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Exhibit 10.57
STANDARD INDUSTRIAL LEASE AGREEMENT
between
CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership,
as Landlord
and
QUAKER FABRIC CORPORATION OF FALL RIVER, INC.,
a Massachusetts corporation,
as Tenant
Premises Location: 14331-14333 East Xxx Xxxxxx Avenue
City of Industry, California 91748
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STANDARD INDUSTRIAL LEASE AGREEMENT
THIS STANDARD INDUSTRIAL LEASE AGREEMENT (this "Lease"), dated
this 10th day of May, 1996, is made and entered into by and between CIIF
ASSOCIATES II LIMITED PARTNERSHIP, a Delaware limited partnership, hereinafter
referred to as "Landlord", and QUAKER FABRIC CORPORATION OF FALL RIVER, INC., a
Massachusetts corporation, hereinafter referred to as "Tenant".
BASIC LEASE PROVISIONS
1. Area of Premises: Approximately 17,286 rentable square
feet. (Paragraph 1.1)
2. Building Address: 14331-14333 Xxx Xxxxxx Xxxxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000
(Paragraph 1.1)
3. Commencement Date: Subject to the terms of Paragraph 1.3,
the Commencement Date shall be August 1, 1996.
4. Term: Sixty-Two (62) months. (Paragraph 1.2)
5. The amount of the First Month's Rent is as follows:
(Paragraph 2.1)
(a) Base Rent (See Exhibit "C"
for adjustments thereto) $6,247.51
(b) Taxes $1,007.33
(c) Insurance $ 432.00
(d) Operating Expenses $ 143.72
FIRST MONTH'S RENT TOTAL $7,830.56
6. Security Deposit: $8,000.00. (Paragraph 2.3)
7. Tenant's Proportionate Share: The Premises comprise six and
32/100th percent (6.32%) of the Building (such percentage
shall be Tenant's Proportionate Share). (Paragraph 2.4)
8. Use of Premises: Warehousing and distribution of fabrics
and general office purposes (Paragraph
3.1)
9. Parking: 25 automobiles and 4 trucks. (Paragraph 3.3)
10. Liability insurance amount: $3,000,000.00.
(Paragraph 12.3.1)
11. Tenant's Address
For Notices: 14331-14333 Xxx Xxxxxx Xxxxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000
(Paragraph 22.21)
12. Landlord's Address For
Payments and Notices: 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(Paragraph 22.21)
13. Tenant's broker: CB Commercial (Xxxxx XxXxxxxxxx)
(Paragraph 22.24)
14. Exhibits:
"A" Site Plan of Project
"B" Intentionally Omitted
"C" Rent Adjustment Rider
"D" Signage Program
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The paragraphs of the Lease identified above in parentheses are those
provisions where references to particular items from the Basic Lease Provisions
appear, and such items are incorporated into the Lease as part thereof. In the
event of any conflict between any Basic Lease Provision and the Lease, the
former shall control.
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1. PREMISES AND TERM.
1.1 LEASE OF PREMISES. Landlord leases to Tenant, and Tenant hires from
Landlord, certain premises (the "Premises") consisting of the rentable area
shown in Item 1 of the Basic Lease Provisions within a building (the "Building")
described in Item 2 of the Basic Lease Provisions. The location of the Building
and Premises are shown on the site plan attached hereto as "Exhibit A" and
incorporated herein. The "Project" shall refer to the land shown on the site
plan (the "Land") together with such additions and deletions to the Land as
Landlord may from time to time designate, plus all buildings and improvements
located thereon.
1.2 TERM. The term of this Lease shall commence on the "Commencement
Date" specified in or established pursuant to Item 3 of the Basic Lease
Provisions, and except as otherwise provided herein, shall continue in full
force and effect through the number of months provided in Item 4 of the Basic
Lease Provisions (the "Term"), provided, however, that if the Commencement Date
is a date other than the first day of a calendar month, the Term shall consist
of the remainder of the calendar month including and following the Commencement
Date, plus said number of full calendar months.
1.3 CONDITION OF PREMISES.
Tenant acknowledges that it has inspected and accepts the
Premises in their present condition as suitable for the purpose for which the
Premises are leased. Notwithstanding the preceding sentence, Landlord shall make
the following repairs, alterations or improvements prior to the Commencement
Date: (i) removal of the existing wood demising wall within the Premises; (ii)
re-seal the existing skylight; and (iii) repaint and carpet the existing office
area within that portion of the Premises commonly known as 00000 Xxx Xxxxxx
Xxxxxx ("Landlord's Work"). The taking of possession by Tenant shall be
conclusive to establish that the Premises are in good and satisfactory condition
when possession is taken. Tenant further acknowledges that no representations or
promises were made by Landlord or any agent of Landlord to repair, alter,
remodel or improve the Premises, except as expressly set forth in this Lease.
The Commencement Date shall be the date provided in Item 3 of
the Basic Lease Provisions. If this Lease is executed before the Premises become
vacant or otherwise available or if any present tenant or occupant of the
Premises holds over, and Landlord cannot acquire possession of the Premises in
time to deliver them by the Commencement Date, or if any required repairs,
alterations or improvements are not substantially completed by Landlord prior to
the Commencement Date, this Lease shall not be void or voidable, and Landlord
shall not be deemed to be in default hereunder, nor shall Landlord be liable for
any loss or damage directly or indirectly arising out of or resulting from such
holdover. Tenant agrees to accept possession of the Premises at such time as
Landlord is able to tender the same, which date shall thenceforth be deemed the
Commencement Date. After the Commencement Date, Tenant shall, upon demand,
execute and deliver to Landlord a letter of acceptance of delivery of the
Premises specifying the Commencement Date.
1.4 EARLY ENTRY INTO PREMISES. Tenant may enter into the Premises upon
receipt of Landlord's consent, solely for the purpose of installing furniture,
special flooring or carpeting, trade fixtures, telephones, computers, photocopy
equipment, and other business equipment. Such early entry will not advance the
Commencement Date so long as Tenant does not commence business operations from
any part of the Premises. All of the provisions of this Lease shall apply to
Tenant during any early entry, including the indemnity in Paragraph 12.1, but
excluding the obligation to pay Rent unless and until Tenant has commenced
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business operations in the Premises, whereupon Rent shall commence. Landlord may
revoke its permission for Tenant's early entry if Tenant's activities or workers
interfere with the completion of Landlord's Work. If Tenant is granted early
entry, Landlord shall not be responsible for any loss, including theft, damage
or destruction to any work or material installed or stored by Tenant at the
Premises or for any injury to Tenant or its agents, employees, contractors,
subcontractors, subtenants, assigns or invitees (collectively, "Tenant's
Parties"). Landlord shall have the right to post appropriate notices of non-
responsibility and to require Tenant to provide Landlord with evidence that
Tenant has fulfilled its obligation to provide insurance pursuant to paragraphs
7(d) and 12.3 of this Lease.
2. RENT AND SECURITY DEPOSIT.
2.1 RENT. Rent (as defined below) shall accrue hereunder from the
Commencement Date. The amounts per month provided in Item 5(a) of the Basic
Lease Provisions, as adjusted pursuant to Paragraph 2.2 ("Base Rent"), plus the
"Additional Rent" (as defined in Paragraph 2.5 below) shall collectively
constitute the "Rent". The first full calendar month's Rent shall be due and
payable upon execution of this Lease in the total amount shown in Item 5 of the
Basic Lease Provisions. A like monthly installment, subject to the adjustments
described herein, shall be due and payable without demand on or before the first
day of each calendar month succeeding the Commencement Date during the Term,
except that Rent for any fractional calendar month at the commencement or end of
the Term shall be prorated on a daily basis.
2.2 ADJUSTMENT OF BASE RENT. Base Rent shall be increased on the first
day of the thirty-second (32nd) month of the Term in accordance with the Rent
Adjustment Rider attached hereto as Exhibit "C" and incorporated herein.
2.3 SECURITY DEPOSIT. Tenant shall deposit with Landlord upon execution
of this Lease the sum provided in Item 6 of the Basic Lease Provisions
("Security Deposit"), which sum shall be held by Landlord in its general fund,
without obligation for interest, as security for the performance of Tenant's
covenants and obligations under this Lease, it being expressly understood and
agreed that the Security Deposit is not an advance rental deposit or a measure
of Landlord's damages in case of Tenant's default. Upon the occurrence of any
event of default by Tenant, Landlord may, without prejudice to any other remedy
provided herein or provided by law, use the Security Deposit to the extent
necessary to make good any arrears of Rent or other payments due Landlord
hereunder, all of which shall be deemed to be Rent, and any other damage,
injury, expense or liability caused by such event of default; and Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
deposit to its original amount. Any remaining balance of the Security Deposit
shall be returned by Landlord to Tenant within fourteen (14) days after
termination of this Lease, provided all of Tenant's obligations under this Lease
have been fulfilled.
2.4 TENANT'S PROPORTIONATE SHARE. "Tenant's Proportionate Share", as
used in this Lease, shall mean (a) with respect to the cost of an item
attributable to the Building, that portion of the cost of the applicable item
that is obtained by multiplying such cost of the applicable item by a fraction,
the numerator of which is the rentable square footage of the Premises and the
denominator of which is the rentable square footage of the Building, which
fraction is set forth as a percentage figure in Item 7 of the Basic Lease
Provisions, and (b) with respect to the cost of an item attributable to the
common areas or Land in the Project (but not any buildings in the Project), that
portion of such cost of the applicable item that is obtained by multiplying the
fraction described in clause (a) above by the portion of the cost of the
applicable item that is allocated to the Building by
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Landlord in a reasonably consistent manner which reflects the size of the
Building and other buildings, the types of uses to which the Building and other
buildings are primarily suited and the relative demands and burdens that such
uses place on the Project.
2.5 ADDITIONAL RENT.
2.5.1 DEFINITION. In addition to the Base Rent set forth in
Paragraph 2.1, Tenant agrees to pay Tenant's Proportionate Share of (a) "Taxes"
as defined in and payable by Landlord pursuant to Paragraph 4.1 below, (b)
Landlord's costs of providing insurance on the Project pursuant to Paragraph
12.2 below, and (c) "Operating Expenses" as defined in and incurred pursuant to
Paragraph 5.1 below (collectively, "Additional Rent").
2.5.2 MONTHLY PAYMENTS AND ANNUAL RECONCILIATION. On the first day
of each month of the Term, Tenant shall pay Landlord a sum equal to 1/12 of the
estimated amount of Additional Rent for that particular year based on Landlord's
reasonable estimate thereof, to be delivered to Tenant on or about April of each
year during the Term. The monthly payments are subject to increase or decrease
as determined by Landlord to reflect revised estimates of such costs. Tenant
shall pay within ten (10) days following demand therefor by Landlord any
increases in estimated Additional Rent upon receipt of any initial or revised
estimate retroactive to January of that calendar year. The payments made by
Tenant shall be reconciled annually. If Tenant's total payments of Additional
Rent are less than the actual Additional Rent due under Paragraph 2.5.1, Tenant
shall pay the difference within ten (10) days following demand therefor by
Landlord; if the total payments of Additional Rent made by Tenant are more than
the actual Additional Rent due under Paragraph 2.5.1, Landlord shall retain such
excess and credit it to Tenant's next accruing Additional Rent payments, except
at the end of the Term, when any excess will be refunded within thirty (30)
days. Any failure or delay by Landlord in delivering any estimate, demand or
reconciliation shall not affect the rights and obligations of the parties
hereunder.
