Exhibit 10.55
LEASE AGREEMENT
BETWEEN
IPT PARTNERS, LLC, a California limited liability company
Landlord
AND
MARKETING SPECIALISTS SALES COMPANY, a Texas corporation
Tenant
Dated: May 2, 2000
Premises: 744 and 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
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INDEX
ARTICLE HEADING PAGE
------- ------- ----
ARTICLE A CERTAIN LEASE PROVISIONS.........................................1
ARTICLE B CERTAIN DEFINITIONS..............................................4
ARTICLE 1 PREMISES AND TERM................................................6
ARTICLE 2 FIXED RENT AND ADDITIONAL RENT...................................7
ARTICLE 3 IMPOSITIONS......................................................7
ARTICLE 4 USE AND OPERATION OF PREMISES....................................9
ARTICLE 5 CONDITION OF PREMISES, ALTERATIONS AND REPAIRS..................10
ARTICLE 6 INSURANCE.......................................................12
ARTICLE 7 DAMAGE OR DESTRUCTION...........................................13
ARTICLE 8 CONDEMNATION....................................................15
ARTICLE 9 ASSIGNMENT AND SUBLETTING.......................................15
ARTICLE 10 SUBORDINATION...................................................18
ARTICLE 11 OBLIGATIONS OF TENANT...........................................20
ARTICLE 12 DEFAULT BY TENANT; REMEDIES.....................................22
ARTICLE 13 NO WAIVER.......................................................25
ARTICLE 14 ESTOPPEL CERTIFICATE............................................26
ARTICLE 15 QUIET ENJOYMENT.................................................26
ARTICLE 16 SURRENDER.......................................................27
ARTICLE 17 ACCESS..........................................................27
ARTICLE 18 ENVIRONMENTAL MATTERS...........................................28
ARTICLE 19 MISCELLANEOUS PROVISIONS........................................31
ARTICLE 20 RENEWAL OPTIONS.................................................33
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EXHIBITS
Exhibit "A" - Description of the Land
Exhibit "B" - Memorandum of Lease
Exhibit "C" - Renewal Options
Exhibit "D" - Depiction of Tenant's Warehouse Space and Landlord's Storage Area
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "LEASE") is made as of the Commencement Date
identified in ARTICLE A, Section 2(b) below by and between IPT PARTNERS, LLC, a
California limited liability company ("Landlord"), and MARKETING SPECIALISTS
SALES COMPANY, a Texas corporation ("TENANT").
W I T N E S S E T H:
- - - - - - - - - -
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
ARTICLE A
CERTAIN LEASE PROVISIONS
1. Address for 744 and 000 Xxxxxx Xxxxxx
the Premises: Xxxxxx, Xxxxxxxxxx 00000
2. (a) Initial Term: Approximately four (4) years, beginning on
the Commencement Date and ending on the
Expiration Date. As used in this Lease, the
term "TERM" shall mean the Initial Term
together with any renewal thereof.
(b) Commencement
Date: May 2, 2000.
(c) Expiration
Date: May 2, 2004, unless sooner terminated
pursuant to this Lease.
(d) Renewal
Options: Two (2) options. The First Renewal Term (as
defined in the EXHIBIT "C" attached to this
Lease) will be 12 months. The Second Renewal
Term (as defined in EXHIBIT "C") will be 60
months.
3. Fixed Rent: Tenant agrees to pay to Landlord as monthly
rental for the Premises (as defined in
ARTICLE B below) (such monthly rental is
herein referred to as "FIXED RENT") in lawful
money of the United States of America, at
0000 Xxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx
00000, or to such other person or entity and
at such other place as Landlord may from time
to time designate in writing, as follows:
From the Commencement Date through the last
day of the thirtieth (30th) full calendar
month of the Initial Term, Tenant shall pay
Fixed Rent in the amount of $42,428.00 in
advance on the first day of each and every
successive calendar month during such period
of time.
From the first day of the thirty-first (31st)
full calendar month of Initial Term through
the Expiration Date, Tenant shall pay Fixed
Rent in the amount of $44,581.00 in advance
on the first day of each and every successive
calendar month during such period of time.
4. Tenant's Use of Premises: For general office and warehouse use and uses
incidental thereto and for no other purpose
without the prior written consent of
Landlord.
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5. Landlord's Use of Storage
Area: For storage purposes of Landlord's vehicles
and other items, including occasional engine
and auto body rebuilding activities, and for
no other purpose without the prior written
consent of Tenant. This use will be permitted
throughout the Term provided that Landlord,
at Landlord's sole cost and expense,
constructs the Demising Wall and Related
Improvements (as defined in ARTICLE B below)
within sixty (60) days after the Commencement
Date. Tenant shall also permit Landlord (a)
to saw-cut the concrete floor slab
(the "FLOOR SLAB") leading from Tenant's
existing restroom facilities within Tenant's
Warehouse Space to Landlord's new restroom
facilities to be constructed in Landlord's
Storage Area, (b) to install new water and
sewer lines (the "WATER AND SEWER LINES") by
directly tapping into Tenant's utility lines,
and (c) to restore all portions of the
Premises affected by the construction of the
Demising Wall and Related Improvements to
their condition existing prior to the
commencement of such construction (the
"RESTORATION WORK"). If either (i) the
installation of the Water and Sewer Lines
impairs the ability of Tenant to obtain water
and/or sewer service to Tenant's Warehouse
Space, or (ii) Landlord does not
substantially complete (A) the Demising Wall
and Related Improvements within such 60-day
period, and/or (B) the Restoration Work as
soon as practicable but (1) in no event more
than sixty (60) days after the Commencement
Date with respect to the Restoration Work not
related to the Floor Slab, and (2) with
respect to the Restoration Work related to
the Floor Slab, in no event more than ten
(10) days after the date on which the Floor
Slab has been saw-cut (all subject to
extension if the construction and/or
restoration is delayed by any Force Majeure
Delays [as defined in Section 19.16 below]),
Tenant shall have the right to complete the
construction of the Demising Wall and Related
Improvements and/or the Restoration Work and
Landlord shall reimburse Tenant upon
Landlord's receipt of a written demand for
all costs and expenses incurred by Tenant in
connection therewith. If Landlord fails to
pay the amount of such costs and expenses
within five (5) days after Landlord's receipt
of any such written demand, Tenant shall have
the right to offset against the next due
installments of Rent the amount of such costs
and expenses until such time as Tenant has
been fully reimbursed for the same. Landlord
covenants and agrees that, in connection with
the construction of the Demising Wall and
Related Improvements and the Restoration
Work, (y) Landlord will use its best efforts
to minimize the disruption to Tenant's
business being conducted in Tenant's
Warehouse Space, and (z) in no event will
Tenant be required to move any of the racks,
refrigerators or freezers located in the
Tenant's Warehouse Space as of the
Commencement Date. Notwithstanding anything
to the contrary contained in this Lease,
during the period of time that Landlord has a
right pursuant to this Lease to use the
Landlord's Storage Area, Tenant shall have no
obligation to maintain or repair the
Landlord's Storage Area.
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6. Address for Notices:
For Landlord: IPT Partners, LLC
c/o Xxxxx Xxxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
For Tenant: Marketing Specialists Sales Company
00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Gage X. Xxxx and
Xxxxx X. Xxxxxxxxx
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ARTICLE B
CERTAIN DEFINITIONS
"ADDITIONAL RENT" is defined in SECTION 2.2.
"ALTERATIONS" is defined in SECTION 5.4.
"BANKRUPTCY CODE" means the provisions of 11 U.S.C. Section 101 et seq. or
any statute of similar purpose or nature as more particularly set forth in
SECTION 9.10.
"BASE BUILDING COMPONENTS" means the foundation, the roof and the
structural walls of the Building.
"BUILDING" means the buildings, building equipment and improvements now or
hereinafter erected on the Land.
"BUSINESS DAY" is every day which most commercial banks based in New York,
New York are open for the ordinary conduct of business.
"CASUALTY REPAIR DELIVERY PERIOD" is defined in SECTION 7.2.
"CLAIMS" is defined in SECTION 11.3.
"CONTRACT OF SALE" is defined in SECTION 21.1.
"COMMENCEMENT DATE" is set forth in ARTICLE A, SECTION 2(b).
"DEFAULT RATE" means three percent (3%) over the prime reference rate
announced from time to time by Citibank, N.A. in New York, New York, as such
prime reference rate may be adjusted and announced from time to time, or if
unavailable, the parties shall use the prime reference rate of any New York
regional bank selected by Landlord.
"DEMISING WALL AND RELATED IMPROVEMENTS" shall mean the double-sided wall
to separate the Landlord's Storage Area and the Tenant's Warehouse Space, which
wall shall be constructed at the location shown on the EXHIBIT "D" attached
hereto, together with adequate, in-floor water and sewer utility lines to be
constructed within Tenant's Warehouse Space and meters for the measurement of
the usage of such utilities, as is also depicted and shall be in all respects
acceptable to Tenant as evidenced by Tenant's written approval of the plans and
specifications therefor prior to the commencement of the construction of the
Demising Wall and Related Improvements (Tenant agrees to deliver to Landlord
written notice of its approval or disapproval of such plans and specifications
within three (3) business days after Tenant's receipt of a complete set of the
same, and Tenant's failure to deliver such written notice within such period of
time shall be deemed an approval of the same).
"ENVIRONMENTAL LAWS" is defined in SECTION 18.9.
"EVENT OF DEFAULT" is defined in SECTION 12.1.
"EXPIRATION DATE" is defined in ARTICLE A, SECTION 2(c).
"FIRST UNION CREDIT AGREEMENT" is defined in SECTION 21.2.
"FIXED RENT" is defined in ARTICLE A, SECTION 3.
"FORCE MAJEURE DELAYS" is defined in SECTION 19.16.
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"HAZARDOUS SUBSTANCES" is defined in SECTION 18.10.
"IMPOSITIONS" is defined in SECTION 3.1.
"INDEMNIFIED PARTIES" is defined in SECTION 11.3.
"INSURANCE COSTS" is defined in SECTION 7.3.
"LAND" means that certain real property described on EXHIBIT "A" attached
hereto and incorporated herein by this reference.
"LANDLORD" is defined in the introductory paragraph to this Lease.
"LANDLORD PARTIES" is defined in SECTION 6.2.
"LANDLORD'S AWARD" is defined in SECTION 8.1.
"LANDLORD'S REPAIR OBLIGATIONS" is defined in SECTION 5.2.
"LANDLORD'S STORAGE AREA" shall mean the westerly portion of the Warehouse
Building containing approximately 3,880 net rentable square feet of space, which
space is located within the Warehouse Building as shown on the EXHIBIT "D"
attached hereto and incorporated herein by this reference.
"LEASE" means this lease made between Landlord, as landlord, and Tenant, as
tenant.
"MORTGAGE" is defined in SECTION 3.2.
