1
EXHIBIT 10.3
SOUTHERN CALIFORNIA CHAPTER OF THE
SOCIETY OF INDUSTRIAL AND OFFICE REALTORS,(R) INc.
INDUSTRIAL REAL ESTATE LEASE
(MULTI-TENANT FACILITY)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and
are to be read in conjunction with the Basic Terms.
SECTION 1.01. DATE OF LEASE: February 7, 2000
SECTION 1.02. LANDLORD (INCLUDE LEGAL ENTITY): TCW REALTY
FUND VA HOLDING COMPANY, a California corporation, and TCW REALTY FUND VB, a
California limited partnership, as tenants in common.
Address of Landlord: 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
SECTION 1.03. TENANT (INCLUDE LEGAL ENTITY): L.A. T SPORTSWEAR,
INC., a Georgia corporation dba Full Line Distributors
Address of Tenant: 0000 Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxx 00000.
SECTION 1.04. PROPERTY: The Property is part of Xxxxxxxx's
multi-tenant real property development known as Fullerton Air Industrial Park
and described or depicted in Exhibit "A" (the "Project"). The Project includes
the land, the buildings and all other improvements located on the land, and the
common areas described in Paragraph 4.05(a). The Property is (include street
address, approximate square footage and description) An approximately 43,200
rentable square foot portion of an 82,474 rentable foot concrete industrial
building commonly known as 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx. INSERT 1
SECTION 1.05. LEASE TERM: three (3) years seven (7) months
beginning on May 1, 2000 or such other date as is specified in this Lease, and
ending on November 30.2003.
SECTION 1.06. PERMITTED USES: (See Article Five) The warehousing,
distribution and wholesale sale of T-shirts and related products and general
office use related thereto, and for no other use or purpose.
SECTION 1.07. TENANT'S GUARANTOR: (if none, so state) None
SECTION 1.08. BROKERS: (See Article Fourteen) (if none, so state)
Landlord's Broker: CB Xxxxxxx Xxxxx
Xxxxxx's Broker: X.X. Xxxxxxx Company
SECTION 1.09. COMMISSION PAYABLE TO LANDLORD'S BROKER: (See
Article Fourteen) $ Per Separate Agreement
SECTION 1.10. INITIAL SECURITY DEPOSIT: (See Section 3.03) $
INSERT 2
SECTION 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See
Section 4.05) 25 unassigned spaces
SECTION 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:
(A) BASE RENT: Seventeen Thousand Four Hundred Ninety-Six and
No/100 Dollars ($17,496.00) per month for the first twenty (20) months, as
provided in Section 3.01, and shall be increased on the first day of the
twenty-first (21st) month after the Commencement Date, as provided in INSERT 3
(B) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section
4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section
4.04); (iv) Tenant's initial Pro Rata Share of Common Area Expenses 9.68% (See
Section 4.05); (v) Impounds for Insurance Premiums and Property Taxes (See
Section 4.08); (vi) Maintenance, Repairs and Alternations (See Article Six).
SECTION 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR
SUBLEASE: (See Section 9.05) Fifty percent (50%) of the Profit (the
"Landlord's Share").
1
2
SECTION 1.14. RIDERS: The following Riders are attached to and
made a part of this Lease: (if none, so state) Tenant shall comply at all times
with all terms and provisions of the Rider to Standard Industrial Lease
attached hereto and incorporated herein by this reference.
ARTICLE TWO: LEASE TERM
SECTION 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the
beginning or end of the Lease Term is changed under any provision of this
Lease. The "Commencement Date" shall be the date specified in Section 1.05
above for the beginning of the Lease Term, unless advanced or delayed under any
provision of this Lease.
SECTION 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable
to Tenant if Landlord does not deliver possession of the Property to Tenant on
the Commencement Date. Landlord's non-delivery of the Property to Tenant on
that date shall not affect this Lease or the obligations of Tenant under this
Lease except that the Commencement Date shall be delayed until Landlord
delivers possession of the Property to Tenant and the Lease Term shall be
extended for a period equal to the delay in delivery of possession of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of a month. If Landlord does not deliver possession of the
Property to Tenant within sixty (60) days after the Commencement Date, Tenant
may elect to cancel this Lease by giving written notice to Landlord within ten
(10) days after the sixty (60) - day period ends. If Tenant give such notice,
the Lease shall be cancelled and neither Landlord nor Tenant shall have any
further obligations to the other. If Tenant does not give such notice, Xxxxxx's
right to cancel the Lease shall expire and the Lease Term shall commence upon
the delivery of possession of the Property to Tenant. If delivery of possession
of the Property to Tenant is delayed, Landlord and Tenant shall, upon such
delivery, execute an amendment to this Lease setting forth the actual
Commencement Date and expiration date of the Lease. Failure to execute such
amendment shall not affect the actual Commencement Date and expiration date of
the Lease.
SECTION 2.03. INSERT 4
SECTION 2.04. HOLDING OVER. Tenant shall vacate the Property upon
the expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from Xxxxxx's delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Xxxxxx's occupancy of the Property shall
be a "month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in
effect shall be increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
SECTION 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this
Lease, Tenant shall pay Landlord the Base Rent in the amount stated in
Paragraph 1.12(a) above for the first month of the Lease Term. On the first day
of the second month of the Lease Term and each month thereafter, Tenant shall
pay Landlord the Base Rent, in advance , without offset, deduction or prior
demand. The Base Rent shall be payable at Landlord's address or at such other
place as Landlord may designate in writing.
SECTION 3.02. COST OF LIVING INCREASES. (THIS SECTION HAS BEEN
DELETED IN ITS ENTIRETY)
SECTION 3.03. SECURITY DEPOSIT; INCREASES.
(a) Upon the execution of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount set forth in Section 1.10 above.
Landlord may apply all or part of the Security Deposit to any unpaid rent or
other charges due from Tenant or to cure any other defaults of Tenant. If
Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit to its full amount within ten (10) days after the Landlord's
written request. Tenant's failure to do so shall be a material default under
this Lease. No interest shall be paid on the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts
and no trust relationship is created with respect to the Security Deposit.
(b) Each Time the Base Rent is Increase. Tenant shall deposit all
additional funds with Landlord sufficient to increase the Security Deposit to
an amount which bears the same relationship to the adjusted Base Rent as the
Initial Security Deposit bore to the initial Base Rent.
SECTION 3.04. TERMINATION; ADVANCE PAYMENTS. Not more than thirty
(30) days after the termination of this Lease under Article Seven (Damage or
Destruction), Article Eight (Condemnation) or any other termination not
resulting from Tenant's default, and after Tenant has vacated the Property in
the manner required by this Lease, Landlord shall refund or credit to Tenant
(or Xxxxxx's successor) the unused portion of the Security Deposit, any advance
rent or other advance payments made by Tenant to Landlord, and any amounts paid
for real property taxes and other reserves which apply to any time periods
after termination of the Lease.
2
3
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
SECTION 4.01. ADDITIONAL RENT. All charges payable by Tenant other
than Base Rent are called "Additional Rent." Unless this Lease provides
otherwise, Tenant shall pay all Additional Rent then due with the next monthly
installment of Base Rent. The term "rent" shall mean Base Rent and Additional
Rent.
SECTION 4.02. PROPERTY TAXES.
(A) REAL PROPERTY TAXES. Tenant shall pay all real property taxes
on the Property (including any fees, taxes or assessments against, or as a
result of, any tenant improvements installed on the Property by or for the
benefit of Tenant during the Lease term. Subject to Paragraph 4.02(c) and
Section 4.08 below, such payment shall be made at least ten (10) days prior to
the delinquency date of the taxes. Within such ten (10) -day period, Tenant
shall furnish Landlord with satisfactory evidence that the real property taxes
have been paid. Landlord shall reimburse Tenant for any real property taxes
paid by Tenant covering any period of time prior to or after the Lease Term. If
Tenant fails to pay the real property taxes when due, Landlord may pay the
taxes and Tenant shall reimburse Landlord for the amount of such tax payment as
Additional Rent.
(B) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means:
(i) any fee, license fee, license tax, business license fee, commercial rental
tax, levy, charge, assessment, penalty or tax imposed by any taxing authority
against the Property; (ii) any tax on the Landlord's right to receive, or the
receipt of, rent or income from the Property or against Landlord's business of
leasing the Property; (iii) any tax or charge for fire protection, streets,
sidewalks, road maintenance, refuse or other services provided to the Property
by any governmental agency; (iv) any tax imposed upon this transaction or based
upon a re-assessment of the Property due to a change of ownership, as defined
by applicable law, or other transfer of all or part of Landlord's interest in
the Property; and (v) any charge or fee replacing any tax previously included
within the definition of real property tax. "Real property tax" does not,
however, include Landlord's federal or state income, franchise, inheritance or
estate taxes.
(C) JOINT ASSESSMENT. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real property tax
payable by Tenant under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such share to Landlord
within fifteen (15) days after receipt of Landlord's written statement.
(D) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to
Xxxxxx. Tenant shall try to have personal property taxed separately from the
Property.
(ii) If any of Tenant's personal property is taxed with
the Property, Tenant shall pay Landlord the taxes for the personal property
within (15) days after Xxxxxx receives a written statement from Landlord for
such personal property taxes. Tenant shall use its best efforts to have
personal property taxed separately from the Property.
