AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
February 28, 2001, is made by and between Xxxxx Canyon Properties, LLC, a
California limited liability company ("LESSOR") and Petco Animal Supplies, Inc.,
a Delaware corporation ("LESSEE"), (collectively the "PARTIES," or individually
a "PARTY").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 0000 Xxxxx Xxxx, located in the County of San Diego, State of
California, and generally described as (describe briefly the nature of the
property and, if applicable, the "PROJECT", if the property is located within a
Project) a two (2) story office building consisting of 43,000 rentable square
feet, located within a 9.06 acre office project (the "Project"), more
particularly described on Exhibit A (the Project legal description) and Exhibit
A-1 (the Project Site Plan) ("PREMISES"). (See also Paragraph 2)
1.3 TERM: eleven (11) years, zero (0) months and fifteen (15) days
("ORIGINAL TERM") commencing upon Substantial Completion (defined below) of the
Lessee Improvements, but not earlier than April 1, 2001. Lessor will provide
Lessee at least ten (10) days' prior written notice of the date upon which
Substantial Completion will occur (see Addendum No. 2) ("COMMENCEMENT DATE") and
ending eleven (11) years after the ("EXPIRATION DATE"). (See also Paragraph 3)
See Addendum No. 1. Commencement Date.
1.4 BASE RENT: $62,350.00 per month ("BASE RENT"), payable on the
first (1st) day of each month commencing on the Commencement Date. (See
also Paragraph 4)
/X/ If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted.
1.5 BASE RENT PAID UPON EXECUTION: $62,350.00 as Base Rent for
the first month of the Original Term (prorated for any partial month and the
balance applied to the next month).
1.6 SECURITY DEPOSIT: $62,350.00 ("SECURITY DEPOSIT"). (See also
Paragraph 5)
1.7 AGREED USE: Office use for corporate headquarters, including related
facilities and services for employees as Lessee desires, such as a cafeteria
and/or general office use, together with necessarily incidental uses.
Notwithstanding the foregoing to the contrary, Tenant has the right to have pets
in the Premises, so long as any that remain overnight (such as fish, rodents and
reptiles) are caged or otherwise contained in appropriate enclosures. Lessee
shall be responsible for any clean up necessitated by the presence of such pets
at the Project. (See also Paragraph 6)
1.8 INSURING PARTY. Lessor is the "INSURING PARTY" unless
otherwise stated herein. (See also Paragraph 8)
1.9 REAL ESTATE BROKERS: (See also Paragraph 15)
(a) REPRESENTATION: The following real estate brokers (collectively,
the "BROKERS") and brokerage relationships exist in this transaction (check
applicable boxes):
/X/ Acree, Weinman, Inc. represents Lessee exclusively ("LESSEE'S BROKER").
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Broker the fee agreed to in their separate
written agreement (or if there is no such agreement, the sum of ______% of the
total Base Rent for the brokerage services rendered by said Broker).
1.10 ADDENDA AND EXHIBITS. Attached hereto are Addenda and Exhibits
Xxxxxxxx Xx. 0, Xxxxxxxx Xx. 0, Xxxxxxx A, Exhibit A-1, Exhibit B, Exhibit C,
Exhibit D, Exhibit E, Exhibit F and Exhibit G, all of which constitute a part of
this Lease.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating rental, is an approximation which the Parties agree is
reasonable and the rental based thereon is not subject to revision whether or
not the actual size is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee broom clean and
free of debris on the Commencement Date, and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee within
thirty (30) days following the Date, warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning
systems ("HVAC"), loading doors, if any, and all other such elements in the
Premises, other than those constructed by Lessee, shall be in good operating
condition on said date and that the structural elements of the roof, bearing
walls and foundation of any buildings on the Premises (the "BUILDING") shall be
free of material defects. If a non-compliance with said warranty exists as of
the Date, Lessor shall promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance,
rectify same at Lessor's expense. See Addendum No. 2.
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2.3 COMPLIANCE. Lessor warrants that the Premises comply with all
applicable laws, covenants or restrictions of record, building codes,
regulations and ordinances ("APPLICABLE REQUIREMENTS") in effect on the Start
Date. Said warranty does not apply to the use to which Lessee will put the
Premises or to any Alterations or Utility Installations (as defined in Paragraph
7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for
determining whether or not the zoning is appropriate for Lessee's intended use.
If the Premises do not comply with said warranty, Lessor shall, except as
otherwise provided, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance, rectify the
same at Lessor's expense. If the Applicable Requirements are hereafter changed
(as opposed to being in existence at the Start Date, which is addressed in
Paragraph 6.2(e) below) so as to require during the term of this Lease the
construction of an addition to or an alteration of the Building, the remediation
of any Hazardous Substance, or the reinforcement or other physical modification
of the Building ("CAPITAL EXPENDITURE"), Lessor and Lessee shall allocate the
cost of such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises by
Lessee as compared with uses by tenants in general, Lessee shall be fully
responsible for the cost thereof, provided, however that if such Capital
Expenditure is required during the last two (2) years of this Lease and the cost
thereof exceeds six (6) months' Base Rent, Lessee may instead terminate this
Lease unless Lessor notifies Lessee, in writing, within ten (10) days after
receipt of Lessee's termination notice that Lessor has elected to pay the
difference between the actual cost thereof and the amount equal to six (6)
months' Base Rent. If Lessee elects termination, Lessee shall cease the use of
the Premises which requires such Capital Expenditure on the termination date set
forth in Lessee's written termination notice to Lessor. Such termination date
shall, however, in no event be earlier than the last day that Lessee could
legally utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall be fully responsible for the cost
thereof; provided, however, that if such Capital Expenditure is required during
the last six (6) months of this Lease, Lessor shall have the option to terminate
this Lease upon ninety (90) days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within ten (10) days after receipt of Lessor's
termination notice that Lessee will pay for such Capital Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from
Rent until Lessor's share of such costs have been fully paid. If Lessee is
unable to finance Lessor's share, or if the balance of the Rent due and payable
for the remainder of this Lease is not sufficient to fully reimburse Lessee on
an offset basis, Lessee shall have the right to terminate this Lease upon thirty
(30) days written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall be
fully responsible for the cost thereof, and Lessee shall not have any right to
terminate this Lease.
2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements), and their suitability for Lessee's intended use, (b) Lessee has
made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessor's agents, nor any Broker has made any
oral or written representations or warranties with respect to said matters other
than as set forth in this Lease. In addition, Lessor acknowledges that: (a)
Broker has made no representations, promises or warranties concerning Lessee's
ability to honor the Lease or suitability to occupy the Premises, and (b) it is
Lessor's sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original
Term of this Lease are as specified in Paragraph 1.3 and Addendum No. 1.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premises) shall, however, be in effect
during such period. Any such early possession shall not affect the Expiration
Date.
3.3 DELAY IN POSSESSION. Lessor agrees to use its best efforts to deliver
possession of the Premises to Lessee by June 1, 2001. If, despite said efforts,
Lessor is unable to deliver possession as agreed, Lessor shall not be subject to
any liability therefor, nor shall such failure affect the validity of this
Lease. Lessee shall not, however, be obligated to pay Rent or perform its other
obligations until it receives possession of the Premises. If possession is not
delivered July 1, 2001, Lessee may, at its option, by notice in writing within
ten (10) days after such date, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is
not received by Lessor within said ten (10) day period, Lessee's right to cancel
shall terminate. If possession of the Premises is not delivered on or before
November 1, 2001, this Lease shall terminate unless other agreements are reached
between Lessor and Lessee, in writing.
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3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor's
election to withhold possession pending receipt of such evidence of insurance.
4. RENT.
4.1 RENT DEFINED. All monetary obligations of Lessee to Lessor
under the terms of this Lease (except for the Security Deposit) are deemed to
be rent ("RENT").
4.2 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which is for less than one (1) full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any portion
of said Security Deposit, Lessee shall within ten (10) days after written
request therefor deposit monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. Lessor shall not be required
to keep the Security Deposit separate from its general accounts. Within fourteen
(14) days after the expiration or termination of this Lease, if Lessor elects to
apply the Security Deposit only to unpaid Rent, and otherwise within thirty (30)
days after the Premises have been vacated pursuant to Paragraph 7.4(c) below,
Lessor shall return that portion of the Security Deposit not used or applied by
Lessor. No part of the Security Deposit shall be considered to be held in trust,
to bear interest or to be prepayment for any monies to be paid by Lessee under
this Lease.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to neighboring properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within five (5)
business days after such request give written notification of same, which notice
shall include an explanation of Lessor's objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE"
as used in this Lease shall mean any product, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements, is not a Reportable Use, and
does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself,
the public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit. Lessor represents that the Premises and the Project are free of
Hazardous Substances and in compliance with environmental laws.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor,
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and provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous
Substance.
(c) REMEDIATION. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Lessee, or any third
party. Lessor shall not cause or permit any Hazardous Substance to be spilled or
released in, under or about the Project (including through the plumbing or
sanitary sewer system) and shall promptly, at Lessor's expense, take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required for the clean up of any contamination of, and for
the maintenance of, security and/or monitoring of the Project or neighboring
properties, that was caused or materially contributed to by Lessor, or
pertaining to or involving any Hazardous Substance brought on to the Project
during the Term of this Lease by Lessor or for Lessor.
(d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and reasonable attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided, however, that Lessee shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from adjacent properties). Lessee's
obligations when required by the Applicable Requirements shall include, but not
be limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease. NO TERMINATION, CANCELLATION OR RELEASE
AGREEMENT ENTERED INTO BY LESSOR AND LESSEE SHALL RELEASE LESSEE FROM ITS
OBLIGATIONS UNDER THIS LEASE WITH RESPECT TO HAZARDOUS SUBSTANCES, UNLESS
SPECIFICALLY SO AGREED BY LESSOR IN WRITING AT THE TIME OF SUCH AGREEMENT.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees, agents and
lenders, harmless from and against any and all damages, liabilities, judgments,
claims, expenses, penalties and reasonable attorneys' and consultants' fees,
including the cost of remediation, which existed as a result of Hazardous
Substances on the Project prior to the Commencement Date or which are caused by
the act, omission or negligence of Lessor, its agents or employees. Lessor's
obligations, as and when required by the Applicable Requirements, shall include,
but not be limited to, the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Commencement Date. Lessee
shall cooperate fully in any such activities at the request of Lessor, including
allowing Lessor and Lessor's agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor's investigative and remedial
responsibilities.
