Exhibit 10.13
AMENDED COMMERCIAL LEASE
THIS Amended Commercial Lease (the "Lease") is made and entered into by
and between Xxxxxxxx Xxx Xxxxxxxx, Xx. and Xxxxx Xxx Xxxxxxxx, his wife,
individually and as trustees of the XXXXXXXX FAMILY IRREVOCABLE TRUST,
hereinafter collectively referred to as Landlord, and Xxxxxx Xxxxxxxx,
hereinafter referred to as Tenant. This Lease supersedes that certain Commercial
Lease dated December 28, 1989, and any amendments thereto (collectively the
"1989 Lease"). Xxxxxx Xxxxxxxx and F F & L, Incorporated have entered into an
agreement for the sale of Schroeders' Restaurant, which business currently is
operated from the Premises described in Article 2 of this Lease. Pursuant to an
assignment and assumption agreement, the 1989 Lease may be assigned to and
assumed by Tenant, said assignment to be effective upon close of escrow. This
Lease is effective as of the date of the close of said escrow and shall be null
and void if said closing has not occurred on or before May 30, 1997.
RECITALS
A. Landlord owns or controls that certain real property commonly known
as 000-000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (the "Real Property").
B. There exists on the Real Property a mixed-use building which
contains restaurant and office space (the "Building").
C. Tenant desires to lease from Landlord and Landlord desires to lease
to Tenant a certain portion of the Building subject to and upon the terms,
covenants and conditions set forth herein.
NOW, THEREFORE, Landlord and Tenant covenant and agree as follows:
1. BASIC LEASE INFORMATION
1.1 The following is a summary of basic lease information. Each term or
matter in this Article 1 shall be deemed to incorporate all of the terms set
forth herein below pertaining to such matter or item and to the extent there is
any conflict between the provisions of this Article 1 and any more specific
provision of this Lease, such more specific provision shall control.
Building Address: 000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Landlord: Xxxxxxxx Xxx Xxxxxxxx, Xx. and Xxxxx Xxx Xxxxxxxx,
his wife, individually and as trustees of the Xxxxxxxx
Family Irrevocable Trust
Notice Addresses P.O. Box 67
of Landlord: Xxxxxxxxx, Xxxxxxxxxx 00000
(for notice by certified mail only)
with a copy to:
Xxxxxx X. X'Xxxxx, Esq.
Xxxxxx & X'Xxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Tenant: Xxxxxx Xxxxxxxx or an assignee corporation of which
Xxxxxx Xxxxxxxx is an officer, director and shareholder
Notice Address 000 Xxxxx Xxxxxx
of Tenant: Xxxxxxx Xxxx, Xxxxxxxxxx 00000
(for all notices -by certified mail and by personal
delivery)
Key Contact Xxxxxx Xxxxxxxx
for Tenant: Telephone: (000) 000-0000
Premises (Article 2): 5170 square feet of ground floor restaurant space;
5600 square feet of basement space and 360 square
feet of mezzanine space at the real property commonly
known as 000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
Term (Article 3): Commencing on April __, 1997; terminating on
March 31, 2012
Base Rent
(Articles 4 and 5): Annual base rent:
For Year 1: $102,000
For Year 2: $114,000
For Year 3: $120,000
For Year 4: $126,000
For Year 5: $132,000
For Year 6: $138,000
For Year 7: $144,000
For Year 8: $144,000 + CPI adjustment
For Year 9: $144,000 + CPI adjustment
For Year 10: $144,000 + CPI adjustment
For Year 11: $144,000 + CPI adjustment
For Year 12: $144,000 + CPI adjustment
For Year 13: $144,000 + CPI adjustment
For Year 14: $144,000 + CPI adjustment
For Year 15: $144,000 + CPI adjustment
Monthly installments:
For Year 1
(first six months): $ 8,000
For year 1
(next six months): $ 9,000
For Year 2: $ 9,500
For Year 3: $10,000
For Year 4: $10,500
For Year 5: $11,000
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For Year 6: $11,500
For Year 7: $12,000
For Year 8: $12,000 + CPI adjustment
For Year 9: $12,000 + CPI adjustment
For Year 10: $12,000 + CPI adjustment
For Year 11: $12,000 + CPI adjustment
For Year 12: $12,000 + CPI adjustment
For Year 13: $12,000 + CPI adjustment
For Year 14: $12,000 + CPI adjustment
For Year 15: $12,000 + CPI adjustment
Tenant's Tax Share 50%
(Article 6):
Tenant's Insurance 50%
Share (Article 7):
Use (Article 7): Restaurant
Security Deposit $19,500 cash
(Article 22):
2. PREMISES
2.1 Subject to the terms, covenants and conditions set forth in these
Lease, Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
those premises (the "Premises"), including improvements, located at 000 Xxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, and consisting of 5170 square feet of
ground floor restaurant space, 5600 square feet of basement space and 360 square
feet of office-mezzanine space, accessible from the ground floor. The Premises
are part of the Building located at 234 and 000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Building").
2.2 The Premises doe not include the furniture, fixtures and equipment
described in Exhibit A, which is attached to and made a part hereof by this
reference, nor 300 square feet of the basement storage area.
2.3 The Premises are subject to the right of Landlord or any tenant of
Landlord to have access to the remaining 300 square feet of storage space by use
of the freight elevator and/or stairs on a reasonable basis.
3. TERM
3.1 The Premises are leased for a term (the "Term") commencing on April
__, 1997, and ending on March 31, 2012, or such earlier date on which this Lease
terminates pursuant to the terms hereof.
3.2 Should the Tenant hold over and continue in possession of the
Premises after expiration of the term of this lease or any extension thereof,
Tenant's continued occupancy of the Premises shall be considered a
month-to-month tenancy subject to all the terms and conditions of this lease
save and except that the rent for the hold over period shall be at a rate of one
hundred and fifty percent (150%) of the last month's rent of the lease prior to
the hold over period.
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4. RENT; ADDITIONAL CHARGES
4.1 Tenant will pay to Landlord during the Term the annual Base Rent
specified in Article 1 as the same may be increased pursuant to Section 5.1
(herein called the "Base Rent"). The Base Rent will be payable in equal
consecutive monthly installments on or before the first day of each month, in
advance, at the address specified for Landlord in Article 1, or such other place
as Landlord may designate in writing, without any prior demand and without any
deduction or setoff. If the Commencement Date occurs on a day other than the
last day of the calendar month, then the rental for such fractional month will
be prorated based on a thirty day month.
4.2 Tenant shall pay to Landlord all charges and other amounts required
under this Lease (herein called "Additional Charge") as additional rent,
including, without limitation, the charges for Real Estate Taxes and Insurance
provided for in Article 6. All such Additional Charges will be payable as
additional rent at the place where the Base Rent is payable. Landlord will have
the same remedies for a default in the payment of any Additional Charges as for
a default in the payment of Base Rent.
4.3 If Tenant fails to pay any Base Rent or Additional Charges within
seven days after the date the same is due and payable, such unpaid amounts will
be subject to a late payment charge equal to six percent (6%) of the unpaid
amounts in each instance. Tenant shall be entitled to only one (1) notice of
late payment in any twelve (12) month period. Tenant shall have five (5)
calendar days after such notice to make full payment to Landlord. If such
payment is not received within such five (5) day period, the late charge shall
be due and payable. After one (1) such notice is given by Landlord in any twelve
(12) month period, all subsequent late payments during the subsequent twelve
(12) month period shall be subject to the late payment charge without notice.
