimbursements to Landlord. . . . . . . . . . . . 33
25.19 No Guard Service. . . . . . . . . . . . . . . . . 33
25.20 Brokers . . . . . . . . . . . . . . . . . . . . . 34
25.21 Brokerage Commission. . . . . . . . . . . . . . . 34
25.22 Parking . . . . . . . . . . . . . . . . . . . . . 34
25.23 Lease Reviewed. . . . . . . . . . . . . . . . . . 35
25.24 Financial Statements. . . . . . . . . . . . . . . 35
25.25 Lease Interest Rate . . . . . . . . . . . . . . . 35
EXHIBITS
- --------
Exhibit A - Performance Standards of Watson Industrial Center
Exhibit B - Outline of Premises
Exhibit B-1 - Description of Common Areas
Exhibit C - Legal Description
Exhibit D - Operating Expenses
Exhibit E - Insurance Summary
Exhibit F - Landlord's Initial Improvement Work
Exhibit F-1 - Work Performance Schedule
Exhibit G - Maintenance and Repair of Roof and
HVAC System
Exhibit H - Tenant's Special Manufacturing Improvements
Exhibit I - Items Purchased from Previous Tenant
LEASE RIDER
- -----------
Lease Rider Number 1
MULTI-TENANT INDUSTRIAL LEASE
This lease ("Lease") is made and entered into as of this 17th day of July,
1991 by and between WATSON LAND COMPANY, a California corporation ("Landlord")
and TELEDYNE, INC., a Delaware corporation ("Tenant").
Landlord and Tenant mutually covenant and agree that Landlord, in
consideration of the rent payable by Tenant and the covenants and agreements to
be kept, observed and performed by Tenant, hereby rents and leases to Tenant,
and Tenant hereby takes and hires from Landlord, the "Premises" (as defined
herein), pursuant to the provisions of this Lease, subject to (i) all applicable
zoning, municipal, county, state and federal laws; (ii) covenants, conditions,
restrictions, reservations, easements, rights and rights-of-way of record; and
(iii) Performance Standards of Watson Industrial Center dated July 1, 1991,
attached hereto as Exhibit "A" and incorporated herein by reference. In the
event of any conflict between the provisions of this Lease and the provisions of
the Performance Standards, the provisions of this Lease shall govern.
ARTICLE I
BASIC LEASE PROVISIONS
1.1 DESCRIPTION OF PREMISES: "Premises," as used herein shall mean and
refer to that certain space located within the building (the "Building")
situated on the real property located in the County of Los Angeles, State of
California, commonly known as 901 East 233rd Street, Carson, California, as
outlined on the attached Exhibit "B", which Premises consists of
approximately 222,496 square feet. The Building consists of approximately
267,496 square feet. Landlord shall retain possession of the remaining 45,000
square feet of the Building (the "Additional Premises"), which may be leased
or used by third parties as determined by Landlord from time to time, in
Landlord's sole and absolute discretion, subject only to Tenant's "Right of
First Offer" to lease the Additional Premises pursuant to Paragraph 6 of the
attached Lease Rider. The Premises and the Building are located on a parcel
of land (the "Land") described in the attached Exhibit "C". The Building and
the Land are collectively referred to herein as the "Building Complex."
1.2 STREET ADDRESS OF PREMISES: 901 East 233rd Street, Carson, California.
1.3 APPROXIMATE PREMISES SQUARE FOOTAGE: 222,496.
1.4 LEASE TERM: Ten (10) years beginning on October 1, 1991 (the
"Commencement Date") and ending on September 30, 2001 (the "Termination
Date").
1.5 EXTENSION OPTIONS: Three (3) periods of Five (5) years each. See
Paragraph 1 of the attached Lease Rider.
1.6 INITIAL MINIMUM RENT: Seventy-Three Thousand Four Hundred
Twenty-Three Dollars ($73,423.00).
1.7 PERIODIC RENT ADJUSTMENTS: See Paragraph 2 of the attached Lease
Rider.
1.8 TENANT's PRORATA SHARE: Eighty-three percent (83%) based on a total
building area of 267,496 square feet.
1.9 [Intentionally Deleted.]
1.10 [Intentionally Deleted.]
1.11 SECURITY DEPOSIT: None.
1.12 BROKERS: The Klabin Company (David A. Prior and Arnold Ng).
1.13 INITIAL IMPROVEMENT WORK: See Paragraph 4 of the attached Lease
Rider.
1.14 EXHIBITS AND RIDERS: The following Exhibits and Riders are
attached to this Lease and made a part hereof:
Exhibit A - Performance Standards of Watson Industrial
Center
Exhibit B - Outline of Premises
Exhibit B-1 - Description of Common Areas
Exhibit C - Legal Description
Exhibit D - Operating Expenses
Exhibit E - Insurance Summary
Exhibit F - Landlord's Initial Improvement Work
Exhibit F-1 - Work Performance Schedule
Exhibit G - Maintenance and Repair of Roof and HVAC System
Exhibit H - Tenant's Special Manufacturing Improvements
Exhibit I - Items Purchased from Previous Tenant
Lease Rider Number 1
1.15 MAILING ADDRESSES:
Landlord: Watson Land Company
22010 South Wilmington Avenue
Suite 400
Carson, California 90745
Tenant: Teledyne, Inc.
1901 Avenue of the Stars, 18th Floor
Los Angeles, California 90067
Attention: Legal Department
With a
Copy to: Teledyne Inet
a Division of Teledyne Industries, Inc.
901 East 233rd Street
Carson, California 90745
ARTICLE II
COMMON AREA, PARKING AND CONDITION OF PREMISES
2.1 The term "Common Area", as used herein, is defined as all
areas and facilities outside the Premises and within the exterior boundary
line of the Land, as shown in the attached Exhibit B-1.
2.2 Landlord hereby grants to Tenant for the benefit of Tenant and
its employees, suppliers, shippers, customers, and invitees, during the
"Early Occupancy Period" and the "Lease Term" (as those terms are defined
herein), the non-exclusive right to use the Common Areas, in common with
others entitled to such use, subject to any rights, powers, and privileges
reserved by Landlord under the terms hereof or under the terms of any rules,
regulations or restrictions now or hereafter governing the use of the
Building Complex. Tenant shall have a priority right to use the portion of
the Common Areas shown as the "Priority Area" in the cross-hatched area in
the attached Exhibit "B-1" for parking, loading and unloading, and Tenant
shall have the non-exclusive right, in common with others entitled to such
use, to use the balance of the Common Areas. However, Tenant agrees to use
its reasonable and diligent efforts to restrict its
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use of the Common Areas to the Priority Area and the "Shipping Access Area"
shown in the attached Exhibit "B-1". Under no circumstances shall the right
herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in any portion of the Common
Areas other than the portions of Tenant's "Priority Area" designated as
"Storage Area" on the attached Exhibit B-1. Tenant may store materials in the
Storage Area for a period of no more than thirty (30) days for any particular
item, but such storage must be in compliance with the requirements of the
Performance Standards. In the event that any unauthorized storage shall
occur, and is not cured within twenty-four (24) hours following notice from
Landlord, then Landlord shall have the right, in addition to such other
rights and remedies that it may have, to remove the stored items and charge
the cost to Tenant, which cost shall be immediately payable upon Landlord's
demand and which shall be deemed to be additional rent under this Lease.
2.3 Tenant shall be allocated three hundred seventy (370) vehicle
parking spaces, which spaces shall be located in the "Priority Area" shown on
the attached Exhibit "B-1". To the extent that any additional parking spaces
are required to be allocated to Tenant pursuant to applicable law, such
spaces may be located on any portion of the Building Complex or at any
location outside of the boundaries of the Building Complex which is within a
reasonable proximity to the Premises. Such parking spaces shall be used only
for parking vehicles no larger than full-size passenger automobiles or pickup
trucks. Tenant agrees that the parking spaces allocated to Tenant may include
"compact" parking spaces, in such number as may be required or permitted by
applicable governmental requirements. Tenant shall use reasonable and
diligent efforts to ensure that trucks and other service vehicles providing
supplies, materials or services to Tenant shall use only the Priority Area or
the Shipping Access Area. Tenant shall use its best efforts to prohibit any
vehicles that belong to or are controlled by Tenant or Tenant's employees,
suppliers, shippers, customers or invitees from being loaded, unloaded, or
parked in areas other than the Priority Area or the Shipping Access Area, and
Tenant shall fully cooperate with landlord in implementing necessary
corrective measures. If Tenant fails to prohibit any use by its employees,
suppliers, shippers, customers or invitees of areas other than the Priority
Area and the Shipping Access Area, then Landlord shall have the right, upon
reasonable notice (except in the event of any emergency, in which event no
notice shall be required), to remove or tow away any vehicle involved. Should
Tenant fail to prohibit any such prohibited use, then Landlord may charge the
removal or towing cost to Tenant, which cost shall be immediately payable to
Landlord upon demand by Landlord.
2.4 Landlord or such other person(s) as Landlord may appoint from
time to time shall have the right, from time to time, to establish, modify,
amend and enforce reasonable rules and regulations with respect to the Common
Areas and the use and maintenance thereof. Tenant agrees to abide by and
conform to such rules and regulations, and to cause its employees, suppliers,
shippers, customers, and invitees to so abide and conform. Landlord agrees to
use reasonable and diligent efforts to cause any other tenant of the Building
Complex to comply with all rules and regulations relating to the use of the
Common Areas and to cause such other tenant to use reasonable and diligent
efforts to avoid using Tenant's Priority Area and will include in its lease
with such other tenant, the right of Landlord to tow away any vehicle used by
any employee, supplier, shipper, customer or invitee of such other tenant
which is parked in Tenant's Priority Area; however, Landlord shall not be
responsible to Tenant for any non-compliance by other tenants in the Building
Complex (if any) with such rules and regulations.
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2.5 Landlord shall have the right, in Landlord's reasonable
discretion, from time to time: (a) to make reasonable changes to the Common
Areas, including, without limitation, changes in the location, size, shape
and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas
and walkways; (b) to close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available; (c) to use the Common Area while engaged in making additional
improvements, repairs or alterations to the Building Complex or any portion
thereof; and (d) to do and perform such other acts and make such changes in,
to or with respect to the Common Areas and Building Complex as Landlord may,
in its reasonable judgment, deems to be appropriate. Notwithstanding the
foregoing, Landlord shall not make any changes to the Common Areas in a
manner which would adversely affect Tenant's use of the Priority Area without
first obtaining Tenant's consent, which consent shall not be unreasonably
withheld or delayed. Responsibility for the repair and maintenance of various
components of the Common Areas shall be allocated Landlord and Tenant as
provided in this Lease.
2.6 Except as otherwise specifically provided in this Lease, Tenant
accepts the Premises and the relevant portion of the Building Complex in their
present condition, state of repair and operating order and present "AS IS"
condition. Tenant acknowledges that prior to the execution of this Lease,
Tenant has been furnished full access to the Premises and has independently
undertaken such studies and inspections of the Premises and the Building
Complex as Tenant has deemed appropriate. Notwithstanding the foregoing, the
Premises shall be in good operating condition as of the Commencement Date,
subject only to Landlord's completion of items described in the attached
Exhibit "F" (Landlord's "Initial Improvement Work") which do not materially
interfere with Tenant's use or occupancy of the Premises. Subject to "Tenant
Delays" (as defined in Paragraph 4 of the attached Lease Rider) and
"Excusable Delays" (as defined herein), Landlord shall complete the work
described in Paragraph 4 of the attached Lease Rider substantially in
accordance with the Work Performance Schedule attached hereto as Exhibit
"F-1". Tenant further acknowledges that neither Landlord nor any real estate
agent or broker representing Landlord or Tenant has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Tenant's business.
ARTICLE III
TERM OF LEASE
3.1 The term of this Lease (the "Lease Term") shall be the period
set forth in Item 1.4 of the Basic Lease Provisions. Subject to the terms and
conditions of this Lease, the Lease Term shall commence on the Commencement
Date and shall terminate on the Termination Date, which dates are specified
in Item 1.4 of the Basic Lease Provisions. All of the terms and conditions of
this Lease shall apply as of the date this Lease is signed by both Landlord
and Tenant (the "Execution Date"); provided, however, that Tenant shall have
no obligation to pay Minimum Rent or Operating Expenses until the
Commencement Date. Notwithstanding the foregoing, in the event Tenant
commences manufacturing operations from the Premises more than thirty (30)
days prior to the Commencement Date, Tenant shall pay to Landlord a
proportionate amount of Minimum Rent and a proportionate amount of Tenant's
Prorata Share of "Operating Expenses" (as defined herein) for each such day
that Tenant so utilizes the Premises before the Commencement Date.
3.2 Commencing on the Execution Date and continuing until the
Commencement Date (the "Early Occupancy Period"),
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Tenant and its agents, contractors, vendors, and security contractors shall
be permitted to enter the Premises for the purposes of plant layout,
facilities planning, security activities, construction of Tenant's Special
Manufacturing Improvements (as described in Paragraph 5 of the attached Lease
Rider) and installation of Tenant's furniture, fixtures, utilities,
telecommunication systems and security systems. Tenant agrees that throughout
the Early Occupancy Period, Tenant shall conduct its activities on the
Premises in such a way so as not to interfere with, disrupt or delay
Landlord's work or activities relating to Landlord's Initial Improvement Work.