(g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition
occurs during the term of this Lease, unless Lessee is legally responsible
therefor (in which case Lessee shall make the investigation and remediation
thereof required by the Applicable Requirements and this Lease shall continue in
full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and
Paragraph 13), Lessor shall investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, and
this Lease shall continue in full force and effect.
6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the reasonable requirements of any applicable fire insurance
underwriter or rating bureau, and the reasonable recommendations of Lessor's
engineers and/or consultants which relate in any manner to the Premises, without
regard to whether said requirements are now in effect or become effective after
the Start Date. Lessee shall, within ten (10) days after receipt of Lessor's
written request, provide Lessor with copies of all permits and other documents,
and other information evidencing Lessee's compliance with any Applicable
Requirements specified by Lessor, and shall immediately upon receipt, notify
Lessor in writing (with copies of any documents involved) of any threatened or
actual claim, notice, citation, warning, complaint or report pertaining to or
involving the failure of Lessee or the Premises to comply with any Applicable
Requirements.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's "Lender" (as defined in
Paragraph 30 below) and consultants shall have the right to enter into Premises
at any time, in the case of an emergency, and otherwise at reasonable times and
upon reasonable advance written notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this
Lease. The cost of any such inspections shall be paid by Lessor, unless a
violation of Applicable Requirements, or a contamination is found to exist or be
imminent. In such case, Lessee shall upon request reimburse Lessor for the cost
of such inspections, so long as such inspection discloses the violation or
contamination.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
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7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility Installations that serve the Premises exclusively, and Alterations in
good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, heating, ventilating, air-conditioning, electrical, lighting
facilities, boilers, pressure vessels, fire protection system, fixtures, walls
(interior and exterior), foundations, ceilings, roofs, floors, windows, doors,
plate glass, and skylights located in, or on the Premises. Lessee, in keeping
the Premises in good order, condition and repair, shall exercise and perform
good maintenance practices, specifically including the procurement and
maintenance of the service contracts required by Paragraph 7.1(b) below.
Lessee's obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in
good order, condition and state of repair. Lessee shall, during the term of this
Lease, keep the exterior appearance of the Building in a first-class condition
consistent with the other buildings in the Project.
(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense,
procure and maintain contracts, with copies to Lessor, in customary form and
substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and improvements ("Basic Elements"), if
any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and
pressure vessels, and (iii) fire extinguishing systems, including fire alarm
and/or smoke detection.
(c) REPLACEMENT. Subject to Lessee's indemnification of Lessor as
set forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if the HVAC equipment or the roof covering the Premises (the "Basic
Elements") cannot be repaired other than at a cost which is in excess of 50% of
the cost of replacing such Basic Elements, then such Basic Elements shall be
replaced by Lessor, and the cost thereof shall be prorated between the Parties
and Lessee shall only be obligated to pay, each month during the remainder of
the term of this Lease, on the date on which Base Rent is due, an amount equal
to the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is the number of months
of the useful life of such replacement as such useful life is specified pursuant
to Federal income tax regulations or guidelines for depreciation thereof
(including interest on the unamortized balance as is then commercially
reasonable in the judgment of Lessor's accountants), with Lessee reserving the
right to prepay its obligation at any time.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any
manner whatsoever, to repair and maintain the Premises, or the equipment
therein, all of which obligations are intended to be that of the Lessee. It is
the intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS"
refers to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communication systems,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "TRADE FIXTURES" shall mean Lessee's furnishings, fixtures, machinery
and equipment that can be removed without doing material damage to the Premises.
The term "ALTERATIONS" shall mean any modification of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion.
"LESSEE OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a). Except as provided in Xxxxxxxx Xx. 0,
Xxxxxx shall not make any Alterations or Utility Installations to the Premises
without Lessor's prior written consent which consent shall not be unreasonably
withheld. Lessee may, however, make non-structural Utility Installations to the
interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside, do not
involve puncturing, relocating or removing the roof or any existing walls, and
the cumulative cost thereof during this Lease as extended does not exceed
$50,000 in any one lease year. See Addendum No. 2.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be deemed
conditioned upon Lessee's: (i) acquiring all applicable governmental permits,
(ii) furnishing Lessor with copies of both the permits and the plans and
specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed
in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications.
(c) INDEMNIFICATION. Except as provided in Xxxxxxxx Xx. 0, Xxxxxx
shall pay, when due, all claims for labor or materials furnished or alleged to
have been furnished to or for Lessee at or for use on the Premises, which claims
are or may be secured by any mechanic's or materialman's lien
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against the Premises or any interest therein. Lessee shall give Lessor not
less than ten (10) days' notice prior to the commencement of any work in, on
or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense defend and protect
itself, Lessor and the Premises against the same and shall pay and satisfy
any such adverse judgment that may be rendered thereon before the enforcement
thereof.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. During the Original Term and any applicable Extension
Term, all Alterations and Utility Installations made by Lessee shall be the
property of Lessee, but considered a part of the Premises. Lessor may, at any
time, elect in writing to be the owner of all or any specified part of the
Lessee Owned Alterations and Utility Installations. All Lessee Owned Alterations
and Utility Installations shall, at the expiration or termination of this Lease,
become the property of Lessor and be surrendered by Lessee with the Premises.
(b) REMOVAL. Lessor may require the removal at any time of all or
any part of any Lessee Owned Alterations or Utility Installations made without
the required consent.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice. Lessee shall repair
any damage occasioned by the installation, maintenance or removal of Trade
Fixtures, furnishings, and equipment as well as the removal of any storage tank
installed by or for Lessee, and the removal, replacement, or remediation of any
soil, material or groundwater contaminated by Lessee. Trade Fixtures shall
remain the property of Lessee and shall be removed by Lessee. The failure by
Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without
the express written consent of Lessor shall constitute a holdover under the
provisions of Paragraph 26 below.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Subject to Xxxxxxxx Xx. 0, Xxxxxx shall pay for
Lessee's Pro Rata Share of all insurance required under Paragraph 8 except to
the extent of the cost attributable to liability insurance carried by Lessor
under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for
policy periods commencing prior to or extending beyond the Lease term shall be
prorated to correspond to the Lease term.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee and Lessor
against claims for bodily injury, personal injury and property damage based upon
or arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "ADDITIONAL INSURED-MANAGERS OR LESSORS OF PREMISES
ENDORSEMENT" and contain the "AMENDMENT OF THE POLLUTION EXCLUSION ENDORSEMENT"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose insurance shall be considered excess
insurance only.
(b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force
a policy or policies in the name of Lessor, with loss payable to Lessor, any
groundlessor, and to any Lender(s) insuring loss or damage to the Premises. The
amount of such insurance shall be equal to the full replacement cost of the
Premises, as the same shall exist from time to time, or the amount required by
any Lenders, but in no event more than the commercially reasonable and available
insurable value thereof. Lessee Owned Alterations and Utility Installations
shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. If the
coverage is available and commercially appropriate, such policy or policies
shall insure against all risks of direct physical loss or damage (except the
perils of flood and/or earthquake), including coverage for debris removal and
the enforcement of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as the
result of a covered loss. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of subrogation,
and inflation guard protection causing an increase in the annual property
insurance coverage amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All Urban Consumers for the city
nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence.
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FORM STN-6-2/97
(b) ADJACENT PREMISES. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are adjacent to the
Premises, the Lessee shall pay for any increase in the premiums for the property
insurance of such building or buildings if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises. Lessor covenants to include a
like provision in all other leases of premises in the Project.
8.4 LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.
(a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.
(b) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after thirty (30) days prior
written notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease, whichever is less.
If either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, reasonable attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought
against Lessor by reason of any of the foregoing matters, Lessee shall upon
notice defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be defended or indemnified. Lessor
shall indemnify, protect, defend and hold harmless Lessee and its agents and
employees from and against any claims and/or damages, liens, judgments, expenses
and/or liabilities arising out of or involving or in connection with Lessor's
negligence or willful misconduct. If any action or proceeding is brought against
Lessee by reason of any of the foregoing matters, Lessor shall upon notice
defend the same at Lessor's expense by counsel reasonable satisfactory to Lessee
and Lessee shall cooperate with Lessor in such defense. Lessee need not have
first paid any such claim in order to be defended or indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, or from other sources or places unless due to Lessor's negligence or
willful misconduct. Lessor shall not be liable for any damages arising from any
act or neglect of any other tenant of Lessor. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in six (6) months or
less from the date of the damage or destruction. Lessor shall
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FORM STN-6-2/97
notify Lessee in writing within thirty (30) days from the date of the damage
or destruction as to whether or not the damage is Partial or Total.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which cannot reasonably be repaired in six (6) months or less
from the date of the damage or destruction. Lessor shall notify Lessee in
writing within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
(c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds (except as to
the deductible which is Lessee's responsibility) as and when required to
complete said repairs. Lessee shall not be entitled to reimbursement of any
funds contributed by Lessee to repair any such damage or destruction. Premises
Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3,
notwithstanding that there may be some insurance coverage, but the net proceeds
of any such insurance shall be made available for the repairs if made by either
Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
damage. Such termination shall be effective sixty (60) days following the date
of such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within ten (10) days after receipt of the termination notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage without reimbursement from Lessor. Lessee shall provide Lessor with
said funds or satisfactory assurance thereof within thirty (30) days after
making such commitment. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date specified in the
termination notice.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last twelve (12)
months of this Lease there is damage for which the cost to repair exceeds one
(1) month's Base Rent, whether or not an Insured Loss, either party may
terminate this Lease effective sixty (60) days following the date of occurrence
of such damage by giving a written termination notice to the other party within
thirty (30) days after the date of occurrence of such damage. Notwithstanding
the foregoing, if Lessee at that time has an exercisable option to extend this
Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a)
exercising such option on or before the earlier of (i) the date which is ten
days after Lessee's receipt of Lessor's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercises such option during such period, Lessor shall, at Lessor's
expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee's option shall be extinguished.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) ABATEMENT. In the event of a Hazardous Substance condition for
which Lessee is not responsible under this Lease, Premises Partial Damage or
Premises Total Destruction, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired. All
other obligations of Lessee hereunder shall be performed by Lessee, and Lessor
shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
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FORM STN-6-2/97
(b) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within ninety (90) days after such obligation shall accrue,
Lessee may, at any time prior to the commencement of such repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual
notice, of Lessee's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such notice
and such repair or restoration is not commenced within thirty (30) days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within said thirty (30) days, this
Lease shall continue in full force and effect. "COMMENCE" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
9.7 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor.