SECTION 4.03. UTILITIES. Tenant shall pay, directly to the
appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Property. However, if any services or utilities are jointly
metered with other property, Landlord shall make a reasonable determination of
Tenant's proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after receipt
of Landlord's written statement.
SECTION 4.04. INSURANCE POLICIES.
(A) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known as
broad form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, property damage (including loss of use of
property) and personal injury arising out of the operation, use or occupancy of
the Property. Tenant shall name Landlord as an additional insured under such
policy. The initial amount of such insurance shall be Two Million Dollars
($2,000,000) per occurrence and shall be subject to periodic increase based
upon inflation, increased liability awards, recommendation of Landlord's
professional insurance advisers and other relevant factors. The liability
insurance obtained by Tenant under this Paragraph 4.04(a) shall (i) be primary
and non-contributing; (ii) contain cross-liability endorsements; and (iii)
insure Landlord against Tenant's performance under Section 5.05, if the matters
giving rise to the indemnity under Section 5.05 result from the negligence of
Tenant. The amount and coverage of such insurance shall not limit Tenant's
liability nor relieve Tenant of any other obligation under this Lease. Landlord
may also obtain comprehensive public liability insurance in an amount and with
coverage determined by Landlord insuring Landlord against liability arising out
of ownership, operation, use or occupancy of the Property. The policy obtained
by Landlord shall not be contributory and shall not provide primary insurance.
INSERT 5
(B) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall contain
an inflation Guard Endorsement and shall provide protection against all perils
included within the
3
4
classification of fire, extended coverage, vandalism, malicious mischief,
special extended perils (all risk), sprinkler leakage and any other perils
which Landlord deems reasonably necessary. Landlord shall have the right to
obtain flood and earthquake insurance. Landlord shall not obtain insurance for
Tenant's fixtures or equipment or building improvements installed by Tenant on
the Property. During the Lease Term, Landlord shall also maintain a rental
income insurance policy, with loss payable to Landlord, in an amount equal to
one year's Base Rent, plus estimated real property taxes and insurance
premiums. Tenant shall be liable for the payment of any deductible amount under
Landlord's or Tenant's insurance policies maintained pursuant to this Section
4.04, in an amount not to exceed Ten Thousand ($10,000). Tenant shall not do or
permit anything to be done which invalidates any such insurance policies.
(C) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall
pay all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained by Landlord or Tenant) within fifteen (15) days after
Xxxxxx's receipt of a copy of the premium statement or other evidence of the
amount due. For insurance policies maintained by Landlord which cover
improvements on the entire Project, Tenant shall pay Tenant's prorated share of
the premiums, in accordance with the formula in Paragraph 4.05(a) for
determining Tenant's share of Common Area costs. If insurance policies
maintained by Landlord cover improvements on real property other than the
Project, Landlord shall deliver to Tenant a statement of the premium applicable
to the Property showing in reasonable detail how Tenant's share of the premium
was computed. If the Lease Term expires before the expiration of an insurance
policy maintained by Landlord, Tenant shall be liable for Tenant's prorated
share of the insurance premiums. Before the Commencement Date, Tenant shall
deliver to Landlord a copy of any policy of insurance which Tenant is required
to maintain under this Section 4.04. At lease thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to Landlord a renewal of
such policy. As an alternative to providing a policy of insurance, Tenant shall
have the right to provide Landlord a certificate of insurance, executed by an
authorized officer of the insurance company, showing that the insurance which
Tenant is required to maintain under this Section 4.04 is in full force and
effect and containing such other information which Landlord reasonably
requires.
(D) GENERAL INSURANCE PROVISIONS.
(i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which requires the insurance carrier
to give Landlord not less than thirty (30) days' written notice prior to
cancellation or modification of such coverage.
(ii) If Tenant fails to deliver any policy, certificate
or renewal to Landlord required under this Lease within the prescribed time
period or if any such policy is cancelled or modified during the Lease Term
without Landlord's consent, Landlord may obtain such insurance, in which case
Tenant shall reimburse Landlord for the cost of such insurance within fifteen
(15) days after receipt of a statement that indicates the cost of such
insurance.
(iii) Tenant shall maintain all insurance required under
this Lease with companies holding a "General Policy Rating" of A-12 or better,
as set forth in the most current issue of "Best Key Rating Guide". Landlord and
Tenant acknowledge the insurance markets are rapidly changing and that
insurance in the form and amounts described in this Section 4.04 may not be
available in the future. Tenant acknowledges that the insurance described in
this Section 4.04 is for the primary benefit of Landlord. If at any time during
the Lease Term, Tenant is unable to maintain the insurance required under the
Lease, Tenant shall nevertheless maintain insurance coverage which is customary
and commercially reasonable in the insurance industry for Tenant's type of
business, as that coverage may change from time to time. Xxxxxxxx makes no
representation as to the adequacy of such insurance to protect Xxxxxxxx's or
Xxxxxx's interests. Therefore, Tenant shall obtain any such additional property
or liability insurance which Tenant deems necessary to protect Landlord and
Tenant.
(iv) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby waive any and all rights
of recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by any
insurance policy in force (whether or not described in this Lease) at the time
of such loss or damage. Upon obtaining the required policies of insurance,
Landlord and Tenant shall give notice to the insurance carriers of this mutual
waiver of subrogation. INSERT 6
SECTION 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS
(A) COMMON AREAS. As used in this Lease, "Common Areas" shall
mean all areas within the Project which are available for the common use of
tenants of the Project and which are not leased or held for the exclusive use
of Tenant or other tenants, including, but not limited to , parking areas,
driveways, sidewalks, loading areas, access roads, corridors, landscaping and
planted areas. Landlord, from time to time, may change the size, location,
nature and use of any of the Common Areas, convert Common Areas into leaseable
areas, construct additional parking facilities (including parking structures)
in the Common Areas, and increase or decrease Common Area land and/or
facilities. Tenant acknowledges that such activities may result in
inconvenience to Tenant. Such activities and changes are permitted if they do
not materially affect Xxxxxx's use of the Property.
(B) USE OF COMMON AREAS. Tenant shall have the nonexclusive right
(in common with other tenants and all others to whom Landlord has granted or
may grant such right(s) to use the Common Areas for the purposes
4
5
intended, subject to such reasonable rules and regulations as Landlord may
establish from time to time. Tenant shall abide by such rules and regulations
and shall use its best effort to cause others who use the Common Areas with
Xxxxxx's express or implied permission to abide by Landlord's rules and
regulations. At any time, Landlord may close any Common Areas to perform any
acts in the Common Areas as, in Landlord's judgment, are desirable to improve
the Project. Tenant shall not interfere with the rights of Landlord, other
tenants or any other person entitled to use the Common Areas.
(C) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be
entitled to use the number of vehicle parking spaces in the Project allocated
to Tenant in Section 1.11 of the Lease without paying any additional rent.
Tenant's parking shall not be reserved and shall be limited to vehicles no
larger than standard size automobiles or pickup utility vehicles. Tenant shall
not cause large trucks or other large vehicles to be parked within the Project
or on the adjacent public streets. Temporary parking of large delivery vehicles
in the Project may be permitted by the rules and regulations established by
Landlord. Vehicles shall be parked only in striped parking spaces and not in
driveways, loading areas or other locations not specifically designated for
parking. Handicapped spaces shall only be used by those legally permitted to
use them. If Tenant parks more vehicles in the parking area than the number set
forth in Section 1.11 of this Lease, such conduct shall be a material breach of
this Lease. In addition to Landlord's other remedies under the Lease, Tenant
shall pay a daily charge determined by Landlord for each such additional
vehicle.
(D) MAINTENANCE OF COMMON AREAS. Landlord shall maintain the
Common Areas in good order, condition and repair and shall operate the Project,
in Landlord's sole discretion, as a first-class industrial/commercial real
property development. Tenant shall pay Tenant's pro rata share (as determined
below) of all costs incurred by Landlord for the operation and maintenance of
the Common Areas. Common Areas include, but are not limited to , costs and
expenses for the following: gardening and landscaping; utilities, water and
sewage charges; maintenance of signs (other than tenants' signs); premiums for
liability, property damage, fire and other types of casualty insurance on the
Common Areas and worker's compensation insurance; all property taxes and
assessments levied on or attributable to the Common Areas of all Common Area
improvements; all personal property taxes levied on or attributable to personal
property used in connection with the Common Areas; straight-line depreciation
on personal property owned by Landlord which is consumed in the operation or
maintenance of the Common Areas; rental or lease payments paid by Landlord for
rented or leased personal property used in the operation or maintenance of the
Common Areas; fees for required licenses and permits; repairing, resurfacing,
repaving, maintaining, painting, lighting, cleaning, refuse removal, security
and similar items; reserves for roof replacement and exterior painting and
other appropriate reserves; and a reasonable allowance to Landlord for
Landlord's supervision of the Common Areas (not to exceed five percent (5%) of
the gross rents of the Project for the calendar year). Landlord may cause any
or all of such services to be provided by third parties and the cost of such
services shall be included in Common Area cost. Common Area costs shall not
include depreciation of real property which forms part of the Common Areas.
(E) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual
pro rata share of all Common Area costs (prorated for any fractional month)
upon written notice from Landlord that such costs are due and payable, and in
any event prior to delinquency. Tenant's pro rata share shall be calculated by
dividing the square foot area of the Property, as set forth in Section 1.04 of
the Lease, by the aggregate square foot area of the Project which is leased or
held for lease by tenants, as of the date on which the computation is made.
