Exhibit 10.12
STANDARD INDUSTRIAL LEASE - SPECIAL NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Parties. This Lease, dated February 19, 1988, is made by and
between Xxxxxxx X. Xxxxx, J. Xxxxx Xxxxxxx, and Xxxxxxxx X. Xxxxx, as
Trustees of AEW #113 Trust established under Declaration of Trust dated
January 19, 1988 (herein called "Lessor") and Vita-Fresh Vitamin Co., Inc., a
California corporation and Vital Industries, Inc. a California Corporation
(herein called "Lessee").
2. Premises. Lessor hereby leases to Lessee and Lessee leases from
Lessor for the term, at the rental, and upon all of the conditions set forth
herein, that certain real property situated in the County of Orange State of
California, commonly known as 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxxx and
described as a manufacturing and distribution facility. Said real property
including the land and all improvements therein, is herein called "the
Premises".
3. Term.
3.1 Term. The term of this Lease shall be for the period
commencing on the date hereof and ending on January 31, 1988 unless sooner
terminated pursuant to any provision hereof.
3.2 Delay in Possession. Notwithstanding said commencement date,
if for any reason Lessor cannot deliver possession of the Premises to Lessee
on said date, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease or the obligations of
Lessee hereunder or extend the term hereof, but in such case, Lessee shall
not be obligated to pay rent until possession of the Premises is tendered to
Lessee; provided, however, that if Lessor shall not have delivered possession
of the Premises within sixty (60) days from said commencement date, Lessee
may, at Lessee's option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder: provided further, however, that if such
written notice of Lessee is not received by Lessor within said ten (10) day
period, Lessee's right to cancel this Lease hereunder shall terminate and be
of no further force or effect.
4. Rent: Special Net Lease.
4.1 Rent. Lessee shall pay to Lessor as rent for the Premises,
monthly payments of $53,200, in advance, on the 1st day of each month of the
term hereof. Lessee shall pay Lessor upon the execution hereof
$________________ as rent for (Fixed
monthly rental due hereunder shall be increased periodically pursuant to the
terms of the Addendum attached hereto.) Rent for any period during the term
hereof which is for less than one month shall be a pro rata portion of the
monthly installment. Rent shall be payable in lawful money of the United
States to Lessor at the address stated herein or to such other persons or at
such other places as Lessor may designate in writing.
4.2 Special Net Lease. This Lease is what is commonly called a
"Net, Net, Net Lease", it being understood that the Lessor shall receive the
rent set forth in Paragraph 4.1 free and clear of any and all other
impositions, taxes, liens, charges or expenses of any nature whatsoever in
connection with the ownership and operation of the Premises. In addition to
the rent reserved by Paragraph 4.1, Lessee shall pay to the parties
respectively entitled thereto all impositions, insurance premiums, operating
charges, maintenance charges, construction costs, and any other charges,
costs and expenses which arise or may be contemplated under any provisions
of this Lease during the term hereof. All of such charges, costs and
expenses shall constitute additional rent, and upon the failure of Lessee to
pay any of such costs, charges or expenses, Lessor shall have the same rights
and remedies as otherwise provided in this Lease for the failure of Lessee to
pay rent. It is the intention of the parties hereto that this Lease shall
not be terminable for any reason by the Lessee, and the Lessee shall in no
event be entitled to any abatement of or reduction in rent payable under this
Lease, except as herein expressly provided. Any present or future law to the
contrary shall not alter this agreement of the parties.
5. Security Deposit. Lessee shall deposit with Lessor upon
execution hereof $106,400 as security for Lessee's faithful performance of
Lessee's obligations hereunder. If Lessee fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
Lease, Lessor may use, apply or retain all or any portion of said deposit for
the payment of any rent or other charge in default or for the payment of any
other sum to which Lessor may become obligated by reason of Lessee's default,
or to compensate Lessor for any loss or damage which Lessor may suffer
thereby. If Lessor so uses or applies all or any portion of said deposit,
Lessee shall within ten (10) days after written demand therefor deposit cash
with Lessor in an amount sufficient to restore said deposit to the full
amount hereinabove stated and Lessee's failure to do so shall be a material
breach of this Lease. If the monthly rent shall, from time to time, increase
during the term of this Lease, Lessee shall thereupon deposit with Lessor
additional security deposit so that the amount of security deposit held by
Lessor shall at all times bear the same proportion to current rent as the
original security deposit bears to the original monthly rent set forth in
paragraph 4 hereof. Lessor shall not be required to keep said deposit
separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not
theretofore been applied by Lessor, shall be returned to Lessee (or, at
Lessor's
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option, to the last assignee, if any, of Lessee's interest hereunder) at the
expiration of the term hereof, and after Lessee has vacated the Premises. No
trust relationship is created herein between Lessor and Lessee with respect
to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only for (See
Addendum) and for no other purpose.
6.2 Compliance with Law. Lessee shall, at Lessee's expense, comply
promptly with all applicable statutes, ordinances, rules, regulations,
orders, covenants and restrictions of record, and requirements in effect
during the term or any part of the term hereof, regulating the use by Lessee
of the Premises. Lessee shall not use nor permit the use of the Premises in
any manner that will tend to create waste or a nuisance or, if there shall be
more than one tenant in the building containing the Premises, shall tend to
disturb such other tenants.
6.3 Condition of Premises. Lessee hereby accepts the Premises in
their condition existing as of the Lease commencement date or the date that
Lessee takes possession of the Premises, whichever is earlier, subject to all
applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises, and any
covenants or restrictions of record, and accepts this Lease subject thereto
and to all matters disclosed thereby and by any exhibits attached hereto.
Lessee acknowledges that neither Lessor nor Lessor's agent has made any
representation or warranty as to the present or future suitability of the
Premises for the conduct of Lessee's business.
SPECIAL NET
(This is a special form containing unique provisions and should only
be used in special situations where the LESSEE will pay rent under
all circumstances and in the event of destruction the LESSEE will
rebuild under all circumstances.)
7. Maintenance, Repairs and Alterations.
7.1 Lessee's Obligations. Lessee shall keep in good order,
condition and repair the Premises and every part thereof, structural and non
structural, (whether or not such portion of the Premises requiring repair, 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
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of the Premises) including, without limiting the generality of the foregoing,
all plumbing, heating, air conditioning. (Lessee shall procure and maintain,
at Lessee's expense, an air conditioning system maintenance contract)
ventilating, electrical, lighting facilities and equipment within the
Premises, fixtures, walls (interior and exterior), foundations, ceilings,
roofs (interior and exterior), floors, windows, doors, plate glass and
skylights located within the Premises, and all landscaping, driveways,
parking lots, fences and signs located on the Premises and sidewalks and
parkways adjacent to the Premises.
7.2 Surrender. On the last day of the term hereof, or on any
sooner termination, Lessee shall surrender the Premises to Lessor in the same
condition as when received, ordinary wear and tear excepted, clean and free
of debris. Lessee shall repair any damage to the Premises occasioned by the
installation or removal of Lessee's trade fixtures, furnishings and
equipment. Notwithstanding anything to the contrary otherwise stated in
this Lease, Lessee shall leave the air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing and fencing on the premises in good operating condition.
7.3 Lessor's Rights. If Lessee fails to perform Lessee's
obligations under this Paragraph 7, or under any other paragraph of this
Lease, Lessor may at its option (but shall not be required to) enter upon the
Premises after ten (10) days' prior written notice to Lessee (except in the
case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee's behalf and put the same in good order, condition
and repair and the cost thereof together with interest thereon at the
maximum rate than allowable by law shall become due and payable as additional
rental to Lessor together with Lessee's next rental installment.
7.4 Lessor's Obligations. Except for the obligations of Lessor
under Paragraph 14 (relating to condemnation of the Premises), it is intended
by the parties hereto that Lessor have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located
thereon nor the equipment therein, whether structural or non structural, all
of which obligations are intended to be that of the Lessee under Paragraph
7.1 hereof. Lessee expressly waives the benefit of any statute now or
hereinafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the premises in good order, condition and repair.
7.5 Alterations and Additions.
(a) In any event, Lessee shall make no change or alteration to the
exterior of the Premises nor the exterior of the building(s) on the Premises
without Lessor's prior written consent. As used in this Paragraph 7.5 the
term "Utility
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Installation" shall mean carpeting, window coverings, air lines, power
panels, electrical distribution systems, lighting fixtures, space heaters,
air conditioning, plumbing, and fencing. Lessor may require that Lessee
remove any or all of said alterations, improvements, additions or Utility
Installations at the expiration of the term, and restore the Premises to
their prior condition. Lessor may require Lessee to provide Lessor, at
Lessee's sole cost and expense, a lien and completion bond in an amount equal
to one and one-half times the estimated cost of such improvements, to insure
Lessor against any liability for mechanic's and materialmen's liens and to
insure completion of the work. Should Lessee make any alterations,
improvements, additions or Utility Installations without the prior approval
of Lessor, Lessor may require that Lessee remove any or all of the same.
