Exhibit 10.7
GROUND LEASE AGREEMENT
Between
OPUS WEST CORPORATION, a Minnesota corporation - Landlord
and
RPM Transportation, Inc., a California corporation - Tenant
Dated: , 1998
|| TABLE OF CONTENTS
Page
ARTICLE 1 LEASE OF PREMISES AND LEASE TERM 1
1.1 Premises 1
1.2 Term of Lease 1
ARTICLE 2 RENTAL AND OTHER PAYMENTS 1
2.1 Basic Rent 1
2.2 Additional Rent 1
2.3 Delinquent Rental Payments 1
2.4 Independent Obligations 1
ARTICLE 3 PAYMENT OF PERSONAL PROPERTY TAXES 1
3.1 Payment of Property Taxes 1
ARTICLE 4 USE 2
4.1 Permitted Use 2
4.2 Acceptance of Premises 2
4.3 Increase Insurance 2
4.4 Rules and Regulations 2
4.5 Tenant's Obligations 2
ARTICLE 5 HAZARDOUS MATERIALS 2
5.1 Hazardous Materials 2
5.2 Hazardous Materials Laws 2
5.2.1 Federal 3
5.2.2 California 3
5.2.3 Other Laws and Regulations 3
5.2.4 Phase 1 Environmental Analysis 3
5.3 Compliance with Hazardous Materials Laws 3
5.4 Notice of Actions 3
5.5 Disclosure and Warning Obligations 4
5.6 Indemnification 4
5.7 Termination of Lease 4
ARTICLE 6 SERVICES AND UTILITIES 5
ARTICLE 7 MAINTENANCE, REPAIR AND ALTERATION OF PREMISES 5
7.1 Tenant's Maintenance 5
7.2 Tenant's Waiver of Claims Against Landlord 5
ARTICLE 8 CHANGES AND ALTERATIONS 5
8.1 Tenant's Changes and Alterations 5
8.2 Liens 5
ARTICLE 9 RIGHTS RESERVED BY LANDLORD 6
9.1 Landlord's Entry 6
9.2 Landlord's Cure 6
ARTICLE 10 INDEMNITY AND INSURANCE 6
10.1 Insurance Coverage 6
10.2 Insurance Provisions 6
10.3 Waiver of Subrogation 7
10.4 Indemnification by Tenant 7
ARTICLE 11 NO ASSIGNMENT OR SUBLETTING 7
11.1 Restriction on Other Transfers 7
ARTICLE 12 INTENTIONALLY OMITTED 7
ARTICLE 13 CONDEMNATION 7
13.1 Condemnation of Entire Premises 7
13.2 Partial Condemnation/Termination of Lease 7
13.3 Partial Condemnation/Continuation of Lease 8
13.4 Continuance of Obligations 8
13.5 Tenant's Waiver 8
ARTICLE 14 DEFAULTS; REMEDIES 8
14.1 Events of Default 8
14.1.1 Intentionally Omitted 8
14.1.2 Failure to Pay 8
14.1.3 Failure to Perform 8
14.1.4 Other Defaults 8
14.1.5 Remedies 8
14.1.6 Right of Landlord to Re-Enter 9
14.1.7 Cumulative Remedies 9
14.2 Legal Costs 9
14.3 No Waiver 9
14.4 Waiver by Tenant 10
14.5 Default by Landlord 10
ARTICLE 15 PROTECTION OF CREDITORS 10
15.1 Subordination 10
15.2 Attornment 10
15.3 Estoppel Certificates 10
15.4 Mortgagee Protection Clause 11
ARTICLE 16 TERMINATION OF LEASE 11
16.1 Surrender of Premises 11
16.2 Holding Over 11
ARTICLE 17 MISCELLANEOUS PROVISIONS 11
17.1 Notices 11
17.2 Landlord's Continuing Obligations 11
17.3 Net Lease 12
17.4 Successors 12
17.5 Memorandum of Lease 12
17.6 Captions and Interpretation 12
17.7 Relationship of Parties 12
17.8 Entire Agreement 12
17.9 Severability 12
17.10 Landlord's Limited Liability 12
17.11 Transfer of Landlord's Interest 12
17.12 Survival 12
17.13 Attorneys' Fees 12
17.14 Broker 13
17.15 Governing Law 13
17.16 Time is of the Essence 13
17.17 Joint and Several Liability 13
17.18 Tenant's Waiver 13
17.19 Delivery of Corporate Documents 13
17.20 Provisions are Covenants and Conditions 13
17.21 Business Days 13
17.22 Force Majeure 13
17.23 Submission of Lease 13
17.24 Tenant's Financial Condition 14
||
Ground Lease Agreement
Summary of Basic Lease Information
10 Lease Date:
, 199
20 Landlord: Opus West Corporation,
a Minnesota corporation
30 Address of Landlord Opus West Management Corporation
for Payment of Rent: 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxx Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
40 Address of Landlord Opus West Corporation
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
With a copy to: Opus U.S. Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With another copy to: Opus West Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
50 Tenant: RPM Transportation Inc., a California
corporation
60 Address of Tenant RPM Transportation Inc.
for Notices: 00000 Xxxxxxxxx Xxxx, Xxxx X
Xxxxx Xx Xxxxxxx, XX 00000
Attn: Xxxx Xxxx
Telephone No.:(000) 000-0000
Facsimile No.:(000) 000-0000
70 Premises The parcel of land situated in the County of
Riverside, State of California, described on
Exhibit "A."
80 Lease Term Initial Lease Term: 1 year from the
Commencement Date. Thereafter, the Tenant
may lease the Premises on a month to month
basis with a ninety (90) day notice
termination right pursuant to Section 1.2
below.
90 Rent: Basic Rent:
Monthly: $5,000
Annually: $60,000
Maximum Rate of Interest: Prime Plus four
percent (4%). For purposes of this Lease
and the Basic Provisions hereof, the term
"Prime" shall mean the rate announced from
time to time by Bank of America, N.A., as
its prime or reference rate. If Bank of
America shall cease to announce its prime or
reference rate, then Landlord shall select
the rate of another financial institution to
be substituted therefor.
Late Charge: 5% of the overdue amount per
month ("Late Charge")
100 Use: The Premises shall be used by Tenant for the
storage of trucks, trailers and other
vehicles, subject to any applicable
covenants, conditions and restrictions
affecting the Premises and for no other use
or purpose.
12. Security Deposit: None.
110 Brokers: None
120 Exhibit: The following exhibit is attached hereto and
incorporated into this Lease:
Exhibit "A" Legal Description of Land
The foregoing Basic Terms are hereby incorporated into and made a part
of this Lease. Each reference in this Lease to the Basic Terms shall mean the
information set forth above and shall be construed to incorporate all of the
terms provided under the particular Lease paragraph pertaining to such
information. In the event of a conflict between the Basic Terms and the
Lease, the Lease shall prevail.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Xxxxxx X. Xxxxxxx, President
Dated:_____________________ TENANT:
RPM Transportation, Inc., a
California corporation
By:
Name:
Title:
By:
Name:
Title:
GROUND LEASE AGREEMENT
This Ground Lease Agreement (the "Lease"), which includes the Basic
Terms (as hereinafter defined), dated as of , 199__
("Effective Date"), is made by and between Landlord and Tenant.
ARTICLE 1
LEASE OF PREMISES AND LEASE TERM
1.1 Premises. Landlord, for and in consideration of the rents,
covenants and agreements hereinafter set forth, hereby leases to Tenant and
Tenant hereby leases from Landlord, upon and subject to the terms, covenants
and conditions hereinafter set forth, all that certain parcel of land situated
in the County of Riverside, and State of California delineated on Exhibit "A"
attached hereto and incorporated herein ("Land" or "Premises"). Tenant
acknowledges that, prior to execution of this Lease, Tenant has had the
opportunity to inspect the Premises and, by its execution of this Lease,
Tenant hereby accepts the Premises in an "as-is" condition without any
representations or warranties from Landlord. Tenant acknowledges that this
Lease is subordinate and subject to all liens, encumbrances, deeds of trust,
reservations, restrictions and other matters affecting the Premises,
("Permitted Encumbrances") and any law, regulation, rule, order or ordinance
of any governmental entity applicable to the Premises or the use or occupancy
thereof, in effect on the execution of this Lease or thereafter promulgated.
1.2 Term of Lease. The initial term of this Lease ("Initial Term")
shall commence on January 1, 1998 ("Commencement Date") and shall end on the
date which is one (1) year after the Commencement Date. Tenant may thereafter
continue to lease the Premises on a month to month basis; provided that either
party may terminate this Lease upon delivery of ninety (90) days written
notice to the other party.
ARTICLE 2
RENTAL AND OTHER PAYMENTS
2.1 Basic Rent. In consideration of the leasing of the Premises,
Tenant covenants to pay Landlord in advance, on the first day of each and
every calendar month during the Term, at the address of Landlord as specified
in Item 3 of the Basic Terms, or at such other place as Landlord may from time
to time designate in writing, a rental for the Initial Term of this Lease
calculated based upon the amounts specified in Item 9 of the Basic Terms
("Basic Rent"). The first calendar month's Rent payment shall be made by
Tenant upon Tenant's execution of this Lease.
2.2 Additional Rent. All charges payable by Tenant to Landlord other
than Basic Rent, however denoted, are called "Additional Rent." Unless this
Lease provides otherwise, all Additional Rent shall be paid with the next
installment of Basic Rent falling due. Basic Rent and Additional Rent are
sometimes collectively referred to as "Rent" or "rent." Rent for any partial
month shall be prorated on the basis of the number of days within such
calendar month and paid within ten (10) days of the Commencement Date.
2.3 Delinquent Rental Payments. Any installment of Basic Rent or
Additional Rent or any other charges payable by Tenant under the provisions
hereof which shall not be paid when due or within ten (10) days thereafter
shall bear interest at the Maximum Rate of Interest specified in Item 10 of
the Basic Terms from the date when the same is due hereunder until the same
shall be paid, but in no event in excess of the maximum lawful rate permitted
to be charged by Landlord against Tenant. In addition, any installment of
Rent which shall not be paid when due and which remains unpaid five (5)
business days thereafter shall be subject to a late payment fee of five
percent (5%) of the unpaid amount. Tenant acknowledges that Tenant's failure
to pay Basic Rent or Additional Rent when due may cause Landlord to incur
unanticipated costs. The exact amount of such costs are impractical or
extremely difficult to ascertain. The parties agree that such charge
specified above represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment and acceptance of such late
charge does not constitute a waiver of Tenant's default or limit any other
remedy of Landlord. The late charge shall be deemed Rent and the rights to
require it shall be in addition to all of Landlord's rights and remedies
hereunder or at law.
2.4 Independent Obligations. Any term or provision of this Lease to
the contrary notwithstanding, the covenants and obligations of Tenant to pay
Basic Rent and Additional Rent hereunder shall be independent from any
obligations, warranties or representations, express or implied, if any, of
Landlord herein contained.
ARTICLE 3
PAYMENT OF PERSONAL PROPERTY TAXES
3.1 Payment of Property Taxes. Tenant shall pay, prior to
delinquency, all taxes, assessments, license fees and public charges levied,
assessed or imposed upon its business operation, fixtures, improvements and
other personal property in, on or upon the Premises. If any such items of
property are assessed with property of Landlord, then the assessment shall be
equitably divided between Landlord and Tenant. Landlord shall determine the
basis of prorating and dividing any of those assessments and its determination
shall be binding.
ARTICLE 4
USE
4.1 Permitted Use. Tenant may use the Premises only for the Permitted
Uses specified in Item 11 of the Basic Terms. Tenant shall not use or occupy
the same, or permit them to be used or occupied, contrary to any statute,
governmental, quasi-governmental or administrative rule, order, ordinance,
requirement or regulation applicable thereto ("Regulatory Requirement"), or
in any manner which would make void or voidable any insurance then in force
with respect thereto or which would cause the value or usefulness of the
Premises, or any portion thereof, substantially to diminish (reasonable wear
and tear excepted), or which would constitute a public or private nuisance or
waste and Tenant agrees that it will promptly, upon discovery of any such use,
take all necessary steps to compel the discontinuance of such use.
4.2 Acceptance of Premises. Tenant acknowledges that neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the Premises or with respect to the suitability or fitness of either for
the conduct of Tenant's business or for any other purpose and, Tenant accepts
the Premises in an "as is" condition. Tenant shall comply with any recorded
covenants, conditions, restrictions and encumbrances affecting the Premises
as of the commencement of this Lease or which are recorded during the Term.
4.3 Increase Insurance. Tenant shall not do or permit to be done
anything which will (i) increase the premium of any insurance policy covering
the Premises or any adjoining property owned by Landlord ("Project") and/or
the property located therein; (ii) cause a cancellation of or be in conflict
with any such insurance policies; (iii) result in a refusal by insurance
companies in good standing to issue or continue any such insurance in amounts
satisfactory to Landlord; or (iv) subject Landlord to any liability or
responsibility for injury to any person or property by reason of any operation
in the Premises. Tenant shall, at Tenant's expense, comply with all rules,
orders, regulations and requirements of insurers and of the American Insurance
Association or any other organization performing a similar function. Tenant
shall promptly, upon demand, reimburse Landlord for any additional premium
charges for such policy or policies caused by reason of Tenant's failure to
comply with the provisions of this Section.
4.4 Rules and Regulations. Tenant shall comply with all rules and
regulations adopted by Landlord from time to time for the Project.
4.5 Tenant's Obligations. Tenant shall obtain and pay for all
permits, required for Tenant's occupancy of the Premises and shall promptly
take all substantial and non-substantial actions necessary to comply with all
applicable Regulatory Requirements regulating the use by Tenant of the
Premises, including, without limitation, the Occupational Health and Safety
Act and the Americans with Disabilities Act.
ARTICLE 5
HAZARDOUS MATERIALS
5.1 Hazardous Materials. The term "Hazardous Material(s)" shall mean
any toxic or hazardous substance, material or waste or any pollutant or
contaminant or infectious or radioactive material, including but not limited
to those substances, materials or wastes regulated now or in the future under
any of the statutes or regulations listed in Section 5.2, and any and all of
those substances included within the definitions of "hazardous substances,"
"hazardous materials," "hazardous waste," "hazardous chemical substance or
mixture," "imminently hazardous chemical substance or mixture," "toxic
substances," "hazardous air pollutant," "toxic pollutant," or "solid waste"
in the statutes or regulations in Section 5.2. Hazardous Materials shall also
mean any and all other similar terms defined in other federal, state and local
laws, statutes, regulations, orders or rules, and materials and wastes which
are, or in the future become, regulated under applicable local, state or
federal law for the protection of health or the environment, or which are
classified as hazardous or toxic substances, materials or wastes, pollutants
or contaminants, as defined, listed or regulated by any federal, state or
local law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) oil or any petroleum products or fractions
thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable
explosives, (vi) urea formaldehyde and (vii) radioactive materials and waste,
and (viii) infectious waste.
5.2 Hazardous Materials Laws. The term "Hazardous Materials Law(s)"
shall mean any federal, state or local laws, ordinances, codes, statutes,
regulations, administrative rules, policies and orders, and other authority,
existing now or in the future, which classify, regulate, list or define
hazardous substances, materials, wastes contaminants, pollutants and/or the
Hazardous Materials, including without limitation the following statutes and
regulations, and any other legal authority, regulations, or policies relating
to or implementing such statutes and regulations:
5.2.1 Federal. Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), as amended
by the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), 42
U.S.C. ' 9601 et seq.; Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. ' 6901 et seq.; Clean Water Act ("CWA"), 33 U.S.C. ' 1251
et seq.; Clean Air Act ("CAA"), 42 U.S.C. ' 78401 et seq.; Toxic Substances
Control Act ("TSCA"), 15 U.S.C. ' 2601 et seq.; The Refuse Act of 1899, 33
U.S.C. ' 407; Occupational Safety and Health Act ("OSHA"), 29 U.S.C. ' 651 et
seq.; Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.;
United States Department of Transportation Table (49 CFR 172.101 and
amendments thereto) and the Environmental Protection Agency Table (40 CFR Part
302 and amendments thereto);
5.2.2 California. Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance
Account Act ("California Superfund"), Cal. Health & Safety Code ' 25300 et
seq.; California Hazardous Waste Control Act, Cal. Health & Safety Code
Sections 25100 et seq.; Xxxxxx-Cologne Water Quality Control Act ("Xxxxxx-
Cologne Act"), Cal. Water Code ' 13000 et seq.; Hazardous Waste Disposal Land
Use Law, Cal. Health & Safety Code ' 25220 et seq.; Safe Drinking Water and
Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety Code
' 25249.5 et seq.; Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety Code ' 25280 et seq.; California Hazardous Substance Act, Cal.
Health & Safety Code ' 28740 et seq.; Air Resources Law, Cal. Health & Safety
Code ' 39000 et seq.; Hazardous Materials Release Response Plans and
Inventory, Cal. Health & Safety Code '' 25500-25541; Toxic Pits Cleanup Act
of 1984 ("TCPA"), Cal. Health & Safety Code '' 25208-25208.17;
5.2.3 Other Laws and Regulations. All other regulations
promulgated pursuant to said foregoing laws or any amendments or replacement
thereof, provided such amendments or replacements shall in no way limit the
original scope and/or definition of Hazardous Materials defined herein as of
the execution date of this Lease.
5.2.4 Phase 1 Environmental Analysis. Landlord has delivered to
Tenant a Phase 1 Environmental Analysis Report ("Phase 1 Report") covering the
Premises, and Tenant acknowledges that this shall be deemed satisfaction of
any obligation on the part of Landlord to disclose any and all Hazardous
Materials on or relating to the Premises as required hereunder or by any
Hazardous Materials Laws.
5.3 Compliance with Hazardous Materials Laws. Tenant shall not cause
or permit any Hazardous Materials to be brought upon, kept, or used in
connection with the Premises or by Tenant, its agents, employees, contractors
or invitees in a manner or for a purpose prohibited by or which could result
in liability under any applicable law, regulation, rule or ordinance,
including, without limitation, the Hazardous Materials Laws. Tenant shall,
at its own expense, at all times and in all respects comply with all Hazardous
Materials Laws relating to the industrial hygiene, environmental protection
or the use, analysis, generation, manufacture, storage, presence, disposal or
transportation of any Hazardous Materials. Tenant shall, at its own expense,
procure, maintain in effect and comply with all conditions of any and all
permits, licenses and other governmental and regulatory approvals relating to
the presence of Hazardous Materials within, on, under or about the Premises
or required for Tenant's use of the Premises, Tenant shall cause any and all
Hazardous Materials to be removed from the Premises and transported in
accordance with and in compliance with all Hazardous Materials Laws. Tenant
shall in all respects, handle, treat, deal with and manage any and all
Hazardous Materials in, on, under or about the Premises in complete conformity
with all applicable Hazardous Materials Laws and prudent industry practices
regarding the management of such Hazardous Materials. Upon expiration or
earlier termination of this Lease, Tenant shall at its own expense, cause all
Hazardous Materials (to the extent such Hazardous Materials are generated,
stored, released or disposed of during the Term of this Lease by Tenant or
Tenant's agents, employees, contractors or invitees ("Tenant's Agents")) to
be removed from the Premises and transported for use, storage or disposal in
accordance and in compliance with all applicable Hazardous Materials Laws.
Tenant shall not take any remedial action in response to the presence of any
Hazardous Materials in, on, about or under the Premises or in any Improvements
situated on the Land, nor enter into any settlement agreement, consent, decree
or other compromise in respect to any claims relating to or in any way
connected with the Premises or the Landlord's Improvements on the Land without
first notifying Landlord of Tenant's intention to do so and affording Landlord
ample opportunity to appear, intervene or otherwise appropriately assert and
protect Landlord's interest with respect thereto.
5.4 Notice of Actions. Tenant shall immediately notify Landlord in
writing of (a) any enforcement, clean-up, removal or other governmental or
regulatory action instituted, completed or threatened against Tenant,
Landlord, or against the Premises pursuant to any Hazardous Materials Laws;
(b) any claim made or threatened by any person against Landlord, Tenant, or
the Premises for which Tenant receives notice, relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials; and (c) any reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or about the Land or the Premises or with respect to any
Hazardous Materials removed from the Land or the Premises, including, any
complaints, notices, warnings, reports or asserted violations in connection
therewith. Tenant shall also provide to Landlord, as promptly as possible,
and in any event within five (5) business days after Tenant first receives or
sends the same, with copies of all claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the Land or the
Premises or Tenant's or Tenant's Agents use thereof. Upon written request of
Landlord (to enable Landlord to defend itself from any claim or charge related
to any Hazardous Materials Law), Tenant shall promptly deliver to Landlord
notices of hazardous waste manifests reflecting the legal and proper disposal
of all such Hazardous Materials removed or to be removed from the Premises.
All such manifests shall list the Tenant or its agent as a responsible party
and in no way shall attribute responsibility for any such Hazardous Materials
to Landlord. Tenant shall also immediately notify Landlord if Tenant knows
or has reason to believe Hazardous Materials have or will be released on or
about the Premises.
5.5 Disclosure and Warning Obligations. Tenant shall also comply with
all laws, ordinances and regulations regarding warning obligations with
respect to the presence or danger of Hazardous Materials or as otherwise may
be required by law. Tenant acknowledges and agrees that it will promptly
notify Landlord prior to reporting to any governmental or quasi-governmental
agencies any matters relating to Hazardous Materials and Landlord shall have
the right to review such reports. So long as Tenant will not be in violation
of any laws requiring Tenant to make such reports, Landlord shall have the
right to assume control over the making of such reports to the applicable
governmental or quasi-governmental agencies. Tenant further agrees to
cooperate with Landlord in complying with all Hazardous Materials Laws
regarding the disclosure of, the presence or danger of Hazardous Materials,
including, without limitation, all notices or other requirements under
California Health and Safety Code Section 25915 et seq., and 25249.5 et seq.
and California Code of Regulations Section 12000 et seq. Notwithstanding the
foregoing, Tenant shall prior to delivering any notices required by this
Section 5.5, to any governmental entity or agency, deliver written notice to
Landlord of the same so as to afford Landlord ample opportunity to take over
such obligation if Landlord so desires.
5.6 Indemnification. Tenant shall indemnify, defend (with counsel
reasonably acceptable to Landlord), protect and hold Landlord and each of
Landlord's officers, directors, partners, employees, agents, attorneys,
successors and assigns (collectively "Indemnitees") free and harmless from and
against any and all claims, liabilities, damages, costs, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death or
injury to any person or damage to any property whatsoever (including water
tables and atmosphere) ("Claims") arising or resulting in whole or in part,
directly or indirectly, from the presence or discharge of Hazardous Materials,
in, on, under, upon or from the Premises or any improvements located thereon
or from the transportation or disposal of Hazardous Materials to or from the
Premises to the extent caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees. Landlord shall indemnify, defend (with
legal counsel reasonable acceptable to Tenant) and hold Tenant and Tenant's
Indemnities harmless from and against any and all Claims arising or resulting
in whole or in part from the presence or discharge of Hazardous Materials by
Landlord in, on, under, upon or for the Premises or the Improvements thereon
or from the transportation or disposal of Hazardous Materials by Landlord.
Each parties' obligations hereunder shall include, without limitation, and
whether foreseeable or unforeseeable, all costs of any required or necessary
repairs, clean-up or detoxification or decontamination of the Premises or the
Improvements, and the presence and implementation of any closure, remedial
action or other required plans in connection therewith, and shall survive the
expiration of or early termination of the term of this Lease and any costs and
fees incurred in the enforcement of the indemnity action.
5.7 Environmental Audits. Upon request by Landlord during the Term
of this Lease, prior to the exercise of any renewal term and/or prior to
vacating any portion of the Premises, Tenant shall undertake and submit to
Landlord an environmental audit from an environmental company reasonably
acceptable to Landlord which audit shall evidence Tenant's compliance with
this Article 5. If the audit confirms the presence of Hazardous Materials in
the soil or surface or the groundwater, or likelihood thereof, Landlord shall
have the right to require Tenant to immediately commence all necessary
remediation, abatement, removal and cleanup actions to return the Premises and
any other property of whatever nature to their condition existing prior to the
appearance of Hazardous Materials. Any plan of remediation, abatement,
removal and cleanup shall be subject to the prior approval of Landlord, in its
sole discretion. Except as specified above, Tenant shall not perform or cause
to be performed, any Hazardous Materials surveys, studies, reports or
inspections, relating to the Premises without obtaining Landlord's advance
written consent.
5.7 Termination of Lease. Landlord shall have the right to terminate
the Lease in Landlord's sole and absolute discretion in the event that (i) any
anticipated use of the Premises by Tenant involves the generation or storage,
use, treatment or disposal of Hazardous Materials in a manner or for a purpose
prohibited by any governmental agency or authority; (ii) Tenant has been
required by any lender or governmental authority to take remedial action in
connection with Hazardous Materials contaminating the Premises if the
contamination resulted from Tenant's action, inaction or use of the Premises;
or (iii) Tenant is subject to an enforcement order issued by any governmental
authority in connection with the use, disposal or storage of Hazardous
Materials on the Premises (unless Tenant is diligently seeking compliance with
such enforcement order).
ARTICLE 6
SERVICES AND UTILITIES
During the Term of this Lease, Tenant will pay, when due, all charges
of every nature, kind or description (including, without limitation, charges
imposed by any utility company as a condition precedent to furnishing or
continuing to furnish utilities or services to the Premises) for utilities
furnished to the Premises or chargeable against the Premises, to the extent
there are any, including all charges for water, sewage, heat, gas, light,
garbage, electricity, telephone, steam, power, or other public or private
utility services and any charges or fees for present or future water or sewer
capacity to serve the Premises, any charges for the underground installation
of gas or other utilities or services, and other charges relating to the
extension of or change in the facilities necessary to provide the Premises
with adequate utility services. No interruption in, or temporary stoppage of,
any utility service or blockage of access to the Premises caused by repairs,
renewals, improvements, alterations, stripes, walk outs, labor controversy,
accidents, inability to obtain fuel or supplies, or other causes shall be
deemed an eviction of disturbance of Tenant's use and possession, or render
Landlord liable for damages, by abatement of rent or otherwise, or relieve
Tenant from any obligation whatsoever under this Lease. Nothing contained in
this Article 6 shall be construed to impose any obligation or duty upon
Landlord to supply any utilities to the Premises.
ARTICLE 7
MAINTENANCE, REPAIR AND ALTERATION OF PREMISES
7.1 Tenant's Maintenance. Tenant, at its sole cost and expense,
throughout the Term of this Lease, whether Tenant is occupying or has vacated
the Premises, shall take good care of the Premises and shall keep the same in
at least the same order, condition and repair, as when received and shall make
and perform all routine maintenance thereof and all necessary repairs thereto,
ordinary and extraordinary, foreseen and unforeseen, of every nature, kind and
description. The maintenance obligation shall apply even if Tenant has
vacated the Premises.
7.2 Tenant's Waiver of Claims Against Landlord. Landlord shall not
be required to furnish any services or facilities or to make any repairs or
alterations in, about or to the Premises or any improvements hereafter erected
thereon. Tenant hereby assumes the full and sole responsibility for the
condition, operation, repair, replacement, maintenance and management of the
Premises and any improvements hereafter erected thereon, and Tenant hereby
waives any rights created by any law now or hereafter in force to make repairs
to the Premises or improvements hereafter erected thereon at Landlord's
expense. Tenant hereby waives and releases its right to perform repairs at
Landlord's expense under any law, statute, or ordinance now or hereafter in
effect in the State in which the Project is located, including, without
limitation, the provisions of Civil Code Sections 1941 and 1942.