Tenant's initial pro rata share is set out in Paragraph 1,13(b). Any changes in
the Common Area costs and/or the aggregate area of the Project leased or held
for lease during the Lease Term shall be effective on the first day of the
month after such change occurs. Landlord may, at Landlord's election, estimate
in advance and charge to Tenant as Common Area costs, all real property taxes
for which Tenant is liable under Section 4.02 of the Lease, all insurance
premiums for which Tenant is liable under Section 4.04 of the Lease, all
maintenance and repair costs for which Tenant is liable under Section 6.04 of
the Lease, and all other Common Area costs payable by Tenant hereunder. At
Landlord's election, such statements of estimated Common Area costs shall be
delivered monthly, quarterly or at any other periodic intervals to be
designated by Landlord. Landlord may adjust such estimates at any time based
upon Xxxxxxxx's experience and reasonable anticipation of costs. Such
adjustments shall be effective as of the next rent payment date after notice to
Tenant. Within sixty (60) days after the end of each calendar year of the Lease
Term, Landlord shall deliver to Tenant a statement prepared in accordance with
generally accepted accounting principles setting forth, in reasonable detail,
the Common Area costs paid or incurred by Landlord during the preceding
calendar year and Xxxxxx's pro rata share. Upon receipt of such statement,
there shall be an adjustment between Landlord and Tenant, with payment to or
credit given by Landlord (as the case may be) so that Landlord shall receive
the entire amount of Tenant's share of such costs and expenses for such period.
SECTION 4.06. LATE CHARGES. Xxxxxx's failure to pay rent promptly
may cause Landlord to incur unanticipated costs. The exact amount of such costs
are impractical or extremely difficult to ascertain. Such costs may include,
but are not limited to, processing and accounting charges and late charges
which may be imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the Property. Therefore, if Landlord does not receive any rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord a
late charge equal to ten percent (10%) of the overdue amount. The parties agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment.
5
6
SECTION 4.07. INTEREST ON PAST DUE OBLIGATION. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate
of fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this
Lease is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law.
SECTION 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY
TAXES. If requested by any ground lessor or lender to whom Landlord has granted
a security interest in the Property, or if Tenant is more than ten (10) days
late in the payment of rent more than once in any consecutive twelve (12)
-month period, Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of
the annual real property taxes and insurance premiums payable by Tenant under
this Lease, together with each payment of Base Rent. Landlord shall hold such
payments in a non-interest bearing impound account. If unknown, Landlord shall
reasonably estimate the amount of real property taxes and insurance premiums
when due. Tenant shall pay any deficiency of funds in the impound account to
Landlord upon written request. If Tenant defaults under this Lease, Landlord
may apply any funds in the impound account to any obligation then due under
this Lease.
ARTICLE FIVE: USE OF PROPERTY
SECTION 5.01. PERMITTED USES. Tenant may use the Property only
for the Permitted Uses set forth in Section 1.06 above.
SECTION 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of tenants of the Project, or which constitutes a nuisance or waste.
Tenant shall obtain and pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act. INSERT 7
SECTION 5.03. INSERT 8
SECTION 5.04. SIGNS AND AUCTIONS. Tenant shall not place
any signs on the Property without Landlord's prior written consent. Tenant
shall not conduct or permit any auctions or sheriff's sales at the Property.
SECTION 5.05. INDEMNITY. Tenant shall indemnify Landlord against
and hold Landlord harmless from any and all costs, claims or liability arising
from: (a) Tenant's use of the Property; (b) the conduct of Tenant's business or
anything else done or permitted by Tenant to be done in or about the Property,
including any contamination of the Property or any other property resulting
from the presence or use of Hazardous Material caused or permitted by Tenant;
(c) any breach or default in the performance of Tenant's obligations under this
Lease; (d) any misrepresentation or breach of warranty by Tenant under this
Lease; or (e) other acts or omissions of Tenant. Tenant shall defend Landlord
against any such cost, claim or liability at Xxxxxx's expense with counsel
reasonably acceptable to Landlord or, at Landlord's election, Tenant shall
reimburse Landlord for any legal fees or costs incurred by Landlord in
connection with any such claim. As a material part of the consideration to
Landlord, Xxxxxx assumes all risk of damage to property or injury to persons in
or about the Property arising from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, except for any claim arising out of
Landlord's gross negligence or willful misconduct. As used in this Section, the
term "Tenant" shall include Tenant's employees, agents, contractors and
invitees, if applicable.
SECTION 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter
the Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall
give Tenant prior notice of such entry, except in the case of an emergency.
Landlord may place customary "For Sale" or "For Lease" signs on the Property.
SECTION 5.07. QUIET POSSESSION. If Tenant pays the rent and
complies with all other terms of this Lease, Tenant may occupy and enjoy the
Property for the full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 6.01. EXISTING CONDITIONS. Tenant accepts the Property in
its condition as of the execution of the Lease, subject to all recorded
matters, laws, ordinances, and governmental regulations and orders. Except as
provided herein, Xxxxxx acknowledges that neither Landlord nor any agent or
employee of Landlord has made any representations as to the condition of the
Property or the suitability of the Property for Xxxxxx's intended use. Tenant
represents and warrants that Tenant has made its own inspection of and inquiry
regarding the condition of the Property and is not relying on any
representations of Landlord , its agents or employees or any Broker with
respect
6
7
thereto. If Landlord or Landlord's Broker has provided a Property Information
Sheet or other Disclosure Statement regarding the Property, a copy is attached
as an exhibit to the Lease.
SECTION 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall
not be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant ,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a) fire,
steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction
or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or any other cause; (c) conditions arising in
or about the Property or upon other portions of the Project, or from other
sources or places, or (d) any act or omission of any other tenant of the
Project. Landlord shall not be liable for any such damage or injury even though
the cause of or the means of repairing such damage or injury are not accessible
to Tenant. The provisions of this Section 6.02 shall not, however, exempt
Landlord from liability for Landlord's gross negligence or willful misconduct.
SECTION 6.03. LANDLORD'S OBLIGATIONS.
(a) INSERT 9
(b) Tenant shall pay or reimburse Landlord for all costs Landlord
incurs under Paragraph 6.03(a) above as Common Area costs as provided for in
Section 4.05 of the Lease. Tenant waives the benefit of any statute in effect
now or in the future which might give Tenant the right to make repairs at
Landlord's expense or to terminate this Lease due to Landlord's failure to keep
the Property in good order, condition and repair.
SECTION 6.04. TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven (Damage or
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions
of the Property (including structural, nonstructural, interior, systems, and
equipment) in good order, condition and repair (including interior repainting
and refinishing, as needed and any and all components of electrical,
mechanical, plumbing, heating and air conditioning systems and facilities
located on the Property ). If any portion of the Property or any system or
equipment in the Property which Tenant is obligated to repair cannot be fully
repaired or restored, Tenant shall promptly replace such portion of the
Property or system or equipment in the Property, regardless of whether the
benefit of such replacement extends beyond the Lease Term; but if the benefit
or useful life of such replacement extends beyond the Lease Term (as such term
may be extended by exercise of any options), the useful life of such
replacement shall be prorated over the remaining portion of the Lease Term (as
extended), and Tenant shall be liable only for that portion of the cost which
is applicable to the Lease Term (as extended): Tenant shall maintain a
preventive maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system by a licensed heating
and air conditioning contractor, unless Landlord maintains such equipment under
Section 6.03 above. If any part of the Property or the Project is damaged by
any act or omission of Tenant, Tenant shall pay Landlord the cost of repairing
or replacing such damaged property, whether or not Landlord would otherwise be
obligated to pay the cost of maintaining or repairing such property. It is the
intention of Landlord and Tenant that at all times Tenant shall maintain the
portions of the Property which Tenant is obligated to maintain in an
attractive, first-class and fully operative condition.
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or
replace the Property as required by this Section 6.04, Landlord may, upon ten
(10) days' prior notice to Tenant (except that no notice shall be required in
the case of an emergency), enter the Property and perform such maintenance or
repair (including replacement, as needed) on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
SECTION 6.05. ALTERNATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written consent, except
for non-structural alterations which do not exceed Ten Thousand Dollars
($10,000) in cost cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part. Landlord may
require Tenant to provide demolition and/or lien and completion bonds inform
and amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord's written request. All alterations, additions,
and improvements shall be done in a good and workmanlike manner, in conformity
with all applicable laws and regulations, and by a contractor approved by
Landlord. Upon completion of any such work, Tenant shall provide Landlord with
"as built" plans, copies of all construction contracts, and proof of payment
for all labor and materials.
7
8
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Xxxxxxxx's consent to such work is required. Landlord may
elect to record and post notices of non-responsibility on the Property.
SECTION 6.06. CONDITION UPON TERMINATION. Upon the termination of
the Lease, Xxxxxx shall surrender the Property to Landlord, broom clean and in
the same condition as received except for ordinary wear and tear which Tenant
was not otherwise obligated to remedy under any provision of this Lease.
