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In consideration of the rent and other charges to be paid by Tenant, and of the
other covenants and agreements hereinafter set forth to be kept and performed by
Tenant, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Leased Premises (as hereinafter defined) on the terms and conditions stated
in this Lease.
1. BASIC LEASE PROVISIONS AND DEFINITIONS
1.1 LANDLORD: XXXXXX MAJOR XXXXX and XXXXX X. XXXXX
LANDLORD'S ADDRESS: WITH A COPY TO:
c/o Major's Sports Center Xxxxxx X. Xxxxxxxx
307 Q Street Muhlheim Xxxxxx Xxxxxxxx & Xxxx
Xxxxxxxxxxx, Xxxxxx 00000 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Fax: 000-000-0000 Xxxxxx, Xxxxxx 00000
Fax: 000-000-0000
1.2 TENANT: MONACO COACH CORPORATION, a Delaware corporation
TENANT'S ADDRESS: WITH A COPY TO:
Legal Department Xxxxxxxx X. Xxxxxxx
Attn: Xxxxxxx X. Xxxx Xxxxxxx Xxxxxxxxxx Xxxxxx
0000 X. Xxxxxxxxx Xxxxxx Xxxxxx Xxxxx & Xxxxx LLP
XX Xxx 000 XX Xxx 0000
Xxxxxxxx, XX 00000 Xxxxxx, Xxxxxx 00000-0000
Fax: 000-000-0000 Fax: 000-000-0000
1.3 LEASED PREMISES. The real property located at 0000 Xxxx Xxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxx, more particularly described on Exhibit A attached
hereto and incorporated herein by this reference. The Leased Premises
include land ("Land"), a building containing approximately 100,000
square feet of manufacturing space and approximately 3,700 square feet
of office space ("Building"), and all other improvements and
appurtenances to the real property described on Exhibit A. The Leased
Premises shall include all Tenant Improvements, as defined in
Section 1.10 and the fixtures and personal property described on
Exhibit B.
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1.4 COMMENCEMENT DATE. April 1, 1997, provided that all of the following
have occurred (or have been waived by Tenant):
1.4.1 Landlord's general site cleanup of the Leased Premises, at
Landlord's sole cost and expense, has been completed. This
shall mean that the interior of the Leased Premises has been
cleaned to a broom clean standard and all personal property
that is not a part of the Leased Premises, all debris and
all other extraneous matter shall be removed from the
exterior of the Leased Premises. If the site cleanup has
not been completed on or before April 1, 1997, the Tenant
may complete the cleanup and offset Tenant's actual and
reasonable costs of cleanup against the rent reserved
hereunder.
1.4.2 Tenant has obtained, with the reasonable cooperation of
Landlord but otherwise at Tenant's sole cost and expense and
utilizing Tenant's best efforts, all necessary governmental
permits and approvals in connection with its use of the
Leased Premises under the Lease, including but not limited
to an air operating permit and any necessary building permit
or similar permits in connection with the construction and
installation of the Tenant Improvements described in
Exhibit C. If Tenant has not obtained the permits and
approvals on or before April 1, 1997, then Tenant may elect
to terminate this Lease as of April 1, 1997.
1.4.3 Landlord has obtained, at Landlord's sole cost and expense,
and Tenant has approved, a written report of a "phase one"
or "level one" environmental study of the Leased Premises,
conforming to standards established by the American Society
for Testing and Materials (ASTM E-1527-94), performed by a
certified consultant chosen by Landlord and reasonably
approved by Tenant, showing that there are no Hazardous
Materials (as that term is defined in Section 7.2.3) or
other environmental conditions at or affecting the Leased
Premises that Tenant (as a tenant or purchaser of the Leased
Premises) could be required to remove, xxxxx, clean up or
otherwise remediate pursuant to applicable environmental
laws (including but not limited to the laws referred to in
Section 7.2.3). If Landlord has not obtained and Tenant has
not approved the report on or before April 1, 1997, then
Tenant may elect to terminate this Lease as of April 1,
1997.
1.4.4 Landlord has obtained, at Landlord's sole cost and expense,
nondisturbance agreements, in form and substance reasonably
satisfactory to Tenant, from persons holding liens or other
security interests in all or any part of the Leased
Premises, providing for Tenant's continued occupancy of the
Leased Premises and continued entitlement to exercise all of
Tenant's rights and remedies under the Lease, including but
not limited to rights under Sections 2.3 and 32, undisturbed
and without regard to any foreclosure or other exercise of a
right
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or remedy of the lien or security interest holder, for so
long as there is no uncured Event of Default under this
Lease. If Landlord has not obtained such agreements on or
before April 1, 1997, then Tenant may elect to terminate
this Lease as of April 1, 1997.
1.5 TERMINATION DATE. The ending date of the Lease term, which shall be
six (6) years from the Commencement Date, unless earlier terminated or
extended in accordance with other provisions of this Lease.
1.6 MONTHLY BASIC RENT. Twenty-Three Thousand and no/ 100 Dollars
($23,000.00) per month for the first 36 months (April 1, 1997 through
March 31, 2000) and Twenty-Six Thousand Five Hundred and no/ 100
Dollars ($26,500.00) for the next 36 months (April 1, 2000 through
March 31, 2003). In addition, in exchange for Tenant's agreement
hereunder to make any repairs and maintenance of the parking areas and
roadway on the Leased Premises that Tenant deems necessary or
appropriate (pursuant to Section 8.2), Tenant shall be entitled to a
credit in an amount equal to, and shall not make, the payment of
Monthly Basic Rent for the 36th month.
1.7 RENT COMMENCEMENT DATE. April 1, 1997.
1.8 PERMITTED USE. The manufacture of recreational vehicles (including
but not limited to motor homes, travel trailers and fifth wheel
trailers), utility trailers and commercial delivery vehicles, related
component manufacture, and processes or methods or subassembly
operations related thereto, and any other similar manufacture,
component or subassembly operations, together with distribution and
sale activities related thereto and office uses related thereto.
1.9 LANDLORD IMPROVEMENTS. The Building and all other improvements to the
Leased Premises installed prior to the Commencement Date, other than
Tenant Improvements.
1.10 TENANT IMPROVEMENTS. Improvements to or alterations of the Leased
Premises described in Exhibit C to be installed or made pursuant to
Section 6 of this Lease at Tenant's expense, and any other
improvements to or alterations of the Leased Premises installed or
made pursuant to Section 6.
1.11 LEASE YEAR. A period of 12 consecutive months, the first such period
commencing on the Commencement Date and subsequent periods beginning
on each consecutive anniversary thereof.
1.12 EXHIBITS. The following Exhibits are attached to this Lease and are
incorporated herein by this reference:
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EXHIBIT A: Legal Description of Leased Premises (Real
Property)
EXHIBIT B: List of Fixtures and Personal Property
Included in Leased Premises
EXHIBIT C: Description of Certain Tenant Improvements
EXHIBIT D: Site Drawing
2. TERM
2.1 COMMENCEMENT DATE. The term of this Lease shall begin on the
Commencement Date (as defined in Section 1.4).
2.2 TERMINATION DATE. The term of this Lease shall end on the Termination
Date (as specified in Section 1.5) unless Tenant exercises one or more
of the options to extend the Termination Date pursuant to Section 2.3.
2.3 EXTENSION OPTION. Tenant shall have two (2) options (each, an
"Extension Option") to extend the Termination Date with respect to
all, but not less than all, of the Leased Premises for successive
periods of two (2) years each, by giving Landlord written notice of
Tenant's intent to exercise its Extension Option at least one hundred
twenty (120) days prior to the Termination Date (with respect to the
Second Extension Option, as such Termination Date may have been
extended pursuant to the valid exercise of the first Extension
Option). Notwithstanding the foregoing, in no event may Tenant
exercise an Extension Option, and any purported exercise of an
Extension Option shall be null and void, if Tenant is in default of
the Lease at the time of exercise or at the start of the Extension
Option period or if the Lease has been terminated (by reason of an
event of default or otherwise) prior to the date on which the
Extension Option period would have commenced. If an Extension Option
is exercised, all terms, covenants, conditions and other provisions of
this Lease shall apply except that the Monthly Basic Rent shall be
$27,500 during the first Extension Option period and $28,500 during
the second Extension Option period.