(b) Any alterations, improvements, additions or Utility
Installations in, or about the Premises that Lessee shall desire to make and
which requires the consent of the Lessor shall be presented to Lessor in
written form, with proposed detailed plans. If Lessor shall give its
consent, the consent shall be deemed conditioned upon Lessee acquiring a
permit to do so from appropriate governmental agencies, the furnishing of a
copy thereof to Lessor prior to the commencement of the work and the
compliance by Lessee of all conditions of said permit in a prompt and
expeditious manner.
(c) Lessee 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 in
the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien 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 the Premises, and Lessor shall have the right to
post notices of non-responsibility in or on the Premises as provided by law.
If Lessee shall, in good faith, contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend itself and Lessor
against the same and shall pay and satisfy any such adverse judgment that may
be rendered thereon before the enforcement thereof against the Lessor or the
Premises, upon the condition that if Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to
such contested lien claim or demand indemnifying Lessor against liability for
the same and holding the Premises free from the effect of such lien or claim.
In addition, Lessor may require Lessee to pay Lessor's attorneys fees and
costs in participating in such action if Lessor shall decide it is to its
best interest to do so.
(d) Unless Lessor requires their removal, as set forth in Paragraph
7.5(a), all alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of
Lessee), which may be made on the Premises, shall become the property of
Lessor and remain upon and be surrendered with the Premises at the expiration
of the term. Notwithstanding the provisions of this
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Paragraph 7.5(d), Lessee's machinery and equipment, other than that which is
affixed to the Premises so that it cannot be removed without material damage
to the Premises, shall remain the property of Lessee and may be removed by
Lessee subject to the provisions of Paragraph 7.2.
8. Insurance Indemnity.
8.1 Insuring Party. As used in this Paragraph 8, the term
"insuring party" shall mean the party who has the obligation to obtain the
Property Insurance required hereunder. The insuring party shall be
designated in Paragraph 46 hereof. Whether the insuring party is the Lessor
or the Lessee, Lessee shall, as additional rent for the Premises, pay the
cost of all insurance required hereunder. If Lessor is the insuring party
Lessee shall, within ten (10) days following demand by Lessor, reimburse
Lessor for the cost of the insurance so obtained.
8.2 Liability Insurance. Lessee shall, at Lessee's expense obtain
and keep in force during the term of this Lease a policy of Combined Single
Limit, Bodily Injury and Property Damage insurance insuring Lessor and Lessee
against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be a combined single limit policy in an amount not less than
$500,000 per occurrence. The policy shall insure performance by Lessee of
the indemnity provisions of this Paragraph 8. The limits of said insurance
shall not, however, limit the liability of Lessee hereunder.
8.3 Property Insurance.
(a) The insuring party shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or damage
to the Premises, in the amount of the full replacement value thereof, as the
same may exist from time to time, which replacement value is now $_________,
but in no event less than the total amount required by lenders having liens
on the Premises, against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, flood (in the event
same is required by a lender having a lien on the Premises), and special
extended perils ("all risk" as such term is used in the insurance industry).
Said insurance shall provide for payment of loss thereunder to Lessor or to
the holders of mortgages or deeds of trust on the Premises. The insuring
party shall, in addition, obtain and keep in force during the term of this
Lease a policy of rental value insurance covering a period of one year, with
loss payable to Lessee, which insurance shall also cover all real estate
taxes and insurance costs for said period. A stipulated value or agreed
amount endorsement deleting the coinsurance provision of the policy shall be
procured with said insurance as well as an automatic increase in insurance
endorsement
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causing the increase in annual property insurance coverage by 2% per quarter.
If the insuring party shall fail to procure and maintain said insurance the
other party may, but shall not be required to, procure and maintain the same,
but at the expense of Lessee. If such insurance coverage has a deductible
clause, the deductible amount shall not exceed $1,000 per occurrence, and
Lessee shall be labile for such deductible amount.
(b) If the Premises are part of a larger building, or if the
Premises are part of a group of buildings owned by Lessor which are adjacent
to the Premises, then Lessee shall pay for any increase in the property
insurance of such other building or buildings if said increase is caused by
Lessee's acts, omissions, use or occupancy of the Premises.
(c) If the Lessor is the insuring party the Lessor will not insure
Lessee's fixtures, equipment or tenant improvements unless the tenant
improvements have become a part of the Premises under paragraph 7, hereof.
But if Lessee is the insuring party the Lessee shall insure its fixtures,
equipment and tenant improvements.
8.4 Insurance Policies. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of at least B plus, or
such other rating as may be required by a lender having a lien on the
Premises, as set forth in the most current issues of "Best's Insurance
Guide". The insuring party shall deliver to the other party copies of
policies of such insurance or certificates evidencing the existence and
amounts of such insurance with loss payable clauses as required by this
paragraph 8. No such policy shall be cancellable or subject to reduction of
coverage or other modification except after thirty (30) days' prior written
notice to Lessor. If Lessee is the insuring party Lessee shall, at least
thirty (30) days prior to the expiration of such policies, furnish Lessor
with renewals or "binders" thereof, or Lessor may order such insurance and
charge the cost thereof to Lessee, which amount shall be payable by Lessee
upon demand. Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in Paragraph 8.3. If Lessee
does or permits to be done anything which shall increase the cost of the
insurance policies referred to in Paragraph 8.3, then Lessee shall forthwith
upon Lessor's demand reimburse Lessor for any additional premiums
attributable to any act or omission or operation of Lessee causing such
increase in the cost of insurance. If Lessor is the insuring party, and if
the insurance policies maintained hereunder cover other improvements in
addition to the Premises, Lessor shall deliver to lessee a written statement
setting forth the amount of any such insurance cost increase and showing in
reasonable detail the manner in which it has been computed.
8.5 Waiver of Subrogation. Lessee and Lessor each hereby release
the other, and waive their entire right of recovery against the other for
loss or damage
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arising out of or incident to the perils insured against under paragraph 8.3,
which perils occur in, on or about the Premises, whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors and/or
invitees. Lessee and Lessor shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
8.6 Indemnity. Lessee shall indemnify and hold harmless Lessor
from and against any and all claims arising from Lessee's use of the
Premises, or from the conduct of Lessee's business or from any activity, work
or things done, permitted or suffered by Lessee in or about the Premises or
elsewhere and shall further indemnify and hold harmless Lessor from and
against any and all claims arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the
terms of this Lease, or arising from any negligence of the Lessee, or any of
Lessee's agents, contractors, or employees, and from and against all costs,
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon except to the extent that
any such claim arises out of the gross negligence or wilful misconduct of
Lessor or its agents; and in case any action or proceeding be brought against
Lessor by reason of any such claim, Lessee upon notice from Lessor shall
defend the same at Lessee's expense by counsel satisfactory to Lessor.
Lessee, as a material part of the consideration to Lessor, hereby assumes all
risk of damage to property or injury to persons, in, upon or about the
Premises arising from any cause and Lessee hereby waives all claims in
respect thereof against Lessor.
8.7 Exemption of Lessor from Liability. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other
person in or about the Premises, nor shall Lessor be liable for injury to the
person of Lessee, Lessee's employees, agents or contractors, 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, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether the said damage or injury 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
and regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Lessee. Lessor shall not be liable for
any damages arising from any act or neglect of any other tenant, if any, of
the building in which the Premises are located.
9. Damage, Destruction, Obligation to Rebuild, Rent Abatement.
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9.1 Obligation to Rebuild. In the event that some or all of the
improvements constituting a part of the Premises or the Premises itself are
damaged or destroyed, partially or totally from any cause whatsoever, whether
or not such damage or destruction is covered by any insurance required to be
maintained under Paragraph 8.3 hereof then Lessee shall repair, restore and
rebuild the Premises to its condition existing immediately prior to such
damage or destruction and this Lease shall remain in full force and effect.
Such repair, restoration and rebuilding (all of which are herein called
"repair") shall be commenced within a reasonable time after such damage or
destruction has occurred and shall be diligently pursued to completion.
9.2 Insurance Proceeds. The proceeds of any insurance maintained
under Paragraph 8.3 hereof shall be made available to Lessee for payment of
costs and expense of repair, provided however, that such proceeds may be made
available to Lessee subject to reasonable conditions, including, but not
limited to architect's certification of cost, retention of percentage of such
proceeds pending recordation of a notice of completion and a lien and
completion bond to insure against mechanic's or materialmen's liens arising
out of the repair and to insure completion of the repair, all at the expense
of Lessee. In the event the insurance proceeds are insufficient to cover the
cost of repair, then any amounts required over the amount of the insurance
proceeds received that are required to complete said repair shall be paid by
Lessee. In the event the insurance proceeds are not made available to Lessee
within 120 days after such damage or destruction, unless the amount of
insurance coverage is in dispute with the insurance carrier, Lessee shall
have the option for 30 days commencing on the expiration of such 120 day
period, of cancelling this Lease. If Lessee shall exercise such option,
Lessee shall have no further obligation hereunder and shall have no claim
against Lessor. Lessee, in order to exercise said option, shall exercise
said option by giving written notice to Lessor within said 30 day period,
time being of the essence.