2.5.3 TENANT'S AUDIT RIGHTS. Provided that Tenant is not then in
default under this leas, then tenant shall have the right, once each calendar
year (but no later than ninty (90) days following the delivery of Tenant's Audit
Notice [defined below]), to cause an independent certified public accountant
reasonably approved by Landlord to review supporting data for any portion of an
actual statement of annual Operating Expenses delivered by Landlord (the "Actual
Statement") (provided, however, Tenant may not have an audit right to all
documentation relating to Building oeprations as this would far-exceed the
relevant information necessary to properly document a pass-through billing
statement, but real estate tax statements, and information on utilities,
repairs, maintenance and insurance will be available), in accordance with the
following procedure.
(i) Tenant shall, within thirty (30) days after any
Actual Statement is delivered, deliver a written notice ("Tenant's Audit
Notice") to Landlord specifying the portions of the Actual Statement that are
claimed to be incorrect, and Tenant shall simultaneously pay to Landlord all
amounts due from Tenant to Landlord as specified in the Actual Statement. In no
event shall Tenant be entitled to withhold, deduct, or offset any monetary
obligation of Tenant to Landlord under the Lease (including without limitation,
Tenant's obligation to make all payments of Rent and all payments of Tenant's
Operating Expenses) pending the completion of and regardless of the results of
any review of records under this Paragraph. The right of Tenant under this
Paragraph may only be exercised once for any Actual Statement, and if Tenant
fails to meet any of the above conditions or time constraints as a prerequisite
to the exercise
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of such right, the right of Tenant under this Paragraph for a particular Actual
Statement shall be deemed waived.
(ii) Tenant acknowledges that Landlord maintains its
records for the Project at Landlord's main office, and Tenant agrees that any
review of records under this Paragraph shall be at the sole expense of Tenant
and shall be conducted by an independent firm of certified public accountants
mutually agreed upon by Tenant and Landlord. Tenant acknowledges and agrees that
any records reviewed under this Paragraph constitute confidential information of
Landlord, which shall not be disclosed to anyone other than the accountants
performing the review, the principals of Tenant who receive the results of the
review, and Tenant's accounting employees. The disclosure of such information to
any other person, whether or not caused by the conduct of Tenant, shall
constitute a material breach of this Lease.
(iii) Any errors disclosed by the review shall be
promptly corrected by Landlord, provided, however, that if Landlord disagrees
with any such claimed errors, Landlord shall have the right to cause another
review to be made. In the event of a disagreement regarding the audits, the
review that discloses the least amount of deviation from the Actual Statement
shall be deemed to be correct. In the event that the results of the review of
records (taking into account, if applicable, the results of any additional
review caused by Landlord) reveal that Tenant has overpaid obligations for a
preceding period, the amount of such overpayment shall be credited against
Tenant's subsequent installment obligations to pay the estimated Operating
Expense (and if such overpayment is in excess of five percent (5%) as a result
of an excessive charge by Landlord, Landlord shall reimburse Tenant for the
reasonable out-of-pocket costs of such audit provided that such costs were paid
on a hourly non-contingent basis). In the event that such results show that
Tenant has underpaid its obligations for a preceding period, the amount of such
underpayment shall be paid by Tenant to Landlord with the next succeeding
installment obligation of estimated Operating Expense.
2.6 PAYMENT. Tenant shall pay Landlord all amounts due from Tenant to
Landlord hereunder, whether for Rent or otherwise, in lawful money of the United
States, at the place designated for the delivery of notices to Landlord pursuant
to Paragraph 22.21, without any deduction or offset whatsoever.
2.7 LATE CHARGES. Tenant acknowledges that late payment by Tenant of
any sum owed to Landlord under this Lease will cause Landlord to incur costs not
contemplated by this Lease, the exact amounts of which are extremely difficult
and impracticable to fix. Such costs include, without limitation, processing and
accounting charges, time spent addressing the issue with Tenant, and late
charges that may be imposed on Landlord by the terms of any obligation or note
secured by any encumbrance covering the Premises. Therefore, if any installment
of rent or other payment due from Tenant is not received by Landlord when due,
Tenant shall pay to Landlord an additional sum equal to ten percent (10%) of the
overdue rent or other payment as a late charge. Late charges shall be deemed
Additional Rent. The parties agree that this late charge represents a fair and
reasonable estimate of the administrative and other costs that Landlord will
incur by reason of a late payment by Tenant. Acceptance of any late payment
charge shall not constitute a waiver of Tenant's default with respect to the
overdue payment, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord under this Lease, at law or in equity,
including, but not limited to, the interest charge imposed pursuant to Paragraph
22.2.
2.8 BASE RENT CREDIT. Provided that Tenant is not in default under any
of the terms, covenants or conditions of this Lease, Tenant shall be credited
with the payment of Base Rent due
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and payable under this Lease for the second (2nd) and third (3rd) months of the
Term, as and when the same becomes due. No such Base Rent credit shall reduce or
limit any Additional Rent or other sum due and payable by Tenant under this
Lease. Tenant understands and agrees that the foregoing Base Rent credit is
conditioned upon Tenant's not having wrongfully terminated this Lease or
Landlord not having terminated this Lease by reason of Tenant's default
hereunder (each such termination, a "Trigger Event"). Accordingly, (a) upon the
occurrence of any Trigger Event during any portion of the Base Rent credit
period, the foregoing Base Rent credit shall be null and void, and all of the
Base Rent which, in the absence of such Base Rent credit, would have been
payable during such period up to the date of the Trigger Event shall become
immediately due and payable by Tenant, and Tenant shall pay Base Rent during the
remainder of such Base Rent credit period as such Base Rent would have become
due and payable in the absence of such Base Rent credit provision, and (b) upon
the occurrence of any Trigger Event after the Base Rent credit period, all Base
Rent which would have been payable during such Base Rent credit period in the
absence of such Base Rent credit shall become immediately due and payable by
Tenant.
3. USE.
3.1 USE OF PREMISES. Subject to any additional uses or limitations on
use contained in Item 8 of the Basic Lease Provisions, the Premises shall be
used only for the purpose of receiving, storing, shipping and selling (other
than retail) products, materials and merchandise made and/or distributed by
Tenant and for such other lawful purposes as may be directly incidental thereto,
and for no other use or purpose. Tenant acknowledges that Landlord has not made
any representations or warranties with respect to the suitability of the
Premises for Tenant's uses. Tenant and Tenant's Parties shall at all times
comply with all rules and regulations regarding the Premises of which Tenant is
notified, the Building and/or the Project as Landlord may establish from time to
time. Landlord shall not be responsible for nor liable to Tenant for any
violation and/or enforcement of such rules and regulations by any other tenant
of the Project.
Tenant shall be responsible for and shall at its own cost and
expense obtain any and all licenses and permits necessary for any such use.
Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the Premises, including, without limitation, the
Americans with Disabilities Act of 1990, as amended, triggered subsequent to the
Commencement Date as a result of Tenant's alterations or use of the Premises.
Without limiting the generality of the foregoing, and subject to Paragraph 7
below, Tenant shall at its own cost and expense install and construct all
physical improvements to or needed to serve the Premises (i) required by any
federal, state or local building code or other law or regulation enacted or
becoming effective after the Commencement Date, including, but not limited to,
special plumbing, railings, ramps and other improvements for use by the
handicapped, or (ii) made necessary by the nature of Tenant's use of the
Premises; provided, however, that Landlord shall have the option to install and
construct such improvements, in which case the cost thereof shall be equitably
allocated by Landlord in its reasonable discretion among the benefitted
premises, and Tenant, upon demand, shall pay to Landlord, as Additional Rent,
such portion of the cost thereof as may be allocated equitably, in Landlord's
reasonable discretion, to the Premises. Tenant shall not place a load upon the
floor of the Premises which exceeds the load per square foot which Tenant is
notified by Landlord that such floor was designed to carry and which is allowed
by law. Tenant shall promptly comply with all governmental orders and directives
for the correction, prevention and abatement of nuisances in or upon, or
connected with, the Premises, all at Tenant's sole expense. Tenant shall not
permit any objectionable or unpleasant odors,
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smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any
other action which would constitute a nuisance or would disturb or endanger any
other tenants of the Project or unreasonably interfere with their use of their
respective premises.
Tenant shall not permit the Premises to be used for any
purpose or in any manner (including without limitation any method of storage)
which would render the insurance thereon void or the insurance risk more
hazardous or cause the state insurance authority to disallow any sprinkler
credits. If any increase in the fire and extended coverage insurance premiums
paid by Landlord or other tenants for the Project is caused by Tenant's use and
occupancy of the Premises, or if Tenant vacates the Premises and causes any
increase in such premiums, then Tenant shall pay as additional Rent the amount
of such increase to Landlord, and, upon demand by Landlord, correct at Tenant's
expense the cause of such disallowance, increased cost, penalty or surcharge to
the satisfaction of the particular insurance provider or authority, as
applicable.
3.2 HAZARDOUS MATERIALS. Except for the incidental use of certain
products for routine cleaning and maintenance of floors, bathrooms, windows,
kitchens, and administrative offices on the Premises or Project, Tenant hereby
represents, warrants and covenants that Tenant will not produce, use, store or
generate any "Hazardous Materials" (as defined below) on, under or about the
Premises and/or Project. Tenant has fully and accurately completed Landlord's
Pre-Leasing Environmental Exposure Questionnaire ("Environmental
Questionnaire"), which is incorporated herein by reference. If Tenant's
Environmental Questionnaire indicates that Tenant will be utilizing Hazardous
Materials, in addition to all other rights and remedies Landlord may have under
this Lease, including, without limitation, declaring a default hereunder by
Tenant for breach of representation, Landlord may require Tenant to execute an
amendment to this Lease relating to such Hazardous Materials use and Tenant's
failure to execute any such amendment within ten (10) days of Landlord's
delivery thereof to Tenant shall constitute a default hereunder by Tenant.
Tenant shall not cause or permit any Hazardous Material to be brought upon,
placed, stored, manufactured, generated, blended, handled, recycled, disposed
of, used or released on, in, under or about the Premises and/or Project by
Tenant or Tenant's Parties. Tenant shall keep, operate and maintain the Premises
in full compliance with all federal, state and local environmental, health
and/or safety laws, ordinances, rules, regulations, codes, orders, directives,
guidelines, permits or permit conditions currently existing and as amended,
enacted, issued or adopted in the future which are applicable to the Premises
(collectively, "Environmental Laws").
Landlord shall have the right (but not the obligation) to
enter upon the Premises and cure any non-compliance by Tenant with the terms of
this Paragraph 3.2 or any Environmental Laws or any release, discharge, spill,
improper use, storage, handling or disposal of Hazardous Materials on, under,
from, or about the Premises or Project, regardless of the quantity of any such
release, discharge, spill, improper use, storage, handling or disposal of
Hazardous Materials on or about the Premises or Project, the full cost of which
shall be deemed to be Rent and shall be due and payable by Tenant to Landlord
immediately upon demand. If Landlord elects to enter upon the Premises and cure
any such non-compliance or release, discharge, spill, improper use, storage,
handling or disposal of Hazardous Materials on, under, from, or about the
Premises or Project, Tenant shall not be entitled to participate in Landlord's
activities on the Premises.
If any information provided to Landlord by Tenant in the
Environmental Questionnaire, or otherwise relating to information concerning
Hazardous Materials is false, incomplete,
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or misleading in any material respect, the same shall be deemed an event of
default by Tenant under this Lease.