ARTICLE 8
CHANGES AND ALTERATIONS
8.1 Tenant's Changes and Alterations. Tenant shall not make any
alterations, additions or improvements ("Alterations") to the Property,
without Landlord's prior written consent, which may be withheld in Landlord's
sole and absolute discretion ("Alterations"). Tenant shall promptly remove
any Alterations constructed in violation of this Section upon Landlord's
written request.
8.2 Liens. Tenant shall keep the Premises free from any mechanics',
materialmen's, designer's or other liens arising out of any work performed,
materials furnished or obligations incurred by or for Tenant or any person or
entity claiming by, through or under Tenant. Landlord shall have the right
at all times to post and keep posted on the Premises any notices which it
deems necessary for protection from such liens. If any such liens are filed
and are not released of record by payment or posting of a proper bond within
thirty (30) days after such filing, Landlord may, without waiving its rights
and remedies based on such breach by Tenant and without releasing Tenant from
any obligations hereunder, cause such liens to be released by any means it
shall deem proper, including payment of the claim giving rise to such lien or
posting security to cause the discharge of such lien, in which event all
amounts paid by Landlord shall immediately be due and payable by Tenant as
Additional Rent. Tenant hereby indemnifies, protects, defends and holds
Landlord and Landlord's Indemnitees and the Premises harmless from any
liability, cost, obligation, expense (including, without limitation,
reasonable attorneys' fees and expenses and attorneys' fees incurred in
enforcing of this indemnity), or claim of any mechanics', materialmen's,
design professional's or other liens in any manner relating to any work
performed, materials furnished or obligations incurred by or for Tenant or any
person or entity claiming by, through or under Tenant. Tenant shall notify
Landlord in writing thirty (30) days prior to commencing any Alterations so
that Landlord shall have the right to record and post notices of non-
responsibility or any other notices deemed necessary by Landlord on the
Premises. Tenant shall not create, and shall promptly discharge and satisfy
of record, any other lien, encumbrance, charge, security interest, or other
right or interest which shall be or become a lien, encumbrance, charge or
security interest upon the Premises, or any portion thereof.
ARTICLE 9
RIGHTS RESERVED BY LANDLORD
9.1 Landlord's Entry. In addition to any other right of entry
provided to Landlord in this Lease, Landlord reserves the right at all
reasonable times and upon reasonable notice to Tenant to enter the Premises
to: (i) inspect them; (ii) show the Premises to prospective purchasers,
mortgagees or tenants, or to the ground or underlying Landlords; (iii) post
notices of non-responsibility or other notices as may be customary in the
State of California or (iv) for any other purpose Landlord deems reasonably
necessary. Except in cases of emergency, two (2) business days prior notice
shall be deemed reasonable notice. Landlord and its authorized
representatives may enter the Premises at any time in case of emergency and
shall have the right to use any and all means which Landlord may deem proper
to open such doors during an emergency in order to obtain entry to any
vehicles or improvements or fixtures on the Premises. Any such entry obtained
by Landlord in the event of any emergency shall not, under any circumstances,
be construed or deemed to be a forcible or unlawful entry into, or detainer
of, the Premises, or to be an eviction of Tenant from the Premises or any
portion thereof.
9.2 Landlord's Cure. If Tenant shall default in the performance of
its obligations under this Lease and if such default is not cured within the
applicable periods provided in Article 14, Landlord may, but shall not be
obligated to, make any such payment or perform any such act on Tenant's part
without waiving its right based upon any default of Tenant and without
releasing Tenant from any obligations hereunder. Except as may be
specifically provided to the contrary in this Lease, Tenant shall pay to
Landlord, within ten (10) days after delivery by Landlord to Tenant of
statements therefor, sums equal to expenditures reasonably made and
obligations incurred by Landlord in connection with the remedying by Landlord
of Tenant's defaults. If there are any outstanding monetary obligations of
Tenant under this Lease attributable to the period prior to the expiration or
termination of this Lease, such obligations shall survive the termination or
expiration of this Lease and such amount shall be payable to Landlord within
ten (10) days after receipt of notice therefor from Landlord. Tenant hereby
agrees to indemnify, protect, defend (with legal counsel reasonably acceptable
to Landlord) and save Landlord harmless from and against such impositions,
insurance premiums, utility charges, maintenance, repair and replacement
expenses, all expenses relating to compliance with laws, and all other costs,
fees, charges, expenses, reimbursements and obligations above referred to.
ARTICLE 10
INDEMNITY AND INSURANCE
10.1 Insurance Coverage. During the Term of this Lease, Tenant, at its
sole cost and expense, shall obtain and continuously maintain in full force
and effect the following insurance coverage:
(a) Comprehensive general liability insurance against any loss,
liability or damage on, about or relating to the Premises, or any portion
thereof, with limits of not less than Five Million Dollars ($5,000,000.00)
combined single limit, per occurrence and aggregate, coverage on an occurrence
basis. Such insurance shall specifically insure (by contractual liability
endorsement) Tenant's indemnity obligations under this Lease. Such insurance
shall also afford coverage for all claims based upon acts, omissions, injury
or damage, which claims occurred or arose (or the onset of which occurred or
arose) in whole or in part during the policy period;
(b) Such other insurance and in such amounts as may from time to time
be reasonably required by Landlord, against any other insurable hazards which
at the time are commonly insured against in the case of premises similar to
those of the Premises; and
The insurance set forth in this Section 10.1 shall be maintained by
Tenant at not less than the limits set forth herein (or if not specified
herein, as reasonably required by Landlord) until reasonably required to be
changed from time to time by Landlord, in writing, whereupon Tenant shall
obtain and maintain thereafter such additional coverage.
10.2 Insurance Provisions. Any such insurance obtained and maintained
by Tenant shall name Landlord, and, if requested by Landlord, Landlord's
mortgagee, as named insured therein and such insurance shall be obtained and
maintained from and with a reputable and financially sound insurance company
authorized to issue such insurance in California. Each policy required under
this Article 10 shall have attached thereto (a) an endorsement that such
policy shall not be canceled or materially changed without at least thirty
(30) days prior written notice to Landlord, and (b) an endorsement to the
effect that the insurance as to the interest of Landlord shall not be
invalidated by any act or neglect of Landlord or Tenant and an "agreed value"
endorsement. All policies of insurance, together with any endorsements
reflecting the changes to the policy required to comply with this Lease, shall
be written by companies reasonably satisfactory to Landlord and licensed in
the state in which the Premises are located. Such certificates of insurance
shall be in a form reasonably acceptable to Landlord, shall be delivered to
Landlord upon commencement of the Term and prior to expiration of such policy,
new certificates of insurance, shall be delivered to Landlord not less than
twenty (20) days prior to the expiration of the then current policy term. In
the event Tenant shall fail to procure such insurance, or to deliver such
policies or certificates and appropriate endorsements, Landlord may, at its
option, procure such policies for the account of Tenant, and the cost thereof
plus a ten percent (10%) handling charge shall be paid by Tenant to Landlord
as Additional Rent within five (5) days after delivery to Tenant of bills
therefor.
10.3 Waiver of Subrogation. Tenant shall cause to be inserted in the
policy or policies of insurance required by this Article 10 hereof a so-called
"Waiver of Subrogation Clause" as to Landlord. Tenant hereby waives, releases
and discharges Landlord, its agents and employees from all claims whatsoever
arising out of loss, claim, expense or damage to or destruction covered or
coverable by insurance required under this Article 10 notwithstanding that
such loss, claim, expense or damage may have been caused by Landlord, its
agents or employees, and Tenant agrees to look to the insurance coverage only
in the event of such loss.
10.4 Indemnification by Tenant. To the fullest extent allowed by law,
Tenant shall at all times indemnify, protect, defend (with legal counsel
acceptable to Landlord) and hold Landlord and Landlord's shareholders,
officers, directors, partners, employees, lender, managing agent, successors
and/or assigns (collectively, "Landlord's Indemnities") harmless against and
from any and all claims, costs, liabilities, actions and damages (including,
without limitation, attorneys' fees and costs and costs related to the
enforcement of this indemnity provision) arising from or out of any occurrence
in, upon or about the Premises or the occupancy or use by Tenant of the
Premises, or the condition of the Premises or occasioned wholly or in part by
any act or omission of Tenant, its agents, contractors, servants, tenants,
invitees or licensees (collectively "Tenant's Agents") or arising from any act
or negligence of Tenant or Tenant's Agents, or a default by Tenant under this
Lease or arising from any accident, injury or damage whatsoever caused to any
person, or entity occurring during the Term of this Lease, in or about the
Premises, and from and against all costs, attorney's fees, expenses and
liabilities incurred in or about any such claim or action or proceeding
brought thereon. In case any action or proceeding be brought against Landlord
by reason of any such claim, Tenant, upon notice from Landlord, covenants to
defend such action or proceeding by counsel reasonably satisfactory to
Landlord. Landlord shall not be liable for injury or damage which may be
sustained by a person, goods, wares, merchandise, or other property of Tenant,
or Tenant's employees, invitees, customers, or of any other person in or about
the Premises caused by or resulting from any peril which may affect the
Premises, whether such damage or injury results from conditions arising upon
the Premises or from other sources.
ARTICLE 11
NO ASSIGNMENT OR SUBLETTING
11.1 Restriction on Other Transfers. Tenant shall not assign,
mortgage, pledge, transfer, sublease or otherwise encumber or dispose of this
Lease, or any interest therein, or in any manner assign, mortgage, pledge,
transfer or otherwise encumber or dispose of its interest or estate in the
Premises, or any portion thereof ("Transfer").
ARTICLE 12
INTENTIONALLY OMITTED
ARTICLE 13
CONDEMNATION
13.1 Condemnation of Entire Premises. If, during the Term of this
Lease, the entire Premises shall be taken as the result of the exercise of the
power of eminent domain (hereinafter referred to as the "Proceedings"), this
Lease shall terminate on the date of vesting of title pursuant to such
Proceedings. In any taking of the Premises, or any portion thereof, whether
or not this Lease is terminated as in this Article provided, Tenant shall not
be entitled to any portion of the award for the taking of the Premises, all
such award, damages, consequential damages and compensation being hereby
assigned to Landlord, and Tenant hereby waives any right it now has or may
have under present or future law to receive any separate award of damages for
its interest in the Premises, or any portion thereof, or its interest in this
Lease, except that Tenant shall have, nevertheless, the limited right to prove
in the Proceedings and to receive any award which may be made for damages to
or condemnation of Tenant's movable trade fixtures and equipment, and for
Tenant's relocation costs in connection therewith.
13.2 Partial Condemnation/Termination of Lease. If, during the Term
of this Lease, less than the entire Premises, but more than twenty-five
percent (25%) of the Premises, shall be taken in any such Proceedings, this
Lease shall, upon vesting of title in the Proceedings, terminate as to the
portion of the Premises so taken, and Tenant or Landlord shall have the right
to terminate this Lease if the business of Tenant conducted in the portion of
the Premises taken cannot reasonably be carried on with substantially the same
utility and efficiency in the remainder of the Premises. Such termination as
to the remainder of the Premises shall be effected by notice in writing given
not more than sixty (60) days after the date of vesting of title in such
Proceedings, and shall specify a date not more than sixty (60) days after the
giving of such notice as the date for such termination.
13.3 Partial Condemnation/Continuation of Lease. If twenty-five
percent (25%), or less, of the Land, shall be taken in such Proceedings, this
Lease shall, upon vesting of title in the Proceedings, terminate as to the
parts so taken. The net amount of the award (after deduction of all costs and
expenses, including attorneys' fees), shall be held by Landlord and Tenant's
Basic Rent shall be abated proportionately.
13.4 Continuance of Obligations. In the event this Lease is not
terminated, then from and after the date of vesting of title in such
Proceedings, Tenant shall continue to pay the Basic Rent and Additional Rent
and other charges payable hereunder, as in this Lease provided, to be paid by
Tenant, subject to an abatement of a just and proportionate part of the Basic
Rent according to the extent and nature of such taking as may be mutually
agreed upon by Tenant and Landlord.
13.5 Tenant's Waiver. Tenant waives the protection of any statute,
code or judicial decision which grants Tenant a right to terminate this Lease
or to obtain any compensation other than that set forth in this Article in the
event of a taking, including, but not limited to, California Code of Civil
Procedure Section 1265.150 or any successor statute or law.
ARTICLE 14
DEFAULTS; REMEDIES
14.1 Events of Default. The occurrence of any of the following shall
constitute a default and breach of this Lease by Tenant:
14.1.1 Intentionally Omitted
14.1.2 Failure to Pay. If Tenant fails to pay such Rent or such
charge as and when due where such failure continues for ten (10) days after
written notice thereof by Landlord to Tenant;
14.1.3 Failure to Perform. If Tenant fails to perform any of
Tenant's nonmonetary obligations under this Lease for a period of thirty (30)
days after written notice from Landlord; provided that if more time is
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 Tenant's failure to perform constitutes a
non-curable breach of this Lease.
14.1.4 Other Defaults. (i) If Tenant makes a general assignment
or general arrangement for the benefit of creditors; (ii) 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 Premises 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 Premises 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
Subsection 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 difference between the Rent (or any other
consideration) paid in connection with such assignment or sublease and the
Rent payable by Tenant hereunder.
The notices required by this Section are intended to satisfy any and all
notice requirements imposed by law on Landlord and are not in addition to any
such requirement.
14.1.5 Remedies. On the occurrence of any default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(ai Terminate Tenant's right to possession of the Premises
at any time by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises 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 without
limitation (i) the worth at the time of the award of the unpaid 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 Basic Rent,
Additional Rent and other charges which Landlord 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 Basic Rent, Additional
Rent and other charges which Tenant 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 reasonable avoided; and (iv) any other
amount, including court costs necessary to compensate Landlord for all the
detriment proximately caused by Tenant'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 Premises after such default,
the cost of recovering possession of the Premises, expenses of reletting,
including necessary repairs to the Premises and any real estate commission
paid or payable; and Landlord's reasonable attorneys' fees incurred in
connection therewith. 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 Maximum Rate of Interest, 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 Premises, Landlord shall have the
option of (i) retaking possession of the Premises and recovering from Tenant
the amount specified in this Paragraph 14.1.5(a), or (ii) proceeding under
Paragraph 14.1.5(b) or (c);
(bi Maintain Tenant's right to possession, in which case
this Lease shall continue in effect whether or not Tenant has abandoned the
Premises. 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. The Landlord has the remedy described in California Civil Code
Section 1951.4. (Landlord may continue Lease in effect after Tenant's breach
and abandonment and recover Rent as it becomes due, if Tenant has right to
sublet or assign, subject only to reasonable limitations). During the period
Tenant is in default, Landlord may enter the Premises and relet them, or any
part of them, to third parties for Tenant's account. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including brokers' commissions, expenses of repairing the Premises
required by the reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease. Tenant shall pay to
Landlord the Rent due under this Lease on the dates the Rent is due, less the
Rent Landlord receives from reletting. No act by Landlord allowed by this
Section 14.1.5 will terminate this Lease unless Landlord notifies Tenant in
writing that Landlord elects to terminate this Lease. After Tenant's default
and for so long as Landlord does not terminate Tenant's right to possession
of the Premises, if Tenant obtains Landlord's consent, Tenant will have the
right to assign or sublet its interest in this Lease, but Tenant will not be
released from liability. If Landlord elects to relet the Premises as provided
in this Section 14.1.5, Rent that Landlord receives from reletting will be
applied to the payment of: (i) first, any indebtedness from Tenant to Landlord
other than Rent due from Tenant; (ii) second, all costs, including costs for
maintenance, incurred by Landlord in reletting; and (iii) third, Rent due and
unpaid under the Lease. After deducting the payments referred to in this
Section 14.1.5, any sum remaining from the Rent Landlord receives from
reletting will be held by Landlord and applied in payment of future Rent as
Rent becomes due under this Lease. If, on the date Rent is due under this
Lease, the Rent received from the reletting is less than the Rent due on that
date, Tenant will pay to Landlord, in addition to the remaining Rent due, all
costs, including for maintenance, Landlord incurred in reletting which remain
after applying the Rent received from the reletting; and/or
(ci 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.
14.1.6 Right of Landlord to Re-Enter. In the event of any
termination of this Lease, Landlord shall have the immediate right to enter
upon and repossess the Premises, and any personal property or equipment of
Tenant may be removed from the Premises and stored in any public warehouse at
the risk and expense of Tenant.
14.1.7 Cumulative Remedies. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
14.2 Legal Costs. Tenant shall reimburse Landlord, upon demand, for
any reasonable costs or expenses incurred by Landlord in connection with any
breach or default of Tenant 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. If an action is commenced between the parties relating to this
Lease, the prevailing party shall be entitled to recover it attorneys' fees
in accordance with Section 19.13 below. Tenant shall also indemnify, protect,
defend and hold Landlord harmless from all costs, expenses, demands and
liability (including, without limitation, attorneys' fees and costs, including
attorneys fees as a result of the enforcement of this indemnity) incurred by
Landlord if Landlord becomes or is made a party to any claim or action (a)
instituted by Tenant, or by any third party against Tenant, or by or against
any person holding any interest under or using the Premises by license of or
agreement with Tenant; (b) for foreclosure of 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 incurred by Landlord in any such claim or action.
14.3 No Waiver. No failure by Landlord or by Tenant to insist upon the
performance of any of the terms of this Lease or to exercise any right or
remedy consequent upon a breach thereof, and no acceptance by Landlord of full
or partial rent from Tenant or any third party during the continuance of any
such breach, shall constitute a waiver of any such breach or of any of the
terms of this Lease. None of the terms of this Lease to be kept, observed or
performed by Landlord or by Tenant, and no breach thereof, shall be waived,
altered or modified except by a written instrument executed by Landlord and/or
by Tenant, as the case may be. No waiver of any default of Tenant shall be
implied from any omission by Landlord to take any action on account of such
default. One or more waivers by Landlord shall not be construed as a waiver
of a subsequent breach of the same covenant, term or condition. No statement
on a payment check 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.
14.4 Waiver by Tenant. Tenant hereby waives all claims by Landlord's
re-entering and taking possession of the Premises and removing and storing the
property of Tenant as permitted under this Lease and will save Landlord
harmless from all losses, costs or damages occasioned Landlord thereby. No
such reentry shall be considered or construed to be a forcible entry by
Landlord. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of the Premises, by reason of the violation by Tenant of any of the
covenants or conditions of this Lease, or otherwise.
14.5 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within thirty (30)
days after written notice by Tenant to Landlord and to the holder of any first
mortgage or deed of trust covering the Premises whose name and address shall
have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
ARTICLE 15
PROTECTION OF CREDITORS
15.1 Subordination. This Lease and all rights of Tenant therein, and
all interest or estate of Tenant in the Premises, or any portion thereof,
shall be subject and subordinate to the lien of any mortgage, deed of trust,
or other document of like nature ("Mortgage"), which at any time may be placed
upon the Premises, or any portion thereof, by Landlord, and to any
replacements, renewals, amendments, modifications, extensions or refinancing
thereof, and to each and every advance made under any Mortgage. Tenant agrees
at any time hereafter, and from time to time on demand of Landlord, to execute
and deliver to Landlord any instruments, releases or other documents that may
be reasonably required for the purpose of subjecting and subordinating this
Lease to the lien of any such Mortgage. It is agreed, nevertheless, that so
long as Tenant is not in default in the payment of Basic Rent and Additional
Rent and the performance and observance of all covenants, conditions,
provisions, terms and agreements to be performed and observed by Tenant under
this Lease, that such subordination agreement or other instrument, release or
document shall not interfere with, hinder or molest Tenant's right to quiet
enjoyment under this Lease, nor the right of Tenant to continue to occupy the
Premises, and all portions thereof, and to conduct its business thereon in
accordance with the covenants, conditions, provisions, terms and agreements
of this Lease. The lien of any such Mortgage shall not cover Tenant's trade
fixtures or other personal property located in or on the Premises.
15.2 Attornment. If Landlord's interest in the Premises is acquired
by any beneficiary under a deed of trust, mortgagee, or purchaser at a
foreclosure sale or by any new person or entity as a result of any transfer
by Landlord, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Premises 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 Premises upon the transfer of Landlord's
interest.
15.3 Estoppel Certificates.
15.3.1 Within ten (10) business days after Landlord's written
request, Tenant shall execute, acknowledge and deliver to Landlord a written
statement certifying: (i) that this Lease (and all guaranties, if any) is
unmodified and in full force and effect (or, if there have been any
modifications, that the same is in full force and effect, as modified, and
stating the modifications); (ii) that this Lease has not been canceled or
terminated; (iii) the last date of payment of the Basic Rent and other charges
and the time period covered by such payment; (iv) whether or not there are
then existing any breaches or defaults by such party or the other party known
by such party under this Lease, and specifying such breach or default, if any,
or any setoffs or defenses against the enforcement of any such breach of this
Lease (or of any guaranties) upon the part of Landlord or Tenant (or any
guarantor), as the case may be, to be performed or complied with (and, if so,
specifying the same and the steps being taken to remedy the same) and (v) such
other statements as required by Landlord, or any lender or prospective lender,
investor or purchaser. Tenant shall deliver such statement to Landlord within
ten (10) business days after Landlord's request. Any such statement by Tenant
may be given by Landlord to any prospective purchaser or encumbrancer of the
Premises. Such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
15.3.2 If Tenant does not deliver such statement to Landlord
within such ten (10) business day period, (i) Tenant irrevocably constitutes
and appoints Landlord as its special attorney-in-fact to execute and deliver
the certificate to any third party and (ii) such failure shall constitute a
default under this Lease entitling Landlord to terminate this Lease. Further,
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 canceled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Basic
Monthly Rent or other charges have been paid in advance; and (iv) that
Landlord is not in default under this Lease. In such event, Tenant shall be
estopped from denying the truth of such facts.
15.4 Mortgagee Protection Clause. Tenant agrees to give any mortgagees
and/or trust deed holders, by registered mail, a copy of any notice of
default, served upon the Landlord, provided that prior to such notice Tenant
has been notified in writing (by way of Notice of Assignment of Rents and
Leases, or otherwise) of the addresses of such mortgagees and/or trust deed
holders. Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided for in this Lease, then the mortgagees and/or
trust deed holders shall have an additional thirty days (30) within which to
cure such default or if such default cannot be cured within that time, then
such additional time as may be necessary if within such thirty days (30) any
mortgagee and/or trust deed holder has commenced and is diligently pursuing
the remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being
so diligently pursued.
ARTICLE 16
TERMINATION OF LEASE
16.1 Surrender of Premises. At the expiration of the Term of this
Lease or earlier termination of this Lease, Tenant shall surrender the
Premises in the same condition as the same were in upon delivery of possession
thereto at the Commencement Date of the term of this Lease, reasonable wear
and tear excepted. Tenant shall at such time remove all of its property
therefrom and all equipment, alterations and improvements placed thereon by
Tenant. Tenant shall repair any damage to the Premises caused by such
removal, and any and all such property not so removed shall, at Landlord's
option, become the exclusive property of Landlord or be disposed of by
Landlord, at Tenant's cost and expense, without further notice to or demand
upon Tenant. If the Premises be not surrendered as above set forth, Tenant
shall indemnify, protect, defend and hold Landlord harmless against loss or
liability resulting from the delay by Tenant in so surrendering the Premises,
including, without limitation, any claim made by any succeeding occupant
founded on such delay. All property of Tenant not removed within thirty (30)
days after the last day of the Term of this Lease shall be deemed abandoned.
Tenant hereby appoints Landlord its agent to remove, at Tenant's cost, all
property of Tenant from the Premises upon termination of this Lease and to
cause its transportation and storage for Tenant's benefit, all at the sole
cost and risk of Tenant and Landlord shall not be liable for damage, theft,
misappropriation or loss thereof and Landlord shall not be liable in any
manner in respect thereto.
16.2 Holding Over. If Tenant remains in possession of the Premises
after expiration of the Lease Term or earlier termination of this Lease, such
occupancy shall be deemed to be a tenancy at sufferance, subject to all the
provisions, conditions and obligations of this Lease, except that Basic Rent
shall be escalated to two hundred percent (200%) of the previous Basic Rent.
In addition, Tenant shall indemnify, defend and hold Landlord harmless from
any and all claims, losses, damages, costs and expenses (including reasonable
attorneys' fees and costs), incurred by Landlord in connection with any
holdover by Tenant, including any claims, losses or damages relating to any
prospective tenant of the Premises.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.1 Notices. All notices, demands and requests which may be or are
required to be given, demanded or requested by either party to the other shall
be in writing. All notices, demands and requests shall be sent by United
States registered or certified mail, postage prepaid or by an independent
overnight courier service, addressed at the addresses specified in the Basic
Terms or at such other place as either party may designate to the other party
by written notice. Notices, demands and requests which shall be served upon
Landlord by Tenant, or upon Tenant by Landlord, in the manner aforesaid, shall
be deemed to be sufficiently served or given for all purposes hereunder three
(3) business days after being mailed for delivery within the United States,
or one (1) business day after being sent by overnight courier.
17.2 Landlord's Continuing Obligations. The term "Landlord," as used
in this Lease so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or owners at
the time in question of the fee of the Premises, and in the event of any
transfer or transfers or conveyance the then grantor shall be automatically
freed and relieved from and after the date of such transfer or conveyance of
all liability as respects the performance of any covenants or obligations on
the part of Landlord contained in this Lease arising thereafter to be
performed, provided that any funds in the hands of such landlord or the then
grantor at the time of such transfer, in which Tenant has an interest, shall
be turned over to the grantee, and any amount then due and payable to Tenant
by Landlord or the then grantor under any provision of this Lease shall be
paid to Tenant.
17.3 Net Lease. Landlord and Tenant do each state and represent that
it is the intention of each of them that all Basic Rent and Additional Rent
shall be paid by Tenant to Landlord without abatement, deduction, diminution,
deferment, suspension, reduction or setoff, and the obligations of Tenant
shall not be affected by reason of damage to Premises; nor shall the
obligations of Tenant be affected by reason of any condemnation, eminent
domain or like proceedings (except as provided in Article 13 hereof); nor
shall the obligations of Tenant be affected by reason of any other cause
whether similar or dissimilar to the foregoing or by any laws or customs to
the contrary.
17.4 Successors. The covenants and agreements herein contained shall
bind and inure to the benefit of Landlord, its successors and assigns, and
Tenant and its permitted successors and assigns.
17.5 Memorandum of Lease. Upon not less than ten (10) days prior
written request by Landlord, Tenant agrees to execute and deliver to Landlord
a Memorandum of Lease, in recordable form, setting forth the following: (a)
the date of this Lease; (b) the parties to this Lease; (c) the term of this
Lease; (d) the legal description of the Premises; and (e) such other matters
reasonably requested by Landlord to be stated therein.
17.6 Captions and 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 Premises with
Tenant's expressed or implied permission.
17.7 Relationship of Parties. This Lease does not create the
relationship of principal and agent, or of partnership, joint venture, or of
any association or relationship between Landlord and Tenant, the sole
relationship between Landlord and Tenant being that of landlord and tenant.
17.8 Entire Agreement. Any exhibits, addenda and schedules attached
hereto shall be incorporated herein as though fully set forth herein. All
preliminary and contemporaneous negotiations are merged into and incorporated
in this Lease. This Lease Agreement together with the Exhibits contains the
entire agreement between the parties. No subsequent alteration, amendment,
change or addition to this Lease shall be binding upon Landlord or Tenant
unless reduced to writing and signed by the party to be charged with their
performance.