"MORTGAGEE" is defined in SECTION 3.2.
"NON-DISTURBANCE AGREEMENT" is defined in SECTION 10.1.
"OFFICE SPACE" shall mean the office space portion of the Building
containing 37,350 net rentable square feet of space.
"PERMITTED TRANSFER" shall mean either (i) a Transfer after Tenant's
receipt of Landlord's prior written consent thereto, or (ii) a Permitted
Transfer Without Landlord Consent.
"PERMITTED TRANSFER WITHOUT LANDLORD CONSENT" is defined in SECTION 9.1
below.
"PREMISES" means the Land and the Building.
"PREMISES DELIVERY DATE" is defined in ARTICLE A, SECTION 2(b) above.
"PROJECT EXPENSES is defined in SECTION 5.7.
"REMEDIAL WORK" is defined in SECTION 18.7.
"RENT" is defined in SECTION 2.3.
"REQUIREMENTS" is defined in SECTION 11.1.
"RESTORATION WORK" is defined in ARTICLE A, SECTION 5 above.
"SUBTENANT" is defined in SECTION 9.5.
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"TENANT" is defined in the introductory paragraph to this Lease.
"TENANT'S EXPENSE PAYMENT" is defined in SECTION 5.6.
"TENANT'S WAREHOUSE SPACE" shall mean the easterly portion of the Warehouse
Building containing 6,540 net rentable square feet of space, which space is
located within the Warehouse Building as shown on the EXHIBIT "D" attached
hereto and incorporated herein by this reference.
"TERM" is defined in ARTICLE A, SECTION 2(a).
"TRANSFER" is defined in SECTION 9.1.
"TRANSFEREE" means any assignee or purchaser of Tenant's interest in this
Lease or any sublessee of all or any portion of the Premises.
"UTILITIES" is defined in SECTION 5.2.
"WAREHOUSE BUILDING" shall mean the warehouse building located on the Land
as of the Commencement Date containing approximately 10,420 net rentable square
feet of space.
"WATER AND SEWER LINES" is defined in ARTICLE A, SECTION 5 above.
ARTICLE 1
PREMISES AND TERM
Section 1.1. During the Term, Landlord, in consideration of the rents
herein reserved and of the terms, provisions, covenants and agreements on the
part of Tenant to be kept, observed and performed, does hereby lease and demise
the Premises unto Tenant, and Tenant does hereby hire and take the Premises from
Landlord, subject to each and every matter affecting title to the Premises
including, without limitation, all of the following which are in effect as of
the Commencement Date: all easements, rights of way, covenants, conditions and
restrictions, liens, encumbrances, encroachments, licenses, notices of pendency,
charges, zoning laws, ordinances, regulations, building codes and other
governmental laws, rules and orders affecting the Premises, and other exceptions
to Landlord's title, whether or not the same are of public record. Tenant shall
allow Landlord to use during the Term the Landlord's Storage Area for the
purpose set forth in ARTICLE A, SECTION 5 above at such time as (a) the
installation of the Water and Sewer Lines has been completed such that such
lines do not impair the ability of Tenant to obtain water and/or sewer service
to Tenant's Warehouse Space, and (b) Landlord has substantially completed the
construction of (i) the Demising Wall and Related Improvements (or Tenant has
completed such construction in the event Landlord fails to complete the same
within 60 days after the Commencement Date), and (ii) the Restoration Work as
soon as practicable but (1) in no event more than sixty (60) days after the
Commencement Date with respect to the Restoration Work not related to the Floor
Slab, and (2) with respect to the Restoration Work related to the Floor Slab, in
no event more than ten (10) days after the date on which the Floor Slab has been
saw-cut (or Tenant has completed such construction in the event Landlord fails
to complete the same within 60-day or 10-day periods of time, as applicable).
The parties hereto acknowledge and agree that the deadline for the satisfaction
of Landlord's obligations with respect to the construction of the Demising Wall
and Related Improvements and the completion of the Restoration Work is subject
to a potential extension in the event of the occurrence of any Force Majeure
Delays (as defined in SECTION 19.16 below).
Section 1.2. Tenant shall lease the Premises for the Term, unless sooner
terminated as hereinafter provided or pursuant to law.
Section 1.3. Provided that Landlord substantially completes the
construction of the Demising Wall within thirty (30) days after the Commencement
Date, Landlord shall have access across the Land to the Landlord's Storage Area
at all times during the Term. Landlord's entrance to the Landlord's Storage Area
shall
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be through the door of the Warehouse Building leading to the Landlord's Storage
Area (which door is identified on the EXHIBIT "D" attached hereto) and not
through the Tenant's Warehouse Space.
ARTICLE 2
FIXED RENT AND ADDITIONAL RENT
Section 2.1. Tenant shall pay to Landlord as Fixed Rent for the Premises
during the Term the amounts stated in ARTICLE A, SECTION 3. Fixed Rent shall be
payable in equal monthly installments in advance on the first day of each and
every month during the Term, without previous demand therefor and without offset
or deduction of any kind whatsoever. Notwithstanding the foregoing, Tenant shall
pay the partial month's installment of Fixed Rent (with respect to the remaining
days of the month in which this Lease is executed) upon the execution of this
Lease.
Section 2.2. Tenant shall also pay and discharge, as additional rent, all
other amounts, liabilities and obligations of whatsoever nature relating to the
Premises, including, without limitation, all Impositions (as defined in SECTION
3.1 below), all Project Expenses (as defined in SECTION 5.7 below) those arising
under any common area maintenance agreements however denominated, easements,
declarations, restrictions, or other similar agreements affecting the Premises
or any adjoining property thereto, and all interest and penalties that may
accrue thereon in the event of Tenant's failure to pay such amounts when due,
and all damages, costs and expenses which Landlord may incur by reason of any
default of Tenant or failure on Tenant's part to comply with the terms of this
Lease, all of which Tenant hereby agrees to pay upon demand or as is otherwise
provided herein (all of the foregoing together with any other amounts and
charges payable by Tenant under this Lease in addition to Fixed Rent are herein
collectively called "ADDITIONAL RENT"). Notwithstanding the foregoing or
anything else to the contrary contained in this Lease, (i) Tenant shall have no
obligation to pay for the cost of any utility services used by Landlord at the
Landlord's Storage Area (the "STORAGE AREA UTILITIES") that are separately
metered and billed directly to Landlord, and (ii) with respect to Storage Area
Utilities that are not separately metered and are billed to Tenant together with
such utility service used by Tenant at the Tenant's Warehouse Space, Landlord
shall reimburse Tenant for Landlord's Proportionate Share (as hereinafter
defined) of the cost of each such utility service billed to Tenant, which
reimbursement shall be made within fifteen (15) days after Landlord's receipt of
a xxxx therefor (which xxxx shall identify the total cost billed to Tenant for
the applicable reimbursement period). As used herein, the term "LANDLORD'S
PROPORTIONATE SHARE" shall mean 37.24%. If Landlord fails to reimburse Tenant
for shared utility service as required by this Section, Tenant shall have the
right to offset against the Fixed Rent due hereunder the amount of each such
reimbursement payment not made by Landlord to Tenant as required hereunder. Upon
any failure by Tenant to pay any of the Additional Rent, Landlord shall have all
legal, equitable and contractual rights, powers and remedies provided either in
this Lease or by statute or otherwise in the case of non-payment of the Fixed
Rent. The term Additional Rent shall be deemed rent for all purposes hereunder
other than with respect to Tenant's internal accounting procedures.
Section 2.3. All Fixed Rent and Additional Rent payable hereunder
(collectively, "RENT") shall be payable when due by wire transfer of immediately
available funds to an account designated from time to time by Landlord. At
Landlord's option upon Landlord's request, Rent shall be made in United States
currency which shall be legal tender for all debts, public and private, payable
to Landlord and sent to Landlord's address set forth in ARTICLE A, or to such
other person or persons or at such other place as may be designated by notice
from Landlord to Tenant, from time to time. Notwithstanding the foregoing,
Impositions shall be payable to the parties to whom they are due, except as
otherwise provided herein.
ARTICLE 3
IMPOSITIONS
Section 3.1. Except as provided to the contrary in SECTION 3.5 below, from
and after the Commencement Date and throughout the Term, Tenant shall pay and
discharge not later than twenty (20) days
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before any fine, penalty, interest or cost may be added thereto for the
non-payment thereof, all taxes, assessments, water rents, sewer rents and
charges, duties, impositions, license and permit fees, charges for public
utilities of any kind, payments and other charges of every kind and nature
whatsoever, ordinary or extraordinary, foreseen or unforeseen, general or
special, in said categories, together with any interest or penalties imposed
upon the late payment thereof, which, pursuant to past, present or future law,
during, prior to or after (but attributable to a period within) the Term, shall
have been or shall be levied, charged, assessed, imposed upon or grow or become
due and payable out of or for or have become a lien on the Premises or any part
thereof, any improvements or personal property in or on the Premises, the Rent
and income payable by Tenant or on account of any use of the Premises and such
franchises as may be appurtenant to the use and occupation of the Premises (all
of the foregoing being hereinafter referred to as "IMPOSITIONS"). Tenant, upon
request from Landlord, shall submit to Landlord the proper and sufficient
receipts or other evidence of payment and discharge of the same. If any
Impositions are not paid when due under this Lease, Landlord shall have the
right but shall not be obligated to pay the same following written notice to
Tenant of such payment, provided Tenant does not contest the same as herein
provided. If Landlord shall make such payment, Landlord shall thereupon be
entitled to repayment by Tenant on demand as Additional Rent hereunder.
Section 3.2. Tenant shall have the right to protest and contest any
Impositions imposed against the Premises or any part thereof, provided (i) the
same is done at Tenant's sole cost and expense, (ii) nonpayment will not subject
the Premises or any part thereof to sale or other liability by reason of such
nonpayment, (iii) such contest shall not subject Landlord or the holder (the
"MORTGAGEE") of any mortgage or deed of trust (a "MORTGAGE") encumbering all or
any part of the Premises to the risk of any criminal or civil liability, and
(iv) Tenant shall provide such security as may reasonably be required by
Landlord or any Mortgagee or under the terms of any Mortgage to ensure payment
of such contested Imposition. Landlord agrees to execute and deliver to Tenant
any and all documents reasonably required for such purpose and to cooperate with
Tenant in every reasonable respect in such contest, but without any cost or
expense to Landlord.
Section 3.3. To the extent permitted by law, Tenant shall have the right to
apply for the conversion of any Impositions to make the same payable in annual
installments over a period of years, and upon such conversion Tenant shall pay
and discharge said annual installments as they shall become due and payable.