9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES. SEE ADDENDUM NO. 1.
10.1 PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered. See Addendum No. 1.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "ASSIGN OR ASSIGNMENT") or sublet
all or any part of Lessee's interest in this Lease or in the Premises without
Lessor's prior written consent, which consent will not be unreasonably withheld.
(b) A change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of forty-nine (49%) or
more of the voting control of Lessee shall constitute a change in control for
this purpose. Any other change in voting control will not constitute an
assignment of this Lease or require Lessor's consent.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other
obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee
or sublessee, without first exhausting Lessor's remedies against any other
person or entity responsible therefore to Lessor, or any security held by
Lessor.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any. Lessee agrees to provide Lessor
with such other or additional information and/or documentation as may be
reasonably requested.
(f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.
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FORM STN-6-2/97
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
(b) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(c) Lessor shall deliver a copy of any notice of Default or Breach
by Lessee to the sublessee, who shall have the right to cure the Default of
Lessee within the grace period, if any, specified in such notice. The sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. A "DEFAULT" is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or rules under
this Lease. A "BREACH" is defined as the occurrence of one or more of the
following Defaults, and the failure of Lessee to cure such Default within any
applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder to Lessor, where such
failure continues for a period of ten (10) days following written notice to
Lessee.
(c) The failure by Lessee to comply with any other provision of this
Lease, where such Default continues for a period of thirty (30) days after
written notice; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach if Lessee commences such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
(d) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "DEBTOR" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within ninety (90) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within ninety (90) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within ninety (90) days; provided, however, in the event that any
provision of this subparagraph (e) is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the validity of the
remaining provisions.
(e) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.
13.2 REMEDIES. In the event of a Breach pursuant to Section 13.1(c),
Lessor may, at its option, perform such duty or obligation on Lessee's behalf,
including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee within thirty (30) days of receipt of invoice therefor. If any check
given to Lessor by Lessee shall not be honored by the bank upon which it is
drawn, Lessor, at its option, may require all future payments to be made by
Lessee to be by cashier's check. In the event of a Breach, Lessor may, with or
without further notice or demand, and without limiting Lessor in the exercise of
any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of 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 the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of the District within which the Premises are
located at the time of award plus one percent (1%). Efforts by Lessor to
mitigate damages caused by Lessee's Breach of this Lease shall not waive
Lessor's right to recover damages under Paragraph 12. If termination of this
Lease is obtained through the provisional remedy of unlawful detainer,
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FORM STN-6-2/97
Lessor shall have the right to recover in such proceeding any unpaid Rent and
damages as are recoverable therein, or Lessor may reserve the right to
recover all or any part thereof in a separate suit.
(b) Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or
the appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's right
to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.
13.3 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within five (5) days after such amount shall be
due, then, without any requirement for notice to Lessee, Lessee shall pay to
Lessor a one-time late charge equal to ten percent (10%) of each such overdue
amount. The Parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding any
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.
13.4 INTEREST. Any monetary payment due hereunder, other than late
charges, not received within thirty (30) days following written notice that same
is past due (which notice must state that if not paid within thirty (30) days
that upon an additional written notice interest will begin to accrue), and
following an additional written notice given not less than three (3) business
days prior to the date upon which interest begins to accrue (which notice must
state that if not paid within such three (3) business day period interest will
begin to accrue), shall bear interest from the date that is three (3) business
days following such second (2nd) written notice. The interest ("INTEREST")
charged shall be equal to twelve percent (12%), but shall not exceed the maximum
rate allowed by law. Interest is payable in addition to the potential late
charge provided for in Paragraph 13.3.
13.5 BREACH BY LESSOR.
(a) NOTICE OF BREACH. Lessor shall be deemed in breach of this Lease
if Lessor fails within a reasonable time to perform an obligation required to be
performed by Lessor. For purposes of this Paragraph, a reasonable time shall in
no event be less than thirty (30) days after receipt by Lessor, and any Lender
whose name and address shall have been furnished Lessee in writing for such
purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days are reasonably required for its
performance, then Lessor shall not be in breach if performance is commenced
within such thirty (30) day period and thereafter diligently pursued to
completion.
(b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor nor Lender cures said breach within thirty (30) days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breach at Lessee's
expense and offset from Rent an amount equal to the greater of one month's Base
Rent or the Security Deposit, and to pay an excess of such expense under
protest, reserving Lessee's right to reimbursement from Lessor. Lessee shall
document the cost of said cure and supply said documentation to Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than ten percent (10%) of the Premises is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing within
thirty (30) days after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession) terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the Premises remaining, except
that the Base Rent shall be reduced in proportion to the reduction of the
Premises caused by such Condemnation. Condemnation awards and/or payments shall
be the property of Lessor, whether such award shall be made as compensation for
diminution in value of the leasehold, the value of the part taken, or for
severance damages; provided, however, that Lessee shall be entitled to any
compensation for Lessee's relocation expenses, loss of business goodwill and/or
Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only,
shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease
is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation.
15. BROKERS' FEE.
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FORM STN-6-2/97
15.1 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Except as
provided in Xxxxxxxx Xx. 0, Xxxxxx and Lessor each represent and warrant to the
other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any) in connection with this Lease, and that no one other
than said named Brokers is entitled to any commission or finder's fee in
connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
Party, including any costs, expenses and/or attorneys' fees reasonably incurred
with respect thereto.
16. ESTOPPEL CERTIFICATES. SEE ADDENDUM NO. 1.
(a) Each Party (as "RESPONDING PARTY") shall within ten (10) days
after written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party without charge, a statement to
the Requiring Party and to any other entity ("Person") specified in such
request: (a) as to whether this Lease has been supplemented or amended, and, if
so, the substance and manner of such supplement or amendment; (b) as to the
validity, force and effect of this Lease, to the certifying party's best
knowledge; (c) as to the existence of any default hereunder, to the certifying
party's best knowledge; (d) as to the existence of any offsets, counterclaims,
or defenses hereto on the part of such other party, to the certifying party's
best knowledge; (e) as to the commencement and expiration dates of the Term; and
(f) as to any other matters which may reasonably be so requested. Any such
certificate may be relied upon by the party requesting it and any Person to whom
the same may be exhibited or delivered, and the contents of such certificate
shall be binding on the party executing same. Each party agrees to provide such
information in the form requested by the Requiring Party or other Person so long
as such form is a commercially reasonable form.
(b) If Lessor desires to finance, refinance, or sell the Premises,
or any part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragaph 20
below, the original Lessor under this Lease, and all subsequent holders of the
Lessor's interest in this Lease shall remain liable and responsible with regard
to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above, and elsewhere in this Lease.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. DAYS. Unless otherwise specifically indicated to the contrary, the
word "days" as used in this Lease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Project and the rents, proceeds and profits therefrom, and to no other
assets of Lessor, for the satisfaction of any liability of Lessor with respect
to this Lease, and shall not seek recourse against the individual partners of
Lessor, or its or their individual partners, directors, officers or
shareholders, or any of their personal assets for such satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties
under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and Attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by courier) or
may be sent by regular, certified or
PAGE 12 Initials _________
FORM STN-6-2/97
registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notices. Either Party may by written notice to the other specify a
different address for notice, except that upon Lessee's taking possession of
the Premises, the Premises shall constitute Lessee's address for notice. A
copy of all notices to Lessor shall be concurrently transmitted to such party
or parties at such addresses as Lessor may from time to time hereafter
designate in writing.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt, provided a copy is also delivered via delivery or mail.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of monies or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
one hundred twenty-five (125%) of the Base Rent applicable during the month
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Lessor to any holding over by Lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the parties, but rather
according to its fair meaning as a whole, as if both parties had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now placed
upon the Premises, to any and all advances made on the security thereof, and to
all renewals, modifications, and extensions thereof. Lessee agrees that the
holders of any such Security Devices (in this Lease together referred to as
"Lessor's Lender") shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any Lender may elect to have this Lease
and/or any Option granted hereby superior to the lien of its Security Device by
giving written notice thereof to Lessee, whereupon this Lease and such Options
shall be deemed prior to such Security Device, notwithstanding the relative
dates of the documentation or recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.
30.3 NON-DISTURBANCE. Lessee's subordination of this Lease shall be
subject to receiving a non-disturbance agreement in the form of Exhibit B
attached hereto or some other commercially reasonable form approved by Lessee,
such approval not to be unreasonably withheld (a "NON-DISTURBANCE AGREEMENT")
from the Lender which Non-Disturbance Agreement provides that Lessee's
possession of the Premises, and this Lease, including any options to extend the
term hereof,
PAGE 13 Initials _________
FORM STN-6-2/97
will not be disturbed so long as Lessee is not in Breach hereof and attorns
to the record owner of the Premises. Further, if within sixty (60) days after
the execution of this Lease, Lessor fails to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is
secured by the Premises, then Lessee may, at Lessee's option, either directly
contact Lessor's lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement, or terminate this Lease upon written
notice to Lessor.
30.4 EXECUTING. Upon written request from Lessor or a lender in connection
with a sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately
document any subordination, attornment and/or Non-Disturbance Agreement provided
for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
involving the Premises to enforce the terms hereof or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"PREVAILING PARTY" shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys' fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be
entitled to attorneys' fees, costs and expenses incurred in the preparation and
service of notices of Default and consultations in connection therewith, whether
or not a legal action is subsequently commenced in connection with such Default
or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times and upon reasonable advance notice for the
purpose of showing the same to prospective purchasers, lenders, or during the
last six (6) months of the Term, lessees. All such activities shall be without
abatement of rent or liability to Lessee. Lessor may at any time place on the
common areas of the Project any ordinary "FOR SALE" signs and Lessor may during
the last six (6) months of the term hereof place on the common areas of the
Project any ordinary "FOR LEASE" signs. Lessee may at any time place on or about
the Premises any ordinary "FOR SUBLEASE" sign.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent, which
consent will not be unreasonably withheld.