17.9 Severability. If any covenant, condition, provision, term or
agreement of this Lease shall, to any extent, be held invalid or
unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Lease shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Lease shall be valid and in
force to the fullest extent permitted by law.
17.10 Landlord's Limited Liability. Tenant agrees to look solely to
Landlord's interest in the Premises for recovery of any judgment from
Landlord, it being agreed that Landlord (and if Landlord is a partnership, its
partners, whether general or limited, and if Landlord is a corporation, its
directors, officers or shareholders) shall never be personally liable for any
personal judgment or deficiency decree or judgment against it.
17.11 Transfer of Landlord's Interest. Should Landlord sell, exchange
or assign this Lease (other than a conditional assignment as security for a
loan), then Landlord, as transferor, shall be relieved of any and all
obligations on the part of Landlord accruing under this Lease from and after
the date of the transfer and the express assumption of such obligations by the
assignee. If any security deposit or prepaid rent has been paid by Tenant,
Landlord may transfer the security deposit or prepaid rent to Landlord's
successor and on such transfer Landlord shall be discharged from any further
liability with respect to the security deposit or prepaid rent.
17.12 Survival. All obligations (together with interest or money
obligations at the Maximum Rate of Interest) accruing prior to expiration of
the Term of this Lease shall survive the expiration or other termination of
this Lease.
17.13 Attorneys' Fees. In the event of any litigation or judicial
action in connection with this Lease or the enforcement thereof or the
enforcement of any indemnity obligation hereunder, the prevailing party in any
such litigation or judicial action shall be entitled to recover all costs and
expenses of any such judicial action or litigation (including, but not limited
to, reasonable attorneys' fees, costs and expenditures fees) from the other
party. Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection with Tenant's request for Landlord's consent under any provision
of this Lease or in connection with any act which Tenant proposes to do and
which requires Landlord's consent.
17.14 Broker. Each party represents to the other party that no other
broker has negotiated or participated in negotiations of this Lease or is
entitled to any commission in connection therewith. Each party shall
indemnify and hold the other harmless from and against any and all
commissions, fees and expenses and all claims therefor by any broker, salesman
or other party in connection with or arising out of such party's actions in
entering into this Lease.
17.15 Governing Law. This Lease shall be governed by the laws of the
State of California. All covenants, conditions and agreements of Tenant
arising hereunder shall be performable in the county wherein the Premises are
located. Any suit arising from or relating to this Lease shall be brought in
the county wherein the Premises are located, and the parties hereto waive the
right to be sued elsewhere.
17.16 Time is of the Essence. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance
is a factor.
17.17 Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
17.18 Tenant's Waiver. Notwithstanding anything to the contrary
contained herein, any claim which Tenant may have against Landlord for default
in performance of any of the obligations herein contained to be kept and
performed by Landlord shall be deemed waived unless such claim is asserted by
written notice thereof to Landlord within ten (10) days of commencement of the
alleged default or of accrual of the cause of action and unless suit be
brought thereon within six (6) months subsequent to the accrual of such cause
of action. Furthermore, Tenant agrees to look solely to Landlord's interest
in the Premises for the recovery of any judgment from Landlord, it being
agreed that Landlord, or if Landlord is a partnership, its partners whether
general or limited, or if Landlord is a corporation, its directors, officers
or shareholders, shall never be personally liable for any such judgment.
17.19 Delivery of Corporate Documents. In the event that Tenant is a
corporation, Tenant shall, without charge to Landlord, at any time and from
time to time within ten (10) days after written request by Landlord, deliver
to Landlord, in connection with any proposed sale or mortgage of the Premises,
the following instruments and documents:
(a) Certificate of Good Standing in the state of incorporation
of Tenant and in the state in which the Premises are
located issued by the appropriate state authority and
bearing a current date;
(b) A copy of Tenant's articles of incorporation and bylaws,
and any amendments or modifications thereof certified by
the secretary or assistant secretary of Tenant.
17.20 Provisions are Covenants and Conditions. All provisions, whether
covenants or conditions, on the part of the Landlord, or on the part of
Tenant, shall be deemed to be both covenants and conditions.
17.21 Business Days. As used herein, the term "business days" shall mean
any day which is not a Saturday, Sunday or a legal holiday in the State of
California.
17.22 Force Majeure. If Landlord shall be delayed or prevented from the
performance of any act required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials, inclement weather,
respect of governmental laws or regulations, or by reason of any order or
direct of any legislative, administrative or judicial body, or any government
department, or by reason of not being able to obtain any licenses, permissions
or authorities required therefor, or other causes without fault or beyond the
reasonable control of Landlord, performance of such acts by Landlord shall be
excused for the period of the delay and the period of the performance of any
such acts shall be extended for a period equivalent to the period of such
delay and Landlord shall not be responsible for any costs or expenses incurred
by Tenant or any other party as a result of such delay. (Herein such delays
are sometimes referred to as "Force Majeure").
17.23 Submission of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
[Remainder of Page Intentionally Left Blank]
17.24 Tenant's Financial Condition. Prior to the Effective Date, and
within fifteen (15) days after written request from Landlord (so long as
Landlord has a reasonable basis for requesting such information based upon
Tenant's financial condition), Tenant shall deliver to Landlord financial
statements prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP") as are reasonably required by
Landlord to verify the net worth of Tenant, or any assignee, subtenant, or
guarantor of Tenant; provided that Lessee shall not be required to provide any
information that would constitute a violation of the rules and regulations of
the Securities Exchange Commission. In addition, Tenant shall deliver to any
lender or proposed purchaser of the Premises or Project or any portion thereof
designated by Landlord any financial statements prepared in accordance with
GAAP required by any lender or purchaser to facilitate the sale, financing or
refinancing of the Premises or Project or any portion thereof. Tenant
represents and warrants to Landlord that (a) each such financial statement is
a true and accurate statement as of the date of such statement; and (b) at all
times after the date of any such statement during the Lease Term or any
extension thereof, Tenant's net worth, as stated therein, shall not be
reduced. All financial statements shall be confidential and shall be used
only for the purposes set forth herein. Each such financial statement shall
be executed by Tenant and shall, if requested by Landlord, be certified by
Tenant to be true and correct.
Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Exhibits
and Addenda which are attached to or incorporated by reference in this Lease.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Xxxxxx X. Xxxxxxx, President
Dated:_____________________ TENANT:
RPM Transportation, Inc., a
California corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT "A"
PREMISES
[To Be Attached]
FIRST AMENDMENT TO
LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE ("First Amendment") is made as of
__________, 1998, by and between PETCO ANIMAL SUPPLIES, INC., a Delaware
corporation ("Tenant"), and OPUS WEST CORPORATION, a Minnesota corporation
("Landlord"), with reference to the facts set forth below.
RECITALS
A. Landlord and Tenant entered into that certain Lease Agreement
dated as of November 24, 1997 ("Lease Agreement"), pursuant to which Tenant
leased from Landlord certain real property identified in Exhibit "A" to the
Lease Agreement ("Premises") and pursuant to which Landlord granted Tenant an
option ("Expansion Option") to expand the Premises to include space to be
constructed on land adjacent to the Premises, which land is described on
Exhibit "A-1" to the Lease ("Expansion Land").
B. Buyer and Seller now desire to enter into this First Amendment to
amend the terms of the Lease Agreement with respect to the Expansion Option.
NOW, THEREFORE, in consideration of the Recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
1. Defined Terms. Any capitalized term not otherwise defined herein
shall have the same meaning as set forth in the Lease Agreement.
2. Expansion Space Lease. The Lease Agreement shall be amended to
provide that Landlord and Tenant acknowledge and agree that Landlord may enter
into a lease agreement with R.P.M. Transportation, Inc., a California
corporation ("RPM") under which Landlord would Lease the Expansion Space to
RPM, commencing on January 1, 1998 for a term of one (1) year followed by a
month to month tenancy, which month to month tenancy would be terminable upon
ninety (90) days prior written notice from Landlord or RPM, in substantially
the form of the lease attached hereto as Attachment "1" ("Expansion Space
Lease"). Landlord and Tenant further acknowledge and agree that
notwithstanding anything to the contrary contained in the Lease Agreement or
the Expansion Space Lease: (a) Landlord would be entitled to receive one
hundred percent of the rent under the Expansion Space Lease until such time
as Tenant's obligation to pay Basic Rent commences under the Lease Agreement
(i.e. two (2) calendar months following commencement of the Initial Term of
the Lease Agreement); (b) Thereafter, Landlord and Tenant agree to enter into
an assignment of the Expansion Space Lease in form of Attachment "2" attached
hereto and incorporated, under which Tenant would upon execution of such
assignment be entitled to collect all of the Basic Rent under the Expansion
Space Lease and Tenant would assume all of Landlord's obligations thereunder;
(c) Tenant agrees to refrain from exercising its Expansion Option until after
December 31, 1998; (d) Tenant, in exercising its Expansion Option, must
deliver its Notice of Exercise at least twelve (12) months prior to the
desired occupancy date for the Premises; and (e) in the event that RPM fails
to vacate the Premises as and when required after receipt of termination
notice from Landlord pursuant to the terms of the Expansion Space Lease, then
the deadline for delivery of the Expansion Space by Landlord (i.e. the Desired
Occupancy Date) under Article 18 of the Lease Agreement would be extended, on
a day for day basis one (1) day for each day that RPM fails to timely vacate
the Premises in accordance with the terms of the Expansion Space Lease.
3. Counterparts. This First Amendment may be executed in
counterparts, each of which, when taken together shall constitute fully
executed originals.
4. Full Force and Effect. Except as amended hereby, the Lease
Agreement is in full force and effect between the parties.
IN WITNESS WHEREOF, this First Amendment has been made and executed as
of the date first above.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
Attachment "1"
Expansion Space Lease
[To Be Attached]
Attachment "2"
Assignment and Assumption of Lease
[To Be Attached]
ATTACHMENT 2
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (the "Assignment") is made as
of _________________, 199__, by and between OPUS WEST CORPORATION, a Minnesota
corporation ("Assignor"), and PETCO ANIMAL SUPPLIES, INC., a Delaware
corporation ("Assignee"), with reference to the facts set forth below.
RECITALS
A. Pursuant to that certain Lease Agreement between Assignor and
Assignee dated as of November 24, 1997, as amended by that certain First
Amendment to Lease Agreement dated as of ____________, 1998 (collectively,
"Petco Lease"), Assignee has an option to expand Assignee's premises under the
Petco Lease into space to be constructed on that certain real property owned
by Assignor and more particularly described on Schedule "1" attached hereto
and incorporated herein (the "Expansion Property").
B. Assignor has also entered into that certain Ground Lease Agreement
with R.P.M. Transportation, Inc., a California corporation ("RPM") dated as
of _______, 1998 ("RPM Lease"), pursuant to which Assignor has leased the
Expansion Property to RPM on the terms and conditions set forth in the RPM
Lease.
C. As of the Effective Date of this Assignment, Assignee has
commenced to pay rent to Assignor under the Petco Lease and pursuant to the
terms of the Petco Lease, Assignor and Assignee have agreed that upon the
commencement of the payment of Basic Rent (exclusive of the initial two month
free rent period) under the Petco Lease, (i) Assignor would (a) exclusively
assign the right to collect Basic Rent under the RPM Lease from Assignor to
Assignee and (b) non exclusively assign Assignor's other rights under the RPM
Lease as the landlord to Assignee and (ii) Assignee would assume all of
Assignor's obligations under the RPM Lease.
NOW, THEREFORE, in consideration of the recitals set forth above and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor and Assignee agree as set forth below.
1. Assignment by Assignor. Commencing on the Effective Date of this
Assignment, Assignor hereby non-exclusively assigns and transfers to Assignee
the right to enforce all of the provisions of the RPM Lease against RPM, as
if Assignee were the Landlord; provided that, except for the exclusive
assignment set forth below, as the owner of the Expansion Property, Assignor
shall also be entitled to enforce the rights of the landlord under the RPM
Lease as against RPM. Assignor hereby exclusively assigns and transfers to
Assignee all of its right, title and interest in and to the Basic Rent under
the RPM Lease commencing on the Effective Date of this Assignment.
2. Acceptance of Assignment. Assignee hereby accepts the assignment
of the RPM Lease as set forth above and assumes and agrees to keep, perform
and fulfill all of the duties, covenants, provisions, conditions and
obligations of the landlord under the RPM Lease which shall arise or be
incurred or are related to events occurring from and after the date hereof.
3. Indemnification by Assignor. Assignor indemnifies, defends,
protects and holds harmless Assignee and Assignee's employees, partners,
directors, officers, affiliates, subsidiaries, shareholders, agents and
representatives from any and all liabilities, claims, damages, costs or
expenses (including reasonable attorneys' fees) arising under the RPM as a
result of any obligations and duties of the landlord thereunder arising prior
to the date hereof.
4. Indemnification by Assignee. Assignee indemnifies, defends,
protects and holds harmless Assignor and Assignor's employees, partners,
directors, officers, affiliates, subsidiaries, shareholders, agents and
representatives from any and all liabilities, claims, damages, costs or
expenses (including reasonable attorneys' fees) as a result of any obligations
and duties of the landlord thereunder which shall arise or be incurred or are
related to events occurring from and after the date hereof.
5. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
6. Authority. Each of the parties signing this Assignment hereby
warrants and represents that it has the full legal power, authority and right
to execute, deliver and perform the obligations under this Assignment, that
this Assignment has been duly authorized by all requisite actions on the part
of such warranting party, and that no remaining action or third party action
is required to make this Assignment binding upon such party.
7. Governing Law. This Assignment shall be construed and enforced
in accordance with the laws of the State of California.
8. Attorneys' Fees. If either party commences litigation against the
other for the specific performance of this Assignment, the interpretation of
this Assignment, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree, in the event
of any such commencement of litigation, the prevailing party shall be entitled
to recover from the other party such costs and reasonable attorneys' fees as
may have been incurred. Any attorneys' fees incurred in enforcing any right
of indemnity set forth in this Assignment shall be recoverable and deemed to
be within the scope of such indemnity and/or this attorneys' fees provision.
9. Counterparts. This Assignment may be executed in any number of
counterparts, each of which, when so executed and when delivered, shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the day and year first set forth above.
ASSIGNOR:
OPUS WEST CORPORATION, a Minnesota
corporation
By: __________________________________
Xxxxxx X. Xxxxxx, President
ASSIGNEE:
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation
By: __________________________________
Name: __________________________________
Title:
__________________________________
By: __________________________________
Name: __________________________________
Title:
__________________________________
SCHEDULE 1
LEGAL DESCRIPTION OF THE PROPERTY
[To be completed with final legal description.]
AGREEMENT FOR PAYMENT OF RENT
This Agreement for Payment of Rent ("Agreement"), dated as of November
__, 1997 ("Effective Date"), is made by and between Opus West Corporation, a
Minnesota corporation ("Landlord") and Petco Animal Supplies, Inc., a Delaware
corporation ("Tenant").
RECITALS
1. Landlord and Tenant have entered into that certain Lease Agreement
("New Lease"), dated as of November __, 1997, pursuant to which Tenant agreed
to lease certain real property identified in Exhibit A to the New Lease ("New
Premises").
2. Tenant has an existing lease ("Previous Lease") for that certain
property located at 00000 Xxxxxxx Xxxxxx, Xxxxxx Cucamonga ("Previous
Premises"), pursuant to which Tenant is obligated to pay rent ("Previous Lease
Rent Obligations"). The Previous Lease expires on May 31, 1999 ("Previous
Lease Expiration Date").
3. In connection with the New Lease, Landlord and Tenant desire to
enter into this separate Agreement pursuant to which Landlord shall reimburse
Tenant for certain of Tenant's Previous Lease Rent Obligations, subject to the
following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Landlord and Tenant agree as
follows:
OPERATIVE PROVISIONS
1. Defined Terms. Any capitalized term not otherwise defined herein
shall have the same meaning as set forth in the New Lease.
2. Payment of Rent Obligations. Subject to the conditions precedent
set forth in Section 4 below, commencing on the Delivery Date of the New
Premises (as defined in the New Lease) and continuing until the earlier of (a)
the Previous Lease Expiration Date or (b) the earlier termination of Tenant's
obligation to pay the Previous Rent Obligation under the Previous Lease, on
the first day of each month Landlord shall make monthly payments to Tenant in
the amount of Fifty-Six Thousand Two Hundred One and No/100 Dollars
($56,201.00) ("Landlord's Payment") as an offset to Tenant's Previous Lease
Rent Obligations. Landlord's Payment for any partial month shall be prorated
based on the number of days within such calendar month and paid with the next
Landlord's Payment. In the event that the Landlord fails to timely make any
required Landlord's Payment, Tenant may deliver to Landlord a reminder notice
("Reminder Notice"). If Landlord fails to pay the required Landlord's Payment
within twenty (20) days of receipt of the Reminder Notice, Tenant shall be
entitled to deduct the required Landlord's Payment from Tenants next monthly
installment of Basic Rent under the New Lease.
3. Subletting of Previous Premises.
3.1 Tenant shall use good faith efforts to sublet the Previous
Premises.
3.2 Landlord shall have the right, but not the obligation, to
assist Tenant in subletting the Previous Premises. In the event Landlord
exercises its right to assist Tenant in subletting the Previous Premises,
Tenant shall cooperate in good faith with Landlord in the effort to sublet the
Previous Premises.
3.3 In the event all or any portion of the Previous Premises is
sublet, Landlord and Tenant shall share equally any monies derived as a result
of the sublease.
4. Conditions Precedent. The obligations of Landlord and Tenant
contained in this Agreement shall be contingent upon Tenant's prior acceptance
of the New Premises from Landlord and delivery to Landlord of the Delivery
Date Acknowledgment and Commencement Date Acknowledgment and (b) that there
shall not have occurred any event of default by Tenant under the New Lease or
this Agreement.
5. Miscellaneous Provisions.
5.1 Successors. The covenants and agreements herein contained
shall bind and inure to the benefit of Landlord, its successors and assigns,
and Tenant and its permitted successors and assigns.
5.2 Captions and Interpretation. The captions of this Agreement
are to assist the parties in reading this Agreement and are not a part of the
terms or provisions of this Agreement. Whenever required by the context of
this Agreement, 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 New Premises
with Tenant's expressed or implied permission.
5.3 Entire Agreement. All preliminary and contemporaneous
negotiations are merged into and incorporated in this Agreement. This
Agreement contains the entire agreement between the parties. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon Landlord or Tenant unless reduced to writing and signed by the party to
be charged with their performance.
5.4 Severability. If any covenant, condition, provision, term
or agreement of this Agreement shall, to any extent, be held invalid or
unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Agreement shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Agreement shall be valid and
in force to the fullest extent permitted by law.
5.5 Governing Law. This Agreement shall be governed by the laws
of the State of California.
[Remainder of Page Intentionally Left Blank]
5.6 Counterparts. This Agreement may be executed in
counterparts, which when taken together shall constitute a fully executed
original.
Landlord and Tenant have signed this Agreement on the dates specified
adjacent to their signatures below.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
LEASE AGREEMENT
FORM
OPUS WEST CORPORATION,
a Minnesota corporation ("Landlord")
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation ("Tenant")
Dated: November __, 1997
|| TABLE OF CONTENTS
Page
ARTICLE 1 LEASE OF PREMISES AND LEASE TERM 4
1.1 Premises 4
1.2 Term of Lease 4
1.2.1 Acknowledgment of Commencement Date 4
1.2.2 Early Occupancy 4
1.3 Delivery of Premises 5
1.3.1 Acknowledgment of Delivery Date 5
ARTICLE 2 RENTAL AND OTHER PAYMENTS 5
2.1 Basic Rent 5
2.1.1 Free Rent Periods 5
2.2 Additional Rent 5
2.3 Rental Deposit 6
ARTICLE 3 PAYMENT OF PROPERTY TAXES AND ASSESSMENTS 6
3.1 Payment of Property Taxes 6
3.2 Property Taxes 6
3.3 Tenant's Right to Contest Property Taxes. 6
3.4 Landlord's Right to Contest Property Taxes 7
ARTICLE 4 USE 7
4.1 Permitted Use 7
4.2 Acceptance of Premises 7
4.3 Rules and Regulations 7
4.4 Tenant's Obligations 7
4.5 Condition of Premises 7
ARTICLE 5 HAZARDOUS MATERIALS 8
5.1 Hazardous Materials 8
5.2 Hazardous Materials Laws 8
5.2.1 Federal 8
5.2.2 California 8
5.2.3 Other Laws and Regulations 8
5.2.4 Phase I Environmental Analysis 8
5.3 Compliance with Hazardous Materials Laws 8
5.4 Notice of Actions 9
5.5 Disclosure and Warning Obligations 9
5.6 Tenant Indemnification 9
5.7 Landlord Indemnification 10
5.8 Environmental Audits 10
5.9 Assignment and Subletting 10
ARTICLE 6 SERVICES AND UTILITIES 10
ARTICLE 7 MAINTENANCE, REPAIR AND ALTERATION OF PREMISES 10
7.1 Construction Warranty and Landlord Obligations 10
7.2 Tenant's Maintenance 11
7.3 Tenant's Waiver of Claims Against Landlord 11
ARTICLE 8 CHANGES AND ALTERATIONS 11
8.1 Tenant's Changes and Alterations 11
8.2 Liens 12
8.3 Compliance with Laws 12
ARTICLE 9 RIGHTS RESERVED BY LANDLORD 13
9.1 Landlord's Entry 13
9.2 Landlord's Cure 13
ARTICLE 10 INDEMNITY AND INSURANCE 13
10.1 Tenant's Insurance Obligations 13
10.2 Insurance Coverage 13
10.3 Insurance Provisions 14
10.4 Waiver of Subrogation 14
10.5 Rental Abatement Insurance 14
10.6 Indemnification by Tenant 14
10.7 Indemnification by Landlord 15
ARTICLE 11 ASSIGNMENT AND SUBLETTING 15
11.1 Restriction on Other Transfers 15
11.2 Permitted Transfers 15
11.3 Sublease Requirements. 16
11.4 No Merger 16
11.5 Profits on Transfer 16
11.5.1 Tenant's Profit Statement 16
ARTICLE 12 DAMAGE OR DESTRUCTION 16
12.1 Destruction and Restoration 16
12.2 Application of Insurance Proceeds 16
12.3 Continuance of Tenant's Obligations 16
12.4 Damage or Destruction at End of Lease Term 17
12.5 Waiver of California Statutes 17
ARTICLE 13 CONDEMNATION 17
13.1 Condemnation of Entire Premises 17
13.2 Partial Condemnation/Termination of Lease 17
13.3 Partial Condemnation/Continuation of Lease 17
13.4 Continuance of Obligations 18
13.5 Tenant's Waiver 18
ARTICLE 14 DEFAULTS; REMEDIES 18
14.1 Events of Default 18
14.1.1 Failure to Pay 18
14.1.2 Failure to Perform 18
14.1.3 Other Defaults 18
14.2 Remedies 18
14.3 Right of Landlord to Re-Enter 19
14.4 Cumulative Remedies 19
14.5 Mitigation 19
14.6 Limitation on Remedies 19
14.7 Legal Costs 19
14.8 No Waiver 19
14.9 Waiver by Tenant 20
14.9.1 Delinquent Rental Payments 20
ARTICLE 15 PROTECTION OF CREDITORS 20
15.1 Subordination 20
15.2 Attornment 21
15.3 Estoppel Certificates 21
15.4 Mortgagee Protection Clause 21
15.5 Non-Disturbance 21
ARTICLE 16 TERMINATION OF LEASE 21
16.1 Surrender of Premises 21
16.2 Holding Over 22
ARTICLE 17 RENEWAL OPTIONS 22
17.1 Options to Renew 22
17.1.1 No Event of Default 22
17.1.2 Fair Market Rent 22
17.1.3 Exercise of Renewal Term(s) 22
17.1.4 Determination of Fair Market Rent 22
17.1.5 Arbitration 23
ARTICLE 18 EXPANSION OPTION 23
18.1 Option to Expand 23
18.2 No Event of Default 23
18.3 Exercise of Expansion Option 23
18.4 Expansion Terms 23
18.5 Expansion Space Basic Rent 24
18.6 Free Rent Period 24
18.7 Failure to Exercise Expansion Option 24
ARTICLE 19 MISCELLANEOUS PROVISIONS 24
19.1 Notices 24
19.2 Landlord's Continuing Obligations 25
19.3 Net Lease 25
19.4 Successors 25
19.5 Memorandum of Lease 25
19.6 Captions and Interpretation 25
19.7 Relationship of Parties 25
19.8 Entire Agreement 25
19.9 Severability 25
19.10 Landlord's Limited Liability 25
19.11 Survival 25
19.12 Attorneys' Fees 25
19.13 Broker 26
19.14 Governing Law 26
19.15 Time is of the Essence 26
19.16 Joint and Several Liability 26
19.17 Delivery of Corporate Documents 26
19.18 Tenant's Financial Condition 26
19.19 Provisions are Covenants and Conditions 26
19.20 Business Days 26
19.21 Force Majeure 26
19.22 No Continuous Operation 26
19.23 Waiver of Landlord's Lien 27
19.24 Submission of Lease 27
||
Lease Agreement
Summary of Basic Lease Information
10 Lease Date: November __, 1997
20 Landlord: Opus West Corporation
30 Address of Landlord Opus West Management Corporation
for Payment of Rent: 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
40 Address of Landlord Opus West Corporation
for Notices: 0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Opus U.S. Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With another copy to: Opus West Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
50 Tenant: PETCO Animal Supplies, Inc., a Delaware
corporation
60 Address of Tenant PETCO Animal Supplies, Inc.
for Notices: 0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx, Esq.
Attorney at Law
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
70 Premises The parcel of land situated in the County of
Riverside, State of California, described on
Exhibit "A," together with all Improvements
thereon (as defined in Section 1.1).
80 Landlord's The Landlord's Improvements to be constructed
by Landlord as
Improvements described in the Work Letter (See Exhibit
"B").
90 Lease Term Initial Lease Term: 86 months from the
Commencement Date
Renewal Terms: Two (2) Renewal Terms each
for five (5) years.
100 Rent: Basic Rent:
Lease Months: 1-2:
Monthly Rent for Premises: Basic Rent
is abated for first two (2)
months. Additional Rent is not
abated.
Lease Months: 3-62:
Monthly Rent for Premises: $89,991.00
($.2727 per square foot)
Monthly Rent for Expansion Land:
Prior to Expansion Land
Commencement Date: $4,125 ($.0125
per square foot of the Building)
After Expansion Land Commencement
Date: Calculated pursuant to
Article 18
Lease Months: 63-86 (and Lease months 87-
122 if Extension Election under Article 18
is exercised):
Monthly Rent for the Premises:
$100,782 ($.3054 per square foot)
Monthly Rent for Expansion Land:
Prior to Expansion Land
Commencement Date: $4,125 ($.0125
per square foot of the Building)
After Expansion Land Commencement
Date: Calculated pursuant to
Article 18
Lease Months: 123-146: (if Extension
Election under Article 18 is exercised):
Monthly Rent for the Premises:
$112,860 ($.3420 per square foot)
Monthly Rent for Expansion Land:
Calculated pursuant to Article 18
Renewal Terms:
Calculated pursuant to Article 17.
The Basic Rent is subject to adjustment
pursuant to the provisions of Section 2.1
and 2.1.1 of this Lease.