Tenant shall pay all such deferred installments prior to the expiration or
sooner termination of the Term, notwithstanding that such installments shall not
then be due and payable; PROVIDED, HOWEVER, that any Impositions (other than one
converted by Tenant so as to be payable in annual installments as aforesaid)
relating to a fiscal period of the taxing authority, a part of which is included
in a period of time after the Expiration Date, shall (whether or not such
Impositions shall be assessed, levied, confirmed, imposed or become payable,
during the Term) be adjusted between Landlord and Tenant as of the Expiration
Date, so that Landlord shall pay that portion of such Impositions which relate
to that part of such fiscal period included in the period of time after the
Expiration Date, and Tenant shall pay the remainder thereof.
Section 3.4. If at any time during the Term, a tax or excise on Rent or
other tax, however described, is levied or assessed with respect to the Rent or
any part thereof (as opposed to the income of Landlord) or against Landlord as a
substitute in whole or in part for any Impositions theretofore payable by
Tenant, Tenant shall pay and discharge such tax or excise on Rent or other tax
before it becomes delinquent, and the same shall be deemed to be an Imposition
levied against the Premises.
Section 3.5. Except as set forth in SECTION 3.4 above, Tenant shall not be
obligated to pay any franchise, excise, corporate, estate, inheritance,
succession, capital, levy or transfer tax of Landlord or any income, profits or
revenue tax upon the income of Landlord. Notwithstanding anything to the
contrary contained in this Lease, (a) Tenant shall not be obligated to pay
either (i) documentary transfer taxes which shall be payable by Landlord or its
successors or assigns, or (ii) any increase in real property taxes on the
Premises caused by a reassessment of the value of the Premises due to a change
of ownership in, or refinancing of, the Premises by Landlord or its successors
or assigns (other than any increase resulting from Landlord's acquisition of the
Premises), and any such increase shall be paid by Landlord or its successors or
assigns prior to delinquency, and (b) special assessments levied for
improvements with a useful life which extends beyond the Term shall be amortized
over the useful life of the improvements and prorated based upon the remaining
years
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of the Term. All ad valorem tax incentives granted by the City of Orange,
California or Orange County applicable to the Premises shall be applied as a
credit to the amount of Impositions payable by Tenant pursuant to Section 3.1
above.
Section 3.6. In the event that Landlord is required pursuant to the terms
of any Mortgage to make monthly or other tax escrow payments to any Mortgagee or
if an Event of Default shall occur and be continuing, Tenant agrees that, on
demand made by Landlord, it shall: (i) deposit with Landlord or Mortgagee, on
the day of demand and on the same day of each month thereafter until thirty (30)
days prior to the date when the next installment of Impositions is due to the
authority or other person to whom the same is paid, an amount equal to said next
installment of Impositions divided by the number of months over which such
deposits are to be made; and (ii) thereafter during the Term deposit with
Landlord or Mortgagee an amount each month estimated by Landlord or Mortgagee to
be adequate to create a fund which, as each succeeding installment of
Impositions becomes due, will be sufficient, thirty (30) days prior to such due
date, to pay such installment in full. Landlord or Mortgagee shall use
reasonable efforts to cause the monthly deposits to be equal in amount, but
neither of them shall be liable in the event that such required deposits are
unequal. If at any time the amount of any Imposition is increased or Landlord or
Mortgagee believes that it will be, said monthly deposits shall be increased
upon demand by Landlord or Mortgagee so that, thirty (30) days prior to the due
date for each installment of Impositions, there will be deposits on hand with
Landlord or Mortgagee sufficient to pay such installments in full. To the extent
permitted by applicable law, Landlord or Mortgagee shall not be required to
deposit any such amounts in an interest bearing account. For the purpose of
determining whether Landlord or Mortgagee has on hand sufficient moneys to pay
any particular Imposition at least thirty (30) days prior to the due date
therefor, deposits for each category of Imposition shall be treated separately,
it being the intention that Landlord shall not be obligated to use moneys
deposited for the payment of an item not yet due and payable to the payment of
an item that is due and payable. Notwithstanding the foregoing, it is understood
and agreed that (a) to the extent permitted by applicable law, deposits provided
for hereunder may be held by Landlord or Mortgagee in a single bank account and
commingled with other funds of Landlord or Mortgagee, and (b) Landlord or
Mortgagee, may, if Tenant fails to make any deposit required hereunder, use
deposits made for any one item for the payment of the same or any other item of
Rent. If this Lease shall be terminated by reason of any Event of Default, all
deposits then held by Landlord shall be applied by Landlord on account of any
and all sums due under this Lease; if there is a resulting deficiency, Tenant
shall pay the same, and if there is a surplus, Tenant shall be entitled to a
refund of the surplus and Landlord shall pay the same to Tenant promptly upon
any determination of such a surplus.
Section 3.7. If Landlord ceases to have any interest in the Premises,
Landlord shall transfer to the person or entity who owns or acquires such
interest in the Premises from Landlord and is the transferee of this Lease, the
deposits made pursuant to SECTION 3.6 hereof, subject, however, to the
provisions thereof. Upon such transfer of the Premises, the transferor shall be
deemed to be released from all liability with respect thereto and Tenant agrees
to look to the transferee solely with respect thereto, and the provisions hereof
shall apply to each successive transfer of the said deposits; PROVIDED, HOWEVER,
that transferor shall not be released from liability unless Tenant either
receives said deposits or said deposits continue to be held by Mortgagee for the
benefit of transferee and Tenant.
Section 3.8. The provisions of this ARTICLE 3 shall survive the expiration
or earlier termination of this Lease.
ARTICLE 4
USE AND OPERATION OF PREMISES
Section 4.1. The Premises may be used and occupied only for the purposes
set forth in ARTICLE A, SECTION 4. Landlord's Storage Area may be used by
Landlord only for the purpose set forth in ARTICLE A, SECTION 5. Tenant shall
not create or suffer to exist any public or private nuisance, hazardous or
illegal condition or waste on or with respect to the Premises (other than the
Landlord's Storage Area if such area is being used by Landlord).
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Section 4.2. Except as expressly provided in this Lease, in no event shall
Tenant use any area outside the Building other than for pedestrian and vehicular
ingress and egress to and from the Building, other than for parking in the areas
currently designated for parking, and other than to perform any of Tenant's
obligations under this Lease requiring the use of such area. Tenant and its
employees shall have access to the Premises (other than the Landlord's Storage
Area if Landlord has a right pursuant to this Lease to use this area) 24 hours
per day, 7 days per week throughout the Term.
ARTICLE 5
CONDITION OF PREMISES, ALTERATIONS AND REPAIRS
Section 5.1. Tenant has examined the Premises, is familiar with the
physical condition, expenses, operation and maintenance, zoning, status of title
and use that may be made of the Premises and every other matter or thing
affecting or related to the Premises, and is leasing the same in its "AS IS"
condition. Except as expressly provided to the contrary in this Lease, Landlord
has not made and does not make any representations or warranties whatsoever with
respect to the Premises or otherwise with respect to this Lease. Tenant assumes
all risks resulting from any defects (patent or latent) in the Premises or from
any failure of the same to comply with any governmental law or regulation
applicable to the Premises or the uses or purposes for which the same may be
occupied.
Section 5.2. Tenant shall be solely responsible for obtaining any services
and/or utilities used, consumed or provided in, furnished to or attributable to
the Premises that Landlord has not expressly agreed to provide to Tenant
pursuant to this Lease (all such services and/or utilities are collectively
referred to as "UTILITIES"). Landlord shall, at Landlord's sole cost and
expense, perform as soon as practicable all repairs needed to be performed to
the structural elements and roof of the Building which are not required as a
result of Tenant's actions ("LANDLORD'S REPAIR OBLIGATIONS"). With the exception
of Landlord's Repair Obligations, Tenant shall be responsible for keeping the
Premises clean and in good condition and repair and Tenant shall make all
repairs and replacements, structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen, and shall perform all maintenance,
necessary to maintain the Premises in good condition and repair, ordinary wear
and tear and damage due to fire or other casualty excepted.
Section 5.3. To the extent not prohibited by law, Tenant hereby waives and
releases all rights now or hereinafter conferred by statute or otherwise which
would have the effect of limiting or modifying any of the provisions of this
ARTICLE 5.
Section 5.4. Tenant shall have the right at any time and from time to time
during the Term to make, at its sole cost and expense, changes, alterations,
additions or improvements (collectively, "ALTERATIONS") in or to the Premises
provided that Tenant first obtains Landlord's written consent thereto, which
consent shall not be unreasonably withheld or delayed. Landlord will be able to
withhold its consent, in its sole and absolute discretion, with respect to any
Alterations in or to the Premises which (i) are made to or affect (A) the
structural components of the Building, or (B) the systems of the Building, (ii)
are visible from the exterior of the Building, or (iii) adversely affect the
value of the Building.
Section 5.5. All fixtures, structures and other improvements installed in
or upon the Premises at any time during the Term (excluding, in any event,
Tenant's trade fixtures, furniture, equipment and other movable personal
property) shall become the property of Landlord and shall remain upon and be
surrendered with the Premises unless Landlord, by notice to Tenant no later than
ninety (90) days prior to the Expiration Date (or if this Lease is terminated
earlier, then within thirty (30) days after the effective date of such
termination), elects to have the same removed or demolished by Tenant, in which
event, the same shall be removed from the Premises by Tenant by the Expiration
Date (or if this Lease is terminated earlier, then within thirty (30) days after
the effective date of such termination) at Tenant's expense. Prior to the
commencement of any Alterations, Landlord will, upon written request by Tenant,
notify Tenant in writing whether Landlord will require such Alterations to be
removed from the Premises prior to the Expiration Date or earlier termination of
this Lease. All property permitted or required to be removed by Tenant at the
end of the Term remaining in the
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Premises after Tenant's removal shall be deemed abandoned and may, at the
election of Landlord, either be retained as Landlord's property or may be
removed from the Premises by Landlord at Tenant's expense. Tenant shall be
responsible for, and shall reimburse Landlord immediately after written demand
therefor, any damage to the Premises caused in whole or in part by the removal
or demolition of Tenant's fixtures, structures or other improvements which
Tenant is required to remove pursuant to this SECTION 5.5 or which Tenant elects
under the provisions of this Lease to remove. The provisions of this SECTION 5.5
shall survive the expiration or earlier termination of the Term.
Section 5.6. In addition to Fixed Rent, Tenant shall pay as Additional
Rent, all Project Expenses (as defined in SECTION 5.7 below) incurred by
Landlord during the Term. Such payment shall hereafter be referred to as
"TENANT'S EXPENSE PAYMENT". Landlord may, if it elects, either deliver to Tenant
periodic statements of Tenant's Expense Payment or Landlord may estimate the
amount of Tenant's Expense Payment payable by Tenant for any calendar year or
any portion thereof. In the event Landlord elects to estimate Tenant's Expense
Payment for any calendar year, Landlord shall provide written notice of the
estimate of Tenant's Expense Payment for the applicable calendar year and the
monthly installment due for each month during such calendar year at least thirty
(30) days prior to the date such installments become due and payable. Tenant
shall pay to Landlord, on the first day of each calendar month during any
calendar year Landlord elects to estimate Tenant's Expense Payment, the amount
of the applicable monthly installments, without demand. Landlord shall, on or
before the first day of July of each calendar year, determine the actual
Tenant's Expense Payment for the preceding calendar year and provide Tenant with
written notice thereof. If Tenant's actual payments of estimated Tenant's
Expense Payment are less than the actual Project Expenses for such year, then
Tenant shall pay to Landlord the amount of the deficiency within thirty (30)
days from the date of Landlord's notice of deficiency. Alternatively, if
Tenant's actual payments of estimated Tenant's Expense Payments are greater than
the actual Project Expenses for such year, then Landlord shall credit the amount
of the surplus against the next accruing installments of Tenant's Expense
Payment.