9.3 Damage Near End of Term.
(a) If the Premises are damaged or destroyed, either partially or
totally, during the last six months of the term of this Lease, Lessor may at
Lessor's option cancel and terminate this Lease as of the date of occurrence
of such damage by giving written notice to Lessee of Lessor's election to do
so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.3(a) to the contrary, in the event
that Lessee has an option to extent or renew this Lease, and the time within
which said option may be exercised has not yet expired, Lessee shall exercise
such option, if it is to be exercised at all, no later than 20 days after
damage or destruction to the Premises, either total or partial occurring
during the last six months of the term of this Lease, which
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damage or destruction is covered by insurance required to be maintained under
paragraph 8. If Lessee duly exercises such option during said 20 day period,
Lessee shall, in accordance with paragraph 9.2 at Lessee'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 said 20
day period, the Lessor may at Lessor's option terminate and cancel this Lease
as of the expiration of said 20 day period by giving written notice to Lessee
of Lessor's election to do so within 10 days after the expiration of said 20
day period, notwithstanding any term or provision in the grant of option to
the contrary.
9.4 Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises and any part thereof, and notwithstanding whether
the casualty is insured or not, there shall be no abatement of rent or of any
other obligation of Lessee hereunder by reason of such damage or destruction
unless the Lease is terminated by virtue of any other provision of this Lease.
9.5 Termination -- Advance Payments. Upon termination of this
Lease pursuant to this Paragraph 9, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee or Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.
9.6 Waiver. Lessee waives the provisions of any statutes which
relate to termination of leases when the thing leased is destroyed and agrees
that such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessee shall pay the real property tax, as
defined in paragraph 10.2, applicable to the Premises during the term of this
Lease. All such payments shall be made at lease ten (10) days prior to the
delinquency date of such payment. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any such taxes paid
by Lessee shall cover any period of time prior to or after the expiration of
the term hereof, Lessee's share of such taxes shall be equitably prorated to
cover only the period of time within the tax fiscal year during which this
Lease shall be in effect, and Lessor shall reimburse Lessee to the extent
required. If Lessee shall fail to pay any such taxes, Lessor shall have the
right to pay the same, in which case Lessee shall repay such amount to Lessor
with Lessee's next rent installment together with interest at the maximum
rate then allowable by law.
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10.2 Definition of "Real Property Tax." As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Premises by any authority
having the direct or indirect power to tax, including any city, state or
federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, as against any legal or
equitable interest of Lessor in the Premises or in the real property of which
the Premises are a part, as against Lessor's right to rent or other income
therefrom, and as against Lessor's business of leasing the Premises. The
term "real property tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "real
property tax," or (ii) the nature of which was hereinbefore included within
the definition of "real property tax," or (iii) which is imposed for a
service or right not charged prior to June 1, 1978, or, if previously
charged, has been increased since June 1, 1978, or (iv) which is imposed as a
result of a transfer, either partial or total, of Lessor's interest in the
Premises or which is added to a tax or charge hereinbefore included within
the definition of real property tax by reason of such transfer, or (v) which
is imposed by reason of this transaction, any modifications or changes
hereto, or any transfers hereof.
10.3 Joint Assessment. If the Premises are not separately
assessed, Lessee's liability shall be an equitable proportion of the real
property taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable determination
thereof, in good faith, shall be conclusive.
10.4 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause said trade fixtures, furnishings, equipment and
all other personal property to be assessed and billed separately from the
real property of Lessor.
(b) If any of the Lessee's said personal property shall be assessed
with Lessor's real property, Lessee shall pay Lessor the taxes attributable
to Lessee within 10 days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
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11. Utilities. Lessee shall pay for all water, gas, heat, light,
power, telephone 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 with other premises.
12. Assignment and Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or in the
Premises, without Lessor's prior written consent, which Lessor shall not
unreasonably withhold. Lessor shall respond to Lessee's request for consent
hereunder in a timely manner and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a breach of this Lease.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph
12.1 hereof, Lessee may assign or sublet the Premises, or any portion
thereof, without Lessor's consent, to any corporation which controls, is
controlled by or is under common control with Lessee, or to any corporation
resulting from the merger or consolidation with Lessee, or to any person or
entity which acquires all the assets of Lessee as a going concern of the
business that is being conducted on the Premises, provided that said assignee
assumes, in full, the obligations of Lessee under this Lease. Any such
assignment shall not, in any way, affect or limit the liability of Lessee
under the terms of this Lease even if after such assignment or subletting the
terms of this Lease are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary.
12.3 No Release of Lessee. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee or Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of
any provision hereof. Consent to one assignment ro subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Lessee or any successor or Lessee, in the
performance of any of the terms hereof. Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.
Lessor may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Lessee, without
notifying Lessee, or any successor of Lessee, and without obtaining its or
their consent thereto and such action shall not relieve Lessee of liability
under this Lease.
12
12.4 Attorney's Fees. In the event Lessee shall assign or sublet
the Premises or request the consent of Lessor to any assignment or subletting
or if Lessee shall request the consent of Lessor for any act Lessee proposes
to do then Lessee shall pay Lessor's reasonable attorneys fees incurred in
connection therewith, such attorneys fees not to exceed $350,000 for each
such request.
13. Default; Remedies.
13.1 Defaults. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee:
(a) The abandonment of the Premises by Lessee.
(b) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of five business days after written
notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee
with a Notice to Pay Rent or Quit within five business days pursuant to
applicable Unlawful Detainer statutes such 5-business-day Notice to Pay Rent
or Quit shall also constitute the notice required by the subparagraph.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Lessee, other than described in paragraph (b) above, where such failure
shall continue for a period of 30 days after written notice thereof from
Lessor to Lessee; provided, however, that if the nature of Lessee's default
is such that more than 30 days are reasonably required for its cure, then
Lessee shall not be deemed to be in default if Lessee commenced such cure
within said 30-day period and thereafter diligently prosecutes such cure to
completion.
(d) (i) The making by Lessee of any general arrangement or
assignment for the benefit of creditors; (ii) Lessee becomes 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 60
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 30
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises of Lessee's
interest in this Lease, where such seizure is not discharged within 30 days.
Provided, however, in the event that any provision of this paragraph
13
13.1(d) is contrary to any applicable law, such provision shall be of no
force or effect.
(e) The discovery by Lessor that any financial statement given to
Lessor by Lessee, any assignee of Lessee, any successor in interest of Lessee
or any guarantor of Lessee's obligation hereunder, and any of them, was
materially false.
13.2 Remedies. In the event of any such material default or breach
by Lessee, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default or 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 of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not limited to, the cost
of recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's
fees, and any real estate commission actually paid; the worth at the time of
award by the court having jurisdiction thereof of the amount by which the
unpaid rent for the balance of the term after the time of such award exceeds
the amount of such rental loss for the same period that Lessee proves could
be reasonably avoided; that portion of the leasing commission paid by Lessor
pursuant to Paragraph 15 applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent
as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations
of Lessee under the terms of this Lease shall bear interest from the date due
at the maximum rate then allowable by law.
14
13.3 Default by Lessor. Lessor shall not be in default unless
Lessor fails to perform obligations required of Lessor within a reasonable
time, but in no event later than thirty (30) days after written notice by
Lessee to Lessor and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have theretofore been
furnished to Lessee in writing, specifying wherein Lessor has failed to
perform such obligation; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences
performance within such 30-day period and thereafter diligently prosecutes
the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder 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
on Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee
shall not be received by Lessor or Lessor's designee within ten (10) days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a late charge equal to 6% of 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 late payment
by Lessee. Acceptance of such late charge by lessor shall in no event
constitute a waiver of Lessee's default with respect to such overdue amount,
nor prevent Lessor from exercising 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 rent,
then rent shall automatically become due and payable quarterly in advance,
rather than monthly, notwithstanding paragraph 4 or any other provision of
this Lease to the contrary.
13.5 Impounds. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) installments of
rent,(1) Lessee shall pay to Lessor, if Lessor shall so request, in addition
to any other payments required under this Lease, a monthly advance
installment, payable at the same time as the monthly rent, as estimated by
Lessor, for real property tax and insurance expenses on the Premises which
are payable by Lessee under the terms of this Lease. Such fund shall be
established to insure payment when due, before delinquency, of any or all
such real property taxes and insurance premiums. If the amounts paid to
Lessor by Lessee under the provisions of this paragraph are insufficient to
discharge the obligations of Lessee to pay such real property taxes and
insurance premiums as the same become due, Lessee shall pay to Lessor, upon
Lessor's demand, such additional sums necessary to pay such obligations.
--------------------------
1 or other sums due Lessor under the Lease, or for late payments of insurance
premiums or real property taxes
15
All moneys paid to Lessor under this paragraph may be intermingled with other
moneys of Lessor and shall not bear interest. In the event of a default in
the obligations of Lessee to perform under this Lease, then any balance
remaining from paid to Lessor under the provisions of this paragraph may, at
the option of Lessor, be applied to the payment of any monetary default of
Lessee in lieu of being applied to the payment of real property tax and
insurance premiums.