3. RENT
3.1 MONTHLY BASIC RENT. Effective on the Rent Commencement Date, Tenant
shall pay to Landlord the Monthly Basic Rent specified in Section 1.6.
3.2 MANNER OF PAYMENT. Except as otherwise provided below in Section 3.4,
all installments of Monthly Basic Rent shall be paid by Tenant to
Landlord in lawful money of the United States of America, without
demand and without deduction or offset, in advance on or before the
first day of the first Lease Year and on or before
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the first day of each month thereafter, at Landlord's address
designated in Section 1.1, or at such other place as may be designated
by Landlord. If the Rent Commencement Date or Termination Date occurs
on a day other than the first or last day of a month, respectively,
then the Monthly Basic Rent payable for the first or last month of the
Lease term shall be prorated on the basis of a 30-days' month.
3.3 ADVANCES BY LANDLORD. Landlord has the right, but shall not be
obligated, to pay or otherwise advance on behalf of Tenant any amounts
payable by Tenant pursuant to this Lease. Any payment or advance by
Landlord pursuant to this Section 3.3 shall be reimbursed by Tenant,
immediately upon Landlord's demand, and shall be in addition to, and
not in limitation of, any other rights or remedies available to
Landlord under this Lease, at law or in equity.
3.4 THIRD PARTY PAYMENTS. Landlord currently owes delinquent Taxes (as
defined below in Section 4.2) to Lane County in the amount of
approximately $140,925.95 (not including interest and penalties).
Landlord shall be obligated to pay the full amount of such delinquent
Taxes and all interest and penalties thereon. However, until the
earlier of July 1, 1998 or the date on which the delinquency in Taxes
(including any interest and penalties accrued to date or that will
accrue thereon in the future) has been paid in full, then
notwithstanding the provisions of Section 3.2 to the contrary, Tenant
shall pay $2,150 of each installment of Monthly Basic Rent directly to
Lane County in reduction of Landlord's delinquent Taxes and the
interest and penalties thereon. If the delinquency in Taxes
(including any interest and penalties) has not been paid in full on or
before July 1, 1998, Tenant may pay off the delinquency, in one or
more installments, and offset such payment(s) against Monthly Basic
Rent payable hereunder. In addition, if amounts paid by Tenant
pursuant to this Section 3.4, when added to any amounts paid by Tenant
pursuant to Section 4.1 that Lane County may apply to reduce the
amount of delinquent Taxes, are not sufficient to pay in full the
delinquency in the 1994-1995 Taxes prior to the commencement of
foreclosure proceedings by Lane County with respect thereto, Tenant
may pay off the delinquency in the 1994-1995 Taxes, in one or more
installments, and may offset such payments against Monthly Basic Rent
payable hereunder commencing May 1, 1998.
4. TAXES
4.1 TENANT'S OBLIGATION TO PAY TAXES. In addition to Monthly Basic Rent,
Tenant shall pay, without deduction or offset all Taxes (as defined in
Section 4.2) for the tax year during which the Commencement Date
occurs and thereafter all Taxes (as defined in Section 4.2) for the
tax years or portion thereof during which the remainder of the Lease
term occurs. Tenant's obligation to pay Taxes for the first and last
year of the term of this Lease shall be equitably prorated between
Landlord and Tenant as of the Commencement Date and Termination Date,
respectively. Tenant shall pay all Taxes accruing for periods
following the Commencement Date directly to the taxing
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authority as and when due, prior to delinquency, and shall promptly
provide Landlord with copies of receipts showing that Taxes have been
paid by Tenant as and when required by this Lease. The parties
acknowledge that Lane County may apply the payments of current Taxes
made by Tenant pursuant to this Section 4.1 to amounts owed with
respect to the delinquent Taxes described in Section 3.4 above. The
parties agree that if Tenant's payments of Taxes pursuant to this
Section 4.1 are applied toward delinquent amounts described above in
Section 3.4, then: (a) notwithstanding such application by the
County, as between Landlord and Tenant, the payments shall not be
deemed to have been applied to the delinquent Taxes (or interest or
penalties thereon) and shall not be taken into account in determining
the respective rights and obligations of Landlord and Tenant pursuant
to Section 3.4, and (b) Tenant shall be deemed to have complied in
full with Tenant's obligation to pay current Taxes as provided in this
Section 4.1 to the extent that Tenant's payments would otherwise have
kept Taxes current but for the delinquent Taxes described above.
4.2 "TAXES" DEFINED. "Taxes" means all taxes, service payments in lieu of
taxes, general or special assessments, excise taxes, transit charges,
charges for street, sidewalk or other improvements, parking
assessments, utility assessments or charges, housing fund assessments
and any and all other charges, levies, fees, costs or charges, general
or special, ordinary or extraordinary, unforeseen as well as foreseen,
of any kind which are assessed, levied, charged, confirmed or imposed
by or at the direction of, or resulting from, laws, rules or
regulations of any federal, state or local governmental authority upon
the Leased Premises, or based upon or imposed in connection with this
Lease or with the use, occupancy or operations of the Leased Premises,
or upon any personal property used in the operation of the Leased
Premises, or with respect to services or utilities in connection with
the use, occupancy, or operations of the Leased Premises, or upon
Landlord with respect to the Leased Premises, or in connection with
the business of renting space within the Leased Premises. Taxes
include, but are not limited to, state and local ad valorem real
property taxes, levies and assessments; any tax, fee or other excise,
however described, which may be levied or assessed in lieu of, or as a
substitute, in whole or in part, for, or as an addition to, any other
Taxes, and any interest or penalties charged on account of such Taxes;
any business rental tax or similar excise or other tax on Landlord's
receipt of, or right to receive, rents; and costs and disbursements
incurred in connection with proceedings to contest, determine or
reduce any Taxes. Taxes also include, but are not limited to, those
taxes that are: (i) imposed upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture,
fixtures and other personal property located in the Leased Premises or
the cost or value of any improvements made in or to the Leased
Premises by or for Tenant, regardless of whether title to such
improvements shall be in Tenant or Landlord; (ii) imposed upon,
measured by or reasonably attributable to the Monthly Basic Rent and
all additional payments payable by Tenant pursuant to this Lease,
including, without limitation, any gross income tax or excise tax
levied by the City or County in which the Leased
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Premises are located, the State of Oregon, the federal government or
any other governmental body or agency with respect to receipt of such
rent; or (iii) imposed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Leased Premises, or any portion thereof.
Taxes shall not include: (a) inheritance or estate taxes imposed upon
or assessed against Landlord (or any of its members or partners) in
connection with the Leased Premises, or any part thereof or interest
therein; or (b) taxes computed upon the basis of the net income
derived from the Leased Premises by Landlord or the owner of any
interest therein, unless, due to a change in the method of taxation,
any of such taxes are levied or assessed against Landlord in lieu of,
or as a substitute, in whole or in part, for, or as an addition to,
any other charge which would otherwise constitute Taxes; or (c) taxes
computed and imposed upon a gain or profit realized by Landlord in
connection with the sale or other disposition of its interest in the
Leased Premises.
5. UTILITY CHARGES
Tenant shall be responsible for and shall pay the charges for all utilities
to be furnished to the Leased Premises, including, without limitation, all
charges, assessments, and service fees for telephone, garbage collection
and removal, water, sewer, and electricity.
6. TENANT IMPROVEMENTS
6.1 TENANT IMPROVEMENTS. Tenant may, at Tenant's sole cost and expense,
construct and install the Tenants Improvements specified in Exhibit C.