The late payment charge has been agreed upon by Landlord and Tenant, after
negotiation, as a reasonable estimate of the additional administrative costs and
detriment that will be incurred by Landlord as a result of any such failure by
Tenant, the actual costs thereof being extremely difficult if not impossible to
determine. The late payment charge constitutes liquidated damages to compensate
Landlord for its damages resulting from such failure to pay and shall be paid to
Landlord together with such unpaid amounts. Acceptance of such late payment
charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount or prevent Landlord from exercising any of
the other rights or remedies granted under this Lease.
4.4 Any amount due to Landlord, if not paid when due, shall bear
interest from the date due until paid at the highest rate legally permitted;
provided that interest shall not be payable on late charges incurred by Tenant
nor any amounts upon which late charges are paid by Tenant to the extent such
interest would cause the total interest to be in excess of that legally
permitted. Payment of interest shall not excuse or cure any default hereunder by
Tenant.
5. ANNUAL RENT ADJUSTMENT
5.1 Upon the eighth anniversary of the commencement of the Lease and on
such anniversary thereafter, the monthly rental for the following lease year
shall be adjusted in accordance with the increase evidenced by the increase in
the Bay Area All Urban Consumer Price Index for the previous 12 month period.
Such annual increase shall in no event be less than 2.5% nor greater than 5%.
6. ADDITIONAL CHARGES FOR INSURANCE AND REAL ESTATE TAXES
6.1 This Lease is intended to be a net Lease; and the Base Rent
hereunder is to be paid by Tenant absolutely net of all costs and expenses
relating to Landlord's ownership and operation of the Building. The provision of
this Article 6 for the payment of Tenant's Tax Share and Tenant's Insurance
Share are intended to pass on to Tenant its share of all such costs and
expenses.
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For purposes of this Article 6, the following terms shall have the
meanings set forth below:
a. "Calendar Year" means each twelve (12) consecutive month period
commencing January 1st of each year during the term, including the partial year
during which the Lease commences.
b. "Tenant's Tax Share" and "Tenant's Insurance Share" mean the
percentage figures so specified in Article 1.
c. "Real Estate Taxes" means all taxes, assessments and charges levied
upon or with respect to the entire Property owned by Landlord of which the
leased Premises are a part, or any personal property of the Landlord used in the
operation thereof, or the Landlord's interest in the Property or such personal
property. Real estate taxes shall include, without limitation, all general real
property taxes and general and special assessments, charges, fees or assessments
for transit, housing, police or other governmental services or purported
benefits to the Property or the occupants thereof, service payments in lieu of
taxes, business taxes, and any tax, fee or excise on the act of entering into
this Lease or any other lease of space in the Property, or on the use or
occupancy of the Building or any part thereof, or on the rent payable under any
lease or in connection with the business of renting space in the Property, that
are now or hereafter assessed against Landlord by the United States of America,
the State of California, or any political subdivision thereof, public
corporation, district or other political or public entity, and shall also
include any other tax, fee or other excise, however described, that may be
levied or assessed as a substitute for, or in addition to, in whole or in part,
any other Real Estate Taxes, whether or not now customary or in the
contemplation of the parties on the date of this Lease. Real Estate Taxes shall
not include franchise, transfer, inheritance or capital stock taxes or income
taxes measured by the net income of Landlord from all sources unless, due to a
change in the method of taxation, any of such tax is levied or assessed against
Landlord as a substitute for, or in addition to, in whole or in part, any tax
that would otherwise constitute a Real Estate Tax. Real Estate Taxes shall also
include reasonable legal fees, costs, and disbursements incurred in connection
with proceedings to contest, determine, or reduce Real Estate Taxes.
d. "Insurance" means the total cost and expenses paid or incurred by
Landlord in connection with obtaining insurance which the Landlord shall carry
to insure the building, of which the Premises are a part, for fire and extended
coverage, vandalism, malicious mischief, sprinkler leakage, water damage (from
roof leakage, ground water, or otherwise) and special extended period
(all-risk).
6.2 Tenant shall pay to Landlord as Additional Charges one twelfth
(1/12) of Tenant's Tax Share for each Calendar Year or portion thereof during
the term, in advance, on or before the first day of each month during such
Calendar Year, in an amount estimated by Landlord in a writing delivered to
Tenant. Landlord may revise such estimates from time to time and Tenant will
thereafter make payments on the basis of such revised estimates. With reasonable
promptness after Landlord has received the tax bills for any Calendar Year, or
within a reasonable period of time after a termination of this Lease which does
not coincide with the expiration of the Calendar Year, Landlord will furnish
Tenant with a statement (hereafter called "Landlord's Tax Statement") setting
forth the amount of Real Estate Taxes for such Calendar Year and Tenant's Tax
Share thereof, which statement shall be conclusive and binding on Tenant. If
Tenant's Tax Share of the actual Real Estate Taxes for such Calendar Year
exceeds the estimated Real Estate Taxes paid by Tenant for such Calendar Year,
Tenant shall pay to Landlord (whether or not this Lease has terminated) the
difference between the amount paid by Tenant and Tenant's Tax Share of the
actual Real Estate Taxes within fifteen (15) days after the receipt of
Landlord's Tax Statement; and if the total amount of estimated Real Estate Taxes
paid by Tenant for such Calendar Year exceeds Tenant's Tax Share for such
Calendar Year, such excess shall be credited against the next installments of
Real Estate Taxes due from Tenant hereunder.
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6.3 Tenant shall pay to Landlord as Additional Charges one twelfth
(1/12) of Tenant's Insurance Share for each Calendar Year or portion thereof
during the term, in advance, on or before the first day of each month during
such Calendar Year, in an amount estimated by Landlord in a writing delivered to
Tenant. Landlord may revise such estimates from time to time and Tenant will
thereafter make payments on the basis of such revised estimates. With reasonable
promptness after the expiration of each Calendar Year, or within a reasonable
period of time after a termination of this Lease which does not coincide with
the expiration of the Calendar Year, Landlord will furnish Tenant with a
statement (hereafter called "Landlord's Insurance Statement") setting forth the
amount of Insurance for such Calendar Year and Tenant's Insurance Share thereof,
which statement shall be conclusive and binding on Tenant. If Tenant's Insurance
Share of the actual Insurance for such Calendar Year exceeds the estimated
Insurance paid by Tenant for such Calendar Year, Tenant shall pay to Landlord
(whether or not this Lease has terminated) the difference between the amount
paid by Tenant and Tenant's Insurance Share within fifteen (15) days after the
receipt of Landlord's Insurance Statement, and if the total amount of estimated
Insurance paid by Tenant for such Calendar Year exceeds Tenant's Insurance Share
of the actual Insurance for such Calendar Year, such excess shall be credited
against the next installments of Insurance due from Tenant hereunder.
6.4 Tenant's Tax Share and Tenant's Insurance Share for the Calendar
Year in which the Lease commences and for the Calendar Year in which the Lease
expires shall be prorated based on a 365-day year, but shall remain subject to
adjustment based on receipt of information after date on which the Lease
expires.
6.5 Tenant hereby waives any and all subrogation rights which might
arise against Landlord or its insurance carrier.
7. USE
7.1 Tenant shall use and continuously occupy the Premises during the
term of this Lease solely for the purpose of operation of a restaurant, for uses
normally incident to such purpose, and for no other use or uses. Tenant shall at
Tenant's own cost and expense comply with all applicable laws, statutes and
regulations relating to Tenant's use and occupancy of the Premises, whether such
laws, statutes or regulations be now in force or hereafter enacted. Tenant's
failure to comply shall be ground for termination of this Lease by Landlord.
