LEASE
MULTI TENANT INDUSTRIAL
MODIFIED NET
LANDLORD:
MIDSTATE 99 DISTRIBUTION BUILDING No. 1, LLC
a California Limited Liability Company
TENANT:
MOULDED FIBRE TECHNOLOGY INC.
a Maine Corporation
ADDRESS:
0000 X. XXXXX XXXXX, XXXXXXX, XXXXXXXXXX
TABLE OF CONTENTS
Section Title Page
------- ----- ----
DEFINED TERMS........................................................ vii
MULTI-TENANT INDUSTRIAL MODIFIED NET LEASE.............................. 1
1. SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS................... 1
1.1. Landlord's Address........................................... 1
1.2. Tenant's Address............................................. 1
1.3. Project...................................................... 1
1.4. Building..................................................... 1
1.5. Premises..................................................... 1
1.6. Commencement Date............................................ 2
1.7. Lease Term of the Premises................................... 2
1.8. Monthly Rent................................................. 2
1.9. Additional Rent.............................................. 2
1.10. Security Deposit............................................. 2
1.11. Permitted Use................................................ 2
1.12. Brokers...................................................... 2
1.13. Parking Spaces............................................... 3
1.14. Tenant Improvement Allowance................................. 3
1.15. Common Areas................................................. 3
1.16. Lease Guaranty............................................... 3
2. LEASE OF PREMISES.................................................... 4
2.1. Common Area.................................................. 4
3. TERM................................................................. 4
3.1. Term; Notice of Lease Dates.................................. 4
3.2. Early Occupancy.............................................. 4
3.3. Option to Extend............................................. 4
3.4. Option Period Rent........................................... 5
3.5. Conditions Precedent......................................... 5
4. RENT................................................................. 5
4.1. Payment...................................................... 5
i
4.2. Monthly Rent................................................. 6
4.3. Additional Rent; Additional Obligations...................... 6
5. OPERATING EXPENSES................................................... 6
5.1. Operating Expenses........................................... 6
5.2. Cap on Controllable Operating Expenses....................... 7
6. SECURITY DEPOSIT..................................................... 7
7. USE.................................................................. 8
7.1. General...................................................... 8
7.2. Signs........................................................ 8
7.3. Hazardous Materials.......................................... 8
7.4. Xxxxxx and Xxxxxx........................................... 10
8. PAYMENTS AND NOTICES................................................ 10
9. BROKERS............................................................. 11
10.SURRENDER; HOLDING OVER............................................. 11
10.1. Surrender of Premises....................................... 11
10.2. Holding Over................................................ 12
10.3. No Effect on Landlord's Rights.............................. 12
11. TAXES.............................................................. 12
11.1. Real Property Taxes and Assessments......................... 12
11.2. Personal Property Taxes..................................... 13
12. REPAIRS............................................................ 13
12.1. Tenant's Repair Obligations................................ 13
12.2. Prohibition Against Waste.................................. 14
12.3. Landlord's Repair Rights and Obligations................... 14
13. ALTERATIONS........................................................ 14
13.1. Tenant Changes; Conditions................................. 14
13.2. Removal of Tenant Changes and Tenant Improvements.......... 15
13.3. Removal of Personal Property............................... 15
13.4. Tenant's Failure to Remove................................. 16
14. LIENS.............................................................. 16
15. ASSIGNMENT AND SUBLETTING.......................................... 16
ii
15.1. Restriction on Transfer.................................... 16
15.2. Transfer Notice............................................ 17
15.3. Landlord's Options......................................... 17
15.4. Additional Conditions...................................... 17
15.5. Permitted Transfers........................................ 18
16. ENTRY BY LANDLORD.................................................. 18
17. UTILITIES AND SERVICES............................................. 18
17.1. Provisions of Utilities and Services....................... 18
17.2. Abatement Conditions....................................... 19
18. INDEMNIFICATION AND EXCULPATION.................................... 19
18.1. Tenant's Assumption of Risk and Waiver..................... 19
18.2. Tenant's Indemnification of Landlord....................... 20
18.3. Landlord's Indemnification of Tenant....................... 20
18.4. Waiver of Consequential Damages............................ 20
18.5. Survival; No Release of Insurers........................... 20
19. DAMAGE OR DESTRUCTION............................................. 20
19.1. Obligation to Restore...................................... 20
19.2. Tenant's Termination Option................................ 21
19.3. Damage Near End of Term.................................... 21
19.4. Reconstruction and Repair Requirements..................... 21
19.5. Rent Abatement During Reconstruction....................... 21
19.6. Disbursement of Insurance Proceeds upon Termination........ 21
19.7. Waiver of Termination...................................... 22
20. EMINENT DOMAIN..................................................... 22
20.1. Total or Partial Taking.................................... 22
20.2. Taking of Common Area...................................... 22
20.3. Temporary Taking........................................... 22
20.4. Waiver of Termination...................................... 22
21. INSURANCE.......................................................... 23
21.1. Tenant's Insurance......................................... 23
21.2. Effect on Insurance........................................ 24
iii
21.3. Landlord's Insurance....................................... 24
22. WAIVER OF SUBROGATION.............................................. 25
22.1. Waiver..................................................... 25
22.2. Waiver of Insurers......................................... 26
23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES........................... 26
23.1. Tenant's Default........................................... 26
23.2. Landlord's Remedies; Termination........................... 26
23.3. Landlord's Remedies; Re-Entry Rights....................... 27
23.4. Landlord's Remedies; Continuation of Lease................. 27
23.5. Landlord's Right to Perform................................ 27
23.6. Interest................................................... 28
23.7. Late Charges............................................... 28
23.8. Rights and Remedies Cumulative............................. 28
24. LANDLORD'S DEFAULT................................................. 28
25. SUBORDINATION...................................................... 29
26. ESTOPPEL CERTIFICATE............................................... 29
26.1. Tenant's and Landlord's Obligations........................ 29
26.2. Failure to Deliver......................................... 29
27. PARKING............................................................ 30
28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES.............. 30
28.1. Modifications.............................................. 30
28.2. Cure Rights................................................ 30
29. QUIET ENJOYMENT.................................................... 30
30. TRANSFER OF LANDLORD'S INTEREST.................................... 30
31. LIMITATION ON LANDLORD'S LIABILITY................................. 31
32. MISCELLANEOUS...................................................... 31
32.1. Governing Law.............................................. 31
32.2. Waiver of Jury Trial....................................... 31
32.3. Attorney's Fees............................................ 31
32.4. Successors and Assigns..................................... 31
iv
32.5. No Merger.................................................. 31
32.6. Professional Fees ......................................... 31
32.7. Waiver..................................................... 31
32.8. Terms and Headings; Interpretation......................... 32
32.9. Time....................................................... 32
32.10. Prior Agreements; Amendments............................... 32
32.11. Severability............................................... 32
32.12. Recording.................................................. 32
32.13. Exhibits and Riders........................................ 32
32.14. Auctions................................................... 33
32.15 Accord and Satisfaction.................................... 33
32.16. Financial Statements....................................... 33
32.17. No Partnership............................................. 33
32.18. Force Majeure.............................................. 33
32.19. Counterparts............................................... 33
32.20. Duty to Act................................................ 33
32.21. Non-Discrimination......................................... 34
33. LEASE EXECUTION.................................................... 34
33.1. Authority.................................................. 34
33.2. No Option.................................................. 34
LIST OF EXHIBITS....................................................... 36
EXHIBIT A. SITE PLAN................................................. A-1
EXHIBIT B. LEGAL DESCRIPTION.......................................... B-1
EXHIBIT C. TENANT WORK AGREEMENT...................................... C-1
1. TENANT IMPROVEMENTS................................................ C-1
1.1. Tenant Improvement Allowance............................... C-1
1.2. Disbursement of the Tenant Improvement Allowance........... C-1
1.3. Construction of the Tenant Improvements.................... C-2
1.4. Completion of the Tenant Improvements; Lease
Commencement Date.......................................... C-3
1.5. Substantial Completion; Punch List......................... C-4
v
2. LANDLORD RESPONSIBILITIES.......................................... C-4
2.1. Books and Records.............................................. C-4
2.2. Governmental Approvals......................................... C-4
2.3. Bidding of Contracts........................................... C-4
2.4. Permits........................................................ C-4
2.5. Project Administration......................................... C-5
2.6. Post-Completion Matters........................................ C-5
2.7. Status Reports................................................. C-5
2.8. Periodic Inspections........................................... C-5
3. MISCELLANEOUS...................................................... C-5
3.1. Tenant's Representative........................................ C-5
3.2. Landlord's Representative...................................... C-5
3.3. Time of the Essence in this Tenant Work Agreement.............. C-6
3.4. Tenant's Lease Default......................................... C-7
DESCRIPTION OF BASE IMPROVEMENTS - SCHEDULE 1......................... C-7
CONSTRUCTION SCHEDULE - SCHEDULE 2................................... C-21
EXHIBIT D. THIRD PARTY GUARANTY....................................... D-1
EXHIBIT E. SAMPLE FORM NOTICE OF LEASE TERMS AND DATES................ E-1
EXHIBIT F. ENVIRONMENTAL QUESTIONNAIRE................................ F-1
EXHIBIT G. SAMPLE FORM SNDA........................................... G-7
EXHIBIT H. SAMPLE FORM OF ESTOPPEL CERTIFICATE ....................... H-1
EXHIBIT 1. MEMORANDUM OF LEASE........................................ I-1
vi
DEFINED TERMS
[left column]
Abatement Conditions .................................. 19
ADA .................................................... 8
Additional Obligations ................................. 6
Additional Rent ........................................ 6
Affiliate ............................................. 18
Builders All Risk ..................................... 15
Building ............................................... 1
Common Area ............................................ 4
Contractor ........................................... C-2
Control ............................................... 18
Controllable Expenses .................................. 7
Cure Notice ........................................... 19
Early Occupancy Date ................................... 4
Effective Date ......................................... 1
Emergency ............................................. 18
Extension Option ....................................... 4
First Lease Year ....................................... 7
Force Majeure ......................................... 33
Guarantor ............................................ D-1
Indemnified Claims .................................... 20
Landlord ............................................... 1
Landlord Indemnified Parties ........................... 9
Landlord Parties ...................................... 20
[right column]
Laws ................................................. C-3
Lease ............................................. 1, D-1
Lease Expiration Date .................................. 2
Memorandum ............................................ 32
Monthly Rent ........................................... 2
Operating Expenses ..................................... 6
Option Period .......................................... 4
Personal Property ..................................... 15
Pre-Approved Change ................................... 14
Premises ............................................... 1
Real Property Taxes and Assessments ................... 12
Rent ................................................... 6
Restoration ........................................... 20
Restore ............................................... 20
Review Period .......................................... 6
Security Deposit ....................................... 2
SNDA .................................................. 29
Statement .............................................. 6
Substantial Completion ............................... C-4
Summary ................................................ 1
Superior Interest ..................................... 29
Tenant ................................................. 1
Tenant Change ......................................... 14
vii
[left column]
Tenant Changes ........................................ 14
Tenant Delays ........................................ C-3
Tenant Improvement Allowance ......................... C-1
Tenant Improvement Allowance Items ................... C-1
Tenant Improvements .................................. C-1
Tenant's Parties ....................................... 8
Tenant's Share of Operating Expenses ................... 2
Tenant's Share of Real Property Taxes .................. 2
Term ................................................... 4
[right column]
Termination Date ......................................... 21
TI Construction Drawings ................................ C-1
Transfer ................................................. 17
Transfer Date ............................................ 17
Transfer Notice .......................................... 17
Transferee ............................................... 17
Work .................................................... C-4
Work Agreement ............................................ 1
viii
MULTI-TENANT INDUSTRIAL MODIFIED NET LEASE
This LEASE ("Lease"), which includes the Summary attached hereto and
incorporated herein by this reference, is made as of NOVEMBER 27, 2000
("EFFECTIVE DATE"), by and between MIDSTATE 99 DISTRIBUTION BUILDING NO. 1, LLC,
a California limited liability company ("LANDLORD"), and MOULDED FIBRE
TECHNOLOGY, INC., a Maine corporation ("TENANT").
1. SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS.
All references in this Lease to any term defined in this Section I--Summary of
Basic Lease Information and Definitions ("SUMMARY") shall have the meaning set
forth in this Summary for such term. Any initially capitalized terms used in
this Summary and any initially capitalized terms in the Lease, which are not
otherwise defined in this Summary, shall have the meaning given to such terms in
the Lease.
1.1. XXXXXXXX'S ADDRESS:
MidState 99 Distribution Building No. 1, LLC
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Leasing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
1.2. TENANT'S ADDRESS:
Moulded Fibre Technology, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile:
1.3. PROJECT.
The industrial development known as MidState 99 Distribution Center, located at
0000 X. Xxxxx Xxxxx, xx xxx Xxxx xx Xxxxxxx, Xxxxxx of Tulare, State of
California, as shown on the site plan attached hereto as Exhibit A, and more
particularly described on Exhibit B hereto. The Project includes the building,
improvements and facilities, now or subsequently located within such
development.
1.4. BUILDING.
A one (1) story building containing at least one hundred twelve thousand eight
hundred ninety-six (112,896) rentable square feet (the "BUILDING") located in
the Project shown on Exhibit A and pursuant to the Work Agreement attached
hereto as Exhibit C (the "WORK AGREEMENT").
1.5. PREMISES.
The Premises shall include thirty seven thousand six hundred thirty-two (37,632)
rentable square feet of the Building, as shown on Exhibit A (the "PREMISES").
1
1.6. COMMENCEMENT DATE.
The Commencement Date shall occur on the date of Substantial Completion (as
determined in accordance with the Work Agreement) of all the Improvements in the
Premises. Subject to Force Majeure Delays and Tenant Delays (as defined herein),
Landlord anticipates that the Commencement Date will occur on or around March 1,
2001.
1.7. LEASE TERM OF THE PREMISES.
The Lease Expiration Date shall be six (6) years following the Commencement Date
(the "LEASE EXPIRATION DATE"). Tenant shall have one (1) extension option of
five (5) years pursuant to Section 3.3 of the Lease. If the Commencement Date
occurs on a day other than the first day of a month, then for purposes of
determining the Lease Expiration Date, the six (6) year period shall be measured
from the first day of the month following the month in which the Commencement
Date occurs.