6.2 OTHER TENANT IMPROVEMENTS. Except pursuant to Section 6.1, above,
Tenant shall not make or cause to be made any alterations, additions
or improvements or install or cause to be installed any fixtures,
exterior signs, floor covering, interior or exterior lighting,
plumbing fixtures, shades or awnings or make any changes to the Leased
Premises or the Building without first obtaining Landlord's written
approval thereof and of the means of installing same. Tenant shall
present to the Landlord plans and specifications for such work at the
time approval is sought.
6.3 OWNERSHIP AND REMOVAL OF TENANT IMPROVEMENTS. All alterations,
decorations, additions and improvements made by or at the expense of
Tenant shall be deemed Tenant Improvements, and shall remain the
property of Tenant for the term of the Lease. At the Termination Date
or earlier termination of this Lease, Tenant may remove any or all of
its Tenant Improvements (other than real property improvements to the
Building or Land that do not constitute fixtures or trade fixtures),
provided that Tenant shall restore the Leased Premises as provided in
Section 16. At the Termination Date or earlier termination of this
Lease, all Tenant Improvements that are not removed by Tenant shall
become the property of Landlord.
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6.4 LIENS FOR TENANT IMPROVEMENTS. Tenant shall not cause or permit liens
of any kind, type or description to attach to or be imposed on the
Leased Premises, or any part thereof, unless Tenant has a good faith
dispute over Tenant's obligation to pay and as long as Tenant shall,
within ten (10) days after learning of the filing of a lien with
respect to the good faith dispute, either secure the discharge of the
lien or post a sufficient bond or other surety reasonably satisfactory
to Landlord in an amount that would be sufficient to discharge the
lien plus reasonable costs, attorney fees and other charges that could
reasonably be anticipated to accrue as a result of the enforcement of
the lienor's rights and foreclosure of the lien on the Lease Premises.
If Tenant causes or permits any lien to attach to or be imposed on the
Leased Premises in violation of this Section 6.4, then Landlord may,
at Landlord's election, exercise any rights or remedies provided in
Section 13, or may satisfy such lien and be reimbursed therefor by
Tenant upon demand. If Landlord elects to pay the lien, and Tenant
fails to reimburse Landlord therefor within 10 days after demand, such
failure shall constitute an Event of Default under this Lease by
Tenant.
7. USE OF PREMISES
7.1 USES PERMITTED. Tenant shall occupy and use the Leased Premises for
the purpose specified in Section 1.8 and for no other purpose without
Landlord's written consent, which consent shall not be unreasonably
withheld. Landlord reserves the right to prescribe the weight,
location, position and manner of installation of all heavy equipment
or other personal property to be placed in or attached to the Leased
Premises. Tenant shall be responsible for all structural engineering
to determine and evaluate the structural load. Tenant shall:
7.1.1 Use the Leased Premises in a careful, safe and proper
manner, and not in violation of any covenants, conditions
and restrictions of record or in violation of a Certificate
of Occupancy or temporary Certificate of Occupancy, or in
violation of a requirement imposed by any governmental
authority having jurisdiction;
7.1.2 Pay on demand for any damage to the Leased Premises caused
by misuse or abuse of the Leased Premises by Tenant, its
agents or employees, or by any other person entering upon
the Leased Premises under express or implied invitation of
Tenant;
7.1.3 Maintain the Leased Premises in good condition, subject to
reasonable wear and tear occasioned by normal use for the
permitted purposes;
7.1.4 Comply with all applicable laws and regulations of public
authorities affecting the Leased Premises and their use, and
at Tenant's expense correct any failure of compliance which
is the fault of Tenant or is the result of Tenant's use;
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7.1.5 Not use or permit the Leased Premises to be used for any
purpose prohibited by the laws of the United States or the
State of Oregon or the ordinances of the city and county in
which the Leased Premises are located; and
7.1.6 Not commit waste, not suffer or permit waste to be
committed, not cause or permit any nuisance on or in the
Leased Premises.
7.2 HAZARDOUS MATERIAL. Without limiting the generality of the foregoing,
Tenant shall not cause or permit any Hazardous Material (as
hereinafter defined) to be brought upon, kept or used in or about the
Leased Premises by Tenant, or Tenant's agents, employees, contractors,
subtenants, or invitees, or by any other person, unless such Hazardous
Material is necessary or useful to business operations permitted to be
conducted, and being conducted at the Leased Premises. Tenant shall
assure that all such Hazardous Material is used, kept and stored in a
manner that complies with all laws, rules, ordinances and regulations
relating to the storage and use of the Hazardous Material. If Tenant
breaches the obligations stated herein, or if the presence of
Hazardous Material on the Leased Premises caused or permitted by
Tenant results in any contamination of the Leased Premises or any
other private or public property, including, without limitation,
sewers or streets, or if contamination of the Leased Premises by
Hazardous Material otherwise occurs for which Tenant is legally liable
to Landlord or to any third party for damages resulting therefrom,
then:
7.2.1 Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims, judgments, damages,
penalties, fines, costs, expenses, liabilities and losses
(including, without limitation, diminution in value of the
Leased Premises, damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Leased
Premises, damages arising from any adverse impact on
marketing the Leased Premises and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees)
that arise during or after the term of this Lease, as a
result of or in connection with such contamination. The
foregoing indemnification of Landlord by Tenant includes,
without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, remedial,
removal or restoration work required or recommended by any
federal, state or local governmental agency or political
subdivision because of Hazardous Material present in the
soil or groundwater on or under the Leased Premises, or any
public facilities, if the presence of the Hazardous Material
is the result of activities of Tenant or Tenant's agents,
employees, contractors, subtenants, or invitees.
7.2.2 Tenant shall promptly take any and all actions, at its sole
cost and expense, as are necessary or appropriate to return
the Leased Premises or other private or public facilities to
the condition existing prior to the introduction of any
Hazardous Material to the Leased Premises. Duplicate copies
of all reports
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and findings made by all contractors, laboratories and
engineering firms chosen by Tenant to undertake any remedial
action that may be necessary or appropriate on or about the
Leased Premises or other private or public facilities shall
be delivered to Landlord concurrently with their delivery to
Tenant.
7.2.3 As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste that is or
becomes regulated by any local governmental authority, the
State of Oregon, or the United States Government. The term
"Hazardous Material" includes, without limitation, any
material or substance which is designated as a hazardous
substance pursuant to the Water Pollution Control Act
(33 USC Section 1317); or defined as hazardous waste
pursuant to the Resource Conservation and Recovery Act
(42 USC Section 6901 et seq.); or defined as a hazardous
substance pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
(42 USC Section 9601 et seq.); or defined as a hazardous
material pursuant to Article 90 of the Uniform Fire Code, as
adopted by the City in which the Leased Premises are
located, as amended from time to time.
7.2.4 Tenant shall not be responsible for and shall have no
obligations under this Section 7.2 for any Hazardous
Material brought upon, kept or used in or about the Leased
Premises by Landlord or its agents, employees and
contractors, or for any Hazardous Material brought upon the
Leased Premises after termination or expiration of the
Lease.
7.3 LANDLORD'S COVENANTS REGARDING HAZARDOUS MATERIAL. Landlord
represents and warrants to Tenant that, except as disclosed in the
environmental report approved pursuant to Section 1.4.3:
7.3.1 NO CONTAMINATION. There does not currently exist any actual
or potential contamination of the soil, subsoil, groundwater
or any other portion or of any parcel of the Leased Premises
by a Hazardous Material or any constituent thereof.
7.3.2 COMPLIANCE WITH ENVIRONMENTAL LAWS. Landlord (and
Landlord's other tenants) have complied at all times with
all applicable federal, state and local environmental laws
and regulations, including, without limitation, the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), the Resource
Conservation and Recovery Act, as amended ("RCRA"), the
Toxic Substance Control Act ("TSCA"), any of the regulations
thereunder, and any other federal statute and any state
statue or municipal ordinance creating liability for the
treatment, storage or disposal or
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the arranging therefore, or the existence on the Leased
Premises of any Hazardous Material, including any
constituent thereof.