However, Tenant shall not be obligated to repair any damage which Landlord is
required to repair under Article Seven (Damage or Destruction). In addition,
Landlord may require Tenant to remove any alterations, additions or
improvements (whether or not made with Xxxxxxxx's consent) prior to the
expiration of the Lease and to restore the Property to its prior condition, all
at Tenant's expense. All alterations, additions and improvements which Landlord
has not required Tenant to remove shall become Landlord's property and shall be
surrendered to Landlord upon the expiration or earlier termination of the
Lease, except that Tenant may remove any of Tenant's machinery or equipment
which can be removed without material damage to the Property. Tenant shall
repair, at Tenant's expense, any damage to the Property caused by the removal
of any such machinery or equipment. In no event, however, shall Tenant remove
any of the following materials or equipment (which shall be deemed Landlord's
property) without Landlord's prior written consent: any power wiring or power
panels; lighting or lighting fixtures; wall coverings; drapes, blinds or other
window coverings; carpets or other floor coverings; heaters, air conditioners
or any other heating or air conditioning equipment; fencing or security gates;
or other similar building operating equipment and decorations. Landlord shall
notify Tenant at the time Landlord approves any alteration, addition or
improvement whether or not Tenant shall be required to remove same upon
termination and such notice shall be binding upon the parties.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
SECTION 7.01. PARTIAL DAMAGE TO PROPERTY
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable as
a result of such damage or less than fifty percent (50%) of Tenant's operations
are materially impaired and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are sufficient to pay for the
necessary repairs, this Lease shall remain in effect and Landlord shall repair
the damage as soon as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures, equipment, or
improvements, and Tenant shall pay Landlord the "deductible" amount under the
Landlord's insurance policies.
(b) If the insurance proceeds received by Landlord are not
sufficient to pay the entire cost of repair, or if the cause of the damage is
not covered by the insurance policies which Landlord maintains under Paragraph
4.04(b), Landlord may elect either to (i) repair the damage as soon as
reasonably possible, in which case this Lease shall remain in full force and
effect, or (ii) terminate this Lease as of the date the damage occurred.
Landlord shall notify Tenant within thirty (30) days after receipt of notice of
the occurrence of the damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage, Tenant shall pay
Landlord the "deductible amount" (if any) under Landlord's insurance policies
and, if the damage was due to an act or omission of Tenant, or Tenant's
employees, agents, contractors or invitees, the difference between the actual
cost of repair and any insurance proceeds received by Landlord. If Landlord
elects to terminate the Lease, Tenant may elect to continue this Lease in full
force and effect, in which case Tenant shall repair any damage to the Property
and any building in which the Property is located. Tenant shall pay the cost of
such repairs, except that upon satisfactory completion of such repairs,
Landlord shall deliver to Tenant any insurance proceeds received by Landlord
for the damage repaired by Tenant. Tenant shall give Landlord written notice of
such election within ten (10) days after receiving Landlord's termination
notice.
(c) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more than thirty (30)
days to repair, either Landlord or Tenant may elect to terminate this Lease as
of the date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Xxxxxx's notice to Landlord of the occurrence of the damage.
SECTION 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease
shall terminate as of the date the destruction occurred. Notwithstanding the
preceding sentence, if the Property can be rebuilt within six (6) months after
the date of destruction, Landlord may elect to rebuild the Property at
Landlord's own expense, in which case this Lease shall remain in full force and
effect. Landlord shall notify Tenant of such election within thirty (30) days
after Xxxxxx's notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord, including the
"deductible" amount (if any) under Landlord's insurance policies.
8
9
SECTION 7.03. TEMPORARY REDUCTION OF RENT. If the Property is
destroyed or damaged and Landlord or Tenant repairs or restores the Property
pursuant to the provisions of this Article Seven, any rent payable during the
period of such damage, repair and/or restoration shall be reduced according to
the degree, if any, to which Xxxxxx's use of the Property is impaired. However,
the reduction shall not exceed the sum of one year's payment of Base Rent,
insurance premiums and real property taxes. Except for such possible reduction
in Base Rent, insurance premiums and real property taxes, Tenant shall not be
entitled to any compensation, reduction, or reimbursement from Landlord as a
result of any damage, destruction, repair, or restoration of or to the
Property.
SECTION 7.04. WAIVER. Tenant waives the protection of any statute,
code or judicial decision which grants a tenant the right to terminate a lease
in the event of the substantial or total destruction of the leased property.
Tenant agrees that the provisions of Section 7.02 above shall govern the rights
and obligation of Landlord and Tenant in the event of any substantial or total
destruction to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs
first. If more than twenty percent (20%) of the floor area of the building in
which the Property is located, or which is located on the Property, is taken,
either Landlord or Tenant may terminate this Lease as of the date the
condemning authority takes title or possession, by delivering written notice to
the other within ten (10) days after receipt of written notice of such taking
(or in the absence of such notice, within ten (10) days after the condemning
authority takes title or possession). If neither Landlord nor Tenant terminates
this Lease, this Lease shall remain in effect as to the portion of the Property
not taken, except that the Base Rent and Additional Rent shall be reduced in
proportion to the reduction in the floor area of the Property. Any Condemnation
award or payment shall be distributed in the following order: (a) first, to any
ground lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property; (b) second, to Tenant,
only the amount of any award specifically designated for loss of or damage to
Tenant's trade fixtures or removable personal property; and (c) third, to
Landlord, the remainder of such award, whether as compensation for reduction in
the value of the leasehold, the taking of the fee, or otherwise. If this Lease
is not terminated, Landlord shall repair any damage to the Property caused by
the Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense. Landlord and Xxxxxx waive the protection of
California Code of Civil Procedure Section 1265.13 allowing either party to
petition the Superior Court to terminate the Lease in event of a partial taking
of the Property by Condemnation.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
SECTION 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the
Property or of Tenant's interest in this Lease may be acquired by any other
person or entity, whether by sale, assignment, mortgage, sublease, transfer,
operation of law, or act of Tenant, without Xxxxxxxx's prior written consent,
except as provided in Section 9.02 below. Landlord has the right to grant or
withhold its consent as provided in Section 9.05 below. Any attempted transfer
without consent shall be void and shall constitute a non-curable breach of this
Lease. If Tenant is a partnership, any cumulative transfer of more than twenty
percent (20%) of the partnership interest shall require Landlord's consent. If
Tenant is a corporation, any change in the ownership of a controlling interest
of the voting stock of the corporation shall require Landlord's consent.
SECTION 9.02. TENANT AFFILIATE. Tenant may assign this Lease to
sublease the Property, without Xxxxxxxx's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume in
writing all of Tenant's obligations under this Lease.
SECTION 9.03. NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release Tenant
or change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under the Lease. Xxxxxxxx's acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If Xxxxxx's
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee. Landlord may consent
to subsequent assignments or modifications of this Lease by Xxxxxx's
transferee, without notifying Tenant or obtaining its consent. Such action
shall not relieve Xxxxxx's liability under this Lease.
SECTION 9.04. OFFER TO TERMINATE. If Tenant desires to assign the
Lease or sublease the Property, Tenant shall have the right to offer, in
writing, to terminate the Lease as of a date specified in the offer. If
Landlord elects in writing to accept the offer to terminate within twenty (20)
days after notice of the offer, the Lease shall terminate as of the date
specified and all the terms and provisions of the Lease governing termination
shall apply. If Landlord does not so elect, the Lease shall continue in effect
until. Otherwise terminated and the provisions of Section 9.05 with respect to
any proposed transfer shall continue to apply.
9
10
SECTION 9.05. LANDLORD'S CONSENT.
(a) INSERT 10
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under
the Lease the Landlord's Share (stated in Section 1.13) of the Profit
(defined below) on such transaction as and when received by Xxxxxx,
unless Xxxxxxxx gives written notice to Xxxxxx and the assignee or
subtenant that Landlord's Share shall be paid by the assignee or
subtenant to Landlord directly. The "Profit" means (A) all amounts
paid to Tenant for such assignment or sublease, including "key" money,
monthly rent in excess of the monthly rent payable under the Lease,
and all fees and other consideration paid for the assignment or
sublease, including fees under any collateral agreements, less (B)
costs and expenses directly incurred by Tenant in connection with the
execution and performance of such assignment or sublease for real
estate broker's commissions and costs of renovation or construction of
tenant improvements required under such assignment or sublease. Tenant
is entitled to recover such costs and expenses before Tenant is
obligated to pay the Landlord's Share to Landlord. The Profit in the
case of a sublease of less than all the Property is the rent allocable
to the subleased space as a percentage on a square footage basis.
(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of
the Property within thirty (30) days after the transaction
documentation is signed, and Landlord may inspect Tenant's books and
records to verify the accuracy of such statement. On written request,
Tenant shall promptly furnish to Landlord copies of all the
transaction documentation, all of which shall be certified by Tenant
to be complete, true and correct. Xxxxxxxx's receipt of Landlord's
Share shall not be a consent to any further assignment or subletting.
The breach of Tenant's obligation under this Paragraph 9.05(b) shall
be a material default of the Lease.
SECTION 9.06. NO MERGER. No merger shall result from Tenant's
sublease of the Property under this Article Nine. Xxxxxx's surrender of this
Lease or the termination of this Lease in any other manner. In any such event,
Landlord may terminate any or all subtenancies or succeed to the interest of
Xxxxxx as sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
SECTION 10.01. COVENANTS AND CONDITIONS. Xxxxxx's performance of
each of Tenant's obligations under this Lease is a condition as well as a
covenant. Xxxxxx's right to continue in possession of the Property is
conditioned upon such performance. Time is of the essence in the performance of
all covenants and conditions.