Landlord shall have no responsibility for any damage, theft, destruction or
injury to Tenant or any of Tenant's property as a result of Tenant's
presence or activities on, or use of, the Premises during the Early Occupancy
Period. Tenant may, at its election, obtain and maintain security services
for the Premises during the Early Occupancy Period. Except as otherwise
provided in Paragraph 3.1 regarding Tenant's obligation to pay Minimum Rent
and Operating Expenses, any use or occupancy of the Premises or the Building
Complex by Tenant pursuant to this Paragraph 3.2 shall be subject to and in
accordance with the terms and conditions of this Lease.
ARTICLE IV
RENT
4.1 Tenant agrees to pay to Landlord at the office of Landlord or at
such other place as may be designated by Landlord from time to time, without
any prior demand therefor and without any deduction or setoff whatsoever, as
minimum monthly rent ("Minimum Rent"), the sum specified as the Initial
Minimum Rent in Item 1.6 of the Basic Lease Provisions. Minimum Rent shall be
payable in advance on the first day of each calendar month of the Lease Term.
If the Lease Term shall commence upon a day other than the first day of a
calendar month, then Tenant shall pay, upon the Commencement Date, a prorata
portion of the Minimum Rent for the first fractional calendar month. Upon the
execution of this Lease by Tenant, Tenant shall pay to Landlord Minimum Rent
for the first month of the Lease Term for which Minimum Rent is payable.
During first five (5) months of the Lease Term, Minimum Rent shall be
abated. Landlord and Tenant acknowledge that the rent abatement for the first
five (5) months of the Lease Term pursuant to this Paragraph 4.1 has been
granted to Tenant as additional consideration for entering into this Lease,
and for agreeing to pay the Minimum Rent and performing the terms and
conditions otherwise required under this Lease. Accordingly, if Tenant shall
default under this Lease and fail to cure such default within the time
permitted for cure pursuant to this Lease, if any, Tenant shall become
obligated to pay to Landlord all Minimum Rent otherwise abated hereunder
during the rent abatement period; provided, however, for each month from the
Commencement Date to the date of the uncured default, the amount of Minimum
Rent payable to Landlord pursuant to this Paragraph 4.1 shall be reduced by
an amount equal to the total amount of the Minimum Rent abated as of the date
of such default divided by one hundred twenty (120); and if at the expiration
of the one hundred twentieth (120th) month of the Lease Term no uncured
default has occurred, Tenant shall have no obligation to pay Landlord the
Minimum Rent abated in accordance with the provisions of this Paragraph 4.1.
Notwithstanding the foregoing, Landlord shall not be entitled to recover such
abated Minimum Rent as provided in this Paragraph 4.1 if, following an
uncured default under this Lease by Tenant, Landlord elects to pursue its
remedy against Tenant pursuant to California Civil Code Section 1951.4.
Minimum Rent payable by Tenant under this Lease is subject to adjustment in
accordance with the provisions of Item 1.7 of the Basic Lease Provisions
and Paragraphs 2 and 3 of the attached Lease Rider.
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4.2 As additional rent hereunder, Tenant shall pay to Landlord
Tenant's Prorata Share of all expenses described in the attached Exhibit "D"
(the "Operating Expenses"). Such Operating Expenses shall be paid to Landlord
within ten (10) days following Tenant's receipt of Landlord's invoice therefor.
Notwithstanding the foregoing, Tenant shall pay its Prorata Share of "real
estate taxes" (as defined in Paragraph 5.1, below) and premiums for the
insurance described in Paragraph 8.1, below, at the times specified in
Paragraphs 5.2 and 8.1, respectively, for the payment of such items. As used
herein, Tenant's "Prorata Share" shall be the percentage amount set forth in
Item 1.8 of the Basic Lease Provisions; however, in the event the square footage
of the Building or the Premises is increased or decreased, Tenant's Prorata
Share shall be adjusted and shall equal a fraction, the numerator of which is
the square footage of the floor area of the Premises and the denominator of
which is the total square footage of the floor area of the Building.
ARTICLE V
TAXES AND ASSESSMENTS
5.1 Landlord shall pay the "real estate taxes" (as defined herein)
applicable to the Building Complex (subject to reimbursement by Tenant of
Tenant's Prorata Share of such real estate taxes), which may be taxed, charged,
levied, assessed or imposed during any fiscal tax year occurring during the
Lease Term (and any extensions or renewals thereof) upon all or any portion of,
or in relation to, the Building Complex. In the partial fiscal tax year in
which the Lease Term shall commence, and in the partial fiscal tax year in which
the Lease Term shall terminate, such taxes and assessments and the Annual Tax
Base Amount shall be prorated on a daily basis (using a 365-day year), and
Tenant's payment obligations shall be computed accordingly. Tenant shall pay to
Landlord, upon demand, the entirety of any increase in real estate taxes
assessed by reason of any improvements placed upon the Premises by Tenant.
5.2 Tenant shall pay to Landlord, within ten (10) days following
Tenant's receipt of Landlord's invoice therefor, Tenant's Prorata Share of all
real estate taxes, together with the full amount of any additional real estate
taxes assessed by reason of any improvements placed upon the Premises by Tenant.
Whenever possible, Tenant shall cause its trade fixtures, furnishings, equipment
and all other personal property to be assessed and billed separately from the
real property of Landlord. If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay to Landlord the taxes
attributable to such personal property within ten (10) days after receipt of a
written statement from Landlord setting forth the taxes applicable to such
personal property. Landlord's invoice to Tenant for Tenant's Prorata Share of
any such real estate taxes shall be submitted to Tenant within a reasonable time
following Landlord's receipt of the tax bill or assessment notice for such real
estate taxes, and the amount of such invoice shall be paid by Tenant to Landlord
no later than fourteen (14) days prior to the due date for the payment of such
taxes to the taxing authority.
5.3 As used herein, the term "real estate taxes" shall include any
form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, rental excise tax,
improvement bond or bonds, levy or tax (other than income taxes) imposed on the
Building Complex by any authority having the direct or indirect power to tax,
including any city, state or the federal government, or any school,
agricultural, sanitary, fire, street, drainage, water or other improvement
district thereof, as against any legal or equitable interest of Landlord in the
Building Complex, as
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against Landlord's right to rent or other income therefrom, and as against
Landlord's business of leasing the Building Complex. If an assessment is levied
against the Premises for a capital improvement (determined in accordance with
generally accepted accounting principles) and such assessment is imposed over a
period which is substantially less than the estimated useful life of such
capital improvement, Tenant shall only be obligated to pay a pro rata portion of
such assessment based on the number of years remaining in the Lease Term as of
the date of the imposition of such assessment, and the estimated useful life of
such capital improvement. The term "real estate taxes" shall also include any
tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax"; or (ii) the nature of which was
hereinbefore included within the definition of "real property tax"; or (iii)
which is imposed for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978; or (iv) which is
imposed by reasons of this transaction, any modifications or changes hereto, or
any transfers hereof.
5.4 In the event of a sale, transfer or conveyance of all or any
portion of the Premises by Landlord occurring after the date of this Lease, or a
"change in ownership" (as the phrase is defined in Section 60 of the California
Revenue and Taxation Code) effected by Landlord of all or any portion of the
Premises occurring after the date of this Lease, or occurring before the date of
this Lease but not reflected in the tax bill for fiscal tax year 1990-1991
(collectively referred to herein as a "Reassessment Event"), it is understood
that Tenant shall have no obligation to pay any increase in real estate taxes
which result solely from such a Reassessment Event. However, nothing contained
in this Paragraph 5.4 shall limit Tenant's obligation to pay any increase in
real property taxes resulting from inflation factor adjustments as provided in
Section 51 of the California Revenue and Taxation Code, or resulting from any
change in taxes or impositions of special taxes as provided in Article 13A of
the California Constitution, unless such increase or change results from a
Reassessment Event, in which case Tenant shall have no obligation to pay such
increase or net increase resulting from any such Reassessment Event.
ARTICLE VI
UTILITY CHARGES
6.1 Gas, electricity, power, telephone, sewer, trash collection and
waste removal and/or disposal, alarm systems, or other services serving the
Premises and the Building Complex (collectively the "Utilities") shall, whenever
possible, be separately billed and/or metered, as applicable, to the Premises in
Tenant's name, and the cost of operation of such Utilities shall be paid
directly by Tenant. The installation costs for separate electrical service and
a separate electrical meter for the Premises shall be paid by Tenant. The
installation costs for a separate electrical meter for any portion of the
Building which is not leased to Tenant shall be paid by Landlord. If all or any
portion of the Building which is not leased to Tenant is used for purposes other
than warehouse and incidental office purposes, then Landlord shall, at its
expense, install separate water and gas meters for the Premises. Any and all
inspections, taxes, levies or excises in connection with the Utilities and all
connection, metering and closing charges, and any tax or excise thereon shall be
paid or caused to be paid directly by Tenant. Any utility charges for services
benefitting the Building Complex which are not separately metered shall be
included in Operating Expenses. Periodic fire sprinkler tests for the Building,
as required by applicable law, shall be conducted by Tenant and any
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costs or fees related to such tests shall be paid by Tenant. Landlord shall
reimburse Tenant for "Landlord's Share" (as defined in Paragraph 9.1, below) of
the costs or fees related to such tests, in the same manner as reimbursements
are made to Tenant pursuant to Paragraph 9.1, below. Landlord and Tenant (or
Landlord only, in Landlord's name, if Landlord so elects) shall contract for
water service for the Premises, but Tenant shall be solely responsible for any
fees, charges or costs of any nature imposed or incurred in connection with
such water service. Landlord may elect to have bills for such water service
delivered directly to Tenant, or Landlord may have such bills delivered to
Landlord and separately invoice Tenant for the actual cost of such water
service. Tenant shall pay any such bill or invoice within ten (10) days
following Tenant's receipt thereof. Except to the extent caused by Landlord's
gross negligence, Landlord shall not be liable to Tenant for any loss, injury,
damage, disruption of business or any other harm resulting from any interruption
of utility services to the Premises.
ARTICLE VII
HOLD HARMLESS
7.1 Tenant covenants and agrees that Landlord shall not at any time
or to any extent whatsoever be liable, responsible, or in any way accountable to
Tenant for any loss, injury, death or damage to persons or property which at any
time may be suffered or sustained by Tenant or by any person whomsoever who may
at any time be using, occupying or visiting the Building Complex, or be in, on,
or about the same, whether such loss, injury, death or damage shall be caused by
or in any way result from or arise out of any act, omission or negligence of
Tenant or of any occupant, subtenant, visitor or user of any portion of the
Premises or the Building Complex or from fire, steam, electricity, water, rain,
act of God, or from the breakage or leakage, or any defect in any pipes,
sprinklers, or plumbing, electrical or heating and air conditioning systems or
fixtures, or from any other cause whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Building
Complex or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Tenant, unless, and to the extent that such damage results from the willful
misconduct or negligence of Landlord. Landlord shall not be liable for any
damages arising from any act or neglect of any other tenant, occupant or user of
the Building Complex, nor from the failure of Landlord to enforce the provisions
of any other lease affecting the Building Complex.
7.2 Landlord covenants and agrees that Tenant shall not at any time
or to any extent whatsoever be liable, responsible, or in any way accountable to
Landlord for any injury to or, death of persons which at any time may be
suffered or sustained by Landlord or by any person whomsoever who may at any
time be using, occupying or visiting the Building Complex, or be in, on, or
about the same, whether such injury or death shall be caused by or in any way
result from or arise out of any act, omission or negligence of Landlord, any
other tenant, visitor or user of the Building Complex or from fire, steam,
electricity, water, rain, act of God, or from breakage or leakage, or any defect
in any pipes, sprinklers, or plumbing, electrical or heating and air
conditioning systems or fixtures, or from any other cause whether said injury or
death results from conditions arising upon other portions of the Building
Complex or from other sources or places and regardless of whether the cause of
such injury or death or the means of repairing the same is inaccessible to
Landlord, unless, and to the extent that such injury or death results from the
willful misconduct or negligence of Tenant.
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ARTICLE VIII
INSURANCE
8.1 Landlord shall, subject to reimbursement as an Operating Expense
pursuant to Paragraph 4.2, above, keep all buildings and improvements which may
from time to time be upon or a part of the Building Complex (but not Tenant's
personal property, fixtures or equipment) insured against all risks (as the term
"all risk" is used in the insurance industry), including earthquake and flood,
in such form and with such policy limits as Landlord may determine from time to
time, so as to provide reasonable insurance coverage for the Building Complex at
a reasonable cost. Landlord agrees that, prior to changing the insurance limits
or deductible amounts of such insurance in a manner which would decrease the
insurance limits or increase the deductible amounts from the limits and
deductibles shown in the insurance summary attached hereto as Exhibit "E",
Landlord will notify Tenant and provide Tenant with an opportunity to obtain its
own insurance against any increased risk resulting from any such decrease in
insurance limits or increase in deductibles. Notwithstanding the foregoing,
Landlord shall not be required to maintain any insurance which becomes
unavailable in the Southern California insurance marketplace. In the event of
any insured loss, Tenant shall be liable to Landlord for Tenant's Prorata Share
of any deductible or coinsurance amount claimed by the insurance carrier.