34. SIGNS. Except for ordinary "For Sublease" signs and as otherwise provided in
Xxxxxxxx Xx. 0, Xxxxxx shall not place any sign upon the Premises without
Lessor's prior written consent, which consent will not be unreasonably withheld.
All signs must comply with all Applicable Requirements.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Lessor's election to have such event
constitute the termination of such interest.
36. CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Default
or Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within ten (10) business days following such request in writing.
37. QUIET POSSESSION. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.
38. OPTIONS. See Addendum No. 1.
39. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
40. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.
PAGE 14 Initials _________
FORM STN-6-2/97
41. AUTHORITY. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each party shall, within thirty
(30) days after request, deliver to the other party satisfactory evidence of
such authority.
42. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
43. OFFER. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease
to the other Party. This Lease is not intended to be binding until executed
and delivered by all Parties hereto.
44. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.
45. MULTIPLE PARTIES. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.
46. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease / / is / / is not attached to this Lease.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
-------------------------------------------------------------------------------
ATTENTION: NO REPRESENTATIVE OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION
TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE
SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED.
-------------------------------------------------------------------------------
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at:
-------------------------------------- -----------------------------------------
on: on:
----------------------------------------------- --------------------------------------------------
By LESSOR: By LESSEE:
XXXXX CANYON PROPERTIES, LLC, PETCO ANIMAL SUPPLIES, INC.,
a California limited liability company a Delaware corporation
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
----------------------------------------------- --------------------------------------------------
Name Printed: Xxxxxxx X. Xxxxx, as Trustee of the Name Printed: Xxxx X. Xxxxxx
Title: Xxxxxxx X. and Xxxxxx X. Xxxxx Family Trust, Title: Vice President - Real Estate
Manager
By: /s/ XXXXX XXXXXX By: /s/ XXXXX X. XXXXX
----------------------------------------------- ---------------------------------------------------
Name Printed: Xxxxx Xxxxxx Name Printed: Xxxxx X. Xxxxx
Title: Manager Title: Executive Vice President and
Address: Chief Financial Officer
------------------------------------------ Address: c/o Property Manager
0000 Xxxxx Xxxx
--------------------------------------------------- Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Telephone: ( ) Telephone: (000) 000-0000
---------------------------------- Facsimile: (000) 000-0000
Facsimile: ( ) Federal ID No.
---------------------------------- ------------------------------------------
Federal ID No. With a copy to:
------------------------------------ Petco Animal Supplies, Inc.
c/o Vice President/Real Estate
0000 Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
PAGE 15 Initials _________
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ADDENDUM NO. 1
TO STANDARD LEASE
This Addendum No. 1 modifies and supplements that certain Standard Lease
dated February ____, 2001 ("Lease"), between Xxxxx Canyon Properties, LLC
("Lessor") and Petco Animal Supplies, Inc. ("Lessee"). All capitalized terms
used herein, which are not otherwise defined, shall have the meanings
ascribed to them in the Lease. In the event of a conflict between this
Addendum No. 1 and the Lease, the provisions of this Addendum No. 1 shall
control.
GENERAL PROVISION. The term "Project" shall mean that certain real property,
consisting of approximately 9.06 acres of land, known as 8925 and 0000 Xxxxx
Xxxx, Xxx Xxxxx, Xxxxxxxxxx (APN # 343-240-3400), more particularly described on
EXHIBIT A attached hereto and incorporated herein. The Project includes the
Premises (designated as Building Two on EXHIBIT A-1) and a second office
building located at 0000 Xxxxx Xxxx, consisting of approximately 43,000 rentable
square feet ("Building One"). The Project is contemplated to have a third office
building ("Building Three"), which Lessor may decide to construct. Provided
Lessor binds the remainder of the Project and such separate parcel or lot with
easements for cross-access and cross-parking and preserving Lessee's rights
under the Lease, Lessor may, in its reasonable discretion, elect to subdivide
the Project or process a parcel map to provide for a separate legal lot for that
portion of the Project upon which Building Three will be built. In such event,
the Premises and Building One will be located on one legal lot and Building
Three will be located on a separate legal lot.
50. BASE RENT. Base Rent for each Lease Year (defined below) during the
term of the Lease shall be as follows:
LEASE YEAR BASE RENT ANNUAL RENT
---------- --------- -----------
Year 1* $ 62,350.00 $ 748,200.00
Year 2 $ 64,532.25 $ 774,387.00
Year 3 $ 66,790.62 $ 801,487.44
Year 4 $ 69,128.29 $ 829,539.48
Year 5 $ 71,547.78 $ 858,573.36
Year 6 $ 74,051.95 $ 888,623.40
Year 7 $ 76,643.77 $ 919,725.24
Year 8 $ 79,326.30 $ 951,915.60
Year 9 $ 82,102.72 $ 985,232.64
Year 10 $ 84,976.32 $1,019,715.80
Year 11 $ 87,950.49 $1,055,405.80
Year 12** $ 91,028.76 $1,092,345.10
Year 13 $ 94,214.76 $1,130,577.10
Year 14 $ 97,512.28 $1,170,147.30
Year 15 $100,925.20 $1,211,110.40
Year 16 $104,457.58 $1,253,490.90
Year 17 $108,113.59 $1,297,363.00
Year 18 $111,897.56 $1,342,770.70
Year 19 $115,813.97 $1,389,767.60
Year 20 $119,867.45 $1,438,409.40
Year 21 $124,062.81 $1,488,753.70
Year 22 $128,405.00 $1,540,860.00
Year 23 $132,899.17 $1,594,790.00
Year 24 $137,550.64 $1,650,607.60
Year 25 $142,364.91 $1,708,378.00
Year 26 $147,347.68 $1,768,172.10
PAGE 16
---- ----
---- ----
*Lease Year 1 will actually be one (1) year and fifteen (15) days long. Lessor
agrees to xxxxx Lessee's Base Rent payment for the first fifteen (15) days of
Lease Year 1. Subject to the foregoing abatement, Base Rent will commence on the
Rent Commencement Date (defined below).
**Years 12 through 26 are Lease Years that are the subject of the Extension
Option provisions set forth in PARAGRAPH 54.
The foregoing amounts are based upon a Base Rent of $1.45 per square foot of
rentable area per month for Lease Year (defined below) 1, with a 3.5 percent
annual increase throughout the Main Term and the Extension Options.
Except for Lease Year 1, the term "Lease Year" shall mean each successive period
of twelve (12) consecutive calendar months, beginning on the first day of the
month following the Commencement Date.
51. OPERATING EXPENSES.
51.1 DEFINITION OF OPERATING EXPENSES. The term "Operating Expenses" shall mean
and refer to all costs and expenses, of any kind or nature, which are paid or
incurred by Lessor relative to the operation, repair, restoration, replacement,
maintenance, and management of the Project, including, without limitation, all
costs and expenses relating to: (i) all personnel involved in the operation,
repair, replacement, maintenance, and management of the Project including wages,
fringe benefits, and other labor payments; (ii) water, sewage disposal,
drainage, refuse collection and disposal, gas, electricity, and other utility
services (excluding those utility costs associated solely with the Premises, for
which Lessee will be responsible, or solely with Building One or Building Three)
and the maintenance of all components, systems, and apparatus by which such
utilities and services are provided; (iii) general maintenance and repair of the
Project, exclusive of the buildings, including, without limitation, driveways,
asphalt, and concrete surfaces, and security services (if any, to be provided at
Lessor's reasonable discretion); (iv) maintenance of landscaping (including
irrigation and sprinkler systems) and replanting; (v) keeping the Parking Area
(defined below) in good condition and free from litter, dirt, debris, and other
obstructions, and keeping all lighting and signage serving the Project in good
condition and fully operating; (vi) any expenses payable by Lessor pursuant to
the provisions of any recorded Covenants, Conditions, and Restrictions or
similar recorded instruments affecting the Project; (vii) all real property or
real estate taxes, assessments, and other impositions, whether general, special,
ordinary, or extraordinary, and of every kind and nature, which may be levied,
assessed, imposed upon or with respect to the Project, or any portion thereof,
by any local, state, or federal entity except to the extent of taxes payable by
Lessee pursuant to the Lease (although if Building Three is constructed on a
separate lot or parcel, it will be separately assessed) ; (viii) any personal
property taxes, assessments, or other impositions levied, assessed, or imposed
upon any personal property of Lessor located at and used in connection with the
Project; (ix) the cost of all casualty, liability, and other insurance required
to be carried by Lessor under the Lease; (x) legal, accounting, inspection, and
consultation fees; and (xi) Permitted Capital Pass-Through Costs (defined
below).
Lessor shall neither duplicate the cost of items included in Operating Expenses,
including, but not limited to, management fees, nor duplicate Operating Expenses
with charges to Lessee elsewhere in this Lease. Notwithstanding any contrary
provision in this Lease, "Operating Expenses" shall not include any of the
following:
(1) costs for which Lessor is entitled to reimbursement by insurance
or condemnation awards;
(2) expenses incurred in connection within leasing or procuring new
tenants or renewing or modifying existing leases with tenants,
including advertising expenses or leasing commissions paid to agents
of Lessor or other brokers;
(3) income, capital stock, estate, inheritance, franchise or other
taxes payable by Lessor;
PAGE 17 Initials _________
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(4) depreciation of the Premises, Building One or Building Three;
(5) interest on debt or amortization payments on any mortgage or deed
of trust;
(6) rental under any prime lease or similar rental under any other
superior lease or sublease, and any late fees, default interest or
similar payments accruing under such lease or sublease;
(7) dividends paid by Lessor;
(8) the portion of the wages, salary or other compensation for any
employee not employed by Lessor full time on behalf of the Project,
to the extent not reasonably allocated by Lessor to the Project and
the wages, salaries or other compensation of any employee above the
grade of Senior Project Manager;
(9) costs which are to be capitalized under GAAP, except for
Permitted Capital Pass-Through Costs (defined below);
(10) accounting fees, expert fees legal fees, court costs, or
disbursements incurred in connection with proceedings of any nature
to assert Lessor's rights under any lease with a tenant in the
Project or to resolve disputes between Lessor and tenants of the
Project as to the interpretation or administration of any lease,
including this Lease, except where incurred predominately for the
benefit of the tenants of the Project, including Lessee;
(11) management or administrative fees other than a management fee, if
any, actually paid by Lessor to a third-party management company
which is not affiliated with Lessor or any of its members and which
is a recognized property management company in San Diego,
California, not to exceed three and one-half percent (3 1/2%) of
Operating Costs (the Parties anticipating that the actual fee paid
will be substantially less than three and one-half percent (3 1/2%)
if Building One is a single tenant building and Lessor agreeing to
use commercially reasonable efforts to obtain the lowest rate
obtainable from such property management company);
(12) the costs for repairs or maintenance that are reimbursed by others,
including, without limitation, reimbursement made on warranty
claims;
(13) any points or fees, including without limitation, late fees, default
interest and other similar payments on loans relating to the
Project;
(14) increases in insurance premiums due to hazardous activities
conducted elsewhere within the Project;
(15) Lessor's cost of any services sold to tenants for which Lessor is
entitled to be reimbursed by such tenants as additional charge above
rent charges;
(16) Lessor's costs of any above building standard janitorial services or
above building standard security services provided to other tenants
of the Project, as well as Lessor's cost of any other above building
standard services (including, without, limitation, above building
standard electrical service) which Lessor provides to other tenants
of the Project.