SECTION 10.02. DEFAULTS. Tenant shall be in material default under
this Lease:
(a) If Xxxxxx abandons the Property or it Tenant's vacation of the
Property results in the cancellation of any insurance described in Section
4.04;
(b) If Tenant fails to pay rent or any other charge when due;
(c) If Tenant fails to perform any of Xxxxxx's non-monetary
obligations under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30) days are required
to complete such performance, Tenant shall not be in default if Tenant
commences such performance within the thirty (30) -day period and thereafter
diligently pursues its completion. However, Landlord shall not be required to
give such notice if Xxxxxx's failure to perform constitutes a non-curable
breach of this Lease. The notice required by this Paragraph is intended to
satisfy any and all notice requirements imposed by law on Landlord and is not
in addition to any such requirement.
(d) (i) If Tenant makes a general assignment or general
arrangement for the benefit of creditors; (ii) if a petition for adjudication
of bankruptcy or for reorganization or rearrangement is filed by or against
Tenant and is not dismissed within thirty (30) days; (iii) if a trustee or
receiver is appointed to take possession of substantially all of Tenant's
assets located at the Property or of Tenant's interest in the Lease and
possession is not restored to Tenant within thirty (30) days; or (iv) if
substantially all of Tenant's assets located at the Property or of Tenant's
interest in this Lease is subjected to attachment, execution or other judicial
seizure which is not discharged within thirty (30) days. If a court of
competent jurisdiction determines that any of the acts described in this
subparagraph (d) is not a default under this Lease, and a trustee is appointed
to take possession (or if Tenant remains a debtor in possession) and such
trustee or Tenant transfers Tenant's interest hereunder, then Landlord shall
receive, as Additional Rent, the excess, if any, of the rent (or any other
consideration) paid in connections with such assignment or sublease over the
rent payable by Tenant under this Lease.
10
11
(e) If any guarantor of the Lease revokes or otherwise terminates,
or purports to revoke or otherwise terminate, any guaranty of all or any
portion of Tenant's obligations under the Lease. Unless otherwise expressly
provided, no guaranty of the Lease is revocable.
SECTION 10.03. REMEDIES. On the occurrence of any material default
by Tenant, Landlord may, at any time thereafter, with or without notice or
demand and without limited Landlord in the exercise of any right or remedy
which Landlord may have:
(a) Terminate Xxxxxx's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the time
of the award of the amount by which the unpaid Base Rent, Additional Rent and
other charges which Xxxxxxxx would have earned after termination until the time
of the award exceeds the amount of such rental loss that Tenant proves Landlord
could have reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid Base Rent, Additional Rent and other charges which
Xxxxxx would have paid for the balance of the Lease Term after the time of
award exceeds the amount of such rental loss that Tenant proves Landlord could
have reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Xxxxxx's failure to
perform its obligations under the Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, any
costs or expenses Landlord incurs in maintaining or preserving the Property
after such default, the cost of recovering possession of the Property, expenses
of reletting, including necessary renovation or alteration of the Property,
Xxxxxxxx's reasonable attorneys' fees incurred in connection therewith, and any
real estate commission paid or payable. As used in subparts (i) and (ii) above,
the "worth at the time of the award" is computed by allowing interest on unpaid
amounts at the rate of fifteen percent (15%) per annum, or such lesser amount
as may then be the maximum lawful rate. As used in subpart (iii) above, the
"worth at the time of the award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award, plus one percent (1%). If Tenant has abandoned the Property, Landlord
shall have the option of (i) retaking possession of the Property and recovering
from Tenant the amount specified in this Paragraph 10.03(a), or (ii) proceeding
under Paragraph 10.03(b);
(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant has abandoned the
Property. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent as it becomes due;
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Property is
located.
SECTION 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for
a postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated
Rent". Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Xxxxxx has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Property in the physical condition
required by this Lease. Tenant acknowledges that its right to receive credit
for the Abated Rent is absolutely conditioned upon Tenant's full, faithful and
punctual performance of its obligations under this Lease. If Tenant defaults
and does not cure within any applicable grace period, the Abated Rent shall
immediately become due and payable in full and this Lease shall be enforced as
if there were no such rent abatement or other rent concession. In such case
Abated Rent shall be calculated based on the full initial rent payable under
this Lease.
SECTION 10.05. AUTOMATIC TERMINATION. Notwithstanding any other
term or provision hereof to the contrary, the Lease shall terminate on the
occurrence of any act which affirms the Landlord's intention to terminate the
Lease as provided in Section 10.03 hereof, including the filing of an unlawful
detainer action against Tenant. On such termination, Xxxxxxxx's damages for
default shall include all costs and fees, including reasonable attorneys' fees
that Landlord incurs in connection with the filing, commencement, pursuing
and/or defending of any action in any bankruptcy court or other court with
respect to the Lease; the obtaining of relief from any stay in bankruptcy
restraining any action to evict Tenant; or the pursuing of any action with
respect to Landlord's right to possession of the Property. All such damages
suffered (apart from Base Rent and other rent payable hereunder) shall
constitute pecuniary damages which must be reimbursed to Landlord prior to
assumption of the Lease by Tenant or any successor to Xxxxxx in any bankruptcy
or other proceeding.
SECTION 10.06. CUMULATIVE REMEDIES. Xxxxxxxx's exercise of any
right or remedy shall not prevent it from exercising any other right or remedy.
11
12
ARTICLE ELEVEN: PROTECTION OF LENDERS
SECTION 11.01. SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease. Tenant
shall execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Xxxxxx's right to quiet possession of the Property during the Lease Term shall
not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
SECTION 11.02. ATTORNMENT. If Xxxxxxxx's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to Xxxxxxxx's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.
SECTION 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver
any instrument or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so. If Tenant fails to do so
within (10) days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
SECTION 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement certifying: (i) that
none of the terms of provisions of this Lease have been changed (or if they
have been changed, stating how they have been changed); (ii) that this Lease
has not been cancelled or terminated; (iii) the last date of payment of the
Base Rent and other charges and the time period covered by such payment; (iv)
that Landlord is not in default under this Lease (or if Landlord is claimed to
be in default, stating why); and (v) such other representations or information
with respect to Tenant or the Lease as Landlord may reasonably request or which
any prospective purchaser or encumbrancer of the Property may require. Tenant
shall deliver such statement to Landlord within ten (10) days after Xxxxxxxx's
request. Landlord may give any such statement by Tenant to any prospective
purchaser or encumbrancer of the Property. Such purchaser or encumbrancer may
rely conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within
such ten (10) -day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts: (i)
that the terms and provisions of this Lease have not been changed except as
otherwise represented by Landlord; (ii) that this Lease has not been cancelled
or terminated except as otherwise represented by Landlord; (iii) that not more
than one month's Base Rent or other charges have been paid in advance; and (iv)
that Landlord is not in default under the Lease. In such event, Tenant shall be
estopped from denying the truth of such facts.
SECTION 11.05. TENANT'S FINANCIAL CONDITION. Within ten (10) days
after written request from Landlord, Tenant shall deliver to Landlord such
financial statements as Landlord reasonably requires to verify the net worth of
Tenant or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant
shall deliver to any lender designated by Landlord any financial statements
required by such lender to facilitate the financing or refinancing of the
Property. Tenant represents and warrants to Landlord that each such financial
statement is a true and accurate statement as of the date of such statement.
All financial statements shall be confidential and shall be used only for the
purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
SECTION 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any costs
or expenses that the Nondefaulting Party incurs in connection with any breach
or default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include reasonable legal fees
and costs incurred for the negotiation of a settlement, enforcement of rights
or otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award to
the party in whose favor a judgment is entered, a reasonable sum as attorneys'
fees and costs. The losing party in such action shall pay such reasonable
attorneys' fees and costs. Tenant shall also indemnify Landlord against and
hold Landlord harmless from all costs, expenses, demands and liability Landlord
may incur if Landlord becomes or is made a party to any claim or action (a)
instituted by Tenant against any third party, or by any third party against
12
13
Tenant, or by or against any person holding any interest under or using the
Property by license of or agreement with Tenant; (b) for foreclosure on any
lien for labor or material furnished to or for Tenant or such other person; (c)
otherwise arising out of or resulting from any act or transaction of Tenant or
such other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended. Tenant shall defend Landlord against any such
claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.
SECTION 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with Xxxxxx's request for
Xxxxxxxx's consent under Article Nine (Assignment and Subletting), or in
connection with any other act which Xxxxxx proposes to do and which requires
Xxxxxxxx's consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
SECTION 13.01. NON-DISCRIMINATION. Tenant promises, and it is a
condition to the continuance of this Lease, that there will be no
discrimination against, or segregation of , any person or group of persons on
the basis of race, color, sex, creed, national origin or ancestry in the
leasing, subleasing, transferring, occupancy, tenure or use of the Property or
any portion thereof.
SECTION 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or Project or the
leasehold estate under a ground lease of the Property or Project at the time in
question. Each Landlord is obligated to perform the obligations of Landlord
under this Lease only during the time such Landlord owns such interest or
title. Any Landlord who transfers its title of interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer. However, each Landlord shall
deliver to its transferee all funds that Tenant previously paid if such funds
have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure of Landlord
to perform any of its obligations under this Lease to Landlord and to any
ground lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Landlord shall not be in default if such cure is commenced within such thirty
(30) -day period and thereafter diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary,
the liability of Landlord for the performance of its duties and obligations
under this Lease is limited to Landlord's interest in the Property and the
Project, and neither the Landlord nor its partners, shareholders, officers or
other principals shall have any personal liability under this Lease.