Without limiting in any way Tenant's obligations under any
other provision of this Lease, Tenant and its successors and assigns shall
indemnify, protect, defend and hold Landlord, its partners, officers, directors,
shareholders, employees, agents, lenders, contractors and each of their
respective successors and assigns (collectively, the "Indemnified Parties")
harmless from any and all claims, judgments, damages, penalties, enforcement
actions, taxes, fines, remedial actions, liabilities, losses, costs and expenses
(including, without limitation, actual attorneys' fees, litigation, arbitration
and administrative proceeding costs, expert and consultant fees and laboratory
costs) including, without limitation, damages arising out the diminution in the
value of the Premises or Project or any portion thereof, damages for the loss of
the Premises or Project, damages arising from any adverse impact on the
marketing of space in the Premises or Project, and sums paid in settlement of
claims, which arise during or after the Term in whole or in part as a result of
the presence or suspected presence of any Hazardous Materials, in, on, under,
from or about the Premises or the Project and/or other adjacent properties due
to Tenant's or Tenant's Parties' activities, or failures to act (including,
without limitation, Tenant's failure to report any spill or release to the
appropriate regulatory agencies), on or about the Premises or Project.
For purposes of this Lease, the term "Hazardous Material"
means any chemical, substance, material, controlled substance, object, waste or
any combination thereof, which is or may be hazardous to human health, safety or
to the environment due to its radioactivity, ignitability, corrosiveness,
reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other
harmful or potentially harmful properties or effects, including, without
limitation, petroleum and petroleum products, benzene, toluene, ethyl benzene,
xylenes, waste oil, asbestos, radon, polychlorinated biphenyls (PCBs),
degreasers, solvents, and any and all of those chemicals, substances, materials,
controlled substances, objects, wastes or combinations thereof which are now or
may become in the future listed, defined or regulated in any manner as
"hazardous substances", "hazardous wastes", "toxic substances", "solid wastes,"
or bearing similar or analogous definitions pursuant to any and all
Environmental Laws.
3.3 USE OF COMMON AREAS. Tenant and Tenant's Parties shall have the
non-exclusive right, in common with the other parties occupying the Project, to
use the grounds, sidewalks, parking areas, driveways and alleys of the Project,
subject to such reasonable rules and regulations as Landlord may from time to
time prescribe. Tenant and Tenant's Parties may park only up to the maximum
number of automobiles and trucks shown in Item 9 of the Basic Lease Provisions
near the Premises during normal business hours on a non-exclusive basis. Outside
storage, including without limitation, trucks and other vehicles, is prohibited
without Landlord's prior written consent, which may be withheld in Landlord's
sole and absolute discretion. Tenant shall not succeed to any of Landlord's
easement rights over and relating to the Project, nor shall Tenant obtain any
rights to common areas, as designated by Landlord, other than those rights
specifically granted to Tenant in this Lease. Landlord shall have the sole right
of control over the use, maintenance, configuration, repair and improvement of
the common area. Landlord may make such changes to the use or configuration of,
or improvements comprising, the common area as Landlord may elect without
liability to Tenant (including the right to add or eliminate buildings from the
Project), subject only to Tenant's vehicular parking rights shown in Item 9 of
the Basic Lease Provisions.
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4. TAXES.
4.1 PAYMENT OF REAL PROPERTY TAXES. Landlord agrees to pay, before they
become delinquent, all real property taxes; current installments of any general
or special assessments; license fees, commercial rental taxes, in lieu taxes,
levies, charges, penalties or similar impositions imposed by any authority
having the direct power to tax, and are paid or incurred by Landlord, including
but not limited to, the following: (a) any tax on or measured by Rent received
by Landlord from the Project or as against Landlord's business of leasing any of
the Project; (b) any assessment, tax, fee, levy or charge imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, transportation, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants; (c)
assessments due to deed restrictions and/or owner associations; and (d) costs of
determining, filing, contesting and appealing any such tax, assessment or
charge, including reasonable accountants', attorneys' and consultants' fees, but
excluding any income, inheritance, estate or corporate franchise taxes of
Landlord (collectively, "Taxes").
Taxes shall also include any assessment, tax, fee, levy or
charge in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of Taxes. It is hereby
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of California in June 1978 and that assessments, taxes, fees, levies and
charges may be imposed by governmental agencies for such services as fire
protection, street, sidewalk and road maintenance, transportation, refuse
removal and other governmental services formerly provided without charge to
property owners or occupants. It is the intention of Tenant and Landlord that
all such new and increased assessments, taxes, fees, levies and charges, and all
similar assessments, taxes, fees, levies and charges be included within the
definition of Taxes for purposes of this Lease.
4.2 LIABILITY FOR ALL PERSONAL PROPERTY TAXES. Tenant shall be liable
for all taxes levied or assessed against personal property, furniture, fixtures,
above-standard Tenant Improvements and alterations, additions or improvements
placed by or for Tenant in the Premises. If any such taxes for which Tenant is
liable are levied or assessed against Landlord or Landlord's property and if
Landlord elects to pay the same or if the assessed value of Landlord's property
is increased by inclusion of personal property, furniture, fixtures,
above-standard Tenant Improvements or alterations, additions or improvements
placed by or for Tenant in the Premises, and Landlord elects to pay the Taxes
based on such increase, Tenant shall pay to Landlord upon demand that portion of
the Taxes.
5. LANDLORD'S MAINTENANCE AND REPAIR.
5.1 LANDLORD'S MAINTENANCE. Landlord shall maintain and repair only the
exterior portions of the roof, and the foundation and the structural soundness
of the exterior walls of the Building and utility facilities stubbed to the
Premises in good condition, reasonable wear and tear excepted. The term "walls"
as used herein shall not include windows, glass or plate glass, doors, special
store fronts or office entries, unless otherwise specified by Landlord in
writing. Landlord shall maintain, repair and repaint the exterior walls,
overhead doors, canopies, entries, handrails, gutters and other exposed parts of
the Building as deemed necessary by Landlord to maintain safety and aesthetic
standards. Landlord shall maintain, repair, and operate the common areas of the
Project, including but not limited to, mowing grass and general landscaping,
maintenance of parking areas, driveways and alleys, parking lot sweeping, paving
and restriping, exterior lighting, painting, pest control and
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window washing. The cost of all of the foregoing, including the cost of all
supplies, uniforms, equipment, tools and materials, together with utility costs
not otherwise charged directly to Tenant or other tenants, all wages and
benefits of employees and independent contractors engaged in the operation,
maintenance and repair of the Project, all expenses for security and safety
services and equipment, any license, permit and inspection fees required in
connection with the operation, maintenance or repair of the Project (but not
related to improvements to tenant space), management, consulting, legal and
accounting fees of independent contractors engaged by Landlord (but not related
to the negotiation or enforcement of leases), other costs and expenses actually
incurred by Landlord in connection with the ownership, operation, leasing and
management of the Project, and other usual costs and expenses which are
typically paid by other landlords to provide on-site operation of industrial,
warehouse and service center projects, are collectively referred to herein as
"Operating Expenses". To the extent that an Operating Expense consists of a
maintenance or repair (including renovation and refurbishment) expense that is
not properly fully deductible as an expense in the year incurred in accordance
with generally accepted accounting principles, such expense shall be amortized
over its useful life. Any amounts which are amortized, together with Landlord's
actual cost of funds, shall result in equal payments being included in Operating
Expenses for the year of expenditure and succeeding years during the
amortization period.
5.2 PROCEDURE AND LIABILITY. Tenant shall immediately give Landlord
written notice of any defect or the need for repair of the items for which
Landlord is responsible, after which Landlord shall have reasonable opportunity
to repair the same or cure such defect. Landlord's liability with respect to any
defects, repairs or maintenance for which Landlord is responsible under any of
the provisions of this Lease shall be limited to the cost of such repairs or
maintenance or the curing of such defect. If Tenant or Tenant's Parties caused
any damage necessitating such repair, then Tenant shall pay the cost thereof,
upon demand. Tenant hereby waives the benefit of California Civil Code Sections
1941 and 1942, and any other statute providing a right to make repairs and
deduct the cost thereof from the Rent. Tenant waives any right to terminate this
Lease or offset or xxxxx Rent by reason of any failure of Landlord to make
repairs to the Premises.
6. TENANT'S MAINTENANCE AND REPAIR.
6.1 TENANT'S MAINTENANCE. Tenant shall, at its own cost and expense,
keep and maintain all parts of the Premises (except those listed as Landlord's
responsibility in Paragraph 5.1 above) in good and sanitary condition, promptly
making all necessary repairs and replacements, including but not limited to,
windows, glass and plate glass, doors, any special store front or office entry,
interior walls and finish work, floors and floor covering, heating and air
conditioning systems, dock boards, truck doors, dock bumpers, plumbing work and
fixtures, termite and pest extermination, and regular removal of trash and
debris. If Tenant shall fail to make any repair for which Tenant is responsible
within ten (10) days following notice from Landlord requiring the same, Landlord
and its agents and contractors shall have the right, but not the obligation, to
enter upon the Premises and perform such repairs, the full cost of which shall
be deemed to be Rent and shall be due and payable by Tenant to Landlord
immediately upon demand. In the case of emergency, Landlord, its agents and
contractors may enter upon the Premises to perform such repairs without the
necessity of prior notice to Tenant. Tenant shall maintain its trash receptacles
within the Premises. Repairs shall be made in accordance with all applicable
laws, including without limitation, the Americans with Disabilities Act of 1990.
The cost of maintenance and repair of any common party wall (any wall, divider,
partition or any other structure separating the Premises from any adjacent
premises
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occupied by other tenants) shall be shared equally by Tenant and the tenant(s)
occupying such adjacent premises. Tenant shall not damage any party wall or
disturb the integrity and support provided by any party wall and shall, at its
sole cost and expense, promptly repair any damage or injury to any party wall
caused by Tenant or Tenant's Parties.
6.2 MAINTENANCE/SERVICE CONTRACTS. Tenant shall, at its own cost and
expense, enter into a regularly scheduled preventive maintenance/service
contract with a maintenance contractor for serving all hot water, heating and
air conditioning systems and equipment within the Premises. The maintenance
contractor and the contract must be approved in writing by Landlord in advance.
The service contract shall include all services recommended by the equipment
manufacturer within the operation/maintenance manual and shall become effective
(and a copy thereof delivered to Landlord) within thirty (30) days following the
date Tenant takes possession of the Premises.
7. ALTERATIONS
Tenant shall make no alterations, additions or improvements to the
Premises (including, without limitation, roof and wall penetrations) or any part
thereof without obtaining the prior written consent of Landlord in each
instance. Such consent may be granted or withheld in Landlord's sole and
absolute discretion. Landlord may impose as a condition to such consent such
requirements as Landlord may deem necessary, in its sole and absolute
discretion, including, without limitation that: (a) Landlord be furnished with
working drawings before work commences; (b) performance and labor and material
payment bonds in form and amount and issued by a company satisfactory to
Landlord be furnished; (c) Landlord approve the contractor by whom the work is
to be performed; (d) adequate course of construction and general liability
insurance be in place and Landlord be named as an additional insured under the
contractor's liability and property insurance policies; and (e) Landlord's
instructions relating to the manner in which the work is to be performed and the
times during which it is to be accomplished shall be complied with. All such
alterations, additions or improvements must be performed in a good and
workmanlike manner in compliance with all laws, rules and regulations,
including, without limitation, the Americans with Disabilities Act of 1990, and
diligently prosecuted to completion. Tenant shall deliver to Landlord upon
commencement of such work a copy of the building permit with respect thereto,
and a certificate of occupancy, if applicable, immediately upon completion of
the work. All such work shall be performed so as not to obstruct the access to
the premises of any other tenant in the Building or Project. Should Tenant make
any alterations without Landlord's prior written consent, or without
satisfaction of any of the conditions established by Landlord in conjunction
with granting such consent, Landlord shall have the right, in addition to and
without limitation of any right or remedy Landlord may have under this Lease, at
law or in equity, to require Tenant to remove all or some of the alterations,
additions or improvements at Tenant's sole cost and restore the Premises to the
same condition as existed prior to undertaking the alterations, or if Tenant
shall fail to do so, Landlord may cause such removal or restoration to be
performed at Tenant's expense and the cost thereof shall be Additional Rent to
be paid by Tenant immediately upon demand. Landlord shall have the right to
require Tenant, at Tenant's expense, to remove any and all alterations,
additions or improvements and to restore the Premises to its prior condition
upon the expiration or sooner termination of this Lease. Tenant shall notify
Landlord in writing at least ten (10) days prior to the commencement of any such
work in or about the Premises, and Landlord shall have the right at any time and
from time to time to post and maintain notices of nonresponsibility in or about
the Premises.