(17) commissions and other costs and expenses incurred in connection with
negotiations with or sales to purchasers or potential purchasers of
the Project;
(18) costs for art work placed on the Project;
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(19) rentals and other related expenses incurred leasing equipment or
machinery for a period of more than five (5) years and which
equipment or machinery would constitute a capital expenditure if
purchased by Lessor, except for Permitted Capital Pass-Through
Costs;
(20) penalties and fines incurred by Lessor due to violation of any
building code or other law;
(21) tort damages awarded against Lessor;
(22) costs paid to a related entity to the extent that the payment
exceeds that which would have been paid in the absence of such a
relationship;
(23) compensation paid to clerks, attendants or other persons to operate
a commercial concession on the Project and costs incurred in
connection with the operation of any club or other entertainment,
exercise or recreational facility on the Project;
(24) costs of renovating or constructing space for Lessee or other
tenants or renovating space vacated by Lessee or other tenants;
(25) the cost of any Building appraisal, other than an appraisal obtained
in connection with contesting real estate taxes or determining
whether the amount of real estate taxes is fair and reasonable;
(26) costs to remove any Hazardous Substance from the Project or
otherwise xxxxx any Hazardous Substance within, under or on the
Project;
(27) costs incurred as a result of the existence of any Hazardous
Substance in the Project;
(28) expenses in connection with services or other benefits which are not
provided to Lessee, but which are provided solely to other tenants
or occupants of the Project;
(29) any costs related to the design and construction of Building Three,
any costs of repairs to or replacements of the Parking Area (defined
below), or other portions of the Project made necessary by or
increased by the construction of Building Three and any increases in
Lessee's Pro Rata Share of Operating Expenses due to the
construction or presence of Building Three;
(30) any costs of maintenance, repair or replacement of any buildings
in the Project;
(31) during the Original Term, any costs of replacement of the Parking
Area even if same are Permitted Capital Past-Through Costs; and
(32) any costs of janitorial services for any building in the Project.
"Permitted Capital Pass-Through Costs" means: (a) any improvement made to the
Property by Lessor that is required under any governmental law or regulations
which was not promulgated, or which was promulgated but was not applicable to
the Project, on the Commencement Date, amortized using such period and method as
is permitted under generally accepted accounting principles ("GAAP"), or (b) any
labor-saving, cost-saving or energy-saving device or other equipment installed
in the Project (provided that the amount included in Operating Costs in any one
year shall in no event exceed the savings realized in Operating Costs during
such year as a result of the installation and use of the applicable device),
amortized using such period and method as is permitted under GAAP.
51.2 PAYMENT OF OPERATING EXPENSES. Lessor shall maintain the common areas of
the Project in good order and repair and in a manner comparable to that of
similar projects in San Diego, California, and in consideration for same,
starting on the Commencement Date, Lessee shall pay to Lessor, on the first day
PAGE 19 Initials _________
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of each calendar month during the Original Term, as Additional Rent, an amount
("Lessee's Monthly Payment") equal to one-twelfth of Lessee's Pro -Rata Share of
the Operating Expenses for such calendar year, as estimated by Lessor in the
most recently delivered Estimated Statement (defined below). Starting on the
Commencement Date and prior to the commencement of each calendar year during the
Term, Lessor will deliver to Lessee a written statement ("Estimated Statement")
setting forth Lessor's estimate of the Operating Expenses allocable to the
ensuing calendar year and Lessee's Pro Rata Share of such Operating Expenses.
Lessor may, at its option, during any calendar year but not more often than once
per calendar quarter, deliver to Lessee a revised Estimated Statement, in
accordance with Lessor's most current estimate. Within approximately ninety (90)
days after the end of each calendar year during the term of the Lease, Lessor
will deliver to Lessee a written statement ("Actual Statement") setting forth
the actual Operating Expenses allocable to the preceding calendar year. Lessee's
failure to object to Lessor regarding the contents of an Actual Statement, in
writing, within one hundred twenty (120) days after delivery to Lessee of such
Actual Statement, shall constitute Lessee's acceptance and approval of the
Actual Statement. Upon not less than ten (10) days' prior written notice to
Lessor, Lessee shall have the right to audit Lessor's books and records
regarding Operating Expenses (any over or under payments revealed by such audit
being paid or credited as provided below). If the sum of Lessee's Monthly
Payments actually paid by Lessee during any calendar year exceeds Lessee's Pro
Rata Share of the actual Operating Expenses allocable to such calendar year,
then such excess will be credited against the amounts next becoming due under
the Lease, unless such calendar year was the calendar year during which the
Expiration Date occurs (the "Last Calendar Year"), in which event either: (i)
such excess shall be credited against any monetary default of Lessee under this
Lease; or (ii) if Lessee is not in default under this Lease, then Lessor shall
pay to Lessee such excess. If the sum of Lessee's Monthly Payments actually paid
by Lessee during any calendar year is less than Lessee's Pro Rata Share of the
actual Operating Expenses allocable to such calendar year, then Lessee shall,
within thirty (30) days of delivery of the Actual Statement, pay to Lessor the
amount of such deficiency. Lessor's delay in delivering any Estimated Statement
or Actual Statement will not release Lessee of its obligation to pay any
Lessee's Monthly Payment or, provided any such delay is less than 365 days, any
such excess upon receipt of the Estimated Statement or the Actual Statement, as
the case may be. For purposes of this Lease, the term "Lessee's Pro Rata Share"
will mean and refer to the portion of the Operating Expenses payable by Lessee.
Except with regard to real estate taxes and assessments (which shall be
proportioned as provided below), Lessee's Pro Rata Share of Operating Expenses
shall be as follows: (A) unless and until Building Three is constructed,
one-half (1/2) of the Operating Expenses, and (B) after Building Three is
constructed, one-third (1/3) of Operating Expenses.
Notwithstanding anything contained herein to the contrary, unless escrow of same
is required by Lessor's lender, Lessee will not be required to pay monthly any
portion of Operating Expenses for real estate taxes and assessments ("Real
Estate Taxes"). Instead, Lessee's Pro Rata Share of Real Estate Taxes will be
payable not earlier than the later of (i) thirty (30) days following receipt
from Lessor of an invoice together with a copy of the real estate tax xxxx and a
calculation of Lessee's Pro Rata Share, or (ii) twenty (20) days prior to the
date such real estate taxes become delinquent. Lessee's Pro Rata Share of Real
Estate Taxes will be as follows: (Y) unless and until Building Three is
constructed, one-half (1/2) of the Real Estate Taxes applicable to the
improvements located in the Project and one-third (1/3) of the Real Estate Taxes
applicable to the land upon which the Project is situated, and (Z) after
Building Three is constructed, one-third (1/3) of the Real Estate Taxes on the
improvements located in the Project and one-third (1/3) of the Real Estate Taxes
applicable to the land upon which the Project is situated (unless Building Three
is on a separate tax parcel, in which case, Lessee's Pro Rata Share of Real
Estate Taxes will be one-half (1/2) of the Real Estate Taxes for the tax parcel
upon which the Premises are located and one-half (1/2) of the Real Estate Taxes
for the improvements located on such tax parcel).
53. PARKING. During the Original Term of the Lease and the Extension Terms,
Lessor grants to Lessee free of charge (for the benefit of Lessee and Lessee's
invitees) the right to the non-exclusive use, together with Lessor, other
lessees of the Project and their employees and invitees, of any parking area
(including but not limited to any parking garage that may hereafter be
constructed on any portion of the Project) within the boundaries of (such
boundaries of the Project to be those of the entire Project shown on Exhibit
A-1, regardless of whether Building Three or any other portion of the Project is
later divided
PAGE 20 Initials _________
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into a separate tax parcel) and serving the Project ("Parking Area").
Lessee's use of the Parking Area shall be subject to the Rules and
Regulations attached to the Lease as EXHIBIT C and, upon not less than ten
(10) days' prior written notice from Lessor, such other reasonable and
non-discriminatory rules and regulations as Lessor may, in its reasonable
discretion, adopt from time to time with respect to the Parking Area,
including without limitation: rules limiting lessees of the Project
(including, without limitation, Lessee) to the use of, or excluding the use
of, certain parking spaces or certain portions of the Parking Area, in order
to maintain the availability of accessible parking spaces for clients,
guests, and invitees of lessees of the Project. Lessee shall be entitled to
at least as favorable treatment regarding any such parking rules as the most
favorably treated other tenant of the Project. In the event of a conflict
between the Lease and any rules and regulations adopted by Lessor, the Lease
controls. There is presently an electric powered gate at the vehicular
driveway entrance to the Project. Lessee shall have the non-exclusive right,
together with Lessor and other lessees of the Project to control such gate.
Such gate shall remain open Monday through Friday from 7:30 a.m. to 6:30 p.m.
At other times access will be card or code controlled.