The term "Basic Rent" as used in this Lease
includes the portion of the rent for the
Expansion Land.
Maximum Rate of Interest: Prime plus two
percent (2%) per annum. For purposes of
this Lease, the term "Prime" shall mean the
rate announced from time to time by Bank of
America, N.A., as its prime or reference
rate. If Bank of America shall cease to use
its prime or reference rate, then Landlord
shall select the rate of another financial
institution to be substituted therefor,
which shall be a major money center
commercial bank.
Late Charge: 2% of the overdue amount.
110 Use: General Office and Warehouse Uses ("Permitted
Use")
120 Deposit: None
130 Rental Deposit: $196,482.00 applicable to third (3rd) and
fourth (4th) month's Basic Rent.
140 Brokers: Landlord's and Tenant's Broker: Xxx &
Associates
150 Exhibits: The following exhibits are attached hereto and
incorporated into this Lease:
Exhibit "A" Legal Description of Land
Exhibit "A-1" Legal Description of Expansion Land
Exhibit "A-2" Expansion Space
Exhibit "B" Work Letter
Schedule 1 to Work Letter Final Plans and Specifications
Exhibit "C" Preliminary Report
Exhibit "D" Commencement Date Acknowledgment
Exhibit "E" Delivery Date Acknowledgment
Exhibit "F" Subordination, Non-Disturbance and Attornment Agreement
The foregoing Basic Terms are hereby incorporated into and made a part
of this Lease. Each reference in this Lease to the Basic Terms shall mean the
information set forth above and shall be construed to incorporate all of the
terms provided under the particular Lease paragraph pertaining to such
information. In the event of a conflict between the Basic Terms and the
Lease, the Lease shall prevail.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
LEASE AGREEMENT
This Lease Agreement (the "Lease"), which includes the Basic Terms (as
hereinafter defined), dated as of November __, 1997 ("Effective Date"), is
made by and between Landlord and Tenant.
ARTICLE 1
LEASE OF PREMISES AND LEASE TERM
1.1 Premises. Landlord, for and in consideration of the rents,
covenants and agreements hereinafter set forth, hereby leases to Tenant and
Tenant hereby leases from Landlord, upon and subject to the terms, covenants
and conditions hereinafter set forth, all that certain parcel of land situated
in the County of Riverside, and State of California delineated on Exhibit "A"
attached hereto and incorporated herein ("Land"), together with those certain
Landlord's Improvements as defined in the Work Letter attached hereto as
Exhibit "B" ("Work Letter") to be constructed by Landlord, including an
approximately three hundred thirty thousand (330,000) square foot building
("Building") and all other improvements, machinery, equipment, fixtures and
other property (except Tenant's trade fixtures), to be installed or located
thereon and all additions, alterations and replacements thereof (collectively
"Improvements"). Herein the Land and the Improvements are referred to
collectively as the "Premises". Tenant acknowledges that this Lease is
subordinate and subject to (a) all liens, encumbrances, deeds of trust,
reservations, covenants, conditions, restrictions and other matters affecting
the Premises ("Title Matters") (i) in effect on the Effective Date of this
Lease as specified in Exhibit "C" attached hereto and incorporated herein
("Preliminary Report") or (ii) approved or deemed approved pursuant to this
Section 1.1, ("Permitted Encumbrances") and (b) any law, regulation, rule,
order or ordinance of any governmental entity applicable to the Premises or
the use or occupancy thereof, in effect on the execution of this Lease or
thereafter promulgated. In the event that, after the Effective Date any new
Title Matters appear of record, such matters shall be subject to the review
and approval of Tenant which approval shall not be withheld so long as the new
Title Matter does not materially and adversely impair the use or occupancy by
Tenant of the Premises for its intended purpose. Tenant shall deliver written
notice to Landlord of its approval or disapproval of such Title Matters within
ten (10) days after delivery by Landlord to Tenant of such new Title Matter.
If Tenant fails to respond within such ten (10) day period and Landlord
delivers a written reminder notice to Tenant and Tenant fails to respond
within five (5) days of the delivery of the written reminder notice, the new
Title Matter shall be deemed approved.
1.2 Term of Lease. The initial term of this Lease ("Initial Term")
shall commence on the Delivery Date (defined in Section 1.3 below) as such
date may be extended until (i) the date of Substantial Completion of the
Landlord's Improvements (as defined in the Work Letter) ("Commencement Date");
provided Tenant shall be permitted by the City to occupy and use the Premises
at such time. The Initial Term shall end on the date which is eighty-six (86)
months after the Commencement Date unless sooner terminated pursuant to the
terms of this Lease. Any reference to the Term of this Lease or similar
reference shall be a reference to the Initial Term together with any renewal
terms of this Lease specified in Article 17. Any reference to Lease Year
shall refer to each consecutive twelve (12) month period during the Term
commencing on the Commencement Date. For purposes of this Lease, a "Lease
Month" shall be defined as those successive calendar month periods beginning
with the Commencement Date and continuing through the Initial Term or any
Renewal Term of this Lease.
1.2.1 Acknowledgment of Commencement Date. Tenant shall, within
ten (10) business days of request therefor by Landlord, execute an
acknowledgment of the Commencement Date prepared by Landlord in the form of
Exhibit "D" attached hereto and incorporated herein ("Commencement Date
Acknowledgment"), provided, however, that the failure of Tenant to execute
such acknowledgment shall not affect any obligation of Tenant hereunder or the
Landlord's determination of the Commencement Date. If the Tenant fails to
execute and deliver such Commencement Date Acknowledgment or provide written
notice of Tenant's disagreement with the contents thereof, then Landlord may
deliver a written reminder notice. If Tenant fails to respond in writing to
the written reminder notice within five (5) days, Landlord may deliver a
second written reminder notice. If Tenant fails to respond in writing to the
second written reminder notice within five (5) days, then Landlord and any
prospective purchaser or encumbrancer may conclusively presume and rely upon
the fact that the Commencement Date is the date specified in the Commencement
Date Acknowledgment.
1.2.2 Early Occupancy. Tenant shall be entitled to early
occupancy of the Premises thirty (30) days prior to the Commencement Date in
accordance with this Section 1.2.2 and the Work Letter. Tenant's early
occupancy of the Premises for installation of furniture, fixtures and
equipment shall be subject to all the terms and conditions of this Lease,
other than the obligation to pay Basic Rent. Early occupancy of the Premises
shall not advance the expiration date of this Lease. Landlord shall have the
right to charge Tenant for any utility costs incurred as a result of Tenant's
early occupancy of the Premises. If during Tenant's early occupancy of the
Premises, Tenant desires to have security for the Premises, Tenant shall
provide such security at no cost to Landlord.
1.3 Delivery of Premises. Landlord shall use its commercially
reasonable efforts to deliver the Premises to Tenant on or before August 1,
1998 ("Delivery Date" with Landlord's Improvements) (as defined in the Work
Letter) Substantially Completed. If Landlord is unable to deliver the
Premises to Tenant by August 1, 1998, then Tenant shall be entitled to receive
from Landlord the amount of Five Thousand Dollars ($5,000) per day for the
first fifteen (15) days beyond August 1, 1998 that Landlord fails to deliver
the Premises (subject to force majeure as provided in Section 19.21) and Ten
Thousand Dollars ($10,000) per day for the fifteen (15) days beyond August 15,
1998 that Landlord fails to deliver the Premises (subject to force majeure as
provided in Section 19.21) and the Delivery Date shall be deemed to have
occurred on such later date. If Landlord fails to deliver the Premises on or
before September 1, 1998 subject to extension for force majeure as provided
in Section 19.21 of this Lease, then Tenant shall, as Tenant's sole and
exclusive remedy, have the option to terminate this Lease by delivering
written notice ("Termination Note") to Landlord. If Tenant accepts delivery
of the Premises, then Tenant shall be deemed to have waived its right to
terminate the Lease as provided for under this Section 1.3. Notwithstanding
anything herein to the contrary, in the event Landlord tenders possession of
the Premises to Tenant in a substantially completed condition during that
period of time from October 1, 1998 through and including November 30, 1998
(the "Non-Acceptance Period"), then, Tenant shall have the right not to accept
possession of the Premises during such period by notifying Landlord, within
five (5) days of the tender of possession of the Premises to Tenant, in which
case the Commencement Date shall not occur until December 1, 1998.
1.3.1 Acknowledgment of Delivery Date. Tenant shall, within ten
(10) business days of request therefor by Landlord, execute an acknowledgment
of the Delivery Date prepared by Landlord in the form of Exhibit "E" attached
hereto and incorporated herein ("Delivery Date Acknowledgment"), provided,
however, that the failure of Tenant to execute such acknowledgment shall not
affect any obligation of Tenant hereunder or the Landlord's determination of
the Delivery Date. If the Tenant fails to execute and deliver such
Commencement Date Acknowledgment or provide written notice of Tenant's
disagreement with the contents thereof, then Landlord may deliver a reminder
notice. If Tenant fails to respond to the reminder notice within five (5)
days, Landlord may deliver a second reminder notice. If Tenant fails to
respond to the second reminder notice within five (5) days, then Landlord and
any prospective purchaser or encumbrancer may conclusively presume and rely
upon the following facts: (i) the Delivery Date is the date specified in the
Delivery Date Acknowledgment and (ii) that the Premises were in acceptable
condition and were delivered in compliance with all of the requirements of
Work Letter.
ARTICLE 2
RENTAL AND OTHER PAYMENTS
2.1 Basic Rent. In consideration of the leasing of the Premises and
the construction of the Landlord's Improvements described in the Work Letter,
Tenant covenants to pay Landlord in advance, on the first day of each and
every calendar month during the Term, at the address of Landlord as specified
in Item 3 of the Basic Terms, or at such other place as Landlord may from time
to time designate in writing, a rental for the Initial Term of this Lease
calculated based upon the amounts specified in Item 10 of the Basic Terms
("Basic Rent"). Upon Substantial Completion (as defined in the Work Letter)
of the Landlord's Improvements, Landlord shall deliver to Tenant a certificate
from Landlord's architect certifying the square footage of the Premises
("Square Footage Certification") together with a calculation of the Basic
Rent. For purposes of calculating the Basic Rent, the Premises shall be
measured from the face of the exterior walls. Tenant shall have the right to
independently confirm such square footage by an architect certified in the
state of California. In the event Tenant's confirmation of such square
footage differs from the calculation provided by Landlord, Tenant shall
provide notice to Landlord within fifteen (15) days after Landlord's delivery
of its Square Footage Certification. Landlord and Tenant shall have fifteen
(15) days after delivery of Tenant's notice to reach agreement on the final
measurement of the square footage of the Premises. In the event Landlord and
Tenant fail to reach agreement on the square footage of the Premises within
such fifteen-day period, then Landlord's architect and Tenant's architect
shall together select a third architect whose determination shall be binding
on the parties. Such selection shall be made within fifteen (15) days after
Landlord and Tenant determine that they cannot reach agreement on the square
footage of the Premises. In the event Landlord's architect and Tenant's
architect cannot reach agreement on a third architect, then the matter shall
be referred to the local office of the American Institute of Architects who
shall make such selection. The third architect so selected shall then make
a final determination of the square footage within fifteen (15) days of such
architect's selection and Landlord shall revise the Square Footage
Certification to reflect this final determination. The parties shall each
bear the costs of their own architect and shall share the costs equally of any
third architect. If the Square Footage Certification differs from the
approximate square footage of the Building set forth in Section 1.1 above,
then the Basic Rent shall be adjusted to reflect the square footage set forth
in the Square Footage Certification.
2.1.1 Free Rent Periods. During the first two (2) calendar
months of the Initial Term, Basic Rent shall be abated ("Free Rent Period").
2.2 Additional Rent. Except as otherwise specifically provided in
Section 7.1 of this Lease, the Basic Rent shall be net to Landlord so that
this Lease shall yield, net to Landlord, the Basic Rent payable under this
Lease for each year of the Term of this Lease and that all charges payable by
Tenant under this Lease for Property Taxes, insurance premiums, utility
charges, maintenance, repair and replacement expenses, all expenses relating
to compliance with laws, and all other costs, fees, charges, expenses,
reimbursements and obligations of every kind and nature whatsoever relating
to the operation and use of the Premises, and/or the Expansion Land (defined
below) (whether or not Tenant has exercised the Expansion Land Option) which
may arise or become due during the Term or by reason of events occurring
during the Term of this Lease or which relate to the performance by Tenant of
all the terms, covenants, conditions and agreements to be performed, paid or
observed by Tenant hereunder shall be paid or discharged by Tenant, at
Tenant's sole cost and expense. Notwithstanding anything to the contrary,
Tenant shall not be responsible for any property management fees or earthquake
insurance premiums paid by Landlord during the Term of this Lease. Except as
otherwise provided in Section 7.1 or 14.9 of this Lease, all payments of Basic
Rent and Additional Rent shall be payable without previous demand therefor and
without any right of setoff or deduction whatsoever. All charges payable by
Tenant other than Basic Rent, however denoted, are called "Additional Rent."
Unless this Lease provides otherwise, all Additional Rent shall be paid with
the next installment of Basic Rent falling due. Rent for any partial month
shall be prorated on the basis of the number of days within such calendar
month and paid within ten (10) days of the later of (a) invoice from Landlord
or (b) the Commencement Date. Basic Rent and Additional Rent are sometimes
collectively referred to as "Rent" or "rent."
2.3 Rental Deposit. Upon execution of this Lease, Tenant shall
deposit with Landlord the sum specified in the Basic Lease Provisions as the
Rental Deposit. The Rental Deposit shall be held by Landlord without
obligation or liability for payment of interest thereon as security for the
faithful payment of Basic Rent by Tenant, but shall be applicable to the third
(3rd) and fourth (4th) month's Basic Rent payments without offset or deduction
therefrom.
ARTICLE 3
PAYMENT OF PROPERTY TAXES AND ASSESSMENTS
3.1 Payment of Property Taxes. Provided Landlord delivers the
Property Tax xxxx to Tenant (if delivered to Landlord) promptly upon receipt
thereof, but no later than twenty (20) days prior to the day on which any
fine, penalty, interest or cost may be added thereto for the non-payment
thereof, Tenant covenants and agrees to pay during the Term of this Lease, as
Additional Rent, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof, all Property Taxes (as defined in Section
3.2 below), which become due and payable during the Term of this Lease.
Within ten (10) days of written request from Landlord, Tenant shall furnish
Landlord with satisfactory evidence that the Property Taxes have been paid.
If any Property Taxes shall cover any period of time prior to or after the
term of this Lease, Tenant's share of such Property Taxes shall be equitably
prorated to cover only the period of time within the tax fiscal year during
which this Lease shall be in effect.
3.2 Property Taxes. "Property Taxes" shall include general real
property and improvement taxes, any form of assessment, special assessment or
reassessment, license, permit or inspection fee or tax, commercial rental tax
(but only to the extent the same is in lieu of some existing Property Taxes),
levy, charge, penalty or similar imposition, whatsoever or at all imposed by
any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement or special assessment district thereof, or any
agency or public body, and all other charges or burdens of whatsoever kind and
nature incurred in the use, occupancy, ownership, operation, leasing or
possession of the Premises, and/or the Expansion Land (whether or not Tenant
has exercised the Expansion Land Option) without particularizing by any known
name or by whatever name hereafter called, and whether any of the foregoing
be general or special, ordinary or extraordinary, foreseen or unforeseen.
Property Taxes shall include, without limitation, the following: (i) any tax
imposed upon the transaction or based upon a reassessment of the Premises,
and/or the Expansion Land (whether or not Tenant has exercised the Expansion
Land Option) due to a change in ownership or transfer of all or part of
Landlord's interest in the Premises the Land, and/or the Expansion Land
(whether or not Tenant has exercised the Expansion Land Option); (ii) any
assessments, taxes, fees, levies or charges in addition to, or in
substitution, partially or totally, for any items previously included within
the definition of Real Property Taxes; (iii) any tax or charge for fire
protection, street lighting streets, sidewalks, road maintenance, refuse,
sewer, water or other services provided to the Premises, and/or the Expansion
Land (whether or not Tenant has exercised the Expansion Land Option) by any
governmental agency; and (iv) capital levy, sales or use tax, gross receipts
tax or other tax on the rents received therefrom, or a franchise tax, or an
assessment, levy or charge measured by or based in whole or in part upon such
rents or value, now or hereafter imposed. Property Taxes do not, however,
include Landlord's state or federal income, franchise, estate or inheritance
taxes.
3.3 Tenant's Right to Contest Property Taxes. Tenant shall have the
right at its own expense, and upon prior notice to Landlord, to contest the
amount or validity, in whole or in part, of any Property Taxes by appropriate
proceedings diligently conducted in good faith, but only after payment of such
Property Taxes, unless such payment, or a payment thereof under protest, would
operate as a bar to such contest or interfere materially with the prosecution
thereof, in which event, notwithstanding the provisions of Section 3.1 hereof,
Tenant may defer payment of such Property Taxes if neither the Premises,
and/or the Expansion Land (whether or not Tenant has exercised the Expansion
Land Option)] nor any portion thereof would, by reason of such deferment, be
in danger of being forfeited or lost and so long as such deferment will not
otherwise materially and adversely impact the Premises, and/or the Expansion
Land (whether or not Tenant has exercised the Expansion Land Option) or impair
the value of the Premises, and/or the Expansion Land (whether or not Tenant
has exercised the Expansion Land Option). Upon the termination of any such
proceedings, Tenant shall pay the amount of such Property Taxes as finally
determined in such proceedings, with any costs, fees, including attorney's
fees, interest, penalties, fines and other liability in connection therewith.
Landlord shall not be required to join in any proceedings referred to in this
Section unless the provisions of any law, rule or regulation at the time in
effect shall require that such proceedings be brought by or in the name of
Landlord, in which event Landlord shall join in such proceedings. Landlord
shall not ultimately be subject to any liability for the payment of any fees,
including attorney's fees, costs and expenses in connection with such
proceedings and Tenant shall reimburse Landlord for all such fees (including
reasonable attorney's fees), costs and expenses on demand.
3.4 Landlord's Right to Contest Property Taxes. In addition to the
right of Tenant under Section 3.3 to contest the amount or validity of
Property Taxes, Landlord shall also have the right, but not the obligation,
to contest the amount or validity, in whole or in part, of any Property Taxes
not contested by Tenant. Any such contests by Landlord shall be at Landlord's
sole expense; provided, however, that if the amounts payable by Tenant for
Property Taxes are reduced (or if a proposed increase in such amounts is
avoided or reduced) by reason of Landlord's contest of Property Taxes, Tenant
shall reimburse Landlord for the costs incurred by Landlord in contesting
Property Taxes, but such reimbursements shall not be in excess of the amount
saved by Tenant by reason of Landlord's actions in contesting such Property
Taxes.
ARTICLE 4
USE
4.1 Permitted Use. Tenant may use the Premises only for the Permitted
Use specified in Item 11 of the Basic Terms. Tenant shall not use or occupy
the same, or knowingly permit them to be used or occupied, contrary to any
statute, governmental, quasi-governmental or administrative rule, order,
ordinance, requirement or regulation applicable thereto ("Regulatory
Requirement"), or in any manner which would violate any certificate of
occupancy affecting the same, or which would make void or voidable any
insurance then in force with respect thereto or which would cause structural
injury to the Improvements or cause the value or usefulness of the Premises,
or any portion thereof, substantially to diminish (reasonable wear and tear
excepted), or which would constitute a public or private nuisance or waste and
Tenant agrees that it will promptly, upon discovery of any such use, take all
necessary steps to compel the discontinuance of such use. Landlord represents
that the Premises are zoned for the Permitted Use.
4.2 Acceptance of Premises. Tenant shall accept delivery of the
Premises with Landlord's Improvements, as set forth on Exhibit "B"
substantially completed. Within thirty (30) days of Substantial Completion
(as defined below) of Landlord's Improvements, Landlord and Tenant shall
provide a "punchlist" identifying the corrective work of the type commonly
found on an architectural punchlist with respect to Landlord's Improvements,
which list shall be based on whether such items were required by the approved
Final Plans and Specifications. Within ten (10) Business Days after delivery
of the punchlist, Landlord shall commence the correction of punchlist items
and diligently pursue such work to completion. The punchlist procedure to be
followed by Landlord and Tenant shall in no way limit Tenant's obligation to
occupy the Premises under the Lease nor shall it in any way excuse Tenant's
obligation to pay Rent as provided under the Lease unless such punch list
items preclude Tenant from occupying the Premises as reasonably determined by
Tenant. Nothing in this Section 4.2 shall be deemed to diminish any
obligation of Landlord under Section 7.1. Tenant acknowledges, that except
as specifically provided in this Lease and the Work Letter, neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the Premises or the Building or with respect to the suitability or fitness
of either for the conduct of Tenant's business or for any other purpose.
Tenant shall comply with the Permitted Encumbrances.
4.3 Rules and Regulations. Tenant shall comply with all rules and
regulations adopted by Landlord from time to time for the Project; provided
that such rules and regulations are applied in a non-discriminatory manner,
and do not adversely affect Tenant's hours of operation or otherwise adversely
affect the operation of Tenant's business. In the event of any conflict
between such rules and regulations and the provisions of this Lease, this
Lease shall prevail.
4.4 Tenant's Obligations. Tenant shall obtain and pay for all
permits, required for Tenant's occupancy of the Premises and shall promptly
take all substantial and non-substantial actions necessary to comply with all
applicable Regulatory Requirements regulating the particular type of use by
Tenant of the Premises, including, without limitation, the Occupational Health
and Safety Act and the Americans with Disabilities Act
4.5 Condition of Premises. Landlord shall deliver the Premises to
Tenant clean and free of debris on the Commencement Date, with Landlord's
Improvements Substantially Completed as provided in the Work Letter and,
except as disclosed in the Phase 1 Report, (defined below), the improvements
constructed by Landlord as Landlord's Improvements shall, as of the
Commencement Date, not contain Hazardous Materials (defined below) in
violation of any of the Hazardous Materials Laws (defined below).
ARTICLE 5
HAZARDOUS MATERIALS
5.1 Hazardous Materials. The term "Hazardous Material(s)" shall mean
any toxic or hazardous substance, material or waste or any pollutant or
contaminant or infectious or radioactive material, including but not limited
to those substances, materials or wastes regulated now or in the future under
any of the statutes or regulations listed in Section 5.2, and any and all of
those substances included within the definitions of "hazardous substances,"
"hazardous materials," "hazardous waste," "hazardous chemical substance or
mixture," "imminently hazardous chemical substance or mixture," "toxic
substances," "hazardous air pollutant," "toxic pollutant," or "solid waste"
in the statutes or regulations in Section 5.2. Hazardous Materials shall also
mean any and all other similar terms defined in other federal, state and local
laws, statutes, regulations, orders or rules, and materials and wastes which
are, or in the future become, regulated under applicable local, state or
federal law for the protection of health or the environment, or which are
classified as hazardous or toxic substances, materials or wastes, pollutants
or contaminants, as defined, listed or regulated by any federal, state or
local law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) oil or any petroleum products or fractions
thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable
explosives, (vi) urea formaldehyde and (vii) radioactive materials and waste,
and (viii) infectious waste.
5.2 Hazardous Materials Laws. The term "Hazardous Materials Law(s)"
shall mean any federal, state or local laws, ordinances, codes, statutes,
regulations, administrative rules, policies and orders, and other authority,
existing now or in the future, which classify, regulate, list or define
hazardous substances, materials, wastes contaminants, pollutants and/or the
Hazardous Materials, including without limitation the following statutes and
regulations, and any other legal authority, regulations, or policies relating
to or implementing such statutes and regulations:
5.2.1 Federal. Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), as amended
by the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), 42
U.S.C. ' 9601 et seq.; Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. ' 6901 et seq.; Clean Water Act ("CWA"), 33 U.S.C. ' 1251
et seq.; Clean Air Act ("CAA"), 42 U.S.C. ' 78401 et seq.; Toxic Substances
Control Act ("TSCA"), 15 U.S.C. ' 2601 et seq.; The Refuse Act of 1899, 33
U.S.C. ' 407; Occupational Safety and Health Act ("OSHA"), 29 U.S.C. ' 651 et
seq.; Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.;
United States Department of Transportation Table (49 CFR 172.101 and
amendments thereto) and the Environmental Protection Agency Table (40 CFR Part
302 and amendments thereto);
5.2.2 California. Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance
Account Act ("California Superfund"), Cal. Health & Safety Code ' 25300 et
seq.; California Hazardous Waste Control Act, Cal. Health & Safety Code
Sections 25100 et seq.; Xxxxxx-Cologne Water Quality Control Act ("Xxxxxx-
Cologne Act"), Cal. Water Code ' 13000 et seq.; Hazardous Waste Disposal Land
Use Law, Cal. Health & Safety Code ' 25220 et seq.; Safe Drinking Water and
Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety Code
' 25249.5 et seq.; Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety Code ' 25280 et seq.; California Hazardous Substance Act, Cal.
Health & Safety Code ' 28740 et seq.; Air Resources Law, Cal. Health & Safety
Code ' 39000 et seq.; Hazardous Materials Release Response Plans and
Inventory, Cal. Health & Safety Code '' 25500-25541; Toxic Pits Cleanup Act
of 1984 ("TCPA"), Cal. Health & Safety Code '' 25208-25208.17;
5.2.3 Other Laws and Regulations. All other regulations
promulgated pursuant to said foregoing laws or any amendments or replacement
thereof, provided such amendments or replacements shall in no way limit the
original scope and/or definition of Hazardous Materials defined herein as of
the execution date of this Lease.
5.2.4 Phase I Environmental Analysis. Landlord has delivered to
Tenant two (2) Phase I Environmental Analysis Reports ("Phase 1 Reports")
covering the Premises, and the Expansion Land, respectively and Tenant
acknowledges that this shall be deemed satisfaction of any obligation on the
part of Landlord to disclose any and all Hazardous Materials on or relating
to the Premises, and the Expansion Land as required hereunder or by any
Hazardous Materials Laws.
5.3 Compliance with Hazardous Materials Laws. Tenant shall not cause
or knowingly and intentionally permit any Hazardous Materials to be brought
upon, kept, or used in connection with the Premises or by Tenant, its agents,
employees or contractors in a manner or for a purpose prohibited by or which
could result in liability under any applicable law, regulation, rule or
ordinance, including, without limitation, the Hazardous Materials Laws.
Tenant shall, at its own expense, at all times and in all respects comply with
all Hazardous Materials Laws relating to the industrial hygiene, environmental
protection or the use, analysis, generation, manufacture, storage, presence,
disposal or transportation of any Hazardous Materials brought thereon by
Tenant, its agents, employees, or contractors. Tenant shall, at its own
expense, procure, maintain in effect and comply with all conditions of any and
all permits, licenses and other governmental and regulatory approvals relating
to Hazardous Materials that are brought upon, knowingly and intentionally
permitted to be brought upon, kept, or used in connection with the Premises
and/or the Expansion Land by Tenant or Tenant's agents, employees, or
contractors ("Tenant's Agents") and Tenant shall cause any and all said
Hazardous Materials to be removed from the Premises and/or the Expansion Land
and transported in accordance with and in compliance with all Hazardous
Materials Laws. Tenant shall in all respects, handle, treat, deal with and
manage any and all Hazardous Materials that are brought upon, knowingly and
intentionally permitted to be brought upon, kept, or used in connection with
the Premises by Tenant or Tenant's Agents, in complete conformity with all
applicable Hazardous Materials Laws and prudent industry practices regarding
the management of such Hazardous Materials. Upon expiration or earlier
termination of this Lease, Tenant shall at its own expense, cause all
Hazardous Materials (to the extent such Hazardous Materials are generated,
stored, released or disposed of during the Term of this Lease by Tenant or
Tenant's Agents) to be removed from the Premises and/or the Expansion Land
and transported for use, storage or disposal in accordance and in compliance
with all applicable Hazardous Materials Laws. Tenant shall not take any
remedial action in response to the presence of any Hazardous Materials in, on,
about or under the Premises and/or the Expansion Land or in any Improvements
situated on the Land and/or the Expansion Land, nor enter into any settlement
agreement, consent, decree or other compromise in respect to any claims
relating to any way connected with the Premises or the Improvements on the
Land and/or the Expansion Land without first notifying Landlord of Tenant's
intention to do so and affording Landlord ample opportunity to appear,
intervene or otherwise appropriately assert and protect Landlord's interest
with respect thereto.