7.2 Tenant shall not commit, or permit the commission by others, of any
waste on the Premises; Tenant shall not maintain, commit or permit the
maintenance or commission of any nuisance as defined in California Civil Code
Sections 3479 through 3503 on the Premises; and Tenant shall not use or permit
the use of the Premises for any unlawful purpose.
8. CONDITION OF PREMISES; ALTERATIONS
8.1 Tenant hereby accepts the Premises in their "as is" condition.
8.2 Except as otherwise expressly provided in Article 9.8 of the Lease,
Tenant shall at its own cost and expense keep and maintain all portions of the
Premises as well as all improvements on the Premises and all facilities
appurtenant to the Premises in good order and repair and in safe and clean
condition, reasonable wear and tear excepted.
8.3 Landlord reserves the right, at any time and from time to time, to
make alterations, additions, repairs or improvements to or in any part of the
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Building, the fixtures and equipment therein, provided that any such alterations
or additions shall not materially adversely affect the functional utilization of
the Premises.
8.4 In the event any governmental entity promulgates or revises any
statute, ordinance or building, fire or other code and imposes mandatory or
voluntary controls or guidelines on Landlord or the Building or any part
thereof, or in the event Landlord is required or elects to make alterations or
to perform maintenance with respect to, any part of the Building in order to
comply with such mandatory or voluntary controls or guidelines, such compliance,
the making of such alterations and or the performance of such maintenance shall
in no event entitle Tenant to any damages, relieve Tenant of the obligation to
pay the full Base Rent and Additional Charges reserved hereunder or to perform
each of its other covenants hereunder or constitute or be construed as a
constructive or other eviction of Tenant.
8.5 Without the prior written consent of Landlord, which Landlord may
refuse in Landlord's sole discretion, Tenant shall not place or install in the
Premises any machine, equipment, files or other load the weight of which shall
exceed 80 pounds per square foot; and if Landlord consents to the placement or
installation of any such machine, equipment, files or other load in the
Premises, Tenant at its sole cost and expense shall reinforce the floor of the
Premises in the area of such placement or installation, pursuant to plans and
specifications approved by Landlord and otherwise in compliance with this
Article 8, to the extent necessary to assure that no damage to the Premises or
the Building or weakening of any structural supports will be occasioned thereby.
8.6 Tenant shall not make or permit any alterations, installations,
additions or improvements, structural or otherwise (herein collectively called
"Alterations"), in or to the Premises or the Building without Landlord's prior
written consent, which Landlord may give or withhold in Landlord's sole
discretion. Tenant shall be responsible for the cost of any additional
alterations and improvements required by the law to be made to or in the
Building as a result of any Alterations. All Alterations shall be done in
accordance with plans and specifications approved by Landlord, and subject to
all other conditions which Landlord may in its sole discretion impose. Upon
completion of any Alterations, Tenant shall provide to Landlord at Tenant's
expense "as built" plans and specifications.
8.7 Except as provided in Section 8.8 and with respect to the property
described in Exhibit A, all appurtenances, fixtures, improvements, equipment,
additions and other property attached to or installed the Premises at the
commencement of or during the Term shall be and remain the property of Landlord
and shall not be removed by Tenant unless requested by Landlord.
8.8 All furniture, furnishings and articles of movable personal
property installed in the Premises by or for the account of Tenant, without
expense to Landlord, and which can be removed without structural or other
material damage to the Building (all of which are herein called "Tenant's
Property") shall be and remain the property of Tenant and may be removed by it
at any time during the Term; provided, however, (i) any equipment or other
property which is a replacement for items originally provided by Landlord at
Landlord's expense shall not be considered Tenant's Property, and (ii) that the
property described in Exhibit A shall not be removed without the written consent
of Landlord. Upon the last day of the term of this Lease, or on any sooner
termination, Tenant shall remove from the Premises all of Tenant's Property
unless, in Tenant's initial request for the Landlord's consent to the
Alterations, Tenant also requested permission to leave the Tenant's Property in
question in place at the expiration of the Term and the Landlord consented in
writing to such request, and except such items as the parties have otherwise
agreed are to remain and to become the property of Landlord. Tenant shall repair
or pay the cost of repairing any damage to the Premises or to the Building
resulting from such removal. Tenant's obligations under this Section 8.9 shall
survive the termination of this Lease. Any items of Tenant's property which
shall remain in the premises after termination of this Lease may, at the option
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of the Landlord, be deemed abandoned and in such case may either be retained by
Landlord as its property or be disposed of, without accountability, at Tenant's
expense in such manner as Landlord may see fit.
8.9 As security for the faithful performance of all of the terms,
conditions and covenants of this Lease to be performed by Tenant, Tenant hereby
grants to Landlord a security interest in all of Tenant's Property now or
hereafter placed on or affixed to the Premises by Tenant. Any right of removal
of Tenant's Property given Tenant by the provisions of Section 8.8 shall be
exercisable only if, at the time of the removal, Tenant is not in default in
performance of this Lease. Tenant may, however, at any time it is not in default
in performance of this Lease, trade in or replace any of Tenant's property free
of the security interest created by this Section 8.8 and this security interest
will then attach to the item that replaced such trade fixture. On default in
performance of any obligation of this Lease to be performed by Tenant, Landlord
shall immediately have as to the foregoing items the remedies provided to a
secured party under the Uniform Commercial Code as enacted in California. Tenant
will deliver to Landlord upon the execution of this Lease a Form UCC-1 Financing
Statement evidencing this security interest and such other documentation as
Landlord may reasonably require to perfect this security interest.
8.10 On the last day of the term hereof, or on any sooner termination,
Tenant shall surrender the Premises to landlord in the same condition as when
received, ordinary wear and tear excepted, clean and free of debris. Tenant
shall repair any damage to the Premises occasioned by the installation or
removal of Tenant's trade fixtures, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in the Lease, Tenant shall leave the
power panels, electrical distribution systems, lighting fixtures, heating,
ventilating and air conditioning systems and plumbing on the Premises in good
operating condition.
9. UTILITIES; MAINTENANCE AND REPAIRS
9.1 Tenant shall pay, and shall hold Landlord free and harmless from,
all charges for the furnishing of gas, water, electricity, telephone service,
sewage, and other public utilities to the Premises during the Term or any
extension thereof and Tenant shall pay for the removal of garbage and rubbish
from the Premises during the terms of this Lease or any extensions thereof.
9.2 It is expressly understood that Tenant shall pay for the
electricity consumed by the heating, ventilation and air conditioning ("HVAC")
system servicing the Premises and shall maintain in good condition said HVAC
system. Tenant will cause to have performed regular, periodic, preventative
maintenance of the HVAC system and Tenant will provide Landlord with evidence of
such within 20 days of the performance of such service.
9.3 Without the prior written consent of Landlord, which Landlord may
refuse in its sole discretion, Tenant shall not (a) connect or use any
electrical equipment that exceeds the capacity of the Building's electrical
system; or (b) connect any apparatus, machinery or device through electrical
outlets except in the manner for which such outlets are designed and without the
use of any device intended to increase the plug capacity of any electrical
outlet.
9.4 Landlord will cause to have performed regular, periodic,
preventative maintenance of the freight elevator. In the event that the freight
elevator needs to be repaired or replaced during the Term of this Lease, Tenant
shall be responsible for 50% of the cost of such repair or replacement and
Landlord shall be responsible for 50% of the cost of such repair or replacement.
9.5 Tenant shall maintain in good condition and repair the kitchen
flue. Tenant shall cause an inspection of the kitchen flue at no less than four
month intervals. Upon written demand by the Landlord, Tenant shall increase
these frequency of the inspections to once every quarter.
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9.6 Tenant shall arrange and pay for a monthly pest control service.