1.8. MONTHLY RENT.
Xxxxxx agrees to pay Landlord, as monthly rent for the Premises, (the "MONTHLY
RENT"), the amounts designated as follows:
MONTHLY RENT
INITIAL TERM PER SQUARE FOOT TOTAL MONTHLY RENT TOTAL ANNUAL RENT
Months 1 - 30 $.292 $10,988.54 $131,862.53
Months 31 - 60 $.315 $11,867.63 $142,411.53
Months 61 - 72 $.341 $12,817.04 $153,804.45
1.9. ADDITIONAL RENT.
Tenants share of Operating Expenses shall be thirty three percent (33%)
("TENANT'S SHARE OF OPERATING EXPENSES").
Tenants share of Real Property Taxes shall be thirty three percent (33%)
("TENANT'S SHARE OF REAL PROPERTY TAXES").
1.10. SECURITY DEPOSIT.
One (1) month's Rent of Ten Thousand Nine Hundred Ninety-Eight 54/100 Dollars
($10,988.54) shall constitute the Security Deposit (the "SECURITY DEPOSIT").
1. 11. PERMITTED USE.
The Premises may be used only for light manufacturing and warehouse, any other
lawful use consistent with a first-class building which is otherwise permitted
by applicable zoning ordinances, including without limitation, any use which
would be permitted, subject to Landlords reasonable approval, by variance or
conditional use permit (the "PERMITTED USE").
1.12. BROKERS.
Xxxx Xxxxxxx of Xxxx Xxxxx representing Tenant, and Xxxxxxx X. Xxxx of Xxxx
Commercial representing Landlord.
2
1.13. PARKING SPACES.
The total amount of parking spaces for the Premises shall be thirty-eight (38)
as shown on Exhibit A.
1.14. TENANT IMPROVEMENT ALLOWANCE.
The Tenant Improvement Allowance shall be Two Hundred Eighteen Thousand Three
Hundred Eight Dollars (218,308).
1.15. COMMON AREAS.
Common Areas shall refer to all areas and facilities on the Project which are
provided and designated from time to time by Landlord for the general,
non-exclusive use and convenience of Tenant, Landlord and other tenants of the
Project and their respective employees, invitees, licensees, or other visitors
including, but not limited to, the walkways, sidewalks, landscaped areas,
non-exclusive parking areas and driveways, all as set forth on Exhibit A.
1.16. LEASE GUARANTY.
The Lease is guaranteed by UFP Technologies pursuant to the Guaranty of Lease
attached as Exhibit D.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
2. LEASE OF PREMISES.
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises upon and subject to the terms, covenants and conditions contained in
this Lease.
2.1. COMMON AREA.
Tenant may, as appurtenant to the Premises, and subject to reasonable rules and
regulations made by Landlord of which Tenant is given notice, use the following
areas (collectively "COMMON AREA") on a non-exclusive basis: (a) the portions of
the Building, if any, to be shared by Tenant and the other occupants of the
Building; (b) the walkways, sidewalks, roadways, Common Area lighting, and
utilities, irrigation systems, trash areas, loading and unloading areas,
landscaped areas, driveways, non-exclusive parking areas, and other Common Area
improvements.
Landlord grants to Tenant, its employees, invitees, licensees and other visitors
a non-exclusive license for the term of this Lease to use the Common Areas,
subject to the terms and conditions of this Lease, and to the reasonable rules
and regulations established from time to time and enforced uniformly by Landlord
from time to time against any and all tenants of the Project.
3. TERM.
3.1. TERM; NOTICE OF LEASE DATES.
This Lease shall be effective upon the Effective Date. Subject to this Section
3, the term of this Lease (the "TERM") for the Premises shall commence upon the
Commencement Date and shall expire on the Lease Expiration Date, unless sooner
terminated or extended as permitted herein, and if extended, the Term will
include the Option Period. Within ten (10) business days after Xxxxxxxx's
written request, Xxxxxx agrees to execute a confirmation of the Commencement
Date in the form of Exhibit D attached hereto.
3.2. EARLY OCCUPANCY.
Landlord shall allow Tenant to enter the Premises when the construction of the
Building has proceeded to a point where, consistent with good construction
practices, Tenant can commence preparation of the Premises for Tenant's
occupancy, on or about December 9, 2000 (the "EARLY OCCUPANCY DATE") for
purposes of Tenant's installation of Tenant's furniture, cabling, fixtures and
equipment. Tenant's entry into the Premises from and after the Early Occupancy
Date shall be subject to Tenant's coordination of such entry with Landlord and
Xxxxxxxx's general contractor(s) so as not to hinder or unreasonably interfere
with the completion of the Premises and the Tenant Improvements therein. Such
early occupancy shall be subject to all of the terms and conditions of this
Lease, including, without limitation, those provisions requiring that Tenant
shall be responsible for all costs, expenses and obligations relating to the
Premises (including, without limitation, Sections 18, 21 and 23) except that
Tenant shall not be obligated to pay any Rent during the period of such early
occupancy. In addition, Xxxxxxxx agrees that neither Xxxxxx, nor any contractor
or subcontractor of Tenant shall be charged for the use of elevators, hoists (if
any), water, electricity, HVAC, security or any other utilities or services
prior to the Commencement Date. Landlord shall have the right to terminate
Xxxxxx's Early Occupancy if in Landlord's reasonable discretion, the Early
Occupancy will interfere with construction of the Premises.
3.3. OPTION TO EXTEND.
Tenant shall have one (1) option (the "EXTENSION OPTION") to extend the Term for
a period (the "OPTION PERIOD") of five (5) years, commencing upon the Lease
Expiration Date upon the same terms and conditions
4
previously applicable. Tenant shall pay Monthly Rent in the amounts set forth in
Section 3.4 hereto. An Extension Option may be validly exercised only by notice
in writing received by Landlord not less than six (6) months prior to the Lease
Expiration Date (or expiration of the first (1st) Option Period, if applicable);
provided, however, that the Extension Option may be validly exercised only if no
undisputed and uncured Tenant default exists for which Landlord has provided
Tenant with written notice beyond any notice and cure periods as of the date of
exercise. If Tenant does not exercise an Extension Option during the exercise
period set forth above in strict accordance with the provisions hereof, each
Extension Option shall forever terminate and be of no further force or effect.
3.4. OPTION PERIOD RENT.
Xxxxxx agrees to pay to Landlord, as Monthly Rent during the Option Period(s),
the amounts set forth below:
MONTHLY RENT
OPTION PERIOD PER SQUARE FOOT TOTAL MONTHLY RENT TOTAL ANNUAL RENT
Months 73 - 90 $0.341 $12,817.04 $153,804.45
Months 91 - 120 $0.368 $13,842.40 $166,108.81
Months 121 - 132 $0.397 $14,949.79 $179,397.51
3.5. CONDITIONS PRECEDENT.
As of the Commencement Date, the Premises shall (i) be adequately served by all
public utilities which shall be separately provided or metered for the Premises,
including water, sewer, gas, electric, telephone, drainage facilities and all
other required or reasonably desired public utilities; (ii) have reasonable
access to and from publicly dedicated streets; (iii) be zoned so as to permit
the Tenant's intended use of the Premises. As of the Commencement Date, all
buildings, improvements (and the structural elements and mechanical systems
thereof), fixtures, machinery, equipment and systems that are a part of, or
located on the Premises, except to the extent the same is to be provided by
Tenant as specifically set forth in this Lease or the Work Agreement, shall be
in good condition and repair and in good working order. Landlord will not be
obligated to deliver possession of the Premises to Tenant (but Tenant will be
liable for Rent if the Commencement Date has occurred and if Landlord can
otherwise deliver the Premises, or the applicable portion thereof, to Tenant as
required hereunder) until Xxxxxxxx has received from Tenant certificates of
insurance as required under Section 21 of this Lease.
4. RENT.
4.1. PAYMENT.
The Monthly Rent shall be paid by Xxxxxx in advance on the first day of each and
every calendar month commencing upon the Commencement Date, except that on the
Commencement Date the Monthly Rent for any partial month at the beginning of the
Term and the Monthly Rent for the first full month of the Term shall be payable
by Tenant. The Monthly Rent for any partial month shall be prorated in the
proportion that the number of days this Lease is in effect during such month
bears to the actual number of days in such month. Late payments of Rent will be
subject to interest and a late charge as provided in Sections 23.6 and 23.7
below.
5
4.2. MONTHLY RENT.
The Monthly Rent shall be as set forth in Section 1.8 of this Lease.
4.3. ADDITIONAL RENT; ADDITIONAL OBLIGATIONS.
The Monthly Rent shall be absolutely "net" to Landlord so that this Lease shall
yield to Landlord the Monthly Rent specified in Section 4.2 and that all
Operating Expenses (as defined in Section 5.1), utility charges, and all other
costs, fees, charges, expenses, reimbursements and obligations of every kind and
nature whatsoever relating to Tenant's use of the Premises which may arise or
become due during the term or by reason of events occurring during the term of
this Lease (all such items being sometimes referred to as "ADDITIONAL
OBLIGATIONS") shall be paid or discharged by Tenant, except to the extent they
are expressly the responsibility of Landlord under this Lease. Any amounts
referred to in this Lease as additional rent (including, without limitation, the
Additional Obligations) are referred to collectively as "ADDITIONAL RENT."
"RENT," as used herein, means all Monthly Rent and Additional Rent.
5. OPERATING EXPENSES.
5.1. OPERATING EXPENSES.
Tenant shall pay to Landlord, Tenant's Share of Operating Expenses, for the
following costs and expenses (collectively "OPERATING EXPENSES"): (i)
insurance premiums for the insurance obtained by Landlord pursuant to Section
21.3, (ii) all reasonable and necessary expenses incurred by or behalf of
Landlord in connection with the operation, cleaning, maintenance, painting
(including periodic repainting of the exterior of the Building), and repair
of the Project, including without limitation, the Common Area; and (iii) HVAC
maintenance contract; (iv) a management fee equal to one and a half percent
(1.5%) of the Monthly Rent. Landlord shall from time to time prepare and
deliver to Tenant a budget setting forth Landlord's estimate of Operating
Expenses for each calendar year during the Term. Tenant shall pay Tenant's
share of the estimated Operating Expenses and Real Property Taxes to Landlord
in monthly installments, each such monthly installment to be in the amount of
one-twelfth (1/12) of the estimated Operating Expenses and Real Property
Taxes for the calendar year according to the budget most recently submitted
by Landlord. Within sixty (60) days following the end of each calendar year,
Landlord shall furnish Tenant a statement showing the actual Operating
Expenses and Real Property Taxes for such calendar year (the "STATEMENT").
Upon the furnishing of the Statement, the installments of Operating Expenses
and Real Property Taxes paid by Tenant for the subject calendar year shall be
reconciled with the actual Operating Expenses and Real Property Taxes for
such calendar year as set forth in the Statement. If the Operating Expenses
and Real Property Taxes for the calendar year as set forth in the Statement
exceed the total of the installments of Operating Expenses and Real Property
Taxes paid by Tenant for such calendar year, then Tenant shall pay the amount
of such excess to Landlord within thirty (30) days after Landlord delivers
the Statement to Tenant. If the total of the installments of Operating
Expenses and Real Property Taxes paid by Tenant for the calendar year exceeds
the actual Operating Expenses and Real Property Taxes for the calendar year
as set forth in the Statement, then Tenant shall receive a credit against the
monthly installments of the Operating Expenses and Real Property Taxes
subsequently accruing until such excess is exhausted or, if this Lease has
been terminated, such excess shall be refunded to Tenant promptly upon
determination of the proper amount thereof.
Within one hundred twenty (120) days after receipt of a Statement by Tenant
("REVIEW PERIOD"), if Tenant disputes the amount set forth in the Statement,
Tenant's employees or an independent certified public accountant (which
accountant is a member of a nationally or regionally recognized accounting firm
and is hired on a non-contingency fee basis), designated by Tenant, may, after
reasonable notice to Landlord and at reasonable times, inspect Xxxxxxxx's
records at Landlord's offices, provided that Tenant is not then in default after
expiration of all applicable cure periods of any obligation under this Lease
(not including the payment of
6
the amount in dispute) and provided further that Tenant and such accountant or
representative shall, and each of them shall use their commercially reasonable
efforts to cause their respective agents and employees to, maintain all
information contained in Landlord's records in strict confidence.
Notwithstanding the foregoing, Tenant shall only have the right to review
Landlord's records one (1) time during any twelve (12) month period. Xxxxxx's
failure to dispute the amounts set forth in any Statement within the Review
Period shall be deemed Tenant's approval of such Statement and Tenant,
thereafter, waives the right or ability to dispute the amounts set forth in such
Statement. If after such inspection, but within thirty (30) days after the
Review Period, Tenant notifies Landlord in writing that Tenant still disputes
such amounts, a certification as to the proper amount shall be made in
accordance with Landlord's standard accounting practices, at Tenant's expense,
by an independent certified public accountant selected by Landlord and who is a
member of a nationally or regionally recognized accounting firm, which
certification shall be binding upon Landlord and Tenant. Landlord shall
cooperate in good faith with Xxxxxx and the accountant to show Tenant and the
accountant the information upon which the certification is to be based. However,
if such certification by the accountant proves that the Operating Expenses set
forth in the Statement were overstated by more than five percent (5%), then the
cost of the accountant and the cost of such certification shall be paid for by
Landlord. Promptly following the parties' receipt of such certification, the
parties shall make such appropriate payments or reimbursements, as the case may
be, to each other, as are determined to be owing pursuant to such certification.
Tenant agrees that this section shall be the sole method to be used by Xxxxxx to
dispute the amount of any Operating Expenses payable by Tenant pursuant to the
terms of this Lease, and Tenant hereby waives any other rights at law or in
equity relating thereto.