5.4 Notice of Actions. Tenant shall immediately notify Landlord in
writing of (a) any enforcement, clean-up, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any
Hazardous Materials Laws; (b) any written claim made or threatened by any
person against Landlord, or the Premises, relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials; and (c) any written reports made to any
environmental agency arising out of or in connection with any Hazardous
Materials in, on or about the Premises or with respect to any Hazardous
Materials removed from the Premises, including, any complaints, notices,
warnings, reports or asserted violations in connection therewith. Tenant
shall also provide to Landlord, as promptly as possible, and in any event
within five (5) business days after Tenant first receives or sends the same,
with copies of all written claims, reports, complaints, notices, warnings or
asserted violations relating in any way to the Premises or Tenant's use
thereof. Upon written request of Landlord (to enable Landlord to defend
itself from any claim or charge related to any Hazardous Materials Law),
Tenant shall promptly deliver to Landlord notices of hazardous waste manifests
reflecting the legal and proper disposal of all such Hazardous Materials
removed or to be removed from the Premises and/or the Expansion Land. All
such manifests shall list the Tenant or its agent as a responsible party only
if such Hazardous Materials were caused or knowingly and intentionally
permitted to be brought upon the Premises or Expansion Land by Tenant, its
agent, employees, or contractors, and in such case shall not attribute
responsibility for any such Hazardous Materials to Landlord.
5.5 Disclosure and Warning Obligations. Tenant shall also comply with
all laws, ordinances and regulations regarding warning obligations with
respect to the presence or danger of Hazardous Materials or as otherwise may
be required by law (to the extent Tenant has knowledge thereof). Tenant
acknowledges and agrees that it will promptly notify Landlord prior to
reporting to any governmental or quasi-governmental agencies any matters
relating to Hazardous Materials and Landlord shall have the right to review
such reports. So long as Tenant will not be in violation of any laws
requiring Tenant to make such reports, Landlord shall have the right to assume
control over the making of such reports to the applicable governmental or
quasi-governmental agencies. Tenant further agrees to cooperate with Landlord
in complying with all Hazardous Materials Laws regarding the disclosure of,
the presence or danger of Hazardous Materials, including, with limitation, all
notices or other requirements under California Health and Safety Code Section
25919 et seq., and 25249.5 et seq. and California Code of Regulations Section
12000 et seq. Notwithstanding the foregoing, Tenant shall prior to delivering
any notices required by this Section 5.5 to any governmental entity or agency,
deliver written notice to Landlord of the same so as to afford Landlord
opportunity to take over such obligation if Landlord so desires.
5.6 Tenant Indemnification. Tenant shall indemnify, defend (with
counsel reasonably acceptable to Landlord), protect and hold Landlord and each
of Landlord's officers, directors, partners, employees, agents, attorneys,
successors and assigns (collectively "Landlord's Indemnitees") free and
harmless from and against any and all claims, liabilities, damages, costs,
penalties, forfeitures, losses or expenses (including reasonable attorneys'
fees) for death or injury to any person or damage to any property whatsoever
(including water tables and atmosphere) ("Claims") to the extent arising or
resulting in whole or in part from the presence or discharge of Hazardous
Materials to the extent such Hazardous Materials are in excess of legally
permissible amounts under the Hazardous Materials Laws by Tenant, Tenant's
agents, employees, or contractors in, on, under, upon or from the Premises
and/or the Expansion Land or the Improvements located thereon or from the
transportation or disposal of Hazardous Materials to or from the Premises
and/or the Expansion Land to the extent caused by Tenant.
5.7 Landlord Indemnification. Landlord shall indemnify, defend (with
legal counsel reasonable acceptable to Tenant) and hold Tenant and Tenant's
officers, directors, partners, employees, agents, attorneys, successors and
assigns (collectively, "Tenant's Indemnitees") free and harmless from and
against any and all Claims to the extent arising or resulting in whole or in
part from the presence or discharge of Hazardous Materials to the extent such
Hazardous Materials are in excess of legally permissible amounts under the
Hazardous Materials Laws by Landlord, or its employees, agents or contractors
in, on, under, upon or for the Premises and/or the Expansion Land or the
Improvements thereon or from the transportation or disposal of Hazardous
Materials by Landlord or its employees, agents, or contractors. Landlord's
obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary repairs,
clean-up or detoxification or decontamination of the Premises and/or the
Expansion Land or the Improvements, and the presence and implementation of any
closure, remedial action or other required plans in connection therewith, and
shall survive the expiration of or early termination of the term of this Lease
and any costs and fees incurred in the enforcement of the indemnity action.
In addition, with respect to any Hazardous Materials that are in excess of
the legally permissible amounts under the Hazardous Materials Laws that were
on the Land and/or the Expansion Land at the time that the Phase 1 Reports
were issued and which were not disclosed by the Phase 1 Reports ("Pre-existing
Hazardous Materials"), Landlord agrees to remediate such Pre-existing
Hazardous Materials if, as and when required by a governmental agency to the
extent required by such governmental agency. Landlord further agrees to
indemnify and hold Tenant harmless from any fines, penalties or other fees
imposed against Tenant by such governmental agency as a result of such Pre-
exiting Hazardous Materials. Notwithstanding the foregoing, nothing in this
Section 5.7 shall be deemed to impose any obligation or liability on Landlord
for remediation, indemnification or payment of any fines, penalties or other
fees if the same would not have been imposed but for some act or omission of
Tenant.
5.8 Environmental Audits. Landlord shall have the right, at any time
during the term of this Lease, to conduct an environmental audit. If Landlord
conducts such an audit, it shall be at Landlord's sole cost and expense,
except that if said audit discloses the presence of Hazardous Materials on the
Premises, or the Expansion Land in violation of Tenant's obligations under
this Article 5, then the cost of such audit shall be borne by Tenant. If the
audit confirms the presence of Hazardous Materials in on or under the
Premises, or the Expansion Land or the groundwater thereunder in violation of
Tenant obligations under this Article 5, Landlord shall have the right to
require Tenant to immediately commence all necessary remediation, abatement,
removal and cleanup actions to return the Premises, and/or the Expansion Land
and any other property of whatever nature to their condition existing prior
to the appearance of Hazardous Materials. Any plan of remediation, abatement,
removal and cleanup shall be subject to the prior approval of Landlord, in its
sole discretion. Except as specified above, Tenant shall not perform or cause
to be performed, any Hazardous Materials surveys, studies, reports or
inspections, relating to the Premises, and/or the Expansion Land without
obtaining Landlord's advance written consent.
5.9 Assignment and Subletting. If (i) any anticipated use of the
Premises by any proposed assignee or sublessee involves the generation,
storage, use, treatment or disposal of Hazardous Materials in a manner or for
a purpose prohibited by any governmental agency or authority, or (ii) the
proposed assignee or sublessee is subject to an enforcement order issued by
any governmental activity in connection with the use, disposal, or storage of
Hazardous Materials, it shall not be unreasonable for Landlord to withhold its
consent to an assignment or subletting to such proposed assignee or sublessee.
ARTICLE 6
SERVICES AND UTILITIES
During the Term of this Lease, Tenant will pay, when due, all charges
of every nature, kind or description (including, without limitation, charges
imposed by any utility company as a condition precedent to furnishing or
continuing to furnish utilities or services to the Premises) for utilities
furnished to the Premises or chargeable against the Premises, including all
charges for water, sewage, heat, gas, light, garbage, electricity, telephone,
steam, power, or other public or private utility services and any charges or
fees for present or future water or sewer capacity to serve the Premises, any
charges for the underground installation of gas or other utilities or
services, and other charges relating to the extension of or change in the
facilities necessary, and requested by Tenant, to provide the Premises with
adequate utility services. Notwithstanding the foregoing, nothing contained
herein shall be deemed to limit Landlord's obligations to complete Landlord's
Improvements pursuant to the terms of the Work Letter.
ARTICLE 7
MAINTENANCE, REPAIR AND ALTERATION OF PREMISES
7.1 Construction Warranty and Landlord Obligations. Except to the
extent caused by Tenant's specific use of the Premises or the negligent acts
or intentional misconduct of Tenant, its agents, employees, or contractors,
or as otherwise provided under this Lease, Landlord shall repair and maintain
in good order, condition and repair the foundation, exterior walls and
structural portions of the roof of the Building ("Structural Portions of the
Building"). However, Landlord shall not be obligated to maintain or repair
windows, doors, plate glass, surfaces of exterior walls, or the membrane or
other nonstructural elements of the roof and the same shall not be deemed to
be included within the definition of the Structural Portions of the Premises
Building. Landlord warrants, as Landlord's sole and exclusive warranty
concerning the Landlord's Improvements and the Improvements (including the
HVAC System), the Landlord's Improvements and the Improvements (including the
HVAC System) against defective workmanship and/or materials for a period of
one (1) year from the date of Substantial Completion (as defined in the Work
Letter) of Landlord's Improvements and Landlord agrees, at its sole cost and
expense, to repair or replace any defective item occasioned by poor
workmanship and/or materials during said one-year period, and performance of
such one-year warranty shall be Landlord's sole and exclusive obligation with
respect to defective workmanship and/or materials, and Tenant's rights to
enforce such one-year warranty shall be Tenant's sole and exclusive remedy
with respect to such defective workmanship and/or materials in limitation of
any contract, warranty or other rights, whether express or implied, that
Tenant may otherwise have under applicable law. Landlord covenants that it
will obtain, as part of the costs of the Landlord's Improvements, a ten (10)
year roof warranty. Landlord shall assign to Tenant, to the extent permitted
under any such warranties provided to Landlord, on a non-exclusive basis, all
rights Landlord may have under any warranties provided by contractors or
subcontractors. From and after the expiration of the one-year warranty of
Landlord against defective workmanship and materials, Landlord agrees to
cooperate with Tenant in the enforcement by Tenant, at Tenant's sole cost and
expense, of any express warranties or guaranties of workmanship or materials
given by subcontractors or materialmen or any service contracts that guarantee
or warrant against defective workmanship or materials or provide service or
repair for a period of time in excess of the one-year period described above.
Notwithstanding anything to the contrary, Landlord, at Landlord's sole cost
and expense, shall be solely responsible for repairing latent structural
defects in the Structural Portions of the Building during the Initial Term and
any Renewal Terms (provided that if Tenant has penetrated, attached any item
to, or otherwise damaged the same, Landlord shall not be responsible for, nor
shall Landlord remedy, any defects attributable to such actions or
conditions). During the Initial Term, Tenant shall be responsible for annual
roof inspections and clean out of gutters and down spouts and Landlord shall
be responsible for all other related maintenance of the roof structure
(exclusive of the roof membrane) including all roof leaks during the first
five (5) years of Initial Lease Term (provided that if Tenant has penetrated,
attached any item to, or otherwise damaged the same, Landlord shall not be
responsible for, nor shall Landlord remedy, any defects attributable to such
actions or conditions). Thereafter, Tenant's exposure shall be capped at Five
Thousand Dollars ($5,000.00) annually inclusive of inspections and clean out
of gutters and down spouts.
7.2 Tenant's Maintenance. Except as otherwise expressly provided in
this Lease, Tenant, at its sole cost and expense, throughout the Term of this
Lease, including the warranty period specified in Section 7.1 above, whether
Tenant is occupying or has vacated the Premises), shall take good care of the
Premises (including the Landlord's Improvements any improvements hereafter
erected or installed on the Land), and shall keep the same in at least the
same order, condition and repair (including interior repainting and
refurnishing, as needed), as when received and shall make and perform all
routine maintenance thereof and all necessary repairs thereto, interior and
exterior, structural and nonstructural, ordinary and extraordinary, foreseen
and unforeseen, of every nature, kind and description. When used in this
Article 7, "repairs" shall include all necessary replacements, renewals,
alterations, additions and betterments, interior and exterior, structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen, of every
nature, kind and description, including, without limitation, any repairs,
replacements, renewals, alterations and additions required by any governmental
law, ordinance or regulations now or hereafter enacted relating to the
Premises. All repairs made by Tenant shall be at least equal in quality,
workmanship and cost to the original work and shall be made by Tenant in
accordance with all laws, ordinances and regulations whether heretofore or
hereafter enacted.
7.3 Tenant's Waiver of Claims Against Landlord. Except as otherwise
specifically provided in this Lease or the Work Letter or this Lease, Landlord
shall not be required to furnish any services or facilities or to make any
repairs or alterations in, about or to the Premises or any improvements
hereafter erected thereon.
ARTICLE 8
CHANGES AND ALTERATIONS
8.1 Tenant's Changes and Alterations. Tenant shall not make any
alterations, additions or improvements ("Alterations") to the Property,
without Landlord's prior written consent, which shall not be unreasonably
withheld, except for non structural alterations in the interior of the
Building that do not affect the Structural Portions of the Building or
exterior of the Building ("Permitted Alterations"). All Alterations shall be
done promptly and in a good and workmanlike manner and in compliance with all
laws, ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments and appropriate departments, commissions,
boards and officers thereof, and in accordance with the orders, rules and
regulations of the Board of Fire Underwriters where the Premises are located,
or any other body exercising similar functions. All such Alterations which
affect the Structural Portions of the Building or the exterior of the Building
("Structural or Exterior Alterations") shall be performed by a contractor
approved by Landlord, in its reasonable discretion. If required by Landlord,
Tenant shall provide demolition and/or lien and completion bonds in form and
amount satisfactory to Landlord in connection with any Structural or Exterior
Alterations. Tenant shall promptly remove any Alterations constructed in
violation of this Section upon Landlord's written request. All permanent
Alterations (i.e. other than Tenant's movable trade fixtures and equipment),
including the Permitted Alterations made or installed by Tenant shall
immediately, upon completion or installation thereof, become the property of
Landlord without payment therefor by Landlord, and shall be surrendered to
Landlord on the expiration of the Term of this Lease. Prior to commencement
of the Alterations, Tenant shall deliver Builder's All Risk Insurance, in an
amount acceptable to Landlord, in conformance with the requirements of Article
10 of this Lease. Notwithstanding anything to the contrary set forth herein,
Tenant agrees, at Tenant's sole cost and expense, and within ten (10) days
request therefor by Landlord at the end of the Lease Term or earlier
termination thereof, to remove any of the following types of Permitted
Alterations and repair the Premises where such Permitted Alterations were
situated to the same or better condition than existed prior to Tenant
installation of said Permitted Alterations: racking, Permitted Alterations to
create manufacturing and/or office space, drop ceilings, mezzanines, and
demising walls. To the extent Tenant removes any other Alterations, Tenant
shall also, within ten (10) days of removal thereof, restore the Premises to
the condition that existed prior to Tenant's installation of such Alterations.
8.2 Liens. Tenant shall keep the Premises free from any mechanics',
materialmen's, designer's or other liens arising out of any work performed,
materials furnished or obligations incurred by or for Tenant or any person or
entity claiming by, through or under Tenant. Landlord shall have the right
at all times to post and keep posted on the Premises any notices which it
deems necessary for protection from such liens. If any such liens are filed
and are not released of record by payment or posting of a proper bond within
thirty (30) days after such filing, Landlord may, without waiving its rights
and remedies based on such breach by Tenant and without releasing Tenant from
any obligations hereunder, cause such liens to be released by any means it
shall deem proper, including payment of the claim giving rise to such lien or
posting security to cause the discharge of such lien, in which event all
amounts paid by Landlord shall immediately be due and payable by Tenant as
Additional Rent. Tenant hereby indemnifies, protects, defends and holds
Landlord and Landlord's Indemnitees and the Premises harmless from any
liability, cost, obligation, expense (including, without limitation,
reasonable attorneys' fees and expenses and attorneys' fees incurred in
enforcing of this indemnity), or claim of any mechanics', materialmen's,
design professional's or other liens in any manner relating to any work
performed, materials furnished or obligations incurred by or for Tenant or any
person or entity claiming by, through or under Tenant. Tenant shall notify
Landlord in writing fifteen (15) days prior to commencing any Alterations so
that Landlord shall have the right to record and post notices of non-
responsibility or any other notices deemed necessary by Landlord on the
Premises. Tenant shall not create, and shall within thirty (30) days
discharge and satisfy of record, any other lien, encumbrance, charge, security
interest, or other right or interest which shall be or become a lien,
encumbrance, charge or security interest upon the Premises, or any portion
thereof.
8.3 Compliance with Laws. Landlord warrants, that provided that the
Tenant Work, and any subsequent Alterations, is in compliance with all present
laws, codes, regulations and ordinances, upon completion of Landlord's
Improvements, the utilities, including without limitation the HVAC, (as
hereinafter defined), the structural portions, the interior and the exterior
of the Premises will meet with all laws, codes, regulations and ordinances in
effect at the time the Premises is delivered by Landlord to Tenant and will
be in good working condition and order (except for punch-list items). If, at
any time, the Premises or such utilities do not meet with such laws, codes,
regulations and ordinances as required by regulations of governing authorities
(other than as a result of Tenant's negligent acts or the failure of Tenant
Work or Tenant's Alterations to comply with such laws, codes, regulations and
ordinances), then, except for work that is specifically required as a result
of the business operation being conducted by Tenant, the Premises will be
brought up to the proper standards at Landlord's expense. Landlord's receipt
of all governmental permits required for initial occupancy shall be deemed
satisfaction of the foregoing representations and obligations. Landlord shall
also be responsible for paying any and all fines or penalties assessed by any
governmental authority if the Premises fails to meet codes and regulations of
governmental authorities during the Term of this Lease, other than as a result
of the failure of the Tenant Work or Alterations and/or improvements made by
Tenant to comply with all laws, codes, regulations and ordinances as required
by regulations of governing authorities. Tenant shall be responsible for
paying any and all fines or penalties for the failure of the Tenant Work and
Alterations and/or improvements made by Tenant to comply with all laws, codes,
regulations and ordinances as required by regulations of governing authorities
during the Term of this Lease and shall cause the Tenant Work and any
Alterations and/or improvements made by Tenant to be brought up to the proper
standards at Tenant's expenses.
ARTICLE 9
RIGHTS RESERVED BY LANDLORD
9.1 Landlord's Entry. In addition to any other right of entry
provided to Landlord in this Lease, Landlord reserves the right, at all
reasonable times and upon twenty-four (24) hours prior notice to Tenant except
in case of emergency when no notice shall be required (but Landlord will use
reasonable efforts to give prior or contemporaneous notice), to enter the
Premises to: (i) inspect them; (ii) show the Premises to prospective
purchasers, mortgagees or tenants (provided that Landlord shall only show the
Premises to prospective tenants during the last (6) six months of the Lease
Term); (iii) post notices of non-responsibility or other notices as may be
customary in the State of California; (iv) for performance of any of
Landlord's repair and/or maintenance rights or obligations; or (v) to exercise
any other rights, obligations or remedies that Landlord may have under this
Lease. Landlord and its authorized representatives may enter the Premises at
any time in case of emergency and shall have the right to use any and all
means which Landlord may deem proper to open such doors during an emergency
in order to obtain entry to the Premises. Any entry to the Premises obtained
by Landlord in the event of any emergency shall not, under any circumstances,
be construed or deemed to be a forcible or unlawful entry into, or detainer
of, the Premises, or to be an eviction of Tenant from the Premises or any
portion thereof.
9.2 Landlord's Cure. If Tenant shall default in the performance of
its obligations under this Lease and if such default is not cured within the
applicable periods provided in Article 14, Landlord upon twenty (20) days
prior notice to Tenant (except in emergency in which case no notice shall be
required) may, but shall not be obligated to, make any such payment or perform
any such act on Tenant's part without waiving its right based upon any default
of Tenant and without releasing Tenant from any obligations hereunder. Except
as may be specifically provided to the contrary in this Lease, Tenant shall
pay to Landlord, within twenty (20) days after delivery by Landlord to Tenant
of statements therefor, sums equal to expenditures reasonably made and
obligations reasonably incurred by Landlord in connection with the remedying
by Landlord of Tenant's defaults. If there are any outstanding monetary
obligations of Tenant under this Lease attributable to the period prior to the
expiration or termination of this Lease, such obligations shall survive the
termination or expiration of this Lease and such amount shall be payable to
Landlord within ten (10) days after receipt of notice therefor from Landlord.
ARTICLE 10
INDEMNITY AND INSURANCE
10.1 Tenant's Insurance Obligations. Tenant, at its sole cost and
expense, shall obtain and continuously maintain in full force and effect
during the Term of this Lease, commencing with the earlier to occur of
(a) Commencement Date or (b) the date Tenant first occupies the Premises,
policies of insurance covering the Improvements constructed, installed or
located on the Premises naming the Landlord, as an additional insured, against
(a) loss or damage by fire; (b) loss or damage from such other risks or
hazards now or hereafter embraced by an "Extended Coverage Endorsement,"
including, but not limited to, windstorm, hail, explosion, vandalism, riot and
civil commotion, damage from vehicles, smoke damage, water damage and debris
removal; (c) loss for damage by earthquake if requested by Landlord (provided
that Landlord shall reimburse Tenant for the cost of insurance allocable to
earthquake coverage); (d) loss from so-called explosion, collapse and
underground hazards; and (e) loss or damage from such other risks or hazards
of a similar or dissimilar nature which are now or may hereafter be
customarily insured against with respect to improvements similar in
construction, design, general location, use and occupancy to the Improvements
other than loss for flood. At all times, such insurance coverage shall be in
an amount equal to 100% of the then "full replacement cost" of the
Improvements exclusive of excavations, foundations and footings "Full
Replacement Cost" shall be interpreted to mean the cost of replacing the
improvements without deduction for depreciation or wear and tear, and it shall
include a reasonable sum for architectural, engineering, legal, administrative
and supervisory fees connected with the restoration or replacement of the
Improvements in the event of damage thereto or destruction thereof. If a
sprinkler system shall be located in the Improvements, sprinkler leakage
insurance shall be procured and continuously maintained by Tenant at Tenant's
sole cost and expense. Prior to occupancy of the Premises, Tenant shall
deliver to Landlord a copy of such insurance policy.
10.2 Insurance Coverage. During the Term of this Lease, Tenant, at its
sole cost and expense, shall obtain and continuously maintain in full force
and effect comprehensive general liability insurance or commercial liability
insurance against any loss, liability or damage on, about or relating to the
Premises, or any portion thereof, with limits of not less than Three Million
Dollars ($3,000,000.00) combined single limit, per occurrence and aggregate,
coverage on an occurrence basis. Such insurance shall specifically insure (by
contractual liability endorsement) Tenant's indemnity obligations under this
Lease.
The insurance set forth in this Section 10.2 shall be maintained by
Tenant at not less than the limits set forth herein. To the extent it is
customary in the marketplace for insurance limits to be higher than those
specified in this Section 10.2, such limits may be increased, upon written
notice from Landlord to Tenant, at the end of each five (5) year period during
which this Lease is in effect ("Adjustment Date") based upon increases (if
any) in the Index (defined below). The most recent Index in publication prior
to the Commencement Date shall be the "Base Index." On each Adjustment Date,
the insurance limits shall be increased by the percentage equal to the
percentage increase (if any) in the most recent Index in publication prior to
the Adjustment Date ("Comparison Index") over the Base Index. The term
"Index" as used in this Lease shall mean the United States Department of
Labor, Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners
and Clerical Workers, Los Angeles-Long Beach-Anaheim Average Subgroup "All
Items," (1982-84 = 100). If the 1982-84 base of the Index should hereafter
be changed, then the new base shall be converted to the 1982-84 base and the
base as so converted shall be used. If at any time the Index should not exist
in the format recited herein, Landlord shall substitute any official index
published by the Bureau of Labor Statistics, or successor or similar
governmental agency, as may then be in existence and shall, in Landlord's
opinion, be most nearly equivalent thereto.
10.3 Insurance Provisions. All policies of insurance required by this
Article shall provide that the proceeds thereof shall be payable to Tenant and
Landlord as their interests appear, and if Landlord so requests shall also be
payable to any contract purchaser of the Premises and the holder of any
mortgages now or hereafter becoming a lien on the fee of the Premises, or any
portion thereof, provided that any such mortgagee has provided Tenant with the
Non-Disturbance Agreement (defined below). Tenant shall not, on Tenant's own
initiative or pursuant to request or requirement of any third party, take out
separate insurance concurrent in form or contributing in the event of loss
with that required in Section 10.1 hereof, unless Landlord is named therein
too as an additional insured with loss payable as in said Section 10.1
provided. Tenant shall immediately notify Landlord whenever any such separate
insurance is taken out and shall deliver to Landlord original certificates
evidencing the same. Any such insurance obtained and maintained by Tenant
shall name Landlord, and, if requested by Landlord, Landlord's mortgagee, as
an additional insured therein, provided that any such mortgagee has provided
Tenant with the Non-Disturbance Agreement (defined below), and such insurance
shall be obtained and maintained from and with a reputable and financially
sound insurance company authorized to issue such insurance in California.
Each policy required under this Article 10 shall have attached thereto (a) an
endorsement that such policy shall not be canceled or materially changed
without at least thirty (30) days prior written notice to Landlord, and (b)
an endorsement to the effect that the insurance as to the interest of Landlord
shall not be invalidated by any act or neglect of Landlord or Tenant and an
"agreed value" endorsement. All policies of insurance, together with any
endorsements reflecting the changes to the policy required to comply with this
Lease, shall be written in companies reasonably satisfactory to Landlord and
licensed in the state in which the Premises are located. Such certificates
of insurance shall be in a form reasonably acceptable to Landlord, shall be
delivered to Landlord upon commencement of the Term and prior to expiration
of such policy, new certificates of insurance, shall be delivered to Landlord
not less than twenty (20) days prior to the expiration of the then current
policy Term. In the event Tenant shall fail to procure such insurance, or to
deliver such policies or certificates and appropriate endorsements, Landlord
may, at its option, procure such policies for the account of Tenant after five
(5) days' written notice, and the cost thereof shall be paid by Tenant to
Landlord as Additional Rent within fifteen (15) days after delivery to Tenant
of bills therefor.
10.4 Waiver of Subrogation. Tenant shall cause to be inserted in the
policy or policies of insurance required by this Article 10 hereof a so-called
"Waiver of Subrogation Clause" as to Landlord. Each party hereby waives,
releases and discharges the other party, its agents and employees from all
claims whatsoever arising out of loss, claim, expense or damage to or
destruction covered or coverable by insurance required under this Article 10
notwithstanding that such loss, claim, expense or damage may have been caused
by such other party, its agents or employees, and each party agrees to look
to the insurance coverage only in the event of such loss.