Tenant shall furnish to Landlord verification of the inspections and service
described in this Section within a reasonable time after each such inspection or
service has been performed.
9.7 All repairs, replacements and maintenance by Tenant shall be made
and performed: (a) at Tenant's cost and expense; (b) by contractors or mechanics
approved by Landlord, (c) so that same shall be at least equal in quality, value
and utility to the original work or installation, (d) in a manner and using
equipment and materials which will not interfere with or impair the operations,
use or occupation of the Building, and (e) in accordance with all applicable
laws and regulations of governmental authorities having jurisdiction over the
Premises. Tenant shall reimburse Landlord upon demand for any expenses incurred
by Landlord in connection with any repairs or replacements required to be made
by Tenant, including, without limitation, any fees charged by Landlord's
contractors to review plans and specifications prepared by Tenant.
9.8 Landlord shall at its own cost and expense maintain in good
condition and repair the exterior roof, exterior walls except show glass
windows, structural supports, and the foundation of the Premises; provided,
however, that Landlord shall not be liable for any damages to Tenant or the
property of Tenant resulting from Landlord's failure to make any repairs
required by this article unless such damages are caused by Landlord's negligence
and written notice of the need for such repairs has been given to Landlord by
Tenant and Landlord has failed for a period of sixty (60) days after receipt of
the notice, unless prevented by causes not the fault of the Landlord, to make
the needed repairs; provided further that Landlord shall promptly be reimbursed
for the full cost of any repairs made pursuant to this article required because
of the negligence or other fault of the Tenant or its employees or agents or
subtenants, if any.
10. LIENS
10.1 Tenant shall keep the Premises free and clear from any and all
liens, claims and demands for work performed, materials furnished, or
obligations incurred by or for Tenant. In the event that Tenant shall not,
within ten (10) days following the imposition of any such lien, Tenant shall
cause the lien to be released of record by payment or posting of a proper bond.
Landlord shall have in addition to all other remedies provided herein and by law
the right but not the obligation to cause same to be released by such means as
it shall deem proper, including the payment of the claim giving rise to such
lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith (including without limitation reasonable attorneys' fees)
shall be payable to Landlord by Tenant upon demand. Landlord shall have the
right at all times to post and keep posted on the Premises any notices permitted
or required by law or that Landlord shall deem proper for the protection of
Landlord, the Premises and the Building from mechanics' and materialmen's liens.
11. COMPLIANCE WITH LAWS
11.1 Tenant, at Tenant's cost and expense, shall comply with all laws,
orders and regulations of federal, state, county and municipal authorities
relating to the Premises or the use, improvement or occupancy thereof. Any word
of installations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant pursuant to the provisions of this Article 11
shall be made in conformity with and subject to the provisions of Section 8.6.
11.2 As used herein, the following items shall have the following
meanings: "Environmental Activity" means any actual, proposed or threatened use,
storage, treatment, existence, release, emission, discharge, generation,
manufacture, disposal or transportation of any Hazardous Materials from, into,
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on/under or about the Premises, or any other activity or occurrence that causes
or would cause any such event to exist; "Environmental Requirements" means all
present and future federal, state, regional or local laws relating to the use,
storage, treatment, existence, release, emission, discharge, generation,
manufacture, disposal or transportation of any Hazardous Materials; and
"Hazardous Material" means at any time any substances or material which at such
time are classified or considered to be hazardous or toxic under any
Environmental Requirement. Tenant shall not engage in nor permit the occurrence
of any Environmental Activity. Tenant shall, at its own expense, procure,
maintain in effect and comply with all conditions of any and all permit,
licenses, and other governmental and regulatory approvals required under any
Environmental Requirements for any Environmental Activity by tenant, including,
without limitation, the discharge of (appropriately treated) materials or wastes
into or through any sanitary sewer serving the Premises, and upon termination of
this Lease shall cause all of its Hazardous Materials to be removed from the
Premises in accordance and in compliance with all applicable Environmental
Requirements. Upon having knowledge thereof, Tenant shall immediately notify
Landlord in writing of any regulatory action that has been instituted, or
threatened by any governmental agency or court with respect to Tenant that
relates to any Environmental Activity; any claim relating to any Environmental
Activity by Tenant in, on or about the Premises, or that arises out of or in
connection with any Hazardous Materials in, on, under or about the Premises or
removed from the Premises; or any actual or threatened material release on,
under or about the Premises or any adjacent property of any Hazardous Material,
except any Hazardous Material whose discharge or emission is expressly
authorized by and in compliance with a permit issued by a federal, state,
regional or local governmental agency pursuant to Environmental Requirements.
Tenant shall provide Landlord with copies of any communications with any third
party relating to any claim made or threatened with respect to any Environmental
Activity by Tenant in, on or about the Premises. Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect, and hold Landlord and
each of Landlord's partners, employees, agents, attorneys, successors and
assigns, free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including attorneys' fees) arising
from or caused in whole or in part, directly or indirectly, by (i) any
Environmental Activity by Tenant; or (ii) Tenant's failure to comply with any
Environmental Requirements. Tenant's obligations under this Section 11.2 shall
include, without limitation, and whether foreseeable or unforeseeable, all costs
of any repair or decontamination of the Premises, or the preparation and
implementation of any closure, remedial action or other plans in Environmental
Activity by tenant, and shall survive the expiration or earlier termination of
this Lease. The provisions of this Section 11.2 shall survive the termination of
this lease.
11.3 Tenant shall not do anything, or permit anything to be done, in or
about the Premises which would: (a) invalidate or be in conflict with the
provisions of or cause any increase in the applicable rates for any fire or
other insurance policies covering the Building, any portion of the Building, or
any property located therein, or (b) resulting in a refusal by fire insurance
companies of good standing to insure the Building, any portion of the Building,
or any property located therein, in amounts reasonably satisfactory to Landlord;
or (c) subject Landlord to any liability or responsibility for injury to any
person or property by reason of any business operation being conducted on the
Premises. Tenant, at Tenant's expense, shall comply with all rules, orders,
regulations or requirements of the American Insurance Association and with any
similar body that shall hereafter perform the function of such Association.
12. SUBORDINATION
12.1 Without the necessity of any additional document, this Lease shall
be subject to and subordinate at all times to (a) all reciprocal easement
agreements and all ground leases or underlying leases which may now exist or
hereafter be executed affecting the Building or the Real Property or both, and
(b) the lien of any mortgage or deed of trust which may now exist or hereafter
be executed in any amount for which the Building, Real Property ground leases or
underlying leases, or Landlord's interest or estate in any of said items, is
specified as security. Notwithstanding the foregoing, Landlord shall have the
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right to subordinate or cause to be subordinated to this Lease any of the items
referred to in clause (a) or (b) above. In the event any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant
shall, notwithstanding any subordination, attorn to and become the tenant of the
successor in interest to Landlord, at the option of such successor in interest.
The provisions of this Article 12 shall be self-operative and no further
instrument shall be required. Tenant covenants and agrees, however, to execute
and deliver, upon demand by Landlord, any additional documents evidencing the
priority or subordination of this Lease to any such ground leases, underlying
leases, reciprocal easement agreements or similar documents or instruments, or
with respect to the lien of any such mortgage or deed of trust.