5.2. CAP ON CONTROLLABLE OPERATING EXPENSES.
Notwithstanding anything to the contrary contained in this Section 5,
"Controllable Operating Expenses" (as hereinafter defined) for any calendar year
after the First Lease Year (as defined below) shall not increase by more than
five percent (5%) over the maximum permitted Controllable Expenses for any
immediately preceding calendar year (regardless of the actual Controllable
Expenses incurred for such preceding calendar year), provided, however, if the
actual Controllable Expenses for any calendar year are greater than the maximum
amount permitted to be charged to Tenant hereunder, the difference shall be
added to the Controllable Expenses for succeeding calendar years until
exhausted. For purposes of this section 5.2, (i) the term "FIRST LEASE YEAR"
shall mean the first partial calendar year and the first calendar year of the
Term; and (ii) the term "CONTROLLABLE EXPENSES" shall mean all Operating
Expenses except: (i) insurance carried by Landlord with respect to the Premises
and/or the operation thereof; (h) Real Property Taxes and Assessments; and
(iii) utilities (if any) provided by Landlord.
6. SECURITY DEPOSIT.
Concurrently with Xxxxxx's execution of this Lease, Tenant shall deposit with
Landlord the Security Deposit. The Security Deposit shall be held by Landlord as
security for the full and faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease to be performed by Tenant during the
Term. The Security Deposit is not, and may not be construed by Tenant to
constitute Rent for the last month or any portion thereof. If Tenant defaults
with respect to any of its obligations under this Lease, Landlord may (but shall
not be required to) use, apply or retain all or any part of the Security Deposit
for the payment of any rent or any other sum in default, or for the payment of
any other amount, loss or damage which Landlord may spend, incur or suffer by
reason of Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10) days after demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount. Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
the Security Deposit. If Tenant shall fully and faithfully perform its
obligations under this Lease, the Security Deposit or any balance thereof shall
be
7
returned to Tenant within two (2) weeks following the expiration of the Term. If
Landlord sells its interest in the Building during the Term and if Landlord
deposits with the purchaser the Security Deposit (or balance thereof), and such
purchaser acknowledges in writing receipt thereof, then, upon such sale,
Landlord shall be discharged from any further liability with respect to the
Security Deposit.
7. USE.
7.1. GENERAL.
Tenant shall use the Premises for the Permitted Use and shall not use or permit
the Premises to be used for any other use or purpose whatsoever. Landlord shall,
at its sole cost and expense as of the Commencement Date, cause the Premises to
comply and, thereafter, subject to Sections 12.1 AND 12.3, Tenant shall observe
and comply with all requirements of any board of fire underwriters or similar
body relating to the Premises, and all laws, statutes, codes, reasonable and
non-discriminatory rules and regulations now or hereafter in force relating to
or affecting the use, occupancy, alteration or improvement (whether structural
or non-structural, including unforeseen and/or extraordinary alterations or
improvements, and regardless of the period of time remaining in the Term) of the
Premises, including, without limitation, the provisions of the Americans with
Disabilities Act and the California Disability Access Laws and their respective
implementing regulations (collectively, the "ADA") as it pertains to Tenant's
use of the Premises. Tenant shall not use or allow the Premises to be used (a)
in violation of any recorded covenants, conditions and restrictions affecting
the Premises or of any law or governmental rule or regulation, or of any
certificate of occupancy issued for the Premises, or (b) for any improper or
unlawful purpose. Tenant shall not cause, maintain or permit any nuisance in, on
or about the Premises, nor commit or suffer to be committed any waste in, on or
about the Premises.
7.2. SIGNS.
Any sign placed by Tenant on the Premises, except in the interior portions of
the Building not visible from the outside, shall contain only Tenant's name and
logo and no advertising material. No sign shall be placed on the Premises by
Tenant without Landlord's written approval (which approval shall not be
unreasonably withheld or delayed) of the location, material, size, design and
content thereof, nor without Tenant's obtaining any necessary permit. No signs
shall be placed on the roof of the Premises. If Landlord installs a sign for
Tenant, Tenant shall reimburse Landlord for any costs incurred by Landlord
within ten (10) days of demand by Landlord. Tenant shall remove any sign
installed by or on behalf of Tenant upon termination or expiration of this Lease
and shall return the Premises to their condition prior to the placement of said
sign.
7.3. HAZARDOUS MATERIALS.
7.3.1. TENANT'S ENVIRONMENTAL REPRESENTATIONS AND INDEMNIFICATION.
Except for ordinary and general office supplies, such as copier toner, liquid
paper, glue, ink and common cleaning and janitorial materials, materials
reasonably necessary for the conduct of Tenant's business that are used and
stored in compliance with all applicable laws (some or all of which may
constitute "Hazardous Materials" as defined in this Lease), Tenant agrees not to
cause or permit any Hazardous Materials to be brought upon, stored, used,
handled, generated, released or disposed of on, in, under or about the Premises
by Tenant, its agents, employees, subtenants, assignees, licensees, contractors
or invitees (collectively, "TENANT'S PARTIES") in violation of any statute,
rule, regulation, order, or ruling of the United States Government or any local
governmental authority, without the prior written consent of Landlord, which
consent Landlord may withhold in its sole and absolute discretion. Concurrently
with the execution of this Lease, Xxxxxx agrees to complete and deliver to
Landlord an Environmental Questionnaire in the form of Exhibit E attached
hereto. Upon the expiration or earlier termination of this Lease, Xxxxxx agrees
to promptly remove from the Premises, at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous
Materials which are installed, brought upon, stored, used, generated or released
upon, in, under or
8
about the Premises by Tenant or any of Tenant's Parties. To the fullest extent
permitted by law, Xxxxxx agrees to promptly indemnify, protect, defend and hold
harmless Landlord and Landlord's partners, officers, directors, employees,
agents, successors and assigns (collectively, "LANDLORD INDEMNIFIED PARTIES")
from and against any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs (including,
without limitation, clean-up, removal, remediation and restoration costs, sums
paid in settlement of claims, attorneys' fees, consultant fees, expert fees and
court costs) which arise or result from the presence of Hazardous Materials
on, in, under or about the Premises and which are caused or permitted by Tenant
or any of Tenant's Parties. Xxxxxx agrees to promptly notify Landlord of any
release of Hazardous Materials of which Xxxxxx obtains actual knowledge during
the Term of this Lease, whether caused by Tenant or any of Tenant's Parties. In
the event of any release of Hazardous Materials caused or permitted by Tenant or
any of Tenant's Parties, Landlord shall have the right, but not the obligation,
to cause Tenant to immediately take all steps Landlord deems reasonably
necessary or appropriate to remediate such release and prevent any similar
future release to the satisfaction of Landlord and Landlord's mortgagee(s). At
all times during the Term of this Lease, Landlord will have the right, but not
the obligation, following reasonable advance written notice to Tenant and in the
presence of Tenant (except in the case of an Emergency, as that term is defined
herein) to enter upon the Premises to reasonably inspect, investigate, sample
and/or monitor the Premises to determine if Tenant is in compliance with the
terms of this Lease regarding Hazardous Materials. Landlord may, upon written
notice to Tenant, cause to be performed an environmental audit of the Premises,
which will be at Tenant's expense if Tenant or Tenant's Parties are found to be
in violation of this section. As used in this Lease, the term "HAZARDOUS
MATERIALS" shall mean and include any hazardous or toxic materials, substances
or waste as now or hereafter designated or regulated under any law, statute,
ordinance, rule, regulation, order or ruling of any agency of the State, the
United States Government or any local governmental authority, including, without
limitation, asbestos, petroleum, petroleum hydrocarbons and petroleum based
products, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"),
and freon and other chlorofluorocarbons. The provisions of this Section 7.3.1
will survive the expiration or earlier termination of this Lease.
7.3.2. LANDLORD'S ENVIRONMENTAL REPRESENTATIONS AND INDEMNIFICATION.
Landlord represents and warrants to Tenant that as of the date of this Lease and
to Landlord's actual knowledge and except as disclosed in that certain Phase I
dated September 5, 2000, prepared by Twinning Laboratories, Inc. (i) there are
no Hazardous Materials in, on, under, below or otherwise located on or about the
Premises in violation of applicable law, and (ii) there has been no release or
migration of any Hazardous Materials in violation of applicable law onto,
beneath, upon or about the Premises. Landlord shall indemnify, protect, defend
and hold Tenant, its successors, assigns, subtenants, agents, employees,
officers and directors harmless from any and all losses, damages, liabilities,
judgments, costs, claims, expenses, penalties, including, but not limited to,
attorneys' fees, consultant fees, expert fees, and court costs (a) arising out
of or involving any Hazardous Materials introduced to the Premises by Landlord
its agents or representatives, or (b) due to Landlord's breach of its foregoing
representation. The provisions of this Section 7.3.2 shall survive the
expiration or earlier termination of this Lease. In addition, Landlord shall be
responsible for, at Landlord's sole cost and expense, the repair, cleanup,
detoxification, encapsulation, removal and/or remediation of Hazardous
Materials, to the extent such action is necessitated, directly or indirectly, by
the presence or use, generation, storage, release, or disposal of Hazardous
Materials by any person at or on the Project, to the Commencement Date,
including any prior owner of such real property, and to the extent such removal
or remediation is required by applicable law, provided that the presence,
generation, storage, release, or disposal of such Hazardous Material is not the
result of acts or omissions of Tenant, or Tenant's Parties (which acts or
omissions shall be governed by Section 7.3.1 above).
9
7.4. REFUSE AND SEWAGE.
Xxxxxx agrees not to keep any trash, garbage, waste or other refuse on the
Premises except in proper containers and agrees to contract directly for the
regular removal of the same from the Premises. Tenant shall keep all containers
or other equipment used for storage of such materials in a reasonably clean and
sanitary condition, ordinary wear and tear excepted. Tenant shall keep that
portion of the sewage disposal system within the Premises free of all
obstructions and in good operating condition, ordinary wear and tear excepted.
Tenant shall contract directly for all trash disposal services at Tenant's sole
cost and expense.
8. PAYMENTS AND NOTICES.
All Rent and other sums payable by Tenant to Landlord hereunder shall be paid to
Landlord at the address below, or to such other persons and/or at such other
place as Landlord may hereafter designate in writing:
MidState 99 Distribution Building No. 1, LLC
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Leasing Manager
Telephone: (000) 000-0000
Facsimile (000) 000-0000
All notice, demands and requests which may be or are required to be given,
demanded or requested by either party to the other shall, be in writing, and
shall be sent by United States registered or certified mail, postage prepaid, by
an independent overnight courier service marked for next business day delivery,
or by telephonic facsimile transmission with automatic written time and date
confirmation of delivery transmitted between the hours of 9:00 a.m. and 5:00
p.m. (time zone of recipient, but only if confirmed within two (2) business days
by receipt of a mailed or personally delivered copy) and address as follows:
To Landlord:
MidState 99 Distribution Building No. 1, LLC
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Leasing Manager
Facsimile: (000) 000-0000
with copy to:
0000 Xxxxxxx Xxxxxxx Xx., Xxx. 000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile:
Attn: General Counsel
10
To Tenant:
Moulded Fibre Technology, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile:
Attention: Xxxx Xxxxxx
Either party may by written notice to the other, specify a different address for
notice purposes.
9. BROKERS.
The parties recognize that the brokers who negotiated this Lease are Xxxx
Xxxxxxx of Xxxx Xxxxx and Xxxxxxx X. Xxxx of Xxxx Commercial, and that Landlord
shall be solely responsible for the payment of the brokerage commission to the
broker and that Tenant shall have no obligation or responsibility for the
payment of the brokerage commission to the brokers.
Each party represents and warrants to the other, that to its knowledge, no other
broker, agent or finder (a) negotiated or was instrumental in negotiating or
consummating this Lease on its behalf, and (b) is or might be entitled to a
commission or compensation in connection with this Lease. Any broker, agent or
finder of Tenant whom Xxxxxx has failed to disclose herein shall be paid by
Xxxxxx. Tenant shall indemnify, protect, defend (by counsel reasonably approved
in writing by Landlord) and hold landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) resulting from any breach
by Tenant of the foregoing representation, including, without limitation, any
claims that may be asserted against Landlord by any broker, agent or finder
undisclosed by Tenant herein. Landlord shall indemnify, protect defend (by
counsel reasonably approved in writing by Xxxxxx) and hold Tenant harmless from
and against any and all claims, judgments, suits, causes of action, damages,
losses, liabilities and expenses (including attorneys' fees and court costs)
resulting from any breach by Landlord of the foregoing representation,
including, without limitation, any claims that may be asserted against Tenant by
any broker, agent or finder undisclosed by Landlord herein. The foregoing
indemnities shall survive the expiration or earlier termination of this Lease.
10. SURRENDER; HOLDING OVER.
10.1. SURRENDER OF PREMISES.
Upon the expiration or sooner termination of this Lease, Tenant shall surrender
all keys for the Premises to Landlord, and Tenant shall deliver exclusive
possession of the Premises to Landlord in broom clean condition and repair,
reasonable wear and tear excepted (and casualty damage excepted if this Lease is
terminated as a result thereof pursuant to Section 19), with all of Tenant's
personal property (and those items, if any, of Tenant Improvements and Tenant
Changes identified by Landlord pursuant to Section 13.2 below) removed therefrom
and all damage caused by such removal repaired, as required pursuant to Sections
13.2 and 13.3 below. If, for any reason, Xxxxxx fails to surrender the Premises
on the expiration or earlier termination of this Lease, with such removal, and
repair obligations completed, then, in addition to Landlord's rights and
remedies under Section 13.4 and the other provisions of this Lease, Tenant shall
indemnify, protect, defend (by counsel reasonably approved in writing by
Landlord) and hold Landlord harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs but excluding, in any event,
consequential damages) resulting from such failure to surrender.
11
10.2. HOLDING OVER.
If Tenant, without Xxxxxxxx's consent, holds over after the expiration or
earlier termination of the Term, then, without waiver of any right on the part
of Landlord as a result of Tenant's failure to timely surrender possession of
the Premises to Landlord, Tenant shall become a tenant at sufferance only, upon
the terms and conditions set forth in this Lease so far as applicable (including
Tenant's obligation to pay all costs, expenses and any other additional rent
under this Lease), but at a Monthly Rent equal to one hundred fifty percent
(150%) of the Monthly Rent applicable to the Premises immediately prior to the
date of such expiration or earlier termination. Acceptance by Landlord of rent
after such expiration or earlier termination shall not constitute consent to a
hold over hereunder or result in an extension of this Lease.