Section 5.7. As used in this Lease, the term "PROJECT EXPENSES" shall mean
all direct costs and expenses of ownership (excluding, however, any Impositions
which are payable by Tenant as provided in ARTICLE 3 above), operation,
security, protection, replacement, repair and maintenance of the Premises
incurred by Landlord, as determined by sound, accrual basis, accounting
principles consistently applied, and shall include all Insurance Costs (as
defined in SECTION 7.3 below), accounting and legal fees, but shall not include
costs and expenses that Landlord has specifically agreed to bear with no
reimbursement from Tenant and the costs and expenses described in the
immediately following sentence. Project Expenses shall not include any of the
following: (a) interest and principal payments on loans secured by mortgages or
deeds of trust covering all or any portion of the Premises, and other debt
costs, if any, and rental under any ground lease or other underlying lease, if
any, covering all or any portion of the Premises; (b) real estate broker's
commissions payable in connection with this Lease; (c) any cost or expenditure
(or portion thereof) for which Landlord is reimbursed, whether by insurance
proceeds or otherwise (Tenant's Expense Payments are not reimbursements); (d)
all costs incurred by Landlord in connection with the satisfaction of Landlord's
Repair Obligations; (e) costs and expenses incurred in the management of the
Premises and/or the administration of Landlord's rights and obligations under
this Lease; (f) costs of improvements to, or alterations of, the Premises; (g)
depreciation; (h) that portion of any cost or expense which is allocated by
Landlord to, or is performed solely for the benefit of, any property owned or
operated by Landlord other than the Premises; (i) legal, accounting and similar
or related costs paid or incurred in connection with any sale, syndication,
financing or refinancing involving the Building and/or the Premises or any of
Landlord's interest therein; (j) any fees, fines, penalties and/or interest
incurred by Landlord as a result of Landlord's noncompliance with any applicable
laws; (k) any costs (including, without limitation, legal fees and expenses),
fees, fines, penalties and/or interest incurred by Landlord as a result of
Landlord's failure to pay any obligations of Landlord; (l) costs of disputes
between Landlord and any third party regarding matters not related to the
Premises; (m) costs of defending any lawsuits with Mortgagees or ground lessors
of Landlord; (n) any debt losses, rent losses or reserves for bad debt; (o)
costs related to Landlord's use and/or maintenance of the Landlord's Storage
Area; and (p) costs or expenses related to Landlord's cleaning, removal,
remediation or compliance required due to the existence of any hazardous or
toxic materials in, on or affecting the Building and/or Land (including, without
limitation, Hazardous Substances) unless such existence is caused by Tenant or
its employees, sublessees or contractors.
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ARTICLE 6
INSURANCE
Section 6.1. Throughout the Term, Tenant shall, at its own cost and
expense, provide and keep in force, for the benefit of Landlord, Tenant and any
Mortgagee:
(a) broad form commercial general liability insurance (including protective
liability coverage on operations of independent contractors engaged in
construction and blanket contractual liability insurance) protecting and
indemnifying Landlord, Tenant and any Mortgagee against all claims for damages
to person or property or for loss of life or of property occurring upon, in, or
about the Premises, if any, written on a per-occurrence basis with an aggregate
limit of not less than $2,000,000 and a per-occurrence limit of not less than
$1,000,000, or such greater limits as may be required from time to time by any
Mortgagee or as may be reasonably required from time to time by Landlord
consistent with insurance coverage on properties similarly constructed, occupied
and maintained. Such coverage shall contain endorsements: (i) including
employees of Tenant as additional insureds; (ii) including cross-liability; and
(iii) waiving the insurer's rights of subrogation against Landlord for events of
which Landlord is not, but Tenant is, covered;
(b) property insurance in respect of Tenant's property located at the
Premises, insuring against loss or damage by fire and such other risks as are
now or hereafter embraced by "extended coverage" policy in an amount sufficient
to prevent Landlord and Tenant from becoming co-insurers and in any event in an
amount not less than one hundred percent (100%) of the actual replacement value
thereof as reasonably determined by Tenant from time to time.
(c) worker's compensation insurance (including employers' liability
insurance) covering all persons employed at the Premises by Tenant to the extent
required by the laws of the State in which the Premises are located; and
(d) such other or further insurance, in such amounts and in such form, as
is customarily obtained by tenants at properties similarly constructed, occupied
and maintained and that is available at commercially reasonable rates, or as
otherwise reasonably required by any Mortgagee.
Section 6.2. Whenever under the terms of this Lease Tenant is required to
maintain insurance for the benefit of Landlord, (i) all Landlord Parties (as
defined below) shall be an additional insured in all such liability insurance
policies, and (ii) either Landlord or Mortgagee, as specified in SECTION 6.3,
shall be named as loss payee in all such casualty insurance policies. In the
event that the Premises shall be subject to a Mortgage, the commercial general
liability insurance shall name the Mortgagee (together with any trustee or
servicer therefor) as an additional insured and all other insurance provided
hereunder shall name the Mortgagee as an additional insured or, as provided in
SECTION 6.3, loss payee under a standard "non-contributory mortgagee"
endorsement or its equivalent. All policies of insurance shall provide that such
coverage shall be primary and that any insurance maintained separately by
Landlord or the Mortgagee shall be excess insurance only. The original
certificates and legible copies of the original policies (or binders therefor if
the policies have not yet been prepared) shall be delivered to Landlord and any
Mortgagee. All insurance shall contain endorsements to the effect that the act
or omission of Tenant or Mortgagee, any occupancy or use of the Premises for
purposes more hazardous than permitted by such policy, any foreclosure or other
proceedings relating to the Premises or any change in title to or ownership of
the Premises will not invalidate the policy as to Landlord or such Mortgagee. As
used in this Lease, the term "LANDLORD PARTIES" shall mean (i) Landlord, (ii)
any Mortgagee that has been identified to Tenant in a writing sent by Landlord
or its agent or property manager, (iii) their respective shareholders, members,
partners, affiliates and subsidiaries, and (iv) any directors, officers,
employees, agents or contractors of such persons or entities.
Section 6.3. All of the above-mentioned insurance policies and/or
certificates shall be obtained by Tenant and delivered to Landlord on or prior
to the date hereof, and thereafter as provided for herein, and shall be written
by insurance companies: (i) rated B+/X or better in "Best's Insurance Guide" (or
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any substitute guide acceptable to Landlord); (ii) authorized to do business in
the state where the Premises are located; and (iii) of recognized responsibility
and which are satisfactory to Landlord and any Mortgagee. Any deductible amounts
under any casualty insurance policy hereunder shall not exceed $25,000.00 per
occurrence.
Section 6.4. At least thirty (30) days prior to the expiration of any
policy or policies of such insurance, Tenant shall renew such insurance, by
delivering to Landlord or Mortgagee, within the said period of time, the
original policies or certificates of insurance, endorsed in accordance with
SECTION 6.2 hereof, together with insurance binders evidencing the coverage
described in this ARTICLE 6. All coverage described in this ARTICLE 6 shall be
endorsed to provide Landlord and Mortgagee with at least thirty (30) days'
notice of change in terms and at least ten (10) days' notice of cancellation or
termination. If Tenant shall fail to procure the insurance required under this
ARTICLE 6 in a timely fashion or to deliver such policies or certificates to
Landlord, Landlord may, at its option, upon written notice to Tenant, procure
the same for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent.
Section 6.5. Tenant shall not violate, or permit to be violated, any of the
conditions of any of the said policies of insurance, and Tenant shall perform
and satisfy the requirements of the companies writing such policies so that
companies of good standing, reasonably satisfactory to Landlord, shall be
willing to write and/or continue such insurance.
Section 6.6. Tenant shall not carry separate or additional insurance
affecting the coverage described in this ARTICLE 6, concurrent in form and
contributing in the event of any loss or damage to the Premises with any
insurance required to be obtained by Tenant under this Lease, unless such
separate or additional insurance shall comply with and conform to all of the
provisions and conditions of this Article. Tenant shall promptly give notice to
Landlord of such separate or additional insurance.
Section 6.7. The insurance required by this Lease, at the option of Tenant,
may be effected by blanket and/or umbrella policies issued to Tenant covering
the Premises and other properties owned or leased by Tenant, provided that the
policies otherwise comply with the provisions of this Lease and allocate to the
Premises the specified coverage, without possibility of reduction or coinsurance
by reason of, or damage to, any other premises named therein, and if the
insurance required by this Lease shall be effected by any such blanket or
umbrella policies, Tenant shall furnish to Landlord or Mortgagee certified
copies or duplicate originals of such policies in place of the originals, with
schedules thereto attached showing the amount of insurance afforded by such
policies applicable to the Premises.
ARTICLE 7
DAMAGE OR DESTRUCTION
Section 7.1. In the event the Building is damaged by fire or other insured
casualty and the insurance proceeds have been made available therefor by the
holder or holders of any Mortgages covering the Building, the damage shall be
repaired by and at the expense of Landlord to the extent of such insurance
proceeds available therefor, provided such repairs can, in Landlord's sole
opinion be made within one hundred eighty (180) days after the occurrence of
such damage without the payment of overtime or other premiums. Until such
repairs are completed, Fixed Rent shall be abated effective as of the date of
such fire or other casualty in proportion to the part of the Building which is
unusable by Tenant in the conduct of its business; provided, however, if the
damage is due to the fault or neglect of Tenant or its employees, agents or
invitees, there shall be no abatement of Fixed Rent unless Landlord has received
loss of rental insurance proceeds intended to replace the Fixed Rent due
hereunder. If repairs cannot, in Landlord's sole opinion reasonably exercised,
be made within one hundred eighty (180) days after the occurrence of such
damage, Landlord may, at its option, make them within a reasonable time, and in
such event, this Lease shall continue in effect and Fixed Rent shall be abated
in the manner provided in the immediately preceding sentence. In the case of
repairs which, in Landlord's opinion reasonably exercised, cannot be made within
such one hundred eighty (180) day period, Landlord shall notify Tenant within
sixty (60) days of the date of occurrence of such damage as to whether or not
Landlord will make such repairs. If (a) Landlord elects not to make such repairs
which cannot be made
13
within such one hundred eighty (180) day period, (b) Landlord fails to give
Tenant written notice of Landlord's intention to make or not to make such
repairs and such failure continues for ten (10) days after Landlord's receipt of
written notice of such failure, or (c) such damage occurs during the last
eighteen (18) months of the Term, then either party may, by written notice to
the other, terminate this Lease as of the date of the occurrence of such damage,
and Landlord shall have no liability to Tenant for failure to make such repairs
except for abatement of Fixed Rent. Except as provided in this SECTION 7.1,
there shall be no abatement of Fixed Rent and no liability of Landlord by reason
of any injury to or interference with Tenant's business or property arising from
the making of any repairs, alterations or improvements in or to any portion of
the Building, or in or to fixtures, appurtenances and equipment located therein,
and, in any event, there shall be no liability of Landlord should repairs
require more than one hundred eighty (180) days for completion. Tenant
acknowledges and agrees that (i) Landlord will not carry insurance of any kind
on (1) Tenant's furnishings or furniture, or (2) any fixtures or equipment
removable by Tenant under the provisions of this Lease, and (ii) Landlord shall
not be required to repair any injury or damage caused by fire or other cause, or
to make any repairs or replacements to or of improvements installed in the
Building by or for Tenant, all of which shall be the sole responsibility of
Tenant.