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8. LIENS.
Tenant shall have no authority, express or implied, to create or place
any lien or encumbrance of any kind or nature whatsoever upon, or in any manner
to bind, the interest of Landlord or Tenant in the Premises or to charge the
Rent payable hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any construction
or repairs. Tenant shall pay or cause to be paid all sums legally due and
payable by it on account of any labor performed or materials furnished in
connection with any work performed by Tenant on the Premises. Tenant shall
discharge of record by payment, bonding or otherwise any lien filed against the
Premises on account of any labor performed or materials furnished in connection
with any work performed by Tenant on the Premises immediately upon the filing of
any claim of lien. Tenant shall indemnify, defend and hold Landlord harmless
from any and all liability, loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of Landlord in the Project or this Lease arising f;rom the
act or agreement of Tenant. Tenant agrees to give Landlord immediate written
notice of the placing of any lien or encumbrance against the Premises. Landlord
shall have the right, at Landlord's option, of paying and discharging the same
or any portion thereof without inquiry as to the validity thereof, and any
amounts so paid, including expenses and applicable late charge, shall be
Additional Rent immediately due and payable by Tenant upon rendition of a xxxx
therefor.
9. SIGNS.
9.1 LANDLORD'S SIGNAGE PROGRAM. Tenant shall abide by the terms of
Landlord's signage program attached hereto as Exhibit "D" and incorporated
herein as the same may be changed from time to time at Landlord's sole
discretion. Upon vacation of the Premises or the removal or alteration of its
sign for any reason, Tenant shall be responsible, at its sole cost, for the
repair, painting and/or replacement of the structure to which signs are attached
to its original condition. If Tenant fails to perform such work, Landlord may
cause the same to be performed, and the cost thereof shall be Additional Rent
immediately due and payable upon rendition of a xxxx therefor.
9.2 CRITERIA FOR CHANGES. Tenant shall not, without Landlord's prior
written consent, which may be withheld in Landlord's sole and absolute
discretion: (a) make any changes to or paint the exterior of the Building; (b)
install any exterior lights, decorations or paintings; or (c) erect or install
any signs, window or door lettering, placards, decorations or advertising media
of any type which can be viewed from the exterior of the Premises. All signs,
decorations, advertising media, blinds, draperies and other window treatment or
bars or other security installations visible from outside the Premises shall be
subject to the prior written approval of Landlord as to construction, method of
attachment, size, shape, height, design, lighting, color and general appearance.
All signs shall be in compliance with all applicable laws and regulations and
all covenants, conditions and restrictions relating to the Premises. All signs
shall be kept in good condition and in proper operating order at all times.
10. UTILITIES
Tenant shall pay for all separately metered water, gas, heat, light,
telephone, sewer and sprinkler charges and for other utilities and services used
on or from the Premises, together with any taxes, penalties, surcharges or the
like pertaining thereto and any maintenance charges for utilities, and shall
furnish all electric light bulbs and tubes. If any utilities serving the
Premises are not separately metered, Tenant shall pay
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to Landlord its proportionate share of the cost thereof as reasonably determined
by Landlord. Landlord shall in no event be liable for any damages directly or
indirectly resulting from or arising out of the interruption or failure of
utility services on the Premises. Tenant shall have no right to terminate this
Lease nor shall Tenant be entitled to any abatement in Rent as a result of any
such interruption or failure of utility services. No such interruptionor failure
of utility services shall be deemed to constitute a constructive eviction of
Tenant. Notwithstanding the foregoing, if the utilities servicing the Premises
are interrupted and not available ("Interruption") for more than five (5)
consecutive business days, then beginning on the sixth (6th) consecutive
business day of Interruption through the last day of such Interruption, Tenant
shall be entitled to an abatement of Base Rent, and the Term shall be extended
the same number of days, but only if (i) the Interruption is not caused by a
casualty covered by Paragraph 11 of this Lease or by an act or omission of
Tenant or Tenant's Parties, and (ii) Tenant is prevented by the Interruption
from using and does not use the Premises or any portion thereof, and (iii) the
Interruption is the direct result of Landlord's negligence or willful
misconduct.
11. FIRE AND CASUALTY DAMAGE.
11.1 NOTICE OF DESTRUCTION. If the Premises are damaged or destroyed by
fire, earthquake or other casualty, Tenant shall give immediate written notice
thereof to Landlord.
11.2 LOSS COVERED BY INSURANCE. If at any time prior to the expiration
or termination of this Lease, the Premises or the Project are wholly or
partially damaged or destroyed, the loss to Landlord from which is fully covered
by proceeds of insurance maintained by Landlord or for Landlord's benefit, which
damage renders the Premises totally or partially inaccessible or unusable by
Tenant in the ordinary conduct of Tenant's business, then:
(a) If all repairs to the Premises or Project can, in
Landlord's judgment, be completed within two hundred (200) days following the
date of notice to Landlord of such damage or destruction without the payment of
overtime or other premiums, and if such damage or destruction is not the result
of the negligence or willful misconduct or omission of Tenant or Tenant's
Parties (as contemplated in Paragraph 11.4), Landlord shall, at Landlord's
expense (provided Landlord can obtain all necessary governmental permits and
approvals therefor at reasonable cost and on reasonable conditions), repair the
same, and this Lease shall remain in full force and effect and a proportionate
reduction of Rent shall be allowed Tenant for such portion of the Premises as
shall be rendered inaccessible or unusable to Tenant during the period of time
that such portion is unusable or inaccessible. There shall be no proportionate
reduction of Rent by reason of any portion of the Premises being unusable or
inaccessible for a period equal to five (5) consecutive business days or less.
(b) If such damage or destruction is not the result of the
negligence or willful misconduct or omission of Tenant or Tenant's Parties, and
if all such repairs cannot, in Landlord's judgment, be completed within two
hundred (200) days following the date of notice to Landlord of such damage or
destruction without the payment of overtime or other premiums, either party may,
at its sole and absolute option, by written notice to the other given within
twenty (20) days following the date of Landlord's notice to Tenant stating that
all such repairs cannot in Landlord's judgment, be completed within said two
hundred (200) days, terminate this Lease as of the date of the occurrence of
such damage or destruction; provided however, if neither party elects to
terminate this Lease within said twenty (20) day period, then this Lease shall
remain in full force and effect,
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but the Rent shall be proportionately reduced as provided in
Paragraph 11.2(a).
Tenant shall pay to Landlord, within ten (10) days following
Landlord's demand therefor, the amount of the deductible under Landlord's
insurance policy. If the damage involves portions of the Project other than the
Premises, Tenant shall pay only a portion of the deductible based on the ratio
of the cost of repairing the damage in the Premises to the total cost of
repairing all of the damage in the Project.
11.3 LOSS NOT COVERED BY INSURANCE. If, at any time prior to the
expiration or termination of this Lease, the Premises or the Project are totally
or partially damaged or destroyed from a risk, the loss to Landlord from which
is not fully covered by insurance maintained by Landlord or for Landlord's
benefit, which damage renders the Premises inaccessible or unusable to Tenant in
the ordinary course of its business, and if such damage or destruction is not
the result of the negligence or willful misconduct or omission of Tenant or
Tenant's Parties, Landlord may, at its option, upon written notice to Tenant
within thirty (30) days after notice to Landlord of the occurrence of such
damage or destruction, elect to repair or restore such damage or destruction, or
Landlord may elect to terminate this Lease. If Landlord elects to repair or
restore such damage or destruction, this Lease shall continue in full force and
effect, but the Rent shall be proportionately reduced as provided in Paragraph
11.2(a). If Landlord elects to terminate this Lease, such termination shall be
effective as of the date of the occurrence of such damage or destruction.
Notwithstanding the foregoing, if all such repairs cannot, in Landlord's
judgment, be completed within two hundred (200) days following the date of
notice to Landlord of such damage or destruction without the payment of overtime
or other premiums, either party may, at its sole and absolute option, by written
notice to the other given within twenty (20) days following the date of
Landlord's notice to Tenant stating that all such repairs cannot, in Landlord's
judgment, be completed within said two hundred (200) days, terminate this Lease
as of the date of occurrence of such damage or destruction; provided, however,
if neither party elects to terminate this Lease within said twenty (20) day
period, then this Lease shall remain in full force and effect but the Rent shall
be proportionately reduced as provided in Paragraph 11.2(a).
11.4 LOSS CAUSED BY TENANT OR TENANT'S PARTIES. If the Premises or the
Project are wholly or partially damaged or destroyed as a result of the
negligence or willful misconduct or omission of Tenant or Tenant's Parties,
Tenant shall forthwith diligently undertake to repair or restore all such damage
or destruction at Tenant's sole cost and expense, or Landlord may at its option
undertake such repair or restoration at Tenant's sole cost and expense;
provided, however, that Tenant shall be relieved of its repair and payment
obligations pursuant to this Paragraph 11.4 to the extent that insurance
proceeds are collected by Landlord to repair such damage, although Tenant shall
in all such events pay to Landlord the full amount of the deductible under
Landlord's insurance policy and any amounts not insured. This Lease shall
continue in full force and effect without any abatement or reduction in Rent or
other payments owed by Tenant.
11.5 DESTRUCTION NEAR END OF TERM. Notwithstanding the foregoing, if
the Premises or the Project are wholly or partially damaged or destroyed within
the final six (6) months of the Term, and such damage cannot, in Landlord's
judgment, be repaired within sixty (60) days, either party may, at its option,
elect to terminate this Lease upon written notice given to the other within
thirty (30) days following such damage or destruction.
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11.6 DESTRUCTION OF IMPROVEMENTS AND PERSONAL PROPERTY. In the event of
any damage to or destruction of the Premises or the Project, under no
circumstances shall Landlord be required to repair, replace or compensate
Tenant, Tenant's Parties or any other person for the personal property, trade
fixtures, machinery, equipment or furniture of Tenant or any of Tenant's
Parties, or any alterations, additions or improvements installed in the Premises
by Tenant, and Tenant shall promptly repair and replace all such personal
property and improvements at Tenant's sole cost and expense.
11.7 EXCLUSIVE REMEDY. The provisions of this Paragraph 11 shall
constitute Tenant's sole and exclusive remedy in the event of damage or
destruction to the Premises or the Project, and Tenant waives and releases all
statutory rights and remedies in favor of Tenant in the event of damage or
destruction, including without limitation those available under California Civil
Code Sections 1932 and 1933(4). No damages, compensation or claim shall be
payable by Landlord for any inconvenience, any interruption or cessation of
Tenant's business, or any annoyance, arising from any damage or destruction of
all or any portion of the Premises or the Project.