10.3. NO EFFECT ON LANDLORD'S RIGHTS.
The foregoing provisions of this Section 10 are in addition to, and do not
affect Landlord's right of re-entry or any other rights of Landlord hereunder or
otherwise provided at law or in equity.
11. TAXES
11.1. REAL PROPERTY TAXES AND ASSESSMENTS.
Tenant shall pay Tenant's Share of Real Property Taxes and Assessments, as
defined below in this Section 11.1. As used in this Lease, the term "REAL
PROPERTY TAXES AND ASSESSMENTS" shall mean: any form of assessment, license fee,
license tax, business license fee, commercial rental tax, levy, charge,
improvement bond, tax or similar imposition imposed against the Project during
the Term by any authority having the direct power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement or special assessment district thereof including
the following by way of illustration but not limitation:
(a) any tax on Xxxxxxxx's "right" to rent or "right" to other income from the
Premises or as against Landlord's business of leasing the Premises;
(b) any assessment, tax, fee, levy or charge in substitution, partially or
totally, of any assessment, tax, fee, levy or charge previously included
within the definition of real property tax, it being acknowledged by Xxxxxx
and Landlord that Proposition 13 was adopted by the voters of the State of
California in the June 1978 election and that assessments, taxes, fees,
levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without
charge to property owners or occupants. It is the intention of Tenant and
Landlord that all such new and increased assessments, taxes, fees, levies
and charges be included within the definition of "Real Property Taxes and
Assessments" for the purposes of this Lease;
(c) any assessment, tax, fee, levy or charge allocable to or measured by the
area of the Premises or other premises in the Project or the rent payable
by Tenant hereunder or other tenants of the Project, including, without
limitation, any gross receipts tax or excise tax levied by state, city or
federal government, or any political subdivision thereof, with respect to
the receipt of such rent, or upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof but not on
Landlord's other operations;
(d) any assessment, tax, fee, levy or charge upon this transaction or any
document to which Tenant is a party, creating or transferring an interest
or an estate in the Premises; and/or
12
(e) any assessment, tax, fee, levy or charge by any governmental agency related
to any transportation plan, fund or system (including assessment districts)
instituted within the geographic area of which the Buildings are a part.
Notwithstanding the foregoing provisions of this Section 11.1 to the contrary,
"Real Property Taxes and Assessments" shall not include (i) any fine, penalty,
cost or interest for any tax or assessment or part thereof which Landlord failed
to timely pay unless such failure is the result of Tenant's failure to comply
with its tax obligations hereunder; or (ii) any tax, assessment, levy or charge
imposed on Landlord in the nature of a franchise capital levy, transfer tax,
estate, inheritance, succession, income or profit, or net revenue tax.
Landlord may apply for a reduction in Real Property Taxes and Assessments under
"Proposition 8" or any similar and/or substitute law allowing a reduction for
temporary loss in value during each property tax fiscal year commencing after
the date hereof, unless a change in ownership of the Premises or the Project
occurred during any of the three (3) preceding property tax fiscal years, or
Landlord determines in its good faith discretion that any such application
would not be prudent. Landlord, however, shall retain the sole right, to be
exercised in its good faith judgment of the potential benefits to the Project,
to settle or compromise any such application or to contest any decision on such
application. In the event Landlord receives a refund as a result of any such
application, the Real Property Taxes and Assessments shall be recalculated for
the applicable period and Landlord shall refund to Tenant any reduction in
Tenant's Share of such Real Property Taxes and Assessments previously paid by
Tenant. Whether or not such application is successful, Landlord's reasonable
expenses related to seeking or obtaining any Proposition 8 reduction shall be
included in Real Property Taxes and Assessments under the Lease.
11.2. PERSONAL PROPERTY TAXES.
Except as provided in Section 11.1 above, Tenant shall be liable for, and shall
pay before delinquency, all taxes and assessments (real and personal) levied
against (a) any personal property or trade fixtures placed by Tenant in or about
the Premises (including any increase in the assessed value of the Premises has
upon the value of any such personal property or trade fixtures); and (b) any
Tenant improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant). If any such taxes or assessments are levied
against Landlord or Landlord's property, Landlord may, after a minimum of ten
(10) business days prior written notice to Tenant (and under proper protest if
requested by Tenant) pay such taxes and assessments, and Tenant shall reimburse
Landlord therefor within thirty (30) days after demand by Landlord; provided,
however, Tenant, at its sole cost and expense, shall have the right, with
Xxxxxxxx's cooperation, to bring suit in any court of competent jurisdiction to
recover the amount any such taxes and assessments so paid under protest as
additional rent.
12. REPAIRS.
12.1. TENANT'S REPAIR OBLIGATIONS.
Except for Landlord's obligations specifically set forth in this Lease, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, clean,
repair, preserve and replace, as necessary (ordinary wear and tear, and damage
and destruction by casualty excepted), the non-structural portions of the
Premises including, without limitation, all Tenant Improvements, alterations,
utility meters, electrical systems, pipes and conduits located within the
Premises (to the extent the same service the Premises exclusively), all
fixtures, furniture and equipment, Tenant's signs, locks, closing devices,
security devices, windows, window sashes, casements and frames, floors and floor
coverings, shelving, kitchen facilities and appliances located within the
Premises, custom lighting, and any alterations, additions and other property
located within the Premises. Tenant shall replace, at its expense, any and all
glass in and about the Premises which is damaged or broken from any cause
whatsoever except due to the negligence or willful misconduct of Landlord, its
agents or employees. Such
13
maintenance and repairs shall be performed with due diligence, lien-free and in
a good and workmanlike manner, by licensed contractor(s) which are selected by
Tenant. Except as otherwise expressly provided in this Lease, Landlord shall
have no obligation to alter, remodel, improve, repair, renovate, redecorate or
paint all or any part of the Premises.
12.2. PROHIBITION AGAINST WASTE.
Tenant shall not do or suffer any waste, damage, disfigurement or injury to the
Premises, damage caused by casualty excepted, or any improvements hereafter
erected thereon, or to the fixtures or equipment therein, or permit or suffer
any overloading of the floors or other use of the Tenant Improvements that would
place an unreasonable stress on the same or any portion thereof beyond that for
which the same was designed.
12.2.1.
Xxxxxx agrees to procure and maintain contracts for janitorial services serving
the Premises exclusively. Such services, maintenance and repairs shall be
performed with due diligence, lien-free and in a good and workmanlike manner, by
reputable licensed contractor(s) which are selected by Tenant.
12.3. LANDLORD'S REPAIR RIGHTS AND OBLIGATIONS.
Landlord shall, at Xxxxxxxx's expense, after written notice from Tenant, repair
in a prompt and diligent manner the roof, bearing walls and subfloors of the
Building. There shall be an abatement of Rent during the performance of such
work, to the extent Tenant is unable to conduct its business in all or any
portion of the Premises. Tenant is required to promptly deliver to Landlord a
cure notice provided in Section 17.2. Landlord shall operate, maintain, paint,
clean and repair the Premises including without limitation, the Common Areas and
the HVAC and Tenant shall reimburse Landlord in accordance with Section 5 hereof
as Operating Expenses. It is the intention of Landlord and Xxxxxx that the terms
of this Lease govern the respective obligations of the Landlord and Tenant as to
maintenance and repair of the Project. Landlord and Tenant expressly waive the
benefit of any stature now or hereafter in effect to the extent, it is
inconsistent with the terms of this Lease.
13. ALTERATIONS.
13.1. TENANT CHANGES; CONDITIONS.
13.1.1. LANDLORD APPROVAL.
Tenant shall not make any alterations, additions, improvements or decorations to
the Premises (collectively, "TENANT CHANGES," and individually, a "TENANT
CHANGE") unless Tenant first obtains Landlord's prior written approval thereof,
which approval Landlord shall not unreasonably withhold, condition or delay.
Notwithstanding the foregoing, Xxxxxxxx's prior approval shall not be required
for any Tenant Change which satisfies all of the following conditions
(hereinafter a "PRE-APPROVED CHANGE"): (i) the cost of such Tenant Change does
not exceed Fifty Thousand Dollars ($50,000) individually; (ii) Tenant delivers
to Landlord final plans, specifications and working drawings (if necessary) of
such Tenant Change at least ten (10) days prior to commencement of the work
thereof, (iii) Tenant and such Tenant Change otherwise satisfy all other
conditions set forth in this Section 13.1; and (iv) the Tenant Change does not
affect the structural, mechanical, life-safety or exterior elements of the
Premises and such Tenant Change is not visible from the exterior of the
Premises. The construction of the Buildings and the initial Tenant Improvements
therein shall be governed by the Work Agreement and not this Section 13; this
Section 13 shall only apply to Tenant Changes subsequent to initial
construction.
14
13.1.2. PERFORMANCE OF TENANT CHANGES.
All Tenant Changes shall be performed: (i) in accordance with the approved
plans, specifications and working drawings; (ii) lien-free and in a good and
workmanlike manner; (iii) in compliance with all laws, rules and regulations of
all governmental agencies and authorities including without limitation
applicable building permit requirements and or the provisions of Title III of
the ADA; and (iv) at such times, in such manner and subject to such
non-discriminatory rules and regulations as Landlord may from time to time
reasonably designate.
13.1.3. WORKER'S COMPENSATION INSURANCE.
Throughout the performance of the Tenant Changes, Tenant shall obtain, or cause
its contractors to obtain, "workers compensation insurance" in compliance with
the provisions of Section 21 of this Lease and "BUILDERS ALL RISK" insurance in
a commercially reasonable amount given the scope of the Tenant Change, covering
the construction of such Tenant Change, it being understood by Tenant, that all
such Tenant Changes shall be insured by Tenant pursuant to Section 21 upon the
completion thereof.
13.1.4. LANDLORD APPROVAL PROCEDURE.
Landlord agrees that Landlord shall reasonably approve or disapprove the plans
and specifications and/or working drawings for any proposed Tenant Change within
ten (10) business days after receipt of the same by Landlord and, if
disapproved, Landlord shall return the plans and specifications and/or working
drawings to Tenant together with a reasonably detailed statement of the basis
for Xxxxxxxx's disapproval. If Xxxxxx disagrees with the plans and
specifications and/or working drawings for the proposed Tenant Change as revised
by Landlord, Landlord, Xxxxxx and Xxxxxx's architect or space planner shall,
within three (3) business days following receipt of notice of such disapproval,
meet and revise the plans and specifications and/or working drawings to the
reasonable satisfaction of Landlord and Tenant. This procedure shall be repeated
until Landlord and Xxxxxx ultimately approve the plans and specifications and/or
working drawings for the proposed Tenant Change. Despite the foregoing, if
Xxxxxxxx fails to respond to any request by Tenant for approval of a Tenant
Change within ten (10) business days after receipt of Xxxxxx's request for such
approval, Xxxxxxxx's failure to respond shall be deemed to be Landlord's
approval with respect to the same.
13.2. REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS.
All Tenant Changes and the initial Tenant Improvements in the Premises shall
became the property of Landlord and shall remain upon and be surrendered with
the Premises at the end of the Term of this Lease; provided, however, Landlord
shall, by written notice delivered to Tenant at the time of Landlord's consent
to such Tenant Change the plans and specifications (as applicable), identify
those items of the initial Tenant Improvements and Tenant Changes which are not
typical warehouse improvements and which Landlord shall require Tenant to remove
at the end of the Term of this Lease. Notwithstanding the foregoing, Landlord
shall not be entitled to require Tenant to remove any initial Tenant
Improvements, which are typical office improvements and which are, consistent
with the plans and specifications reviewed by Landlord as of the date of this
Lease. If Landlord requires Tenant to remove any such items as described above,
Tenant shall, at its sole cost, remove the identified items on or before the
expiration or earlier termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, and provided Landlord
has given Tenant at least ten (10) business days written notice prior to taking
any action shall pay to Landlord all of Landlord's actual and documented costs
of such removal and repair).
13.3. REMOVAL OF PERSONAL PROPERTY.
All articles of personal property owned by Tenant or installed by Tenant at its
expense in the Premises (including business and trade fixtures, furniture and
movable partitions, phone systems and security systems) (the "PERSONAL
PROPERTY") shall be, and remain, the property of Tenant, and shall be removed by
Tenant from the Premises, at Tenant's sole cost and expense, on or before the
expiration or earlier termination at this Lease. Xxxxxxxx agrees that Xxxxxx may
remove the Personal Property from the Premises at any time during the Term.
Tenant shall repair any damage caused by such removal.
15
13.4. TENANT'S FAILURE TO REMOVE.
If Tenant fails to remove by the expiration or sooner termination of this
Lease all of its Personal Property, or any items of Tenant Improvements or
Tenant Changes identified by Landlord for removal pursuant to Section 13.2
above, Landlord may, following an additional ten (10) business days' prior
written notice to Tenant (without liability to Tenant for loss thereof), at
Tenant's sole cost and in addition to Landlord's other rights and remedies
under this Lease, at law or in equity: (a) remove and store such items in
accordance with applicable law; and/or (b) upon fifteen (15) business days'
prior written notice to Tenant sell all or any such items at private or
public sale for such price as Landlord may obtain as permitted under
applicable law. Landlord shall apply the proceeds of any such sale to any
amounts due to Landlord under this Lease from Tenant (including Xxxxxxxx's
attorneys' fees and other costs incurred by Landlord in the removal, storage
and/or sale of such items), with any remainder to be paid to Tenant.