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 (all of which are herein called "condemnation") this Lease
shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than
10% of the floor area of the building on the Premises, or more than 25% of
the land area of the Premises which is not occupied by any building, is taken
by condemnation, Lessee may, at Lessee's option, to be exercised in writing
only within ten (10) 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 rent shall be reduced in the proportion that the floor area
of the building taken bears to the total floor area of the building situated
on the Premises. No reduction of rent shall occur if the only area taken is
that which does not have building located thereon. Any award for the taking
of all or any part of the Premises under the power of eminent domain or any
payment made under threat of the exercise of such power shall be the property
of Lessor, whether such award shall be made as compensation for dimunition in
value of the leasehold or for the taking of the fee, or as severance damages;
provided, however, that Lessee shall be entitled to any award for loss of or
damage to Lessee's trade fixtures and removable personal property. In the
event that this Lease is not terminated by reason of such condemnation,
Lessor shall to the extent of severance damages received by Lessor in
connection with such condemnation, repair any damage to the Premises caused
by such condemnation except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall pay any amount in excess
of such severance damages required to complete such repair.
16. Estoppel Certificate.
(a) Lessee shall at any time upon not less than ten (10) days'
prior written notice from Lessor execute, acknowledge and deliver to Lessor
a statement in writing (i) certifying that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is
16
in full force and effect) and the date to which the rent and other charges
are paid in advance, if any, and (ii) acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of Lessor hereunder, or
specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser of encumbrancer of the
Premises.
(b) At Lessor's option, Lessee's failure to deliver such statement
within such time shall be a material breach of this Lease or shall be
conclusive upon Lessee (i) that this Lease is in full force and effect,
without modification except as may be represented by Lessor, (ii) that there
are no uncured defaults in Lessor's performance, and (iii) that not more than
one month's rent has been paid in advance or such failure may be considered
by Lessor as a default by Lessee under this Lease.
(c) If Lessor desires to finance, refinance, or sell the Premises,
or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall
include the past three years' financial statements of Lessee. 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. Lessor's Liability. The term "Lessor" as used herein shall
mean only the owner or owners at the time in question of the fee title and,
in the event of any transfer of such title or interest, Lessor herein named
(and in case of any subsequent transfers then the grantor) shall be relieved
from and after the date of such transfer of all liability as respects
Lessor's obligations thereafter to be performed, provided that any funds in
the hands of the Lessor or the then grantor at the time of such transfer, in
which Lessee has an interest, shall be delivered to the grantee. The
obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during
their respective periods of ownership.
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. Interest on Past-due Obligations. Except as expressly herein
provided, any amount due to Lessor not paid when due shall bear interest at
the maximum rate then allowable by law from the date due. Payment of such
interest shall not excuse or cure any default by Lessee under this Lease,
provided, however, that interest shall not be payable on late charges
incurred by Lessee nor on any amounts upon which late charges are paid by
Lessee.
17
20. Time of Essence. Time is of the essence.
21. Additional Rent. Any monetary obligations of Lessee to Lessor
under the terms of this Lease shall be deemed to be rent.
22. Incorporation of Prior Agreements; Amendments. This Lease
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by
the parties in interest at the time of the modification. Except as otherwise
stated in this Lease, Lessee hereby acknowledges that neither the real estate
broker listed in Paragraph 15 hereof nor any cooperating broker on this
transaction nor the Lessor or any employees or agents of a . . . . said
persons has made any oral or written warranties or representations to Lessee
relative to the condition or use by Lessee of said Premises and Lessee
acknowledges that Lessee assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the
Premises and the compliance thereof with all applicable laws and regulations
in effect during the term of this Lease except as otherwise specifically
stated in this Lease.
23. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery or by
certified mail, and if given personally or by mail, shall be deemed
sufficiently given if addressed to Lessee or to Lessor at the address noted
below the signature of the respective parties, as the case may be. Either
party may by notice to the other specify a different address for notice
purposes except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for notice purposes. A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.
24. Waivers. No waiver by Lessor or any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Lessee of the same or any other provision. Lessor's consent to, or approval
of, any acts shall not be deemed to render unnecessary the obtaining of
Lessor's consent to or approval of any subsequent act by Lessee. The
acceptance of rent hereunder by Lessor shall not be a waiver of any preceding
breach by Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted, regardless of Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
18
26. Holding Over. If Lessee, with Lessor's consent, remains in
possession of the Premises or any part thereof after the expiration of the
term hereof, such occupancy shall be a tenancy from month to month upon all
the provisions of the Lease pertaining to the obligations of Lessee, but all
options and rights of first refusal, if any, granted under the terms of this
Lease shall be deemed terminated and be of no further effect during said
month to month tenancy.
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. Each provision of this Lease
performable by Lessee shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions
hereof restricting assignment or subletting by Lessee and subject to the
provisions of Paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State wherein the Premises are located.
30. Subordination.
(a) This Lease, at Lessor's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation or security
not or hereafter placed upon the real property of which the Premises are a
part and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of
the Premises shall not be disturbed if Lessee is not in default and so long
as Lessee shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms.
If any mortgagee, trustee or ground lessor shall elect to have this Lease
prior to the lien of its mortgage, deed of trust or ground lease, and shall
give written notice thereof to Lessee, this Lease shall be deemed prior to
such mortgage, deed of trust, or ground lease, whether this Lease is dated
prior or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof.
19
(b) Lessee agrees to execute any documents reasonably required to
effectuate an attornment, a subordination or to make this Lease prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be.
Lessee's failure to execute such documents within 10 days after written
demand shall constitute a material default by Lessee hereunder.
31. Attorney's Fees. If either party or the broker named herein
brings an action to enforce the terms hereof or declare rights hereunder, the
prevailing party in any such action, on trial or appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
court.
32. Lessor's Access. Lessor and Lessor's agents shall have the
right to enter the Premises at reasonable times during normal business hours
for the purpose of inspecting the same, showing the same to prospective
purchasers, lenders, or lessees, and making such alterations, repairs,
improvements or additions to the Premises or to the building of which they
are a part as Lessor may deem necessary or desirable. Lessor may at any time
place on or about the Premises any ordinary "For Sale" signs and Lessor may
at any time during the last 120 days of the term hereof place on or about the
Premises any ordinary "For Lease" signs, all without rebate of rent or
liability to Lessee.
33. Auctions. Lessee shall not conduct, not permit to be
conducted, either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Lessor's prior written consent.
Notwithstanding anything to the contrary in this Lease, Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether
to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises
without Lessor's prior written consent.
35. Merger. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall
not work a merger, and shall, at the option of Lessor, terminate all or any
existing subtenancies or may, at the option of Lessor, operate as an
assignment to Lessor of any or all of such subtenancies.
36. Consents.
37. Guarantor. In the event that there is a guarantor of this
Lease, said guarantor shall have the same obligations as Lessee under this
Lease.
20
38. Quiet Possession. Upon Lessee paying the rent for the
Premises and observing and performing all of the covenants, conditions and
provisions on Lessee's part to be observed and performed hereunder, Lessee
shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease. The individuals executing
this Lease on behalf of Lessor represent and warrant to Lessee that they are
fully authorized and legally capable of executing this Lease on behalf of
Lessor and that such execution is binding upon all parties holding an
ownership interest in the Premises.
39. Options.
39.1 Definition. As used in this paragraph the word "Options" has
the following meaning: the right or option to extend the term of this Lease
or to renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor.
39.2 Options Personal. Each Option granted to Lessee in this Lease
are personal to Lessee and may not be exercised or be assigned, voluntarily
or involuntarily, by or to any person or entity other than Lessee, provided,
however, the Option may be exercised by or assigned to any Lessee Affiliate a
defined in paragraph 12.2 of this Lease. The Options herein granted to
Lessee are not assignable separate and apart from this Lease.
39.3 Multiple Options. In the event that Lessee has any multiple
options to extend or renew this Lease a later option cannot be exercised
unless the prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, (i)
during the time commencing from the date Lessor gives to Lessee a notice of
default pursuant to paragraph 13.1(b) or 13.1(c) and continuing until the
default alleged in said notice of default is cured, or (ii) during the period
of time commencing on the day after a monetary obligation to Lessor is due
from Lessee and unpaid without any necessity for notice thereof to Lessee)
continuing until the obligation is paid, or (iii) at any time after an event
of default described in paragraphs 13.1(a), 13.1(d), or 13.1(e) (without any
necessity of Lessor to give notice of such default to Lessee), or (iv) in the
event that Lessor has given to Lessee three or more notices of default under
paragraph 13.1(b), where a late charge has become payable under paragraph
13.4 for each of such defaults, or paragraph 13.1(c), whether or not the
defaults are cured, during the 12 month period prior to the time that Lessee
intends to exercise the subject Option.