13. INABILITY TO PERFORM
13.1 If Landlord is unable to fulfill, or is delayed in fulfilling any
of Landlord's obligations under this Lease, by reason of acts of God, accidents,
breakage, repairs, maintenance, strikes, lockouts, other labor disputes,
inability to obtain materials, or any other reason beyond Landlord's reasonable
control, then no such inability or delay by Landlord shall constitute an actual
or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of Base Rent or Additional Charges, or entitle Tenant to
any abatement or diminution of Base Rent or Additional Charges, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord or its agents by reason of inconvenience, annoyance, interruption,
injury or loss to or interference with Tenant's business or use and occupancy or
quiet enjoyment of the Premises or any loss or damage occasioned thereby. Tenant
hereby waives and releases any right to terminate this Lease under California
Civil Code Section 1932(1) or under any similar law, statute or ordinance now or
hereafter in effect.
14. DESTRUCTION
14.1 If the Premises or the Building are damaged by fire or casualty,
Landlord shall forthwith repair the same provided that such repairs can e made
within 180 days after the date of such damage under the laws and regulations of
the federal, state and local governmental authorities having jurisdiction
thereof. In such event, this Lease shall remain in full force and effect except
that Tenant shall be entitled to a proportionate reduction of Base Rent and
Additional Charges while such repairs to be made hereunder by Landlord are being
made. Such proportionate reduction shall be based upon the extent to which such
damage and the making of such repairs by Landlord shall interfere with the
business carried on by Tenant in the Premises. Within 60 days after the date of
such damage (or as soon as reasonably possible after such 60-day period),
Landlord shall notify Tenant whether or not such repairs cannot be made within
180 days after the date of such damage and Landlord's determination thereof
shall be binding on Tenant. If such repairs cannot be made within 180 days from
the date of Landlord's notice to Tenant of the time necessary to make such
repairs either to: (a) notify Tenant of Landlord's intention to repair such
damage and diligently prosecute such repairs, in which event this Lease shall
continue in full force and effect and the Base Rent and Additional Charges shall
be reduced as provided herein; or (b) notify Tenant of Landlord's election to
terminate this Lease as of a date specified in such notice, which date shall be
not less than 30 nor more than 60 days after notice is given. In the event that
such notice to terminate is given by Landlord, this Lease shall terminate on the
date specified in such notice. In case of termination, the Base Rent and
Additional Charges shall be reduced by a proportionate amount based upon the
extent to which such damage interfered with the business carried on by Tenant in
the Premises, and Tenant shall pay such reduced Base Rent and Additional Charges
up to the date of termination based upon estimate produced by Landlord, with a
final settlement of Additional Charges to be completed after the end of the
applicable Calendar Year, in accordance with Article 6 above. Landlord agrees to
refund to Tenant any Base Rent and Additional Charges previously paid for any
period of time subsequent to such date of termination. The repairs to be made
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hereunder by Landlord shall not include, and Landlord shall not be required to
repair, any damage by fire or other cause to the Property of Tenant or any
damage caused by the employees or any repairs or replacements of any paneling,
decorations, railings, floor coverings, or any alterations, additions, fixtures
or improvements installed on the Premises by or at the expense of Tenant. Tenant
hereby waives the provisions of California Civil Code Sections 1932(2) and
1933(4).
15. EMINENT DOMAIN
15.1 If all or any part of the Premises shall be taken as a result of
the exercise of power of eminent domain or any transfer in lieu thereof, this
Lease shall terminate as to the part so taken as of the date of taking, and, in
the case of a partial taking, either Landlord or Tenant shall have the right to
terminate this Lease as to the balance of the Premises by written notice to the
other within 30 days after such date, provided, however, that a condition to the
exercise by Tenant of such right to terminate shall be that the portion of the
Premises taken shall be of such extent and nature as substantially to handicap,
impede or impair Tenant's use of the balance of the Premises. If any material
part of the Building shall be taken as a result of the exercise of the power of
eminent domain or any transfer in lieu thereof, Landlord shall have the right to
terminate this Lease by written notice to Tenant within 30 days of the date of
taking. In the event of taking, Landlord shall be entitled to any and all
compensation, damages, income, rent, awards, or any interest therein whatsoever
which may be paid or made in connection therewith, and Tenant shall have no
claim against landlord for the value of any unexpired term of this Lease or
otherwise; provided that Landlord shall have no claim to any portion of the
award that is specifically allocable to Tenant's relocation expenses or the
interruption of or damage to Tenant's business. In the event of a partial taking
of the Premises which does not result in a termination of this Lease, the Base
Rent and Additional Charges thereafter to be paid shall be equitably reduced.
15.2 Notwithstanding any other provision of this Article 15, if a
taking occurs with respect to all or any portion of the premises for a limited
period of time, this Lease shall remain unaffected thereby and Tenant shall
continue to pay Base Rent and Additional Charges and to perform all of the
terms, conditions and covenants of this Lease. In the event of any such
temporary taking, Tenant shall be entitled to receive that portion of any award
which represents compensation for the use or occupancy of the Premises during
the term up to the total Base Rent and Additional Charges owing by Tenant for
the period of the taking, and Landlord shall be entitled to receive the balance
of any award.
15.3 Tenant hereby waives and releases any right to terminate this
Lease in whole or in part under California Code of Civil Procedure Sections
1265.120 and 1265.130 or under any similar law, statute or ordinance now or
thereafter in effect.
16. LIMITATION OF LANDLORD'S LIABILITY
16.1 Landlord shall not be responsible for or liable to Tenant and
Tenant hereby waives all claims against Landlord for any injury, loss or damage
to any person or property in or about the Premises by or from any cause
whatsoever (other than Landlord's gross negligence or willful misconduct)
including, without limitation, acts or omissions of persons occupying any
portion of the Building; theft, burst, stopped or leaking water, as, sewer or
steam pipes; or gas, fire, smoke, paint, polish, Environmental Activity, oil or
electricity in, on or about the Premises or the Building.
17. ACCESS TO PREMISES
17.1 Landlord reserves, for itself and any designated agent,
representative, employee or contractor, the right to enter the Premises at all
reasonable times and, except in cases of emergency, after giving Tenant
reasonable notice: (a) to inspect the Premises, (b) to determine whether Tenant
is complying with the terms of this Lease, (c) to show the Premises to
prospective purchasers, mortgagees or, during the last year of the Term of this
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Lease, tenants, (d) to post notices of nonresponsibility, and (e) to alter,
improve or repair the Premises and any portion of the Building, without the
abatement of Base Rent or Additional Charges, and may for that purpose erect,
use and maintain necessary structures in and through the Premises where
reasonably required by the character of the work to be performed, provided that
the entrance to the Premises shall not be blocked thereby, and further provided
that the business of the Tenant shall not be interfered with unreasonably.
Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises or any other loss occasioned thereby. Tenant agrees that 24 hours
notice shall be deemed reasonable notice under this Section 17.1. Landlord shall
at all times have and retain a key with which to unlock all of the doors, in,
upon and about the Premises (excluding Tenant's vaults or safes). Landlord shall
have the right to use any and all means that Landlord may deem necessary or
proper to open said doors in an emergency in order to obtain entry to any
portion of the Premises, and any entry to the Premises or portions thereof
obtained by Landlord by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into, or
detainer of, the Premises, or an eviction, actual or constructive, of Tenant
from the premises or any portion thereof.
18. INDEMNITY AND INSURANCE
18.1 Tenant agrees to indemnify Landlord against and save Landlord
harmless against and save Landlord harmless from any and all loss, cost,
liability, damage and expense, including, without limitation, reasonable
attorney's fees and costs, incurred in connection with or arising from: (a) any
default by Tenant in the observance or performance of any of the terms,
covenants or conditions of this Lease on Tenant's part to be observed or
performed, or (b) the uses or occupancy or manner of uses or occupancy of the
Premises by Tenant or any person or entity claiming through or under Tenant, or
(c) the condition of the Premises or any occurrence on the Premises from any
cause whatsoever, except to the extent caused by the gross negligence or willful
misconduct of Landlord, or (d) any acts, omissions or negligence of Tenant or of
the contractors, agents, servants, employees, visitors or licensees of Tenant,
in, on or about the Premises or the Building. Tenant's obligations under this
Section 18.1 shall survive the termination of the Lease.