7.3.3 NO UNDERGROUND STORAGE TANKS. There are no underground
storage tanks on the Leased Premises.
7.3.4 NO VIOLATIONS. The Leased Premises are not subject to any
federal, state or local "superfund" lien, proceedings,
claim, liability or action, or the threat or likelihood
thereof, for the cleanup, removal or remediation of any
Hazardous Material from the Leased Premises.
7.3.5 INDEMNITY. If Landlord is in breach of any of the foregoing
representations or warranties, or if the presence of
Hazardous Material on the Leased Premises caused or
permitted by Landlord (or any of Landlord's other tenants)
has resulted or results in any contamination of the Leased
Premises or any other private or public property, including,
without limitation, sewers or streets, or if contamination
of the Leased Premises by Hazardous Material otherwise
occurs for which Landlord is legally liable to Tenant or to
any third party for damages resulting therefrom, then
Landlord shall indemnify, defend and hold Tenant harmless
from and against any and all claims, judgments, damages,
penalties, fines, costs, expenses, liabilities and losses
(including, without limitation, diminution in value of the
Leased Premises, damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Leased
Premises, damages arising from any adverse impact on
marketing the Leased Premises and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees)
that arise during or after the term of this Lease, as a
result of or in connection with such contamination. The
foregoing indemnification of Tenant by Landlord includes,
without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, remedial,
removal or restoration work required or recommended by any
federal, state or local governmental agency or political
subdivision because of Hazardous Material present in the
soil or groundwater on or under the Leased Premises, or any
public facilities, if the presence of the Hazardous Material
is the result of activities of Landlord or Landlord's
agents, employees, contractors, subtenants, or invitees.
8. MAINTENANCE
8.1 TENANT'S OBLIGATIONS. Tenant shall maintain in good order, condition
and repair (ordinary wear and tear excepted), at Tenant's cost and
expense, the Building's water, sewer, gas, electrical and plumbing
systems from the point of entry into the Building, the heating,
ventilating and air conditioning system (provided that such system is
in good working order and repair at the Commencement Date), the
interior
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of the Leased Premises, the doors and windows of the Leased Premises,
the exterior lighting at the Leased Premises, the backflow device on
the fire protection system and the pump station, and any portions of
the Leased Premises damaged by Tenant's negligence. If Tenant refuses
or neglects to maintain and repair as required by this Lease, and to
the reasonable satisfaction of Landlord as soon as reasonably possible
after written demand, Landlord may effect the maintenance and repair
without liability for loss or damage which may accrue to Tenant or
Tenant's property, and Tenant shall promptly pay Landlord's costs for
the maintenance and repair, plus interest on such costs at the rate of
10% per annum from the date of completion by Landlord.
8.2 LANDLORD'S OBLIGATION. Landlord shall maintain in good order,
condition and repair (ordinary wear and tear excepted) at Landlord's
cost and expense, the exterior of the Building, including the roof,
gutters and exterior walls, the water, sewer, gas, electrical and
plumbing systems up to the point of entry into the Building, and any
other items of maintenance or repair that Tenant is not required to
make (except that Landlord shall not be obligated to repair or
maintain the parking areas and roadway on the Leased Premises, which
shall be repaired and maintained by Tenant as and to the extent deemed
necessary or appropriate by Tenant). In addition, it shall be
Landlord's obligation to provide that the plumbing, heating,
ventilating and air conditioning system is in good working order and
repair at the Commencement Date.
9. ASSIGNMENT AND SUBLETTING
Tenant shall not assign this Lease in whole or in part, nor sublet all or
any part of the Leased Premises, without the prior written consent of
Landlord in each instance, which will not be unreasonably withheld,
conditioned or delayed. The consent by Landlord to any assignment or
subletting shall not constitute a waiver of the necessity for such consent
to any subsequent assignment or subletting. This prohibition against
assignment and subletting shall include a prohibition against any
assignment or subletting by operation of law. If this Lease is assigned,
or if the Leased Premises or any part thereof are sublet or occupied by
anyone other than Tenant, Landlord may, during the existence of any Event
of Default, collect rent and other charges from the assignee, subtenant or
occupant, and apply the net amount collected to the rent and other charges
herein reserved, but no such assignment, subletting occupancy or collection
shall be deemed a waiver of this covenant, or the acceptance of the
assignee, subtenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of this Lease. If Tenant requests Landlord's
consent to an assignment or sublease to a proposed assignee or sublessee
who appears financially capable of performing the obligations of the Tenant
that are assigned or sublet, Landlord shall consent to the assignment or
sublease. If Tenant's interest in this Lease is assigned, then
notwithstanding the consent of the Landlord to the assignment the right of
first refusal granted pursuant to Section 33 shall be terminated and upon
such assignment Section 33 shall be of no further force or effect.
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10. TITLE INSURANCE
Landlord and Tenant shall each pay one-half of the premium for the issuance
of a standard leasehold policy of title insurance, insuring Tenant's
interest under this Lease and showing title vested in landlord's name,
subject only to exceptions numbers 6 through 16 as shown in the Preliminary
Report issued by Cascade Title Co., dated December 12, 1996 (as of
November 27, 1996) issued under Report No. CT-209834.
11. INSURANCE
11.1 CASUALTY INSURANCE. Tenant, at Tenant's sole cost and expense, shall
keep in full force and effect a policy insuring the Leased Premises
against fire and other casualty, with extended coverage, and against
such other risks and perils as Landlord may reasonably require
("Casualty Insurance"). The amount of the Casualty Insurance coverage
shall be no less than the replacement value of the improvements
included in the Leased Premises. The Casualty Insurance policy or
policies shall be issued for the benefit of, and with loss payable to,
Tenant and Landlord as their interests may appear at the time of loss.
The insured persons shall, at Landlord's election, also include the
holder of any mortgage or deed of trust covering the Leased Premises,
in which case all such policies shall, in addition to fulfilling the
other requirements of this Section 11, be issued by an insurer
satisfactory to (and provide insurance against such risks and in such
amounts as may be required by) the holder of the senior mortgage or
deed of trust on the Leased Premises.
11.2 LIABILITY INSURANCE. Tenant, at Tenant's sole cost and expense, shall
keep in full force and effect a policy of public liability and
property damage insurance (insuring both Tenant and Landlord) with
respect to the Leased Premises and the business operated by Tenant in
the Leased Premises in which the limits of public liability coverage
shall be at least $1,000,000.00 per occurrence, insuring against
damages to person or property on or outside of the Leased Premises
resulting from the use or possession thereof by Tenant, Tenant's
agents, employees, officers, contractors, vendors, invitees or
licensees.
11.3 TENANT'S PROPERTY INSURANCE. Tenant, at Tenant's sole cost and
expense, shall maintain insurance in Tenant's name covering Tenant's
furniture, trade fixtures, equipment, inventory items, spare parts,
supplies, and other personal property, and the personal property of
others in Tenant's possession at the Leased Premises.
11.4 POLICY REQUIREMENTS; MUTUAL WAIVER OF SUBROGATION. A certificate
issued by the insurance carrier for each policy of insurance required
by this Lease shall be delivered to Landlord at the Commencement Date
and within 10 days prior to the expiration of the term of each policy.
Each certificate and policy of insurance required by this Lease shall
expressly evidence insurance coverage as
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required by this Lease (including the waiver of subrogation rights as
required by this section) and shall contain an endorsement or
provision requiring at least 10 days' written notice to Landlord prior
to the expiration, cancellation, diminution in the perils insured
against, or reduction in the amount of coverage of the policy.
Landlord and Tenant shall obtain from each insurer of the Leased
Premises a written waiver for the benefit of the other of all rights
of subrogation which the insurer might otherwise have against the
other party.
12. CASUALTY DAMAGE
12.1 If the Leased Premises shall be damaged by fire, the elements,
unavoidable accident or other casualty, but are not thereby rendered
untenantable in whole or in part, then:
12.1.1 The rent shall not be abated.
12.1.2 To the extent of any insurance proceeds recoverable by
either party, the damage shall be promptly repaired by the
insured party.