21
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise
an Option because of the provisions of paragraph 37.4(a).
(c) All rights of Lessee under the provision of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option, if, after such exercise and prior to
commencement of the Option period, (i) Lessee fails to pay to Lessor a
monetary obligation of Lessee for a period of 30 days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to
Lessee), or (ii) Lessee fails to commence to cure a default specified in
paragraph 13.1(c) within 30 days after the date that Lessor gives notice to
Lessee of such default and/or Lessee fails thereafter to diligently prosecute
said cure to completion, or (iii) Lessee commits a default described in
paragraph 13.1(a), 13.1(d) or 13.1(e) (without any necessity of Lessor to
give notice of such default to Lessee), or (iv) Lessor gives to Lessee three
or more notices of default under paragraph 13.1(b), where a late charge
becomes payable under paragraph 13.4 for each such default, or paragraph
13.1(c), whether or not the defaults are cured.
40. Multiple Tenant Building. In the event that the Premises are
part of a larger building or group of buildings than Lessee agrees that it
will abide by keep and observe all reasonable rules...[ ] from time to time
for the management, , care and cleanliness of the building and grounds,
the parking of vehicles and the preservation of good order therein as well as
for the convenience of other occupants and tenants of the building. The
violations of any such rules and regulations shall be deemed a material
breach of this Lease by Lessee.
41. 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
Lessee, its agents and invitees from acts of third parties.
42. Easements. Lessor reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable and to cause the recordation of Parcel Maps and
restrictions, so long as such easements, rights, dedications, Maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee shall sign any of the aforementioned documents upon request
of Lessor and failure to do so shall constitute a material breach of this
Lease.
43. Performing 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
22
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 under the provisions of
this Lease.
44. Authority. If Lessee is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute
and deliver this Lease on behalf of said entity. If Lessee is a corporation,
trust of partnership, Lessee shall, within thirty (30) days after execution
of this Lease, deliver to Lessor evidence to such authority satisfactory to
Lessor.
45. Conflict. Any conflict between the printed provisions of the
Lease and the typewritten or handwritten provisions shall be controlled by
the typewritten or handwritten provisions.
46. Insuring Party. The insuring party under this lease shall be
Lessee.
47. Addendum. Attached hereto is an addendum or addenda containing
paragraphs 1 through 13 which constitutes a part of this Lease.
47.1 In the event there is more than one Lessee hereunder, each
such Lessee shall be jointly and severally liable for performance of Lessee's
obligations hereunder.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY 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.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL
ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX
23
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO: THE PARTIES
SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL
AND TAX CONSEQUENCES OF THIS LEASE.
The parties hereto have executed this Lease at the place on the dates specified
immediately adjacent to their respective signatures.
Xxxxxxx X. Xxxxx, J. Xxxxx Xxxxxxx, and Xxxxxxxx
Executed at LESSOR: X. Xxxxx, as Trustees of AFW
----------------- ----------------------------------------------------
#113 Trust, established under Declaration of Trust on
on dated January 19, 1988
-------------------------- ----------------------------------------------------
Address By: /s/
---------------------- ------------------------------------------------
-----------------------------
as Trustee as aforesaid and not individually
"LESSOR" (Corporate seal)
Executed at LESSEE: Vita-Fresh Vitamin Co., Inc. a California corporation
-----------------
By: /s/
------------------------------------------------
on
---------------------------
Xxx X. Xxxxxx, President
Address Vital Industries, Inc. a California Corporation
---------------------- ------------------------------------------------
-----------------------------
By: /s/
------------------------------------------------
Xxx X. Xxxxxx, President
For these forms write or call the American Real Estate Association, 000 Xxxxx
Xxxxxxxx Xx., Xxxxx 000, Xxx Xxxxxxx, XX 00000 (213) 687-8777.
24
ADDENDUM TO STANDARD INDUSTRIAL LEASE -- SPECIAL NET
VITA-FRESH VITAMIN CO., INC.
THIS ADDENDUM TO STANDARD INDUSTRIAL LEASE shall constitute a part
of that certain Standard Industrial Lease -- Special Net dated February 19,
1988 (the "Lease"), between Xxxxxxx X. Xxxxx, J. Xxxxx Xxxxxxx, and Xxxxxxxx
X. Xxxxx, as Trustees of AEW #113 Trust established by Declaration of Trust
dated January 19, 1988 ("Lessor"), and Vita-Fresh Vitamin Co., Inc., a
California corporation ("Lessee"), and the terms hereof shall for all
purposes be deemed incorporated into the Lease.
1. Amendment of Paragraph 4.1. Paragraph 4.1 of the Lease is hereby
amended to add the following sentences at the end thereof:
Effective as of the commencement of each Rent Period (other than
the first Rent Period) during the term of this Lease, the fixed
monthly rental payable hereunder shall be increased to the sum of
(a) the fixed monthly rental during the immediately preceding
Rent Period (the "Base Period"), plus (b) the sum obtained by
multiplying such amount by the percentage increase (expressed as
a fraction) in the Consumer Price Index, measured from the month
immediately preceding the commencement of the Base Period to the
final month of the Base Period. "Rent Period" shall refer to
each consecutive period of 30 calendar months, provided that the
first Rent Period shall commence with the commencement of the
Lease term and end at the end of the 30th month thereafter, and
the final Rent Period shall terminate upon termination of
-------------------------
* and Vital Industries, Inc., a California Corporation
the Lease. As used herein, the term "Consumer Price Index" shall
mean the United States Department of Labor's Bureau of Labor
Statistics Consumer Price Index, All Urban Consumers, All Items, Los
Angeles, Long Beach, Anaheim Area, California (1967 = 100), or the
successor of such Index. Notwithstanding the foregoing, however,
the fixed monthly rental for any Rent Period (other than the first
Rent Period) shall be not less than 1.1166 times, nor more than
1.213 times, the fixed monthly rental during the Base Period.
2. Amendment of Paragraph 5. Paragraph 5 of the Lease is hereby
amended to add the following sentence at the end thereof:
Lessor agrees to invest the Security Deposit in a money market
account at a financial institution reasonably acceptable to both
Lessor and Lessee, with interest to accrue to Lessee's benefit,
provided that: (i) Lessor shall have no liability for any loss of
principal, interest, or alternative investment opportunity, and
(ii) Lessor shall have the right to terminate any such investment
at any time when Lessor would have the right to apply such
deposit or a portion thereof as provided for herein, without any
liability for loss of principal or interest, or both.
3. Amendment of Paragraph 6.1. Paragraph 6.1 of the Lease is hereby
amended to read as follows:
6.1 Use. The Premises shall be used and occupied only for the
manufacture and distribution of vitamins and pharmaceuticals, or
for any other lawful purpose that does not: (a) materially
increase wear and tear on the Premises or the building in which
the Premises are located (the "Building"), (b) violate any
conditions, covenants, and restrictions applicable to the
Premises or the Building, (c) involve in any material fashion the
manufacture, storage, or release on or from the Premises of
hazardous or toxic substances or materials, (d) render
2
unobtainable any insurance required hereunder, or (e) in Lessor's
reasonable judgment, decrease the marketability of the Premises or
the Building with respect to sale or leasing or both. Lessee
acknowledges that it has reviewed and is familiar with the content
of the restrictions with respect to use of the Premises set forth in
that certain Corporation Grant Deed recorded June 30, 1978 in the
Official Records of Orange County in Book 12739, Page 1281.
4. Amendment of Paragraph 7.2. Paragraph 7.2 of the Lease is hereby
amended to read as follows:
7.2 Surrender. Upon expiration or termination of the Lease, Lessee
shall surrender to Lessor the Premises and all Lessee's improvements
(including HVAC, air filtration and other building systems) and
alterations in good condition, and shall remove all of its personal
property, including without limitation any manufacturing equipment
and other trade fixtures (other than trade fixtures constituting
HVAC, air filtration or other building systems). Lessee shall
perform all restoration made necessary by the removal of any
improvements, alterations, or personal property prior to expiration
of the Lease term. If any such removal would damage the building in
which the Premises are situated, Lessee shall give Lessor prior
written notice thereof and Lessor may elect to make such removal at
Lessee's expense or otherwise to require Lessee to post a bond or
other security for such restoration. Lessor may retain or dispose
of in any manner any such improvements, alterations or personal
property of Lessee that Lessee does not remove from the premises
upon expiration or termination of the Lease term, in which case
title thereto shall vest in Lessor. Lessee hereby waives all claims
against Lessor for any damage or loss to Lessee arising out of
Lessor's retention or disposition of, and agrees to be liable to
Lessor for Lessor's costs of storing, removing, and disposing of,
any such improvements, alterations, or personal property of Lessee.
If Lessee
3
fails to surrender the Premises to Lessor upon expiration or
termination of the Lease as required by this Paragraph, Lessee shall
indemnify, defend, and hold Lessor harmless from all damages, loss,
cost, and expense (including attorneys' fees) arising out of or in
connection with Lessee's failure to do so, including without
limitation any claims made by a succeeding tenant.