SECTION 13.03. SEVERABILITY. A determination by a court of
competent jurisdiction that any provision of this Lease or any part thereof is
illegal or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.
SECTION 13.04. INTERPRETATION. The captions of the Articles or
Sections of this Lease are to assist the parties in reading this Lease and are
not a part of the terms or provisions of this Lease. Whenever required by the
context of this Lease, the singular shall include the plural and the plural
shall include the singular. The masculine, feminine and neuter genders shall
each include the other. In any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Property with
Xxxxxx's expressed or implied permission.
SECTION 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS.
This Lease is the only agreement between the parties pertaining to the lease of
the Property and no other agreements are effective. All amendments to this
Lease shall be in writing and signed by all parties. Any other attempted
amendment shall be void.
SECTION 13.06. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by
certified mail, return receipt requested, postage prepaid. Notices to Tenant
shall be delivered to the address specified in Section 1.03 above, except that
upon Xxxxxx's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to the
other party.
SECTION 13.07. WAIVERS. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord
from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check
13
14
from Tenant or in a letter accompanying a payment check shall be binding on
Landlord. Landlord may, with or without notice to Tenant, negotiate such check
without being bound to the conditions of such statement.
SECTION 13.08. NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or Tenant
may require that a "Short Form" memorandum of this Lease executed by both
parties be recorded. The party requiring such recording shall pay all transfer
taxes and recording fees.
SECTION 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord
or Tenant. However, Landlord shall have no obligation to Xxxxxx's successor
unless the rights or interests of Xxxxxx's successor are acquired in accordance
with the terms of this Lease. The laws of the state in which the Property is
located shall govern this Lease.
SECTION 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant
is a corporation, each person signing this Lease on behalf of Tenant represents
and warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general partner of the partnership, that he or it has full authority
to sign for the partnership and that this Lease binds the partnership and all
general partners of the partnership. Tenant shall give written notice to
Landlord: of any general partner's withdrawal or addition. Within thirty (30)
days after this Lease is signed, Xxxxxx shall deliver to Landlord a copy of
Xxxxxx's recorded statement of partnership or certificate of limited
partnership.
SECTION 13.11. JOINT AND SEVERAL LIABILITY. All parties
signing this Lease as Tenant shall be jointly and severally liable to all
obligations of Tenant.
SECTION 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Xxxxxxxx's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
SECTION 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Xxxxxxxx's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
SECTION 13.14. SURVIVAL. All representations and warranties of
Landlord and Tenant shall survive the termination of this Lease.
ARTICLE FOURTEEN: BROKERS
INSERT 11
ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED HERETO OR
IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE DRAW
A LINE THROUGH THE SPACE BELOW.
14
15
Landlord and Xxxxxx have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all
Riders which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on , 2000 TCW REALTY FUND VA HOLDING COMPANY,
----------------------------- a California corporation,
at . as tenant in common
------------------------------------------
By:
------------------------------------------------
Authorized Signatory
By:
------------------------------------------------
Authorized Signatory
TCW REALTY FUND VB,
a California limited partnership,
as tenant in common
By: TCW ASSET MANAGEMENT COMPANY,
a California corporation,
as General Partner
By:
--------------------------------------------
Authorized Signatory
By:
--------------------------------------------
Authorized Signatory
By: WESTMARK REALTY ADVISORS L.L.C.,
a Delaware limited liability company,
as General Partner
By:
--------------------------------------------
Authorized Signatory
By:
--------------------------------------------
Authorized Signatory
"TENANT"
Signed on 2-16-00 , 2000 L.A.T. SPORTSWEAR, INC.,
----------------------------- ------------------------------------------------
at a Georgia corporation dba Full Line Distributors
------------------------------------------ ------------------------------------------------
By: /s/ Xxxx Xxxxxx XxXxxxx
--------------------------------------------
Its: V.P.
--------------------------------------------
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------------
Its: CFO
--------------------------------------------
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT
WITH A PROFESSIONAL SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER
PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING
THE POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE DIRECTION OF
THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE
REALTORS,(R) INC. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE SOUTHERN
CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE REALTORS,(R) INC.,
ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR EMPLOYEES OR
AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD RETAIN LEGAL COUNSEL
TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE ADVICE OF SUCH LEGAL
COUNSEL.
15
16
RIDER TO INDUSTRIAL REAL ESTATE LEASE
(MULTI-TENANT FACILITY)
RIDER TO SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE
REALTORS, INC. ("SIOR"), INDUSTRIAL REAL ESTATE LEASE (MULTI-TENANT FACILITY)
DATED FEBRUARY 7, 2000, BY AND BETWEEN TCW REALTY FUND VA HOLDING COMPANY, A
CALIFORNIA CORPORATION, AND TCW REALTY FUND VB, A CALIFORNIA LIMITED
PARTNERSHIP, AS TENANTS IN COMMON, AS LANDLORD, AND L.A.T. SPORTSWEAR, INC., A
GEORGIA CORPORATION DBA FULL LINE DISTRIBUTORS, AS TENANT. TO THE EXTENT THAT
ANY PROVISIONS OF THE FORM SIOR INDUSTRIAL REAL ESTATE LEASE (MULTI-TENANT
FACILITY) ARE INCONSISTENT WITH ANY PROVISIONS OF THIS RIDER, IT IS
SPECIFICALLY AGREED AND UNDERSTOOD THAT THE PROVISIONS OF THIS RIDER SHALL
CONTROL.
INSERT 1. SECTION 1.04 (NEW). Landlord and Tenant hereby acknowledge
and agree that the foregoing statement of square footage is
not a representation or warranty of the exact number of
square feet but rather is only a reasonable approximation and
that the Base Rent payable below is not subject to revision
whether or not the actual square footage is more or less than
the approximation.
INSERT 2. SECTION 1.10 (CONTINUED). The parties acknowledge that
Landlord is currently holding Tenant's security deposit under
the Original Lease (as hereinafter defined) in the amount of
Thirteen Thousand Eight Hundred Twenty-Four and No/100
Dollars ($13,824.00) (the "Existing Deposit"). Upon execution
hereof, Tenant shall increase the Existing Deposit by Three
Thousand Six Hundred Seventy-Two and No/100 Dollars
($3,672.00) so that the Security Deposit under this Lease
shall be Seventeen Thousand Four Hundred Ninety-Six and
No/100 Dollars ($17,496.00).
INSERT 3. SECTION 1.12(A) (CONTINUED). On the first day of the
twenty-first (21st) month following the Commencement Date
(the "Index Adjustment Date"), Base Rent shall be adjusted
upward only, in the same percentage that the Consumer Price
Index published by the United States Department of Labor,
Bureau of Labor Statistics (the "Bureau") (All Times) index
for All Urban Consumers in the Los Angeles Anaheim-Riverside
metropolitan area (1982 - 1984 = 100) (the "Index") for the
calendar month which is three (3) full months immediately
preceding the Index Adjustment Date shall increase over the
Index for the calendar month which is three (3) full months
immediately preceding the Commencement Date; provided, that
on the Index Adjustment Date the Base Rent shall in any event
increase by at least three percent (3%) per annum but no
more than seven percent (7%) per annum. Landlord shall use
reasonable efforts to calculate and give Tenant written
notice of any such increase in Base Rent prior to, and Tenant
shall in all events pay the increased Base Rent effective on,
the Index Adjustment Date. Should the Bureau discontinue the
publication of the Index, or publish the same less
frequently, or alter the same in some other manner, the most
nearly comparable Index or procedure as determined by
Landlord shall be substituted therefor by Landlord.
INSERT 4. SECTION 2.03 (CONTINUED). Landlord and Tenant acknowledge
that Tenant is currently occupying the Property pursuant to
that certain SIOR Industrial Real Estate Lease (Multi-Tenant
Facility) dated January 23, 1995 (the "Original Lease"), by
and between Landlord and Tenant, which Original Lease expires
according to its terms on April 30, 2000 (the "Original Lease
Expiration Date"). The terms and provisions of the Original
Lease shall remain in effect until the Original Lease
Expiration Date. The terms and provisions of this Lease shall
be effective on the Commencement Date of this Lease.
17
INSERT 5. SECTION 4.04(A) (CONTINUED). Notwithstanding any provision
of this Lease to contrary, any premiums paid by Landlord for
Commercial General liability insurance, including umbrella or
Excess Liability relating to the Common Area or the Property,
shall be included as a Common Area Cost, and Tenant shall pay
its pro rata share of any such premiums.
INSERT 6. SECTION 4.04(D)(IV) (CONTINUED). Tenant shall secure an
appropriate clause in, or an endorsement upon, each insurance
policy required by this Lease, pursuant to which the
insurance company waives subrogation or permits the insured,
prior to any loss, to agree with a third party to waive any
claim it might have against said third party without
invalidating the coverage under the insurance policy. Such
waiver of subrogation or permission for waiver of any claim
shall extend to the agents and employees of Landlord and
Tenant, respectively.