10.5 Rental Abatement Insurance. Landlord may maintain insurance
coverage (including loss of use and rental abatement coverage) upon Tenant's
business and upon all personal property of Tenant or the personal property of
others kept, stored or maintained on the Premises against loss or damage by
fire, windstorm or any other casualties or causes for such amount as Landlord
may desire. Tenant shall reimburse Landlord for the actual and commercially
reasonable costs of such rental abatement insurance, covering a period not to
exceed eighteen (18) months, on an annual basis. Tenant shall pay such
amounts to Landlord as Additional Rent, no later than thirty (30) days after
receipt of a statement therefor from Landlord. Landlord shall have the right
to require payments on a semi-annual or annual basis. The failure of Landlord
to deliver a statement for such charges shall not constitute a waiver of
Landlord's rights to collect such amounts if delivered within six (6) months.
Tenant shall have the right, upon at least six (6) months prior notice, to
elect to carry its own business interruption or rental abatement insurance,
in amounts reasonably acceptable to Landlord and which satisfy the
requirements set forth in Section 10.3 and this Section 10.5 of this Lease.
In such case, Landlord shall cancel the rental abatement insurance. Tenant
agrees that such policies shall contain a waiver of subrogation clause as to
Landlord.
10.6 Indemnification by Tenant. To the fullest extent allowed by law,
Tenant shall at all times indemnify, protect, defend with legal counsel
reasonably acceptable to Landlord) and hold Landlord and Landlord's
shareholders, officers, directors, partners, employees, lender, managing
agent, successors and/or assigns (collectively, "Landlord's Indemnities")
harmless against and from any and all claims, costs, liabilities, actions and
damages (including, without limitation, attorneys' fees and costs and costs
related to the enforcement of this indemnity provision) arising from or out
of any occurrence in, upon or about the Premises or the occupancy or use by
Tenant of the Premises, or the condition of the Premises to the extent caused
by any act or omission of Tenant, its agents, contractors, servants, tenants,
invitees (i.e. persons directed or requested by Tenant to enter the Premises)
or licensees (collectively "Tenant's Agents") or arising from any act or
negligence of Tenant or Tenant's Agents, or a default by Tenant under this
Lease or, to the extent covered by insurance Tenant is required to carry under
this Lease, arising from any accident, injury or damage whatsoever caused to
any person, or entity occurring during the Term of this Lease, in or about the
Premises, and from and against all costs, attorney's fees, expenses and
liabilities incurred in or about any such claim or action or proceeding
brought thereon. Notwithstanding the foregoing, Tenant shall not have any
liability hereunder or otherwise with respect to any claim, cost, liability,
action or damage caused by the negligence or wilful misconduct of Landlord or
any of Landlord's Indemnitees or Landlord's Agents or any material default by
Landlord under this Lease. In case any action or proceeding be brought
against Landlord by reason of any such claim, Tenant, upon notice from
Landlord, covenants to defend such action or proceeding by counsel reasonably
satisfactory to Landlord.
10.7 Indemnification by Landlord. To the fullest extent allowed by
law, Landlord shall at all times indemnify, protect, defend (with legal
counsel reasonably acceptable to Tenant) and hold Tenant and Tenant's
shareholders, officers, directors, partners, employees, affiliates, successors
and/or assigns (collectively, "Tenant's Indemnitees") harmless against and
from any and all claims, costs, liabilities, actions and damages (including,
without limitation, attorneys' fees and costs and costs related to the
enforcement of this indemnity provision) arising from or out of any negligence
or wilful misconduct by Landlord or any of the Landlord's Indemnities or
Landlord's Agents, in, on, or about the Premises or any breach by Landlord of
its obligations under this Lease, and from and against all costs, attorneys'
fees, expenses and liabilities incurred in or about any such claim or action
or proceeding brought thereon; provided, however, that in no event shall
Landlord be obligated to indemnify, defend and hold Tenant or any of Tenant's
Indemnitees or Tenant's Agents harmless to the extent of any claims, costs,
liabilities, actions or damages arising from or out of, or occasioned in whole
or in part by, the negligence or wilful misconduct of Tenant, Tenant's
Indemnitees or Tenant's Agents or any material default by Tenant under this
Lease. In case any action or proceeding be brought against Tenant by reason
of any such claim, Landlord, upon notice from Tenant, covenants to defend such
action or proceeding by counsel reasonably satisfactory to Tenant. Landlord
shall cause the obligations under this Section 10.7 to be covered under
Landlords policy of commercial general liability insurance.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
11.1 Restriction on Other Transfers. Except as specifically permitted
in Section 11.2 below, Tenant shall not assign, sublease, mortgage, pledge,
transfer, or otherwise encumber or dispose of this Lease, or any interest
therein, or in any manner assign, mortgage, pledge, transfer or otherwise
encumber or dispose of its interest or estate in the Premises, or any portion
thereof ("Transfer"), without obtaining Landlord's prior written consent in
each and every instance, which consent shall not be unreasonably withheld,
delayed or conditioned. If Landlord fails to respond to any request by Tenant
for Landlord's consent or approval within twenty (20) days of such request,
Tenant shall provide Landlord with a second written request. If Landlord
fails to respond to such second written request within ten (10) days of
Landlord's receipt thereof, Landlord shall be deemed to have consented to such
Transfer; provided that such second written request specifically states that
Landlord's failure to respond within ten (10) days shall be deemed consent
under this Section 11.1 of this Lease. No Transfer shall release Tenant from
its liability under this Lease. Tenant acknowledges and agrees that this
covenant and agreement is a material inducement to the decision of Landlord
to lease the Premises to Tenant and that Landlord may use its sole and
absolute discretion hereunder. Landlord shall have the right to withhold
consent to any sublessee in the event any of the conditions set forth in
Section 5.8 of this Lease apply.
11.2 Permitted Transfers. Notwithstanding the provisions of
Section 11.1, Tenant shall have the right, without Landlord's prior consent,
to Transfer all or any portion of the Premises to a related entity or
affiliate of Tenant. Tenant may also Transfer the lease to any successor
entity, whether by merger, consolidation or otherwise, and to any entity that
purchases all or substantially all of Tenant's assets. Finally Tenant shall
be permitted to assign or sublease to an Affiliate (as hereinafter defined)
of Tenant. The foregoing Transfers described in this Section 11.2 are
referred to as "Permitted Transfers." No such Permitted Transfer shall
require Landlord's prior approval or consent, provided that Tenant shall
provide to Landlord written notice of the Transfer, within a reasonable time
thereafter, including the name of the transferee and the terms of the
Transfer, and an agreement executed by the transferee acceptable to and in
favor of Landlord whereby the transferee agrees to assume Tenant's obligations
under this Lease. No such Permitted Transfer shall release Tenant from its
liability under this Lease. As used herein, the term "Affiliate" shall mean
any person, directly or indirectly through one or more intermediaries,
controlling, controlled by, or under common control with the person in
question, which, in the case of a person which is a partnership, shall include
each of the partners thereof and each of their Affiliates. The term
"control," as used in the immediately preceding sentence, means, with respect
to a person that is a corporation, the right to exercise, directly or
indirectly, more than twenty percent (20%) of the voting rights attributable
to the shares of the controlled corporation, and, with respect to a person
that is not a corporation, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
controlled person.
11.3 Sublease Requirements. Any sublease permitted under this Article
11 shall contain provisions to the effect that, except as may otherwise be
specifically agreed to by Landlord in writing, (i) such sublease is only for
actual use and occupancy by the sublessee; (ii) such sublease is subject and
subordinate to all of the terms, covenants and conditions of this Lease and
to all of the rights of Landlord thereunder; and (iii) Tenant shall continue
to be and remain liable under the Lease. In the case of a sublease, a copy
of any sublease fully executed and acknowledged by Tenant and the sublessee
shall be mailed to Landlord ten (10) days prior to the effective date of such
sublease, which sublease shall be in form and content reasonably acceptable
to Landlord.
11.4 No Merger. No merger shall result from Tenant's sublease of the
Premises under this Article 11, Tenant's surrender of this Lease or the
termination of this Lease in any other manner.
11.5 Profits on Transfer. In the event that Tenant shall make a
permitted Transfer hereunder of all or any portion of the Premises (the
"Transfer Space"), then the following shall apply: Tenant shall pay Landlord
monthly, as Additional Rent, at the same time as the monthly installment of
Basic Rent required hereunder, fifty percent (50%) of the "Profit" payable by
the Transferee pursuant to the terms reserved in the Transfer agreement,
assignment or sublease. For purposes of this Section 11.5, "Profit" shall
mean all rent and other amounts paid or payable by the Transferee to Tenant
pursuant to the terms of the Transfer which are in excess of the applicable
Basic Rent and Additional Rent (if the obligation to pay Additional Rent is
not passed through to or assumed by the Transferee under this Lease) after
deducting therefrom Tenant's actual and reasonable costs incurred in
connection with the Transfer, including but not limited to reasonable real
estate commissions, costs of renovations or improvements, reasonable tenant
improvement allowances, reasonable attorneys fees and reasonable rent
concessions.
11.5.1 Tenant's Profit Statement. Tenant shall and hereby agrees
that it will furnish to Landlord upon written request from Landlord a complete
statement, setting forth in detail the computation of all profit derived and
to be derived from such assignment or sublease, such computation to be made
in accordance with generally accepted accounting principles. Tenant agrees
that Landlord or its authorized representatives shall be given access, at all
reasonable times (at Tenant's Southern California office) upon ten (10)
business days advance notice, not to exceed more than one (1) time per year
per Transfer, to the books, records and papers of Tenant relating directly to
any such assignment or subletting.
ARTICLE 12
DAMAGE OR DESTRUCTION
12.1 Destruction and Restoration. Tenant covenants and agrees that in
case of damage to or destruction of the Improvements after the Commencement
Date by fire or otherwise, Tenant at its sole cost and expense, shall promptly
restore, repair, replace and rebuild the same ("Restoration") as nearly as
possible to the condition that the same were in immediately prior to such
damage or destruction with such changes or alterations as may be reasonably
acceptable to Tenant or required by law. Tenant shall forthwith give Landlord
written notice of such damage or destruction upon the occurrence thereof and
specify in such notice, in reasonable detail, the extent thereof. The
Restoration shall be carried on and completed in accordance with the
provisions and conditions of this Lease. All insurance proceeds shall be held
by Landlord and Tenant as co-trustee. If the insurance moneys in the hands
of Landlord and Tenant as co-trustees shall be deemed to be insufficient by
Landlord to pay the entire costs of the Restoration, Tenant agrees, only to
the extent Tenant failed to maintain the insurance Tenant is required to
maintain under this Lease, to pay any deficiency promptly upon demand that
would have been paid by the insurance company had Tenant maintained the
required insurance.
12.2 Application of Insurance Proceeds. All insurance moneys recovered
by Landlord or Tenant shall be held by Landlord and Tenant as co-trustees on
account of such damage or destruction, less the costs, if any, to Landlord of
such recovery, shall be applied to the payment of the costs of the Restoration
and shall be paid out from time to time as the Restoration progresses, in
accordance with requirements imposed by Landlord or any mortgagee of record,
provided that any such mortgagee has theretofore or concurrently provided,
Tenant with the Non-Disturbance Agreement (defined below). Tenant shall
furnish Landlord at the time of any such payment with lien releases and
evidence reasonably satisfactory to Landlord that there are no unpaid bills
in respect to any work, labor, services or materials performed, furnished or
supplied in connection with such Restoration.
12.3 Continuance of Tenant's Obligations. No destruction of or damage
to the Premises, or any portion thereof, by fire, casualty or otherwise shall
permit Tenant to surrender this Lease or shall relieve Tenant from its
liability to pay to Landlord the Basic Rent and Additional Rent payable under
this Lease or from any of its other obligations under this Lease, and Tenant
waives any rights now or hereafter conferred upon Tenant by present or future
law or otherwise to quit or surrender this Lease or the Premises, or any
portion thereof, to Landlord or to any suspension, diminution, abatement or
reduction of rent on account of any such damage or destruction.
12.4 Damage or Destruction at End of Lease Term. In the event the
damage or destruction occurs during the last eighteen (18) months of the Lease
Term, then, notwithstanding the provisions of Section 12.1 and 12.2, Tenant
shall not be obligated to complete such Restoration so long as Tenant assigns
to Landlord all insurance proceeds except those amortized and allocable to
Tenant's Work (as defined in the Work Letter) (including the amount of any
deductibles and any other amounts necessary) so that Landlord can complete
such Restoration.
12.5 Waiver of California Statutes. 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 damage or destruction of the Premises,
including, but not limited to, the provisions of Sections 1932(2) and 1933(4)
of the Civil Code or any successor statute or law. Tenant agrees that the
provisions of this Article shall govern the rights and obligations of Landlord
and Tenant in the event of any damage or destruction of the Premises.
Notwithstanding the foregoing, Basic Rent and Additional Rent shall be abated
proportionately during any period of repair under this Article for a period
not to exceed eighteen (18) months; provided that Tenant has complied with the
requirements of Section 10.5.
ARTICLE 13
CONDEMNATION
13.1 Condemnation of Entire Premises. If, during the Term of this
Lease, the entire Premises shall be taken as the result of the exercise of the
power of eminent domain (hereinafter referred to as the "Proceedings"), this
Lease shall terminate on the date of vesting of title pursuant to such
Proceedings. In any taking of the Premises, or any portion thereof, whether
or not this Lease is terminated as in this Article provided, Tenant shall not
be entitled to any portion of the award for the taking of the Premises or
damage to the Improvements, except as otherwise provided for in Section 13.3
with respect to the restoration of the Improvements, or for the estate or
interest of Tenant therein, all such award, damages, consequential damages and
compensation being hereby assigned to Landlord, and Tenant hereby waives any
right it now has or may have under present or future law to receive any
separate award of damages for its interest in the Premises, or any portion
thereof, or its interest in this Lease, except that Tenant shall have,
nevertheless, the limited right to prove in the Proceedings and to receive any
award which may be made for damages to or condemnation of Tenant's movable
trade fixtures and equipment, and for Tenant's relocation costs in connection
therewith.
13.2 Partial Condemnation/Termination of Lease. If, during the Term
of this Lease, less than the entire Premises, but more than ten percent (10%)
of the floor area of the Building, or more than fifteen percent (15%) of the
land area of the Premises, shall be taken in any such Proceedings, this Lease
shall, upon vesting of title in the Proceedings, terminate as to the portion
of the Premises so taken, and Tenant shall have the right to terminate this
Lease if the business of Tenant conducted in the portion of the Premises taken
cannot reasonably be carried on with substantially the same utility and
efficiency in the remainder of the Premises and Tenant cannot construct or
secure substantially similar space to the space so taken, on the Premises.
Such termination as to the remainder of the Premises shall be effected by
notice in writing given not more than sixty (60) days after the date of
vesting of title in such Proceedings, and shall specify a date not more than
sixty (60) days after the giving of such notice as the date for such
termination.
13.3 Partial Condemnation/Continuation of Lease. If ten percent (10%),
or less, of the floor area of the Building, or fifteen percent (15%), or less,
of the Land, shall be taken in such Proceedings, or if more than ten percent
(10%) of the floor area of the Building or more than fifteen percent (15%) of
the Land is taken (but less than the entire Premises), and this Lease is not
terminated as in Section 13.2 hereof provided, this Lease shall, upon vesting
of title in the Proceedings, terminate as to the parts so taken. The net
amount of the award (after deduction of all costs and expenses, including
attorneys' fees), shall be held by Landlord and Tenant as co-trustees and
applied as hereinafter provided. Tenant, in such case, covenants and agrees,
at Tenant's sole cost and expense (subject to reimbursement to the extent
hereinafter provided), promptly to restore that portion of the Improvements
on the Premises not so taken to a complete architectural and mechanical unit
for the use and occupancy of Tenant as in this Lease provided. In the event
that the net amount of the award (after deduction of all costs and expenses,
including attorney's fees) that may be received by Landlord and held by
Landlord and Tenant as co-trustees in any such Proceedings is insufficient to
pay all costs of such restoration work, Landlord may elect to either (a)
terminate the Lease in accordance with the provisions of Section 13.1 or (b)
continue the Lease and restore that portion of the Improvements on the
Premises not so taken to a complete architectural and mechanical unit for the
use and occupancy of Tenant as in this Lease provided. If Landlord elects to
terminate the Lease under this Section 13.3, Landlord shall deliver to Tenant
written notice of Landlord's election to terminate along with an estimate of
the amount of the deficiency between the costs of complete restoration and the
award ("Deficiency Amount"), Tenant may continue the Lease in effect by
delivery written notice to Landlord, within fifteen (15) days of receipt of
Landlord's termination notice, of its election to continue the Lease and pay
the Deficiency Amount. If Tenant elects to continue the Lease, Tenant shall
deliver to Landlord and Tenant as co-trustees the Deficiency Amount within
fifteen (15) days of written request by Landlord. If the Premises are
restored, the award amounts shall be disbursed in accordance with the same
requirements set forth in Section 12.2 of this Lease. If the Lease is
terminated, the award amounts shall be disbursed in accordance with Section
13.1.
13.4 Continuance of Obligations. In the event this Lease is not
terminated, then from and after the date of vesting of title in such
Proceedings, Tenant shall continue to pay the Basic Rent and Additional Rent
and other charges payable hereunder, as in this Lease provided, to be paid by
Tenant, subject to an abatement of a just and proportionate part of the Basic
Rent according to the extent and nature of such taking as may be mutually
agreed upon by Tenant and Landlord.
13.5 Tenant's Waiver. Tenant waives the protection of any statute,
code or judicial decision which grants Tenant a right to any compensation
other than that set forth in this Article in the event of a taking, including,
but not limited to, California Code of Civil Procedure Section 1265.150 or any
successor statute or law.
ARTICLE 14
DEFAULTS; REMEDIES
14.1 Events of Default. The occurrence of any of the following shall
constitute a default and breach of this Lease by Tenant:
14.1.1 Failure to Pay. If Tenant fails to pay such Rent or such
charge as and when due where such failure continues for ten (10) days after
written notice thereof by Landlord to Tenant.
14.1.2 Failure to Perform. If Tenant fails to perform any of
Tenant's nonmonetary obligations under this Lease for a period of thirty (30)
days after written notice from Landlord; provided that if more time is
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.
14.1.3 Other Defaults. (i) If Tenant makes a general assignment
or general arrangement for the benefit of creditors; (ii) a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed by
or against Tenant and is not dismissed within sixty (60) days; (iii) if a
trustee or receiver is appointed to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in the Lease
and possession is not restored to Tenant within sixty (60) days; or (iv) if
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease is subjected to attachment, execution or other judicial
seizure which is not discharged within sixty (60) days. If a court of
competent jurisdiction determines that any of the acts described in this
Subsection 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 difference between the Rent (or any other
consideration) paid in connection with such assignment or sublease and the
Rent payable by Tenant hereunder.
The notices required by this Section are intended to satisfy any and all
notice requirements imposed by law on Landlord and are not in addition to any
such requirement.
14.2 Remedies. On the occurrence of any default by Tenant, Landlord
may, at any time thereafter, with or without any additional notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Tenant's right to possession of the Property
at any time 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 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 Basic Rent, Additional Rent and other
charges which Landlord 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 Basic Rent, Additional Rent and other charges which
Tenant 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 reasonable avoided; and (iv) any other amount, including court costs
necessary to compensate Landlord for all the detriment proximately caused by
Tenant'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, Landlord'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 Maximum Rate of
Interest set forth in Item 10 of the Basic Terms. 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
14.1.5(a), or (ii) proceeding under Paragraph 14.1.5(b) or (c);
(b) Maintain Tenant's right to possession, in which case
this Lease shall continue in effect whether or not Tenant has abandoned the
Property. 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. This remedy is intended to and is hereby declared to be that
described in California Civil Code Section 1951.4. During the period Tenant
is in default, Landlord may enter the Premises and relet them, or any part of
them, to third parties for Tenant's account. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including brokers' commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease. Tenant shall pay to
Landlord the Rent due under this Lease on the dates the Rent is due, less the
Rent Landlord receives from reletting. No act by Landlord allowed by this
Section 14.2(b) will terminate this Lease unless Landlord notifies Tenant in
writing that Landlord elects to terminate this Lease. After Tenant's default
and for so long as Landlord does not terminate Tenant's right to possession
of the Premises, if Tenant obtains Landlord's consent, Tenant will have the
right to assign or sublet its interest in this Lease, but Tenant will not be
released from liability. If Landlord elects to relet the Premises as provided
in this Section 14.2(b), Rent that Landlord receives from reletting will be
applied to the payment of: (i) first, any indebtedness from Tenant to Landlord
other than Rent due from Tenant; (ii) second, all costs, including for
maintenance, incurred by Landlord in reletting; and (iii) third, Rent due and
unpaid under the Lease. After deducting the payments referred to in this
Section 14.2(b), any sum remaining from the Rent Landlord receives from
reletting will be held by Landlord and applied in payment of future Rent as
Rent becomes due under this Lease. If, on the date Rent is due under this
Lease, the Rent received from the reletting is less than the Rent due on that
date, Tenant will pay to Landlord, in addition to the remaining Rent due, all
costs, including for maintenance, Landlord incurred in reletting which remain
after applying the Rent received from the reletting; and/or
(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.
14.3 Right of Landlord to Re-Enter. In the event of any termination
of this Lease, Landlord shall have the immediate right to enter upon and
repossess the Premises, and any personal property of Tenant may be removed
from the Premises and stored in any public warehouse at the risk and expense
of Tenant.
14.4 Cumulative Remedies. Landlord's exercise of any right or remedy
shall not prevent it from exercising any other right or remedy.
14.5 Mitigation. Landlord shall have the obligation to use all
reasonable efforts to mitigate any loss or damages suffered by Landlord on
account of any default by Tenant.
14.6 Limitation on Remedies. Notwithstanding anything to the contrary
in this Article 14, Landlord shall not be permitted to accelerate the payment
of Rent for the remainder of the Lease Term unless there has been a monetary
default by Tenant for over 60 days. Except as otherwise specifically provided
in this Lease, neither Landlord nor Tenant shall not be entitled to recover
consequential and/or punitive damages from the other as a result of the breach
of this Lease.
14.7 Legal Costs. Each party shall reimburse the other party, upon
demand, for any reasonable costs or expenses incurred by such other party in
connection with any actual breach or default of the non-performing 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. Tenant shall also
indemnify, protect, defend and hold Landlord harmless from all costs,
expenses, demands and liability (including, without limitation, attorneys'
fees and costs, including attorneys fees as a result of the enforcement of
this indemnity) incurred by Landlord if Landlord becomes or is made a party
to any claim or action (a) instituted by Tenant (other than against Landlord),
or by any third party against Tenant, or by or against any person holding any
interest under or using the Premises by license of or agreement with Tenant;
(b) for foreclosure of 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 incurred by
Landlord in any such claim or action.
14.8 No Waiver. No failure by Landlord or by Tenant to insist upon the
performance of any of the terms of this Lease or to exercise any right or
remedy consequent upon a breach thereof, and no acceptance by Landlord of full
or partial rent from Tenant or any third party during the continuance of any
such breach, shall constitute a waiver of any such breach or of any of the
terms of this Lease. None of the terms of this Lease to be kept, observed or
performed by Landlord or by Tenant, and no breach thereof, shall be waived,
altered or modified except by a written instrument executed by Landlord and/or
by Tenant, as the case may be. No waiver of any default of either party
herein shall be implied from any omission by the other party to take any
action on account of such default. One or more waivers by either party shall
not be construed as a waiver of a subsequent breach of the same covenant, term
or condition. No statement on a payment check 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.
14.9 Waiver by Tenant. Tenant hereby waives all claims by Landlord's
re-entering and taking possession of the Premises and removing and storing the
property of Tenant as permitted under this Article 14 and will save Landlord
harmless from all losses, costs or damages occasioned Landlord thereby. No
such reentry shall be considered or construed to be a forcible entry by
Landlord. If Landlord fails to perform any of Landlord's obligations under
this Lease, which failure continues for more than fifteen (15) days after
Tenant's delivery of written notice to Landlord specifying such failure, or
if such failure is of a nature that it requires more than fifteen (15) days
to remedy and continues beyond the time reasonably necessary to cure (and
Landlord has not undertaken procedures to cure the failure withing such
fifteen (15) day period and diligently pursued such efforts to complete such
cure), Tenant may deliver a reminder notice ("Reminder Notice"). If Landlord
fails to commence to cure such failure within fifteen (15) days of receipt of
Tenant's Reminder Notice and diligently pursue the same to completion, then
Tenant may incur reasonable expenses necessary to perform the obligation of
Landlord specified in such notice and invoice Landlord therefor. If Landlord
fails to reimburse Tenant within fifteen (15) days following receipt of such
invoice, then Tenant may deliver a reminder notice ("First Reminder Notice").
If Landlord fails to reimburse Tenant within fifteen (15) days of receipt of
Tenant's First Reminder Notice, Tenant may deliver a second reminder notice
("Second Reminder Notice"). If Landlord fails to reimburse Tenant within
fifteen (15) days of receipt of Tenant's Second Reminder Notice, then Tenant
may apply the cost of such repairs against the next Basic Rent obligations due
hereunder, and invoice Landlord therefor.
Notwithstanding anything contained herein to the contrary, Tenant's
rights to deduct from Basic Rent shall be restricted to any amount per month
not in excess of the sum of twenty-five percent (25%) of the Basic Rent;
provided, however, that the sum which was not capable of offset as a result
of such cap shall bear interest at the Maximum Rate of Interest from thirty
(30) days after the date Tenant first invoiced Landlord for such expenses to
be offset until the date Tenant actually recovers such costs through offset.
It is further agreed that, if any default by Landlord cannot be cured by
Tenant by the expenditure of a sum that is recoverable from future offsets as
authorized in this Lease by the end of the then applicable Term, the aforesaid
twenty-five percent (25%) figure shall be increased to such percentage of the
Basic Rent as is necessary in order to assure that such sum is recoverable
from future offsets.
14.9.1 Delinquent Rental Payments. Any installment of Basic Rent
or Additional Rent or any other charges payable by Tenant under the provisions
hereof which shall not be paid when due or within ten (10) days thereafter
shall be subject to a late payment fee of two percent (2%) of the unpaid
amount per month commencing on the date said payment is due ("Late Payment
Fee"). Tenant acknowledges that Tenant's failure to pay Basic Rent or
Additional Rent when due may cause Landlord to incur unanticipated costs. The
exact amount of such costs are impractical or extremely difficult to
ascertain. The parties agree that such charge specified above represents a
fair and reasonable estimate of the costs Landlord will incur by reason of
such late payment and acceptance of such late charge does not constitute a
waiver of Tenant's default or limit any other remedy of Landlord. The late
charge shall be deemed Rent and the rights to require it shall be in addition
to all of Landlord's rights and remedies hereunder or at law. Notwithstanding
the foregoing, Tenant shall not be subject to the late payment fee specified
herein unless Landlord has given Tenant ten (10) days written notice of any
payment of Additional Rent or Basic Rent that is past due ("Late Payment
Notice"); provided that after Tenant's receipt of two (2) such Late Payment
Notices in any Lease Year, Landlord shall no longer be required to deliver a
Late Payment Notice in order to collect the late payment fee during said Lease
Year. Notwithstanding the foregoing, Landlord waives its right to collect the
Late Payment Fee the first time Landlord would otherwise be entitled to such
a Late Payment Fee in any Lease Year.