54. EXTENSION OPTIONS.
54.1 OPTIONS. Lessee shall have the option to extend the Original Term of the
Lease (individually, "Option" and collectively, "Options") for three (3)
consecutive periods of five (5) years each (individually, "Extension Term" and
collectively, "Extension Terms"), provided Lessee gives Lessor written notice of
its election to exercise the Options at least twelve (12) months prior to the
expiration of the Original Term of the Lease (or the then applicable Extension
Term, to the extent the Original Term has been previously extended pursuant to
the terms of this paragraph). The terms and conditions governing each such
Extension Term will be the same as those for the Original Term, except as set
forth herein. Time is of the essence with respect to each and every term of this
PARAGRAPH 54. Notwithstanding anything contained in the Lease or this Addendum
to the contrary, if Lessee has exercised any right of first refusal for
expansion into any portion of Building One or Building Three prior to the
applicable Extension Term, Lessee may exercise the corresponding Option for
either the Premises alone or for the Premises together with the Expansion Space
(defined below) in Building One, the Expansion Space in Building Three, or both.
54.2 EXERCISE OF OPTIONS. The Options herein granted to Lessee may be assigned
with any permitted assignment of the Lease. Lessee shall not have the right to
exercise the Options, notwithstanding anything set forth above to the contrary,
during any period of time commencing from the date Lessor gives to Lessee a
written notice that Lessee is in material default under any provision of the
Lease, and continuing until the default alleged in said notice is cured. The
period of time within which the Options may be exercised shall not be extended
or enlarged by reason of Lessee's inability to exercise the Options because of
the foregoing provisions of this PARAGRAPH 54, even if the effect thereof is to
eliminate Lessee's right to exercise the Options. All rights with respect to the
Options shall terminate and be of no further force or effect, even after
Lessee's due and timely exercise of the Options, if, after such exercise, but
prior to the commencement of the applicable Extension Term, Lessee is in
material default under any provision of the Lease beyond applicable cure
periods. The Base Rent for each Extension Term shall be as set forth in
PARAGRAPH 50 above.
55. FINDER'S FEE. Notwithstanding any provision of the Lease to the contrary,
Acree, Weinman, Inc. (the Broker identified in the Lease) shall be entitled to
receive a brokerage commission, which commission shall be paid pursuant to a
separate written agreement, and Xxxxx Xxxxxx shall be entitled to receive a
finder's fee from Lessor for his work on behalf of Lessor in connection with the
Lease and pursuant to PARAGRAPHS 58 AND 59 below, which fee shall be paid
pursuant to a separate agreement.
56. PROJECT AND SURROUNDING PROJECT EXPANSION/MODIFICATION.
56.1 FURTHER CONSTRUCTION. Lessee acknowledges that Lessor may construct or
permit a third party to construct a parking garage to serve the entire Project
and Building Three. Lessee acknowledges that any such construction work will
necessarily involve, among other things, the generation of noise, dust, and
PAGE 21 Initials _________
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vibrations, barricading portions of the Project and the placement of scaffolding
within the Project, demolition, structural alterations, storage of materials and
equipment within the Project, and the presence of workmen within the Project,
all of which may require the rearrangement of parking areas, roadways, lighting
facilities, and the redirection of vehicular and pedestrian traffic. Lessor
covenants to maintain at all times reasonable access to the Premises and the
Parking Area, to use its best efforts to minimize interference with Lessee's
business in the Premises, not to cause or permit interruption of utilities to
the Premises and to include the foregoing covenants as obligations of any third
party (including, without limitation, any contractor) authorized to construct
Building Three. Lessor's Contractor shall coordinate the construction activities
for Building Three with any construction schedule for any Alterations being
performed by or on behalf of Lessee. Lessor further agrees to indemnify, defend
and hold harmless Lessee from all losses, liabilities, actions, damages, costs
and expenses claimed, asserted, or arising in connection with the construction
of Building Three. Lessor will not construct or permit to be constructed on the
Project any buildings or other structures, except for a parking garage to serve
the entire Project and Building Three, which parking garage will be constructed
on the common areas of the Project in an area reasonably approved by Lessee, and
which Building Three will be constructed only in the area shown on EXHIBIT
"A-1". If Lessor constructs Building Three and such parking garage, the parking
garage will be constructed first.
56.2 RIGHT OF ABATEMENT. Notwithstanding anything to the contrary contained in
PARAGRAPH 56.1, in the event any Construction Work undertaken by Lessor or any
third party (including, without limitation, any contractor) authorized to
construct such parking garage and/or Building Three, materially interferes with
the operation of Lessee's business within the Premises, Lessee's Base Rent will
be abated two (2) days for each day of such material interference.
57. CONDITION OF THE PREMISES. Lessee is accepting the Premises in the
condition described in Xxxxxxxx Xx. 0, XXXXXXXXX 64. Should Lessee desire to
make additional improvements to the Premises in the future, such Lessee Work
shall be constructed in accordance with the procedures outlined in Addendum
No. 2.
58. RIGHT OF FIRST OFFER TO LEASE. During the Original Term, and any
Extension Term, Lessor grants to Lessee a continuing right of first offer to
lease (the "Expansion Right") any portion of Building One. When Lessor
desires to offer to lease all or any portion of Building One (the "Expansion
Space") to third parties, Lessor shall deliver written notice (the "Offer
Notice") to Lessee setting forth the terms upon which Lessor will offer to
lease the Expansion Space to third parties and offering to lease, the
Expansion Space to Lessee upon such terms. Once Lessor has sent the Offer
Notice, if Lessee elects to exercise said Expansion Right in accordance with
the terms of the Offer Notice, Lessee shall do so by giving Lessor written
notice of such election within ten (10) days after receiving the Offer
Notice. In the event Lessee rejects the Expansion Space Offer or fails to
respond to the Offer Notice within said ten (10) day period, Lessor may,
within six (6) months following the date of the Offer Notice, lease the
Expansion Space to third parties on "Substantially the Same Terms and
Conditions" (defined below) as are set forth in the Offer Notice. As used in
this PARAGRAPH 58, "Substantially the Same Terms and Conditions" means that
(a) the rent under the third party lease is not less than ninety-five percent
(95%) of that set forth in the Offer Notice, (b) the lease terms are no more
favorable than set forth in the Offer Notice, (c) the duration and
construction allowance are the same as in the Offer Notice, (c) the third
party lease does not provide the third party Lessee financing of any costs
except to the extent set forth in the Offer Notice, and (e) the commencement
of the third party lease is within six (6) months of the Offer Notice. If the
third party lease is not on Substantially the Same Terms and Conditions as
the Offer, Lessor must again provide Lessee a Refusal Right Notice in
accordance with this PARAGRAPH 58. Notwithstanding anything contained therein
to the contrary, the duration (including any renewal options) of any lease
entered into with such third party will not exceed fifteen (15) years. If
Lessee leases the Expansion Space, the lease of the Expansion Space shall be
upon the same terms and conditions as the Lease, as modified by the
provisions of the Offer Notice. Further, in addition to and separate and
distinct from the foregoing right of first offer regarding Building One,
Lessor hereby grants to Lessee a continuing right of first offer to lease any
portion Building Three (if constructed) on the same terms and conditions as
the foregoing right of first offer regarding Building One. The Broker
identified in the Lease shall be entitled to receive a brokerage
PAGE 22 Initials _________
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commission and Xxxxx Xxxxxx shall be entitled to receive a finder's fee in
connection with the proper exercise by Lessee of its Expansion Right (and/or
similar rights regarding Building Three) under this PARAGRAPH 58, which
payments shall be the subject of separate written agreements. If, during the
Original Term or any Extension Term, Lessee is in material monetary Breach of
the Lease (beyond applicable cure periods), the Expansion Right will
terminate. Notwithstanding the foregoing to the contrary, if prior to such
material monetary Breach (beyond applicable cure periods) Lessee has
purchased any building in the Project, such Expansion Right will not
terminate, but will remain in effect despite such Breach.
59. RIGHT OF FIRS OFFER TO PURCHASE. During the Original Term, and any Extension
Term, Lessor grants Lessee a continuing right of first offer to purchase (the
"Purchase Right"): (i) the Premises and Building One (together with an allocable
portion of the Common Areas of the Project) and/or (ii) Building Three (but only
after such time as Building Three has been constructed) (together with an
allocable portion of the Common Areas of the Project); and/or (iii) the Project.
When Lessor desires to offer to sell any of the Premises and Building One,
Building Three or the Project to third parties, Lessor shall deliver written
notice (the "Purchase Right Notice") to Lessee setting forth the terms upon
which Lessor will offer to sell the applicable building, buildings or Project
and offering to sell the same to Lessee upon such terms. Once Lessor has sent
the Purchase Right Notice, if Lessee elects to exercise said Purchase Right in
accordance with the terms of the Purchase Offer, Lessee shall do so by giving
Lessor written notice of such election within ten (10) days after receiving the
Purchase Notice. In the event Lessee rejects the Purchase Offer or fails to
respond to the Purchase Notice within said ten (10) business day period, Lessor
may sell the applicable building or buildings or Project to third parties on
Substantially the Same Terms and Conditions (defined below) as are set forth in
the Purchase Right Notice. As used in this PARAGRAPH 59, "Substantially the Same
Terms and Conditions" means that (a) the sales price is not less than
ninety-five percent (95%) of that set forth in the Offer Notice, (b) the
contract terms are no more favorable than set forth in the Offer Notice, (c) the
inspection period, title review period and closing date are the same as in the
Offer Notice, (d) the third party contract does not provide the third party
purchase financing of any costs except to the extent set forth in the Offer
Notice, and (e) the closing date is within six (6) months of the Offer Notice.
If the third party sale is not on Substantially the Same Terms and Conditions as
the Purchase Right Notice, Lessor must again provide Lessee a Purchase Right
Notice in accordance with this PARAGRAPH 59. Notwithstanding anything contained
herein to the contrary, any sale to such third party will be subject to the
Lease. The Broker identified in the Lease shall be entitled to receive
a-brokerage commission and Xxxxx Xxxxxx shall be entitled to receive a finder's
fee in connection with the proper exercise by Lessee of its Purchase Right under
this PARAGRAPH 59, which payments shall be the subject of separate written
agreements. If, during the Original Term or any Extension Term, Lessee is in
material monetary Breach of the Lease (beyond applicable cure periods), the
Purchase Right will terminate. Notwithstanding the foregoing to the contrary, if
prior to such material monetary Breach (beyond applicable cure periods) Lessee
has purchased any building in the Project, such Purchase Right will not
terminate, but will remain in effect despite such Breach. Lessor covenants that
it will not divide the Premises and Building One into separate parcels and that
it will not sell either the Premises or Building One without the other.