INSERT 7. SECTION 5.02 (CONTINUED). Notwithstanding anything
contained in this Lease to the contrary, Tenant shall, in
respect of its use and occupancy, at its sole cost and
expense, faithfully observe and promptly comply with all
local, state or federal laws, statutes, ordinances and
governmental rules, regulations or requirements now or
hereafter in force with respect to Tenant's use occupancy and
possession of the Property and Tenant's business conducted
thereon including, but not limited to, the Occupational
Safety and Health Act, laws or regulations relating to the
accessibility or useability of the Property by disabled
persons, and the requirements of any board of fire
underwriters or other similar bodies now or hereafter
constituted relating to or affecting the condition, use or
occupancy of the Property. Tenant acknowledges that Landlord
makes no representation or warranty in this Lease that the
Property or any portion thereof is in compliance with any
governmental statutes, ordinances, rules or regulations
relating to the accessibility or useability of the Property
or any portion thereof by disabled persons.
INSERT 8. SECTION 5.03 (SUBSTITUTION). HAZARDOUS MATERIALS.
(A) DEFINITION. As used in this Lease, the term "Hazardous
Materials" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste
or related materials, including any substances defined as or
included in the definition of "hazardous substances",
"hazardous wastes", "infectious wastes", "hazardous
materials" or "toxic substances" now or subsequently
regulated under any federal, state or local laws, regulations
or ordinances including, without limitation, oil,
petroleum-based products, pair solvents, lead, cyanide, DDT,
printing inks, acids, pesticides, ammonia compounds and other
chemical products, asbestos, PCBs and similar compounds, and
including any different products and materials which are
subsequently found to have adverse effects on the environment
or the health and safety of persons.
(B) GENERAL PROHIBITION. Tenant shall not cause or permit any
Hazard Materials to be generated, produced, brought upon,
used, stored, treated, discharged, released, spilled or
disposed of on, in, under or about the Property Tenant, its
affiliates, agents, employees, contractors, sublessees,
assignees or invitees (collectively, "Tenant Parties")
without the prior written consent of Landlord, which consent
shall be granted or denied in Landlord's good faith business
judgment; provided, however, Landlord's consent shall not be
required to use or store (i) small quantities of standard
office supplies standard for offices of the size of their
office space contained in the Property or (ii) small
quantities of common household cleaning supplies standard for
the size of the Property (such supplies, together with any
other hazardous materials for which consent is given, are
hereinafter referred to as the "Permitted Materials"). In no
event, however, shall Landlord be required to consent to the
use of asbestos-containing materials, PCBs or the
installation or use of any storage tanks in, on or under the
Property. Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all actions (including,
without limitation, remedial or enforcement actions of any
kind, administrative or judicial proceedings, and orders or
judgments arising out
2
18
of or resulting therefrom), costs, claims, damages
(including, without limitation, punitive damages), expenses
(including, without limitation, attorneys', consultants' and
experts' fees, court costs and amounts paid in settlement of
any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other
relief (whether or not based upon personal injury, property
damage, or contamination of, or adverse effects upon, the
environment, water tables or natural resources), liabilities
or losses ("Environmental Claims") arising from (a) a breach
of this prohibition by Tenant or any of the Tenant Parties or
(b) the presence, generation, production, use, storage,
treatment, discharge, release, spill or disposal of the
Permitted Materials.
(c) In the event that Hazardous Materials are discovered
upon, in, or under the Property, or any governmental agency
or entity having jurisdiction over the Property requires the
removal of such Hazardous Materials, Tenant shall be
responsible for removing those Hazardous Materials arising
out of or related to the use or occupancy of the Property by
Tenant or any of the Tenant Parties; Tenant shall not be
responsible for removing Hazardous Materials arising out of
or related to the use or occupancy of the Property by prior
tenants or owners of the Property except to the extent that
Tenant or any of the Tenant Parties have exacerbated such
preexisting condition. Notwithstanding the foregoing, Tenant
shall not take any remedial action in or about the Property,
nor enter into any settlement agreement, consent decree or
other compromise with respect to any claims relating to any
Hazardous Materials in any way connected with the Property
without first notifying Landlord of Tenant's intention to do
so and affording Landlord the opportunity to appear,
intervene or otherwise appropriately assert and protect
Xxxxxxxx's interest with respect thereto. Tenant immediately
shall notify Landlord in writing of: (i) any spill, release,
discharge or disposal of any Hazardous Material in, on or
under the Property, or any portion thereof of which Tenant
has knowledge, (ii) any enforcement, cleanup, removal or
other governmental or regulatory action instituted,
contemplated, or threatened (if Tenant has notice thereof)
pursuant to any Hazardous Materials Laws of which Tenant has
knowledge; (iii) any claim made or threatened by any person
against Tenant, any of the Tenant Parties or the Property,
relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials of which Tenant has
knowledge; and (iv) any reports made to any governmental
agency or entity arising out of or in connection with any
Hazardous Materials in, on, under or about or removed from
the Property of which Tenant has knowledge, including any
complaints, notices, warnings, reports or asserted violations
in connection therewith. Tenant also shall supply to Landlord
as promptly as possible, and in any event within five (5)
business days after Xxxxxx first receives or sends the same,
copies of all claims, reports, complaints, notices, warnings
or asserted violations relating in any way to the Property or
the use or occupancy thereof by Tenant or any of the Tenant
Parties.
(d) The respective rights and obligations of Landlord and
Tenant under this Section 5.03 shall survive the expiration
or earlier termination of this Lease.
(e) Attached hereto as Exhibit "B" is a true and correct copy
of the Industrial Lease Hazardous Material Questionnaire
completed by Tenant and submitted to Landlord as a material
inducement relied upon by Landlord in entering into this
Lease.
INSERT 9. SECTION 6.03 (SUBSTITUTION) - LANDLORD'S OBLIGATIONS.
Subject to the provisions of Article Seven (Damage or
Destruction) and Article Eight (Condemnation), and Initials
except for damage caused by any act or omission of Tenant, or
Tenant's employees, agents, contractors or invitees, Landlord
shall keep the foundation, roof and structural portions of
the improvements on the Property in good order, condition and
repair. All costs incurred by Landlord for roof maintenance
(including, but not limited to, repair of roof leaks) shall
be deemed a Common Area cost and Tenant shall pay Tenant's
pro rata share of such costs in accordance
3
19
with Section 4.05(e) of this Lease. Landlord shall be
responsible for the cost and expense of roof replacement
unless replacement is necessitated by Tenant's negligence,
willful misconduct or misuse. All costs incurred by Landlord
in connection with painting the exterior of the buildings in
the Project and slurry coating the Project's parking lots
shall be deemed Common Area costs and Tenant shall pay
Tenant's pro rata share of such costs in accordance with
Section 4.05(e) of this Lease. Landlord shall repaint the
exterior of the buildings in the Project and slurry coat the
Project's parking lots at such times as Landlord deems
necessary. Tenant shall bear the entirety of the cost of
repairing any damage to the Project's parking lots caused by
Tenant's negligence, willful misconduct or excessive use of
the parking lots, including but not limited to, damage to
Tenant's parking/truck court. Landlord shall not be obligated
to maintain or repair windows, doors, plate glass or the
surfaces of walls. Landlord shall not be obligated to make
any repairs under this Section 6.03 until a reasonable time
after receipt of a written notice from Tenant of the need for
such repairs. Tenant waives the benefit of any present or
future law which might give Tenant the right to repair the
Property at Landlord's expense or to terminate this Lease
because of the condition of the Property.
INSERT 10. SECTION 9.05(A) (SUBSTITUTION) - LANDLORD'S CONSENT. Xxxxxx's
request for consent to any such sublease, assignment or other
transfer shall set forth in writing the details of the
proposed sublease, assignment or other transfer, including
the name, business and financial condition of the prospective
transferee (including copies of current financial statements
of the prospective transferee), financial details of the
proposed transaction (e.g., the term of and the rent,
security deposit and any other consideration payable under
such proposed assignment, sublease or transfer), and any
other information Landlord reasonably may request. Landlord
and Tenant hereby agree that, in determining whether to grant
or withhold consent to such proposed sublease, assignment or
other transfer, Landlord may consider, without limitation,
the following factors, which Landlord and Tenant acknowledge
and agree are reasonable: (i) the business of the proposed
assignee, sublessee or transferee and the proposed use of the
Property; (ii) the financial strength and the business
reputation of the proposed assignee, sublessee or transferee;
(iii) the proposed use, storage, treatment, generation or
production of any Hazardous Materials by the proposed
assignee, sublessee or transferee; and (iv) Tenant's
compliance with all of its obligations under this Lease.
Notwithstanding any provisions of this Lease, or any present
or future statute, law, rule or ordinance, to the contrary,
Landlord and Tenant hereby expressly agree that if a court of
competent jurisdiction determines that Landlord unreasonably
withheld consent to a proposed sublease, assignment or other
transfer by Xxxxxx, then Xxxxxx's sole and exclusive remedy
for such breach by Landlord shall be limited to termination
of this Lease as of the date of such court determination, and
Tenant hereby expressly waives the right to recover any
monetary damages of whatever kind for such breach.
INSERT 11. ARTICLE FOURTEEN (SUBSTITUTION) - BROKERS. Except with respect
to the brokers named in Section 1.08, with whom Xxxxxx has
dealt in connection with this Lease, Tenant hereby represents
and warrants to Landlord that it has not entered into any
agreement or incurred any obligation which might result in
the obligation to pay any brokerage commission, finder's fee
or other compensation with respect to this Lease, and Xxxxxx
agrees to indemnify and hold Landlord harmless from and
against any losses, damages, costs or expenses (including,
without limitation, attorney's fees) incurred by Landlord by
reason of any breach or inaccuracy of such representation or
warranty.