ARTICLE 15
PROTECTION OF CREDITORS
15.1 Subordination. This Lease and all rights of Tenant therein, and
all interest or estate of Tenant in the Premises, or any portion thereof,
shall be subject and subordinate to the lien of any mortgage, deed of trust,
or other document of like nature ("Mortgage"), which at any time may be placed
upon the Premises, or any portion thereof, by Landlord, and to any
replacements, renewals, amendments, modifications, extensions or refinancing
thereof, and to each and every advance made under any Mortgage. Tenant agrees
at any time hereafter, and from time to time on demand of Landlord, to execute
and deliver to Landlord a Subordination, Non-Disturbance and Attornment
Agreement in the form of Exhibit "F" attached hereto and incorporated herein
("SNDA") and any other instruments, releases or other documents that may be
reasonably required for the purpose of subjecting and subordinating this Lease
to the lien of any such Mortgage and which are reasonably acceptable to
Tenant. It is agreed, nevertheless, that so long as Tenant is not in default
in the payment of Basic Rent and Additional Rent and the performance and
observance of all covenants, conditions, provisions, terms and agreements to
be performed and observed by Tenant under this Lease, that such SNDA or other
instrument, release or document shall not interfere with, hinder or molest
Tenant's right to quiet enjoyment under this Lease, nor the right of Tenant
to continue to occupy the Premises, and all portions thereof, and to conduct
its business thereon in accordance with the covenants, conditions, provisions,
terms and agreements of this Lease. The lien of any such Mortgage shall not
cover Tenant's trade fixtures or other personal property located in or on the
Premises.
15.2 Attornment. If Landlord's interest in the Premises is acquired
by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale or by any new person or entity as a result of
any transfer by Landlord, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Premises and recognize such transferee
or successor as Landlord under this Lease if all obligations and liabilities
accruing under this Lease after such acquisition are assumed in writing by
such transferee or successor. 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 Premises upon the transfer of Landlord's
interest.
15.3 Estoppel Certificates.
15.3.1 Within fifteen (15) business days after Landlord's or
Tenant's written request (the "Requesting Party"), the non-requesting party
(the "Responding Party") shall execute, acknowledge and deliver to the
Requesting Party a written statement certifying: (i) that this Lease (and all
guaranties, if any) is unmodified and in full force and effect (or, if there
have been any modifications, that the same is in full force and effect, as
modified, and stating the modifications); (ii) that this Lease has not been
canceled or terminated; (iii) the last date of payment of the Basic Rent and
other charges and the time period covered by such payment; (iv) whether or not
there are then existing any breaches or defaults by such party or the other
party known by such party under this Lease, and specifying such breach or
default, if any, or any setoffs or defenses against the enforcement of any
such breach of this Lease (or of any guaranties) upon the part of Landlord or
Tenant (or any guarantor), as the case may be, to be performed or complied
with (and, if so, specifying the same and the steps being taken to remedy the
same) and (v) such other statements as reasonably required by The Requesting
Party, or any lender or prospective lender, investor or purchaser. the
Responding Party shall deliver such statement to the Requesting Party within
fifteen (15) business days after the Requesting Party's request. Any such
statement by Tenant may be given by Landlord to any prospective purchaser or
encumbrancer of the Premises. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.
15.3.2 If the Responding Party, does not deliver such statement
to the Requesting Party within such fifteen (15) business day period, then the
Requesting Party may deliver a second request and if the Responding Party does
not deliver such statement to Landlord within five (5) business days after
receipt of such second request, then the Requesting Party, 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 the Requesting Party;
(ii) that this Lease has not been canceled or terminated except as otherwise
represented by the Requesting Party; (iii) that not more than one month's Base
Monthly Rent or other charges have been paid in advance; and (iv) that the
Requesting Party is not in default under this Lease. In such event, the
Responding Party shall be estopped from denying the truth of such facts.
15.4 Mortgagee Protection Clause. Tenant agrees to give any mortgagees
and/or trust deed holders, by registered mail, a copy of any notice of
default, served upon the Landlord, provided that prior to delivery of such
notice Tenant has been notified in writing (by way of Notice of Assignment of
Rents and Leases, or otherwise) of the addresses of such mortgagees and/or
trust deed holders and the same have executed a Non-Disturbance Agreement as
provided and defined below. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then
the mortgagees and/or trust deed holders shall have an additional fifteen days
(15) within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be necessary if within such
fifteen days (15) any mortgagee and/or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default (including
but not limited to commencement of foreclosure proceedings if necessary to
effect such cure), in which event this Lease shall not be terminated while
such remedies are being so diligently pursued.
15.5 Non-Disturbance. Landlord represents that as of the Effective Date
of this Lease, there is no mortgage encumbering the Land. With respect to any
future Mortgages, Tenant's subordination is expressly conditioned upon
Landlord's delivery to Tenant of a fully executed Recognition and Non-
Disturbance Agreement substantially in the form of the SNDA or in such other
form and substance as may be reasonably acceptable to Tenant with respect to
such Mortgage ("Non-Disturbance Agreement").
ARTICLE 16
TERMINATION OF LEASE
16.1 Surrender of Premises. At the expiration of the Term of this
Lease or earlier termination of this Lease, Tenant shall surrender the
Premises together with all alterations placed thereon by Tenant (except
Alterations Tenant elects to remove or Alterations Landlord, in the exercise
of reasonable discretion, informed Tenant, in connection with Landlord=s
approval of the installation thereof, that Landlord would require Tenant to
remove upon the expiration of the Lease) in the same condition as the same
were in upon delivery of possession thereto at the Commencement Date of the
term of this Lease, reasonable wear and tear excepted, and shall surrender all
keys to the Premises to Landlord at the place then fixed for the payment of
Basic Rent and shall inform Landlord of all combinations on locks, safes and
vaults, if any. Tenant shall at such time remove all of its property
therefrom and all alterations and improvements placed thereon by Tenant unless
Landlord requires Tenant to leave the same. Tenant shall repair any damage
to the Premises caused by such removal, and any and all such property not so
removed shall, at Landlord's option, after five (5) business days notice to
Tenant, become the exclusive property of Landlord or be disposed of by
Landlord, at Tenant's cost and expense, without further notice to or demand
upon Tenant. If the Premises be not surrendered as above set forth, Tenant
shall indemnify, protect, defend and hold Landlord harmless against loss or
liability resulting from the delay by Tenant in so surrendering the Premises,
including, without limitation, any claim made by any succeeding occupant
founded on such delay. All property of Tenant not removed within thirty (30)
days after the last day of the Term of this Lease shall be deemed abandoned.
Tenant hereby appoints Landlord its agent to remove, at Tenant's cost, all
property of Tenant from the Premises left thirty (30) days or longer after
termination of this Lease and to cause its transportation and storage for
Tenant's benefit, all at the sole cost and risk of Tenant and Landlord shall
not be liable for damage, theft, misappropriation or loss thereof and Landlord
shall not be liable in any manner in respect thereto.
16.2 Holding Over. In the event Tenant remains in possession of the
Premises after expiration of this Lease, and without the execution of a new
lease, it shall be deemed to be occupying the Premises as a tenant from month
to month, subject to all the provisions, conditions and obligations of this
Lease insofar as the same can be applicable to a month-to-month tenancy,
except that the Basic Rent shall be escalated to one hundred twenty-five
percent (125%) of the then current Basic Rent for the Premises.
ARTICLE 17
RENEWAL OPTIONS
17.1 Options to Renew. Tenant shall have the right, to be exercised
as hereinafter provided, to extend the term of this Lease ("Renewal Option")
for up to two (2) periods of five (5) years each (each such five (5) year
period is sometimes hereinafter referred to as a "Renewal Term") upon the
following terms and conditions and subject to the limitations set forth below.
17.1.1 No Event of Default. At the respective times hereinafter
set forth for the exercise of each Renewal Option and at the time of the
commencement of each Renewal Term, this Lease shall be in full force and
effect and there shall be no uncured Event of Default under this Lease, but
Landlord shall have the right, at its sole discretion, to waive any such
condition regarding an Event of Default.
17.1.2 Fair Market Rent. The Premises shall be leased to Tenant
on an "as is" basis on the same terms, covenants and conditions contained in
this Lease, except that the annual Basic Rent for the Premises, including all
buildings, structures and fixtures erected thereon, together with all
additions, alterations and replacements thereof (except Tenant's moveable
trade fixtures, machinery and equipment) shall be adjusted to reflect ninety-
five percent (95%) of the Fair Market Rent (as hereinafter defined) for the
Premises, as of the date of commencement of such Renewal Term ("Adjusted Basic
Rent"); provided that in no event shall such Adjusted Basic Rent be less than
the Basic Rent for the Lease Year immediately prior to the Renewal Term.
17.1.3 Exercise of Renewal Term(s). Tenant shall exercise its
right to extend the Term of this Lease for any Renewal Term set forth in this
Article 17, if at all, by notifying Landlord, in writing, of its election to
exercise the right to renew and extend the term of this Lease at least nine
(9) months prior to the expiration of the Initial Term or the applicable
Renewal Term, as the case may be.
17.1.4 Determination of Fair Market Rent. In calculating the
Fair Market Rent, the Premises shall be deemed to include all buildings,
structures and fixtures erected thereon, together with all additions and
replacements thereof (except Tenant's moveable trade fixtures, machinery and
equipment). Not earlier than eighteen (18) months prior to the expiration of
the Initial Term and each Renewal Term, Tenant may notify Landlord of its
desire to consider renewal of this Lease. Thereafter, Landlord and Tenant
shall make a good faith effort to agree upon the "Fair Market Rent" of the
Premises for the ensuing Renewal Term. In the event Landlord and Tenant fail
to agree within sixty (60) days after delivery of Tenant's notice ("Initial
Rent Determination Period"), the "Fair Market Rent" shall be determined by
arbitration in accordance with the process described below. Without limiting
the foregoing, in determining the Fair Market Rent, the following factors
shall be considered: the amount per rentable square foot that a willing,
comparable, non-equity tenant would pay, and a willing landlord of a
comparable property in the marketplace (as set forth above) would accept in
an arm's-length transaction giving appropriate consideration to rental rates
per rentable square foot, escalation clauses (including, but not limited to,
operating expenses and real estate taxes), abatement provisions reflecting
free rent, if any, length of lease term, size and location of premises being
leased, tenant improvement allowances, if any, and any other generally
applicable terms and conditions of tenancy for the subject space.
17.1.5 Arbitration. All arbitrators appointed by or on behalf of
either party or appointed pursuant to the provisions hereof shall be MAI
members of the American Institute of Real Estate Appraisers with not less than
ten (10) years of experience in the appraisal of improved commercial and
industrial real estate in the Riverside, California area and be devoting a
substantial amount of time to professional appraisal work at the time of
appointment and be in all respects impartial and disinterested. If the
parties are unable to agree upon the Fair Market Base Rent during the Initial
Rent Determination Period, then within fifteen (15) days after termination of
the Initial Rent Determination Period, each party shall deliver to the other
party a notice specifying the name, address and professional qualifications
of the person designated to act as arbitrator on its behalf. The two (2)
arbitrators so selected shall select a third arbitrator no later than thirty
(30) days after the Initial Rent Determination Period. If the party receiving
a request for arbitration fails to appoint its arbitrator within the time
above specified, or if the two (2) arbitrators so selected cannot agree on the
selection of the third arbitrator within the time above specified, then either
party, on behalf of both parties, may request such appointment of such second
or third arbitrator, as the case may be, by application to any Judge of the
District Court of the County of Riverside, State of California, upon ten (10)
days prior written notice to the other party of such intent. The decision of
the arbitrators so chosen shall be given within a period of thirty (30) days
after the appointment of such third arbitrator. The arbitrators so selected
shall have all rights and power conferred on him or her by the California Code
of Civil Procedure Sections 1280 et seq. or any successor statute or law, and
except as otherwise provided for herein, the arbitration proceedings shall be
carried on and governed by such statute. No discovery shall be permitted by
the Landlord and Tenant in the arbitration except that all parties shall make
available to the arbitrators such information as may be requested by such
arbitrators. Acting independently of each other and without consultation with
each other, each of said three arbitrators, within sixty (60) days after
appointment of the third appraiser, and his or her acceptance of such
appointment, shall make their appraisal and submit to Landlord and Tenant a
written report and appraisal setting forth the appraiser's opinion as to the
fair market value of the Premises. The two appraisals of all of the
appraisals reported by the three appraisers that are closest in amount shall
be averaged (or if the appraisal is less than one of the other appraisals and
more than the other appraisal by the same amount, all three appraisals shall
be averaged). Such averaged amount shall be the Fair Market Rent of the
Premises. All arbitrators appointed by or on behalf of either party or
appointed by the Presiding Judge of the Superior Court of Riverside County,
California as hereinafter provided, shall be in all respects impartial and
disinterested. Each party shall pay the fees and expenses of the arbitrator
appointed by or on behalf of such party and the fees and expenses of the third
arbitrator shall be borne equally by both parties. Landlord and Tenant shall
then execute an amendment recognizing the Fair Market Rent for the Renewal
Term and the fact Tenant shall pay ninety-five percent (95%) of such Fair
Market Rent or the Basic Rent for the Previous Lease Year, whichever is
greater.
ARTICLE 18
EXPANSION OPTION
18.1 Option to Expand. Tenant shall have the right, to be exercised
as hereinafter provided, to expand the Premises ("Expansion Option") into
space to be constructed on the Land adjacent to the Premises, which land is
more particularly described on Exhibit "A-1" attached hereto and incorporated
herein ("Expansion Land") together with certain improvements to be constructed
thereon, including an approximately ninety-five thousand (95,000) square foot
addition to the Building, depicted as the Expansion Space on Exhibit "A-2"
("Expansion Space"), upon the following terms and conditions and subject to
the limitations set forth below.
18.2 No Event of Default. At the respective times hereinafter set
forth for the exercise of the Expansion Option and the delivery of the
Expansion Space, this Lease shall be in full force and effect and there shall
be no uncured Event of Default (as defined below) under this Lease.
18.3 Exercise of Expansion Option. Tenant may exercise its right to
expand by notifying Landlord, in writing, of its election to exercise the
Expansion Option ("Notice of Exercise") at least nine (9) months prior to the
desired occupancy date for the Premises, which Notice of Exercise shall
specify the exact desired occupancy date ("Desired Occupancy Date"); provided
that, subject to the provisions below, there will still be at least five (5)
years remaining in the Initial Term after the Desired Occupancy Date. In the
event that there will not be at least five (5) years remaining in the Initial
Term at the time Tenant desires to exercise its Expansion Option, Tenant may
still exercise its Expansion Option up until nine (9) months prior to the end
of the Initial Term ("Expansion Option Termination Date") if, in Tenant's
Notice of Exercise, Tenant indicates that it is also electing to extend the
Initial Term by the number of days necessary to cause there to be exactly five
(5) years between the Desired Occupancy Date and the expiration of the Initial
Term ("Extension Election"). In the event, Tenant exercises the Extension
Election, the commencement date for the Expansion Space shall occur upon
Substantial Completion of the Expansion Space Landlord's Improvements (as
described in the Work Letter) ("Expansion Space Commencement Date"). The term
of the Lease for the Expansion Space shall terminate concurrently with the
Term of the Lease for the balance of the Premises.
18.4 Expansion Terms. The Expansion Space shall be leased to Tenant
on the same terms, covenants and conditions contained in this Lease, except
as provided in this Article and except that the Basic Rent for the Expansion
Space due and payable each month shall be computed in accordance with
Section 18.5 below and paid along with the Basic Rent provided in Item 10 of
the Basic Terms. The Basic Rent per rentable square foot for the Expansion
Space shall be increased from time to time in accordance with any
proportionate increases to the Basic Rent provided under Item 10 of the Basic
Terms and under Section 18.3 above (provided that increases in the Expansion
Space Rent shall not occur until the sixty-third (63rd) month after the
Expansion Space Commencement Date). If Tenant exercises any Expansion Option,
Landlord and Tenant shall enter into an amendment of this Lease setting forth
the adjusted Basic Rent and other relevant provisions based on the increase
in the area of the Premises effective on the Expansion Space Commencement
Date. If Tenant exercises its Expansion Option, then (a) all references to
the Premises shall include the Expansion Space and Expansion Land, and all
references to the Land shall include the Expansion Land, effective as of the
Expansion Space Commencement Date; (b) Landlord shall be subject to the same
monetary penalties for failure to deliver the Expansion Space by the Desired
Occupancy Date as are (provided in Section 1.3 for failure to deliver the
Premises by August 1, 1998 provided that Tenant shall not have the termination
rights set forth in Section 1.3); and (c) Tenant shall be entitled to the same
early occupancy rights for the Expansion Space as those set forth in Section
1.2.2 and in the Work Letter for the Premises.
18.5 Expansion Space Basic Rent. Commencing on the Expansion Space
Commencement Date, Tenant shall pay Basic Rent for the Expansion Space in the
amount provided in this Section 18.5 at which time Tenant shall no longer be
required to pay the portion of the Basic Rent described as "Monthly Rent for
Expansion Land" in Item 10 of the Basic Terms. The Basic Rent, paid monthly,
for the Expansion Space shall be the product of ten and one half percent
(102%), multiplied by the following costs ("Expansion Space Basic Rent"):
(1) The Expansion Land valued at $525,000;
(2) The cost of building the Expansion Space (inclusive of a
tenant improvement allowance not to exceed Five Dollars
($5.00) per square foot) as determined by (a) the lowest
competitive bid by general contractors acceptable to both
parties or (b) Landlord's in-house general contractor at
a fee of five percent (5%) of Hard Costs (defined below);
(3) Commercially reasonable and standard Architectural and
engineering fees, permit fees, governmental charges, soil
testing costs and surveying costs incurred by Landlord in
connection with the Expansion Space building;
(4) A three percent (3%) development fee on all Hard Costs.
As used herein, the term "Hard Costs" shall mean the
actual costs paid by Landlord to construct the
Improvements, including without limitation, all amounts
paid to the contractors, suppliers, and all general
contractors, all architectural, engineering and other
design consultants and on-site overhead costs directly
attributable to the Expansion Space, all standard fees
paid to the governmental agencies for the construction of
the Improvements, and other costs commonly included in
what is customarily known as "Hard Costs";
(5) The best available interim financing costs, not to exceed
the Maximum Rate of Interest specified in Item 10 of the
Basic Terms; and
(6) Any standard real estate commission paid or due and
payable by Landlord in connection with the Expansion Space
or Expansion Land.
18.6 Free Rent Period. The first two (2) calendar months of the
Expansion Space Basic Rent shall be abated.
18.7 Failure to Exercise Expansion Option. In the event Tenant fails
to exercise the Expansion Option during the Initial Term only, for so long as
there has been no Expansion Space Commencement Date, Tenant shall continue to
pay the portion of the Basic Rent described as "Monthly Rent for Expansion
Land." In the event that Tenant has not exercised the Expansion Option as of
the Expansion Option Termination Date, then notwithstanding anything to the
contrary contained herein, commencing on the first day following the Expansion
Option Termination Date, Tenant shall no longer be required to pay the Monthly
Rent for Expansion Land or any Taxes or other Additional Rent attributable to
the Expansion Land.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 Notices. All notices, demands and requests which may be or are
required to be given, demanded or requested by either party to the other shall
be in writing. All notices, demands and requests shall be sent by United
States registered or certified mail, postage prepaid or by Federal Express or
other reputable independent overnight courier service, addressed at the
addresses specified in the Basic Terms or at such other place as either party
may designate to the other party by written notice, and shall be deemed to
have been delivered on the date the same is (i) postmarked, if sent by
certified mail, or (ii) deposited, if sent by Federal Express or such other
reputable overnight courier service, but shall not be deemed received until
(a) one (1) business day following deposit with Federal Express or other
reputable overnight courier service, or (b) three (3) days following deposit
in the United States Mail if sent by certified mail.
19.2 Landlord's Continuing Obligations. The term "Landlord," as used
in this Lease so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or owners at
the time in question of the fee of the Premises, and in the event of any
transfer or transfers or conveyance the then grantor shall be automatically
freed and relieved from and after the date of such transfer or conveyance of
all liability as respects the performance of any covenants or obligations on
the part of Landlord contained in this Lease thereafter to be performed,
provided (a) that such liability is assumed in writing by the transferee and
(b) that any funds in the hands of such landlord or the then grantor at the
time of such transfer, in which Tenant has an interest, shall be turned over
to the grantee, and any amount then due and payable to Tenant by Landlord or
the then grantor under any provision of this Lease shall be paid to Tenant.
19.3 Net Lease. Landlord and Tenant do each state and represent that
it is the intention of each of them that, except as otherwise provided
herein, this Lease be interpreted and construed as a net lease and, except as
otherwise provided in this Lease, all Basic Rent and Additional Rent shall be
paid by Tenant to Landlord without abatement, deduction, diminution,
deferment, suspension, reduction or setoff.
19.4 Successors. The covenants and agreements herein contained shall
bind and inure to the benefit of Landlord, its successors and assigns, and
Tenant and its permitted successors and assigns.
19.5 Memorandum of Lease. Upon not less than fifteen (15) business
days prior written request by Landlord or Tenant, the other party agrees to
execute and deliver to the requesting party a Memorandum of Lease, in
recordable form, setting forth the following: (a) the date of this Lease; (b)
the parties to this Lease; (c) the term of this Lease; and (d) the legal
description of the Premises.
19.6 Captions and 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 Premises with
Tenant's expressed or implied permission.
19.7 Relationship of Parties. This Lease does not create the
relationship of principal and agent, or of partnership, joint venture, or of
any association or relationship between Landlord and Tenant, the sole
relationship between Landlord and Tenant being that of landlord and tenant.
19.8 Entire Agreement. Any exhibits, addenda and schedules attached
hereto shall be incorporated herein as though fully set forth herein. All
preliminary and contemporaneous negotiations are merged into and incorporated
in this Lease. This Lease Agreement together with the Exhibits contains the
entire agreement between the parties. No subsequent alteration, amendment,
change or addition to this Lease shall be binding upon Landlord or Tenant
unless reduced to writing and signed by the party to be charged with their
performance.
19.9 Severability. If any covenant, condition, provision, term or
agreement of this Lease shall, to any extent, be held invalid or
unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Lease shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Lease shall be valid and in
force to the fullest extent permitted by law.
19.10 Landlord's Limited Liability. Tenant agrees to look solely to
Landlord's interest in the Premises and any income derived directly therefrom
for recovery of any judgment from Landlord, it being agreed that Landlord (and
if Landlord is a partnership, its partners, whether general or limited, and
if Landlord is a corporation, its directors, officers or shareholders) shall
never be personally liable for any personal judgment or deficiency decree or
judgment against it.
19.11 Survival. All obligations of Landlord and Tenant (together with
interest or money obligations at the Maximum Rate of Interest) accruing prior
to expiration of the Term of this Lease shall survive the expiration or other
termination of this Lease.
19.12 Attorneys' Fees. In the event of any litigation or judicial
action in connection with this Lease or the enforcement thereof or the
enforcement of any indemnity obligation hereunder, the prevailing party in any
such litigation or judicial action shall be entitled to recover all costs and
expenses of any such judicial action or litigation (including, but not limited
to, reasonable attorneys' fees, costs and expenditures fees) from the other
party.
19.13 Broker. Each party represents and warrants that it has not had
any dealings with any realtors, brokers or agents in connection with the
negotiation of this Lease except for Xxx & Associates, whose commission shall
be payable by Landlord, and each party agrees to hold the other party harmless
from and against the failure to pay any realtors, brokers or agents and from
any cost, expense or liability for any compensation, commission or changes
claimed by any other realtors, brokers or agents claiming by, through or on
behalf of such party with respect to this Lease and/or the negotiation hereof.
19.14 Governing Law. This Lease shall be governed by the laws of the
State of California. All covenants, conditions and agreements of Tenant
arising hereunder shall be performable in the county wherein the Premises are
located. Any suit arising from or relating to this Lease shall be brought in
the county wherein the Premises are located, and the parties hereto waive the
right to be sued elsewhere.
19.15 Time is of the Essence. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance
is a factor.
19.16 Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
19.17 Delivery of Corporate Documents. In the event that Tenant is a
corporation, Tenant shall, without charge to Landlord, at any time and from
time to time within fifteen (15) days after written request by Landlord, if
required by a prospective lender or purchaser, deliver to Landlord, in
connection with any proposed sale or mortgage of the Premises, the following
instruments and documents:
(a) Certificate of Good Standing in the state of incorporation
of Tenant and in the state in which the Premises are
located issued by the appropriate state authority and
bearing a current date;
(b) A copy of Tenant's articles of incorporation and bylaws,
and any amendments or modifications thereof certified by
the secretary or assistant secretary of Tenant.
19.18 Tenant's Financial Condition. Prior to the Effective Date, and
within fifteen (15) business days after written request from Landlord (so long
as Landlord has a reasonable basis for requesting such information based upon
Tenant's financial condition) and not more than one (1) time per twelve month
period, Tenant shall deliver to Landlord financial statements prepared in
accordance with generally accepted accounting principles consistently applied
("GAAP") as are reasonably required by Landlord to verify the net worth of
Tenant, or any assignee, subtenant or guarantor of Tenant provided that Tenant
shall not be required to provide any information that would constitute a
violation of the rules and regulations of the Securities Exchange Commission.
In addition, Tenant shall deliver to any lender or proposed purchaser of the
Premises, Project, Land and/or Expansion Land or any portion thereof
designated by Landlord any financial statements prepared in accordance with
GAAP required by any lender or purchaser to facilitate the sale, financing or
refinancing of the Premises or Project or any portion thereof. Tenant
represents and warrants to Landlord that (a) each such financial statement is
a true and accurate statement as of the date of such statement; and (b) at all
times after the date of any such statement during the Lease Term or any
extension thereof, Tenant's net worth, as stated therein, shall not be
reduced. All financial statements shall be confidential and shall be used
only for the purposes set forth herein. Each such financial statement shall
be executed by Tenant and shall, if requested by Landlord, be certified by
Tenant to be true and correct. Notwithstanding the foregoing, if Tenant is
a publicly traded company. Tenant may provide Landlord with copies of
Tenant's latest 10-Q and 10-K filings with the Securities Exchange Commission
in lieu of the above referenced financial statements.
19.19 Provisions are Covenants and Conditions. All provisions, whether
covenants or conditions, on the part of the Landlord, or on the part of
Tenant, shall be deemed to be both covenants and conditions.
19.20 Business Days. As used herein, the term "business days" shall
mean any day which is not a Saturday, Sunday or a legal holiday in the State
of California.
19.21 Force Majeure. If either party shall be delayed or prevented from
the performance of any act required hereunder, other than the payment of Rent,
Additional Rent or any other sums required to be paid hereunder, by reason of
acts of God, strikes, lockouts, labor troubles, inability to procure
materials, respect of governmental laws or regulations, or by reason of any
order or direct of any legislative, administrative or judicial body, or any
government department, or by reason of not being able to obtain any licenses,
permissions or authorities required therefor, or other causes without fault
or beyond the reasonable control of such party, then notwithstanding anything
to the contrary contained herein, performance of such acts by such party shall
be excused for the period of the delay and the period of the performance of
any such acts shall be extended for a period equivalent to the period of such
delay; (herein such delays are sometimes referred to as AForce Majeure@.)
19.22 No Continuous Operation. Notwithstanding anything in this Lease
to the contrary, nothing herein shall be construed as an obligation for Tenant
to open or operate its business in the Premises. Tenant shall have the right
to remove Tenant's personal property and cease operations in the Premises at
any time and at Tenant's sole discretion. However, the right to cease to
operate its business shall not affect Tenant's obligation to pay all amounts
due hereunder and to perform all covenants and obligations hereunder. Tenant
agrees, at such time it is operating its business in the Premises, to conduct
its business in a first-class manner, consistent with reputable business
standards and practices.