Landlord shall also obtain and maintain "rental value insurance" covering one
year's rent (Minimum Rent, real estate taxes, and Operating Expenses) payable
under this Lease. The premiums for all insurance specified in this Paragraph
8.1 shall be included as Operating Expenses. Such premiums shall be paid by
Tenant to Landlord within ten (10) days following Tenant's receipt of Landlord's
invoice therefor, but in no event shall Tenant's payment of such invoice be due
more than fourteen (14) days prior to the due date for Landlord's payment of
such premiums to the insurance carrier or insurance agent. In the insurance
policy year in which the Lease Term shall commence and in the insurance policy
year in which it shall terminate, such insurance premiums and the Annual
Insurance Base Amount shall be prorated on a daily basis (using a 365-day year),
and Tenant's Operating Expense payment obligations with respect to insurance
premiums shall be computed accordingly. Such insurance shall have attached
thereto such form of lender's loss payable endorsement as any lender whose loan
is secured in whole or in part by the Building Complex ("Landlord's Lender") may
require.
8.2 Landlord and Tenant agree that if the building and improvements
at any time forming a part of the Building Complex shall be damaged or destroyed
by risks insured against under Paragraph 8.1, or if any of Tenant's machinery,
fixtures, furniture, merchandise or other property, real or personal, are
damaged or destroyed from any cause covered by a property policy obtained by
Tenant, then and to the extent allowable and without invalidating such
insurance, and whether or not such damage or destruction was caused by the
negligence of the other party, neither party shall have any liability to the
other nor to any insurer of the other for or in respect of such damage or
destruction. If obtainable, each party shall require all policies of fire or
other insurance carried by such party during the Lease Term upon the Building
Complex or contents therein to include a provision whereby the insurer
designated therein shall waive its right of subrogation against the other party.
8.3 During the entire Lease Term, Tenant, at Tenant's sole cost and
expense, shall procure and maintain in full force and effect personal injury and
property damage liability insurance with a combined single limit of not less
than Five Million Dollars ($5,000,000). Such insurance may be evidenced by a
Primary Policy or a combination of a Primary Policy and an
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Umbrella Excess Policy. Tenant's liability insurance shall be primary and
any liability insurance maintained by Landlord shall be excess coverage over
the coverage provide by Tenant. Landlord shall be named as an additional
insured in such policies, and a policy endorsement so naming Landlord shall
be furnished to Landlord. The limits of said policies shall not limit the
liability of Tenant under this Lease. In the event that either party hereto
shall at any time deem the limits of such liability insurance then carried to
be insufficient, the parties shall endeavor to agree upon the proper and
reasonable limits for such insurance then to be carried. If the parties
shall be unable to agree thereon, the proper and reasonable limits for such
insurance then to be carried shall be determined by an impartial third person
knowledgeable of insurance risk matters selected by the parties, or should
they be unable to agree upon a selection by an impartial third person such
determination shall be made pursuant to the judicial reference procedure
described in Paragraph 18.2, below. The decision of such impartial third
person or referee as to such limits then to be carried shall be binding upon
the parties. Such insurance shall be carried with the limits as agreed upon
or determined pursuant to this Paragraph until such limits shall again be
changed pursuant to the provisions of this Paragraph. The expenses of such
determination shall be borne equally between Landlord and Tenant.
8.4 All of the insurance provided by Tenant under this Article VIII
and all renewals thereof shall be issued by such good, responsible and
standard companies rated at least A:Class XII in the current edition of
Best's Insurance Guide, and authorized to do business in California. The
policy or policies of insurance provided for in Paragraph 8.1 hereof shall be
payable to Landlord, or jointly to Landlord and Landlord's Lender, and Tenant
agrees to endorse any check to the order of Landlord which might be made
payable jointly to Landlord and Tenant by the insurance company. Tenant
agrees to immediately comply with any request of the insurance carrier
providing insurance described in Paragraph 8.1 if the failure to comply
therewith will cause cancellation of such insurance. All policies provided
by Tenant shall expressly provide that the policy shall not be canceled or
altered without thirty (30) days' prior written notice to Landlord. Neither
Landlord nor Tenant shall do or permit to be done anything which will
invalidate the insurance policies provided for in this Article VIII. Upon
the issuance or renewal of the liability insurance policy described in this
Article VIII, or upon commencement of the Lease Term if such policy is then
in force or effect, Tenant shall have its insurance carrier furnish Landlord
with a Certificate of said insurance. If requested in writing by Landlord,
Tenant shall reproduce and forward to Landlord a true copy of any insurance
policy described in this Lease and obtained by Tenant. Tenant shall obtain
such fire insurance and other insurance on Tenant's machinery, fixtures,
furniture and other property, real or personal, as Tenant deems appropriate,
and with which Landlord shall not otherwise be concerned.
ARTICLE IX
REPAIRS, MAINTENANCE, ALTERATIONS
AND REMOVAL OF EQUIPMENT
9.1 Landlord shall be responsible for the cost of any maintenance or
repairs of the structural aspects of the foundation and exterior walls of the
Building, and for the repair and maintenance of all water, sewer and gas
lines located outside of the perimeter of the Building (unless and to the
extent the maintenance or repair of any such items is necessitated by any
negligent or intentional act or omission of Tenant, Tenant's employees,
shippers, customers or invitees, in which case Tenant shall be responsible
for all such costs). Except as otherwise
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specifically provided in this Lease, and subject to the provisions of
Exhibits "D" and "G" to this Lease, Tenant shall, at its sole cost and
expense, maintain, keep in good condition and repair the parking lots,
walkways, driveways (including sweeping and cleaning), landscaping, fences,
roof decking, roof membrane and non-structural roof components of the entire
Building Complex and all heating, ventilating and air conditioning equipment
serving the Premises, and all other portions of the Premises and all portions
and components of the Building Complex which serve the Premises or are used
by Tenant. Except for the initial repainting of the exterior of the Building
to be performed by Landlord as part of Landlord's Initial Improvement Work,
Tenant shall be responsible for repainting the Building in accordance with
the requirements of the Performance Standards, and Landlord shall reimburse
Tenant for Landlord's Share of the cost of such repainting. Landlord shall
be responsible for contributing Landlord's Share of the maintenance and
repair costs for the parking lots, walkways, driveways, landscaping, fences,
roof decking, roof membrane and non-structural roof components of the
Building Complex. Landlord's Share of any such maintenance and repair costs
shall be reimbursed to Tenant within ten (10) days following Landlord's
receipt of a detailed invoice for such items, together with such supporting
documentation (such as vendor's invoices) as Landlord may reasonably
request. The difference between: (a) one hundred percent (100%); and (b)
Tenant's Prorata Share, (as Tenant's Prorata Share may exist from time to
time as provided in this Lease), shall constitute the "Landlord's Share".
All maintenance and repair work performed by Tenant shall be consistent with
the then prevailing standards for buildings owned by Landlord in Watson
Industrial Center South, and shall comply with the requirements of the
Performance Standards. Tenant shall consult with Landlord and obtain
Landlord's approval (which approval shall not be unreasonably withheld or
delayed) prior to performing any major repair or maintenance work (such as
parking lot repaving of roof replacement). Tenant acknowledges its
understanding and awareness that Tenant's failure to promptly and properly
perform its maintenance obligations under this Lease could adversely affect
other tenants in the Building. Without limiting the generality of the
foregoing, Tenant's maintenance and repair obligations shall include all
plumbing, electrical and lighting facilities and equipment within the
Premises, all fixtures, interior walls and interior surfaces of exterior
walls, and all ceilings, windows, doors, plate glass, and skylights located
within the Premises. Tenant's and Landlord's respective obligations relating
to the maintenance and repair of the roof of the Building and the Building's
heating, ventilating and air conditioning systems are set forth in the
attached Exhibit "G". Landlord may undertake any of the repair or
maintenance work provided in this Paragraph 9.1 from time to time as Landlord
deems necessary, but Landlord shall have no obligation to make repairs under
this Paragraph 9.1 until a reasonable time after receipt of written notice
from Tenant of the need for such repairs. Tenant expressly waives the
benefits of any statute now or hereafter in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair. Landlord shall not be liable for damages or losses of
any kind or nature by reason of Landlord's damages or losses of any kind or
nature by reason of Landlord's failure to furnish any Common Area services
when such failure is caused by accident, breakage, repairs, strikes,
lockouts, "Excusable Delays" (as defined herein) or other disturbances or
disputes of any character or by any other cause unless and to the extent due
to Landlord's gross negligence or willful misconduct.
9.2 If Tenant fails to maintain and repair the Premises and the
Building Complex as required pursuant to this Lease, Landlord may, at its
election, notify Tenant of Tenant's obligation to undertake such repair and
maintenance work. If
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Tenant fails to commence such work within a reasonable period of time
following Tenant's receipt of such notice (determined in light of
then-prevailing facts and circumstances) Landlord may enter the Premises and
perform any such work on behalf of Tenant. Notwithstanding the foregoing, no
notice to Tenant shall be required in case of emergency, and in the event of
an emergency Landlord may enter the Premises and perform such repair and
maintenance on behalf of Tenant. In any such case, Tenant shall reimburse
Landlord for all reasonable costs so incurred immediately upon demand,
together with interest thereon at the "Lease Interest Rate" (as defined in
Paragraph 25.25, below). Landlord's right to perform maintenance and repair
work pursuant to this Paragraph 9.2 shall not be deemed to create any
obligation on the part of Landlord to do so, and shall not in any way limit
Landlord's remedies under this Lease.
9.3 Upon the expiration or sooner termination of this Lease, Tenant
shall surrender the Premises to Landlord, broom clean and in the same
condition as received, except for: (i) ordinary wear and tear which Tenant
is not otherwise obligated to remedy under any provision of this Lease; (ii)
repair and maintenance items which are the obligation of Landlord pursuant to
Paragraph 9.1, above; (iii) damage from casualty which Tenant is not
otherwise required to repair under the terms of this Lease; (iv) the effect
of any taking of all or any portion of the Premises by right of eminent
domain; and (v) removal of any "Exempt Alterations" (as defined in Paragraph
9.4, below). Any damage to, or deterioration of, the Premises shall be
deemed not to be ordinary wear and tear if the same could have been prevented
by good maintenance practices. In addition, Landlord may require Tenant to
remove all alterations, additions or improvements prior to the termination of
the Lease and to restore the Premises to its prior condition, or Landlord may
perform such removals and restorations itself, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required
Tenant to remove or which Tenant has not elected to remove, as provided
herein, shall become Landlord's property and shall be surrendered to Landlord
upon the expiration or sooner termination of the Lease, except that Tenant
may remove any of Tenant's machinery and equipment from the Premises so long
as Tenant repairs any damage to the Premises resulting from the installation
and/or removal of such machinery or equipment. If, whether in violation of
this Lease or pursuant to Landlord's permission (which may be granted or
withheld in Landlord's sole and absolute discretion), Tenant installs any
"Underground Storage Tanks" (as defined herein) in the Premises of the
Building Complex, Tenant shall, at its sole cost and expense, remove any such
Underground Storage Tanks immediately upon the request of Landlord, the
expiration or sooner termination of this Lease, or the order of any
governmental authority, whichever occurs first. Notwithstanding any
provisions of this Lease to the contrary, such Underground Storage Tanks
shall at all times be and remain the property of Tenant. As used herein, the
term "Underground Storage Tank" means any one or combination of tanks,
including all pipes, sumps, valves and other equipment connected thereto,
which are used for the storage of petroleum products, hydrocarbon substances
or fractions thereof, or other Hazardous Materials, and which are located
wholly or partially beneath the surface of the ground. Tenant shall repair,
at Tenant's expense, any damage to the Premises caused by the removal of any
such machinery or equipment.
9.4 Except for "Tenant's Special Manufacturing Improvements" listed in
the attached Exhibit "H", Tenant shall not, without the prior written
approval of Landlord, make any additions, alterations, changes or
improvements to the Premises or any portion thereof. Any request for approval
of additions, alterations, changes or improvements (including Tenant's
Special Manufacturing Improvements) shall be presented to Landlord in
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writing, accompanied by detailed drawings and specifications. If Tenant so
requests, Landlord shall notify Tenant, in writing, at the time of Landlord's
approval of such additions, alterations, changes or improvements, whether
Landlord will require the removal of any such additions, alterations, changes
or improvements upon the expiration or sooner termination of the Lease Term.
Any such item for which Landlord so notifies Tenant that Landlord will not
require to be removed are referred to herein as "Exempt Alterations." If
Landlord has indicated that Landlord will require the removal of any
additional alteration, change or improvement, Landlord may subsequently
notify Tenant that Landlord will not require the removal of such item, in
which event Tenant shall not (unless it has previously done so) remove such
alteration, addition, change or improvement. Notwithstanding the foregoing,
Tenant shall not be required to obtain Landlord's consent for any
non-structural additions, alterations, changes or improvements to the
Premises which do not affect any building service equipment, and which, as to
any particular integrated group of additions, alterations, changes or
improvements, have a cost of less than Ten Thousand Dollars ($10,000). No
addition, alteration, change or improvement shall be made which will weaken
the structural strength, lessen the value of, interfere with, or make
inoperable any portion of the Premises or the "building service equipment",
or change the architectural appearance of the Premises. All approved
additions, alterations, changes and improvements shall be made in workmanlike
manner, in full compliance with all laws and ordinances applicable thereto.