11.8 LENDER DISCRETION. Notwithstanding anything herein to the
contrary, in the event the holder of any indebtedness secured by a mortgage or
deed of trust covering the Premises requires that the insurance proceeds from
insurance held by Landlord be applied to such indebtedness, then Landlord shall
have the right to deliver written notice to Tenant terminating this Lease.
12. INDEMNITY AND INSURANCE.
12.1 INDEMNITY. Tenant hereby releases all Indemnified Parties, and
shall indemnify, protect, defend and hold the Indemnified Parties harmless from
any and all claims, judgments, damages, liabilities, losses, sums paid in
settlement of claims, costs and expenses (including, but not limited to,
reasonable attorneys' fees and litigation costs), obligations, liens and causes
of action, whether threatened or actual, direct or indirect (collectively,
"Claims"), which arise in any way, directly or indirectly, resulting from or in
connection with, in whole or in part, Tenant's or Tenant's Parties' activities
in, on or about the Premises or Project, including, without limitation, Tenant's
breach or default of any obligation of Tenant to be performed under the terms of
this Lease, the conduct of Tenant's business, the nonobservance or
nonperformance of any law, ordinance or regulation or the negligence or
misconduct of Tenant or Tenant's Parties, the buildings and improvements located
on the Project becoming out of repair, the leakage of gas, oil, water, steam or
electricity emanating from their usual conduits, or due to any cause whatsoever;
except injury to persons or damage to property the sole cause of which is the
active, gross negligence or willful misconduct of Landlord, or the wrongful
failure of Landlord to repair any part of the Project which Landlord is
obligated to repair and maintain hereunder within a reasonable time after the
receipt of written notice from Tenant of needed repairs. Landlord shall not be
liable to Tenant for any damages arising from any act, omission or neglect of
any other tenant in the Project.
12.2 LANDLORD'S INSURANCE. Landlord shall maintain insurance covering
the Project and Landlord's ownership and operation thereof in such types and
amounts as it deems necessary or desirable in its sole discretion, which may
include, without limitation, liability, property damage and/or loss of rental
income coverage. Such insurance shall be for the sole benefit of Landlord and
under its sole control. The premiums for any such insurance shall be an
Operating Expense.
12.3 TENANT'S INSURANCE OBLIGATIONS. Tenant agrees that at all times
from and after the date Tenant is given access to the
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Premises for any reason, Tenant shall carry and maintain, at its sole cost and
expense, the following types, amounts and forms of insurance:
12.3.1 GENERAL LIABILITY INSURANCE. A broad form comprehensive
general liability or commercial general liability policy covering property
damage, personal injury, advertising injury and bodily injury, and including
blanket contractual liability coverage for obligations under this Lease,
covering the Project in an amount of not less than the amount per occurrence
specified in Item 10 of the Basic Lease Provisions. Such policy shall be in the
occurrence form with a per location general aggregate. Each policy shall name
Landlord and any management agent from time to time designated by Landlord and
any lender of Landlord as additional insureds, and shall provide that any
coverage to additional insureds shall be primary; when any policy issued to
Landlord provides duplicate coverage or is similar in coverage, Landlord's
policy will be excess over Tenant's policies. No deductibles in excess of Five
Thousand Dollars ($5,000) per occurrence shall be permitted. Tenant shall pay
any deductibles. The amounts of such insurance required hereunder shall be
subject to adjustment from time to time as required by Landlord based upon
Landlord's determination as to (a) the amounts of such insurance generally
required at such time for comparable tenants, premises and buildings in the
general geographical location of the Building; (b) as requested by any lender
with an interest in the Building or Project; (c) Tenant's activities; (d)
increases in recovered liability claims; (e) increased claims consciousness by
the public; or (f) any combination of the foregoing.
12.3.2 PROPERTY INSURANCE. A policy or policies, including the
Boiler and Machinery Perils and the Special Causes of Loss form of coverage
("All Risks"), including vandalism and malicious mischief, theft, sprinkler
leakage (including earthquake sprinkler leakage) and water damage coverage in an
amount equal to the full replacement value, new without deduction for
depreciation, on an agreed amount basis (no co-insurance requirement), of all
trade fixtures, furniture and equipment in the Premises, and all alterations,
additions and improvements to the Premises installed by or for Tenant or
provided to Tenant. Such insurance shall also include business interruption and
extra expense coverage for Tenant's operations and debris removal coverage for
removal of property of Tenant and Tenant's Parties which may be damaged within
the Premises. Such coverage shall name the Landlord as an additional insured
and/or loss payee as its interest may appear. No deductibles in excess of Fifty
Thousand Dollars ($50,000) shall be permitted. Tenant shall pay any deductibles.
12.3.3 WORKERS' COMPENSATION INSURANCE. Workers' compensation
insurance, including employers' liability coverage, shall comply with applicable
California law. Such insurance shall include a waiver of subrogation in favor of
Landlord, if available.
12.4 EVIDENCE OF COVERAGE. All of the policies required to be obtained
by Tenant pursuant to Paragraph 12.3 shall be with companies and in form
satisfactory to Landlord. Each insurance company providing coverage shall have a
current Best's Rating of "A-XII" or better. Upon notice from Landlord, Tenant
shall add any mortgagee of Landlord as an additional insured or loss payee, as
applicable. Tenant shall provide Landlord with certificates and copies of
endorsements (and upon request, policies) of insurance acceptable to Landlord
issued by each of the insurance companies issuing any of the policies required
pursuant to the provisions of Paragraph 12.3, and said certificates and
endorsements shall provide that the insurance issued thereunder shall not be
altered, cancelled or non-renewed until after thirty (30) days' written notice
to Landlord. "Claims made" policies shall not be permitted. Each policy shall
permit the waiver in
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Section 12.5 below. Evidence of insurance coverage shall be furnished to
Landlord prior to Tenant's possession of the Premises and thereafter not fewer
than fifteen (15) days prior to the expiration date of any required policy.
Tenant may satisfy its insurance obligations hereunder by carrying such
insurance under a so-called blanket policy or policies of insurance which are
acceptable to Landlord. If Tenant fails to obtain any insurance required hereby
or provide evidence thereof to Landlord, Landlord may, but shall not be
obligated to, and Tenant hereby appoints Landlord as its agent to, procure such
insurance and xxxx the cost of the insurance plus a twenty percent (20%)
handling charge to Tenant. Tenant shall pay such costs to Landlord as Additional
Rent with the next monthly payment of Rent.
12.5 WAIVERS OF SUBROGATION. Landlord waives any and all rights of
recovery against Tenant for or arising out of damage to, or destruction of the
Building or the Premises to the extent that Landlord's insurance policies then
in force insure against such damage or destruction and permit such waiver and
only to the extent of insurance proceeds actually received by Landlord for such
damage or destruction. Tenant waives any and all rights of recovery against
Landlord for or arising out of damage to or destruction of any property of
Tenant to the extent that Tenant's insurance policies then in force or the
policies required by this Lease, whichever is broader, insure against such
damage or destruction.
13. LANDLORD'S RIGHT OF ACCESS.
Tenant shall permit Landlord and its employees and agents, at all
reasonable times and at any time in case of emergency, in such manner as to
cause as little disturbance to Tenant as reasonably practicable (a) to enter
into and upon the Premises to inspect them, to protect the Landlord's interest
therein, or to post notices of non-responsibility, (b) to take all necessary
materials and equipment into the Premises, and perform necessary work therein,
and (c) to perform periodic environmental audits, inspections, investigations,
testing and sampling of the Premises and/or the Project, and to review and copy
any documents, materials, data, inventories, financial data, notices or
correspondence to or from private parties or governmental authorities in
connection therewith. No such work shall cause or permit any rebate of Rent to
Tenant for any loss of occupancy or quiet enjoyment of the Premises, or damage,
injury or inconvenience thereby occasioned, or constitute constructive eviction.
Landlord may at any time place on or about the Building any ordinary "for sale"
and "for lease" signs, except that Landlord shall not place a "for lease" sign
on the Building with respect to the availability of Tenant's Premises until the
earlier of (i) six (6) months prior to the expiration of this Lease, (ii) the
termination of this Lease, or (iii) any other time with the consent of Tenant.
Tenant shall also permit Landlord and its employees and agents, upon request, to
enter the Premises or any part thereof, at reasonable times during normal
business hours, to show the Premises to any fee owners, lessors of superior
leases, holders of encumbrances on the interest of Landlord under the Lease, or
prospective purchasers, mortgagees or lessees of the Project or Building as an
entirety. During the period of six (6) months prior to the expiration date of
this Lease, Landlord may exhibit the Premises to prospective tenants.
14. ASSIGNMENT AND SUBLETTING.
14.1 LANDLORD'S CONSENT. Tenant shall not assign all or any portion of
its interest in this Lease, whether voluntarily, by operation of law or
otherwise, and shall not sublet all or any portion of the Premises, including,
but not limited to, sharing them, permitting another party to occupy them or
granting concessions or licenses to another party, except with the prior written
consent of Landlord, which Landlord may withhold for any
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reasonable condition, including, but not limited to: (a) Tenant is in default of
this Lease; (b) the assignee or subtenant is unwilling to assume in writing all
of Tenant's obligations hereunder; (c) the assignee or subtenant has a financial
condition which is reasonably unsatisfactory to Landlord or Landlord's
mortgagee; (d) the Premises will be used for different purposes than those set
forth in Paragraph 3 or for a use requiring or generating increased or different
Hazardous Materials; (e) the proposed assignee or subtenant or its business is
subject to compliance with additional requirements of the law (including related
resolutions) commonly known as the Americans with Disabilities Act of 1990
beyond those requirements applicable to Tenant; (f) Tenant proposes to assign
less than all of its interest in this Lease or to sublet the Premises in units
that are unusually small for the Project; and (g) the assignee or subtenant
requires extensive alterations to the Premises.
14.2 FEES. Tenant shall pay Landlord's reasonable attorneys' fees
incurred in evaluating any proposed assignment or sublease and documenting
Landlord's consent.
14.3 PROCEDURE. Whenever Tenant has obtained an offer to assign any
interest in-this Lease or to sublease all or any portion of the Premises, Tenant
shall provide to Landlord the name and address of said proposed assignee or
sublessee, the base rent and all other compensation to be paid to Tenant, the
proposed use by the proposed assignee or sublessee, the proposed effective date
of the assignment or subletting, and any other business terms which are material
to the offer and/or which differ from the provisions of this Lease ("Notice of
Offer"). Tenant shall also provide to Landlord the nature of business, financial
statement and business experience resume for the immediately preceding five (5)
years of the proposed assignee or sublessee and such other information
concerning such proposed assignee or sublessee as Landlord may require. The
foregoing information shall be in writing and shall be received by Landlord no
less than sixty (60) days prior to the effective date of the proposed assignment
or sublease.
Within thirty (30) days following its receipt of a Notice of
Offer for the proposed assignment or subletting, Landlord shall be entitled to
terminate this Lease as to all of the Premises (unless Tenant proposes a
sublease of a portion of the Premises, in which event Landlord may terminate
this Lease as to such portion) by written notice to Tenant ("Termination
Notice"), and such termination shall be effective as of the proposed effective
date of the proposed assignment or sublease. If Landlord does not elect to
terminate this Lease, Landlord shall either notify Tenant that Landlord consents
to the proposed assignment or subletting or withholds its consent for reasons to
be specified in the notice. If Landlord does not provide a Termination Notice or
a notice withholding its consent to Tenant within thirty (30) days following its
receipt of a Notice of Offer, Landlord shall be deemed to have consented to the
proposed assignment or subletting.