12.1.3 To the extent that insurance proceeds recoverable for the
damage are not sufficient to pay the costs of repair, the
damage shall be promptly repaired by Tenant.
12.2 If, by reason of such damage, the Leased Premises are rendered
untenantable only in part, then:
12.2.1 The Monthly Basic Rent payable by Tenant shall be abated
commensurately with the loss of or interference with
Tenant's use of the Leased Premises.
12.2.2 Repair of the damage shall be made as provided in
Section 12.1.
12.3 If, by reason of such damage, the Leased Premises are rendered wholly
untenantable, then either party shall have the elective right to
terminate the Lease as of the date the Leased Premises became
untenantable by giving written notice to the other within ninety (90)
days of the damage; provided, however, that if Landlord shall elect to
terminate the Lease, Tenant shall have thirty (30) days following
Landlord's written termination notice to exercise the Option to
purchase the Leased Premises on the terms, covenants, conditions, and
other provisions of Section 32 (other than Section 32.1 relating to
the time for exercising the Option), with the "fair market
value" determined as of the date of the damage to the Leased Premises,
as so damaged. All insurance proceeds recoverable for the damage to
the Leased Premises shall be the property of Landlord; provided, that
Tenant shall be entitled to an amount equal to the incremental value
added to the Leased Premises by Tenant, in accordance with Section 36;
and further provided that, if the Option is exercised, the "fair
market
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value" and the purchase price shall be determined based on the
Leased Premises as damaged and unrestored. If both parties elect to
continue the Lease, their rights and obligations respecting repair and
restoration of the Leased Premises and abatement of rent and taxes
following the damage shall be as they may then mutually agree.
13. DEFAULT BY TENANT
13.1 Tenant shall be in breach of this Lease if at any time during the term
of the Lease (and regardless of the pendency of any bankruptcy,
reorganization, receivership, insolvency or other proceedings in law,
in equity or before any administrative tribunal, which might have the
effect of preventing Tenant from complying with the terms of this
Lease) any one of the following events occurs (each of which shall be
deemed an "Event of Default"):
13.1.1 Tenant fails to make payment of any monthly installment of
rent or of any other charge to be paid by Tenant, and such
failure is not cured within 10 days after Landlord has given
written notice to Tenant of such failure of payment
(provided, however, that it shall be an Event of Default if
Tenant fails to make payment of any monthly installment of
rent or of any other charge to be paid by Tenant with ten
(10) days of the due date therefor if Landlord has given
Tenant written notice pursuant to this Section 13.1.1 two or
more times in the twelve (12) preceding calendar months); or
13.1.2 Tenant fails in a material manner or to a material extent to
perform any of its other obligations hereunder and such
failure is not cured within 30 days after Landlord has given
written notice to Tenant of such failure; provided, however,
that if the nature of Tenant's obligation is such that more
than 30 days are required for performance, then Tenant shall
not be in breach if Tenant commences performance within 10
days after such notice and thereafter diligently prosecutes
the cure to completion; or
13.1.3 Tenant becomes insolvent, or makes a transfer in fraud of
its creditors, or makes an assignment for the benefit of its
creditors; or
13.1.4 Tenant voluntarily files or has filed against it, a petition
under any provision of the United States Bankruptcy Act, as
amended, or under any similar law or statute of the United
States or any state, and (in the case of a voluntary
petition) such petition is not dismissed within 30 days
thereafter, or Tenant is adjudged bankrupt or insolvent in a
proceeding filed by or against Tenant; or
13.1.5 A receiver or trustee is appointed for all or substantially
all of Tenant's assets.
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13.2 If Tenant breaches this Lease and abandons the Leased Premises before
the end of the term or any extension thereof, or if Tenant's right to
possession is terminated by Landlord because of an Event of Default,
then, except as provided in Section 13.3, the Lease shall
automatically terminate and Landlord may recover from Tenant:
13.2.1 The worth at the time of award of the unpaid rent which had
been earned at the time of termination; plus
13.2.2 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 rental loss
for such period which could have been reasonably avoided by
Landlord's diligence; plus
13.2.3 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 rental loss for such period
which could be reasonably avoided by Landlord's diligence;
plus
13.2.4 Any other amount necessary to compensate Landlord for all
damage proximately caused by Tenant's breach of its
obligations under this Lease, or which in the ordinary
course of events would be likely to result therefrom,
including but not limited to taxes, insurance premiums,
maintenance and other obligations of Tenant for the balance
of the term to the extent such losses could not be
reasonably avoided by Landlord's diligence.
13.3 In the event Tenant has breached this Lease and abandoned the Leased
Premises, the Lease shall continue in full force and effect so long as
Landlord does not terminate Tenant's right to possession of the
premises, and Landlord may enforce all of its rights and remedies
under the Lease, including the right to recover rent as it becomes
due. For purposes of this section, the following acts by Landlord
shall not constitute termination of Tenant's right to possession of
the premises:
13.3.1 Acts of maintenance or preservation or efforts to relet the
Leased Premises.
13.3.2 The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest under this Lease or
in the Leased Premises.
13.4 If Landlord elects to reenter the Leased Premises or to take
possession pursuant to legal proceedings or pursuant to any notice
provided by law, Landlord may either terminate this Lease or may from
time to time without terminating this Lease make such alterations and
repairs as may be necessary in order to relet the premises, and may
relet the premises or any part thereof for such term or terms (which
may be for a term extending beyond the term of this Lease) and at such
rental or rentals and upon
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such other terms and conditions as Landlord in its sole discretion may
deem advisable. Upon each such reletting all rental received by
Landlord from such reletting shall be applied as follows: first, to
the payment of any costs and expenses of such reletting, including
brokerage fees, attorneys' fees, and the costs of such alterations and
repairs; second, to the payment of any indebtedness other than rent
due hereunder from Tenant to Landlord; third, to the payment of rent
due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of future rent as the same may become
due and payable hereunder. If rental income received from such
reletting during any month is less than that to be paid during that
month by Tenant hereunder, Tenant shall immediately pay the deficiency
to Landlord. The deficiency shall be calculated and paid monthly. No
reentry or taking possession of the premises by Landlord shall be
construed as an election to terminate this Lease unless a written
notice of such election is given by Landlord to Tenant or unless the
termination be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination, Landlord may at any
time thereafter elect to terminate this Lease for the previous breach.
If Landlord at any time terminates this Lease for any breach, then
Landlord may (in addition to exercising any other remedies Landlord
may have under other provisions of this Lease or otherwise) recover
from Tenant all damages Landlord may incur by reason of such breach,
including the cost of recovering the Leased Premises, plus reasonable
attorneys' fees, and plus the worth at the time of such termination of
the excess, if any, of the amount of rent and other charges reserved
in this Lease for the remainder of the stated term over the then
reasonable rental value of the Leased Premises for the remainder of
the stated term, all of which amounts shall be immediately due and
payable from Tenant to Landlord.
13.5 DEFINITIONS AND INCIDENTAL RIGHTS
13.5.1 The "worth at the time of award" of amounts referred to in
Sections 13.2.1 and 13.2.2 shall be computed by allowing
interest at the rate of 10% per annum. The "worth at the
time of award" of the amount referred to in Section 13.2.3,
and the "worth at the time of such termination" of the
amount referred to in Section 13.4 shall each be computed by
discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco in effect at the time of award
or termination, as the case may be.
13.5.2 The "damage proximately caused by Tenant's breach" referred
to in Section 13.2.4 shall include, without limitation, any
and all broker's commissions and other expenses reasonably
incurred in reletting the Leased Premises.
13.5.3 Any efforts by Landlord to mitigate the damages caused by
Tenant's breach of this Lease shall not constitute a waiver
of Landlord's right to recover the damages stated above.