Except for any Underground Storage Tanks, which shall, at all times be and
remain the property of Tenant, all such additions, alterations, changes and
improvements shall become a part of the Premises, and become the property of
Landlord when installed; and, unless Landlord shall require removal thereof
as required pursuant to this Paragraph 9.4 or Paragraph 16.2, below, all such
improvements, including all building service equipment improvements (but
specifically excluding any Underground Storage Tanks), shall remain in and be
surrendered as a part of the Premises upon the expiration or sooner
termination of this Lease. Tenant shall furnish Landlord with a set of "as
built" drawings which accurately set forth the nature and extent of
improvements made by Tenant to the Premises. Tenant and any assignee or
sublessee of Tenant shall obtain Landlord's prior written consent before any
signs are installed on the Premises. Such signs shall remain the property of
Tenant or any assignee or sublessee who installs the same and they shall be
removed from the Premises at the expiration or sooner termination of the
Lease Term. Any damage arising out of or resulting from the installation,
placement or removal of such signs shall be repaired by Tenant as Tenant's
sole cost and expense. The term "building service equipment" shall include,
without limitation, equipment and property ordinarily necessary or convenient
for the operation and utilization of a building, which are present in the
Building Complex as of the Execution Date (other than the items purchased by
Tenant from the previous tenant of the Building Complex, as described in the
attached Exhibit I), or are installed in the Building Complex by Landlord as
part of Landlord's Initial Improvement Work, together with any replacements
of such items, such as heaters, air conditioners, solar panels, power panels,
transformers, light fixtures, sprinklers, suspended ceilings, plumbing
fixtures, walls, cabinets, shelving affixed to walls in office areas, doors,
floor coverings, fixtures, fencing, paging systems, emission or pollution
control facilities, security and alarm systems, dock levelers, and utility
services such as gas, electricity, water, steam, telephone, sewer and
other similar services used in connection with the foregoing items.
Building service equipment shall also include any related power
installations, plumbing installations, pollution control installations,
sprinkler installations, energy conservation installations, and security
installations, including wiring, conduits, ducts, lines, pipes
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and meters for the transportation, distribution, measuring and/or disposal
thereof. Building service equipment shall also include installations affixed
to the Building which serve machinery and equipment, including, without
limitation, air lines, conveyors, crane ways, dust collectors, paint booths,
buss ducting, power panels and related power installations, but building
service equipment shall not include any of Tenant's Special Manufacturing
Improvements.
9.5 Tenant shall have the right, without Landlord's prior
approval, to install within the Premises Tenant's equipment, trade fixtures,
furniture and furnishings (hereinafter collectively called "Tenant's
Equipment"). Under no circumstances, however, shall Underground Storage Tanks
be installed on the Premises. Tenant shall notify Landlord in writing and
Tenant shall obtain Landlord's prior written approval before the installation
of any heavy equipment, or heavy trade fixtures in the Premises, and prior to
placing any load on the roof or attaching any load to the walls or the
underside of the roof of any building. Tenant shall not place any load on the
floor of any building in excess of the design load. Tenant shall not install
any of Tenant's Equipment in such manner as to weaken the structural strength
of the improvements on the Premises, interfere with, or make inoperable any
portion of the Premises or the building service equipment. If Tenant makes
any addition, alteration, change, or improvement to the Premises described in
Paragraph 9.4 without Landlord's consent, or if Tenant installs any of
Tenant's Equipment in violation of this Paragraph 9.5, then Tenant shall, upon
receipt of written notice from Landlord, promptly correct such installations
in such manner as Landlord shall reasonably require and direct, and Tenant
shall reimburse Landlord, on demand and as additional rent, for all
architect's, engineer's and legal fees incurred by Landlord in connection with
such installations. If Tenant or any person with whom Tenant is engaged in
business causes any damage to the Premises or the improvements, structural or
otherwise, Tenant assumes all risk of such damage to any improvements and
Tenant shall, upon demand, promptly repair all such damage to the reasonable
satisfaction of Landlord. Tenant shall promptly repair any damage to the
Premises arising from the installation, use, and removal of Tenant's
Equipment; and Tenant shall restore the Premises to a clean and orderly
condition and appearance, state of repair and operating order with all
remaining improvements thereon in a good, safe, fully operable condition and
in full compliance with all federal, state and local laws, rules, regulations
and ordinances. If Tenant fails to perform any act or obligation required of
Tenant under this Paragraph 9.5, Landlord shall have the right, but not the
obligation, after ten (10) days' written notice to Tenant specifying the
action required by Tenant, to enter upon the Premises and perform such act or
obligation. In that event, Tenant agrees to pay Landlord, as additional rent
within ten (10) days of receipt of Landlord's invoice, for all costs incurred
by Landlord in performing Tenant's act or obligation, plus a single additional
rent payment of fifteen percent (15%) of such cost.
9.6 Landlord shall not be obligated to maintain or to make any
repairs or replacements of any kind, nature or description whatsoever to the
Premises or the Building Complex, except as specifically provided in this
Lease.
9.7 Tenant shall comply with and abide by all federal, state,
county, municipal and other governmental statutes, ordinances, laws, and
regulations affecting the Premises, the improvements thereon, the business to
be conducted therein and thereon by Tenant, or any activity or condition on or
in the Premises. Any and all "Hazardous Materials" (as defined herein) and
their containers which are brought upon the Premises by, at the direction of,
or with the consent or approval of Tenant shall, at all times, as between
Landlord and Tenant, remain the
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property of Tenant. Tenant warrants that Tenant's business and all activities
to be performed by Tenant in, on or about the Premises shall comply with such
statutes, ordinances, laws and regulations; and Tenant agrees to change any
such activity or install necessary equipment, safety devices, pollution
control systems, or other installations at any time during the Lease Term to
so comply therewith. Tenant acknowledges its understanding and awareness that
the Building was constructed prior to 1979, and that some asbestos-containing
materials may have been used in the construction of the Building. Tenant
acknowledges its receipt of an "Asbestos Disclosure Letter" from Landlord, a
copy of which is incorporated herein by reference. Tenant acknowledges its
awareness that the release of asbestos fibers can present a serious health
risk, and Tenant agrees that it shall not undertake any activities on the
Premises which might disturb or release asbestos-containing materials without
implementing appropriate safety procedures.
9.8 Landlord has not, to its actual knowledge, received any
request (written or otherwise) from any governmental agency or other entity
for information or provided any notification to any such agency or entity,
concerning releases of Hazardous Materials to or from, affecting or related to
the Premises or the Building Complex and none of such property is the subject
of any testing or other investigation which would require some remediation
action to be taken pursuant to any applicable "Environmental Laws" (as
hereinafter defined).
9.9 Landlord has no actual knowledge of any prior or current use
by any owner, tenant, or occupant of the Premises or the Building Complex, for
the purpose of generating, treating, producing, storing, handling,
transferring, processing, transporting, disposing or otherwise releasing
Hazardous Materials, either on, in, from or about the Premises which (a)
threatens to create, creates or causes a contamination or release of Hazardous
Materials on or about the Premises, (b) creates any form of liability, civil
or criminal, direct or indirect, due to such actual or threatened
contamination or release, or (c) is in contravention of any Environmental
Laws. Tenant represents that it does not have actual knowledge of any of the
foregoing.
9.10 To the actual knowledge of Landlord, no underground storage
tanks are currently located on the Premises and Landlord has no actual
knowledge that Underground Storage Tanks have ever been located on the
Premises or the Building Complex.
9.11 The term "Hazardous Materials" as used throughout the Lease
shall mean any flammable, explosives, radioactive materials, hazardous wastes,
petroleum products and their fractions friable asbestos or any material
containing asbestos, toxic substances or related materials, including, without
limitation, substances now or hereafter defined as "Hazardous Substances",
"Hazardous Materials" or "Toxic Substances" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Section 6901, et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901, et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801, et seq.), any so-called "Superfund" or "Superlien" law or any
other applicable federal, state or local law, common law, code, rule,
regulation, ordinance, presently in effect or hereafter enacted (the
aforedescribed laws, codes, rules, regulations or ordinances being referred to
as "Environmental Laws"). As used in this Article IX, the term "actual
knowledge" shall with respect to Landlord mean that none of the senior
executive officers of Landlord with responsibility for marketing or property
management, have actual personal knowledge of the facts in question.
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9.12 The Tenant agrees that it alone shall be responsible for
complying with any and all Environmental Laws relating to, or applicable by
reason of, the Tenant's use and occupancy of the Premises, including any and
all costs and expenditures related to or necessitated by such compliance.
9.13 Landlord agrees to indemnify and hold harmless the Tenant
from any and all claims, damages, fines, judgments, penalties, costs,
liabilities, or losses (including, without limitation, any and all sums paid
for defense or settlement of claims, attorneys' fees, consultant, and expert
fees, but specifically excluding consequential damages) arising during or
after the Lease Term from or in connection with the migrations, presence, or
discharge of Hazardous Materials in, on or affecting the Premises prior to the
Execution Date of this Lease (or released or discharged by Landlord after the
date of this Lease), unless the Hazardous Materials are present as a result of
negligence, willful misconduct, or other acts of Tenant, Tenant's agents,
employees or contractors (the "Preexisting Environmental Conditions").
Without limitation of the foregoing, this indemnification shall include any
and all costs incurred due to any investigation of the site or any cleanup,
removal or restoration mandated by a federal, state, or local agency or
political subdivision, unless the Hazardous Materials are present as a result
of the negligence, willful misconduct, or other acts of Tenant, Tenant's
agent, employees or contractors.
9.14 Tenant agrees to indemnify, defend and hold harmless the Landlord
from any and all claims, damages, fines, judgments, penalties, costs,
liabilities or losses (including, without limitation, any and all sums paid
for defense or settlement of claims, attorneys' fees, consultant, and expert
fees) arising during or after the Lease Term from or in connection with the
migration, presence, suspected presence or discharge of Hazardous Materials
in, on or affecting the Premises, as a result of Tenant's activities on the
Premises. Without limitation of the foregoing this indemnification shall
include any and all costs incurred due to any investigation less of the site
or any cleanup, remediation removal, or restoration mandated by a federal,
state, or local agency or political subdivision, as a result of Tenant's
activities on the Premises. The provisions of this Paragraph 9.14, above and
Paragraphs 9.7, 9.12 and 9.13 above shall survive the expiration or sooner
termination of this Lease.
9.15 Tenant shall immediately notify Landlord of Tenant's receipt
of any notice, citation or other communication received by Tenant relating to
the presence, storage, use or release of any Hazardous Materials in, on or
about the Premises which could reasonably be expected to materially and
adversely affect the Premises or the Building Complex. Tenant shall, each
year during the Lease Term, deliver to Landlord a copy of the "business plan"
prepared by Tenant for the Premises pursuant to the requirements of California
Health and Safety Code Section 25500 ET. SEQ. Prior to the Execution Date of
this Lease, Tenant shall provide Landlord with a copy of Tenant's business
plan for its facility located at 2750 West Lomita Boulevard, Torrance,
California 90509-2883, together with such other information as Landlord may
reasonably request in order for Landlord to assess the risks to Landlord
relating to Tenant's proposed use of Hazardous Materials on the Premises.
ARTICLE X
INSPECTION OF PREMISES BY LANDLORD
10.1 Tenant agrees that Landlord and the authorized
representatives of Landlord shall have the right, upon reasonable notice to
Tenant (determined in light of then-prevailing facts
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and circumstances) to enter the Premises at all reasonable times during usual
business hours, or at any time in the case of an emergency, for the purpose of
(a) inspecting same; and (b) making such repairs or reconstruction to the
Premises or the Building Complex required by or permitted to be made by
Landlord, and (c) determining whether Tenant is in compliance with the
provisions of this Lease relating to Hazardous Materials. Nothing herein
shall imply any duty of Landlord to do any work which, under the provisions of
this Lease, Tenant is required to perform and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to
perform the same. Landlord may, during the progress of any work on the
Premises, keep and store upon the parking area of or within the Premises, all
necessary materials, tools and equipment. Landlord shall not in any event be
liable for any inconvenience, annoyance, disturbance, loss of business, or
other damage sustained by Tenant while making such repairs or the performance
of any such work on the Premises or the Building Complex, or on account of
bringing materials, supplies and equipment into or through the Premises or the
Building Complex during the course thereof, but Landlord agrees to use
reasonable efforts to avoid causing any unnecessary inconvenience, annoyance
or disturbance. In the event Landlord makes any repairs or maintenance which
Tenant has failed to do or perform, the cost thereof plus an overhead
allowance of fifteen percent (15%) of such cost shall constitute additional
rent and shall be paid to Landlord within ten (10) days of receipt of
Landlord's invoice.