18.2 Tenant shall procure at its cost and expense and keep in effect
during the Term comprehensive general liability insurance, including contractual
liability with a combined single limit of liability of not less than two million
dollars ($2,000,000.00), and with a deductible amount acceptable to Landlord.
Such coverage shall be in a comprehensive general liability form with at least
the following endorsements to the extent such endorsements are generally
available: (i) deleting any employee exclusion on personal injury coverage, (ii)
including employees as additional insureds, (iii) providing coverage and
products completed operations coverage (where applicable), (iv) deleting any
liquor liability exclusions, and (v) providing for coverage of employee's
automobile nonownership liability. Such insurance shall name Landlord and any
other party designated by Landlord as an additional insured, shall specifically
include the liability assumed hereunder by Tenant, shall provide that it is
primary insurance and not excess over contributory with any other valid,
existing and applicable insurance covering the same loss carried by Landlord or
any other party, shall provide for severability of interests, shall further
provide that an act or omission of one of the named insureds which would void or
otherwise reduce coverage shall not reduce or void the coverage as to any
insured, shall afford coverage for all claims based on acts, omissions, injury
or damage which occurred or arose (or the onset of which occurred or arose) in
whole or in part during the public period, and shall provide the Landlord will
receive 30 days written notice from the insurer prior to any cancellation or
changes of coverage. Tenant shall deliver to Landlord policies of such insurance
satisfactory to Landlord on or before the Commencement Date, and thereafter at
least 30 days before the expiration dates of expiring policies; and in the event
Tenant shall fail to procure such insurance, or to deliver such policies,
Landlord may, at its option, procure same for the account of Tenant, and the
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cost thereof shall be paid to the Landlord within five days after delivery to
Tenant of bills therefor. Tenant's compliance with the provisions of this
Article 18 shall in no way limit Tenant's liability under provisions of Article
19.
18.3 Tenant shall be responsible, at its cost and expense, for
separately insuring Tenant's Property.
18.4 Notwithstanding anything to the contrary contained herein, to the
extent permitted by their respective policies of insurance and to the extent of
insurance proceeds received with respect to a loss Tenant hereby waives any
right of recovery against Landlord and against any other party maintaining a
policy of insurance with respect to the Building or any portion thereof or the
contents of any of the same for any loss or damage maintained by such other
party with respect to the Building or the Premises or any portion of any thereof
or the contents of the same or any operation therein, whether or not such loss
is caused by the fault or negligence of Landlord. If any policy of insurance
relating to the Premises carried on by Tenant does not permit the foregoing
waiver or if the coverage under any such policy would be invalidated as a result
of such waiver, Tenant shall, if possible, obtain from the insurer under such
policy a waiver of all rights of subrogation the insurer might have against
Landlord or any other party maintaining a policy of insurance covering the same
loss, in connection with any claim, loss or damage covered by such policy.
18.5 In order that the business of Tenant may continue with as little
interruption as possible, tenant shall, during the full term of this lease and
any renewals or extensions thereof, maintain at Tenant's own cost and expense an
insurance policy issued by a company rated by A.M. Best as an A rated company,
or better, which is acceptable to Landlord and is authorized to conduct
insurance business in California insuring for their full insurable value all
fixtures and equipment and, to the extent possible, all merchandise that is, at
any time during the term of this Lease, in or on the Premises against damage or
destruction by fire, theft, or the elements ("all-risk" insurance).
19. ASSIGNMENT AND SUBLETTING
19.1 Tenant may not directly or indirectly (including, without
limitation, by merger, acquisition; or other transfer of any controlling
interest in Tenant); voluntarily or by operation of law, sell, assign,
encumbered, pledge or otherwise transfer or hypothecate all or any part of its
interest in or rights with respect to the Premises or its leasehold or
subleasehold estate hereunder (collectively, "Assignment"), or permit all or any
portion of the Premises to be occupied by anyone other than itself or sublet all
or any portion of the Premises (collectively, "Sublease") without Landlord's
prior written consent in each instance, which shall not be unreasonably
withheld. Without limiting the circumstances in which it may be reasonable for
Landlord to withhold its consent to an assignment or subletting, Landlord and
Tenant acknowledge that it shall be reasonable for landlord to withhold its
consent in the following instances:
(a) in Landlord's reasonable judgment, the use of the Premises
by the proposed assignee or sublessee would involve occupancy by other than
restaurant purposes; would entail any alternations which would lessen the value
of the leasehold improvements in the Premises, or would require increased
services by Landlord;
(b) in Landlord's reasonable judgment, the financial worth of
the proposed assignee or sublessee (a) is insufficient to support the
obligations of the assignment or sublease or (b) does not meet the credit
standards applied by Landlord for other leases with comparable terms;
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(c) in Landlord's reasonable judgment, the proposed assignee
or sublessee does not have a good reputation as a tenant of property;
(d) Landlord has experienced previous defaults by or is in
litigation with the proposed assignee or sublessee;
(e) in Landlord's reasonable judgment, the Premises or a part
thereof will be used in a manner that will violate a negative covenant as to use
contained in another lease of space in the Building;
(f) the uses of the Premises by the proposed assignee or
sublessee will violate any applicable law, ordinance or regulation;
(g) the proposed assignment or sublease fails to include all
of the terms and provisions required to be included therein pursuant to this
Article 19;
(h) Tenant is in default of any obligation of the Tenant under
this Lease, or Tenant has defaulted under this Lease on three or more occasions
during the 12 months preceding the date that Tenant shall request consent; or
(i) the subletting would result in the division of the
Premises into two or more subparcels or would require access to be provided
through space leased or held for lease to another tenant or improvements to be
made outside of the Premises.
19.2 If Tenant desires to enter into an Assignment of this Lease or a
Sublease of the Premises or any portion thereof, it shall give written notice
(herein called "Notice of Proposed Transfer") to Landlord of its intention to do
so, which notice shall state the terms and conditions under which Tenant is
willing to enter into such a proposed Assignment or Sublease.
19.3 Within fifteen business days after Landlord's receipt of the
Notice of Proposed Transfer pursuant to Section 19.2, Landlord shall provide
Tenant with a written notice of Landlord's approval or disapproval of the
proposed transfer. If Landlord approves the proposed transfer, Tenant shall be
entitled for a period of 90 days following the Landlord's notice to enter into
such Assignment or Sublease of the Premises, or portion thereof, subject to
landlord's prior written approval of the proposed subtenant or assignee
(collectively "Transferee"), which shall not be unreasonably withheld as
provided above; provided, however, that any rent or other consideration realized
by Tenant under any such Assignment or Sublease, in excess of the Base Rent and
Additional Charges payable hereunder (or the amount thereof proportionate to the
portion of the Premises subject to each Sublease or Assignment) and reasonable
commissions and the cost of any Alterations incurred in connection with such
Sublease or Assignment, shall be divided and paid fifty percent (50%) to
Landlord and fifty percent (50%) to Tenant, Tenant shall provide Landlord with
such information regarding the proposed Transferee as Landlord may reasonably
request. Landlord's failure to provide a written notice of its decision to
approve or disapprove a proposed transfer within said 15 business days shall
constitute a disapproval of the proposed transfer.