14.4 BONUS RENT. If any interest in this Lease is assigned or all or
any portion of the Premises is subleased, Landlord shall receive all of the
"bonus rent" to be realized from such assignment or subletting. The bonus rent
shall mean any lump sum payment or other value received by Tenant, plus any base
rent, percentage rent or periodic compensation received by Tenant from or for
the benefit of an assignee or sublessee in excess of (a) all amounts owed for
Rent and other charges pursuant to this Lease, and (b) all reasonable
commissions and fees paid to any real estate broker or finder who is
unaffiliated with Tenant in connection with the assignment or subletting. If a
portion of the Premises is subleased, the amount in clause (a) shall be prorated
based on the portion of the Premises' rentable area to be subleased. The bonus
rent shall be paid on the first (1st) day of each calendar month next following
tenant's receipt of
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each payment from its assignee or sublessee, after reduction for all amounts
described in clauses (a) and (b) above, amortized over the full term of the
assignment or sublease.
14.5 CONTINUING TENANT OBLIGATIONS. No subleasing or assignment shall
relieve Tenant from liability for payment of all forms of Rent and other charges
herein provided or from Tenant's obligations to keep and be bound by the terms,
conditions and covenants of this Lease.
14.6 WAIVER, DEFAULT AND CONSENT. The acceptance of Rent from any other
person shall not be deemed to be a waiver of any of the provisions of this Lease
or a consent to the assignment or subletting of the Premises. Any assignment or
sublease without the Landlord's prior written consent shall be voidable, at
Landlord's election, and shall constitute a noncurable event of default under
this Lease. Consent to any assignment or subletting shall not be deemed a
consent to any future assignment or subletting.
14.7 RESTRUCTURING OF BUSINESS ORGANIZATIONS. Any transfer of corporate
shares or partnership interests of Tenant, so as to result in a change in the
present voting control of Tenant by the person or persons owning a majority of
said corporate shares or partnership interests on the date of this Lease (except
for trading on an exchange), shall constitute an assignment and shall be subject
to the provisions of this Paragraph 14. Notwithstanding the foregoing, an
assignment of this Lease by operation of law as a result of a merger or
consolidation of Tenant, and an assignment of this Lease in conjunction with (i)
the sale of all or substantially all of Tenant's assets, or (ii) a public
offering of the stock of Tenant, shall not constitute an assignment of this
Lease under this Paragraph 14, provided that, and only so long as, the surviving
tenant or assignee has a net worth greater than or equal to that of Tenant as of
the date hereof. Notwithstanding the foregoing, an assignment of this Lease to
an entity which owns, or is owned by, Tenant, shall not constitute an assignment
of this Lease under this paragraph 14, provided that (a) such entity owns more
than fifty percent (50%) of the oustanding shares of all classes of voting stock
of Tenant, or Tenant own more than fifty percent (50%) of all ownership and
controlling interests of such assignee, and (b) in either such case, the
assignee has a net worth at least equal to that of Tenant as of the date of this
Lease hereof.
14.8 ASSIGNMENT OF SUBLEASE RENT. Tenant immediately and irrevocably
assigns to Landlord, as security for Tenant's obligations under this Lease, all
rents from any subletting of all or any part of the Premises, and Landlord, as
assignee and as attorney-in-fact for Tenant for purposes hereof, or a receiver
for Tenant appointed on Landlord's application, may collect such rents and apply
same toward Tenant's obligations under this Lease, except that, until the
occurrence of an event of default by Tenant, Tenant shall have the right and
license to collect such rents.
14.9 ASSIGNMENT IN BANKRUPTCY. If this Lease is assigned to any person
or entity pursuant to the provisions of the United States Bankruptcy Code, 11
U.S.C. Section 101 et seq., or such similar laws or amendments thereto which may
be enacted from time to time (the "Bankruptcy Code"), any and all monies or
other considerations payable or otherwise to be delivered in connection with
such assignment shall be paid or delivered to Landlord, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant or of
the estate of Tenant within the meaning of the Bankruptcy Code. Any and all
monies or other considerations constituting Landlord's property under the
preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and be promptly paid or delivered to Landlord.
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14.10 ASSUMPTION OF OBLIGATIONS. Any person or entity to which this
Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed, without further act or deed, to have assumed all of the obligations
arising under this Lease on and after the date of such assignment. Any such
assignee shall upon demand execute and deliver to Landlord an instrument
confirming such assumption.
15. CONDEMNATION.
15.1 TOTAL TAKING. If the whole or any substantial part of the Premises
or the Project shall be taken or damaged because of the exercise of the power of
eminent domain, whether by condemnation proceedings or otherwise, including acts
or omissions constituting inverse condemnation, or any transfer of the Premises
or Project or portion thereof in avoidance of the exercise of the power of
eminent domain (collectively, a "Taking"), and the Taking would prevent or
materially interfere with the use of the Premises for the purpose for which they
are being used, this Lease shall terminate effective when the physical Taking of
the Premises shall occur.
15.2 PARTIAL TAKING. If part of the Premises shall be subject to a
Taking and this Lease is not terminated as provided in the Paragraph 15.1 above,
this Lease shall not terminate but the Rent payable hereunder during the
unexpired portion of this Lease shall be reduced in proportion to the area of
the Premises rendered unusable by Tenant.
15.3 CONDEMNATION AWARD. The entire award or compensation for any
Taking of the Project and/or the Premises, or any part thereof, or for
diminution in value, shall be the property of Landlord, and Tenant hereby
assigns its interest in any such award to Landlord; provided, however, Landlord
shall have no interest in any separate award made to Tenant for loss of
business, for relocation purposes, or for the taking of Tenant's fixtures and
improvements.
15.4 EXCLUSIVE REMEDY. This Paragraph 15 shall be Tenant's sole and
exclusive remedy in the event of any Taking. Tenant hereby waives the benefits
of California Code of Civil Procedure Section 1265.130 or any other statute
granting Tenant specific rights in the event of a Taking which are contrary to
the provisions of this Paragraph 15.
16. SURRENDER AND HOLDING OVER.
16.1 SURRENDER. Upon the expiration or sooner termination of this
Lease, Tenant shall surrender the Premises in as good condition as when
received, reasonable wear and tear excepted, broom clean and free of trash and
rubbish, and free from all tenancies or occupancies by any person. Subject to
Landlord's rights under Paragraph 19.8, Tenant shall remove all trade fixtures,
furniture, equipment and other personal property installed in the Premises prior
to the expiration or earlier termination of this Lease. Unless otherwise
provided in Paragraph 7 or waived by Landlord in writing prior to the expiration
or earlier termination of this Lease, Tenant shall remove at its sole cost all
alterations, additions and improvements made by Tenant to the Premises.
Alterations, additions and improvements remaining on the Premises at the
expiration or earlier termination of this Lease shall become the property of
Landlord. Tenant shall, at its own cost, completely repair any and all damage to
the Premises and the Building resulting from or caused by such removal. The
provisions of Paragraph 7 shall apply to such removal and repair work.
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16.2 HOLDING OVER. If Landlord agrees in writing that Tenant may hold
over after the expiration or earlier termination of this Lease, unless the
parties hereto otherwise agree in writing as to the terms of such holding over,
the holdover tenancy shall be subject to termination by Landlord or Tenant at
any time upon not less than thirty (30) days' prior written notice. If Tenant
holds over without the consent of Landlord, the same shall be a tenancy at will
terminable at any time, and Tenant shall be liable to Landlord for, and Tenant
shall indemnify, protect, defend and hold Landlord harmless from and against,
any damages, liabilities, losses, costs, expenses or claims suffered or caused
by such holdover, including damages and costs related to any successor tenant of
the Premises to whom Landlord could not deliver possession of the Premises when
promised. All of the other terms and provisions of this Lease shall be
applicable during any holdover period, with or without consent, except that
Tenant shall pay to Landlord from time to time upon demand, as Rent for the
period of any holdover, an amount equal to two hundred percent (200%) of the
then applicable Base Rent plus all Additional Rent in effect on the termination
date, computed on a daily basis for each day of the holdover period. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this Lease. The preceding provisions of this Paragraph 16.2 shall not be
construed as Landlord's consent to any holding over by Tenant.
16.3 ENTRY AT END OF TERM. If during the last month of the Term, Tenant
shall have removed substantially all of Tenant's property and personnel from the
Premises, Landlord may enter the Premises and, repair, alter and redecorate the
same, without abatement of Rent and without liability to Tenant, and such acts
shall have no effect on this Lease. Tenant shall give written notice to Landlord
at least thirty (30) days prior to vacating the Premises and shall arrange to
meet with Landlord for a joint inspection of the Premises prior to vacating. In
the event of Tenant's failure to give such notice or arrange such joint
inspection, Landlord's inspection at or after Tenant's vacation of the Premises
shall be conclusively deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration.
17. QUIET ENJOYMENT.
Landlord represents and warrants that it has full rights and authority
to enter into this Lease and that Tenant, upon paying the Rent and performing
its other covenants and agreements herein set forth, shall peaceably and quietly
have, hold and enjoy the Premises for the Term without hindrance or molestation
from Landlord, subject to the terms and provisions of this Lease, any ground
lease, any mortgage or deed of trust now or hereafter encumbering the Premises
or the Project, and all matters of record.
18. EVENTS OF DEFAULT.
The following events shall be deemed to be events of default by Tenant
under this Lease:
18.1 FAILURE TO PAY RENT. Tenant shall fail to pay any installment of
the Rent herein reserved when due, or any other payment or reimbursement to
Landlord required herein when due.
18.2 INSOLVENCY. Tenant or any guarantor of Tenant's obligations
hereunder shall generally not pay its debts as they become due or shall admit in
writing the inability to pay its debts or shall make a general assignment for
the benefit of creditors.
18.3 APPOINTMENT OF RECEIVER. A receiver or trustee (or similar
official) shall be appointed for all or substantially all of the assets of
Tenant.
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18.4 BANKRUPTCY. Intentionally omitted.
18.5 ATTACHMENT. The attachment, execution or other judicial seizure or
non-judicial seizure of all or substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
ten (10) business days after the levy thereof.
18.6 VACATION OF PREMISES. Tenant shall vacate all or a substantial
portion of the Premises, whether or not Tenant is in default of the Rent or
other charges due under this Lease.
18.7 CERTIFICATES. Tenant shall fail to deliver to Landlord any
subordination agreement within the time limit prescribed in Paragraph 21 below,
or a Certificate of Occupancy, all financial statements or an estoppel
certificate within the time limits prescribed in Paragraph 22.7 below.
18.8 FAILURE TO DISCHARGE LIENS. Tenant shall fail to discharge any
lien placed upon the Premises in violation of Paragraph 8 hereof.
18.9 FALSE FINANCIAL STATEMENT. Landlord discovers that any financial
statement given to Landlord by Tenant, any assignee, subtenant or successor in
interest of Tenant, or any guarantor of Tenant's obligations hereunder, or any
of them, was materially false when given to Landlord.
18.10 FAILURE TO COMPLY WITH LEASE TERMS. Tenant shall fail to comply
with any other term, provision or covenant of this Lease, and shall not cure
such failure within fifteen (15) days after written notice thereof to Tenant;
provided, however, if the nature of the obligation is such that it cannot be
cured within fifteen (15) days, Tenant shall not be in default so long as Tenant
commences performance of such cure as soon as possible (and in no event later
than fifteen days following Landlord's delivery of notice to Tenant) and
thereafter diligently prosecutes the same to completion (not to exceed ninety
(90) days).