10.2 Landlord is hereby given the right upon reasonable prior notice
to Tenant to enter the Premises during usual business hours to exhibit the
Premises for purposes of sale or mortgage, and during the last six (6) months
of the Lease Term to exhibit the same to any prospective tenant.
ARTICLE XI
MECHANICS' LIENS
11.1 Tenant covenants and agrees to keep all of the Premises and
the Building Complex free and clear of and from any and all mechanics',
materialmen's and other liens for work or labor done, services performed,
materials, appliances, transportation or power contributed, used or furnished
or to be used in or about the Premises or the Building Complex for or in
connection with any operations of Tenant, any alterations, improvements,
repairs or additions, which Tenant may make or permit or cause to be made, or
any work or construction by, for or permitted by Tenant on or about the
Premises or the Building Complex; and at all times Tenant shall promptly and
fully pay and discharge any and all claims upon which any such lien may or
could be based; and Tenant shall save and hold Landlord, the Premises and the
Building Complex free and harmless of and from any and all such liens and
claims of liens and suits or other proceedings pertaining thereto. Tenant, or
any subtenant, assignee or other occupant of the Premises covenants and agrees
to give Landlord written notice not less than ten (10) days in advance of the
commencement of any construction, alteration, addition, improvements or repair
to the Premises in order that Landlord may post an appropriate notice of
Landlord's non-responsibility.
11.2 No mechanics' or materialmen's liens or mortgages, deeds of
trust, or other liens of any character whatsoever created or suffered by
Tenant shall in any way or to any extent affect the interest or rights of
Landlord in any buildings or other improvements in the Building Complex, or
attach to or affect Landlord's title to or rights in the Premises or the
Building Complex.
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11.3 Tenant shall have the right to contest any mechanic's lien or other
lien claim filed against the Premises or the Building Complex provided that
Tenant gives Landlord written notice of such contest, Tenant diligently
prosecutes such contest, at all times effectually stays or prevents any
official or judicial sale of the Premises and the Building Complex under
execution or otherwise, and pays or otherwise satisfies any final judgment
adjudging or enforcing such contested lien and thereafter procures record
satisfaction or release thereof. If requested in writing by Landlord, Tenant
shall furnish to Landlord a surety bond issued by a surety company acceptable
to Landlord in an amount not less than one and one-half times the amount of
any such mechanic's lien or other lien claim filed against the Premises or
the Building Complex.
ARTICLE XII
DAMAGE OR DESTRUCTION OF PREMISES
12.1 In the event the Building Complex or the Premises are damaged or
destroyed, then so long as the cost of repairing such damage or destruction
is covered by insurance policies carried by Landlord (except for deductible
amounts), Landlord shall repair and restore such improvements then owned by
Landlord to their condition prior to said damage or destruction, and this
Lease shall continue in full force and effect. The proceeds of insurance
maintained pursuant to Paragraph 8.1 which are paid to Landlord shall be
utilized by Landlord to defray the cost and expense of repairing and
rebuilding the Premises and the Building Complex.
12.2 In the event the buildings or other structures within the Building
Complex or the Premises are damaged or destroyed, and the cost of repairing
such damage or destruction is not covered by insurance policies carried by
Landlord, Landlord will be responsible for rebuilding the Premises so long as
the uninsured cost of repairing such damage or destruction does not exceed
Five Hundred Thousand Dollars ($500,000.00). If the uninsured cost of
repairing such damage or destruction exceeds Five Hundred Thousand Dollars
($500,000.00), Landlord shall have the right, at its election, to either
rebuild the Premises, or to terminate this Lease. However, if Tenant so
desires, Tenant may prevent termination of the Lease pursuant to this
Paragraph 12.2 by agreeing to pay the amount by which the uninsured cost of
repairing such damage or destruction exceeds Five Hundred Thousand Dollars
($500,000.00). Notwithstanding any other provisions of this Lease, in the
event of any damage or destruction occurring in the last two (2) years of the
Lease Term which is not covered by insurance policies carried by Landlord,
Landlord shall have the right to terminate this Lease upon thirty (30) days
notice to Tenant, which notice shall be given within thirty (30) days of the
date of occurrence of such damage or destruction.
12.3 In the event of damage or destruction of the Premises, or any
portion thereof, the Minimum Rent and Operating Expenses payable by Tenant
pursuant to the provisions of Paragraph 4.1 shall abate, in the proportion
that the part of the Premises rendered unusable to Tenant bears to the whole
thereof, from the date of the damage or destruction through the time
required by Landlord to repair and rebuild the Premises, but only to the
extent to which Landlord receives reimbursement for such abatement pursuant
to the rental value insurance maintained under Paragraph 8.1 of this Lease.
Except for abatement of such Minimum Rent and Operating Expenses, if any,
Tenant shall have no claim against Landlord by reason of any damage,
destruction, repair or rebuilding of the Premises.
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12.4 Upon the occurrence of any damage or destruction to the Building
Complex or the Premises, Landlord shall, within thirty (30) days following
the date of occurrence of such damage or destruction, provide to Tenant a
written notice of Landlord's reasonable and good faith estimate of the time
required to complete the repair and restoration of the Premises ("Landlord's
Time Estimate"). If Landlord reasonably estimates that such repair and
restoration will take more than one hundred eighty (180) days to complete
(measured from the date of issuance of necessary building permits for the
repair and restoration work) either Landlord or Tenant may elect to terminate
this Lease upon written notice to the other, which notice shall be given, if
at all, within fifteen (15) days following Tenant's receipt of Landlord's
Time Estimate. Once notice has been delivered, the fifteen (15) day response
period has expired and repair and restoration work has commenced, neither
party shall have the right to terminate this Lease as a result of the
occurrence of such damage or destruction. If Tenant elects to terminate this
Lease as a result of such damage or destruction, Tenant will be required to
reimburse Landlord for Landlord's unamortized brokerage commissions and
Tenant Improvement Expenditures in the initial aggregate amount of Seven
Hundred Fifty Thousand Dollars ($750,000.00). This amount shall decrease by
Six Thousand Two Hundred Fifty Dollars ($6,250.00) per month for each full
month of the Lease Term for which Tenant has paid Minimum Rent and other
charges to be paid by Tenant pursuant to the terms of the Lease.
12.5 If the Building Complex or the Premises is damaged or destroyed,
either partially or totally, during the last year of the Lease Term, Landlord
or Tenant may, at such party's option, cancel and terminate the Lease as of
the date of the occurrence of such damage by giving written notice to the
other party of the electing party's election to terminate, within thirty (30)
days after the date of occurrence of such damage. Provided, however, that if
Tenant possesses an option to extend the Lease Term in the time within which
Tenant may exercise such option has not expired, and if Tenant validly
exercises such option within twenty (20) days after the occurrence of such
damage or destruction, then Landlord shall not have the right to terminate
this Lease pursuant to this Paragraph 12.5. In such event, the repair and
restoration of the Premises shall be governed by the other applicable
provisions of this Article XII.
12.6 Tenant waives the provisions of any statutes which relate to
termination of leases when the Premises are destroyed; and Tenant agrees that
such event shall be governed by the terms of this Lease and not by any such
statute.
ARTICLE XIII
CONDEMNATION
13.1 If title to all or any portion of the Premises or the Building
Complex shall be taken by any public of quasi-public use or authority under
any statute or by right of eminent domain, or by private purchase in lieu
thereof, then the rights of the parties to share in the condemnation award or
purchase price thereby resulting shall be governed by the provisions of this
Article XIII.
13.2 Should all or such portion of the Premises or the Building Complex
be taken in such a manner as to materially interfere with Tenant's use and
occupancy thereof, then this Lease shall terminate as of the date that
possession of said Premises or part thereof shall be taken. Landlord shall be
entitled to (a) any amount paid for the taking of Landlord's fee interest in
the Building Complex, (b) any severance damages included in the award, (c)
any amount paid for the taking of the
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Premises except that paid for any improvements made to the Premises by Tenant
which remain the property of Tenant, and (d) any amount which represents the
present worth of rent payments to be made in the future under the provisions
of this Lease; and none of Landlord's interests in the above shall be subject
to any diminution or appointment whatsoever. Tenant shall be entitled to
compensation paid under condemnation for the taking of any improvements made
to the Premises by Tenant which remain the property of Tenant.
13.3 In the event of a partial taking of the Premises or the Building
Complex which does not materially interfere with Tenant's continued use and
occupancy of the Premises and there remains sufficient of the Premises for the
continued use of Tenant, then this Lease shall terminate only as to the part
so taken, as of the date that possession of such part of the Premises is
taken, and the Minimum Rent and Operating Expenses herein provided for shall
be reduced in proportion as the square footage of building floor area taken
bears to the total building floor area existing before such taking. In the
event of a partial taking, Landlord agrees to replace or repair the Building
Complex to its condition as existed when the Lease Term commenced, and
without regard to improvements made by Tenant, by reinstalling, plumbing,
electrical, wiring, walls and paving, if necessary, so that said Building
Complex shall be completely operable and an integral whole, but at a cost to
Landlord not to exceed the condemnation award received by Landlord. In the
event of such partial taking, Landlord shall be entitled to receive all
amounts described in the second sentence of Paragraph 13.2; and none of
Landlord's interest in the above shall be subject to any diminution or
apportionment whatsoever. Tenant shall be entitled to compensation paid under
condemnation for the taking of any improvements made to the Premises by
Tenant which remain the property of Tenant.
13.4 Landlord and Tenant agree to execute all documents and assignments
necessary to carry out this Article XIII in the event of condemnation or
purchase in lieu thereof.
ARTICLE XIV
USE OF PREMISES - ASSIGNMENTS
14.1 Tenant shall have the right to use the Premises for manufacturing,
warehousing and general office purposes in compliance with all applicable
laws and regulations, including, without limitation, environmental laws and
laws relating to Hazardous Materials; and Tenant agrees such use shall comply
with all applicable laws and regulations in effect when this Lease Term
commences and as may be amended or newly enacted during the Lease Term.
Tenant shall not use the Premises for the retail sale of property.
Tenant shall not conduct nor permit to be conducted any auction or auction
sale at the Premises. Tenant's use of the Premises is subject to limitations
imposed by the Watson Industrial Center Performance Standards attached hereto
as Exhibit "A" and the limitations contained in this Lease.
14.2 Tenant shall not transfer, assign, sublet, mortgage or otherwise
hypothecate this Lease, or Tenant's interest in and to the Premises, nor
enter into any license or concession agreements with respect thereto, without
first procuring the written consent of Landlord. Any such attempted or
purported transfer, assignment, subletting, mortgage or hypothecation, or
license or concession agreement (collectively "Transfer") without Landlord's
prior written consent shall be void and of no force and effect, and shall not
confer any interest or estate in the purported transferee (the "Transferee")
and shall, at Landlord's option, constitute an incurable default under this
Lease. Landlord agrees that, in the event of a proposed Transfer to an
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"Affiliate" (as defined herein), Landlord will not withhold its consent to
such Transfer so long as (i) such Affiliate's use of the Premises is in
conformance with Paragraph 14.1; (ii) such Affiliate's use of the Premises
will not result in any material increase in the potential risk to Landlord
arising out of or relating to Hazardous Materials; and (iii) such Transfer
will not cause any portion of the amounts received by Landlord pursuant to
this Lease or any sublease to fail to qualify as "rents from real property"
within the meaning of Section 856(d) of the Internal Revenue Code, or which
could cause any other income received by Landlord to fail to qualify as
income described in Section 856(c)(2) of the Internal Revenue Code. As used
herein, the term "Affiliate" shall mean any corporation for which fifty
percent (50%) or more of the voting stock (i) is owned by Tenant; or (ii) is
owned, directly or indirectly, by a corporation owning more than fifty
percent of the voting stock of Tenant. Any transfer of stock or other
ownership interest of Tenant which is made with the purpose or principal
intent of circumventing the Transfer restrictions imposed under this Article
XIV shall be deemed to be a Transfer requiring Landlord's consent. The
consent of Landlord required hereunder shall not be unreasonably withheld;
however, a condition precedent to any consent to a Transfer shall be Tenant's
agreement to pay to Landlord as rent any costs and expenses incurred by
Landlord for review and consultation by Landlord's legal counsel, securing
credit reports, administrative overhead and the like. Notwithstanding the
foregoing, Landlord and Tenant agree that, in determining whether to
reasonably consent to a proposed transfer, Landlord may consider, among other
things, any or all of the following factors:
14.2.1 The reputation of the Transferee (including any principals,
partners or shareholders of such assignee, subtenant to Transferee),
including, without limitation, the Transferee's reputation for dishonesty,
criminal conduct or unethical business practices;
14.2.2 The financial capacity of the proposed Transferee to perform
its obligations under this Lease;
14.2.3 Whether the business experience and quality of business
operations of the proposed Transferee is comparable to that of Tenant;
14.2.4 The credit history of the proposed Transferee;
14.2.5 The intended use of the Premises by the proposed Transferee,
and Landlord's assessment of the impact of such use upon the Premises and
neighboring properties;
14.2.6 Whether the proposed Transferee's use of the Premises will
involve the generation, storage, use, treatment or disposal of any Hazardous
Materials, or will in any way increase any potential risk or liability to
Landlord arising out of or relating to Hazardous Materials.