19.4 No Sublease or Assignment by Tenant nor any consent by Landlord
thereto shall relieve Tenant of any obligation to be performed by Tenant under
this Lease. Any Sublease or Assignment that is not in compliance with this
Article 19 shall be void and, at the option of the Landlord, shall constitute a
material default by Tenant under this Lease. The acceptance of any Base Rent,
Additional Charges or other payments by Landlord from a proposed Transferee
shall not constitute consent to such Sublease or Assignment by Landlord or a
recognition of any Transferee, or a waiver by Landlord of any failure of Tenant
or other Transferor to comply with this Article 19.
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19.5 Each Transferee shall assume all obligations of Tenant under this
Lease and shall be and remain liable jointly and severally with Tenant for the
payment of Base Rent and additional charges, and for the performance of all of
the terms, covenants, conditions and agreements herein contained on Tenant's
part to be performed for the Term. No assignment shall be binding on Landlord
unless Tenant or Transferee shall deliver to Landlord a counterpart of the
Assignment and an instrument in recordable form that contains a covenant of
assumption by such Transferee satisfactory in substance and form to Landlord,
and consistent with the requirements of this Section 19.5, but the failure or
refusal of such Transferee to execute such instrument of assumption shall not
release or discharge such Transferee from its liability as set forth above.
19.6 Tenant shall reimburse Landlord on demand for any reasonable costs
that may be incurred by Landlord in connection with any proposed Sublease or
Assignment, including, without limitation, the costs of making investigations as
to the acceptability of the proposed Transferee and legal costs incurred in
connection with the granting of any requested consent.
20. DEFAULT
20.1 Any vacation or abandonment of more than fifty percent (50%) of
the Premises for a continuous period in excess of five business days or any
failure to pay any Base Rent or Additional Charges as and when due, or any
failure to perform or comply with any covenant, condition or representation made
under this Lease (including any exhibits hereto), shall constitute a default
hereunder by Tenant, subject in the specific instances set forth below to the
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of three days from the date of the written notice from Landlord
within which to cure any default in the payment of Base Rent or Additional
Charges; provided, however, that Landlord shall not be required to provide such
notice regarding Tenant's failure to make such payments when due more than once
during any twelve month period, and any such failure by Tenant after Tenant has
received one such notice in any twelve month period from Landlord shall
constitute a default by Tenant hereunder without any requirement on the part of
Landlord to give Tenant notice of such failure. Tenant shall have a period of
ten days from the date of written notice from Landlord within which to cure any
other default under this Lease.
20.2 The appointment of a receiver to take possession of all or
substantially all of the assets of Tenant for the benefit of creditors, or any
action taken or suffered by Tenant under any insolvency, bankruptcy,
reorganization, moratorium or other debtor relief act or statute, whether now
existing or hereafter amended or enacted, shall also constitute a default under
this Lease by Tenant.
20.3 Upon the occurrence of a default by Tenant which is not cured by
Tenant within the applicable grace period specified in Section 20.1, Landlord
shall have the following rights and remedies in addition to all other rights or
remedies available to Landlord at law or in equity:
(a) The rights and remedies provided by California Civil Code
Section 1951.2, including, but not limited to, the right to terminate Tenant's
right to possession of the Premises and to recover the worth at the time of
award of the amount by which the unpaid Base Rent and Additional Charges for the
balance of the Term after the time of award exceeds the amount of rental loss
for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to California Civil Code Section 1951.2(b).
(b) The rights and remedies provided by California Civil Code
Section 1951.4, which allows Landlord to continue this Lease in effect and to
enforce all of its rights and remedies under this Lease, including the right to
16
recover rent as it becomes due, for so long as Landlord does not terminate
Tenant's right to possession; acts of maintenance or preservation, efforts to
relet the Premises or the appointment of a receiver upon Landlord's initiative
to protect its interest under this Lease shall not constitute a termination of
Tenant's right to possession. If Landlord exercises its rights under California
Civil Code Section 1951.4, Landlord as attorney-in-fact for Tenant may from time
to time sublet the Premises or any part thereof for such term or terms (which
may extend beyond the Term) and at such rent and upon such other terms as
Landlord in its sole discretion may deem advisable, with the right to make
alterations and repairs to the Premises. Upon each subletting, Tenant shall be
immediately liable for payment to Landlord of, in addition to Base Rent and
Additional Charges due hereunder, the cost of such subletting and such
alterations and repairs incurred by Landlord and the amount, if any, by which
the Base Rent and Additional Charges owing hereunder for the period of such
subletting (to the extent such period does not exceed the Term) excess the
amount to be paid as Basic Rent and Additional Charges for the Premises for such
period pursuant to such subletting. For all purposes set forth in this
subsection 20.3(b), Landlord is hereby irrevocably appointed attorney-in-fact
for Tenant, with power of substitution. No taking possession of the Premises by
Landlord as attorney-in-fact for Tenant shall be construed as an election on
Landlord's part to terminate this Lease or Tenant's right to possession unless a
written notice of such intention is given to Tenant. No action taken by Landlord
pursuant to this subsection 20.3(b) shall be deemed a waiver of any default by
Tenant and, notwithstanding such subletting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous default.
(c) The right to have a receiver appointed for Tenant upon
application by Landlord to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted to the Landlord as attorney-in-fact for Tenant pursuant to subsection
20.3(b) hereof.
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULTS
21.1 If Tenant shall default in the performance of its obligations
under this Lease, Landlord at any time thereafter and without notice may remedy
such default for Tenant's account and at Tenant's expense without thereby
waiving such default or any rights or remedies of Landlord on account of such
default. Tenant shall pay to Landlord upon demand all sums expended by Landlord,
or other costs damages, expenses or liabilities incurred by Landlord, including,
without limitation, reasonable attorney's fees and costs, in remedying or
attempting to remedy such default. Tenant's obligations under this Section 21.1
shall survive the termination of this Lease.
22. SECURITY DEPOSIT
22.1 Tenant shall pay to the Landlord Tenant's security deposit for the
faithful performance of all terms, covenants and conditions of this Lease. The
sum of the security deposit shall be $19,500, payable as follows: (1) the sum of
$9,500 shall be paid upon execution of this Lease; (2) the sum of $2,000 shall
be paid on or before June 1, 1997; (3) the sum of $2,000 shall be paid on or
before July 1, 1997; (4) the sum of $2,000 shall be paid on or before August 1,
1997; (5) the sum of $2,000 shall be paid on or before September 1, 1997; and
(6) the sum of $2,000 shall be paid on or before October 1, 1997. This
obligation shall be deemed partially satisfied to the extent of any amounts
Tenant previously shall have paid Landlord as a security deposit pursuant to the
consent to assignment of the 1989 Lease. Tenant agrees that Landlord may,
without waiving any of Landlord's other rights and remedies under this Lease
upon the occurrence of any of the events of default described in Article 20
hereof, apply the security deposit in whole or in part to remedy any failure by
Tenant to repair or maintain the Premises or to perform any other terms,
covenants or conditions contained herein. Without limiting the foregoing, in the
event the Lease is terminated and such termination does not coincide with the
expiration of a Calendar Year, Landlord may retain the security deposit for a
reasonable period of time after the expiration of the Calendar Year, in order to
allow it to determine the actual amount of Tenant's Tax Share and Tenant's
17
Insurance Share, as applicable. Should Landlord use any portion of the security
deposit to cure any default by Tenant hereunder, Tenant shall forthwith
replenish the security deposit to the original amount. Landlord shall not be
required to keep the security deposit separate from its general funds, and
Tenant shall not be entitled to interest on any such deposit.