Landlord shall be under no obligation to do any
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remodeling of the Leased Premises at a cost exceeding $2,500
in order to relet even if such remodeling is necessary to
obtain a new tenant, and Tenant shall make no claim that
Landlord failed to mitigate its damages by refusing to relet
if remodeling was required in order to do so. Should
Landlord elect to remodel the Leased Premises in order to
relet the same, the reasonable costs of such remodeling
shall be recoverable from Tenant. In no case shall the
Landlord be guilty of trespass, or liable for any other
damages to Tenant for Landlord's reasonable acts and
omissions in connection with repossession of the Leased
Premises, or in rendering the Leased Premises fit for
occupancy by any other tenant.
13.5.4 No provision of this Section 13 and no action or election by
Landlord pursuant to this Section 13 shall operate or be
construed to affect the provisions of this Lease regarding
Landlord's right to indemnification from Tenant for
liability accruing as a result of events, acts, or omissions
prior to the termination of this Lease. All of Tenant's
such indemnification obligations shall survive the
expiration or other termination of this Lease.
13.5.5 No right or remedy conferred upon or reserved to Landlord in
this Lease is intended to be exclusive of any other right or
remedy granted to Landlord by statute or common law, and
each and every such right and remedy shall be cumulative.
13.5.6 For purposes of this Section 13, the rent payable by Tenant
after an Event of Default shall include Monthly Basic Rent,
all Taxes and insurance, and all other monetary obligations
of Tenant under this Lease.
14. EMINENT DOMAIN
14.1 If the whole of the Leased Premises shall be acquired or condemned by
eminent domain for any public or quasi-public use or purpose, then the
term of this Lease shall cease and terminate as of the date of the
earlier of title vesting or possession taken in such proceeding, and
all rent, Taxes accruing after the Commencement Date and other
obligations of Tenant under this Lease shall be paid up to that date
and Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease.
14.2 If only a part of the Leased Premises shall be acquired or condemned
by eminent domain for any public or quasi-public use or purpose, and
if such partial taking or condemnation shall render the Leased
Premises unsuitable for the business of the Tenant, then the term of
this Lease shall cease and terminate as of the date of the earlier of
title vesting or possession taken in such proceeding, and Tenant shall
have no claim against Landlord for the value of any unexpired term of
this Lease. If the partial taking or condemnation is not extensive
enough to render the Leased Premises
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unsuitable for the business of Tenant, then Landlord shall promptly
restore the Leased Premises to a condition comparable to their
condition at the time of the condemnation less the portion lost in the
taking, and this Lease shall continue in full force and effect as to
the remainder of the Leased Premises, with the Monthly Basic Rent
thereafter payable by Tenant being reduced by a percentage equal to
the percentage reduction, if any, in the total value of the Leased
Premises.
14.3 In the event of any condemnation or taking, whether whole or partial,
and except as otherwise provided below in Section 14.4, Tenant shall
not be entitled to receive any part of the award, as damages or
otherwise, for such condemnation and Landlord is to receive the full
amount of the award, the Tenant hereby expressly waiving any right or
claim to any part thereof.
14.4 In the event of any condemnation or taking, whether whole or partial,
Tenant shall be entitled to a portion of the award or compensation
that is equal to the incremental value added to the Leased Premises by
Tenant, in accordance with Section 36, and Tenant shall have the right
to claim and recover from the condemning authority, but not from
Landlord, such compensation as may be separately awarded or
recoverable by Tenant in Tenant's own right on account of any and all
damage to Tenant's business by reason of the condemnation, and for or
on account of any cost or loss which Tenant may incur in removing
Tenant Improvements that Tenant elects to remove and Tenant's
furniture, fixtures, trade fixtures, equipment, and other personal
property.
15. INDEMNIFICATION OF LANDLORD
Tenant shall indemnify Landlord and save Landlord harmless from and against
any and all claims, actions, damages, liability and expense in connection
with loss of life, personal injury or damage to property arising out of the
occupancy or use by Tenant of the Leased Premises, or occasioned wholly or
in part by any act or omission of Tenant, its agents, contractors,
employees or servants. If Landlord shall, without fault on Landlord's
part, be made a party to any litigation commenced by or against Tenant,
then Tenant shall defend and hold harmless Landlord, and shall pay all
costs, expenses and reasonable attorney's fees incurred or paid by Landlord
in connection with such litigation.
16. SURRENDER OF LEASED PREMISES
At the expiration or other termination of this Lease, Tenant shall
surrender the Leased Premises in good order, condition and state of repair,
except for reasonable wear and tear and for damage caused by insured
casualty. Before surrendering the Leased Premises, Tenant shall be
entitled to remove all of Tenant's personal property, trade fixtures and
other fixtures and any Tenant Improvements to be removed by Tenant pursuant
to Section 6.3, and shall repair any damage to the Leased Premises caused
by the removal. Tenant's obligations under this Section 16 shall survive
the expiration or other termination of this Lease.
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17. TRANSFER OF TITLE
In the event of any transfer or conveyance of title to the Leased Premises,
Landlord herein named (and, in case of any subsequent transfer or
conveyance, the then grantor) shall from and after the date of the transfer
or conveyance be automatically released from all liability for the
performance of any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed. However, Landlord or
the then grantor shall not be relieved of any liability which shall have
accrued prior to the transfer or conveyance by reason of the failure of
Landlord or the then grantor to perform obligations of the Landlord
hereunder; and Landlord or the then grantor shall not cease to be liable
under any covenant, condition or obligation imposed upon Landlord or the
then grantor by this Lease unless and until Landlord or the then grantor
shall have caused the vendee or transferee to execute, acknowledge and
deliver to Tenant a written instrument under which the vendee or grantee
assumes and agrees to perform all of the terms on the part of Landlord to
be performed and to comply with and be bound by all the terms, covenants
and conditions of this Lease for and during the period from and after the
date of the transfer or conveyance.
18. SUBORDINATION OF LEASE
Except as provided in Section 1.4.4, at Landlord's election, this Lease
shall be subordinated to any mortgage, deed of trust, or other encumbrance
now or hereafter placed upon the Leased Premises, and to any and all
advances, whether obligatory or optional, made on the security thereof, and
to all renewals, modifications, consolidations, replacements and extensions
thereof. Tenant shall attorn to any purchaser at any foreclosure sale, or
to any grantee or transferee designated in any deed given in lieu of
foreclosure. Tenant agrees to execute any documents required to effectuate
a subordination and, failing to do so within 10 days after Landlord's
written demand to Tenant, does hereby irrevocably appoint Landlord as
Tenant's attorney-in-fact and authorize Landlord in Tenant's name so to do.
However, any such subordination by Tenant shall include a covenant
providing for Tenant's occupancy to continue undisturbed under the Lease.
19. ESTOPPEL CERTIFICATES
19.1 Tenant shall, within seven days after written request from Landlord,
execute, acknowledge and deliver to Landlord a statement in writing
(herein called "Estoppel Certificate"):
19.1.1 Certifying that this Lease is unmodified and in full force
and effect, or, if modified, stating the nature of the
modifications and certifying that this Lease, as so
modified, is in full force and effect and the date to which
the rent and other charges are paid in advance, if any; and
19.1.2 Acknowledging that Tenant does not know of any uncured
default on the part of Landlord, or specifying any defaults
that are claimed.
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19.2 The Estoppel Certificate may be conclusively relied upon by Landlord
and by any prospective purchaser or encumbrancer of the Leased
Premises.
19.3 Tenant's failure to deliver an Estoppel Certificate within the time
above stated shall be conclusive upon Tenant:
19.3.1 That this Lease is in full force and effect, without
modification except as may be represented by Landlord;
19.3.2 That there are no uncured defaults in Landlord's
performance; and
19.3.3 That not more than one month's rent has been paid in
advance.