18.11 GUARANTOR DEFAULT. Any guarantor of Tenant's obligations
hereunder shall be in default under the terms of its guaranty.
19. LANDLORD'S REMEDIES.
Upon the occurrence of any event of default, Landlord may, at its
option without further notice or demand and in addition to any other rights and
remedies hereunder or at law or in equity, do any or all of the following:
19.1 TERMINATION. Terminate Tenant's right to possession of the
Premises by any lawful means upon at least 3 days' written notice (which notice
may be satisfied by any notice which may be given by Landlord pursuant to
Paragraph 18, if applicable), in which case Tenant shall immediately surrender
possession of the Premises to Landlord and, in addition to any rights and
remedies Landlord may have at law or in equity, Landlord shall have the
following rights:
(a) To re-enter the Premises then or at any time thereafter
and remove all persons and property and possess the Premises,
without prejudice to any other remedies Landlord may have by
reason of Tenant's default or of such termination, and Tenant
shall have no further claim hereunder.
(b) To recover all damages incurred by Landlord by reason of
the default, including without limitation (i) the worth at the
time of the award of the payments owed
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by Tenant to Landlord under this Lease that were earned but
unpaid at the time of termination; (ii) the worth at the time
of the award of the amount by which the payments owed by
Tenant to Landlord under the Lease that would have been earned
after the date of termination until the time of the award
exceeds the amount of the loss of payments owed by Tenant to
Landlord under this Lease for the same period that Tenant
proves could have been reasonably avoided; (iii) the worth at
the time of the award of the amount by which the payments owed
by Tenant to Landlord for the balance of the Term after the
time of the award exceeds the amount of the loss of payments
owed by Tenant for the same period that Tenant proves could
have been reasonably avoided; (iv) all costs incurred by
Landlord in retaking possession of the Premises and restoring
them to good order and condition; (v) all costs, including
without limitation brokerage commissions, advertising costs
and restoration costs, incurred by Landlord in reletting the
Premises; plus (vi) any other amount, including without
limitation attorneys' fees and audit expenses, necessary to
compensate Landlord for all detriment proximately caused by
Tenant's failure to perform its obligations under this Lease
or which in the ordinary course of things would be likely to
result therefrom. "The worth at the time of the award," as
used in clauses (i) and (ii) of this paragraph, is to be
determined by computing interest as to each unpaid payment
owed by Tenant to Landlord under the Lease, at the highest
interest rate permitted by law. "The worth at the time of the
award," as referred to in clause (iii) of this paragraph, is
to be determined by discounting such amount, as of the time of
award, at the discount rate of the San Francisco Federal
Reserve Bank, plus one percent (1%).
(c) To remove, at Tenant's sole risk, any and all personal
property in the Premises and place such in a public or private
warehouse or elsewhere at the sole cost and expense and in the
name of Tenant. Any such warehouser shall have all of the
rights and remedies provided by law against Tenant as owner of
such property. If Tenant shall not pay the cost of such
storage within thirty (30) days following Landlord's demand,
Landlord may, subject to the provisions of applicable law,
sell any or all such property at a public or private sale in
such manner and at such times and places as Landlord deems
proper, without notice to or demand upon Tenant. Tenant waives
all claims for damages caused by Landlord's removal, storage
or sale of the property and shall indemnify and hold Landlord
free and harmless from and against any and all loss, cost and
damage, including without limitation court costs and
attorneys' fees. Tenant hereby irrevocably appoints Landlord
as Tenant's attorney-in-fact, coupled with an interest, with
all rights and powers necessary to effectuate the provisions
of this subparagraph.
19.2 CONTINUATION OF LEASE. Maintain Tenant's right to possession, in
which case this Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event, Landlord may enforce all of Landlord's
rights and remedies under this Lease, including the right to recover rent as it
becomes due hereunder, and, at Landlord's election, to re-enter and relet the
Premises on such terms and conditions as Landlord deems appropriate. Without
limiting the generality of the foregoing, Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in
effect after lessee's breach and abandonment and recover rent as it becomes due,
if lessee has right to sublet or assign, subject only to reasonable
limitations). If Landlord relets the Premises
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or any portion thereof, any rent collected shall be applied against amounts due
from Tenant. Landlord may execute any lease made pursuant hereto in its own
name, and Tenant shall have no right to collect any such rent or other proceeds.
Landlord's re-entry and/or reletting of the Premises, or any other acts, shall
not be deemed an acceptance of surrender of the Premises or Tenant's interest
therein, a termination of this Lease or a waiver or release of Tenant's
obligations hereunder. Landlord shall have the same rights with respect to
Tenant's improvements and personal property as under Paragraph 19.1 above, even
though such re-entry and/or reletting do not constitute acceptance of surrender
of the Premises or termination of this Lease.
19.3 APPOINTMENT OF RECEIVER. Cause a receiver to be appointed in any
action against Tenant and to cause such receiver to take possession of the
Premises and to collect the rents or bonus rent derived therefrom. The foregoing
shall not constitute an election by Landlord to terminate this Lease unless
specific notice of such intent is given.
19.4 LATE CHARGE. Charge late charges as provided in Paragraph 2.7.
19.5 INTEREST. Charge interest on any amount not paid when due as
provided in Paragraph 22.2. Interest shall accrue from the date funds are first
due or, if the payment is for funds expended by Landlord on Tenant's behalf,
from the date Landlord expends such funds.
19.6 ATTORNEYS' FEES. Collect, upon demand, all reasonable attorneys'
fees and expenses incurred by Landlord in enforcing its rights and remedies
hereunder.
19.7 INJUNCTION. To restrain by injunction or other equitable means any
breach or anticipated breach of this Lease.
20. TENANT'S REMEDIES.
20.1 LANDLORD'S DEFAULT. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
sixty (60) days after written notice is delivered by Tenant to Landlord and to
the holder of any mortgages or deeds of trust (collectively, "Lender") covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying the obligation which Landlord has failed to
perform; provided, however, that if the nature of Landlord's obligation is such
that more than sixty (60) days are required for performance, then Landlord shall
not be in default if Landlord or Lender commences performance within such sixty
(60) day period and thereafter diligently prosecutes the same to completion. All
obligations of Landlord hereunder shall be construed as covenants, not
conditions.
20.2 TENANT'S REMEDIES. In the event of any default, breach or
violation of Tenant's rights under this Lease by Landlord, Tenant's exclusive
remedies shall be an action for specific performance or action for actual
damages. Tenant hereby waives the benefit of any laws granting it the right to
perform Landlord's obligation, a lien upon the property of Landlord and/or upon
Rent due Landlord, or the right to terminate this Lease or withhold Rent on
account of any Landlord default.
20.3 NON-RECOURSE. Notwithstanding anything to the contrary in this
Lease, any judgment obtained by Tenant or any of Tenant's Parties against
Landlord or any Indemnified Parties shall be satisfied only out of Landlord's
equity interest in the Building and the legal parcel of land on which it sits.
Neither Landlord nor any Indemnified Parties shall have any personal liability
for any matter in connection with this Lease or its obligations as Landlord of
the Premises, except as provided above. Tenant shall not institute, seek or
enforce any personal or deficiency
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judgment against Landlord or any Indemnified Parties, and none of their property
shall be available to satisfy any judgment hereunder, except as provided in this
Paragraph 20.3.
20.4 SALE OF PREMISES. In the event of any sale or transfer of the
Premises (and provided that any security deposit held by the seller, transferor
or assignor (collectively, "Seller") is delivered or credited to the purchaser,
transferee or assignee (collectively, "Purchaser"), the Seller shall be and
hereby is entirely freed and relieved of all agreements, covenants and
obligations of Landlord thereafter to be performed and it shall be deemed and
construed without further agreement between the parties or their successors in
interest or between the Seller and the Purchaser on any such sale, transfer or
assignment that such Purchaser has assumed and agreed to carry out any and all
agreements, covenants and obligations of Landlord hereunder.
21. MORTGAGES.
Tenant accepts this Lease subject and subordinate to any ground lease,
mortgage and/or deed of trust now or at any time hereafter constituting a lien
or encumbrance upon the Premises. Notwithstanding any such subordination,
Tenant's right to quiet possession of the Premises shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay the Rent and observe
and perform all of its obligations hereunder, unless this Lease is otherwise
terminated pursuant to its terms. If any ground lessor, mortgagee or beneficiary
under a deed of trust elects to have Tenant's interest in this Lease superior to
any such instrument, then by notice to Tenant from such ground lessor, mortgagee
or beneficiary, this Lease shall be deemed superior to such ground lease or
lien, whether this Lease was executed before or after said ground lease,
mortgage or deed of trust. Tenant shall at any time hereafter on demand execute
any instruments, releases or other documents which may be required by any ground
lessor or mortgagee for the purpose of attornment or subjecting and
subordinating this Lease to any ground lease or the lien of any such mortgage.
Tenant's failure to execute each instrument, release or document within ten (10)
days after written demand shall constitute an event of default by Tenant
hereunder without further notice to Tenant, or at Landlord's option Landlord
shall execute such instrument, release or document on behalf of Tenant as
Tenant's attorney-in-fact. Tenant does hereby make, constitute and irrevocably
appoint Landlord as Tenant's attorney-in-fact, coupled with an interest, and in
Tenant's name, place and stead, to execute such documents in accordance with
this Paragraph 21.
22. GENERAL PROVISIONS.
22.1 SINGULAR AND PLURAL. Words of any gender used in this Lease shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, unless the context otherwise
requires.
22.2 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided to the contrary, any amount due to Landlord 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 Tenant under
this Lease, provided, however, that interest shall not be payable on late
charges incurred by Tenant.
22.3 TIME OF ESSENCE. Time is of the essence.
22.4 BINDING EFFECT. The terms, provisions and covenants and conditions
contained in this Lease shall apply to, inure to the benefit of, and be binding
upon, the parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns, except as otherwise herein expressly provided.
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22.5 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California applicable to contracts made and to be performed in such
state.
22.6 CAPTIONS. The captions inserted in this Lease are for convenience
only and in no way define, limit or otherwise describe the scope or intent of
this Lease, or any provision hereof, or in any way affect the interpretation of
this Lease.
22.7 CERTIFICATES. Tenant agrees from time to time within ten (10) days
after request of Landlord, to deliver to Landlord, or Landlord's designee a
Certificate of Occupancy for work performed by Tenant or Tenant's Parties in the
Premises, annual financial statements for each of the previous three (3) fiscal
years of Tenant, and an estoppel certificate stating 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 in full
force and effect), the date to which Rent has been paid, the unexpired Term of
this Lease and such other matters pertaining to this Lease as may be requested
by Landlord or Landlord's designee. Any such certificate may be conclusively
relied upon by Landlord or Landlord's designee. At Landlord's option, Tenant's
failure to timely deliver such certificate shall be an event of default by
Tenant, without further notice to Tenant, or it shall be conclusive upon Tenant
that this Lease is in full force and effect, without modification except as may
be represented by Landlord, that there are no uncured defaults in Landlord's
performance, and that not more than one (1) month's rent has been paid in
advance.
22.8 AMENDMENTS. This Lease may not be altered, changed or amended
except by an instrument in writing signed and dated by both parties hereto.
Tenant agrees to make such reasonable modifications to this Lease as may be
required by any lender in connection with the obtaining of financing or
refinancing of the Project or any portion thereof.