60. LESSEE'S FINANCIAL INFORMATION. Not more often than one (1) time per Lease
Year and not more than ten (10) times during the Original Term and all Extension
Terms combined, Lessee shall provide Lessor with reasonable evidence (such
evidence to be in the form generally provided by Lessee to its landlords and
lenders) of Lessee's financial condition within ten (10) days following Lessor's
written request therefor.
61. ADDITIONAL DOCUMENTS. Simultaneously with the execution of the Lease,
Lessor and Lessee (as applicable) will execute the following:
(a) Easement Agreement regarding the Project (the "Easement Agreement")
in the form attached hereto as EXHIBIT D, which Easement Agreement
Lessor will promptly record against the Project at Lessor's sole
cost.
PAGE 23 Initials _________
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(b) Memorandum of Lease (the "Memorandum of Lease") in the form attached
hereto as EXHIBIT F, which Memorandum of Lease Lessor will promptly
record against the Project at Lessor's sole cost.
(c) Memorandum of First Offer (the "Memorandum of First Offer") in the
form of EXHIBIT F, which Memorandum of First Offer Lessor will
promptly record against the Project at Lessor's sole cost.
(d) Agreement Regarding Memorandum of First Offer (the "Agreement
Regarding Memorandum of First Offer") in the form attached hereto as
EXHIBIT G, which Agreement Regarding Memorandum of First Offer will
be held in escrow by Xxxxxxx Title Company of San Diego.
62. HOT WATER. Lessee's Pro Rata Share of the cost of the hot water to Lessee
and other lessees of the Project shall be one-half (1/2). If Building Three is
constructed, hot water for Building Three will not be supplied by the same
centrally located plant that supplies the Premises and Building One. Building
Three, if constructed, will have a separate hot water supply source.
63. LEASES OF BUILDING ONE AND BUILDING THREE. Lessor will not enter into any
lease for a term (including all extension options) in excess of fifteen (15)
years with a third party for all or any portion of Building One or Building
Three without first obtaining Lessee's prior written consent, which consent will
not be unreasonably withheld.
LESSOR: LESSEE:
XXXXX CANYON PROPERTIES, LLC, PETCO ANIMAL SUPPLIES, INC.,
a California limited liability company a Delaware corporation
By: /s/ XXXXX X. XXXXX
By: /s/ XXXXXXX X. XXXXX --------------------------------
----------------------------------------------- Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, as Trustee of the Executive Vice President and
Xxxxxxx X. and Xxxxxx X. Xxxxx Family Trust, Chief Financial Officer
Manager
By: /s/ XXXX X. XXXXXX
By: /s/ XXXXX XXXXXX --------------------------------
----------------------------------------------- Xxxx X. Xxxxxx
Xxxxx Xxxxxx Vice President - Real Estate
Manager
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ADDENDUM NO. 2 TO STANDARD LEASE
This Addendum No. 2 modifies and supplements that certain Standard Lease
dated February ____, 2001 ("Lease"), between Xxxxx Canyon Properties, LLC
("Lessor") and Petco Animal Supplies, Inc. ("Lessee"). All capitalized terms
used herein, which are not otherwise defined, shall have the meanings
ascribed to them in the Lease. In the event of a conflict between this
Addendum No. 2 and the Lease, the provisions of this Addendum No. 2 shall
control.
GENERAL PROVISION. LESSOR SHALL PROVIDE A MUTUALLY AGREED UPON STANDARD FINISH
FOR THE PREMISES AND SHALL PROVIDE A LESSEE IMPROVEMENT ALLOWANCE (DEFINED
BELOW) FOR THE COST OF THE LESSEE IMPROVEMENTS TO BE CONSTRUCTED BY LESSOR,
SUBJECT TO THE TERMS AND CONDITIONS AS MORE COMPLETELY DESCRIBED HEREIN.
64. LESSOR'S WORK. Following execution of the Lease by Lessor and Lessee, Lessor
shall reinstall the building core of the Premises to a mutually agreed upon
condition in compliance with the mutually agreed upon plans, specifications and
working drawings and the attached SCHEDULE 1 to this Addendum No. 2 (the "Core
Contract"). The portion of Lessor's Work included in the Core Contract will be
at Lessor's sole cost. The Core Contract will include completion of the
bathrooms in the Premises to mutually agreed upon building standard condition in
compliance with the mutually agreed upon plans, specifications and working
drawings and any modifications to the Premises necessary to cause the Premises
to comply with applicable laws, including, without limitation, fire rated doors
on all exit corridors and the requirements of the Americans With Disabilities
Act and any similar state laws. Any work of a curative nature necessary to cause
the Premises to comply with applicable laws will be performed as a part of
Lessor's Work under the Core Contract, at Lessor's sole cost. The Core Contract
will also include: (a) securing the easterly boundary of the Project from
adjacent property in an appropriate locked manner, and (b) sealing and
restriping the Project's Parking Area. The second of such contracts (the "Lessee
Improvements Contract") shall be for the construction of improvements to the
Premises as specified in the plans and specifications originally prepared by
Lessor for completion of the finishes and other interior improvements to the
Premises (the "Original Plans"), as modified by Lessee and approved by Lessor in
accordance with this PARAGRAPH 64 (the "Lessee Improvements"). All of the work
described in this PARAGRAPH 64 is collectively, "Lessor's Work". Lessor's Work
shall be promptly completed by Lessor in a good and workmanlike manner, and in
accordance with working drawings, plans, and specifications for the Premises
mutually agreed upon by Lessor and Lessee. Lessee will review and submit
required changes to the Original Plans to Lessor as soon as reasonably possible.
Lessor will then have ten (10) days to approve (such approval not to be
unreasonably withheld) or to provide Lessee with written objections to such
changes (such process to repeat until the plans, specifications and working
drawings are mutually agreed upon by Lessor and Lessee). Thereafter, such
mutually approved plans, specifications and working drawings will be attached
hereto and made a part of the Lease. As part of Lessor's Work, Lessor will
provide electricity to the Premises. Lessee will have the right to use the
existing electrical panels and electrical wiring for the Premises without Lessor
charging any costs therefor against the Lessee Improvement Allowance. Lessor
represents and warrants to Lessee that such existing electrical panels and
wiring comply with applicable codes. In addition, as part of the Lessee
Improvements, Lessee will have the right to install card or code access readers
at any exterior entrances to the Premises it so desires. Lessee will be entitled
to the maximum signage on the exterior facade of the Premises as is allowed by
applicable law (including any variance obtained by Lessee), and Lessee shall be
entitled to the top one-half (1/2) of the monument sign located at the Project,
Lessee's sign panel installation to be included in Lessor's Work, and both the
cost of the panel and the installation thereof to be charged against the Lessee
Improvement Allowance. Lessee shall not be liable for any loss, cost, damage, or
expense incurred or claimed by Lessor or any other person or party on account of
the construction or installation of Lessor's Work. Lessor agrees to obtain, at
Lessor's cost, any necessary consents of third parties for all of the
above-described signage, including, without limitation, approvals required
pursuant to that certain Declaration of Covenants, Conditions and Restrictions
dated December 24, 1986, and recorded February 4, 1987, as File No. 87-063214 of
the Official Records of San Diego County, California (the "CC&Rs"). Lessor
represents and warrants to Lessee based on Lessor's due diligence and proper
investigation that the "approving agent" (defined in the CC&Rs) does not exist
and that no approvals of the existing Premises or of Lessor's Work are required.
Lessor hereby agrees to indemnify, hold harmless and defend Lessee from and
against all
PAGE 25
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claims (including consequential damages) arising out of the failure of the
existing Premises or Lessor's Work to comply with the CC&Rs. Lessee will have
the right to offset against Base Rent and other charges due under this Lease
any costs it incurs due to any such failure and/or the breach of such
representation. Lessor hereby acknowledges and agrees that the compliance of
Lessor's Work and the plans, specifications and working drawings therefor,
with all applicable governmental laws, codes and regulations shall be solely
Lessor's responsibility. Lessee assumes no liability or responsibility
resulting from the failure of Lessor to comply with all applicable
governmental laws, codes and regulations or for any defect in any of Lessor's
Work. Lessor further agrees to indemnify, defend and hold harmless Lessee
from all losses, liabilities, actions, damages, costs and expenses claimed,
asserted or arising in connection with any of the foregoing. Lessor shall
submit to at least three (3) mutually approved general contractors for bid
the working drawings, plans and specifications for the Lessee Improvements.
In addition to the general contractor, Lessee will also have approval rights
over the mechanical, electrical and plumbing contractors selected. Both
Lessor and Lessee shall be provided a copy of each bid. Selection of the
general contractor to be used to perform the Lessee Improvements will be made
by Lessor with the approval of Lessee, which approval will not be
unreasonably withheld. Thereafter, Lessor will enter into the Lessee
Improvements Contract for construction of the Lessee Improvements, and Lessor
shall provide Lessee with a copy of said contract for review and approval,
such approval not to be unreasonably withheld. Lessor agrees to use all
commercially reasonable efforts to obtain the best possible prices for labor
and materials to be used in the construction of the Lessee Improvements. The
Lessee Improvements Contract shall require the general contractor to comply
with Lessor's construction rules and regulations set forth in PARAGRAPHS
70.1-70.9 below (adjusted as applicable to apply to such general contractor).
Lessor agrees to obtain any necessary consents under the CC&Rs. Lessor and
such general contractor are responsible for compliance with all applicable
codes and regulations of duly constituted authorities having jurisdiction as
far as the performance of Lessor's Work is concerned, for compliance with the
CC&Rs and for compliance with all applicable safety regulations, OSHA or
other regulatory agencies, and Lessor further agrees to indemnify and hold
Lessee harmless for Lessor's actions arising from Lessor's Work. Lessor
agrees that upon Lessee's written request, Lessor will enforce all warranty
claims under the Core Contract and the Lessee Improvements Contract. If
Lessor fails to enforce same within thirty (30) days of Lessee's written
request, Lessee may enforce same at Lessor's cost, which if not paid to
Lessee within ten (10) days of invoice Lessee may offset against Base Rent
and other charges next becoming due under this Lease until fully reimbursed.