14.3 Notwithstanding any permitted Transfer, Tenant shall at all times
remain directly, primarily or fully responsible and liable for the payment of
rent and for compliance with all obligations under the terms, provisions and
covenants of this Lease. All Transfer agreements shall expressly provide
that, in the event of a default by Tenant under this Lease, the Transferee
covenants and agrees with Landlord, contemporaneously with receipt of written
notice from Landlord that Tenant is in default of this Lease, and for so long
as such default continues, but not for a period of time in excess of the term
of the Transfer, to accept Landlord as Landlord of Transferee, to attorn to
Landlord as Landlord, to thereafter perform all duties and responsibilities
under the Transfer agreement directly to Landlord for Land-
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lord's sole benefit, and to cure any default of Tenant under this Lease. Upon
the occurrence of any default by Tenant, if the Premises or any part thereof are
then sublet, Landlord, in addition to any other remedies herein provided or
provided by law, may at its option collect directly from such subtenant all
rents becoming due to Tenant under such sublease and apply such rent against any
sums due to Landlord from Tenant hereunder, and no such collection shall be
construed to constitute a novation or release of Tenant from the further
performance of Tenant's obligations under this Lease. Any sale, assignment,
transfer or hypothecation of Tenant's interest under this Lease, and any
proposed subletting or occupancy of the Premises not in compliance with this
Article XIV shall be void and shall, at the option of Landlord exercisable by
notice to Tenant, terminate this Lease.
14.4 Should Tenant desire to make a Transfer of the Premises, Tenant
shall give not less than thirty (30) days' prior written notice thereof to
Landlord setting forth the name of the proposed Transferee, the term, use,
rental rate and other relevant particulars of the proposed Transfer, including,
without limitation, evidence satisfactory to Landlord that the proposed
Transferee will not use, store or dispose of any Hazardous Materials in or on
the Premises or the Building Complex, and that the proposed Transferee will
immediately occupy and thereafter use the Premises for the entire term of the
Lease or the sublease (as the case may be). Such notice shall be accompanied,
in the case of a sublease, by a copy of the proposed sublease, and in the case
of any Transfer, any documents or financial information Landlord may require in
order to make a determination as to the suitability of the Transferee.
14.5 Landlord shall have the right to condition its consent to any
subletting or assignment upon payment by Tenant to Landlord of fifty percent
(50%) of all "Transfer Consideration" (as defined herein) received or to be
received, directly or indirectly, by Tenant on account of such subletting or
assignment. Notwithstanding the foregoing, no Transfer Consideration shall
be payable to Landlord in connection with a Transfer by Tenant to an
Affiliate. In no event shall Tenant's monetary obligations to Landlord, as
set forth in this Lease, be reduced as a result of any subletting or
assignment. Such Transfer Consideration shall be paid to Landlord at the
same time or times as the same is paid to or used by Tenant. "Transfer
Consideration" shall mean (i) in the case of a sublease, any consideration
paid or given, directly or indirectly, by the sublessee to Tenant pursuant to
the sublease for the use of the Premises, or any portion thereof (after
subtracting therefrom actual and reasonable attorneys' fees and brokerage
commissions, costs of tenant improvements, costs of environmental studies and
other economic concessions made to the sublessee or incurred by Tenant in
connection with such sublease), over and above the rent, however denominated,
in this Lease, payable by Tenant to Landlord for the use of the Premises (or
portion thereof), prorating as appropriate the amount payable by Tenant to
Landlord under this Lease if less than all of the Premises is sublet, and
(ii) in the case of an assignment, the gross amount of any consideration paid
or given, directly or indirectly, by the assignee to Tenant in exchange for
entering into the assignment. Notwithstanding anything contained in this
Lease to the contrary, Landlord may withhold its consent to any of the
following (i) any subletting or assignment of the Premises or this Lease on
any basis such that the rent or other amounts to be paid by the sublessee or
assignee thereunder would be based, in the whole or in part, on the income or
profits derived by the business activities of the sublessee or assignee; (ii)
any sublease or assignment under circumstances in which Tenant would furnish
or render any services to the sublessee or assignee or operate the Premises
so subleased or assigned; (iii) any sublease or assignment of the Premises
or this Lease to any person that
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Tenant or Landlord owns, directly or indirectly (by applying the constructive
ownership rules set forth in Section 856(d)(5) of the Internal Revenue Code
[the "Code"]), provided, however, that the restriction contained in this item
(iii) shall not apply to an assignment of this Lease to an Affiliate of Tenant
if no Transfer Consideration arises and if Landlord does not own, directly or
indirectly (as described above), an interest in such assignee; or (iv) any
sublease or assignment of the Premises or this Lease in any other manner (other
than a sublease of substantially all or less than substantially all of the
Premises, regardless of whether Landlord will receive any Transfer Consideration
as a result of such sublease) which could cause any portion of the amounts
received by Landlord pursuant to this Lease or any sublease to fail to qualify
as "rents from real property" within the meaning of Section 856(d) of the Code,
or which could cause any other income received by Landlord to fail to qualify as
income described in Section 856(c)(2) of the Code.
14.6 In addition to Landlord's right of approval pursuant to
Paragraph 14.2, above, and Landlord's right to share in Transfer Consideration
pursuant to Paragraph 14.5, above, Landlord shall have the option, in the event
of any proposed Transfer (other than a transfer to an Affiliate), to cancel this
Lease as to the affected portion of the Premises as of the effective date of the
Transfer set forth in Tenant's notice. The option shall be exercised, if at
all, by Landlord giving Tenant written notice thereof within thirty (30) days
following Landlord's receipt of Tenant's written request. Upon any such
cancellation, Tenant shall pay to Landlord all amounts, as estimated by
Landlord, payable by Tenant to such termination date with respect to that
portion of any obligations, costs or charges which are the responsibility of
Tenant under this Lease and allocable to the affected portion of the Premises.
Further, upon any such cancellation Landlord and Tenant shall have no further
obligations or liabilities to each other with respect to the affected portion of
the Premises, except with respect to obligations or liabilities which have
accrued as of such cancellation date (in the same manner as if such cancellation
date were the date originally fixed for the expiration of the Lease Term, or
Extended Term, as the case may be). Without limitation, Landlord may lease the
affected portion of the Premises to the prospective Transferee, without
liability to the Tenant. Landlord's failure to exercise said cancellation right
as herein provided shall not be construed as Landlord's consent to the proposed
Transfer.
14.7 If the Lease is assigned to any person or entity pursuant to
the provisions of the "Revised Bankruptcy Act" (Title 11 of the United States
Code; 11 U.S.C. Section 101 et seq.), any and all monies or other
consideration payable or otherwise to be delivered in 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 Revised Bankruptcy Act.
Any and all monies or other considerations constituting Landlord's property
under this Article XIV not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord. Any person or entity to which this Lease is assigned pursuant to
the provisions of the Revised Bankruptcy Act 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.
14.8 Landlord shall have the right to sell, transfer, delegate or
assign any of its rights or obligations under this Lease, but Landlord shall not
assign its obligations to Tenant under this Lease unless Landlord simultaneously
assigns its ownership interest in the Building Complex to the same party.
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ARTICLE XV
EVENT OF DEFAULT
15.1 Tenant shall be in default under this Lease if:
15.1.1 Tenant shall fail to make any payment of Minimum Rent,
Operating Expenses, any additional rent payable hereunder, or any other monetary
obligation required of Tenant under this Lease (including, without limitation,
restoration of any security deposit as required under this Lease) and such
failure shall continue for three (3) days after Tenant's receipt of written
notice from Landlord that said rent or monetary obligation is due and payable as
provided in this Lease; or
15.1.2 Tenant shall neglect or fail to perform or observe
any of the covenants herein contained on Tenant's part to be performed or
observed, and Tenant shall fail to remedy the same within thirty (30) days
after Landlord shall have given to Tenant written notice specifying such
neglect or failure (provided, however, that if the performance or observance
of any such covenant reasonably requires more than thirty (30) days to
perform, Tenant shall not be in default under this Lease as a result of its
failure to perform or observe any such covenant within such (30) day period
so long as Tenant has commenced the actions necessary to perform or observe
such covenant within such thirty (30) day period, and is diligently pursuing
such cure to completion); or
15.1.3 Tenant shall abandon the Premises and such
abandonment shall continue for a period of fourteen (14) consecutive days
during which Minimum Rent for the Premises has remained unpaid.
15.2 In the event of any default by Tenant, and without any further
notice or demand, Landlord shall have the right at Landlord's election, then or
at any time thereafter, to:
15.2.1 Terminate this Lease, which shall terminate Tenant's
right to the use, occupancy and possession of the Premises, and Tenant shall
immediately surrender possession of the Premises to Landlord; or
15.2.2 Re-enter and take possession of the Premises or any
part thereof as provided by law, in which event this Lease shall terminate
effective when Landlord takes possession; or
15.2.3 Continue this Lease in effect and enforce any or all
rights and remedies of Landlord under this Lease, including the right to recover
Minimum Rent, additional rent and charges equivalent to rent (sometimes
collectively referred to herein as "rent") as they become due under this Lease,
for so long as Landlord does not terminate Tenant's right to possession of the
Premises; or
15.2.4 Seek any legal or equitable relief permitted by law.
15.3 If Landlord terminates this Lease as provided in subparagraphs
15.2.1 or 15.2.2 hereof, Landlord shall have the right to recover from Tenant:
15.3.1 The worth, at the time of the award, of the unpaid
rent that had been earned at the time of termination of this Lease; and
15.3.2 The worth, at the time of the award, of the amount by
which the unpaid rent that would have been earned after the date of termination
of this Lease until the time of
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award exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; and
15.3.3 The worth, at the time of the award, of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; and
15.3.4 Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's breach or which in the ordinary
course of things would be likely to result therefrom; such as, the cost of
recovering possession of the Premises, expenses of reletting including
attorney's fees and any real estate commissions paid or payable, necessary
repair, restoration, renovation, or alteration of the Premises, and care and
safekeeping of the Premises.
"The worth, at the time of the award," as used in
subparagraphs 15.3.1 and 15.3.2 of this paragraph, is to be computed by allowing
interest at the Lease Interest Rate in effect when each installment of rent
referred to in said subparagraphs became payable. "The worth, at the time of
the award," as referred to in subparagraph 15.3.3 of this paragraph, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award, plus one percent (1%).
15.4 If Tenant shall breach this Lease and abandon the Premises, this
Lease shall continue in full force and effect for so long as Landlord does
not terminate Tenant's right to possession of the Premises, and Landlord may
enforce all of its rights and remedies under this Lease, including but not
limited to the right to recover rent and charges equivalent to rent as they
become due under this Lease. For the purposes of this Paragraph 15.4 and
Paragraph 15.2, the following acts by Landlord shall not constitute a
termination of Tenant's right to possession of the Premises: (i) maintenance
or preservation of the Premises, (ii) efforts to relet the Premises, or (iii)
the appointment of a receiver upon initiative of Landlord to protect
Landlord's interest under the Lease.
15.5 In the event Landlord re-enters and takes possession of the
Premises, Landlord may at Landlord's option require Tenant to remove from the
Premises any of Tenant's property located therein. If Tenant fails to do so,
Landlord shall not be responsible for the care or safekeeping thereof and may
remove any of the same from the Premises and place the same in storage in a
public warehouse at the cost, expense and risk of Tenant with authority to
the warehouseman to sell the same in the event that Tenant shall fail to pay
the costs of transportation and storage, all in accordance with the rules and
regulations applicable to the operation of a public warehouseman's business.
Any refusal by a public warehouseman to accept personal property located in
the Premises upon such condition shall be conclusive evidence that the same
is of no substantial value, and shall be an unconditional warrant to Landlord
for disposing of the same in any manner Landlord may see fit, and without
accountability for any alleged value thereof. In addition, Landlord may, at
Landlord's election, dispose of said property pursuant to the provisions of
Sections 1980 through 1991 of the California Civil Code. In any and all such
cases of re-entry, Landlord may make any repairs in, to or upon the Premises
which may be necessary, desirable or convenient, and Tenant hereby waives any
and all claims for damages which may be caused or occasioned by such reentry
or any of the aforesaid acts of Landlord or by reason of any loss or
destruction or damage to any property in or about the Premises or any part
thereof.
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15.6 Tenant further covenants and agrees that if Landlord fails or
neglects for any reason to take advantage of any of the terms hereof provided
for the termination of this Lease or for the termination or forfeiture of the
estate hereby leased, or if Landlord, having the right to declare this Lease
terminated or the estate hereby leased terminated or forfeited, shall fail to
do so, any such failure or neglect of Landlord shall not be or be deemed or
be construed to be a waiver of any provisions for the termination of this
Lease continuing to exist or for the termination or forfeiture of the estate
hereby leased subsequently arising, or as a waiver of any of the covenants,
terms and conditions of this Lease or of the prompt performance thereof by
Tenant. None of the covenants, terms or conditions of this Lease can be
waived by conduct of the parties or by estoppel; any claim or waiver must be
in writing and signed by the party entitled to the benefit thereof.