Section 7.2. If Landlord is obligated to repair damage to the Building
pursuant to SECTION 7.1, Landlord shall use reasonable efforts to complete or
cause the completion of the repairs to the same on or before the expiration of
the Casualty Repair Delivery Period (as defined below in this paragraph).
Notwithstanding anything else to the contrary contained in this Lease, if
Landlord, for any reason whatsoever, cannot complete or cause the completion of
the repair of the applicable damage to the Building such that the Building is
usable by Tenant for the purposes identified in ARTICLE A, SECTION 4 above on or
before the last day of the Casualty Repair Delivery Period, then Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom, but Tenant
shall, as its sole and exclusive remedy, have the right to terminate this Lease
by giving Landlord written notice thereof within thirty (30) days after the
expiration of the Casualty Repair Delivery Period and in any event prior to
Landlord's delivery of possession of the Building to Tenant in such a usable
condition. As used herein, the term "CASUALTY REPAIR DELIVERY PERIOD" shall mean
the period of time beginning on the date the Building has been damaged by fire
or other insured casualty and ending on the last day of the ninth (9th) calendar
month following the date of such damage.
Section 7.3. Landlord covenants and agrees that throughout the Term it will
insure the Building (excluding excavation, foundation, footings and underground
flues and drains) and the machinery, boilers and equipment contained therein
owned by Landlord (excluding any property with respect to which Tenant is
obligated to insure pursuant to the provisions of ARTICLE 6 above) against
damage by fire and extended perils coverage in an amount equal to the full
replacement value of such insured portions of the Building. Tenant shall
reimburse Landlord for the costs of such insurance (herein referred to as
"INSURANCE COSTS") within thirty (30) days after Tenant's receipt of written
evidence of the amount of such costs paid by Landlord. Notwithstanding Tenant's
payment of the cost of insurance premiums as provided herein, Tenant
acknowledges that it has no right to receive any proceeds from any such
insurance policies carried by Landlord and that such insurance will be for the
sole benefit of Landlord with no coverage for Tenant for any risk against which
insurance has been obtained.
Section 7.4. All fire, extended coverage and/or damage insurance which must
be carried by Landlord and Tenant shall be endorsed with a subrogation clause
substantially as follows: "This insurance shall not be invalidated should the
insured waive in writing, prior to a loss, any or all right of recovery against
any party for loss occurring to the property described herein." Landlord and
Tenant each hereby waives any rights it may have against the other (including,
but not limited to, a direct action for damages) on account of any loss or
damage occasioned to Landlord or Tenant, as the case may be (WHETHER OR NOT SUCH
LOSS OR DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT,
ACTS OR OMISSIONS OF LANDLORD OR TENANT OR THEIR RESPECTIVE OFFICERS, PARTNERS,
DIRECTORS, EMPLOYEES, SERVANTS AGENTS OR INVITEES), to their respective
property, the Premises or its contents arising from any risk covered by any
insurance required to be carried by Tenant and Landlord, respectively, pursuant
to this Lease. Without in any way limiting the foregoing waivers and to the
extent permitted by applicable law, the parties hereto each, on behalf of their
respective insurance companies
14
insuring the property of either Landlord or Tenant against any such loss, waive
any right of subrogation that Landlord or Tenant or their respective insurers
may have against the other party or their respective officers, directors,
employees, agents or invitees and all rights of their respective insurance
companies based upon an assignment from its insured. Each party to this Lease
agrees immediately to give to each such insurance company written notification
of the terms of the mutual waivers contained in this Section and to have said
insurance policies properly endorsed, if necessary, to prevent the invalidation
of said insurance coverage by reason of said waivers. The foregoing waivers
shall be effective whether or not the parties maintain the required insurance.
ARTICLE 8
CONDEMNATION
Section 8.1. If the Premises, or a substantial part thereof, shall be
lawfully taken or condemned (or conveyed under threat of such taking or
condemnation) for any public or quasi-public use or purpose, then (i) the term
of this Lease shall terminate on, and not before, the date of the taking of
possession by the condemning authority, and without apportionment of the award,
and (ii) current Rent due hereunder shall be apportioned as of the date of such
termination. In the event a taking or condemnation results in a permanent loss
of adequate parking on the Land or a permanent deprivation of access to the
Premises, then this Lease may be terminated at the election of Tenant, which
election shall be made by Tenant's delivery of written notice thereof to
Landlord within thirty (30) days after the date of such taking or condemnation.
No money or other consideration shall be payable by Landlord to Tenant for the
right of termination, and Tenant hereby waives any right Tenant may have to
share in, and assigns to Landlord Tenant's interest, if any, in, any (1)
condemnation award as a result of such taking or condemnation, (2) judgment for
damages based on such taking or condemnation, or (3) proceeds of any sale made
under any threat of condemnation or taking (the award, damages or proceeds
described in subparts (1) through (3) of this paragraph are herein collectively
referred to as "LANDLORD'S AWARD").
Section 8.2. If any part of the Premises not constituting a substantial
part of the Premises shall be so taken or condemned (or conveyed under threat of
such taking or condemnation), or if the grade of any street adjacent to the
Building is changed by any competent authority and such taking or change of
grade makes it necessary or desirable to substantially remodel or restore the
Building, Landlord shall have the right to terminate this Lease upon not less
than ninety (90) days notice prior to the date of termination designated in the
notice. In the event this Lease is not terminated by Landlord pursuant to the
preceding sentence, then (a) this Lease shall continue in full force and effect
without abatement or reduction of rental due hereunder except in the event a
portion of the Premises has been taken or condemned, in which case Fixed Rent
shall be equitably adjusted, and (b) Landlord shall, within a reasonable time
and at the sole cost and expense of Landlord to the extent of the applicable
Landlord's Award, restore or remodel the Building and, if applicable, the
Premises.
Section 8.3. Except as provided in this ARTICLE 8, there shall be no
reduction of Fixed Rent and no liability of Landlord by reason of any injury to,
or interference with, Tenant's business or property arising from the making of
any repairs, alterations or improvements in or to any portion of the Premises
following a taking or condemnation of the same, or in or to fixtures,
appurtenances and equipment located therein. Notwithstanding anything to the
contrary contained herein, Tenant shall have the right to recover from any
condemning authority, through a separate award which does not reduce Landlord's
Award, any compensation as may be awarded to Tenant on account of moving and
relocation expenses and depreciation to and removal of Tenant's physical
property from the Premises.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
Section 9.1. Except in strict accordance with the provisions of this
Article 9, Tenant shall not sell, assign, sublease or otherwise transfer,
directly or indirectly (each a "TRANSFER"), all or any portion of
15
Tenant's interest in this Lease or the Premises without Landlord's prior written
consent, which written consent shall not be unreasonably withheld or delayed.
Landlord and Tenant agree that no corporate reorganization of Tenant, or any
merger, consolidation, take-over, buy-out or other change in the corporate
structure or effective voting control of Tenant shall be deemed a prohibited
Transfer under this SECTION 9.1 so long as (y) Tenant has at least the amount of
net worth immediately after the transaction as Tenant has immediately prior to
the transaction and (z) Tenant provides written notice to Landlord describing in
reasonable detail the nature of such transaction, the name, address and state of
formation of the surviving entity and the ownership of Tenant. Any assignment or
subletting permitted without Landlord's prior written consent as provided above
(a "PERMITTED TRANSFER WITHOUT LANDLORD CONSENT") shall not release Tenant from
any of its obligations under this Lease. If the common stock of Tenant or of any
corporation which controls Tenant ever becomes the subject of a public offering,
such issuance of shares and/or subsequent trading of stock in Tenant shall not
be deemed a prohibited transfer under this SECTION 9.1. For purposes of this
ARTICLE 9, the terms "CONTROL" or "CONTROLS" shall mean possession, direct or
indirect, of the power to direct or to cause the direction of, the management
and policies of any person or entity, whether through the ownership of voting
securities, or partnership interest, by contract or otherwise. Without limiting
in any way Landlord's right to withhold its consent on any reasonable grounds,
it is agreed that Landlord will not be acting unreasonably in refusing to
consent to an assignment or sublease if, (a) the proposed assignment or sublease
involves a change of use of the Premises from that specified herein, (b) the
proposed assignee or subtenant is not, in Landlord's reasonable opinion, of
reputable or good character (for the purposes of this Lease, Landlord shall be
conclusively deemed to have reasonably exercised its discretion to withhold its
consent to an assignment or subletting to a person or entity that is not of the
character, quality or financial strength of a tenant to whom Landlord would
generally lease space of a comparable size and quality as the Premises), (c) a
Mortgagee does not approve such assignment or sublease after being requested to
approve the same, or (d) in the case of a subletting, the subletting shall not
be expressly subject to all of the provisions of this Lease and the obligations
of Tenant hereunder and shall not further provide that if Landlord shall recover
or come into possession of the Premises before the expiration of this Lease,
Landlord shall have the right to take over the sublease and to have it become a
direct lease with Landlord, in which case Landlord shall succeed to all of the
rights of Tenant, as sublessor, thereunder and that in such case subtenant shall
be bound to Landlord for the balance of the term of the sublease and shall
attorn to and recognize Landlord as its landlord under the sublease under all of
the then executory terms of the sublease, except that Landlord will not (i) be
liable for any previous acts or omissions of Tenant, as sublessor, (ii) be
subject to any claims of subtenant not expressly set forth in the sublease,
(iii) be bound by any modification of the sublease for which Landlord shall have
not expressly consented, or (iv) be obligated to perform any repairs or other
work beyond Landlord's obligations under this Lease. Tenant acknowledges and
agrees (again without in any way limiting Landlord's right to withhold its
consent on reasonable grounds) that Landlord may also withhold its consent to a
Transfer based on any one or more of the following: (1) Tenant's failure to
satisfy its obligations in SECTION 9.3 below; (2) at the time thereof an Event
of Default has occurred and is continuing; or (3) the fact that the instrument
effecting the proposed Transfer is not in form and content reasonably
satisfactory to Landlord.