5. Amendment of Paragraph 7.5. Paragraph 7.5 of the Lease is hereby
amended to add the following sentences to the beginning of subparagraph (a):
Lessee may make non-structural, interior alterations,
improvements, and additions (other than Utility Installations
involving major building systems) to the Premises without
Lessor's prior written consent, provided (i) that Lessee present
any such proposed alterations to Lessor in written form, together
with detailed plans, prior to commencement of any work, (ii) that
Lessee obtain a permit for the proposed work from the appropriate
governmental agencies, furnish a copy thereof to Lessor prior to
commencement of the work, and comply with all conditions of such
permit promptly and expeditiously, (iii) that such alterations do
not diminish the general level of tenant improvements within the
Premises, the overall value of the Premises or the building in
which the Premises are situated, or the ability of Lessor to
relet the Premises, (iv) that such alterations are installed in
accordance with all applicable laws, ordinances, regulations, and
covenants, conditions, and restrictions, and (v) that such
alterations do not increase materially the cost of obtaining any
insurance required hereunder. Notwithstanding the foregoing
sentence, Lessee shall not make any alterations, improvements, or
additions of any sort to the Premises during the last twelve
months of the Lease term, whether non-structural or otherwise,
without Lessor's prior written consent. Lessee shall be entitled
to make structural alterations and Utility Installations
involving major building systems provided that all of the
requirements of (a)(i) through
4
(a)(v), above, are met, and that Lessee obtain Lessor's
prior written consent.
6. Amendment of Paragraphs 8.2, 8.3, and 8.4. Paragraphs 8.2, 8.3,
and 8.4 of the Lease are hereby amended to read as follows:
8.2 Liability Insurance. The insuring party shall carry public
liability insurance, insuring Lessor and Lessee against claims
for personal injury or death and property damage, in an amount
not less than $1,000,000 per occurrence for personal injury or
death and $1,000,000 per occurrence for property damage, and with
umbrella or excess coverage of no less than $10,000,000. Lessee
shall provide Lessor with satisfactory evidence of compliance
with California requirements for Workers' Compensation coverage
and of employee automobile coverage.
8.3 Property Insurance. The insuring party shall obtain and
keep in force constantly during the term of this Lease a policy
or policies of insurance in an amount not less than 100% of the
full replacement cost (less deductibles) of the Premises,
including all tenant improvements and fixtures (other than trade
fixtures) insuring Lessor (as the named insured and loss payee)
against loss or damage by fire or other risks included from time
to time in what is commonly called "all-risk" or extended
coverage insurance, including, but not limited to endorsements
covering losses sustained by reason of fire and lightning, flood,
earthquake, riot and civil commotion, and vandalism and malicious
mischief. Such full replacement cost shall be subject to
adjustment no less than annually, which adjustments shall in any
event be subject to Lessor's reasonable approval. The insuring
party shall, in addition, obtain and keep in force during the
term of this Lease a policy of rental value insurance covering a
period of one (1) year, with loss payable to Lessee, which
insurance shall also cover all real estate taxes and insurance
costs for said period. If such insurance coverage has a
deductible clause, the
5
deductible amount shall not exceed $50,000 per
occurrence for property insurance (other than flood and
earthquake coverage), 10% for flood and earthquake
insurance and $10,000 for rental value insurance, and
Lessee shall be liable for such deductible amount.
8.4 Policies. All policies of insurance required by this Lease
shall be maintained with insurers licensed to conduct business in
California with a Best's rating classification of not less than
"A" (except with respect to worker's compensation ) and otherwise
reasonably satisfactory to Lessor and shall contain a replacement
cost endorsement and a waiver of subrogation rights by the
insurer. All policies of insurance shall include an endorsement
providing that any proceeds of the policy shall be payable to
Lessor, or, with respect to liability insurance, to a third
party, in accordance with the policy terms and notwithstanding
any act or negligence of Lessee, and, if Lessee is the insuring
party, shall contain an agreement by the insurer that such policy
shall not be amended or cancelled without at least 30 days' prior
written notice to Lessor (provided that Lessee shall exercise its
best efforts to secure a 60 day notice period from each insurer
and that a 10 day notice period of cancellation following
nonpayment of premium shall be satisfactory). Any policies
containing a coinsurance clause shall include a replacement cost
endorsement adequate to ensure that the coinsurance clause is
rendered inoperative. At Lessor's option, any insurance obtained
by Lessor may be part of a "blanket" policy maintained by Lessor.
The insuring party shall deliver to the other party copies of
policies of such insurance or certificates evidencing the
existence and amounts of such insurance with loss payable clauses
as required by this Paragraph 8. If Lessee is the insuring party
Lessee shall, at least 30 days prior to the expiration of such
policies, furnish Lessor with renewals or "binders" thereof, or
Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee upon demand.
Lessee shall not do or permit to be done
6
anything that would invalidate the insurance policies
referred to in Paragraph 8.3.
7. Amendment of Paragraph 10. Paragraph 10 of the Lease is hereby
amended to add a new paragraph 10.5, as follows:
Notwithstanding the foregoing provisions of paragraph 10.1,
Lessor may, at Lessor's option, elect to pay such real property
taxes directly, in which event Lessee agrees to reimburse Lessor
therefor in full with Lessee's next rent installment, provided,
however, that Lessor shall have notified Lessee in writing at
least 30 days prior to delinquency of (i) Lessor's intention to
pay such taxes, and (ii) the length of time for which Lessor
intends to pay such taxes directly.
8. Amendment of Paragraph 12. Paragraph 12 of the Lease is hereby
amended to read as follows:
12. Assignment and Subletting.
(a) Lessee shall not, without the prior written consent
of Lessor, assign this Lease or any interest herein, sublet
the Premises or any part thereof, permit the use or
occupancy of the Premises by any person other than
Lessee, or hypothecate this Lease or any interest herein.
Any of the foregoing acts without such consent shall be
void and shall, at the option of Lessor, constitute a
default that shall entitle Lessor to terminate this Lease.
Regardless of Lessor's consent, no hypothecation,
assignment, subletting, occupation, or use by any other
person shall (i) release Lessee from Lessee's obligations
or alter the primary liability of Lessee to pay the rental
and to perform all other obligations hereunder, or (ii) be
deemed to be a consent to any subsequent hypothecation,
assignment, subletting, occupation, or use by another
person. The acceptance of rental by Lessor from any
other person shall not be deemed to be a waiver by
Lessor of any provision hereof. This Lease shall not,
nor shall any interest herein, be assignable as to the
7
interest of Lessee involuntarily or by operation of law
without the prior written consent of Lessor. Lessee
agrees that the instrument by which any assignment or
subletting consented to by Lessor is accomplished shall
expressly provide that the assignee or subtenant will
perform and observe all the agreements, covenants,
conditions, and provisions to be performed and observed
by Lessee under this Lease as and when performance and
observance is due, that no assignee or subtenant shall
have the further right to assign or sublet, and that Lessor
shall have the right to enforce such agreements,
covenants, conditions, and provisions directly against
such assignee or subtenant. Lessee shall in all cases
remain responsible for the performance by any subtenant
or assignee as indicated thereon of all such agreements,
covenants, conditions, and provisions. Any assignment
or subletting without an instrument containing the
foregoing provision shall be void and shall, at the option
of Lessor, constitute a default that entitles Lessor to
terminate this Lease.
(b) If the Lessee is a privately held corporation, or is
an unincorporated association or partnership, the
transfer, assignment, or hypothecation of any stock or
interest in such corporation, association, or partnership in
excess of fifty percent (50%) in the aggregate shall be
deemed an assignment or transfer within the meaning and
provisions of this paragraph 12. Notwithstanding the
foregoing sentence, neither the transfer of all of the stock
of Vita-Fresh Vitamin Co., Inc., a California
corporation, nor the transfer of all of the stock of Vital
Industries, Inc., a California corporation, to X. Xxxxxx
Nutritional Products Corp., a Delaware corporation,
shall be deemed such an assignment or transfer. If
Lessee is a publicly held corporation, the public trading
of stock in Lessee shall not be deemed an assignment or
transfer within the meaning of this paragraph.
(c) Notwithstanding the provisions of subparagraph
12(a) above, Lessee may assign this Lease, without
Lessor's consent, to X. Xxxxxx Nutritional Products
8
Corp., a Delaware corporation ("X. Xxxxxx"), or to any
wholly owned subsidiary thereof, upon X. Xxxxxx'x
acquisition of all of the stock of Lessee or Lessee's
parent corporation, or to any corporation resulting from
the merger or consolidation with Lessee, provided that
said assignee assumes, in full, the obligations of Lessee
under this Lease.