14. LIENS.
Tenant shall not permit any mechanic's, materialmen's or other liens to be filed
against all or any part of the Premises by reason of or in connection with any
repairs alterations, improvements or other work contracted for or undertaken by
Tenant or any other act or omission at Tenant or Tenant's agents, employees,
contractors, licensees or invitees. Tenant shall, at Xxxxxxxx's request, provide
Landlord with enforceable, conditional and final lien releases (and other
reasonable evidence reasonably requested by Xxxxxxxx to demonstrate protection
from liens) from all persons furnishing labor at the request of Xxxxxx, and/or
materials with respect to the Premises, Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, promptly cause such
lien to be released of record or bonded so that it no longer affects title to
the Premises. If Tenant fails to cause such lien to be so released or bonded
within thirty (30) days after filing thereof, Landlord may, following an
additional ten (10) business days prior written notice to Tenant, without
waiving its rights and remedies based on such breach, and without releasing
Tenant from any of its obligations, cause such lien to be released by posting of
an appropriate bond to cause the lien to be released. Tenant shall pay to
Landlord within fifteen (15) days after receipt of invoice from Landlord, any
sum paid by Landlord to obtain the bonds required to remove such liens, together
with interest at the Interest Rate from the date of such payment by Landlord.
15. ASSIGNMENT AND SUBLETTING.
15.1. RESTRICTION ON TRANSFER.
Tenant will not assign or encumber, mortgage or pledge this Lease in whole or in
part, nor sublet all or a part of the Premises, without the prior written
consent of Landlord, which consent Landlord will not unreasonably withhold
condition or delay. The consent by Landlord to any assignment encumbrance or
subletting shall not constitute a waiver of the necessity for such consent to
any subsequent assignment or subletting and Tenant shall remain fully liable
under this Lease and shall not be released from performing any of the terms,
covenants and conditions of this Lease. Without limiting in any way Xxxxxxxx's
right to withhold its consent on a reasonable grounds, it is agreed that
Landlord will not be acting unreasonably in refusing to consent to an assignment
or sublease if, in Landlord's reasonable opinion, (i) the proposed assignee does
not have the financial capability to fulfill the obligations imposed by the
assignment; or (ii) the proposed assignment or sublease involves a change of use
of the Premises from that specified herein.
16
15.2. TRANSFER NOTICE.
If Tenant desires to effect an assignment, encumbrance, mortgage, pledge or
subletting (a "TRANSFER") for which Landlord's consent is required, then at
least ten (10) business days prior to the date when Tenant desires the Transfer
to be effective (the "TRANSFER DATE"), Xxxxxx agrees to give Landlord a notice
(the "TRANSFER NOTICE"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"TRANSFEREE") reasonable information (including references) concerning the
ownership and financial condition of the proposed Transferee, the Transfer Date,
any ownership or commercial relationship between Tenant and the proposed
Transferee, and the consideration and all other material terms and conditions of
the proposed Transfer, all in such detail as Landlord may reasonably require.
15.3. LANDLORD'S OPTIONS.
Within ten (10) business days of Landlord's receipt of any Transfer Notice, and
any additional information requested by Xxxxxxxx concerning the proposed
Transferee's financial responsibility, Landlord will notify Tenant of its
election to do one of the following: (i) consent to the proposed Transfer
subject to such reasonable conditions as Landlord may impose in providing such
consent; or (ii) refuse such consent, which refusal shall be on reasonable
grounds which shall be set forth in a detailed written statement to Tenant.
15.4. ADDITIONAL CONDITIONS.
A condition to Xxxxxxxx's consent to any Transfer of this Lease will be the
delivery to Landlord of a true copy to the fully executed instrument of
assignment, sublease, transfer or hypothecation, in form and substance
reasonably satisfactory to Landlord. With respect to a Transfer pursuant to
which Tenant subleases a portion the Premises for a period that expires prior to
the last twelve (12) months of the initial Term or any Option Period(s), Xxxxxx
agrees to pay to Landlord, as additional rent, on a monthly basis, fifty percent
(50%) of all sums and other consideration paid to and for the benefit of Tenant
by the sublessee in excess of the Rent payable under this Lease for the same
period and portion at the Premises. In calculating excess rent or other
consideration which may be payable to Landlord under this Section, Tenant will
be entitled to deduct commercially reasonable third party brokerage commissions
and attorneys' fees (including those fees and costs required to be reimbursed to
Landlord as provided below) and other amounts reasonably and actually expended
by Tenant in connection with such subletting including, without limitation, (i)
the costs of any changes, alterations and improvements to the Premises in
connection with the Transfer, (ii) any space planning architectural or design
fees or expenses incurred in marketing such space or in connection with such
Transfer, (iii) any improvement allowance or other monetary concessions provided
to the Transferee, (iv) any lease takeover cost incurred by Tenant in connection
with the Transfer, and (v) out-of-pocket costs of advertising the space which is
the subject of the Transfer, if written evidence of such expenditures is
provided to Landlord. No Transfer will release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent and to
perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any Transferee remit directly to Landlord on a monthly basis, all
monies due Tenant by said Transferee and each sublease shall provide that if
Landlord gives said sublessee written notice that Tenant is in default under
this Lease beyond any applicable notice and cure period, said sublessee will
thereafter make all payments due under the sublease directly to or as directed
by Landlord, which payments will be credited against any payments due under this
Lease. Tenant hereby irrevocably and unconditionally assigns to Landlord all
rents and other sums payable under any sublease of the Premises; provided,
however, that Landlord hereby grants Tenant a license to collect all such rents
and other sums so long as Tenant is not in default under this Lease. Tenant
shall within ten (10) days after the execution and delivery of any assignment or
sublease, deliver a copy thereof to Landlord. Consent by Landlord to one
Transfer will not be deemed consent to any subsequent Transfer. In the event of
default by any Transferee of Tenant or any successor, Xxxxxxxx may proceed
directly against Tenant without the necessity of exhausting remedies against
such Transferee or successor. If Tenant effects a Transfer
17
or requests the consent of Landlord to any Transfer (whether or not such
Transfer is consummated), then, within thirty (30) days after Xxxxxx's receipt
of written demand from Landlord, Xxxxxx agrees to pay Landlord a nonrefundable
administrative fee of Five Hundred Dollars ($500), plus Landlord's reasonable
attorneys' fees and costs (for outside counsel only) and other costs incurred by
Landlord in reviewing such proposed assignment or sublease (which fees and costs
shall in no event exceed One Thousand Five Hundred ($1,500) per proposed
Transfer).
15.5. PERMITTED TRANSFERS.
Notwithstanding anything to the contrary contained in this Section 15, Landlord
consents to the Transfer of the Premises to any holding company, corporation,
association or entity which is or becomes a parent, subsidiary or affiliate of
Tenant or any entity which is controlled by, controls, or is under common
control with Tenant, or to any entity resulting from a merger, consolidation or
reorganization of Tenant or any entity succeeding to all (or substantially all)
of the stock or business and assets of Tenant (collectively, an "AFFILIATE"),
provided that Tenant notify Landlord of any such Transfer prior to the effective
date thereof and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such Transfer or such Affiliate
(including an assumption of Tenant's obligations under this Lease), and further
provided that such Transfer is not a subterfuge by Tenant to avoid obligations
under this Lease. "CONTROL," as used in this Section 15.5, shall mean the
ownership directly or indirectly of greater than fifty percent (50%) of the
voting interest in an entity.
16. ENTRY BY LANDLORD.
Landlord and its employees and agents shall at all reasonable times and with
reasonable advance written notice (which shall be at least 24 hours), and in the
presence of Tenant or Tenant's representatives except in the case of an
"EMERGENCY", which for purposes of this Lease means situations in which there is
an imminent threat to persons and/or property within the Building) have the
right to enter the Premises to inspect the same, to exhibit the Premises to
prospective lenders, purchasers, and tenants, and to post notices of
non-responsibility, and/or to alter, improve or repair the Premises as
contemplated by Section 12.3, all without being deemed guilty of or liable for
any breach of Landlord's covenant of quiet enjoyment or any eviction of Tenant,
and without abatement of rent. Landlord shall exercise its rights under this
Section in such a manner as to minimize the imposition on Tenant's business, and
shall provide Tenant with reasonable advance written notice of such entry,
except in an Emergency. Landlord shall have the means, which Landlord may deem
reasonably proper, to open Tenant's doors in an Emergency in order to obtain
entry to the Premises. Any entry to the Premises obtained by Landlord in an
Emergency or otherwise shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof, or grounds for any
abatement or reduction of Rent and Landlord shall not have any liability to
Tenant for any damages or losses an account of any such entry by Landlord except
subject to the provisions of Sections 32.7 and 24 to the extent of Landlord's
negligence or willful misconduct in which case Landlord's liability (if any)
shall be limited to the extent such damages or losses are not covered by
insurance carried by Tenant or required to be carried by Tenant hereunder.
17. UTILITIES AND SERVICES.
17.1. PROVISIONS OF UTILITIES AND SERVICES.
Except for Landlord's obligations set forth in the Work Agreement, Tenant
shall be solely responsible for obtaining and shall promptly pay all charges
for heat, air conditioning, water, gas, electricity, refuse service or any
other utility used, consumed or provided in, furnished to or attributable to
the Premises directly to the supplying utility companies. If any of such
utilities are not separately metered, Tenant shall pay a prorata share, based
on use as reasonably determined by Landlord. Except as specifically provided
below, in no event shall
18
Rent xxxxx or shall Landlord be liable for any interruption or failure in the
supply of any such utility services to Tenant. In addition, notwithstanding
anything to the contrary contained in this Section 17, Landlord will be solely
responsible for the payment of all water capacity charges, meter setting fees,
tap in fees and all other similar charges which may be imposed by any
governmental authority or utility provider in connection with the initial
provision of such utilities to the Premises.
17.2. ABATEMENT CONDITIONS.
Notwithstanding anything to the contrary contained in this Lease, if Tenant is
prevented from using all or a portion of the Premises for its normal business
operations, and Tenant does not, in fact, use any or all such portion of the
Premises, due to any service or utility not being provided to the Premises, or
portion thereof, or due to Tenant not having access to the Building, the
Premises, or any portion thereof, and where such prevention of Tenant's use of
the Premises is caused by the negligence or willful misconduct of Landlord its
agent, contractors, or employees, the following provisions of this Section 17.2
shall apply (the foregoing conditions shall be referred to as the ("ABATEMENT
CONDITIONS"). Notwithstanding the foregoing, this Section 17.2 shall not apply
to the damage or destruction of the Premises pursuant to Section 19 below, or to
the condemnation of the Premises pursuant to Section 20 below. To the extent, an
Abatement Condition affects only a portion of the Premises, and Tenant is not
reasonably able to conduct its business in the remaining portion of the
Premises, the Abatement Condition shall be deemed to affect the entire Premises.
Tenant shall, within twenty-four (24) hours of the Abatement Conditions, deliver
to Landlord notice (the "CURE NOTICE") of such condition and the Rent applicable
to the affected portion of the Premises shall be abated from the later of (a)
the date of the commencement of the Abatement Condition; or (b) the date on
which Tenant cannot use that portion of the Premises for the Permitted Use until
the date that such condition is cured. If Xxxxxx has previously paid Rent to
Landlord for a period of time subsequent to the commencement of Tenant's right
to xxxxx Rent hereunder, then Landlord shall credit to Tenant an amount
equivalent to such excess payments against the Monthly Rent next due under this
Lease, or, if after the expiration or termination of this Lease, reimburse to
Tenant the amount of such excess payments within ten (10) days of the date of
such termination or expiration.
18. INDEMNIFICATION AND EXCULPATION.
18.1. TENANT'S ASSUMPTION OF RISK AND WAIVER.
Landlord shall not be liable to Tenant, Tenant's employees, agents or invitees
for: (i) any damage to property of Tenant, or of others, located in, on or about
the Premises; (ii) the loss of or damage to any property of Tenant or of others
by theft or otherwise; (iii) any injury and damage to persons or property
resulting from fire, explosion, failing plaster, steam, gas, electricity, water,
rain or leaks from any part of the Premises or from the pipes, appliance of
plumbing works or from the roof, street or subsurface or from other places or
by dampness or by any other cause of whatsoever nature; or (iv) any such damage
caused by other persons in the Premises, occupants of adjacent property, or the
public, or caused by operations in construction of any private, public or
quasi-public work, except to the extent such matter is not covered by insurance
required to be maintained by Tenant under this Lease and such matter is
attributable to the negligence or willful misconduct of Landlord or Landlord's
Parties or default of its obligation hereunder. All property of Tenant kept or
stored at the Premises shall be so kept or stored at the sole risk of Tenant and
Tenant shall hold Landlord harmless from any claims arising out of damage to the
same unless such damage shall be caused by the negligence or willful misconduct
of Landlord or Xxxxxxxx's agent(s). Landlord or its agents shall not be liable
for interference with the right or other intangible rights.
18.2. TENANT'S INDEMNIFICATION OF LANDLORD.
Tenant shall be liable for, and shall indemnify, defend, protect and hold
Landlord and Xxxxxxxx's partners,
19
officers, directors, employees, agents, successors and assigns (collectively
"LANDLORD PARTIES") harmless from and against, any and all claims, damages,
judgments, suits, causes of action, losses, liabilities and expenses including
reasonable attorneys fees and court costs (collectively "INDEMNIFIED CLAIMS"),
arising or resulting from any act or omission of Tenant or any of Tenant's
Parties in (i) the use of the Premises and conduct of Tenant's business by
Xxxxxx or any Tenant's Parties, or any other activity, work or thing done,
permitted or suffered by Tenant or any Tenant's Parties, in or about the
Premises; and/or (ii) any default by Tenant of any obligations on Tenant's part
to be performed under the terms of this Lease except, in each case, to the
extent caused by Landlord's negligence, willful misconduct, criminal acts or
default by Landlord of its obligations hereunder. In case any action or
proceeding is brought against Landlord or any Landlord Parties by reason of any
such Indemnified Claims, Tenant, upon notice from Landlord, shall defend the
same at Tenant's expense by counsel approved in writing by Landlord, which
approval shall not be unreasonably withheld.