ARTICLE XVI
SURRENDER OF PREMISES
16.1 Upon the termination of this Lease, whether by lapse of time,
cancellation pursuant to an election provided for herein, forfeiture, or
otherwise, Tenant shall immediately surrender possession of the Premises
(excepting those improvements which Landlord shall have required Tenant to
remove therefrom pursuant to Paragraph 9.3 hereof) to Landlord in a clean and
orderly condition and appearance, state of repair and operating order, and
with all such improvements thereon in a good, safe, fully operable condition,
and in full compliance with all Federal, State and local laws, rules,
regulations and ordinances (including, without limitation, any laws, rules,
regulations and ordinances relating to Hazardous Materials, except to the
extent relating to Pre-existing Environmental Conditions) and each provision
of this Lease, including without limitation the provisions of Article IX
hereof. If possession is not immediately surrendered, Landlord may, with
process of law, enter the Premises and repossess the same and expel Tenant or
any subtenant or occupant therefrom. Landlord shall hold the Premises after
any such re-entry free of any right, privilege or estate of Tenant and
without any duty or obligation to Tenant in respect of any subsequent
reletting or disposition of the Premises. If Tenant's business operations on
the Premises or uses of the Premises involve any generation, storage, use,
treatment or disposal of any Hazardous Material, Tenant shall be responsible
for removing any such Hazardous Materials from the Premises and the Building
Complex and for decontaminating the Premises and the Building Complex and any
neighboring properties affected by such Hazardous Materials.
16.2 Upon the termination of this Lease, Tenant, if not in default
hereunder at the time, shall have the right to remove, and if directed so to
do by Landlord shall remove, from the Premises, all of Tenant's machinery,
equipment (excluding building service equipment), trade fixtures, signs,
furniture, furnishings, supplies and inventory then installed or in place in,
on or about the Premises or the Building Complex (except that Tenant shall
not be required to remove any Exempt Alterations). Except as hereinafter
expressly set forth, such removal shall be completed prior to the expiration
or earlier terminations of this Lease. Tenant shall make all repairs to the
Premises or the Building Complex required because of such removal and Tenant
shall restore the Premises and the relevant portion of the Building Complex
to their condition as existed when the Lease Term commenced. If this Lease
shall terminate at any time other than the time herein fixed as the
expiration of the Lease Term, and occurring not due to a default by Tenant,
then Tenant, if not in default hereunder at the time, shall have a reasonable
time thereafter to effect the removal of the foregoing items, not to
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exceed sixty (60) days. Tenant shall pay Minimum Rent and items designated in
this Lease as additional rent to Landlord on a per diem basis during the time
such removal is taking place.
16.3 If any of Tenant's machinery, equipment, trade fixtures, signs,
furniture, furnishings, supplies and inventory remain on the Premises after
the end of the term hereof or time allowed to remove the same, such property
of Landlord without any claim therein of Tenant should Landlord so elect.
16.4 Upon termination of this Lease, Tenant shall surrender the
Premises and the relevant portion of the Building Complex in a "broom-clean"
condition, with all refuse and debris removed therefrom, and with all
electrical, plumbing, heating and air conditioning installations in a good,
safe and fully operable condition, and prior to such termination, Tenant
shall fill or repair any holes or openings made by Tenant in the walls, roof
or floor of the building, remove any protuberance, and perform any
maintenance or repairs required of Tenant by this Lease. Nothing contained in
this Paragraph 16.4 shall be deemed to limit Tenant's repair and maintenance
obligations pursuant to Article IX of this Lease. If directed so to do by
Landlord, Tenant shall also remove any improvements, additions or alterations
made to the Premises or the Building Complex by Tenant (other than Exempt
Alterations) and thereafter restore the Premises and the Building Complex to
their original condition, even though such improvements by the terms of this
Lease become a part of the Premises and the property of Landlord.
ARTICLE XVII
DELAYS -- EXTENSIONS OF TIME
17.1 The time within which Landlord or Tenant is obligated herein to
construct, repair or rebuild any building, improvement or other structure
shall be extended and the performance excused when the delay is occasioned by
the other party (such as failure to promptly give required approvals, or
installation of machinery and equipment during construction which interferes
with or delays the contractor); or by strikes, threats of strikes or
lockouts; blackouts, war, threats of war, bombing, insurrection, riot or
invasion; acts of God, calamities, civil commotions, violent action of the
elements or fire; action, inaction or delayed action of any governmental
agency; regulations or laws of any national, state or local governmental
authority; unavailability of materials at reasonable prices, delays in
delivery of materials by suppliers to weather conditions which impair or
delay construction; or other matters or things, whether similar or dissimilar
to the foregoing, beyond the reasonable control of the obligated party.
Delayed action by a governmental agency shall be deemed to occur if a
building permit is not issued within forty-five (45) days after drawings,
specifications, and engineering calculations for such permit are filed for
plan check with such governmental agency.
ARTICLE XVIII
ATTORNEYS' FEES AND DISPUTE RESOLUTION
18.1 In the event that either Landlord or Tenant brings any action or
proceeding against the other for possession of the Premises or for the
recovery of any sum due hereunder, or because of the breach of any covenant,
condition or provisions hereof, or for any other relief against the other,
declaratory or otherwise, including appeals therefrom, and whether being an
action based upon a tort or contract, then the prevailing party to this Lease
in any such proceeding shall be paid reasonable attorneys' fees and costs of
such action or proceeding which shall be enforceable
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whether or not such action or proceeding, is prosecuted to final judgment,
and including an allowance for reasonable attorneys' fees for appeals and
rehearings. In addition to the foregoing award of attorneys' fees to the
prevailing party, the prevailing party in any such lawsuit shall be entitled
to its attorneys' fees incurred in any post-judgment proceedings to collect
or enforce the judgment. This provision is separate and several and shall
survive the merger of this Lease into any judgment on this Lease. Should
Landlord be made a party to any suit or proceeding brought by a third party,
arising by reason of Tenant's use or occupancy of the Premises and not being
a dispute essentially between Landlord and Tenant, then Tenant shall defend
Tenant and Landlord therein, at Tenant's sole cost and expense, and shall
hold Landlord free and harmless from any claim, loss, liability, duty or
obligation therein, including any reasonable attorneys' fees of Landlord.
18.2 At the election of either Landlord or Tenant, either party shall
have the right to have any dispute arising under this Lease heard by a
reference procedure pursuant to the provisions of California Code of Civil
Procedure Section 638 ET. SEQ., for a determination to be made which shall be
binding upon the parties as if tried before a court or jury. Notwithstanding
the foregoing, any action to recover possession of the Premises as a result
of a default by Tenant shall be brought and maintained pursuant to the
provisions of California Code of Civil Procedure Sections 1159 ET. SEQ., and
the provisions of this Paragraph 18.2 shall not apply to any such actions.
The parties agree specifically as to the following:
(a) Within five (5) business days after service of a demand by a
party hereto, the parties shall agree upon a single referee who shall then
try all issues, whether of fact or law, and then report a finding and
judgment thereon. If the parties are unable to agree upon a referee, either
party may seek to have one appointed, pursuant to California Code of Civil
Procedures, Section 640, by the presiding judge of the Los Angeles County
Superior Court. The venue for any judicial reference heard pursuant to this
Paragraph 18.2 shall be Los Angeles County.
(b) The compensation of the referee shall be such charge as is
customarily charged by the referee for like services. The cost of such
proceeding shall initially be borne equally by the parties. However, the
prevailing party in such proceeding shall be entitled, in addition to all
other costs, to recover its contribution for the cost of the reference as an
item of damages an/or recoverable costs.
(c) If a reporter is requested by either party, then a reporter
shall be present at all proceedings, and the fees of such reporter shall be
borne by the party requesting such reporter. Such fees shall be an item of
recoverable costs. Only a party shall be authorized to request a reporter.
(d) The referee shall apply all California Rules of Procedure and
Evidence and shall apply the substantive law of California in deciding the
issues to be heard. Notice of any motions before the referee shall be given,
and all matters shall be set at the convenience of the referee.
(e) The referee's decision under California Code of Civil
Procedure, Section 644, shall stand as the judgment of the court, subject to
appellate review as provided by the laws of the State of California.
(f) The parties agree that any such dispute shall be decided as
soon as practicably possible. The date of hearing for any proceeding shall be
determined by agreement of the
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parties and the referee, or if the parties cannot agree, then by the referee,
but in no event shall the date of the hearing be later than one hundred
twenty (120) days after the date of the service or demand.
(g) The referee shall have the power to award damages and all other
relief in the event of a violation of any of the provisions of this Lease
which are to be resolved pursuant to this Paragraph 18.2.
ARTICLE XIX
STATEMENT OF LEASE
19.1 Tenant agrees at any reasonable time and upon not less than ten
(10) days' prior written request by Landlord, to execute, acknowledge and
deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect (or if modified, in full force and
effect as modified and stating modifications), and the dates to which rent or
other sums have been paid in advance, it being intended that any such
statement delivered pursuant to this paragraph may be relied upon by any
prospective purchaser, mortgagee, assignee, or beneficiary. Tenant shall also
deliver to Landlord, upon Landlord's written request, the latest annual or
quarterly report for Teledyne, Inc. (or the current audited financial
statements of any assignee of Tenant, if this Lease is assigned to any party
other than an Affiliate).
ARTICLE XX
RIGHTS RESERVED BY LANDLORD
20.1 Landlord expressly reserves all rights in and with respect to the
Premises and the Building Complex which are not inconsistent with Tenant's
use of the Premises as provided in this Lease, and which do not unreasonably
interfere with Tenant's use or occupancy of the Premises, including (without
in any way limiting the generality of the foregoing) all rights to the
subsurface of the land more than five (5) feet below ground level, except
where building improvements extend more than five (5) feet below ground
level; and all rights to the airspace more than ten (10) feet above the roof
of any building; and the rights to enter upon the Premises and the Building
Complex for itself or to give easements to others for the purpose of
installing, using, maintaining, renewing and replacing such overhead or
underground water, oil, gas, sewer drainage, and other pipe lines, and
telephone, electric, power, television and other lines, cables and conduits
as Landlord may deem desirable in connection with the development or use of
any other property in the neighborhood of the Premises and the Building
Complex, whether owned by Landlord or not, all of which pipelines, lines and
conduits shall be buried to a sufficient depth or raised to a sufficient
height to as not to interfere with the use or stability of the Premises.
ARTICLE XXI
COVENANT OF QUIET ENJOYMENT
21.1 Landlord does hereby covenant, promise and agree to and with
Tenant with Tenant, for so long as it is not in default hereof and is in
compliance with all of the terms and conditions of this lease, shall and may
at all times peaceable and quietly have, hold, use, occupy and possess the
Premises throughout the term of this Lease, subject to all of the terms and
conditions of this Lease, without any molestation or eviction by Landlord or
any persons claiming by or through Landlord.
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ARTICLE XXII
RECORDATION
22.1 Neither this Lease nor a short form of memorandum of this Lease
shall be recorded in the office of any county recorder without Landlord's
express written consent which may be granted or withheld by Landlord in its sole
and absolute discretion. In the event of any such recordation (unless such
recordation is requested or required by Landlord), Tenant shall be solely
responsible for any documentary transfer taxes or other taxes relating to or
arising out of any such recordation.
ARTICLE XXIII
SUBORDINATION
23.1 Subject to Landlord's obtaining and providing to Tenant a "non-
disturbance agreement" as provided in Paragraph 23.2, below, this Lease and
Tenant's rights hereunder are and will remain subject and subordinate to any
ground lease, mortgage, deed of trust or any other hypothecation for security
now or hereafter placed upon the real property of which the Premises are a part
(the "Property"), and to all increases, renewals, modifications, consolidations,
replacements, and extensions thereof (collectively referred to as the
"Mortgage"). If the holder of a mortgage becomes the owner of the Property by
reason of foreclosure or acceptance of a deed in lieu of foreclosure, at such
holder's election tenant will be bound to such holder or its successor-in-
interest under all terms and conditions of this Lease, and Tenant will be deemed
to have attorned to and recognized such holder or successor as Landlord's
successor-in-interest for the remainder of the Lease Term or any extension
thereof. The foregoing is self-operative and no further instrument of
subordination and/or attornment will be necessary unless required by Landlord or
the holder of a Mortgage, in which case Tenant will, within ten (10) days after
written request, execute and deliver without charge any documents reasonably
required by Landlord or such holder in order to confirm the subordination and
attornment set forth above. Should the holder of a Mortgage request that this
Lease and Tenant's rights hereunder be made superior, rather than subordinate,
to the Mortgage, then Tenant will, within ten (10) days after written request,
execute and deliver without charge such agreement as may be reasonably required
by such holder in order to effectuate and evidence such superiority of the Lease
to the Mortgage.
23.2 If Tenant fails to execute and deliver any documents as and when
required above, such failure will constitute a default under this Lease,
entitling the Landlord to the same rights and remedies as if such default were
with respect to non-payment of Minimum Rent. With respect to each Mortgage that
may encumber the Property at or after the commencement of the Lease term,
Landlord agrees that promptly following its receipt of written request by
Tenant, Landlord will obtain from the holder of the Mortgage, at Landlord's
expense, a "non-disturbance agreement," in a commercially reasonable form. The
term "non-disturbance agreement" as used herein means, in general, an agreement
that as long as Tenant is not in default under this Lease, this Lease will not
be terminated if such holder acquires title to the Property by reason of
foreclosure proceedings or acceptance of a deed in lieu of foreclosure, provided
that Tenant attorns to such holder in accordance with such holder's
requirements.