(d) Notwithstanding the provisions of subparagraph
12(a), before entering into any assignment of this Lease
or into a sublease of all or part of the Premises, Lessee
shall give written notice to Lessor identifying the
intended assignee or subtenant by name and address, the
terms of the intended assignment or sublease, and the
nature of the business of the proposed assignee or
sublessee, and providing current financial statements for
the proposed assignee or sublessee (which financials, in
the case of an assignee, shall have been audited) and,
thereafter, any other information that Lessor may
reasonably request. For a period of 30 days after such
notice is given, Lessor shall have the right by written
notice to Lessee (i) in the case of a proposed sublease,
either to (A) sublet from Lessee any portion of the
Premises proposed to be sublet for the term for which
such portion is proposed to be sublet but at the same rent
as Lessee is required to pay to Lessor under this Lease
for the same space, computed on a pro rata square
footage basis, or (B) if the proposed subletting is for
substantially the remaining period of the term of this
Lease, terminate this Lease entirely or as it pertains to
the portion of the Premises so proposed by Lessee to be
sublet, or (ii) in the case of a proposed assignment, to
terminate this Lease. If Lessor so terminates this Lease,
such termination shall be as of the date specified in
Lessor's notice. If Lessor so terminates this Lease,
Lessor may, if it elects, enter into a new lease covering
the Premises or a portion thereof with the intended
assignee or subtenant on such terms as Lessor and such
person may agree, or enter into a new lease covering
the Premises or a portion thereof with any other person;
in such event, Lessee shall not be entitled to any portion of
9
the profit, if any, that Lessor may realize on account of
such termination and reletting. Lessor's exercise of its
aforesaid option shall not be construed to impose any
liability upon Lessor with respect to any real estate
brokerage commission(s) or any other costs or expenses
incurred by Lessee in connection with its proposed
subletting or assignment.
(e) If Lessee complies with the provisions of
paragraph 12(a) and 12(d) above, and Lessor does not
exercise any of the options provided to Lessor under
paragraph 12(d), Lessor's consent to a proposed
assignment or sublet shall not be withheld unreasonably,
and shall be granted or refused within 30 days after
Lessor's receipt of all the information to which it is
entitled pursuant to subparagraph 12(d). If Lessor
refuses such consent, Lessor shall state the basis for such
refusal. Without limiting the other instances in which it
may be reasonable for Lessor to withhold its consent to
an assignment or subletting, Lessor and Lessee
acknowledge that it shall be reasonable for Lessor to
withhold its consent in the following instances:
(1) the proposed assignee or sublessee is a governmental
agency;
(2) the use of the Premises by the proposed
assignee or sublessee would involve occupancy in
violation of Paragraph 6 of this Lease;
(3) in Lessor's reasonable judgment, the
financial worth of the proposed assignee or
sublessee does not meet the credit standards
applied by Lessor or its investment advisors for
other tenants under leases with comparable terms;
(4) in Lessor's reasonable judgment, the
proposed assignee or sublessee does not have a
good reputation as a tenant of property;
10
(5) Lessor has received from any prior lessor
of the proposed assignee or subtenant a negative
report concerning such prior lessor's experience
with the proposed assignee or subtenant;
(6) Lessor has experienced previous defaults
by or is in litigation with the proposed assignee or
subtenant;
(7) the use of the Premises by the proposed
assignee or subtenant would violate any applicable
law, ordinance, regulation, or covenants,
conditions, and restrictions;
(8) the proposed assignment or sublease fails
to include all of the terms and provisions required
to be included therein pursuant to this Paragraph
12; or
(9) Lessee is in default of any obligation of
Lessee under this lease, or Lessee has defaulted
under this Lease on three or more occasions
during the 12 months last preceding the date that
Lessee shall request consent.
(f) In the case of an assignment, any sums or other
economic consideration received by Lessee as a result of
such assignment shall be paid to Lessor after first
deducting the cost of any real estate commissions
incurred in connection with such assignment. In the case
of a subletting, any sum or economic consideration
received by Lessee as a result of such subletting in
excess of the monthly rental due hereunder (such
monthly rental prorated if necessary to reflect only rental
allocable to the sublet portion of the Premises) shall be
paid to Lessor after first deducting (1) the cost of
leasehold improvements made to the sublet portion of the
Premises at Lessee's cost for the specific benefit of the
sublessee, amortized over the term of the sublease, and
(2) the cost of any real estate commissions incurred in
connection with such subletting, amortized over the term
11
of the sublease. Upon Lessor's request, Lessee shall
assign to Lessor all amounts to be paid to Lessee by any
such subtenant or assignee and shall direct such subtenant
or assignee to pay the same directly to Lessor.
(g) If Lessee shall assign or sublet the Premises, or
request the consent of Lessor to any assignment or
subletting, or if Lessee shall request the consent of
Lessor for any act that Lessee proposes to do, then
Lessee shall pay Lessor's reasonable attorneys' fees
incurred in connection therewith.
9. Amendment of Paragraph 13.1. The Lease is hereby amended to
add a new subparagraph (f) to Paragraph 13.1, as follows:
(f) The vacating of the Premises by Lessee for a period of two
consecutive months or more, provided that, notwithstanding the
provisions of paragraph 13.2 hereof, and only if Lessee is not
otherwise in default hereunder, Lessor's sole remedy with respect
to this subparagraph 13.1(f) shall be to terminate the Lease and
retake possession of the Premises.
10. Options to Extend Term. The Lease is hereby amended to add a new
Paragraph 48, as follows:
48. Options to Extend Term. Lessor hereby grants to Lessee the
following options (the "Options") to extend the term of this
Lease for two successive five-year periods (each an "Option
Period"), each commencing upon expiration of the then current
term, upon each and all of the following terms and conditions:
(a) Each Option shall be exercised by written notice
of exercise given to and actually received by Lessor on a
date that precedes the expiration of the then current term
by at least 9, and not more than 12 months.
(b) The provisions of Paragraph 39 of the Lease,
including the provision relating to defaults of Lessee set
12
forth in Paragraph 39.4, shall govern the exercise of
each Option.
(c) Except where specifically modified by this
Paragraph 48, all of the terms and conditions of this
Lease (including without limitation the Consumer Price
Index rent adjustments provided for in Paragraph 4.1
of the Lease) shall apply during the term of an Option.
(d) The initial fixed monthly rental payable pursuant
to Paragraph 4.1 of the Lease during each Option period
shall be the "Fair Rental Value" of the Premises,
meaning the monthly rental rate per square foot of
rentable area prevailing at the time the term of each
Option period commences for comparable manufacturing
and distribution space similarly situated in Orange
County that is thenbeing leased, multiplied by the
greater of 140,000 square feet or the net rentable area of
the Premises,with appropriate adjustments for
comparison rentals that are not on a triple-net basis.
Lessor shall notify Lessee in writing on or before the
date that is three months prior to commencement of each
Option period of Lessor's statement of Fair Rental
Value. If Lessee in good faith disputes Lessor's
determination of Fair Rental Value as so indicated,
Lessee shall so notify Lessor in writing within 10 days
following receipt of Lessor's statement. If such dispute
is not resolved by negotiation between the parties within
15 days after such notice of dispute is given, Lessee may
elect to submit Fair Rental Value to determination by
appraisal pursuant to subparagraph 48(e) below. If
Lessee fails to make such election in writing within 10
days following the close of such 15-day negotiation
period, Lessee shall be deemed to have accepted Lessor's
determination of Fair Rental Value. If an Option period
commences prior to such determination by appraisal,
Lessee shall pay rental when due based upon Lessor's
determination of Fair Rental Value, subject to retroactive
adjustment between the parties in the event a
determination by appraisal is different from Lessor's
determination.
13
(e) If Fair Rental Value is to be determined by
appraisal, within 10 days after expiration of the 15-day
negotiation period, Lessor and Lessee shall each appoint
as an appraiser an independent real estate broker with at
least 10 years experience in the leasing of manufacturing
and distribution space in the Orange County area, or a
similarly qualified real estate appraiser, and give notice
of such appointment to the other. If either Lessor or
Lessee shall fail to appoint an appraiser in timely
fashion, the appointed appraiser shall select the second
appraiser within 10 days after the failure of Lessor or
Lessee, as the case may be, to appoint. Such appraisers
shall, within 30 days after the appointment of the last of
them to be appointed, complete their determination of
Fair Rental Value and submit their appraisal reports to
Lessor and Lessee. If the valuations vary by 5% or less
of the higher value, the Fair Rental Value shall be the
average of the two valuations. If the valuations vary by
more than 5% of the higher value, the two appraisers
shall, within 10 days after submission of the last
appraisal report, appoint a third appraiser who shall be
similarly qualified. If the two appraisers are unable to
agree timely on the selection of a third appraiser, then
either appraiser, on behalf of both, may request such
appointment by the presiding Judge of the United States
District Court for the Central District of California.
Such appraiser shall, within 30 days after appointment,
make a determination of Fair Rental Value and submit
the appraisal report to Lessor and Lessee. The Fair
Rental Value shall be as determined by the third
appraiser, unless it is less than the valuations set forth in
the lower appraisal previously obtained, in which case
the valuation set forth in the lower appraisal shall be
controlling, or unless it is greater than the valuation set
forth in the higher appraisal previously obtained, in
which case the valuation set forth in the higher appraisal
shall be controlling. Lessor and Lessee shall each pay
the fees of their respective appraisers, and the fees of the
third appraisal shall be paid one-half by Lessor and one-
half by Lessee.