18.3. XXXXXXXX'S INDEMNIFICATION OF TENANT.
Landlord shall indemnify, defend, protect, and hold Tenant and Xxxxxx's Parties
harmless from and against any Indemnified Claims arising or resulting from any
act or omission by Landlord or Landlord Parties in (i) the use of the Premises,
or any other activity, work or thing done, permitted or suffered by Landlord or
any of Landlord's Parties in or about the Premises; and or (ii) any default of
any obligation of Landlord or any of Landlord's Parties to be performed under
this Lease and Work Agreement, except in each case, to the extent caused by
Xxxxxx's negligence, willful acts, criminal acts, or defaults by Tenant of its
obligations hereunder. In case any action or proceeding is brought against
Tenant or any Tenant's Parties by reason of any such Indemnified Claims,
Landlord, upon notice from Tenant, shall defend the same at Landlord's expense
by counsel approved in writing by Xxxxxx, which approval shall not be
unreasonably withheld.
18.4. WAIVER OF CONSEQUENTIAL DAMAGES.
Notwithstanding any contrary provision of this Lease, neither Landlord nor
Tenant shall be liable to the other party for any consequential damages for a
breach or default under this Lease, provided that this sentence shall not be
applicable to any consequential damages which may be incurred by the Landlord
Parties relating to or in connection with any holdover by Tenant following the
expiration of the Term, subject to and in accordance with the provisions of
Section 10 of this Lease.
18.5. SURVIVAL; NO RELEASE OF INSURERS.
The indemnification obligations of Landlord and Tenant under this Section 18
shall survive the expiration or earlier termination of this Lease. Landlord's
and Tenant's covenants, agreements and indemnification in this Section 18, are
not intended to and shall not relieve any insurance carrier of its obligations
under policies required to be carried by Landlord and Tenant, pursuant to the
provisions of this Lease.
19. DAMAGE OR DESTRUCTION.
19.1. OBLIGATION TO RESTORE.
Except as provided in Section 19.2 below, in case of damage to or destruction
of Premises, whether or not by a risk required to be covered by insurance as
set forth in Section 21 of this Lease, this Lease shall not terminate and
Landlord shall promptly restore, rebuild, replace or repair (hereinafter
referred to as "RESTORE" or "RESTORATION") the Premises to substantially the
same condition as existed immediately prior to such damage or destruction.
Such Restoration shall be commenced promptly but in no event later than the
later of (i) sixty (60) days after the casualty in the event of an uninsured
casualty; or (ii) sixty (60) days following Landlord's receipt of applicable
insurance proceeds if the casualty is one which is required to be covered by
insurance pursuant to this Lease, and such Restoration shall be prosecuted
with due diligence, subject to Force Majeure. For purposes of this Section
19, Landlord shall be deemed to have commenced Restoration upon the
commencement of
20
preparation of plans and specifications for the Restoration to be performed by
Landlord.
19.2. TENANT'S TERMINATION OPTION.
Notwithstanding the foregoing, however, in the case of damage to or destruction
of the Premises that will render the Premises substantially inaccessible or
unusable for purposes of conducting Tenant's business for period of six (6)
months or more Tenant may elect to terminate this Lease by giving Landlord
written notice of such election within sixty (60) days effective upon receipt of
notice following the casualty, in which event Landlord shall have no obligation
to Restore the Premises; provided, however, in the event the casualty is covered
by insurance required to be carried by Tenant under this Lease or by insurance
actually maintained by Tenant, Tenant shall, subject to Tenant's receipt of the
applicable insurance proceeds for such purpose, deliver any and all remaining
insurance proceeds to Landlord. To the extent a casualty affects only a portion
of the Premises and Tenant is not reasonably able to conduct its business from
the remaining portion of the Premises, such casualty shall be deemed to affect
the entire Premises. If Tenant elects to terminate this Lease in accordance with
this paragraph, this Lease shall terminate as of the date set forth in Tenant's
notice (the "TERMINATION DATE"), which Termination Date shall in no event be
earlier than the date of such notice. Said termination shall not release Tenant
from the obligations and liabilities of Tenant under this Lease actual or
contingent, which have accrued on or prior to the Termination Date.
19.3. DAMAGE NEAR END OF TERM.
In addition to the termination rights set forth in Sections 19.2 and 19.3 above,
Landlord and Tenant shall each have the right to terminate this Lease if any
damage or destruction to the Premises occurs during the last twelve (12) months
of the Term (or during the last twelve (12) months of any Option Period) that
renders the Premises substantially inaccessible or unusable for the purpose of
conducting Tenant's business.
19.4. RECONSTRUCTION AND REPAIR REQUIREMENTS.
Landlord shall obtain Tenant's prior approval of all plans for Restoration work
performed by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed. If Tenant fails to respond to any written request for
such approval from Landlord within ten (10) days after Xxxxxxxx's second such
request (Xxxxxx's original request to be deemed the first notice), Xxxxxxxx's
request for approval of the Restoration shall be deemed approved.
19.5. RENT ABATEMENT DURING RECONSTRUCTION.
From and after the date of any casualty of the Premises until the date of
Restoration of the Premises is complete and Tenant's use of the Premises is
fully restored, Rent applicable to any portion of the Premises that is rendered
unusable by Tenant as a result of such casualty shall xxxxx. To the extent a
casualty affects only a portion of the Premises and Tenant is not reasonably
able to conduct its business from the remaining portion of the Premises, such
casualty shall be deemed to affect the entire Premises.
19.6. DISBURSEMENT OF INSURANCE PROCEEDS UPON TERMINATION.
Upon any termination of this Lease under the provisions of this Section 19, all
proceeds from insurance policies maintained under Section 20 (other than
proceeds attributable to Tenant's personal property and Tenant Changes paid for
by Tenant that Landlord previously informed Xxxxxx would have to be removed upon
the expiration or earlier termination of this Lease) shall be disbursed and paid
to Landlord.
19.7. WAIVER OF TERMINATION.
The agreements contained in this Section 19 provide a material part of the
consideration for this Lease and in bargaining for and obtaining its rights
under this Section 19, Tenant waives any right to terminate this Lease under
Section 1932 and/or 1933 of the Civil Code of California, or any similar statute
or law now or hereafter in force.
21
20. EMINENT DOMAIN.
20.1. TOTAL OR PARTIAL TAKING.
In case all of the Premises, or such part thereof which materially or
adversely interferes with Xxxxxx's ability to conduct its normal business
operations at the Premises, shall be taken for any public or quasi-public
purpose by any lawful power or authority by exercise of the right of
appropriation, condemnation or eminent domain, or sold to prevent such
taking, Tenant shall have the right to terminate this Lease effective as of
the date possession is required to be surrendered to said authority. Tenant
shall not assert any claim, against Landlord or the taking authority for any
compensation because of such taking, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate or
interest of Tenant; provided, however, in the event of such a taking, Tenant
shall be entitled to such portion of the award as shall be attributable to
goodwill and for damage to, or the cost of removal of, Xxxxxx's personal
property, Xxxxxx's relocation expenses and any other damage to Tenant's
business by reason of such taking and fifty percent (50%) of the "bonus" or
"excess value" of its leasehold interest hereunder. In the event this Lease
is not terminated following a taking, Landlord shall be entitled to the
entire amount of the award without deduction for any estate or interest of
Tenant, Landlord shall restore the Premises to substantially their same
condition prior to such partial taking to the extent of any award proceeds
received by Landlord, and a fair and equitable abatement shall be made to
Tenant for the Rent corresponding to the time during which, and to the part
of the Premises of which, Tenant shall be so deprived on account of such
taking and restoration. If the award proceeds from the taking are
insufficient to restore the Premises as required by the preceding sentence
and Landlord does not provide its own funds to so restore the Premises, and
if as a result thereof Xxxxxx's ability to use the Premises as contemplated
by this Lease is materially and substantially impaired, then Tenant may elect
to terminate this Lease.
20.2. TAKING OF COMMON AREA.
In the event there shall be a taking of the Common Area which materially or
adversely interferes with Tenant's ability to conduct its normal business,
Tenant may at its sole option elect to terminate this Lease by written notice to
Landlord effective thirty (30) days after the date of such notice.
20.3. TEMPORARY TAKING.
In the event of taking of the Premises or any part thereof for temporary use,
this Lease shall be and remain unaffected thereby and Rent applicable to any
portion of the Premises that is rendered unusable by Tenant as a result of such
temporary taking shall xxxxx. To the extent such temporary taking affects only a
portion of the Premises and Tenant is not reasonably able to conduct its
business from the remaining portion of the Premises, such temporary taking shall
be deemed to affect the entire Premises. In addition, Tenant shall be entitled
to receive such portion or portions of any award made for such use with respect
to the period of the taking, which is within the Lease Term to the extent Tenant
incurs reasonable costs in, connection with the temporary taking. For purposes
of this Section 20.2, a temporary taking shall be defined as a taking for a
period of six (6) months or less. The remaining portion of any award shall be
provided to Landlord.
20.4. WAIVER OF TERMINATION.
Tenant and Landlord waive any right to terminate this Lease under Section
1265.130 of the California Code of Civil Procedure, or any similar statute or
law now or hereafter in force.
22
00.XXXXXXXXX.
21.1. TENANT'S INSURANCE.
On or before the earlier of the Early Occupancy Date or the date Tenant
commences or causes to be commenced any work of any type in or on any portion of
the Premises, and continuing during the entire Term, Tenant shall obtain and
keep in full force and effect respecting the Premises, the following insurance:
(a) Special Form coverage (with commercially reasonable deductibles), including
fire and extended coverage, sprinkler leakage (including earthquake
sprinkler leakage), vandalism, malicious mischief, and, at Landlord's sole
option, flood coverage and earthquake insurance, upon Tenant's property of
every description and kind located on the Premises, including, without
limitation, furniture, equipment and any other personal property and Tenant
Changes identified by Landlord for removal pursuant to Section 13.2 of this
Lease, in an amount not less than the full replacement cost thereof.
(b) Commercial general liability insurance coverage, on an occurrence basis,
covering personal injury, bodily injury (including wrongful death), broad
form property damage, operations hazard, owner's protective coverage,
contractual liability (including Tenants indemnification obligations
under this Lease including Section 18 hereof) products and completed
operations liability, and owned/non-owned auto liability, with a general
aggregate of not less than Two Million Dollars ($2,000,000) per
occurrence with "umbrella" or excess liability coverage of not less than
Five Million Dollars ($5,000,000) arising out of or relating (directly or
indirectly) to Tenant's business operations, conduct, assumed liabilities
or use or occupancy of the Premises or Building. The limits of such
commercial general liability insurance may be increased every five (5)
years during the term of this Lease to an amount reasonably required by
Landlord, but in no event shall the limits at such insurance be increased
to an amount which is greater than that typically required of tenants of
comparable buildings in Visalia.
(c) Xxxxxx's compensation and employer's liability insurance, in statutory
amounts and limits, covering all persons employed in connection with any
work done in, on or about the Premises for which claims for death or
bodily injury could be asserted against Landlord, Tenant or the Premises.
(d) Business interruption insurance covering a minimum of six (6) months of
Tenant's Rent and such additional amounts as will reimburse Tenant for
direct or indirect loss of earnings attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of
access to the Premises or Tenant's parking areas as a result of such
perils.
(e) Any other form or forms of insurance, pertaining to (a) and (b) above, as
Tenant or Landlord or the mortgagees of Landlord may reasonably require
from time to time, in form, amounts and for insurance risks against which
a prudent tenant would protect itself, but only to the extent such risks
and amounts are available in the insurance market at commercially
reasonable costs and are typically required of tenants of comparable
buildings in Visalia taking into account the size of the Premises and the
financial strength of Tenant.
The aforesaid insurance shall be issued by insurers authorized to do business in
the State of California and rated not less than financial class VII, and/or,
policyholder rating A in the most recent version of Best's Key Rating Guide (a)
be in form reasonably satisfactory to Landlord; (b) name Tenant as named insured
thereunder and shall name Landlord and, at Landlord's request in writing, which
shall include the name of such mortgagee, Xxxxxxxx's mortgagees as additional
insureds thereunder, all as their respective interests may appear; (e)
specifically provide that the insurance afforded by such policy for the benefit
of Landlord and Xxxxxxxx's
23
mortgagees and Tenant shall be primary, and any insurance carried by Tenant
shall be excess and noncontributing; (d) except for worker's compensation
insurance, contain an endorsement that the insurer waives its right to
subrogation as described in Section 22 below; and (e) require the insurer to
notify Landlord (and the mortgagees who are named as additional insureds) in
writing not less than thirty (30) days prior to any change, reduction in
coverage, cancellation or other termination thereof. Xxxxxx agrees to deliver
to Landlord, as soon as practicable after the placing of the required
insurance, but in no event later than the Commencement Date, certificates
from the insurance company evidencing the existence of such insurance and
Tenant's compliance with the foregoing provisions of this Section 21. Tenant
shall cause replacement certificates to be delivered to Landlord not less
than thirty (30) days prior to the expiration of any such policy or policies.
If any such initial or replacement certificates are not furnished within the
time(s) specified herein, Landlord shall have the right, but not the
obligation, following at least an additional five (5) business days' notice
to Tenant, to procure such policies and certificates at Tenant's expense.
Despite any provision to the contrary in this Section 21, Xxxxxx's obligation
to carry the specified insurance may be brought within the coverage at a
so-called blanket policy or policies of property insurance carried and
maintained by Tenant, provided, however, that the coverage afforded Landlord,
and Landlord's mortgagees (if any) will not be reduced or diminished by
reason of use of such blanket policy of insurance.
21.2. EFFECT ON INSURANCE.
Tenant shall not do or permit to be done anything which will violate or
invalidate any insurance policy maintained by Tenant hereunder. If Tenant's
occupancy or conduct of its business in or on the Premises results in any
increase in premiums for any insurance carried by Landlord and Landlord or its
insurer can reasonably substantiate the nature of Tenant's activities which are
causing the increase in such premiums, then Tenant shall pay such increase as
additional rent within ten (10) business days after being billed therefor by
Landlord. If any insurance coverage carried by Landlord shall be canceled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to be upon the Premises, and if Tenant fails to remedy such condition within
thirty (30) days after notice thereof (or commence such cure within such thirty
(30) day period if such matter is not capable of being fully cured within thirty
(30) days, in which case Tenant shall diligently prosecute such cure to
completion), Landlord shall have all remedies provided in this Lease, at law or
in equity, including, without limitation, the right (but not the obligation) to
enter upon the Premises and attempt to remedy such condition at Xxxxxx's cost.