19.23 Waiver of Landlord's Lien. Landlord hereby waives any
contractual, statutory or other Landlord's lien on Tenant's furniture,
moveable trade fixtures, supplies, equipment and inventory. Tenant shall have
the absolute right from time to time during the Term hereof and without
Landlord's further approval, written or otherwise, to grant and assign a
mortgage or other security interest Tenant's furniture, fixtures, supplies,
equipment and inventory to Tenant's lenders in connection with Tenant's
financing arrangement. Landlord agrees to execute such confirmation
certificates and other documents (except amendments to this Lease unless
Landlord hereafter consents in its sole and absolute discretion) as Tenant's
lenders may reasonably request in connection with any such financing.
19.24 Submission of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Exhibits
and Addenda which are attached to or incorporated by reference in this Lease.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBITS
Page First
Appearing
Exhibit "A" - Legal Description of Land 1
Exhibit "A-1" - Legal Description of Expansion Land 18
Exhibit "A-2" - Expansion Space 18
Exhibit "B" - Work Letter 1
Schedule 1 to Work Letter - Final Plans and Specification N/A
Exhibit "C" - Preliminary Report 1
Exhibit "D" - Commencement Date Acknowledgment 1
Exhibit "E" - Delivery Date Acknowledgment 1
Exhibit "F" - Subordination, Non-Disturbance and Attornment Agreement 15
EXHIBIT "A"
Legal Description of Land
[To Be Attached]
EXHIBIT "A-1"
Legal Description of Expansion Land
[To Be Attached]
EXHIBIT "A-2"
Depiction of Expansion Space
[To Be Attached]
EXHIBIT "B"
WORK LETTER
OPUS WEST CORPORATION, a Minnesota corporation, ("Landlord") and PETCO
ANIMAL SUPPLIES, INC., a Delaware corporation ("Tenant") as of this ___ day
of November, 1997, are executing simultaneously with this Work Letter
Agreement ("Work Letter"), a written lease (the "Lease") covering the Premises
described in the Lease.
This Work Letter defines the scope of Landlord's Improvements (as
defined below) which Landlord shall be obligated to construct or install on
the Premises. It there is a conflict between the terms and provisions of this
Work Letter and the Lease, this Work Letter shall control. Terms which have
initial capital letters and are not otherwise defined in this Letter shall
have the meaning set forth in the Lease.
This Work Letter is a part of the Lease and shall be subject to all of
its terms and condition, including all definitions contained therein. Unless
the context otherwise requires, any references to the Lease shall include the
Work Letter and the obligations contained herein shall, to the extent
applicable, continue during the Lease Term.
In consideration of the mutual covenants hereinafter contained, Landlord
and Tenant mutually agree as set forth below.
CONSTRUCTION OF IMPROVEMENTS
1. Improvements. Landlord agrees to furnish, at Landlord's sole cost
and expense, all of the material, labor, and equipment for the construction
on the Land of the improvements ("Landlord's Improvements") designated on the
Final Plans and Specifications attached hereto and as Schedule 1 and
incorporated herein ("Final Plans and Specifications" or "Construction
Documents"). When Landlord requests Tenant to specify details or layouts,
Tenant shall specify same, subject to the provisions of the Final Plans and
Specifications, so as not to delay completion of the Landlord's Improvements.
Except as specifically set forth in this Lease and delineated on the Final
Plans and Specifications, Landlord shall not provide or pay for any other
improvements related to the Premises. Landlord's Improvements shall be
constructed in a good and workmanlike manner in accordance with the Final
Plans and Specifications and Landlord agrees to complete the construction
thereof in accordance with the applicable building code as it is presently
interpreted and enforced by the governmental bodies having jurisdiction
thereof. By execution of the Lease, Tenant hereby approves of the attached
Final Plans and Specifications. Tenant shall pay to Landlord all increased
costs or damages incurred by Landlord attributable to delays caused by Tenant.
1.1 Premises Furnishings. Tenant shall be solely responsible
for the performance and expense of the design, layout, provision, delivery and
installation of any furniture, furnishings, telephone systems, computer
systems, office equipment, and any other personal property Tenant will use at
the Premises. In arranging for the performance of any of the work referred
to in the preceding sentence, Tenant shall adopt a schedule in conformance
with the schedule(s) of Landlord's Contractor(s) (defined below) and conduct
its work in such a manner as to maintain harmonious labor relations and so as
not to interfere unreasonably with or delay the work of Landlord's
Contractor(s) in substantially completing the Landlord's Improvements.
2. Construction of Landlord's Improvements. A contractor selected
by Landlord in Landlord's sole discretion ("Landlord's Contractor") shall use
its commercially reasonable efforts (a) to Substantially Complete (as defined
below) the Landlord's Improvements on or before August 1, 1998 and (b) to
ensure that the structural and exterior portions of the Premises, including
without limitation the roof (hereinafter, the "Structural Portions of the
Demised Premises"), the plumbing, electrical, gas, and other utilities,
including without limitation the HVAC (hereinafter, the "Utilities") servicing
same are in good working condition and order on the Commencement Date and are
in compliance with all existing law, codes, regulations and ordinances of any
governmental authorities, including seismic requirements and the Americans
with Disabilities Act, as evidenced by a Certificate of Occupancy issued by
the City.
3. Completion of Landlord's Improvements. Landlord shall be
responsible for the construction of the Landlord's Improvements in accordance
with the approved Final Plans and Specifications. Within thirty (30) days of
Substantial Completion (as defined below) of the Landlord's Improvements,
Landlord and Tenant shall provide a "punchlist" identifying the corrective
work of the type commonly found on an architectural punchlist with respect to
the Landlord's Improvements, which list shall be in Landlord's reasonable
discretion based on whether such items were required by the approved Final
Plans and Specifications. Within ten (10) Business Days after delivery of the
punchlist, Landlord shall commence the correction of punchlist items and
diligently pursue such work to completion. The punchlist procedure to be
followed by Landlord and Tenant shall in no way limit Tenant's obligation to
occupy the Premises under the Lease nor shall it in any way excuse Tenant's
obligation to pay Rent as provided under the Lease unless such punch list
items preclude Tenant from occupying the Premises as reasonably determined by
Landlord and Tenant.
4. Substantial Completion. "Substantial Completion" or
"Substantially Completed" as used herein shall mean delivery of written notice
to Tenant of the completion of construction of the Landlord's Improvements in
the Premises pursuant to the approved Final Plans and Specifications with the
exception of minor details of construction, installation, decoration, or
mechanical adjustments and punchlist items as certified to by Landlord.
Substantial Completion shall be deemed to have occurred, and completion of the
Landlord's Improvements shall be deemed to have occurred upon issuance of a
temporary or permanent certificate of occupancy, notwithstanding the
requirement to complete "punchlist" items or similar corrective work. Tenant
agrees that if Landlord shall be delayed in causing such work to be
Substantially Completed as a result of any of the events as defined below
(referred to herein as a "Tenant Delay"), then such delay shall be the
responsibility of Tenant, and will result in the Commencement Date of the Term
being the earlier of: (i) Tenant's opening of the Premises for business; (ii)
the date of Substantial Completion or (iii) the date when Substantial
Completion would have occurred if there had been no Tenant Delay, providing
that Landlord shall not be required to work on an overtime basis in order to
bring the Premises to Substantial Completion. For the purposes of this Work
Letter, a Tenant Delay is defined as follows: (a) Tenant's failure to comply
with any time frames set forth herein or in the Lease, (b) any changes in the
Final Plans and Specifications requested by Tenant after execution of this
Lease, or (c) Tenant's failure to perform any act or obligation imposed on
Tenant by the Lease or this Work Letter as and when requested thereunder or
hereunder, or (d) any other delay otherwise caused by Tenant, its agents,
employees or contractors which operates to delay Landlord's Substantial
Completion of the Landlord's Improvements, as reasonably determined by
Landlord.
5. Force Majeure. Landlord shall diligently proceed with the
construction of the Landlord's Improvements and complete the same and deliver
possession thereof to Tenant in accordance with the project schedule to be
submitted by Landlord to Tenant within fifteen (15) days after the Effective
Date of the Lease; provided, however, if delay is caused or contributed to by
act or neglect of Tenant, Tenant delays as described in Section 4 above or
those acting for or under Tenant, change orders requested by Tenant, labor
disputes, casualties, acts of God or the public enemy, governmental embargo
restrictions, shortages of fuel, labor, or building materials, action or non-
action of public utilities, or of local, state or federal governments
affecting the work, or other causes beyond Landlord's reasonable control, then
the time of completion of said construction shall be extended for the
additional time caused by such delay. Such delays are each hereinafter
referred to as an "Excused Delay." Landlord shall notify Tenant in writing
of any Excused Delay that is due to a Tenant Delay.
6. Possession of Premises. Tenant shall, within five (5) business
days after request therefrom by Landlord, advise Landlord of required color
selections. Tenant shall be responsible for Landlord's increased cost of
labor and materials if any, and loss of Rent, arising out of delay in the
completion of the Premises caused by Tenant's failure to comply in a timely
manner with the foregoing schedule. Landlord shall notify Tenant at least
thirty (30) days prior to its estimated date of Substantial Completion and
Tenant shall during such thirty (30) day period have the right to access the
warehouse portion of the Premises to install fixtures and equipment
("Fixturization Period") provided that Tenant does not thereby interfere with
the completion of construction or occasion any labor dispute as a result of
such installations and provided further that Tenant does hereby agree to
assume all risk of loss or damage to such machinery, equipment, fixtures and
other personal property. Tenant shall adopt a schedule in conformance with
the schedule of Landlord and conduct its work in such a manner as to maintain
harmonious labor relations so as not to interfere unreasonably with or delay
the work of Landlord. Tenant shall not be liable to Landlord for the payment
of Basic Rent or taxes during such Fixturization Period but Tenant shall be
subject to the other terms and provisions of this Lease, including the
insurance and indemnity obligations and the obligation to maintain the
Premises free of mechanic liens. Basic Rent and the payment and performance
of all other obligations to be paid by Tenant shall commence upon the
Commencement Date; provided, however, in the event that Landlord's
Improvements are partially completed and partially ready for occupancy, and
are occupied by Tenant, or Tenant is required to occupy same, the terms of
such occupancy or use of the Premises shall apply and a pro rata portion of
the Basic Rent and the pro rata portion of all other obligations to be paid
by Tenant shall be payable commencing with such date of partial occupancy, and
shall be equitably adjusted from time to time based upon the area and value
of the portion of Landlord's Improvements substantially completed and ready
for Tenant's occupancy. The failure of Tenant to take possession of or to
occupy the Premises or any portion thereof which Tenant is required to occupy
on or after the date Landlord's Improvements or such applicable portion
thereof are substantially complete and ready for occupancy by Tenant shall not
serve to relieve Tenant of said obligations or delay payments by Tenant to
Landlord.
7. Tenant Work.
7.1 Finish Work. All finish work and decoration and other work
desired by Tenant and not included within the Landlord's Improvements as set
forth in the approved Construction Documents, including specifically, without
limitation, all computer systems, telephone systems, telecommunications
systems and other items (the "Tenant Work") shall be furnished and installed
by Tenant at Tenant's sole expense.
7.1.1 Consent of Landlord. If any Tenant Work is not set
forth on the approved Construction Documents, Tenant shall secure Landlord's
prior consent for such Tenant Work in the same manner and following the same
procedures provided for in the Lease. Tenant shall not commence the
construction or installation of any improvements on the Premises, including,
specifically, the Tenant Work, without Landlord's prior written approval which
shall not be unreasonably withheld of: (i) Tenant's contractor, (ii) detailed
plans and specifications for the Tenant Work, and (iii) certificate(s) of
insurance accurately showing that Tenant's contractor maintains insurance
coverage in amounts, types, form and with companies reasonably acceptable to
Landlord. All such certificates or policies shall be endorsed to show
Landlord as an additional insured and such insurance shall be maintained by
Tenant or Tenant's contractor at all times during the performance of the
Tenant Work.
7.2 Landlord's Obligations. Landlord is under no obligation to
construct or supervise construction of any of the Tenant Work and any
inspection by Landlord shall not be construed as a representation that the
Tenant Work is in compliance with the final plans and specifications therefor
or that the construction will be free from faulty material or workmanship, or
that the Tenant Work is in conformance with any building codes or other
applicable requirements. All of the Tenant Work shall be undertaken and
performed in strict accordance with the provisions of the Lease and this Work
Letter.
8. Risk of Loss. All materials, work, installations and decorations
of any nature brought upon or installed in the Premises before the
Commencement Date shall be at the risk of the party who brought such materials
or items onto the Premises. Neither Landlord nor any party acting on
Landlord's behalf shall be responsible for any damage or loss or destruction
of such items brought to or installed in the Premises by Tenant prior to such
date, except in the event of Landlord's gross negligence or willful
misconduct.
9. Expansion Space. If Tenant exercises its Expansion Option to
lease the Expansion Space (as defined in the Lease), then the terms of this
Work Letter, to the extent applicable, shall apply with respect to the
Expansion Space; provided that an amendment to the Lease and/or this Work
Letter shall be executed by the parties which shall set forth more
specifically the provisions hereof that shall apply to the Expansion Space.
If Tenant acquires the Expansion Space, Landlord shall furnish the material,
labor and equipment for the construction of improvements similar to the
Landlord's Improvements described in Schedule 1, which shall be agreed upon
and incorporated into the amendment ("Expansion Space Landlord's
Improvements"). With respect to Expansion Space Landlord's Improvements,
Substantial Completion of such improvements shall be deemed to have occurred
in accordance with the same criteria for Substantial Completion provided under
Section 4 of this Work Letter.
10. Conformance with Laws. All work performed by Tenant, including
the Tenant Work, shall be done in conformity with applicable codes and
regulations of governmental authorities having jurisdiction over the Project
and the Premises and valid building permits and other necessary authorizations
from appropriate governmental agencies when required, shall be obtained by
Tenant for the Tenant Work at Tenant's expense. Notwithstanding any failure
by Landlord to object to any such Tenant Work, Landlord shall have no
responsibility therefor.
11. Tenant's Representative. Tenant has designated Xxxx Xxxxx as its
sole representative with respect to the matters set forth in this Work Letter,
who shall have full authority and responsibility to act on behalf of Tenant
as required in this Work Letter. Tenant may change its representative under
this Work Letter at any time by providing five (5) days prior written notice
to Landlord. All inquiries, requests, instructions, authorizations and other
communications with respect to matters covered by this Work Letter from
Landlord will be made to Tenant's Representative.
12. Landlord's Representative. Landlord has designated Xxxx Xxxxxxxxx
as its sole representative with respect to the matters set forth in this Work
Letter, who shall have full authority and responsibility to act on behalf of
Landlord as required in this Work Letter. Landlord may change its
representative under this Work Letter at any time by providing five (5) days
prior written notice to Tenant. All inquiries, requests, instructions,
authorizations and other communications with respect to the matters covered
by this Work Letter from Tenant will be made to Landlord's representative.
Tenant will communicate solely with Landlord's Representative and will not
make any inquiries of or requests to, and will not give any instructions or
authorizations to, any other employee or agent of Landlord, including
Landlord's architect, engineers, and contractors or any of their agents or
employees, with regard to matters covered by this Work Letter.
13. Miscellaneous.
13.1 Sole Obligations. Except as herein expressly set forth with
respect to the Landlord's Improvements, Landlord has no agreement with Tenant
and has no obligation to do any work with respect to the Premises. Any other
work in the Premises which may be permitted by Landlord pursuant to the terms
and conditions of the Lease, including any alterations or improvements as
contemplated in the Lease, shall be done at Tenant's sole cost and expense and
in accordance with the terms and conditions of the Lease.
13.2 Applicability. This Work Letter shall not be deemed
applicable to: (a) any additional space added to the original Premises at any
time, whether by the exercise of any options under the Lease or otherwise, or
(b) any portion of the original Premises or any additions thereto in the event
of a renewal or extension of the original Lease Term, whether by the exercise
of any options under the Lease or any amendment or supplement thereto. The
construction of any additions or improvements to the Premises not contemplated
by this Work Letter shall be effected pursuant to a separate work letter
agreement, in the form then being used by Landlord and specifically addressed
to the allocation of costs relating to such construction.
13.3 Authority; Counterparts. Any person signing this Work
Letter on behalf of Tenant warrants and represents that such person has
authority to do so. This Work Letter may be executed in counterparts, each
of which shall be deemed an original, but all of which together constitute one
instrument.
13.4 Binding on Successors. Subject to the limitations on
assignment and subletting contained in the Lease, this Work Letter shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
13.5 Time of the Essence. Time is of the essence as to each and
every term and provision of this Work Letter. In all instances where Tenant
is required to approve an item, if no written notice of disapproval is given
within the stated time period at the end of said period the item shall
automatically be deemed approved and the next succeeding time period shall
commence. Except as otherwise provided, all references herein to a "number
of days" shall mean and refer to calendar days.
13.6 Attorneys' Fees. In any action to enforce or interpret the
terms of this Work Letter, the party prevailing in that action shall be
entitled to recover its reasonable attorneys' fees and costs of suit, both at
trial and on appeal.
13.7 Incorporation. This Work Letter is and shall be
incorporated by reference in the Lease and all of the terms and provisions of
the Lease are incorporated herein for all purposes. Any default by Tenant
hereunder also constitutes a default under the Lease.
[Remainder of Page Intentionally Left Blank]
14. Tenant's Acceptance of Premises. Within a period of sixty (60)
days after commencement of the Initial Term, Tenant shall notify Landlord, in
writing, of all portions of the Landlord's Improvements which are incomplete
and Landlord shall forthwith complete such items. Failure to deliver such
notice shall constitute an acknowledgment that the Landlord's Improvements are
complete.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a Minnesota
corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
SCHEDULE 1
Plans and Specification
[To Be Attached]
EXHIBIT "C"
Preliminary Report
EXHIBIT "D"
Commencement Date Acknowledgment
TO: Opus West Corporation
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
("Landlord")
FROM: PETCO Animal Supplies
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
("Tenant")
RE: Lease Agreement dated ___________________, 1997 ("Lease") covering
the premises described therein ("Premises") located in the County
of Riverside, State of California.
Pursuant to the term of the Lease, Tenant has agreed to provide this
Commencement Date Acknowledgment ("Acknowledgment") to Landlord within ten
(10) business days after Landlord's request therefor. This Acknowledgment is
not in any way intended to modify any of the terms of the Lease.
1. Commencement Date. The term of the Lease commenced on
___________________, is presently in force, and, unless Tenant exercises its
renewal or extension options, will expire on __________________________.
Tenant has two (2) five (5) year Renewal Options exercisable pursuant to
Article 17 the Lease and an Extension Election exercisable pursuant to Article
18 of the Lease.
2. Amendments. The Lease has not been modified, altered or amended
in any respect, except for (indicate "None" if
none)______________________________________.
The information set forth in this Acknowledgment is true and correct as
of the date hereof. This Acknowledgment shall be binding upon the successors
and assigns of Tenant.
DATED:
TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT "E"
Delivery Date Acknowledgment
TO: Opus West Corporation
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
("Landlord")
FROM: PETCO Animal Supplies
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
("Tenant")
RE: Lease Agreement dated ___________________, 1997 ("Lease") covering
the premises described therein ("Premises") located in the County
of Riverside, State of California.
Pursuant to the term of the Lease, Tenant has agreed to provide this
Delivery Date Acknowledgment ("Acknowledgment") to Landlord within ten (10)
business days after Landlord's request therefor. This Acknowledgment is not
in any way intended to modify any of the terms of the Lease.
1. Acceptance of Premises. Tenant has accepted possession of the
Premises, is the actual occupant in possession of the Premises and has not
sublet, assigned or otherwise transferred its interest in the Premises. All
improvements to be constructed on the Premises by Landlord have been completed
and accepted by Tenant (with the exception of any identified punch list
items). The Premises were in acceptable condition and were delivered in
compliance with all of the requirement of the Work Letter (as defined in the
Lease) and the Lease.
2. Delivery Date. The Delivery Date under the Lease is and the
Premises were delivered from Landlord to Tenant on ___________________
3. Substantial Completion. The date of Substantial Completion of the
Premises (as defined in the Lease) is ________________________.
4. Amendments. The Lease has not been modified, altered or amended
in any respect, except for (indicate "None" if
none)______________________________________.
The information set forth in this Acknowledgment is true and correct as
of the date hereof. This Acknowledgment shall be binding upon the successors
and assigns of Tenant.
DATED:
TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT "F"
RECORDED AT THE REQUEST OF )
)
AND )
)
WHEN RECORDED MAIL TO: )
______________________________ )
______________________________ )
______________________________ )
______________________________ )
)
Space Above This Line for Recorder's Use
SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made and entered into this ___ day of October, 1997,
by and among ___________________(ALender@), whose address is_______________,
PETCO ANIMAL SUPPLIES, INC., a Delaware corporation (the "Tenant") and OPUS
WEST CORPORATION, a Minnesota corporation (ALandlord@).
RECITALS
1. Lender is the owner and holder of that certain ____________
(Promissory Note or Loan Agreement) dated ____________, in the principal sum
of
($_____________). The ___________________ is secured by a deed of trust,
assignment and security agreement recorded prior to or contemporaneously with
the recording hereof in the records of San Diego County, California, which
Deed of Trust constitutes a lien or encumbrance on that real property more
particularly described on Schedule "A" attached hereto and by this reference
incorporated herein.
2. Tenant is the holder of a leasehold estate (the "Leased
Premises") included in the real property described on Schedule "A" attached
hereto and by this reference incorporated herein, pursuant to the terms of
that lease (the "Lease") dated _______, and executed by Tenant and Landlord.
The Lease includes without limitation all right, title and interest that
Tenant may have in all or any portion of the Leased Premises.
3. Tenant and Lender desire to confirm their understanding with
respect to the Lease and the Deed of Trust.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree and covenant as follows:
1. So long as Tenant is not in default (beyond any period given
Tenant to cure such default) in the payment of rent or in the performance of
any of the terms, covenants or conditions of the Lease to be performed by
Tenant, Lender shall not disturb or interfere with Tenant's possession and
occupancy of the Leased Premises during the term of the Lease or any extension
thereof duly exercised by Tenant.
2. If the interests of Tenant shall be transferred to and owned by
Lender by judicial foreclosure, private trustee sale or any other manner, and
Lender succeeds to the interest of Landlord under the Lease, Tenant shall be
bound to Lender under all of the covenants, conditions and provisions of the
Lease for the remaining term thereof, and any extension thereof duly exercised
by Tenant, with the same force and effect as if Lender were the Landlord under
the Lease. Tenant hereby attorns to Lender as its Landlord, and that
attornment shall be self-operative and shall be effective immediately upon
Lender's succeeding to the interest of Landlord under the Lease without the
execution of any further instruments by any of the parties hereto.
3. If the interests of Landlord shall be transferred to and owned by
Lender by judicial foreclosure, private trustee sale or any other manner, and
Lender succeeds to the interest of Landlord under the Lease, Lender shall be
bound to Tenant under all of the terms, covenants and conditions of the Lease
except that Lender shall not be:
(a) Liable for any act or omission of any prior landlord
(including Landlord);
(b) Subject to any offsets or defenses that Tenant might have
against any prior landlord (including Landlord) unless Lender has been given
notice and an opportunity to cure in accordance with the terms of the Lease;
(c) Bound by any rent or additional rent or advance rent that
Tenant might have paid for more than the current month to any prior landlord
(including Landlord) and all such rent shall remain due and owing
notwithstanding such advance payment;
(d) Bound by any amendment or modification of the Lease made
without its consent and written approval;
(e) Liable for any security deposit Tenant might have paid to
any prior landlord (including Landlord), except to the extent Lender has
actually received said security deposit;
(f) Personally liable under the Lease. Lender's liability under
the Lease shall be limited to the ownership interest of Lender in the Leased
Premises and any income derived therefrom by Lender.
In addition, Lender shall not have any liability or responsibility under or
pursuant to the terms of the Lease or this Agreement after it ceases to own
an interest in or to the property described on Schedule "A."
4. The Lease is now, and shall at all times continue to be, subject
and subordinate in each and every respect to the Deed of Trust and to all
extensions, modifications, renewals, replacements, substitutions and/or
consolidations thereof; but only to the extent that such extensions,
modifications, renewals, replacements, substitutions, and/or consolidations
thereof do not materially and detrimentally alter Tenant's rights and
obligations under the Lease. Nothing contained herein shall be deemed or
construed as limiting or restricting the enforcement by Lender of any of the
covenants, conditions, provisions or remedies of the Deed of Trust, whether
or not consistent with the Lease.
5. Tenant shall give written notice to Lender of any failure by
Landlord to perform or observe any of the covenants, conditions or provisions
of the Lease, and Lender shall have the right, but not the obligation, to cure
such failure. In the event of any such failure by Landlord, Tenant shall not
take any action with respect to such failure, including without limitation any
action to terminate, rescind or avoid the Lease or to withhold any rent
thereunder, for a period of fifteen (15) days after notice thereof to Lender;
provided, however, that if such failure cannot reasonably be remedied within
that fifteen (15) day period, Tenant shall not take any action with respect
to such failure, including without limitation any action to terminate, rescind
or avoid the Lease or to withhold any rent thereunder, so long as Lender shall
commence to remedy the failure within the fifteen (15) day period and
thereafter shall diligently prosecute the remedy to completion.
6. All notices, demands and requests which may be or are required to
be given, demanded or requested by either party to the other shall be in
writing. All notices, demands and requests shall be sent by United States
registered or certified mail, postage prepaid or by Federal Express or other
reputable independent overnight courier service, addressed at the addresses
specified at the beginning of this Agreement or at such other place as either
party may designate to the other party by written notice, and shall be deemed
to have been delivered on the date the same is (i) postmarked, if sent by
certified or registered United States mail, or (ii) deposited, if sent by
Federal Express or such other reputable overnight courier service, but shall
not be deemed received until (a) one (1) business day following deposit with
Federal Express or other reputable overnight courier service, or (b) three (3)
days following deposit in the United States Mail if sent by certified or
registered mail.
7. The term "Lender" shall be deemed to include _________, a
__________, and its successors and assigns, including anyone who shall have
succeeded to Landlord's interest by or through judicial foreclosure, private
trustee's sale, or other proceedings brought pursuant to the Deed of Trust or
deed in lieu of such foreclosure or proceedings.
8. Each covenant, condition and provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law
but if any covenant, condition or provision of this Agreement shall be held
to be void or invalid, the same shall not affect the remainder hereof which
shall be effective as though the void or invalid covenant, condition or
provision had not been contained herein.
9. This Agreement may not be modified orally or in any other manner
than by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their successors and assigns.
10. This Agreement shall be governed by and construed according to the
laws of the State of California.
11. This Agreement may be executed in any number of counterparts, and
each counterpart executed by any of the undersigned, together with all other
counterparts so executed, shall constitute a single instrument and agreement
of the parties.
IN WITNESS WHEREOF, these presents are executed as of the date indicated
above.
_____________________________, a
__________________________________
By:
Name:
Title:
Lender
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation
By:
Name:
Title:
Tenant
OPUS WEST CORPORATION,
a Minnesota corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Landlord
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
SCHEDULE "A"
Legal Description
[TO BE ATTACHED]