14
(f) Notwithstanding the foregoing, Fair Rental Value,
whether determined pursuant to Lessor's statement or by
appraisal, shall in no event be less than the fixed monthly
rental applicable to the Rent Period immediately
preceding the commencement of the Option period,
increased by the percentage increase in the Consumer
Price Index as provided in Paragraph 4.1 of this Lease.
The provisions of Paragraph 4.1 regarding Consumer
Price Index adjustments shall continue to apply
throughout each Option period.
11. Environmental Obligations. The Lease is hereby amended to
add a new Paragraph 49, as follows:
49. Hazardous Materials. Lessee hereby covenants and
agrees not to cause or permit the presence, use,
generation, release, discharge, storage, disposal, or
transportation of any Hazardous Materials (as defined
below) on, under, in, above, to, or from the Premises
other than in strict compliance with all applicable
federal, state, and local laws, regulations, and orders.
For the purposes of this Lease the term "Hazardous
Materials" shall refer to any substances, materials, and
wastes that are or become regulated as hazardous or
toxic substances under any applicable local, state, or
federal law, regulation, or order. Lessee shall
indemnify, defend, and hold Lessor harmless from and
against (a) any loss, cost, expense, claim, or liability
arising out of any investigation, monitoring, clean-up,
containment, removal, storage, or restoration work
("Remedial Work") required by, or incurred by Lessor
or any non-governmental entity or person in a reasonable
belief that such work is required by, any applicable
federal, state, or local law, governmental agency, or
political subdivision, and (b) any claims of third parties
for loss, injury, expense, or damage arising out of the
presence, release, or discharge of any Hazardous
Material on, under, in, above, to, or from the Premises
during the term of this Lease. In the event any Remedial
Work is so required under any applicable federal, state,
15
or local law during the term of this Lease, Lessee shall
perform or cause to be performed the Remedial Work in
compliance with such law, regulation, or order. All
Remedial Work shall be performed by one or more
contractors under the supervision of a consulting
engineer, each selected by Lessee and approved in
advance in writing by Lessor. In the event Lessee shall
fail to commence the Remedial Work in timely fashion
or fail to prosecute diligently the Remedial Work to
completion, Lessor may, but shall not be required to,
cause the Remedial Work to be performed, subject fully
to the indemnification provisions of this paragraph.
12. Right of First Negotiation. The Lease is hereby amended to add
a new Paragraph 50, as follows:
50. Right of First Negotiation. During the term of
this Lease, Lessor agrees that, prior to accepting any
offer from an unaffiliated third party to purchase the
Premises, Lessor shall notify Lessee (a "Notice of Desire
to Sell") of Lessor's desire to sell the Premises. If,
within five business days of Lessee's receipt of a Notice
of Desire to Sell, Lessee notifies Lessor in writing of
Lessee's desire to purchase the Premises, Lessor agrees
to negotiate in good faith with Lessee for a period of 20
business days following Lessor's Notice of Desire to Sell
prior to accepting the offer of any other party for the
purchase and sale of the Premises. If, notwithstanding
such good faith negotiations, the parties fail to execute a
binding, written agreement within such 20-business-day
period with respect to Lessee's purchase of the Premises
from Lessor, Lessor shall be entitled to market and sell
the Premises on any terms whatsoever and free of any
further obligation to notify or negotiate with Lessee.
13. Assignment of Contracts. The Lease is hereby amended to add
a new Paragraph 51, as follows:
16
51. Assignment of Contracts. Lessee agrees that,
effective upon termination of this Lease, Lessee shall
assign to Lessor any and all service contracts relating to
the Property of which Lessor desires to take an
assignment, including without limitation any alarm repair
or maintenance or landscaping contracts.
14. Exculpation. The Lease is hereby amended to add a new
Paragraph 52, as follows:
52. Exculpation. Neither the shareholders, nor the
trustees, nor the officers of Vanguard Real Estate Fund
I, created pursuant to that certain Amended and Restated
Declaration of Trust of Vanguard Real Estate Fund I
dated as of December 9, 1986, nor the trustees of AEW
#113 Trust shall bear any liability whatsoever under this
Lease or for the performance of any obligations
hereunder. To the extent that the beneficiary of AEW
#113 Trust shall have any liability under law for the acts
or omissions of Lessor under this Lease (without
admission or acknowledgment of such liability), Lessee
shall look solely to the trust estate of Vanguard Real
Estate Fund I for the payment of any claim arising under
or relating to this Lease or for the performance of any
term hereof.
17
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum to
Standard Industrial Lease as of the date of the Lease.
LESSOR: LESSEE:
Xxxxxxx X. Xxxxx, X. Xxxxx Xxxxxxx, Xxxx-Fresh Vitamin Co., Inc., a
and Xxxxxxxx X. Xxxxx, as Trustees of California corporation
AEW #113 Trust, established by
Declaration of Trust dated January 19,
1988
By:/s/
---------------------------------
Name: Xxx X. Xxxxxx
Its: President
By:/s/
--------------------------------- Vital Industries, Inc., a California
as Trustee as aforesaid and not Corporation
individually
By:/s/
---------------------------------
Name: Xxx X. Xxxxxx
Its: President
18
FIRST LEASE AMENDMENT FOR THE LEASE BETWEEN XXXXXXX X. XXXXX, J. XXXXX
XXXXXXX, AND XXXXXXXX X. XXXXX, AS TRUSTEES OF AEW #113 TRUST ESTABLISHED
UNDER DECLARATION OF TRUST DATED JANUARY 19, 1988, (LESSOR) AND VITA-FRESH
VITAMIN CO. INC., A CALIFORNIA CORPORATION AND VITAL INDUSTRIES, INC. A
CALIFORNIA CORPORATION (LESSEE) DATED FEBRUARY 19,1988 FOR THE PREMISES KNOWN
AS 0000 XXXXXXXXXX XXX, XXXXXX XXXXX, XXXXXXXXXX
Effective upon full execution of this document by both parties, the
above referenced lease and its addendum shall be modified to reflect the
following changes:
Paragraph I Parties: Delete "Xxxxxxx X. Xxxxx, J. Xxxxx
Xxxxxxx, and Xxxxxxxx X. Xxxxx, as
Trustees of AEW #113 Trust established
under Declaration of Trust dated January
19, 1988" and substitute "Sierra Pacific
California - LP."
Delete "Vita-Fresh Vitamin Co., Inc. A
California Corporation and Vital Industries,
Inc. A California Corporation" and
substitute "Xxxxxx Health Products Inc. a
Delaware Corporation."
Paragraph 3 Term: Delete "January 31, 1998" and substitute
"October 31, 2002."
Paragraph 4 Base Rent: Delete entire paragraph and substitute the
following:
"Beginning on August 1, 1997, and
thereafter, but subject to further adjustment
as herein provided, the base monthly rent
for the premises shall be $67,200.00 per
month payable without offset in advance on
the first day of each and every month."
Rent Delete "Amendment of Paragraph 4.1 " of the
Adjustment: Addendum and substitute the following:
"The base rental shall be adjusted on
August 1, 1998 and on each August 1st
thereafter based upon the same percentage
increase in the CPI as published by The
Bureau of Labor Statistics for All Urban
Wage Earners and Clerical for La-Long
Beach-Riverside (1967=100) or any
successor index between the base month of
August 1997 and the month of August
preceding each rental adjustment date with a
maximum of 5% annually during this lease
term and any extension thereof."
Rent The rent payable to Lessor for August -
Abatement: November 15, 1997 shall be base rent free.
Improvements Lessor to paint the exterior of the building
at his sole cost and expense. Color to be
similar to that of Lessees' Xxxxxx Facility.
Cancellation Lessee shall have the right to accelerate the
expiration date of the Lease by providing
Lessor with a written notice no less than 12
months prior to the new proposed expiration
date. Such notice shall be delivered in
accordance with Section 23 of the Lease.
The earliest date that the Lessee may
accelerate the expiration date of the Lease is
to January 31, 2001. Upon Lessee
providing Lessor with the referenced notice,
Lessee shall provide Lessor with a check in
accordance with the following schedule:
Early expiration date January 31, 2001 - the
fee will be equal to 3 times the January
2001 baserent.
Early expiration date February 1, 2001 to
December 31, 2001 - the fee will be equal
to 2 times the base rent of the new ending
date.
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Early expiration date January 1, 2002 to
September 30, 2002 - the fee will be equal
to the base rent of the new ending date.
Except where modified above, all terms, covenants and conditions of the
Lease and its Amendment shall remain unchanged and in full force and effect.
AGREED AND ACCEPTED
By: Sierra Pacific California-LP By: Xxxxxx Health Products (Lessee)
(Lessor)
By: /s/ /s/
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Xxxx X. Xxxxxxxxxxxx Xxxxxx X. Xxx
Managing Director - FPM Senior Vice President - Operations
Date: 6/12/97 Date: June 11, 1997
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