ARTICLE FIFTEEN - OTHER PROVISIONS (NEW).
15.01 CONFIDENTIALITY. Tenant agrees that except as required
by law, it shall keep confidential, and shall not disclose to
any third party, the terms, provisions and contents of this
Lease, or any information relating to this Lease.
4
20
15.02 LANDLORD'S LIABILITY. Notwithstanding anything to the
contrary contained in this Lease, Xxxxxx agrees that its sole
and exclusive remedy shall be against Landlord's interest in
the Project and that the obligations of Landlord under this
Lease do not constitute personal obligations of the
individual partners, whether general or limited, directors,
officers, shareholders or trustees of Landlord, and Tenant
shall not seek recourse against the individual partners,
directors, officers, shareholders or trustees of Landlord or
any of their personal assets for satisfaction of any
liability with respect to this Lease. Notwithstanding
anything to the contrary contained in this Lease, in no event
shall Landlord be liable under any circumstances for any
consequential damages, including without limitation, lost
profits.
ARTICLE SIXTEEN - OPTION TO EXTEND (NEW).
SECTION 16.01. Landlord hereby grants to Tenant one (1)
option (the "Option") to extend the term of this Lease for
three (3) years (the "Extension Period"), on the same terms
and conditions as set forth in this Lease (except that there
shall be no additional option to extend the Extension Period)
but at an increased rent as set forth in Section 16.03 below.
The Option shall be exercised only by written notice
delivered to Landlord no earlier than two hundred and forty
(240) days and no later than one hundred and eighty (180)
days prior to the expiration of the Lease Term. If Tenant
fails to deliver to Landlord written notice of the exercise
of the Option on or before such date, the Option shall lapse,
and there shall be no further right to extend the term of
this Lease. The Option shall be exercisable by Tenant only on
the express condition that (i) at the time of the exercise,
and at all times prior to the commencement of the Extension
Period, Tenant shall not be in material default under any of
the provisions of this Lease, and (ii) Tenant shall not have
been ten (10) or more days late in the payment of Base Rent
more than twice during any twelve (12) consecutive month
period during the Lease Term.
SECTION 16.02. If Tenant subleases any portion of the
Property or assigns or otherwise transfers any interest under
this Lease to any person or entity other than a Tenant
Affiliate prior to the exercise of the Option, the Option
shall lapse. If Tenant subleases any portion of the Property
or assigns or otherwise transfers any interest of Tenant
under this Lease to any person or entity after the exercise
of the Option but prior to the commencement of the Extension
Period (whether with or without Landlord's consent), the
Option shall lapse and the term of this Lease shall expire as
if such Option were not exercised. Notwithstanding anything
to the contrary set forth in this Section 16.02, the Option
shall not lapse if any such sublease, assignment or other
transfer is to an entity which controls, is controlled by or
is under common control with Tenant.
SECTION 16.03. Base Rent for the Property shall be increased
on the first day of the Extension Period to an amount equal
to the "fair rental value" of the Property (which fair rental
value determination may include increases in rent during the
Extension Period and percentage rent amounts), which fair
rental value shall be determined by Landlord in its sole but
reasonable discretion, after evaluating, among other things,
the rents at similar buildings in the same general geographic
area, but in no event shall the Base Rent be less than the
then current Base Rent being paid by Tenant. Landlord shall
notify Tenant in writing of such determination of fair rental
value within thirty (30) days after Xxxxxxxx's receipt of
Tenant's notice exercising the Option. If Tenant shall
dispute Landlord's determination of fair rental value for the
Property, then Landlord and Tenant shall cooperate in good
faith to arrive at a mutually agreeable Base Rent within
thirty (30) days after receipt of Landlord's notice of fair
rental value. If the parties cannot agree, Tenant shall have
the right to either (a) submit the issue of Landlord's
reasonableness (but not the fair rental value) for neutral
binding arbitration (and not by court action) to the American
Arbitration Association in accordance with the rules of such
Association then in effect, or (b) rescind Tenant's exercise
of the Option by delivering written notice to Landlord within
ten (10) days after said thirty (30) day negotiation period,
in which event this
5
21
Lease shall terminate upon the expiration of the Lease Term
(unless sooner terminated in accordance herewith) and Tenant
shall have no further right or option to extend the Lease
Term. Tenant shall exercise such right of arbitration by
delivering written notice of such election within thirty (30)
days after receipt of Landlord's notice of fair rental value.
If the arbitrators shall decide that Landlord's determination
of fair rental value was reasonable, then fair rental value
shall be the amount previously determined by Landlord. If the
arbitrators shall determine that Landlord acted unreasonably,
then Landlord shall redetermine the fair rental value in its
sole but reasonable discretion, provided that Tenant shall
again have the right to challenge Landlord's reasonableness
in the manner set forth above. In no event shall the
arbitrators be permitted to determine rental value under this
Lease. The decision of the arbitrators shall be binding upon
both parties. Each party shall share equally the cost of the
arbitration process.
6
22
EXHIBIT "A"
SITE PLAN
[DIAGRAM]
A-1
23
EXHIBIT "B"
HAZARDOUS MATERIALS QUESTIONNAIRE
(Company Name) L.A.T. SPORTSWEAR, INC., a Georgia corporation dba Full Line
Distributors
"Premises": 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx
This Hazardous Materials Questionnaire is designed to solicit information
concerning your proposed use of Hazardous Materials at 0000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx. The term "HAZARDOUS MATERIALS" means any flammable
items, explosives, radioactive materials, hazardous or toxic substances,
material or waste or related materials, including any substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"infectious wastes", "hazardous materials" or "toxic substances" now or
subsequently regulated under any federal, state or local laws, regulations or
ordinances, including without limitation, oil, petroleum-based products,
paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia
compounds and other chemical products, asbestos, PCBs and similar compounds,
and including any different products and materials which are subsequently found
to have adverse effects on the environment or the health and safety of persons.
1. BACKGROUND INFORMATION
L.A.T. SPORTSWEAR, INC., a Georgia corporation dba Full Line Distributors
Name (Corporation, General/Limited Partnership, Public Agency or Individual)
0000 Xxxxxxx Xxxxx,
Street Address:
Ball Ground, GA 30107
City, State, Zip Code
Contact Person and Title: Xxxx XxXxxxx, VP
Telephone Number: (000) 000-0000
2. If you have conducted the specific business or activity planned for the
"Premises" at any other site, please provide the following information: N/A
a. Address of other site:
b. Period of operation at such site:
c. Name under which operations were conducted:
d. Type of activity or manufacturing Process conducted at other site:
3. Have you ever been the subject of any investigation, inquiry, notice of
violation, order or proceeding regarding your use of Hazardous Materials?
If so, please explain. N/A
B-1
24
4. With respect to the proposed operation at the "Premises", please provide
the following information:
a. Type of activity or manufacturing process proposed for "Premises" if
different from 2(d).
N/A
b. Do you intend to store or use any Hazardous Materials on the Premises? No
If yes, the information below is to be incorporated on the attached table
which will be incorporated into the lease.
c. Please list on the attached exhibit all hazardous materials to be used
in the proposed operation or manufacturing process or stored at the
site. Described the use of the material, the quantity to be used on a
weekly or monthly basis, the quantity to be stored at the site at any
one time, the method of storage, volume of wastewaters or solid and
hazardous material wastes generated and the method of disposal of such
wastes (including disposal company and disposal site).
d. Please provide a list of the permits and/or filings that have been
obtained or will be necessary to obtain in connection with the use
and/or storage of hazardous materials at the Premises.
Permit/Filing Obtained/To Be Obtained
----------------------- ------------------------
----------------------- ------------------------
----------------------- ------------------------
----------------------- ------------------------
----------------------- ------------------------
----------------------- ------------------------
e. Please include MSDS sheets for any hazardous material to be used at the
Premises and listed in the enclosed table.
B-2
25
5. As an officer, a general partner, or duly authorized representative of the
company, I am familiar with all of the company and the operations to be
conducted on the Premises. I have made due inquiry in answering the
foregoing questions and hereby certify that to the best of my knowledge,
the information disclosed above is true, correct and complete.
/s/ Xxxx Xxxxxx-XxXxxxx
-----------------------------
Signature
Xxxx Xxxxxx-XxXxxxx
-----------------------------
Print Name
Exec. V.P. Operations
-----------------------------
Title
2-14-00
-----------------------------
Date
B-3
26
HAZARDOUS MATERIAL INVENTORY
ADDRESS: 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx
Quantity Quantity Wastes Disposal Method
Material (1) Use Used (2) Stored (3) Method of storage Generated (4) Of Wastes Generated (5)
------------ --- -------- ---------- ----------------- ------------- -----------------------
--------
(1) Please attached Material Safety Data Sheets (MSDS).
(2) Quantity used in 30 day period.
(3) Quantity stored in 30 day period.
(4) Estimated volume of Hazardous Material wastewaters or other Hazardous
Material liquids generated; estimated volume of Solid Hazardous Materials
waste generated.
(5) Describe the treatment, recycling, storage or disposal activities for all
Hazardous Materials Waste including name of disposal company.
B-4