19.4 If Landlord desires to finance, refinance or sell the Leased Premises
or any interest therein, Tenant shall at Landlord's request deliver to
Landlord and to any prospective lender or purchaser designated by
Landlord such financial statements of Tenant as may be reasonably
required by the lender or purchaser. Tenant's financial statements
shall be received by Landlord in confidence and shall be used only for
the purposes herein stated. At Tenant's request, Landlord and any
other person to whom Tenant's financial statements may be delivered
shall execute and deliver to Tenant a confidentiality agreement
relating thereto, in such form as may be prescribed by Tenant.
20. ATTORNEYS' FEES
If Landlord shall commence any action to recover rent or other charges
payable by Tenant, or if Landlord shall commence any judicial proceeding
for eviction of Tenant for a claimed default under this Lease, or if either
Landlord or Tenant shall commence any action against the other for
enforcement of or to recover damages for the breach of any provision of
this Lease, then the prevailing party shall be entitled to collect, and the
other party shall pay, in addition to costs and disbursements allowed by
law, the prevailing party's reasonable attorney fees in the action or
proceeding, including proceedings on appeal, as may be fixed by the court.
Such sum shall include an amount estimated by the court as the reasonable
costs and fees to be incurred by the prevailing party in collecting any
monetary judgment or award or otherwise enforcing each order, judgment or
decree entered in the action or proceeding.
21. ACCESS BY LANDLORD
Landlord and its agents shall have the right to enter and examine the
Leased Premises at all reasonable times, and to show them to prospective
purchasers or tenants.
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22. HOLDING OVER
Any holding over by Tenant after the expiration of the term with Landlord's
consent shall unless otherwise agreed in writing, constitute a tenancy from
month to month on the terms and conditions herein specified, except that
the Monthly Basic Rent payable during the holdover tenancy shall be 125% of
the amount of the Monthly Basic Rent that was payable for the month
immediately prior to the expiration of the term.
23. COVENANT OF QUIET ENJOYMENT
Upon Tenant's timely payment of the rents and other Charges herein
provided, and performance of all other obligations under this Lease, Tenant
shall, subject to the terms and conditions of this Lease, peaceably and
quietly hold and enjoy the Leased Premises for the term of the Lease
without hindrance or interruption by Landlord or any person claiming by,
through or under Landlord.
24. USE OF PRONOUN
The use of the neuter singular pronoun to refer to Tenant and Landlord
shall be deemed a proper reference even though Tenant or Landlord may be an
individual, a partnership, a corporation, a limited liability company, or a
group of two or more individuals or other entities. The necessary
grammatical changes required to make the provisions of this Lease apply in
the plural sense where there is more than one Tenant and Landlord and to
either corporations, associations, partnerships, limited liability
companies, or individuals, males or females, shall in all instances be
assumed as though in each case fully expressed.
25. PARTIAL INVALIDITY
If any term, covenant or condition of this Lease or the application thereof
to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such
term, covenant or condition to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby
and each term, covenant or condition of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
26. RECORDING
At Tenant's request, Landlord shall join with Tenant in executing a
memorandum of this Lease (including express reference to the option
described in Section 32), in recordable form, which Tenant may cause to be
recorded in the real property records of Lane County, Oregon. If the Lease
or a memorandum thereof is so recorded, Tenant shall promptly upon written
request from Landlord execute and deliver any documents required to
effectuate a subordination of
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the Lease as provided in Section 18, and, following expiration or other
termination of the Lease, any documents reasonably required to evidence
such expiration or termination.
27. NONWAIVER OF BREACH
The waiver by Landlord of a breach of any term, covenant or condition of
this Lease shall not be deemed a waiver of the term, covenant or condition
or of any subsequent breach of the same or any other term, covenant or
condition. The acceptance of rent hereunder by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant
or condition of this Lease, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord's knowledge of the
preceding breach at the time of acceptance of the rent. No covenant, term
or condition of this Lease shall be deemed to have been waived by Landlord
unless the waiver is in writing and signed by Landlord.
28. ACCORD AND SATISFACTION
Except as provided in Section 13.4, any payment by Tenant of a lesser
amount than the total rent then due shall be applied toward payment of the
earliest rent then due and unpaid. No endorsement or statement on any
check or any letter accompanying any check or payment as rent or other
charges shall be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the rent and other charges or pursue any other remedy provided
in this Lease.
29. CAPTIONS
The captions appearing at headings of sections in this Lease are provided
for convenience of reference only and shall not be used to construe or
interpret the meaning of this Agreement.
30. AMENDMENTS
No modification, alteration, amendment, change or addition to this Lease
shall be binding upon Landlord or Tenant unless reduced to writing and
signed by the party to be bound.
31. NOTICES
Any notice, request, or demand required or permitted to be given under this
Lease shall be seemed to have been given only when it is in writing, has
been hand delivered or deposited in the United States mail, with postage
prepaid, to be forwarded by certified or registered mail, and is addressed
to Tenant or to Landlord at the address as specified in Section 1, or at
such other address as a party may for itself designate from time to time by
giving written notice to the other party. A copy of the notice, request,
or demand shall concurrently be transmitted by facsimile to the copy
addressees specified in Section 1.
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32. OPTION TO PURCHASE.
So long as Tenant is not in default under the terms of this Lease and this
Lease has not expired or terminated, Landlord hereby grants to Tenant an
option to purchase the Leased Premises on the following terms and
conditions ("Option").
32.1 The Option is exercisable at any time during thirteenth (13th) through
eighteenth (18th) months of the second Extension Option period (that
is, from April 1, 2006 through September 30, 2006). The Option may be
exercised only by written notice of exercise given by Tenant to
Landlord pursuant to this Lease.
32.2 If Tenant has duly exercised the Option, the sale of the Leased
Premises to Tenant shall close one hundred eighty (180) days after the
date on which Tenant gives Landlord written notice of the exercise of
the Option or as soon thereafter as is reasonably practicable, and
this Agreement shall thereupon terminate.
32.3 Landlord shall convey title to the Leased Premises to Tenant by
statutory warranty deed free and clear of all liens and encumbrances
other than the lien of current taxes and assessments that are not
delinquent, easements, covenants, restrictions and other similar
matters of record at the date hereof. Landlord shall provide to
Tenant, at Landlord's expense, a standard owner's policy of title
insurance, in the amount of the purchase price, insuring Tenant that
fee title is vested in Tenant, subject only to the standard printed
exceptions and the lien of real property taxes not yet delinquent. In
paying the title insurance premium, Landlord shall be entitled to
utilize any available credit that the title company may give by reason
of the issuance of the leasehold policy described in Section 10,
above. In all other respects, the Leased Premises shall be sold,
transferred and conveyed to Tenant in its condition "as-is" at the
time of the closing.
32.4 Landlord and Tenant shall each pay one-half of closing escrow fees,
recording fees and other similar costs of closing.
32.5 The purchase price shall be paid in cash or by such other method as
Landlord and Tenant may agree, and shall be equal to the then "fair
market value" of the Leased Premises. For purposes of this Option,
the "fair market value" of the Leased Premises shall be determined as
if unencumbered by (and without regard to the income or other stream
of payments flowing from) this Lease, and shall have deducted
therefrom an amount equal to the incremental value added to the Leased
Premises by Tenant, in accordance with Section 36. Within thirty (30)
days of the exercise of the Option, Landlord and Tenant shall agree as
to the fair market value (as defined above). If the parties do not
agree within that thirty (30) day period, then Landlord and Tenant
shall each employ the services of a Lane County MAI appraiser to
complete an MAI appraisal of the fair market value (as defined above).
If the difference in value
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between the two appraisal is ten percent (10%) or less, the purchase
price shall be the average of the two opinions of value set forth in
the two MAI appraisals. If the difference in value between the two
appraisals is greater than ten percent (10%), the two MAI
appraisers shall select a third Lane County MAI appraiser. If the
two appraisers are unable to agree upon a third appraiser, an
appraiser located in Lane County will be selected by the then
President or, in the President's absence, the Vice President of the
Local Chapter of MAI appraisers. The appraisal of fair market value
(as defined above) of the third appraiser will be averaged with the
appraisal of the closest in value of the other two appraisals, whether
higher or lower, and the average thereof shall be the purchase price.