Section 9.2. Notwithstanding the provisions of SECTION 9.1 above, Tenant
shall not be required to obtain the prior consent of Landlord for any sublease
of a part (but not all) of the Premises, which sublease is ordinary and
incidental to Tenant's business as such business has been run prior to the
inception of this Lease. In the event of a proposed sublease which is either
inconsistent with the ordinary and incidental operations of Tenant's business,
or which does not fall within the foregoing parameters of this SECTION 9.2, such
shall not be allowed without Landlord's prior written consent in each instance,
which consent shall not be unreasonably withheld or delayed.
Section 9.3. If Tenant shall desire Landlord's consent to a Transfer,
Landlord shall be given not less than thirty (30) days' advance written notice
of the proposed effective date of such Transfer, which notice shall be delivered
to Landlord together with (i) either an executed counterpart or, if unavailable,
a copy of the proposed instrument(s) of the Transfer and (ii) such other
documents and information as Landlord may reasonably request.
Section 9.4. Any consent by Landlord under this ARTICLE 9 shall apply only
to the specific transaction thereby authorized and shall not relieve Tenant from
the requirement of obtaining the prior written
16
consent of Landlord to any further Transfer of this Lease. No Transfer of all or
a portion of this Lease shall release or relieve the transferor from any
obligations of Tenant hereunder, and the transferor shall remain liable for the
performance of all obligations of Tenant hereunder.
Section 9.5. Tenant shall cause each subtenant permitted pursuant to this
Article 9 (a "SUBTENANT") to comply with its obligations under its respective
sublease, and Tenant shall diligently enforce all of its rights as the landlord
thereunder in accordance with the terms of such sublease and this Lease.
Section 9.6. The fact that a violation or breach of any of the terms,
provisions or conditions of this Lease results from or is caused by an act or
omission by any of the Subtenants shall not relieve Tenant of Tenant's
obligation to cure the same. Tenant shall take all necessary steps to prevent
any such violation or breach.
Section 9.7. If this Lease is assigned, or if the Premises or any part
thereof is subleased or occupied by anybody other than Tenant, Landlord may,
after the occurrence and during the continuance of an Event of Default by
Tenant, collect Rent from the assignee or Subtenants, and apply the net amount
collected to the Rent herein reserved, but no such assignment, sublease,
occupancy or collection shall be deemed a waiver of this covenant, or the
acceptance of the assignee or Subtenant as tenant, or a release of Tenant from
the further performance by Tenant of the terms, covenants, and conditions on the
part of Tenant to be observed or performed hereunder. After any assignment or
subletting, Tenant's liability hereunder shall continue notwithstanding any
subsequent modification or amendment hereof or the release of any subsequent
tenant hereunder from any liability, to all of which Tenant hereby consents in
advance. The consent by Landlord to any Transfer shall not in any way be
construed to relieve Tenant from obtaining the express written consent of
Landlord to any further Transfer.
Section 9.8. To secure the prompt and full payment by Tenant of the Rent
and the faithful performance by Tenant of all the other terms and conditions
herein contained on its part to be kept and performed, Tenant hereby assigns,
transfers and sets over unto Landlord, subject to the conditions hereinafter set
forth, all of Tenant's right, title and interest in and to all Subleases and
hereby confers upon Landlord, its agents and representatives, a right of entry
in, and sufficient possession of, the Premises to permit and insure the
collection by Landlord of the rentals and other sums payable under the
Subleases, and further agrees that the exercise of said right of entry and
qualified possession by Landlord shall not constitute an eviction of Tenant from
the Premises or any portion thereof and that should said right of entry and
possession be denied Landlord, its agent or representative, Landlord, in the
exercise of said right, may use all requisite force to gain and enjoy the same
without responsibility or liability to Tenant, its servants, employees, guests
or invitees, or any Person whomsoever; provided, however that such assignment
shall become operative and effective only if (a) an Event of Default shall occur
or (b) this Lease and the Term shall be canceled or terminated pursuant to the
terms, covenants and conditions hereof or (c) there occurs repossession under a
dispossess warrant or other re-entry or repossession by Landlord under the
provisions hereof or (d) a receiver for the Premises is appointed, and then only
as to such of the subleases that Landlord may elect to take over and assume. At
any time and from time to time upon Landlord's demand, Tenant promptly shall
deliver to Landlord a schedule of all subleases, setting forth the names of all
Subtenants, with a photostatic copy of each of the subleases. Upon reasonable
request of Landlord, Tenant shall permit Landlord and its agents and
representatives to inspect all subleases affecting the Premises. Tenant
covenants that each sublease shall provide that the Subtenant thereunder shall
be required from time to time, upon request of Landlord or Tenant, to execute,
acknowledge and deliver, to and for the benefit of Landlord, an estoppel
certificate confirming with respect to such sublease the information set forth
in SECTION 14.1 hereof.
Section 9.9. Tenant covenants and agrees that all subleases hereafter
entered into affecting the Premises shall provide that (a) they are subject to
this Lease, (b) the term thereof should end not less than one (1) day prior to
the Expiration Date hereof, unless Landlord shall consent otherwise, which
consent may be withheld in Landlord's sole discretion, (c) the Subtenants will
not do, authorize or execute any act, deed or thing whatsoever or fail to take
any such action which will or may cause Tenant to be in violation of any of its
obligations under this Lease, (d) the Subtenants will not pay rent or other sums
under the subleases with Tenant
17
for more than one (1) month in advance, (e) the Subtenants shall give to
Landlord at the address and otherwise in the manner specified in SECTION 19.8
hereof, a copy of any notice of default by Tenant as the landlord under the
subleases at the same time as, and whenever, any such notice of default shall be
given by the Subtenants to Tenant, and (f) in the event of the termination or
expiration of this Lease prior to the Expiration Date hereof, any such
Subtenant, at Landlord's election, shall be obligated to attorn to and recognize
Landlord as the lessor under such Sublease, in which event such Sublease shall
continue in full force and effect as a direct lease between Landlord and the
Subtenant upon all the terms and conditions of such Sublease, except as
hereinafter provided. Any attornment required by Landlord of such Subtenant
shall be effective and self-operative as of the date of any such termination or
expiration of this Lease without the execution of any further instrument;
PROVIDED, HOWEVER, that such Subtenant shall agree, upon the request of
Landlord, to execute and deliver any such instruments in recordable form and
otherwise in form and substance satisfactory to Landlord to evidence such
attornment. With respect to any attornment required by Landlord of any Subtenant
hereunder, (i) at the option of Landlord, Landlord shall recognize all rights of
Tenant as the lessor under such sublease and the Subtenant thereunder shall be
obligated to Landlord to perform all of the obligations of the Subtenant under
such sublease and (ii) Landlord shall have no liability, prior to its becoming
lessor under such Sublease, to such Subtenant nor shall the performance by such
Subtenant of its obligations under the sublease, whether prior to or after any
such attornment, be subject to any defense, counterclaim or setoff by reason of
any default by Tenant in the performance of any obligation to be performed by
Tenant as lessor under such sublease, nor shall Landlord be bound by any
prepayment of more than one (1) month's rent unless such prepayment shall have
been expressly approved in writing by Landlord. The provisions of this SECTION
9.9 shall survive the expiration or earlier termination of the Term.
Section 9.10. If Tenant assumes this Lease and proposes to assign the same
pursuant to the provisions of Title 11 of the United States Code or any statute
of similar purpose or nature (the "BANKRUPTCY CODE") to any person or entity who
shall have made a BONA FIDE offer to accept an assignment of this Lease on terms
acceptable to Tenant, then notice of such proposed assignment shall be given to
Landlord by Tenant no later than twenty (20) days after receipt of such offer by
Tenant, but in any event no later than ten (10) days prior to the date that
Tenant shall file any application or motion with a court of competent
jurisdiction for authority and approval to enter into such assumption and
assignment. Such notice shall set forth (a) the name and address of the
assignee, (b) all of the terms and conditions of such offer, and (c) the
proposal for providing adequate assurance of future performance by such person
under the Lease, including, without limitation, the assurance referred to in
Section 365 of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed
without further act or deed to have assumed all of the obligations arising under
this Lease from and after the date of such assignment. Any such assignee shall
execute and deliver to Landlord upon demand an instrument confirming such
assumption.
Section 9.11. The provisions of SECTIONS 9.8, 9.9 and 9.10 hereof shall
survive the expiration or earlier termination of this Lease.
Section 9.12. In no event shall Tenant mortgage, encumber, pledge, grant a
security interest in, collaterally assign or conditionally transfer this Lease
or removable trade fixtures incorporated in or used in connection with the
Premises or any Subleases or any of the rents, issues and profits therefrom,
other than the grant of a security interest in Tenant's leasehold interest.
ARTICLE 10
SUBORDINATION
Section 10.1. This Lease shall be subject and subordinate to all Mortgages
now or hereinafter in effect and to all renewals, modifications, consolidations,
replacements and extensions of any such Mortgages; PROVIDED, HOWEVER, that the
Mortgagee of such Mortgage shall execute and deliver to Tenant an agreement to
the effect that, if there shall be a foreclosure of its Mortgage, such Mortgagee
will not make Tenant a party defendant to such foreclosure, unless necessary
under applicable law for the Mortgagee to foreclose, or if there shall be a
foreclosure of such Mortgage, such Mortgagee shall not evict Tenant, disturb
Tenant's leasehold
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estate or rights hereunder, in all events provided that no Event of Default then
exists (any such agreement, or any agreement of similar import, from a Mortgagee
being hereinafter called a "NON-DISTURBANCE AGREEMENT"), and Tenant shall attorn
to the Mortgagee or any successor-in-interest to Landlord or the Mortgagee. This
SECTION 10.1 shall be self-operative and no further instrument of subordination
other than a Non-Disturbance Agreement shall be required to make the interest of
any Mortgagee superior to the interest of Tenant hereunder. Notwithstanding the
previous sentence, however, Tenant shall, together with the Mortgagee, execute
and deliver promptly each Non-Disturbance Agreement that Landlord may request to
effect such subordination. If Tenant fails to execute and deliver to Landlord
any Non-Disturbance Agreement delivered to Tenant for Tenant's execution within
ten (10) days after Tenant's receipt of the same, (1) such failure shall
constitute an Event of Default hereunder until such time as it has been
delivered to Landlord, (2) Tenant shall be deemed to have agreed to all of the
terms and provisions of such Non-Disturbance Agreement, and (3) Tenant shall
thereafter be estopped from disclaiming any of the obligations, benefits and
burdens set forth therein including, without limitation, (i) the subordination
of this Lease to any deed of trust, mortgage, ground lease or similar
instruments, (ii) any non-disturbance rights provided to Tenant therein, and
(iii) any attornment agreements of Tenant set forth therein. If, in connection
with the financing of the Premises, any lending institution or Landlord shall
request reasonable modifications of this Lease that do not increase the monetary
obligations of Tenant under this Lease or materially increase the other
obligations of Tenant under this Lease or materially and adversely affect the
rights of Tenant under this Lease, Tenant shall make such modifications. The
standards (i.e., time and manner of giving such consent and standard of
reasonableness, if applicable) of a Mortgagee's consent with respect to this
Lease shall be materially consistent with those to which Landlord is subject
under this Lease. Any Non-Disturbance Agreement may be made on the condition
that neither the Mortgagee nor anyone claiming by, through or under such
Mortgagee shall be:
(a) liable for any act or omission of any prior Landlord (including,
without limitation, the then defaulting Landlord);
(b) bound by any payment of Rent which Tenant might have paid for more than
the current month to any prior Landlord (including, without limitation, the then
defaulting Landlord);
(c) bound by any obligation to make any payment to Tenant which was
required to be made prior to the time such Landlord succeeded to any prior
Landlord's interest other than the reimbursement payments required to made to
Tenant in ARTICLE 2 above;
(d) bound by any obligation to perform any work or to make improvements to
the Premises other than the obligations of the Landlord set forth in this Lease;
(e) bound by any modification, amendment or supplement to this Lease made
without the prior written consent of the Mortgagee; or
(f) bound by any security deposit for Tenant's obligations under this Lease
unless such deposit is actually received by Mortgagee.