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ARTICLE XXIV
HOLDING OVER
24.1 If Tenant remains in possession of the Premises after the
expiration of the Lease Term or any extension or renewal hereof, such holding
over shall not operate to extend or renew this Lease but shall be construed as a
tenancy from month-to-month which may be terminated by Landlord upon three (3)
days' prior written notice if Tenant is then in default of this Lease, or by
either party upon at least thirty (3) days' prior written notice directed to the
end of the calendar month. Such month-to-month tenancy by Tenant shall be
subject to all the terms and provisions of this Lease, except that the Minimum
Rent payable during the period of holding over shall be the greater of: (a)
Minimum Rent set forth in Item 1.6 of the Basic Lease Provisions, plus a
percentage of such rent equal to the percentage change in the CPI between the
Commencement Date of this Lease and the period of holding over; or (b) one
hundred fifty percent (150%) of the average monthly Minimum Rent payable by
Tenant during the last twelve (12) months of the Lease Term or any extension or
renewal thereof. Any option, rights, or privileges granted to Tenant, if any,
to extend the Lease Term, to acquire the Premises, or re-lease the same, shall
not be applicable during said period of holding over.
ARTICLE XXV
GENERAL
25.1 REMEDIES CUMULATIVE. The specific remedies to which Landlord
may resort under the terms of this lease are cumulative and are not intended to
be exclusive of any other remedies or means of redress to which Landlord may be
lawfully entitled in case of any breach or threatened breach by Tenant of any
provision of this Lease.
25.2 SUCCESSORS AND ASSIGNS. The covenants and agreements herein
contained shall bind and inure to the benefit of Landlord, its successors and
assigns, and Tenant, its successors and assigns, subject to the provisions of
this Lease.
25.3 PAYMENTS AND INTEREST. Except as otherwise specifically
provided in this Lease, each covenant, agreement or stipulation by a party
hereto shall be performed at such party's own cost and expense, and without cost
or expense to the other party. Any monetary obligations due from Tenant to
Landlord which are not paid when due shall bear interest from the due date until
paid to Landlord at the Lease Interest Rate. Such interest shall be paid at the
time of payment of the principal obligation as a condition of remedy of such
principal obligation. Any check tendered by Tenant which is dishonored by the
drawee bank shall not constitute payment of any obligation under this Lease.
25.4 LATE CHARGE. Tenant acknowledges that late payment of Minimum
Rent and items designated in this Lease as additional rent will cause Landlord
to incur costs and suffer damages not contemplated by this Lease, the exact
amount of which will be impracticable to ascertain. Such costs and damages
include, but are not limited to, late charges which may be imposed on Landlord
by the terms of any trust deed covering the Premises; additional administrative
duties of Landlord's personnel; possible adverse effects on Landlord's credit
rating resulting from impairment of Landlord's cash flow; and attorneys' fees
resulting from consultations with counsel. Accordingly, if any installment of
Minimum Rent or items designated as additional rent are not received by Landlord
within ten (10) days after the same are due,
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Tenant shall pay Landlord, as additional rent, a late charge equal to five
percent (5%) of such overdue amount. Landlord and Tenant agree that such late
charge represents a fair, equitable, and reasonable estimate of the costs and
damages Landlord will incur because of Tenant's late payment.
25.5 LATE PAYMENTS AND IMPOUNDS. In the event that a late charge is
payable pursuant to Paragraph 25.4, whether or not collected, for two (2)
consecutive installments of rent, then rent shall automatically become due and
payable quarterly in advance, rather than monthly, notwithstanding Paragraph 4.1
or any other Provision of this Lease to the contrary. All monies paid to
Landlord under this paragraph may be intermingled with other monies of Landlord
and shall not bear interest. All advance payments provided for in this
Paragraph shall be deemed rent under this Lease.
25.6 NOTICES. Any notice or demand required or permitted by law or
by any of the provisions of this Lease shall be in writing. All notices or
demands by either party shall be deemed to have been properly given upon
delivery when served personally; two (2) business days after being deposited
with the U.S. Postal Service when sent by registered or certified mail, postage
prepaid; or by noon on the business day following the day of deposit with an
overnight express service, such as Federal Express. Notices from Landlord to
Tenant shall be given to Tenant at the address of the Premises, with a copy to
Teledyne, Inc., 1901 Avenue of the Stars, 18th Floor, Los Angeles, California
90067, Attention: Legal Department. Notices or demands to Landlord shall be
given to Landlord at 22010 Wilmington Avenue, Suite 400, Carson, California
90745. Either party hereto may change the place to which notices are to be
given by advising the other party in writing.
25.7 CAPTIONS. The headings or captions of Articles in this Lease
are for convenience and reference only, and they in no way define, limit or
describe the scope or intent of this Lease or the Provisions of such Articles.
25.8 PRONOUNS AND SINGULAR/PLURAL. Feminine or neuter pronouns shall
be substituted for those masculine form or vice versa, and the plural shall be
substituted for the singular number of vice versa, in the place or places herein
where the context may require such substitution or substitutions.
25.9 TIME OF ESSENCE. Time is hereby declared to be of the essence
of this Lease and of each and every covenant, term, condition or provision
hereof.
25.10 REASONABLE CONSENT. Unless otherwise provided in this Lease,
whenever the consent or approval of Landlord or Tenant is required by the
provisions of this Lease, such consent or approval shall not be unreasonably
withheld or delayed.
25.11 FAIR MEANING. The language in all parts of this Lease shall be
in all cases construed as a whole according to its fair meaning, and not
strictly for nor against either Landlord or Tenant.
25.12 ENTIRE AGREEMENT. This Lease contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreement or understanding pertaining to any such matter
shall be effective for any purpose. No provision of this Lease may be amended
or added to except by an agreement in writing signed by the parties hereto or
their respective successors in interest.
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25.13 NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of a lesser amount than that stipulated herein for Minimum rent,
additional rent or any other charge shall be deemed to be other than on
account of the earliest stipulated Minimum Rent, additional rent or other
charge than due, nor shall any endorsement or statement on a check or letter
accompanying any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to rights to
recover the balance of such Minimum Rent, additional rent, or other charges
or pursue any other remedy in this Lease, at law or in equity.
25.14 CHOICE OF LAW. This Lease shall be governed by and construed
pursuant to the laws of the State of California.
25.15 NON-DISCRIMINATION. Tenant herein covenants by and for
itself, its heirs, executors, administrators and assigns, and all persons
claiming under or through it; and this Lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination
against or segregation of any person or group of persons, on account of race,
color, creed, national origin, or ancestry in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the Premises, nor shall
the Tenant itself, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of Tenant's
lessees, sublessees or vendees on the Premises.
25.16 COUNTERPARTS. This Lease may be executed in several
counterparts, each of which shall constitute an original.
25.17 CORPORATE RESOLUTION. Tenant shall deliver to Landlord,
contemporaneously with delivery of this Lease executed by Tenant, a corporate
resolution or a letter from Tenant's legal department confirming that Tenant
has the corporate power and authority to enter into this Lease, and that the
persons executing this Lease are authorized to execute this Lease on behalf
of Tenant.
25.18 REIMBURSEMENTS TO LANDLORD. If Tenant, or any third party on
behalf of Tenant or with whom Tenant is engaged or contemplates engaging in
business, requests that Landlord review or approve any drawings,
specifications or engineering calculations respecting any improvements Tenant
intends to install in the Premises or execute any agreement or written
instrument; and if Landlord refers such matter to any architect, engineer,
surveyor or other professional or administrative personnel of Landlord or to
legal counsel for review and advice to Landlord, then Tenant agrees to
reimburse Landlord as additional rent for all professional fees and costs
incurred by Landlord at the actual cost thereof for persons not in the direct
employ of Landlord, and at the rate of Fifty Dollars ($50.00) per hour for
all time spent by professional and administrative persons in the direct
employ of Landlord. Notwithstanding the foregoing, Tenant shall not be
responsible for reimbursing Landlord for any such fees or costs relating to
the installation of any of Tenant's Special Manufacturing Improvements which
occurs prior to the expiration of the sixth (6th) month of the Lease Term. If
Tenant requests that Landlord consent to an assumption and/or assignment of
this Lease or a subletting of the Premises to a third party for which
Landlord's written consent is required, Tenant agrees to reimburse Landlord,
as additional rent, for all time spent by Landlord's administrative and
professional personnel, in reviewing the proposed form of all legal documents
submitted by Tenant and preparing necessary additional legal documents, in
evaluating the investigating the credit worthiness of the proposed assignee
or subtenant, in inspecting the Premises to determine if the same is in the
condition and state of repair as
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required by this Lease, in reviewing drawings and specifications for any
additional improvements to be made to the Premises; and for any other action
required in the reasonable judgment of Landlord. Landlord shall be reimbursed
at the rate of Fifty Dollars ($50.00) per hour for the time spent by its
administrative and professional personnel, and at the actual cost of
professional fees and costs incurred by Landlord for persons not in the direct
employ of Landlord, for each such request made by Tenant. The hourly fee
payable to Landlord's administrative and professional personnel under this
Paragraph shall be increased by the percentage increase in the Consumer Price
Index ("all items" index for urban wage earners and clerical workers, Los
Angeles/Anaheim/Riverside area, 1982-84 = 100) on each anniversary date of the
commencement of the term of this Lease.
25.19 NO GUARD SERVICE. 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 any such service or measures. Tenant assumes all responsibility for
the protection of Tenant, its agents and invitees from acts of third parties.
25.20 BROKERS. Tenant represents and warrants to Landlord that
Tenant has had no dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, excepting only the brokers
specifically named in Item 1.12 of the Basic Lease Provisions. Tenant hereby
indemnifies and holds Landlord harmless from any liability or claim that may be
asserted against Landlord by any broker, finder or person with whom Tenant has
purportedly dealt whose name is not inserted in this paragraph.
25.21 BROKERAGE COMMISSION. Tenant acknowledges its understanding
that Landlord has paid a real estate brokerage commission for securing Tenant's
tenancy at the Premises for the term of this Lease. If Tenant defaults under
this Lease and discontinues paying the rent specified herein, Tenant shall,
within thirty (30) days of such event, reimburse Landlord for the unamortized
portion of such brokerage commission pursuant to the following formula:
Total amount of Number of months of
brokerage commission x unexpired lease term.
- -------------------------------------------------------------
Number of months of least term
Notwithstanding the foregoing, Landlord shall not be entitled to recover such
unamortized portions of the brokerage commission as provided in this Paragraph
25.21 if, following an uncured default under this Lease by Tenant, Landlord
elects to pursue its remedy against Tenant pursuant to California Civil Code
Section 1951.4.
25.22 PARKING. Tenant shall instruct and require that Tenant's
employees, agents, visitors and business invitees park motor vehicles within the
parking areas included in the Building Complex; and such employees, agent,
visitors and invitees shall not park on the streets within the Watson Industrial
Center. If there is insufficient parking area included on the Premises for
parking of such motor vehicles, Tenant shall use its best efforts to obtain off-
street parking privileges on other properties in the vicinity of the Premises.
25.23 LEASE REVIEWED. Landlord and Tenant have carefully read and
reviewed this Lease and each term and provision contained herein, and each of
them has referred this Lease to its own legal counsel for review and advice as
to the legal consequences of this Lease. Landlord and Tenant acknowledge their
informed and voluntary consent thereto. Landlord and Tenant
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further agree that, at the time this Lease is executed, the terms of this Lease
are commercially reasonable and effectuate the intent and purpose of Landlord
and Tenant with respect to the Premises.
25.24 FINANCIAL STATEMENTS. As a material inducement to Landlord's
execution of this Lease, Tenant hereby represents and warrants that Tenant has
furnished to Landlord the most current annual report for Teledyne, Inc.
Throughout the Lease Term, Tenant shall, within ten (10) days following
Landlord's request, provide Landlord with the most current annual report for
Teledyne, Inc. If Tenant assigns this Lease to any party other than an
Affiliate, such assignee shall deliver to Landlord, within ten (10) days
following Landlord's request, such assignee's then-current financial statements.
25.25 LEASE INTEREST RATE. As used in this Lease, the "Lease
Interest Rate" shall be a rate equal to two percent (2%) per year in excess of
the "Reference Rate" most recently announced by Bank of America, Los Angeles
from time to time, provided however that if Bank of America ceases to announce
such Reference Rate; and provided further, however, that in no event shall the
Lease Interest Rate exceed the highest lawful rate of interest permissible by
law.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
"LANDLORD" "TENANT"
WATSON LAND COMPANY, TELEDYNE, INC.,
a California corporation a Delaware corporation
By: /s/ By: /s/ Douglas I. Grant
-------------------------------- ------------------------------------
Its: President Its: Treasurer
---------------------------- --------------------------------
Date executed: 7-22-91 By: /s/ J. W. Dougherty
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Its: Manager, Real Estate
--------------------------------
Date executed: 7/17/91
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