21.3. LANDLORD'S INSURANCE.
During the entire Term of this Lease, Landlord shall obtain and keep in full
force and effect respecting the Project, the following insurance:
(a) Special Form coverage (with commercially reasonable deductibles), including
fire and extended coverage, sprinkler leakage (including earthquake
sprinkler leakage), vandalism, malicious mischief, and flood coverage (if
the Premises is located in a flood zone), and earthquake insurance,
insuring the Project and all improvements thereon, except for any Tenant
Changes identified by Landlord for removal pursuant to Section 13.2 of this
Lease, in an amount not less than the full replacement cost thereof.
(b) Commercial general liability insurance coverage, on an occurrence basis,
covering personal injury, bodily injury (including wrongful death), broad
form property damage, operations hazard, owner's protective coverage,
contractual liability (including Landlord's indemnification obligations
under this Lease including Section 18 hereof) products and completed
operations liability, and owned/non-owned auto liability, with a general
aggregate of not less than Two Million Dollars ($2,000,000) per occurrence
with "umbrella" or excess liability coverage of not less than Five Million
Dollars ($5,000,000) arising
24
out of or relating (directly or indirectly) to Landlord's business
operations, conduct, assumed liabilities or use or occupancy of the
Project.
(c) Xxxxxx's compensation and employer's liability insurance, in statutory
amounts and limits, covering all persons employed by Landlord in connection
with any work done in, on or about the Project for which claims for death
or bodily injury could be asserted against Landlord, Tenant or the Project.
(d) Insurance against loss up to a minimum of six (6) months of rental income
that is caused by any damage covered by (a) above.
(e) Any other form or forms of insurance pertaining to (a) and (b) above as
Tenant or Landlord or the mortgagees of Landlord may reasonably require
from time to time, in form, amounts and for insurance risks against which a
prudent landlord would protect itself, but only to the extent such risks
and amounts are available in the insurance market at commercially
reasonable costs and are typically required of landlords of comparable
buildings in Visalia taking into account the size of the Project.
The aforesaid insurance shall be issued by insurers authorized to do business in
the State of California and rated not less than financial class VII, and/or,
policyholder rating A in the most recent version of Best's Key Rating Guide (a)
be in form reasonably satisfactory to Tenant; (b) name Landlord as named insured
thereunder and shall name Tenant as additional insureds thereunder, as the
interests may appear; (c) specifically provide that the insurance afforded by
such policy for the benefit of Landlord and Landlord's mortgagees shall be
primary, and any insurance carried by Landlord or Landlord's mortgagees shall be
excess and non-contributing; (d) except for worker's compensation insurance,
contain an endorsement that the insurer waives its right to subrogation as
described in Section 22 below; and (e) require the insurer to notify Tenant in
writing not less than thirty (30) days prior to any change, reduction in
coverage, cancellation or other termination thereof. Xxxxxxxx agrees to deliver
to Tenant, as soon as practicable after the placing of the required insurance,
but in no event later than the Commencement Date, certificates from the
insurance company evidencing the existence of such insurance and Tenant's
compliance with the foregoing provisions of this Section 21. Landlord shall
cause replacement certificates to be delivered to Tenant not less than thirty
(30) days prior to the expiration of any such policy or policies. If any such
initial or replacement certificates are not furnished within the time(s)
specified herein, Tenant shall have the right, but not the obligation, following
at least an additional five (5) business days' notice to Landlord, to procure
such policies and certificates at Landlord's expense. Despite any provision to
the contrary in this Section 21, Xxxxxxxx's obligation to carry the specified
insurance may be brought within the coverage at a so-called blanket policy or
policies of property insurance carried and maintained by Landlord, provided,
however, that the coverage afforded Tenant will not be reduced or diminished by
reason of use of such blanket policy of insurance.
22. WAIVER OF SUBROGATION.
22.1. WAIVER.
Landlord and Tenant each hereby waive their rights against each other with
respect to any claims or damages or losses which are caused by or result from
(a) occurrences insured against under any insurance policy carried by
Landlord or Tenant pursuant to the provisions of this Lease, or (b) occurrences
which would have been covered under any insurance (except worker's compensation)
required to be obtained and maintained by Landlord or Tenant under Section 21 of
this Lease had such insurance been obtained and maintained as required therein.
The foregoing waiver shall be in addition to, and not a limitation of, any other
waivers or releases contained in this Lease.
25
22.2. WAIVER OF INSURERS.
Each party shall cause each property damage and loss of income, extra expense
and business interruption insurance policy required to be obtained by it
pursuant to this Lease to provide that the insurer waives all rights of
recovery by way of subrogation against the other party in connection with any
claims, losses and damages covered by such policy. In addition, each party
shall cause its property damage insurance policy to provide that the insurer
waives all rights of recovery by way of subrogation against the other party
in connection with any claims, losses and damages covered by such policy, if
either Landlord or Tenant fails to maintain property insurance required
hereunder, or business interruption insurance, such insurance shall be deemed
to be self-insured with a deemed full waiver of subrogation as set forth in
the immediately preceding sentence.
23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
23.1. TENANT'S DEFAULT.
The occurrence of any one or more of the following events shall constitute a
default under this Lease by Tenant:
(a) the abandonment of the Premises by Xxxxxx as defined in California Civil
Code Section 1951;
(b) the failure by Tenant to make any payment of Rent or any other payment
required to be made by Tenant hereunder, within ten (10) days after
Xxxxxx's receipt of written notice from Landlord that such payment was not
received;
(c) the failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in section (a) or (b) above, where such
failure shall continue for a period of thirty (30) days after Xxxxxx's
receipt of written notice specifying in detail Tenant's failure to perform
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant shall commence such cure within said thirty (30) day period and
thereafter diligently prosecute such cure to completion; and
(d) the making by Tenant of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement
under any law relating to bankruptcy (unless in the case of a petition
filed against the Tenant the same is dismissed within sixty (60) days),
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within
sixty (60) days, or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease where such seizure is not discharged
within sixty (60) days.
23.2. LANDLORD'S REMEDIES; TERMINATION.
In the event of any such default by Xxxxxx, in addition to any other remedies
available to Landlord under this Lease, at law or in equity, Landlord shall have
the immediate option to terminate this Lease and all rights of Tenant hereunder.
In the event that Landlord shall elect to so terminate this Lease, then Landlord
may recover from Tenant:
(a) the worth at the time of award of any unpaid rent which had been earned at
the time of such termination; plus
26
(b) the worth at the time of the award at the amount by which the unpaid rent
which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid rent for
the balance at the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus
(d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Xxxxxx's failure to perform its obligations under
this Lease or which, in the ordinary course of things, would be likely to
result therefrom.
As used in Sections 23.2(a) and 23.2(b) above, the "worth at the time of award"
is computed by allowing interest at Interest Rate set forth in Section 23.6. As
used in Section 23.2(c) above, the "worth at the time award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco the time of award plus one percent (1%).
23.3. LANDLORD'S REMEDIES; RE-ENTRY RIGHTS.
In the event of any such default by Xxxxxx, in addition to any other remedies
available to Landlord under this Lease, at law or in equity, Landlord shall also
have the right as permitted by applicable law, with or without terminating this
Lease, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored and/or disposed of pursuant to
Section 13.4 of this Lease or at other procedures permitted by applicable law.
No re-entry or taking possession of the Premises by Landlord pursuant to this
Section 23.3, and no acceptance of surrender of the Premises or other action on
Landlord's part, shall be construed as an election to terminate this Lease
unless written notice of such intention be given to Tenant or unless the
termination thereof be decreed by a court of competent jurisdiction.
23.4. LANDLORD'S REMEDIES; CONTINUATION OF LEASE.
In the event of any such default by Xxxxxx, in addition to any other remedies
available to Landlord under this Lease, at law or in equity, Landlord shall have
the right to continue this Lease in full force and effect, whether or not Tenant
shall have abandoned the Premises. The foregoing remedy shall also be available
to Landlord pursuant to California Civil Code Section 1951.4 and any successor
statute thereof in the event Tenant has abandoned the Premises. In the event
Landlord elects to continue this Lease in full force and effect pursuant to this
Section 23.4 then Landlord shall be entitled to enforce all of its rights and
remedies under this Lease including the right to recover rent as it becomes due,
Landlord's election not to terminate this Lease pursuant to this Section 23.4 or
pursuant to any other provision of this Lease, at law or in equity, shall not
preclude Landlord from subsequently electing to terminate this Lease or pursuing
any of its other remedies.
23.5. XXXXXXXX'S RIGHT TO PERFORM.
Except as specifically provided otherwise in this Lease, Tenant shall perform
all covenants and agreements under this Lease, at Xxxxxx's sole cost and expense
and without any abatement or offset of rent. Except as specifically provided
otherwise in this Lease, if Tenant shall fail to pay any sum of money (other
than Rent) or perform any other act on its part to be paid or performed
hereunder in all material respects and such failure shall continue for ten (10)
days with respect to monetary obligations (or thirty (30) days with respect to
monetary obligations) after Xxxxxx's receipt of written notice thereof from
Landlord, Landlord may following an additional five (5) days written notice to
Tenant, without waiving or releasing Tenant from any of Tenant's obligations,
make such payment or perform such other act on behalf of Tenant. All sums so
paid by Xxxxxxxx and all reasonably necessary incidental costs incurred by
Landlord in performing such other acts shall be payable by Tenant to Landlord
within ten (10) business days after demand therefor as additional rent.
27
23.6. INTEREST.
If any other amount payable by Landlord or Tenant hereunder is not received by
the party entitled to such payment within ten (10) days after the date when due,
it shall bear interest of the lesser of: (a) the prime rate then announced by
Xxxxx Fargo Bank, NA (or the largest state chartered bank in the State of
California if Xxxxx Fargo Bank, NA ceases to exist or to publish a prime rate)
plus two percent (2%) per annum; or (b) the maximum rate permitted by law, from
the date due until paid. All interest, and any late charges imposed on Tenant
pursuant to Section 23.7 below, shall be considered additional rent due from
Tenant to Landlord under the terms of this Lease.
23.7. LATE CHARGES.
Tenant acknowledges that, in addition to interest costs, the late payments by
Tenant to Landlord of any Monthly Rent or other sums due under this Lease will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of such costs being extremely difficult and impractical to fix. Such other costs
include, without limitation, processing, administrative and accounting charges
and late charges that may be imposed on Landlord by the terms of any mortgage,
deed of trust or related loan documents encumbering the Premises. Accordingly,
if any monthly installment of Rent or any other amount payable by Tenant
hereunder is not received by Landlord within ten (10) days following written
notice that such amount is due, Tenant shall pay to Landlord an additional sum
of five percent (5%) of the overdue amount as a late charge for the first late
charge due and payable by Tenant pursuant to this Section 23.7 in any calendar
year, or ten (10%) of the overdue amount as a late charge for the second and any
subsequent late charge due and payable by tenant pursuant to this Section 23.7
in any calendar year. However, in no event shall any late charge be more than
the maximum late charge allowed by law. The parties agree that such late charge
represents a fair and reasonable estimate of the costs that Landlord will
incur by reason of any late payment as hereinabove referred to by Tenant, and
the payment of late charges and interest are distinct and separate in that the
payment of interest is to compensate Landlord for the use of Landlord's money by
Xxxxxx, while the payment of late charges is to compensate Landlord for
Landlord's processing, administrative and other costs incurred by Landlord as a
result of Tenant's delinquent payments. Acceptance of a late charge or interest
or waiver of a late charge shall not constitute a waiver of Tenant's default
with respect to the overdue amount or prevent Landlord from exercising any of
the other rights and remedies available In Landlord under this Lease or at law
or in equity now or hereafter in effect.
23.8. RIGHTS AND REMEDIES CUMULATIVE.
All rights, options and remedies of Landlord and Tenant contained in this
Section 23 or in Section 24 below and elsewhere in this Lease shall be construed
and held to be cumulative, and no one of them shall be exclusive of the other,
and Landlord or Tenant, as applicable shall have the right to pursue any one or
all of such remedies or any other remedy or relief which may be provided by law
or in equity, whether or not stated in this Lease. Nothing in this Section 23 or
in Section 24 shall be deemed to limit or otherwise affect the indemnification
obligations of Landlord and Tenant pursuant to any provision of this Lease.
24. LANDLORD'S DEFAULT.
Landlord shall be in default in the performance of any obligation required to be
performed by Landlord under this Lease if (i) Landlord is obligated to make a
payment of money to Tenant and Landlord fails to make such payment within ten
(10) days of written notice from Tenant that the same was not paid when due, or
(ii) such obligation is other than the payment of money and Landlord has failed
to perform such obligation within thirty (30) after the receipt of written
notice from Tenant specifying in detail Landlord's failure to perform; provided
however, that the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, then Landlord shall not be deemed in
default if it commences such performance within such thirty (30) day period and
thereafter diligently pursues the same to completion. Upon any such uncured
default by
28
Landlord, Tenant may exercise any of it rights provided in law or at equity;
provided, however, Xxxxxx's rights and remedies hereunder shall be limited to
the extent (i) Tenant has expressly waived in this Lease any of such rights or
remedies, and/or (ii) this Lease otherwise expressly limits Tenant's rights or
remedy.