If required by any Mortgagee, Tenant promptly shall join in any
Non-Disturbance Agreement to indicate its concurrence with the provisions
thereof and its agreement, in the event of a foreclosure of any Mortgage to
attorn to such Mortgagee, as Tenant's landlord hereunder. Tenant shall promptly
so accept, execute and deliver any Non-Disturbance Agreement proposed by any
Mortgagee which conforms with the provisions of this SECTION 10.1. Any
Non-Disturbance Agreement may also contain other terms and conditions as may
otherwise be required by any Mortgagee which do not increase Tenant's monetary
obligations or materially and adversely affect the rights or obligations of
Tenant under this Lease.
Section 10.2. Provided Tenant has received written notice of the name and
address for notices of a Mortgagee, Tenant agrees to give to such Mortgagee
copies of all notices given by Tenant of default by Landlord under this Lease at
the same time and in the same manner as, and whenever, Tenant shall give any
such notice of default to Landlord. Such Mortgagee shall have the right to
remedy any default under this Lease,
19
or to cause any default of Landlord under this Lease to be remedied, and for
such purpose Tenant hereby grants such Mortgagee such period of time as may be
reasonable to enable such Mortgagee to remedy, or cause to be remedied, any such
default in addition to the period given to Landlord for remedying, or causing to
be remedied, any such default which is a default. Tenant shall accept
performance by such Mortgagee of any term, covenant, condition or agreement to
be performed by Landlord under the Lease with the same force and effect as
though performed by Landlord. No default under the Lease shall exist or shall be
deemed to exist (i) as long as such Mortgagee, in good faith, shall have
commenced to cure such default and shall be prosecuting the same to completion
with reasonable diligence, subject to Force Majeure Delays (as defined in
SECTION 19.16 below), or (ii) if possession of the Premises is required in order
to cure such default, or if such default is not susceptible of being cured by
such Mortgagee, as long as such Mortgagee, in good faith, shall have notified
Tenant that such Mortgagee intends to institute proceedings under the Mortgage
and, thereafter, as long as such proceedings shall have been instituted and
shall prosecute the same with reasonable diligence and, after having obtained
possession, prosecutes the cure to completion with reasonable diligence. The
Lease shall not be assigned (subject to the provisions of ARTICLE 9) by Tenant
or modified, amended or terminated without such Mortgagee's prior written
consent in each instance. In the event of the termination of the Lease by reason
of any default thereunder or for any other reason whatsoever except the
expiration thereof, upon such Mortgagee's written request, given within thirty
(30) days after any such termination, Tenant, within fifteen (15) days after
receipt of such request, shall execute and deliver to such Mortgagee or its
designee or nominee a new lease of the Premises for the remainder of the Term of
the Lease upon all of the terms, covenants and conditions of this Lease. Neither
such Mortgagee nor its designee or nominee shall become liable under the Lease
unless and until such Mortgagee or its designee or nominee becomes, and then
only for so long as such Mortgagee or its designee or nominee remains, the fee
owner of the Premises. Such Mortgagee shall have the right, without Tenant's
consent, to foreclose the Mortgage or to accept a deed in lieu of foreclosure of
such Mortgage.
ARTICLE 11
OBLIGATIONS OF TENANT
Section 11.1. Tenant shall promptly comply with all laws, ordinances,
orders, rules, regulations, and requirements of all Federal, state, municipal or
other governmental or quasi-governmental authorities or bodies then having
jurisdiction over the Premises (or any part thereof) and/or the use and
occupation thereof by Tenant which relate to Tenant's use and/or occupancy of
the Premises, whether any of the same relate to or require (i) structural
changes to or in and about the Premises, or (ii) changes or requirements
incident to or as the result of any use or occupation thereof or otherwise
(collectively, the "REQUIREMENTS"), and subject to ARTICLE 7, Tenant shall so
perform and comply, whether or not such laws, ordinances, orders, rules,
regulations or requirements shall now exist or shall hereafter be enacted or
promulgated and whether or not the same may be said to be within the present
contemplation of the parties hereto provided that the same relate to Tenant's
use and/or occupancy of the Premises. Notwithstanding anything to the contrary
contained in this Lease, during the period of time, if any, in which Landlord
has a right pursuant to this Lease to use the Landlord's Storage Area, Tenant
shall have no obligations or liabilities with respect to violations and/or
noncompliance with any Requirements which result from either (1) the condition
of the Landlord's Storage Area, or (2) the use or occupancy of the Landlord's
Storage Area.
Section 11.2. Tenant agrees to give Landlord notice of any law, ordinance,
rule, regulation or requirement enacted, passed, promulgated, made, issued or
adopted by any of the governmental departments or agencies or authorities
hereinbefore mentioned affecting in a material adverse manner (i) the Premises,
(ii) Tenant's use thereof, or (iii) the financial condition of Tenant, a copy of
which is served upon or received by Tenant, or a copy of which is posted on, or
fastened or attached to the Premises, or otherwise brought to the attention of
Tenant, by mailing within five (5) business days after such service, receipt,
posting, fastening or attaching or after the same otherwise comes to the
attention of Tenant, a copy of each and every one thereof to Landlord. At the
same time, Tenant will inform Landlord as to the work which Tenant proposes to
do or take in order to comply therewith (excluding, however, any work required
with respect to the Landlord's Storage Area if Landlord then has a right
pursuant to this Lease to use such area). Notwithstanding the foregoing,
however, if such work would require any Alterations which would, in Landlord's
opinion, reduce the value of the Premises
20
or change the general character, design or use of the Building or other
improvements thereon, and if Tenant does not desire to contest the same, Tenant
shall, if Landlord so requests, defer compliance therewith in order that
Landlord may, if Landlord wishes, contest or seek modification of or other
relief with respect to such Requirements, so long as Tenant is not put in
violation of any law, ordinance, rule, regulation or requirement enacted,
passed, promulgated, made, issued or adopted by any such governmental
departments or agencies or authorities, but nothing herein shall relieve Tenant
of the duty and obligation, at Tenant's expense, to comply with such
Requirements, or such Requirements as modified, whenever Landlord shall so
direct.
Section 11.3. Except in the case of the gross negligence or willful
misconduct of Landlord or its agents, BUT SPECIFICALLY INCLUDING SUCH PARTY'S
NEGLIGENCE OTHER THAN GROSS NEGLIGENCE, Tenant shall defend, indemnify and save
harmless Landlord, any partners of Landlord, any partners of any partners of
Landlord and any officers, stockholders, directors or employees of any of the
foregoing (collectively, "INDEMNIFIED PARTIES"), from (a) any and all
liabilities, claims, causes of actions, suits, damages and expenses
(collectively, "CLAIMS") arising from or under this Lease or Tenant's use,
occupancy and operations of, in or about the Premises prior to or during the
Term; and (b) all costs, expenses and liabilities incurred, including actual and
customary attorney's fees and disbursements through and including appellate
proceedings, in or in connection with any of such Claims. If any action or
proceeding shall be brought against any of the Indemnified Parties by reason of
any such Claims, Tenant, upon notice from any of the Indemnified Parties, shall
resist and defend such action or proceeding, at its sole cost and expense by
counsel to be selected by Tenant but otherwise satisfactory to such Indemnified
Party in its reasonable discretion. Tenant or its counsel shall keep each
Indemnified Party fully informed at all times of the status of such defense.
Notwithstanding the foregoing, an Indemnified Party may retain its own attorneys
to defend or assist in defending any claim, action or proceeding involving
potential liability in excess of Five Million Dollars ($5,000,000), and Tenant
shall pay the actual and customary fees and disbursements of such attorneys. The
provisions of this SECTION 11.3 shall survive the expiration or earlier
termination of this Lease.
Section 11.4. If at any time prior to or during the Term (or within the
statutory period thereafter if attributable to Tenant), any mechanic's or other
lien or order for payment of money, which shall have been either created by,
caused (directly or indirectly) by, or suffered against Tenant, shall be filed
against the Premises or any part thereof, Tenant, at its sole cost and expense,
shall cause the same to be discharged by payment, bonding or otherwise, within
ten (10) days after the filing thereof unless such lien or order is contested by
Tenant in good faith and Tenant provides sufficient security or evidence of
financial ability, in each case to the reasonable satisfaction of Landlord, to
pay the amount of such lien or order. Tenant shall, upon notice and request in
writing by Landlord, defend for Landlord, at Tenant's sole cost and expense, any
action or proceeding which may be brought on or for the enforcement of any such
lien or order for payment of money, and will pay any damages and satisfy and
discharge any judgment entered in such action or proceeding and save harmless
Landlord from any liability, claim or damage resulting therefrom. In default of
Tenant's procuring the discharge of any such lien as aforesaid Landlord may,
without notice, and without prejudice to its other remedies hereunder, procure
the discharge thereof by bonding or payment or otherwise, and all cost and
expense which Landlord shall incur shall be paid by Tenant to Landlord as
Additional Rent forthwith.