Compensation of the third appraiser shall be borne equally by the
Landlord and Tenant.
32.6 If the Option is exercised, Tenant shall give Landlord Tenant's
reasonable cooperation with respect to the Landlord's intent to
complete an Internal Revenue Code Section 1031 tax deferred exchange.
Tenant will reasonably cooperate with the Landlord and the Landlord's
accommodator toward this exchange process, provided that Tenant shall
not incur any liability or cost related to this exchange process, and
that Tenant shall not be obligated to take title to any other suffer
any delay in closing. Tenant's purchase of the Leased Property is not
subject to the Landlord's completion of this exchange.
32.7 Tenant shall have the right to record a memorandum of this Option in
the real property records of Lane County, Oregon. If the Tenant
records a memorandum of option, Tenant shall promptly, upon written
request from Landlord, execute and deliver any documents required to
effectuate a subordination of the Lease as provided in Section 18 and,
following expiration or other termination of the Lease, any documents
reasonably required to evidence such expiration or termination.
32.8 The Option may not be assigned separately from the Lease as a whole,
and then only in accordance with Section 9 of this Lease.
33. RIGHT OF FIRST REFUSAL
33.1 Landlord agrees not to sell, transfer, exchange, grant an option to
purchase, lease, or otherwise dispose of the Leased Premises, or any
interest therein, without first offering the Leased Premises to Tenant
on the terms and conditions set forth in this Lease.
33.1.1 If Landlord receives from a third party ("Third-Party
Offeror") a bona fide offer to purchase the Leased Premises
and Landlord intends to accept such offer, Landlord shall
give Tenant written notice ("Notice") of the price, terms,
and conditions of the offer and deliver a copy of the offer
("Offer") to Tenant.
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33.1.2 When Tenant receives the Notice and a copy of the Offer,
Tenant shall have the prior and preferential right to
purchase the Leased Premises at the same price and on the
same terms and conditions as are contained in the Offer,
except that if Tenant exercises the right of first refusal
by electing to purchase the Leased Premises then: (1) the
closing of the transaction contemplated by the Offer Shall
take place no earlier than 90 days after the date that
Tenant elects to exercise the right of first refusal, and
(2) Tenant shall receive a credit against the sale price of
the Leased Premises in an amount equal to any brokerage
commission that Landlord may save by selling the Leased
Premises to Tenant rather than the Third-Party Offeror.
33.1.3 Tenant shall have thirty (30) days from the date Tenant
receives the Notice and a copy of the Offer to notify
Landlord whether Tenant elects to purchase the Leased
Premises pursuant to the terms of the Offer. If Tenant
elects to exercise its right to purchase the Leased
Premises, then, in addition to giving Landlord written
notice of its election with the 30-day period, Tenant also
shall tender an amount equal to the xxxxxxx money deposit,
if any, specified in the Offer, which will be held and used
in accordance with the terms of the Offer.
33.1.4 If Tenant fails to timely exercise its right to purchase the
Leased Premises pursuant to the terms of the Lease, then
landlord shall be entitled to sell the Leased Premises
according to the terms of the Offer to the Third-Party
Offeror, subject to the terms of Section 32, above.
33.1.5 If Tenant fails to timely exercise its right to purchase the
Leased Premises pursuant to the terms of this Lease, and for
any reason Landlord shall not sell or convey the Leased
Premises to the Third-Party Offeror on the terms contained
in the Offer within six months of Tenant's election not to
purchase, then Landlord must resubmit the Offer as well as
any other offer to Tenant before selling the Leased
Premises, and such offers shall be subject to Tenant's right
of first refusal under this Lease
33.2 TERM. The term of this right of first refusal commences as of the
date of this Lease and terminates on the earlier to occur of: (1) the
expiration of this Lease for any reason or (2) the consummation of a
sale of the Leased Premises to the Third Party Offeror as described
above. Tenant shall cooperate in providing Landlord with any
instruments that Landlord reasonably may require for the purpose of
removing from the public record any cloud on title to the Leased
Premises attributable in any manner to the grant or existence of this
right of first refusal, pursuant to Paragraph 33.5.
33.3 EXCLUDED TRANSFERS. The right of first refusal created by this Lease
shall not apply to any sale or conveyance of the Leased Premises by
Landlord to any
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partnership, limited partnership, joint venture, corporation, or other
entity in which Landlord owns and controls at least a fifty percent
(50%) interest.
33.4 ASSIGNMENT OF RIGHT OF FIRST REFUSAL. This right of first refusal may
not be assigned by Tenant, either separately from or as a part of the
Lease as a whole, in accordance with Section 9 of this Lease.
33.5 RECORDING. Upon request of Tenant, Landlord agrees to join in
executing a memorandum of this Lease to be filed for recording in the
Official Records of Lane County, Oregon, to give notice to the public
of the right of first refusal of Tenant under this Lease. Tenant
shall pay the cost of recording the memorandum. The memorandum shall
note the date this Agreement expires and Tenant shall join in
executing a termination agreement when this Agreement has expired or
terminated, failing which, Landlord may execute the termination
agreement on behalf of Tenant.
33.6 STATUTORY DISCLAIMER: THIS INSTRUMENT WILL NOT ALLOW USE OF THE
PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND
USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD
CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO
VERIFY APPROVED USES.
34. SECONDARY ACCESS. Landlord shall give Tenant Landlord's reasonable
cooperation if Tenant desires to provide for secondary access to the Leased
Premises. This reasonable cooperation shall include, but shall not be
limited to, entering into a perpetual reciprocal easement with the owner of
property adjoining the Leased Premises if the purpose of the perpetual
reciprocal easement is to provide for ingress and egress by the owners and
tenants of the respective properties, if Tenant agrees to make the initial
installation of road improvements, and if the future maintenance and repair
obligations with respect to any secondary access road improvements is
apportioned between the easement holders in accordance with their
respective use.
35. POND FILL RIGHTS AND OBLIGATIONS. On or before March 31, 2000, Landlord
shall obtain all governmental permits, licenses or approvals necessary to
allow Tenant to fill the pond on the southerly portion of the Leased
Premises that is shown on the drawing attached as Exhibit D. If Landlord
has not obtained all necessary governmental permits, licenses or approvals
on or before March 31, 2000, Tenant may do so and may offset against
Monthly Basic Rent Tenant's actual and reasonable costs of so doing. After
all such permits, licenses and approvals have been obtained, Tenant shall
have the right, but not the obligation, to fill the pond and to improve the
surface of the filled pond for roadway, parking and similar purposes, at
Tenant's sole cost and expense.
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36. CHANGE IN VALUE RESULTING FROM TENANT IMPROVEMENTS. At several places in
this Lease the parties are required to adjust their respective rights to
give the Tenant credit for the "incremental value added to the Leased
Premises by Tenant." Only Tenant Improvements permitted by Sections 1.10
and 6.2 shall be included in determining such incremental value or the
amount of credit to be given. Tenant's fixtures and trade fixtures to be
removed at the end of the Lease, as described in Section 6.3, shall not be
included in determining such incremental value or the amount of credit to
be given. However, the amount by which the Leased Premises increase in
value as a result of the creation of any secondary access, pursuant to
Section 34, shall be included in determining such incremental value or the
amount of credit to be given to Tenant. If the parties cannot agree on the
incremental value added to the Leased Premises by Tenant, the value shall
be determined by MAI appraisers using the same process described in
Section 32.5, except that such appraisers will be asked to determine the
incremental value added to the Leased Premises by Tenant rather than, or in
addition to, fair market value.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease effective as of
__________________, 1997.
TENANT: LANDLORD:
MONACO COACH CORPORATION, a
Delaware corporation -----------------------------------------
Xxxxxx Major Xxxxx
By:
--------------------------------
Its: -----------------------------------------
---------------------------- Xxxxx X. Xxxxx
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