25. SUBORDINATION.
At the request of Landlord or any mortgagee of a mortgage or a beneficiary of a
deed of trust now or hereafter encumbering all or any portion of the Premises,
this Lease shall be subject and subordinate at all times to such lien of such
mortgages and deeds of trust, as well as to any advances made thereunder and to
all renewals, replacements, modifications and extensions thereof (each a
"SUPERIOR INTEREST"). However, no subordination of this Lease shall result in
Tenant being disturbed in its possession of the Premises or in the enjoyment of
its rights under this Lease so long as Tenant is not in default with respect to
its obligations hereunder. Notwithstanding the foregoing, Landlord shall have
the right to subordinate or cause to be subordinated the Superior Interest to
this Lease. Tenant agrees to subordinate its leasehold interest in the Premises
to the interest of (and to attorn to) the holder of each existing or future
Superior Interest encumbering the Premises or the Project, if and only if
Landlord furnishes to Tenant from each such holder of an existing or future
Superior Interest, a commercially reasonable non-disturbance agreement in
substantially the form attached as Exhibit F (the "SNDA"). The SNDA shall
provide that the holder of such Superior Interest agrees not to disturb or
interfere with Xxxxxx's possession of the Premises during the Term (including
any Option Period) so long as Tenant is not in default under the terms and
conditions of this Lease and Tenant agrees to attorn to the holder of such
Superior Interest should the interest of Landlord be transferred to and owned by
the holder of such Superior Interest. In addition the SNDA shall include the
obligation of any current or future holder of Superior Interest to recognize
Xxxxxx's rights specifically set forth in this Lease to offset certain amounts
against Rent due hereunder, or to otherwise receive certain credits against Rent
as set forth expressly herein and in the Work Agreement; apply to any successors
or assigns of Tenant.
26. ESTOPPEL CERTIFICATE.
26.1. TENANT'S AND LANDLORD'S OBLIGATIONS.
Within ten (10) business days following a party's written request, the other
party shall execute and deliver to the first party an estoppel certificate, in a
form substantially similar to the form of Exhibit G attached hereto certifying
(a) the Commencement Date of this Lease; (b) that this Lease is unmodified and
in full force and effect (or, if modified, that this Lease is in full force and
effect as modified, and stating the date and nature of such modifications); (c)
the date to which the Rent and other sums payable under this Lease have been
paid; (d) that there are not, to the best of the party's knowledge, any defaults
under this Lease by either Landlord or Tenant, except as specified in such
certificate; and (e) such other matters as are set forth in Exhibit G or are
reasonably requested. Any such estoppel certificate delivered pursuant to this
Section 26.1 may be relied upon by any mortgagee, beneficiary, purchaser or
prospective purchaser, any proposed assignee or subtenant of any portion of the
Premises, as well as their assignees.
26.2. FAILURE TO DELIVER.
Failure of Landlord or Tenant to deliver such estoppel certificate within such
time shall constitute a default hereunder without the applicability of notice
and cure periods specified in Section 23 above and shall be conclusive upon the
other party that: (a) this Lease is in full force and effect without
modification, except as may be represented by Landlord or Tenant, as applicable,
in good faith; (b) there are no uncured defaults in Landlord's or Tenant's
performance (other than the failure to deliver the estoppel certificate); and
(c) not more than one (1) month Rent has been paid in advance.
29
27. PARKING.
Subject to Sections 19, 20 and 32.18 of this Lease, Tenant shall be entitled,
commencing at the Commencement Date, to use not less than thirty-eight (38)
total spaces for the Premises, which parking spaces shall pertain to the parking
facilities designated for the Premises, as outlined in Exhibit A attached
hereto. Notwithstanding anything to the contrary contained herein, except in the
case of casualty or condemnation, under no circumstances may Landlord reduce the
number of parking spaces available for the Premises below the ratio of not less
than thirty-eight (38) total spaces for the Premises. The parking spaces to
which Xxxxxx is entitled pursuant to this Section 27 are solely for use by
Xxxxxx's own personnel, Tenant's visitors, suppliers and invitees and such
spaces may not be transferred assigned, subleased or otherwise alienated by
Tenant without Landlord's prior approval.
28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES.
28.1. MODIFICATIONS.
If, in connection with Xxxxxxxx's obtaining or entering into any financing for
any portion of the Premises, the lender shall request modifications to this
Lease, Tenant shall, within ten (10) business days after request therefor,
execute an amendment to this Lease including such modifications, provided such
modifications are reasonable, do not (i) increase the obligations of Tenant
hereunder; (ii) extend the Term; or (iii) otherwise adversely affect the
leasehold estate created hereby or Tenant's rights and benefits hereunder.
28.2. CURE RIGHTS.
In the event of any default on the part of Landlord, Tenant will use reasonable
effort to give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee covering the Premises whose address shall have been
furnished to Tenant in writing.
29. QUIET ENJOYMENT.
Landlord covenants and agrees with Tenant that, upon Xxxxxx performing all of
the covenants and provisions of Xxxxxx's part to be observed and performed under
this Lease (including payment of rent hereunder), Tenant shall and may peaceably
and quietly have, hold and enjoy the Premises in accordance with and subject to
the terms and conditions of this Lease as against all persons claiming by,
through or under Landlord.
30. TRANSFER OF LANDLORD'S INTEREST.
The term "Landlord" as used in this Lease, so far as covenants or obligations on
the part of the Landlord are concerned, shall be limited to mean and include
only the owner or owners, at the time in question, of the fee title to the
Premises. In the event of any transfer or conveyance of any such title or
interest (other than a transfer for security purposes only), the transferor
shall be automatically relieved of all covenants and obligations on the part of
Landlord contained in this Lease accruing after the date of such transfer or
conveyance, provided that the transferee of Landlord's interest has expressly
agreed to assume, in writing or by operation of law, the performance of all the
covenants and obligations of Landlord under this Lease following the date of
such transfer. Landlord and Xxxxxxxx's transferees and assignees shall have the
absolute right to transfer all or any portion of their respective title and
interest in the Premises and/or this Lease without the consent of Tenant, and
such transfer or subsequent transfer shall not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease.
30
31. LIMITATION ON LANDLORD'S LIABILITY.
Notwithstanding anything contained in this Lease to the contrary, the
obligations of Landlord under this Lease (including any actual or alleged
breach or default by Landlord) do not constitute personal obligations of the
individual partners, directors, officers or shareholders of Landlord or
Landlord's partners, and Tenant shall not seek recourse against the
individual partners, directors, officers or shareholders of Landlord or
Landlord's partners, or any of their personal assets for satisfaction of any
liability with respect to this Lease.
32. MISCELLANEOUS.
32.1. GOVERNING LAW.
This Lease will be governed by the law of the State of California and will be
constructed and interpreted according to that law. Venue on an action arising
out of this Lease will be proper only in the Tulare County Superior Court, State
of California.
32.2. WAIVER OF JURY TRIAL.
Xxxxxxxx and Xxxxxx waive trial by jury in any action, proceeding, or
counterclaim brought by either of them against the other on all matters arising
out of this Lease or the use and occupancy of the Premises (except claims for
personal injury or property damage).
32.3. ATTORNEY'S FEES.
If Landlord and Tenant litigate any provision of this Lease or the entry into
this Lease, or the subject matter of this Lease, the unsuccessful litigant will
pay to the successful litigant all costs and expenses, including reasonable
attorneys' fees and court costs, incurred by the successful litigant at trial
and on any appeal. If, without fault, either Landlord or Tenant is made a party
to any litigation instituted by or against the other, the other will indemnify
the faultless against all loss, liability, and expense, including reasonable
attorneys' fees and court costs, incurred by it in connection with such
litigation.
32.4. SUCCESSORS AND ASSIGNS.
Subject to the provisions of Section 30 above, and except as otherwise provided
in this Lease, all of the covenants, conditions and provisions of this Lease
shall be binding upon, and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives and permitted successors and
assigns; provided, however, no rights shall inure to the benefit at any
Transferee of Tenant unless the Transfer to such Transfer is made in compliance
with the provisions of Section 15.
32.5. NO MERGER.
The voluntary or other surrender of this Lease by Tenant or a mutual termination
thereof shall not work as a merger and shall, at the option of Landlord, either
(a) terminate all or any existing subleases, or (b) operate as an assignment to
Landlord at Tenant's interest under any or all such subleases.
32.6. PROFESSIONAL FEES.
If either Landlord or Tenant should bring suit against the other with respect to
this Lease, including for unlawful detainer or any other relief against the
other hereunder, then all costs and expenses incurred by the prevailing party
therein (including, without limitation, its actual appraisers', accountants',
attorneys' and other professional fees, expenses and court costs), shall be paid
by the other party.
32.7. WAIVER.
The waiver by either party of any breach by the other party of any term,
covenant or condition here contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or
31
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the performance by the other in strict accordance with said terms. No waiver of
any default of either party hereunder shall be implied from any acceptance by
Landlord or delivery by Tenant (as the case may be) of any Rent or other
payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect defaults other than as specified in said waiver.
The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any term, covenant or condition
of this Lease other than the failure of Tenant to pay the particular Rents
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance at such Rent.
32.8. TERMS AND HEADINGS; INTERPRETATION.
The words "Landlord" and "Tenant" as used herein shall include the plural as
well as the singular. Words used in any gender include other genders. The
Section headings of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof. Any deletion
of language from this Lease prior to its execution by Landlord and Tenant shall
not be construed to raise any presumption, canon of construction or implication,
including, without limitation, any implication that the parties intended thereby
to state the converse of the deleted language.
32.9. TIME.
Time is of the essence with respect to performance of every provision at this
Lease in which time performance is a factor. All references in this Lease to
"days" shall mean calendar days unless specifically modified herein to be
"business" days.
32.10. PRIOR AGREEMENTS; AMENDMENTS.
This Lease, including the Summary and all Exhibits and Riders attached hereto
contains all at the covenants, provisions, agreements, conditions and
understandings between Landlord and Tenant concerning the Premises and any other
matter covered or mentioned in this Lease, and no prior agreement,
understanding, oral or written, express or implied, pertaining to the Premises
or any such other 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. The parties
acknowledge that all prior agreements, representations and negotiations are
deemed superseded by the execution of this Lease to the extent they are not
expressly incorporated herein.
32.11. SEVERABILITY.
The invalidity or unenforceability of any provision of this Lease (except for
Tenant's obligation to pay Rent) shall in no way affect, impair or invalidate
any other provision hereof and such other provisions shall remain valid and in
full force and effect to the fullest extent permitted by law.
32.12. RECORDING.
Concurrently with the execution of this Lease, Landlord and Tenant shall each
execute a Memorandum of Lease ("MEMORANDUM"), which shall be in the form of
Exhibit H.
32.13. EXHIBITS AND RIDERS.
All Exhibits and Riders attached to this Lease are hereby incorporated in this
Lease for all purposes as though set forth at length herein.
32
32.14. AUCTIONS.
Tenant shall have no right to conduct any auction in, on or about the Premises.
32.15. ACCORD AND SATISFACTION.
No payment by Tenant or receipt by Landlord of a lesser amount than the rent
payment herein stipulated shall be deemed to be other than on account of the
rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease. Tenant agrees that each
of the foregoing covenants and agreements shall be applicable to any covenants
or agreements either expressly contained in this Lease or imposed by any statute
or common law.
32.16. FINANCIAL STATEMENTS.
Upon ten (10) business days prior written request from Landlord (which Landlord
may make at any time during the Term but no more often than once in any calendar
year), Tenant shall deliver to Landlord a current financial statement of Tenant.
Such statements shall be prepared in accordance with generally acceptable
accounting principles and certified as true in all material respects by Tenant
(if Tenant is an individual) or by an authorized officer or general partner of
Tenant (if Tenant is a corporation or partnership, respectively). If Tenant is a
publicly traded company, Tenant may fulfill the requirements of this Section
32.16 by delivering to Landlord a copy Tenant's most recent annual report or
those statements submitted by Tenant to the Securities and Exchange Commission.
32.17. NO PARTNERSHIP.
Landlord does not, in any way or for any purpose, become a partner of Tenant in
the conduct of its business, or otherwise, or joint venturer or a member of a
joint enterprise with Tenant by reason of this Lease.
32.18. FORCE MAJEURE.
In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of
strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, governmental moratorium or other governmental action or inaction
(including failure, refusal or delay in issuing permits, approvals and/or
authorizations) injunction or court order, riots, insurrection, war, fire,
earthquake, flood, rain or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "FORCE MAJEURE"), then performance at such act
shall be excused for the period of the delay and the period for the performance
of any such act shall be extended for a period equivalent to the period of such
delay. The provisions of this Section 32.18 shall not apply to nor operate to
excuse Landlord or Tenant from the payment of Rent or other amounts strictly in
accordance with the terms of this Lease.
32.19. COUNTERPARTS.
This Lease may be executed in one or more counterparts, each at which shall
constitute an original and all of which shall be one and the same agreement.
32.20. DUTY TO ACT REASONABLY.
Whenever this Lease grants Landlord or Tenant the right to take action, exercise
discretion, establish rules and regulations or make allocations or other
determinations, unless another standard is expressly prescribed, Landlord and
Tenant shall act reasonably and in good faith.
33
32.21. NON-DISCRIMINATION.
Landlord and Xxxxxx acknowledge and agree that there shall be no discrimination
against or segregation of, any person, group of persons, or entity on the basis
of race, color, creed, religion, age, sex, marital status, national origin, or
ancestry in the leasing, subleasing, transferring, assignment, occupancy,
tenure, use, or enjoyment of the Premises, or any portion thereof.
33. LEASE EXECUTION.
33.1. AUTHORITY.
If either Landlord or Tenant executes this Lease as a partnership or
corporation, then such party represents and warrants that: (a) Landlord or
Tenant, as applicable, is a duly authorized and existing partnership or
corporation as the case may be and is qualified to do business in the State of
California; (b) such persons and/or entities executing this Lease are duly
authorized to execute and deliver this Lease on behalf of Landlord or Tenant, as
applicable, in accordance with such a duly adopted resolution of such party's
board of directors and such party's by-laws; and (c) this Lease is binding upon
Landlord and Tenant in accordance with its terms.
33.2. NO OPTION.
The submission of this Lease for examination or execution by Xxxxxx does not
constitute reservation of or option for the Premises and this Lease shall not
become effective as a Lease until it has been executed by Landlord and delivered
to Tenant.
34
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT"
Moulded Fibre, Inc. a Maine corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
--------------------
Title: Vice President
-------------------
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------
Title: Vice President
-------------------
Note: Pursuant to recent California case law, non-California entities
are required to have two officers sign on a lease.
"LANDLORD"
MIDSTATE 99 DISTRIBUTION BUILDING NO. 1, LLC
a California Limited Liability Company
By: MidState 99 Distribution Center, LLC,
a California limited liability company
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx, Chief Operating Officer
35