22.9 ENTIRE AGREEMENT. This Lease constitutes the entire understanding
and agreement of Landlord and Tenant with respect to the subject matter of this
Lease, and contains all of the covenants and agreements of Landlord and Tenant
with respect thereto, and supersedes all prior agreements or understandings.
Landlord and Tenant each acknowledge that no representations, inducements,
promises or agreements, oral or written, have been made by Landlord or Tenant,
or anyone acting on behalf of Landlord or Tenant, which are not contained
herein, and any prior agreements, promises, negotiations, or representations not
expressly set forth in this Lease are of no force or effect.
22.10 WAIVERS. The waiver by Landlord of any term, covenant, agreement
or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant, agreement or
condition herein contained, nor shall any custom or practice which may arise
between the parties in the administration of this Lease be construed to waive or
lessen the right of Landlord to insist upon the performance by Tenant in strict
accordance with all of the provisions of this Lease. The subsequent acceptance
of Rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any provisions, covenant, agreement or condition
of this Lease, other than the failure of Tenant to pay the particular Rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such Rent.
22.11 ATTORNEYS' FEES. If either Landlord or Tenant commences or
engages in, or threatens to commence or engage in, an action by or against the
other party arising out of or in connection with this Lease or the Premises,
including but not limited to any action for recovery of Rent due and unpaid, to
recover possession or for damages for breach of this Lease, the
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prevailing party shall be entitled to have and recover from the losing party
reasonable attorneys' fees and other costs incurred in connection with the
action, preparation for such action, any appeals relating thereto and enforcing
any judgments rendered in connection therewith. If Landlord becomes involved in
any action, threatened or actual, by or against anyone not a party to this
Lease, but arising by reason of or related to any act or omission of Tenant or
Tenant's Parties, Tenant agrees to pay Landlord's reasonable attorneys' fees and
other costs incurred in connection with the action, preparation for such action,
any appeals relating thereto and enforcing any judgments rendered in connection
therewith.
22.12 MERGER. The voluntary or other surrender of this Lease by Tenant
or a mutual cancellation hereof shall not constitute a merger. Such event shall,
at the option of Landlord, either terminate all or any existing subtenancies or
operate as an assignment to Landlord of any or all of such subtenancies.
22.13 SURVIVAL OF OBLIGATIONS. Paragraphs 2, 3.2, 4.2, 5.2, 8, 12.1,
12.5, 15.3, 16, 19, 20 and 22 and all obligations of Tenant hereunder not fully
performed as of the expiration or earlier termination of the Term shall survive
the expiration or earlier termination of the Term, including without limitation,
all payment obligations with respect to Rent and all obligations concerning the
condition of the Premises. Upon the expiration or earlier termination of the
Term, and prior to Tenant vacating the Premises, Tenant shall pay to Landlord
any amount reasonably estimated by Landlord (i) as necessary to perform Tenant's
duties under paragraphs 6.1 and 16.1 and put the Premises, including without
limitations all heating and air conditioning systems and equipment therein, in
good condition and repair, and (ii) as sufficient to meet Tenant's obligation
hereunder for prorated Additional Rent for the year in which the Lease expires
or terminates. All such amounts shall be used and held by Landlord for payment
of such obligations, with Tenant being liable for any additional costs therefor
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied as the case may be. Any
Security Deposit held by Landlord shall be credited against the amounts payable
by Tenant under this Paragraph 22.13.
22.14 SEVERABILITY. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws effective during
the Term, the remainder of this Lease shall not be affected thereby, and in lieu
of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there shall be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable.
22.15 SECURITY MEASURES. Tenant hereby acknowledges that the Rent
payable to Landlord hereunder does not include the cost of guard service or
other security measures, and that Landlord shall have no obligation whatsoever
to provide same. Tenant assumes all responsibility for the protection of Tenant,
Tenants' Parties and their property from acts of third parties.
22.16 EASEMENTS. Landlord reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of parcel maps, easement
agreements and covenants, conditions and restrictions, so long as such
easements, rights, dedications, maps and covenants, conditions and restrictions
do not unreasonably interfere with the permitted use of the Premises by Tenant.
Tenant shall sign any of the aforementioned documents upon request of Landlord
and failure to do so shall constitute a material breach of this Lease.
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22.17 MULTIPLE PARTIES. If more than one person or entity is named as
Tenant herein, the obligations of Tenant hereunder shall be the joint and
several responsibility of all persons or entities so named.
22.18 CONFLICT. Any conflict between the printed provisions of this
Lease and any typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
22.19 NO THIRD PARTY BENEFICIARIES. This Lease is not intended by
either party to confer any benefit on any third party, including without
limitations any broker, finder, or brokerage firm.
22.20 EFFECTIVE DATE/NONBINDING OFFER. Submission of this Lease for
examination or signature by Tenant does not constitute an offer or option for
lease, and it is not effective as a lease or otherwise until executed and
delivered by both Landlord and Tenant.
22.21 NOTICES. Each provision of this Lease or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by one party to the other shall be deemed to be complied with when and if the
following steps are taken:
(a) All Rent and other payments required to be made
hereunder shall be payable to the applicable party hereto as follows: to
Landlord at the address set forth in Item 12 of the Basic Lease Provisions, and
to Tenant at the Premises, or at such other addresses as the parties may have
hereafter specified by written notice. All obligations to pay Rent and/or any
other amounts under the terms of this Lease shall not be deemed satisfied until
such Rent and other amounts have been actually received by the respective party.
(b) Wherever any notice is required or permitted
hereunder, such notice shall be in writing. Any notice or document required or
permitted to be delivered hereunder shall be deemed to be delivered (i) upon
personal delivery; (ii) seventy- two (72) hours after deposit thereof in the
United States mail, postage prepaid, certified or registered mail, return
receipt requested; (iii) upon confirmation of delivery by Federal Express or
other reputable overnight delivery service; or (iv) upon written confirmation of
delivery by telegraph, telecopy or other electronic written transmission device;
correctly addressed to the parties hereto as follows: if to Tenant before the
Commencement Date, then at the address specified in Item 11 of the Basic Lease
Provisions; if to Tenant after the Commencement Date, then at the Premises; and
if to Landlord, then at the address specified in Item 12 of the Basic Lease
Provisions; or at such other address (but no more than one (1) address at a
time, except as provided in Paragraph 20.1) as the recipient may theretofore
have specified by written notice.
22.22 WATER OIL AND MINERAL RIGHTS. Landlord reserves all right, title
or interest in water, oil, gas or other hydrocarbons, other mineral rights and
air and development rights, together with the sole and exclusive right of
Landlord to sell, lease, assign or otherwise transfer the same, but without any
right of Landlord or any such transferee to enter upon the Premises during the
Term except as otherwise provided herein.
22.23 CONFIDENTIALITY. Tenant agrees to keep the Lease and its terms,
covenants, obligations and conditions strictly confidential and not to disclose
such matters to any other landlord, tenant, prospective tenant, or broker;
provided, however, Tenant may provide a copy of this Lease to its attorneys,
accountants and bankers, and to a non-party solely in
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conjunction with Tenant's reasonable and good faith effort to secure an assignee
or sublessee for the Premises.
22.24 BROKER'S FEES. Tenant represents and warrants that it has dealt
with no broker, agent or other person in connection with this transaction and
that no broker, agent or other person brought about this transaction, other than
the brokerage firm specified in Item 13 of the Basic Lease Provisions, if any,
and Tenant shall indemnify, defend, protect and hold Landlord harmless from and
against any claims, losses, liabilities, demands, costs, expenses or causes of
action by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant with regard to this
leasing transaction.
22.25 REMEDIES CUMULATIVE. All rights, privileges and remedies of the
parties are cumulative and not alternative or exclusive to the extent permitted
by law, except as otherwise provided herein.
22.26 RETURN OF CHECK. If Tenant's check, given to Landlord in payment
of any sum, is returned by the bank for non-payment, Tenant shall pay to
Landlord immediately on demand, as Additional Rent, all expenses incurred by
Landlord as a result thereof.
22.27 NO RECORDATION OF LEASE. Neither this Lease nor any memorandum
hereof may be recorded.
22.28 AUTHORITY. If Tenant is a corporation or 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. Tenant
shall, within thirty (30) days following execution of this Lease, deliver to
Landlord evidence of such authority satisfactory to Landlord.
22.29 INTERPRETATION. This Lease shall be construed fairly according to
its terms without regard to which party, or which party's attorneys, prepared
its form.
22.30 LANDLORD'S APPROVALS. Except where the provisions of this Lease
expressly provide that Landlord's consent or approval must be reasonably given,
all consents or approvals of Landlord sought or required pursuant to the terms
of this Lease may be given or withheld in Landlord's sole and absolute
discretion.
22.31 ADDITIONAL PROVISIONS. Those additional provisions set forth in
Exhibit "E", if any, are hereby incorporated by this reference as if fully set
forth herein.
22.32 WAIVER OF RIGHT TO TRIAL BY JURY. Tenant hereby waives the right
to trial by jury.
22.33 SUBSTITUTED PREMISES. At any time after the execution and
delivery of this Lease by Landlord and Tenant, Landlord shall have the right,
upon not less than thirty (30) days' prior written notice to Tenant, to
substitute for the Premises for all purposes under this Lease, other premises of
Landlord's selection within the Building containing the same or larger amount of
floor area as the Premises, provided that the Rental shall not increase as a
result of the relocation and provided further that Landlord shall (a) pay all
expenses reasonably incurred in moving Tenant's property to such new location;
and (b) furnish the substituted premises with Tenant Improvements comparable in
quality to those in the Premises.
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LANDLORD: TENANT:
CIIF ASSOCIATES II LIMITED QUAKER FABRIC CORPORATION
PARTNERSHIP, a Delaware OF FALL RIVER, INC., a
limited partnership Massachusetts corporation
By: Xxxxxx Advisors, Inc., a By: /s/
Massachusetts corporation ------------------------------
Its: V.P. - Sales
Its: Managing General By: /s/
Partner ------------------------------
Its: V.P.
By: /s/
-------------------------------
Its: XXXXXXXXXXX X. XXXXXXXX
Vice President
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EXHIBIT "A"
[Technical diagram of Building 162]
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EXHIBIT "B"
INTENTIONALLY OMITTED
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EXHIBIT "C"
RENT ADJUSTMENT RIDER
For CPI Rent Increases:
The Base Rent is initially $6,247.51 per month.
The Base Rent shall be adjusted as provided below on the first day of
the thirty-second (32nd) month of the Term (the "Adjustment Date"):
The adjusted Base Rent as of each Adjustment Date shall be the Base
Rent effective on the day preceding that Adjustment Date, multiplied by a
fraction, the numerator of which is the CPI figure for the third calendar month
preceding the month during which the particular Adjustment Date occurs and the
denominator of which is the CPI figure for the month occurring three (3)
calendar months prior to the month in which the previous Adjustment Date, or if
none, the Commencement Date, occurred. As used in this paragraph, the "CPI"
means the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los
Angeles/Anaheim/ Riverside CMSA, all items (1982-84 = 100), published by the
U.S. Department of Labor, Bureau of Labor Statistics, or if such index is no
longer published, the U.S. Department of Labor's most comprehensive official
index then in use that most nearly corresponds to the index named above. If it
is calculated from a base different from the base period 1982-84 = 100, figures
used for calculating the adjustment shall first be converted to the base period
used under a formula supplied by the Bureau. If the described index shall no
longer be published, another index generally recognized as authoritative shall
be substituted by Landlord.
Notwithstanding the foregoing, on each Adjustment Date, the Base Rent
shall be increased by no less than 3% per year and by no more than 6% per year,
which increase shall be cumulative and compounded annually.
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