65. LESSEE IMPROVEMENT ALLOWANCE. Lessor shall be responsible for bearing all
costs and expenses of completing the Lessee Improvements up to a maximum of
$15.00 per rentable square foot of the Premises ($645,000.00) ("Lessee
Improvement Allowance"). All costs and expenses of the Lessee Improvements in
excess of the Lessee Improvement Allowance (the "Excess") shall be payable by
Lessee to Lessor upon ten (10) days' written notice from Lessor, accompanied by
reasonable documentation evidencing the Excess. Upon completion of Lessor's
Work, Lessee shall have the right to audit Lessor's books and records with
regard thereto, and if such audit reveals an overpayment of the actual Excess
(based upon actual invoices and paid receipts), any such overage will be
credited against amounts next becoming due under the Lease. The Lessee
Improvements Contract shall contain cost savings provisions whereby any savings
in the cost of Lessee's Improvements below $15.00 per rentable square foot are
shared forty percent (40%) by the contractor and sixty percent (60%) by Lessor
("Lessor's Portion"). Lessor and Lessee agree to share Lessor's Portion of such
savings as follows: for Lessor's Portion of savings up to One and 50/100 Dollars
($1.50) per rentable square foot of the Premises, Lessor will pay to Lessee on
the Commencement Date seventy-five percent (75%) of such Lessor's Portion, and
for Lessor's Portion of savings in excess of One and 50/100 Dollars ($1.50) per
rentable square foot, Lessor will pay to Lessee on or before the Commencement
Date fifty percent (50%) of such savings. Notwithstanding the foregoing to the
contrary, solely for the purpose of calculating the cost savings described
above, change orders during construction will be excluded on both the cost side
and the savings side.
66. CONDITION OF PREMISES FOLLOWING COMPLETION OF LESSOR'S WORK. The Premises
shall be delivered to Lessee with Lessor's Work substantially completed. Lessor
shall provide Lessee at least ten (10) days' prior written notice (the "Notice
of Substantial Completion") of the date upon which "Substantial
PAGE 26 Initials _________
FORM STN-6-2/97
Completion" (defined below) will occur. Thereafter, Lessor will promptly
complete all portions of Lessor's Work. Subject to the abatement described in
PARAGRAPH 50, Base Rent will commence on the later of the date Lessor's Work
is Substantially Complete or the date that is ten (10) days following
Lessee's receipt of the Notice of Substantial, Completion (the "Rent
Commencement Date"). "Substantial Completion" or "Substantially Complete"
means (i) that the Lessor's Work has been performed in the Premises in
substantial accordance with the plans, specifications and working drawings,
(ii) all construction debris has been removed from the Premises and the
Premises are clean, and (iii) the Premises may reasonably be used and
occupied by Lessee in accordance with PARAGRAPH 1.8 of the Lease.
67. ESTIMATED COMPLETION DATE. Lessor shall use its best efforts to cause the
Lessor's Work to be substantially completed by June 1, 2001 following mutual
execution of the Lease, subject to delays from causes beyond the reasonable
control of Lessor, including, without limitation, acts of God, strikes, work
stoppages, unavailability of or delay in receiving permits, labor or materials,
defaults by contractors or subcontractors, weather conditions, fire or other
casualty, or action of governmental authorities ("Force Majeure Events").
68. EFFECT OF DELAY ON TEASE TERM. In the event the Lessor's Work is not
substantially completed by July 1, 2001, the provisions of PARAGRAPH 3.3 of
the Lease shall apply.
69. ALTERATIONS. If Lessee desires to alter or perform additional construction
work in the Premises (the "Alterations"), the cost of which exceeds $50,000.00
in any Lease Year, Lessee shall cause detailed plans and specifications (the
"Lessee Plans") to be prepared and delivered to Lessor, which Lessee Plans shall
reflect the proposed Alterations (unless the Alterations are limited to floor
and wall coverings in which case detailed plans and specifications are not
required). Further, any modifications to the exterior of the Premises shall be
subject to Lessor's prior approval, which approval will not be unreasonably
withheld. No romex wiring shall be allowed, nor shall water lines be placed in
slabs, unless approved by Lessor prior to installation. Any equipment placed
upon the roof as a result of the Alterations, and any roof penetrations, shall
be approved by Lessor (such approval not to be unreasonably withheld) prior to
the commencement of the Alterations. Lessor shall, within ten (10) days
following its receipt of the Lessee Plans, either approve (such approval not to
be unreasonably withheld) such Lessee Plans or provide Lessee with written
objections to the Lessee Plans (such process to repeat until the Lessee Plans
are approved). No Alterations shall be undertaken by Lessee until the Lessee
Plans have been approved by Lessor (such approval not to be unreasonably
withheld). Performance by Lessee of the Alterations shall conform to the
approved Lessee Plans, and any material deviation will require Lessor's prior
approval (such approval not to be unreasonably withheld). Lessee shall cause the
Alterations to be completed in accordance with sound construction practices and
in a manner consistent with this Addendum No. 2.
70. CONSTRUCTION OF THE ALTERATIONS BY LESSEE'S CONTRACTOR. In the event of
Alterations that require Lessor's approval, after the Lessee Plans for the
Alterations have been approved by Lessor, Lessee shall submit to Lessor the
name, address, license number and evidence of insurance of Lessee's proposed
contractor ("Lessee's Contractor") for Lessor's review and approval (such
approval not to be unreasonably withheld). If Lessor deems, in its reasonable
discretion, that Lessee's proposed Contractor is unacceptable, Lessee shall
resubmit information on a replacement contractor until a mutually approved
Contractor is selected. Upon said selection, Lessee shall enter into a
construction contract with the Contractor which shall include a provision for
compliance with the construction rules and regulations set forth in Paragraphs
70.1-70.9 below, and Lessee shall provide Lessor with a copy of said contract.
In no event shall Lessee be permitted to commence the Alterations without first
providing Lessor with the above-listed information relating to the Alterations.
Lessor shall have the right to post a notice of non-responsibility at a
prominent location within the Premises prior to the commencement of any
Alterations. All costs and expenses arising from the Alterations or any part
thereof shall be the sole and exclusive responsibility of Lessee to pay in a
prompt and timely fashion as such costs become due.
70.1 Lessee's Contractor shall perform the Alterations in a manner and at
times which do not impede or delay of any work by Lessor in the Project.
PAGE 27 Initials _________
FORM STN-6-2/97
70.2 Lessee's Contractor shall be responsible for the repair, replacement,
or clean-up of any damage caused in the Premises or the Project. Firelanes and
sidewalks may not be blocked or obstructed at any time.
70.3 Lessee's Contractor shall contain its storage of materials and its
operations within the Premises and such other space as he may be assigned by
Lessor. Should Lessee's Contractor be assigned space outside of the Premises,
Lessee's Contractor shall move to such other space as Lessor shall direct from
time to time to avoid interference or delays with other work. Lessee's
Contractor shall. park construction vehicles in areas designated by Lessor.
70.4 All trash and surplus construction materials shall be stored within
the Premises and shall be promptly removed from the Premises. Lessee's
Contractor shall not use common area trash enclosures or waste bins for disposal
of trash or surplus construction material.
70.5 Noise emanating outside the Premises shall be kept to a minimum at
all times, and Lessee's Contractor shall not be permitted to interfere with the
conduct of other lessees' business or the performance of any work by another
lessee, or the general operation of the Project. Lessee's Contractor shall
coordinate the Alterations with any construction schedule for any work being
performed by or on behalf of Lessor or any other lessee, and that the
performance of the Alterations shall not interfere with Lessor's or any other
lessee's construction activities. If there be such interference or conflict,
notice thereof shall be given by Lessor to Lessee, and immediately after receipt
of such notice Lessee agrees to cease or cause to be terminated such
interference or conflict. Lessee further covenants and agrees that Lessee and
Lessee's Contractor shall comply with all reasonable directives of Lessor
governing permissible hours for construction. Lessee's Contractor shall notify
Lessor or Lessor's project manager of any planned work to be done on weekends or
other than normal job hours.
70.6 Lessee and Lessee's Contractor are responsible for compliance with
all applicable codes and regulations of duly constituted authorities having
jurisdiction as far as the performance of the Alterations is concerned and for
all applicable safety regulations established by Lessor, OSHA, or other
regulatory agencies, and Lessee further agrees to indemnify and hold Lessor
harmless for Lessee's actions arising from the Alterations. Prior to
commencement of construction, Lessee shall submit to Lessor evidence of
insurance as required by the Lease and evidence of insurance for Lessee's
Contractor.
70.7 Lessee's Contractor shall not post signs on any part of the Project
or on the Premises without Lessor's prior written approval.
70.8 Lessee shall be responsible for and shall obtain and record a Notice
of Completion promptly following completion of the Lessee's Work.
70.9 All required permits and approvals, including, without limitation,
Planning, Building, Fire, and Health department permits, must be obtained and
all necessary calculations, including, without limitation, those required under
Title 24, must be submitted to the local governing agencies for all Alterations.
71. NO LESSOR LIABILITY. Lessor shall not be liable for any loss, cost, damage,
or expense incurred or claimed by Lessee or any other person or party on account
of the construction or installation of the Alterations. Lessee hereby
acknowledges and agrees that the compliance of the Alterations and Lessee's
Plans, with all applicable governmental laws, codes, and regulations shall be
solely Lessee's responsibility. Lessor assumes no liability or responsibility
resulting from the failure of the Lessee to comply with all applicable
governmental laws, codes and regulations or for any defect in any of the
Alterations. Lessee further agrees to indemnify, defend, and hold harmless
Lessor from all losses, liabilities, actions, damages, costs and expenses
claimed, asserted, or arising in connection with any of the foregoing.
PAGE 28 Initials _________
FORM STN-6-2/97
LESSOR: LESSEE:
XXXXX CANYON PROPERTIES, LLC, PETCO ANIMAL SUPPLIES, INC.,
a California limited liability company a Delaware corporation
By: /s/ XXXXX X. XXXXX
By: /s/ XXXXXXX X. XXXXX -----------------------------
--------------------------------------------- Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, as Trustee of the Executive Vice President and
Xxxxxxx X. and Xxxxxx X. Xxxxx Family Trust, Chief Financial Officer
Manager
By: /s/ XXXX X. XXXXXX
By: /s/ XXXXX XXXXXX -----------------------------
--------------------------------------------- Xxxx X. Xxxxxx
Xxxxx Xxxxxx Vice President - Real Estate
Manager
PAGE 29 Initials _________
FORM STN-6-2/97