22.2 If Tenant has fully and faithfully performed all of the terms and
conditions of the Lease through the end of the fifth year of the Term, then
$9,500 of the security deposit shall be returned to Tenant. If there has been an
event of default under Article 20 of the Lease prior to the end of the fifth
year of the Term, then Tenant shall not be entitled to the return of any portion
of the security deposit prior to the end of the Term; in that event, Tenant's
right to the return of all or any portion of the security deposit at the end of
the Term is subject to the Landlord's rights under Section 22.1, above.
23. TAX ON TENANT'S PERSONAL PROPERTY
23.1 At least ten days prior to delinquency, Tenant shall pay all taxes
levied or assessed upon Tenant's Property and shall deliver satisfactory
evidence of such payment to Landlord. If the assessed value of Landlord's
property is increased by the inclusion therein of a value placed upon Tenant's
Property, Tenant shall pay to Landlord, upon written demand, the taxes so levied
against Landlord, or the portion thereof resulting from said increase in
assessment, as determined from time to time by Landlord.
24. AUTHORITY
24.1 If Tenant signs as a corporation, each of the persons executing
this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a
duly authorized and existing corporation, that Tenant has and is qualified to do
business in California, that Tenant has full right and authority to enter into
this Lease, and that each person signing on behalf of Tenant is authorized to do
so. Upon Landlord's request, Tenant shall provide landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and
warranties.
25. RECORDING
25.1 Either Landlord or Tenant shall, upon request of the other,
executive, acknowledge and deliver to the other a "short form" memorandum of
this Lease for recording purposes.
26. NOTICES
26.1 Notices or other communications given or required to be given
under this Lease shall be effective only if given in writing, sent by certified
mail with a return receipt requested or delivered personally: (a) to Tenant; (i)
at the address indicated in Article 1 or to such other address as tenant may
designate as its new address for such purpose by notice given to Landlord in
accordance with the provisions of this Article 25; (ii) at the Premises, (iii)
at any place where Tenant or any agent, officer or employee of Tenant may be
found, or (b) to Landlord: (i) at the addresses indicated in Article 1 to such
other address (or addresses) as Landlord may designate as its new address (or
addresses) in accordance with the provisions of this Article 25. Any such notice
shall be deemed to have been given two days after the date upon which it shall
have been mailed if sent by certified mail, or upon the date personal delivery
is made.
27. NO WAIVER
27.1 No failure by Landlord to insist upon the strict performance of
any obligation of Tenant under this Lease or to exercise any right, power or
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remedy consequent upon a breach thereof, no acceptance of full or partial Base
Rent or Additional Charges during the continuation of such breach, and no
acceptance of the keys to or possession of the Premises prior to the expiration
of the Term by any employee or agent of Landlord shall constitute a waiver of
any such breach or of such term, covenant or condition or operate as a surrender
of this Lease.
27.2 Neither this Lease nor any term or provision hereof may be
changed, waived, discharged or terminated orally, and no breach thereof shall be
waived, altered or modified, except by a written instrument signed by the part
against which the enforcement of the change, waiver, discharge or termination is
sought. No waiver of any breach shall affect or alter this Lease, but each and
every term, covenant and condition of this Lease shall continue in full force
and effect with respect to any other then-existing or subsequent breach thereof.
The consent of the Landlord given in any instance under the terms of this Lease
shall not relieve the Tenant of any obligation to secure the consent of the
Landlord in any other or future instance under the terms of this Lease.
28. TENANT'S CERTIFICATES
28.1 Tenant, at any time and from time to time upon not less than ten
days' prior written notice from Landlord, will execute and deliver to Landlord
or to any party designated by Landlord, a certificate of estoppel of Tenant
stating: (a) that Tenant has accepted the Premises, (b) the Term of this Lease,
(c) that this Lease is unmodified and in full force and effect (or, if there
have been modifications, that same is in full force and effect as modified and
stating the modifications), (d) whether or not there are then existing any
defenses against the enforcement of any of the obligations of Tenant under this
Lease (and, if so, specifying same), (e) whether or not there are then existing
any defaults by Landlord in the performance of its obligations under this Lease
(and, if so, specifying same), (f) the dates to which Base Rent and Additional
Charges and other charges under this Lease have been paid, and (g) any other
information that may reasonably be required by any such persons.
29. ATTORNEYS' FEES
29.1 In the event that either Landlord or tenant fails to perform any
of its obligations under this Lease or in the event a dispute arises concerning
the meaning of interpretation of any provision of this Lease, the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party in enforcing or
establishing its rights hereunder, including without limitation, court costs and
reasonable attorneys' fees.
30. MISCELLANEOUS
30.1 The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. If there is more than one Tenant, the
obligations under this Lease shall be joint and several. The captions preceding
the articles of this Lease have been inserted solely as a matter of convenience
and such captions in no way define or limit the scope or intent of any
provisions of this Lease.
30.2 The terms, covenants and conditions contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and, except as otherwise
provided herein, their respective personal representatives and successors and
assigns; provided, however, that upon the sale, assignment or transfer by
Landlord (or by any subsequent landlord) of its interest in the Building,
including any transfer by operation of law, Landlord (or subsequent landlord)
shall be relieved from all subsequent obligations and liabilities arising under
this Lease subsequent to such sale, assignment or transfer.
30.3 If any provision of this Lease or the application thereof to any
person, entity or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such provision
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to persons, entities or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each provision of this
Lease shall be valid and be enforced to the full extent permitted by law.
30.4 This instrument, including exhibits hereto, which are made a part
of this Lease, constitutes the entire agreement between the parties and all
prior negotiations and agreements are merged herein. Tenant acknowledges that
neither Landlord nor Landlord's agents have made any representations or
warranties with respect to the Premises, the Building or this Lease except as
expressly set forth herein, and no rights, easements or licenses are or shall be
acquired by Tenant by implication or otherwise unless expressly set forth
herein.
30.5 Time is of the essence in respect of all provisions of this Lease
in which a definite time for performance is specified.
30.6 In the event of any default by Landlord under this Lease, Tenant
shall look only to Landlord's interest in the Real Property and Building for the
satisfaction of Tenant's remedies; and no other property or assets of Landlord,
disclosed or undisclosed, shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies under or with
respect to this Lease.
30.7 Landlord and Tenant acknowledge and verify than they are not aware
of any brokerage fee related to this Lease. Further, they hereby indemnify and
hold each other harmless from the claims of any brokers, agents or finders.
30.8 This Lease shall be construed and enforced in accordance with the
laws of the State of California.
31. JURY TRIAL
31.1 LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
LEASE. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT
AND TENANT ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON BEHALF OF
LANDLORD HAS MADE NAY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES
THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN
THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. TENANT FURTHER ACKNOWLEDGES THAT IT HAS READ
AND UNDERSTANDS THE MEANING OF AND RAMIFICATIONS OF THIS WAIVER PROVISION AND AS
EVIDENCE OF THIS FACT SIGNS ITS INITIALS.
/s/ X.X.
Initials of Tenant
Executed on April 22, 1997, in San Francisco, California.
Landlord XXXXXXXX FAMILY IRREVOCABLE TRUST
by /s/ Xxxxxxxx Xxx Xxxxxxxx, Xx., Trustee
Xxxxxxxx Xxx Xxxxxxxx, Xx., Trustee
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XXXXXXXX FAMILY IRREVOCABLE TRUST
by /s/ Xxxxx Xxx Xxxxxxxx, Trustee
Xxxxx Xxx, Trustee
(signature continue on next page)
XXXXXXXX XXX XXXXXXXX, XX.
/s/ Xxxxxxxx Xxx Xxxxxxxx, Xx.
XXXXX XXX XXXXXXXX
/s/ Xxxxx Xxx Xxxxxxxx
Tenant XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
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