Section 11.5. Landlord shall not under any circumstances be liable to pay
for any work, labor or services rendered or materials furnished to or for the
account of Tenant upon or in connection with the Premises, and no mechanic's or
other lien for such work, labor or services or material furnished shall, under
any circumstances, attach to or affect the reversionary interest of Landlord in
and to the Premises or any alterations, repairs, or improvements to be erected
or made thereon. Nothing contained in this Lease shall be deemed or construed in
any way as constituting the request or consent of Landlord, either express or
implied, to any contractor, subcontractor, laborer or materialman for the
performance of any labor or the furnishing of any materials for any specific
improvement, alteration to or repair of the Premises or any part thereof, nor as
giving Tenant any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials on behalf of
Landlord that would give rise to the filing of any lien against the Premises.
Section 11.6. Neither Landlord nor its agents shall be liable for any loss
of or damage to the property of Tenant or others by reason of casualty, theft or
otherwise, or for any injury or damage to persons or
21
property resulting from any cause of whatsoever nature, INCLUDING THAT WHICH IS
CAUSED BY OR ARISES BY THE NEGLIGENCE OF LANDLORD OR ITS AGENTS OTHER THAN THEIR
GROSS NEGLIGENCE, unless caused by or due to the gross negligence or willful
misconduct of Landlord, its agents, servants or employees.
Section 11.7. Landlord shall not be required to furnish to Tenant any
facilities or services of any kind whatsoever, including, but not limited to,
water, steam, heat, gas, oil, hot water, and/or electricity, all of which Tenant
represents and warrants that Tenant has obtained from the public utility
supplying the same, at Tenant's sole cost and expense. Upon Tenant's written
request, however, Landlord agrees to cooperate with Tenant (at no cost to
Landlord) with respect to such services.
Section 11.8. Landlord shall defend, indemnify and save harmless Tenant,
any partners of Tenant, any partners of any partners of Tenant and any officers,
stockholders, directors or employees of any of the foregoing, from (a) any and
all Claims arising from or in connection with (i) the construction of the
Demising Wall and Related Improvements and the completion of the Restoration
Work, and (ii) Landlord's access to, or the use or occupancy of, the Landlord's
Storage Area during the Term, and (b) all costs, expenses and liabilities
incurred, including actual and customary attorneys' fees and disbursements
through and including appellate proceedings, in or in connection with any of
such Claims.
ARTICLE 12
DEFAULT BY TENANT; REMEDIES
Section 12.1. Each of the following shall be deemed an event of default (an
"EVENT OF DEFAULT") and a breach of this Lease by Tenant:
(a) If Tenant shall fail to pay the Fixed Rent or any Tenant's Expense
Payment as and when due hereunder and such failure continues for a period of
five (5) days after written notice of such failure has been delivered to Tenant
(provided, however, that Landlord shall not be required to send more than two
(2) such notices to Tenant during any consecutive twelve (12) month period, and
thereafter it shall be an Event of Default if Tenant shall fail to pay the Fixed
Rent or any Tenant Expense Payment when due).
(b) If Tenant shall fail to pay any Additional Rent required to be paid by
Tenant hereunder and such failure continues for a period of twenty (20) days
after written notice of such failure has been delivered to Tenant (provided,
however, that Landlord shall not be required to send more than two (2) such
notices to Tenant during any consecutive twelve (12) month period, and
thereafter it shall be an Event of Default if Tenant shall fail to pay any
Additional Rent when due).
(c) If Tenant shall default in the performance or observance of any of the
other agreements, conditions, covenants or terms herein contained, or if such
default is of such a nature that it can be remedied, then if such default shall
continue for thirty (30) days after written notice by Landlord to Tenant (or if
such default is of such a nature that it cannot be completely remedied within
said thirty (30) day period, then if Tenant does not agree in writing within
such thirty (30) day period to cure the same, commence and thereafter diligently
prosecute the cure and complete the cure within a reasonable period of time
under the circumstances after such original written notice of default by
Landlord to Tenant, but in any event prior to the time such failure would result
in a violation of applicable laws or a default by Landlord under any Mortgage).
(d) The occurrence and continuance of a Vacation of the Premises (as
hereinafter defined) or a Material Abandonment of the Premises (as hereinafter
defined).
(e) If Tenant shall transfer all or any of its interest in this Lease
without compliance with the provisions of this Lease applicable thereto.
22
(f) Tenant fails or refuses to execute any subordination agreement required
pursuant to ARTICLE 10 or estoppel certificate required pursuant to ARTICLE 14
within ten (10) business days after Tenant's receipt thereof.
(g) Tenant shall fail to maintain any insurance that this Lease requires
Tenant to maintain.
(h) Tenant shall do or permit to be done any act which results in a lien
being filed against the Premises or any improvements of part thereof if such
lien is not released, bonded or otherwise provided for by indemnification
satisfactory to Landlord within thirty (30) days after Tenant first obtains
actual knowledge of such lien.
As used in this Lease, the phrase "VACATION OF THE PREMISES" shall mean vacating
the Premises without providing a reasonable level of security to minimize the
potential for vandalism, or where the coverage of the property insurance under
either or both of SECTIONS 6.1(A) OR 7.3 above is jeopardized as a result
thereof, and the phrase "MATERIAL ABANDONMENT OF THE PREMISES" shall mean the
abandonment by Tenant of the Premises for ten (10) business days during any
period of time in which an Event of Default has occurred and is continuing.
Section 12.2. Upon the occurrence and during the continuance of an Event of
Default, Landlord may, with or without further notice or demand, and without
limiting Landlord in the exercise of any right or remedy which Landlord may have
by reason of such Event of Default:
(a) Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession to Landlord. In such event, Landlord shall be entitled to
recover from Tenant: (i) the unpaid Rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Tenant proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid Rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by the Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Landlord in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (ii) of the immediately preceding
sentence shall be computed by allowing interest at the rate of ten percent (10%)
per annum, and the worth at time of award of the amount referred to in provision
(iii) of the immediately preceding sentence shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco
plus one percent (1%). Efforts by Landlord to mitigate damages caused by
Tenant's Breach of this Lease shall not waive Landlord's right to recover
damages under this Article 12. If termination of this Lease is obtained through
the provisional remedy of unlawful detainer, Landlord shall have the right to
recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Landlord may reserve the right to recover all or any part thereof in
a separate suit. If a notice and grace period required under Section 12.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Tenant under the unlawful detainer statute shall also constitute the notice
required by Section 12.1. In such case, the applicable grace period required by
Section 12.1 and the unlawful detainer statute shall run concurrently, and the
failure of Tenant to cure the Event of Default within the greater of the two
such grace periods shall constitute both an unlawful detainer and a breach of
this Lease entitling Landlord to the remedies provided for in this Lease and/or
by said statute.
(b) Continue the Lease and Tenant's right to possession and recover the
Rent as it becomes due, in which event Tenant may sublet or assign, subject only
to reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Landlord's interests, shall not
constitute a termination of the Tenant's right to possession.
23
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Tenant's right to
possession shall not relieve Tenant from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Tenant's occupancy of the Premises.
Section 12.3. To the extent not prohibited by law, Tenant hereby waives and
releases all rights now or hereafter conferred by statute or otherwise which
would have the effect of limiting or modifying any of the provisions of this
ARTICLE 12. Tenant shall execute, acknowledge and deliver any instruments which
Landlord may request, whether before or after the occurrence of an Event of
Default, evidencing such waiver or release.
Section 12.4. The Rent payable by Tenant hereunder and each and every
installment thereof, and all costs, actual and customary attorneys' fees and
disbursements and other expenses which may be incurred by Landlord in enforcing
the provisions of this Lease on account of any delinquency of Tenant in carrying
out the provisions of this Lease shall be and they hereby are declared to
constitute a valid lien upon the interest of Tenant in this Lease and in the
Premises.
Section 12.5. Suit or suits for the recovery of damages, or for a sum equal
to any installment or installments of Rent payable hereunder or any other sums
payable by Tenant to Landlord pursuant to this ARTICLE 12, may be brought by
Landlord from time to time at Landlord's election, and nothing herein contained
shall be deemed to require Landlord to await the date whereon this Lease or the
Term would have expired by limitation had there been no Event of Default by
Tenant and termination.
Section 12.6. Nothing contained in this ARTICLE 12 shall limit or prejudice
the right of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution proceeding
an amount equal to the maximum allowed by a statute or rule of law governing
such proceeding and in effect at the time when such damages are to be proved,
whether or not such amount shall be greater than, equal to or less than the
amount of the damages referred to in any of the preceding Sections of this
ARTICLE 12.
Section 12.7. No receipt of moneys by Landlord from Tenant after
termination of this Lease, or after the giving of any notice of the termination
of this Lease shall reinstate, continue or extend the Term or affect any of the
right of Landlord to enforce the payment of Rent payable by Tenant hereunder or
thereafter falling due, or operate as a waiver of the right of Landlord to
recover possession of the Premises by proper remedy, except as herein otherwise
expressly provided, it being agreed that after the service of notice to
terminate this Lease or the commencement of any suit or summary proceedings, or
after a final order or judgment for the possession of the Premises, Landlord may
demand, receive and collect any monies due or thereafter falling due without in
any manner affecting such notice, proceedings, order, suit or judgment, all such
monies collected being deemed payments on account of tenant's liability
hereunder.
Section 12.8. Except as otherwise expressly provided herein or as
prohibited by applicable law, Tenant hereby expressly waives the service of any
notice of intention to re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant, also waives any and all
right of redemption provided by any law or statute now in force or hereafter
enacted or otherwise, or re-entry or repossession or to restore the operation of
this Lease in case Tenant shall be dispossessed by a judgment or by warrant of
any court or judge or in case of re-entry or repossession by Landlord or in case
of any expiration or termination of this Lease, and Landlord and Tenant waive
and shall waive trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matter whatsoever
arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, Tenant's use or occupancy of the Premises, or any claim of
injury or damage.
24
Section 12.9. No failure by Landlord to insist upon the strict performance
of any covenant, agreement, term or condition of this Lease or to exercise any
right or remedy consequent upon a breach thereof, and no acceptance of full or
partial Rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of such covenant, agreement, term or condition. No
covenant, agreement, term or condition of this Lease to be performed or complied
with by Tenant, and no breach thereof, shall be waived, altered or modified
except by a written instrument executed by Landlord. No waiver of any breach
shall affect or alter this Lease, but each and every covenant, agreement, term
and condition of this Lease shall continue in full force and effect with respect
to any other then existing or subsequent breach thereof.
Section 12.10. In the event of any breach or threatened breach by Tenant of
any of the covenants, agreements, terms or conditions contained in this Lease,
Landlord shall be entitled to a decree compelling performance of any of the
provisions hereof, and shall have the right to invoke any rights and remedies
allowed at law or in equity or by statute or otherwise as though re-entry,
summary proceedings, and other remedies were not provided for in this Lease.
Section 12.11. Tenant shall pay to Landlord all costs and expenses,
including, without limitation, attorneys' fees and disbursements, incurred by
Landlord in any action or proceeding to which Landlord may be made a party by
reason of any act or omission of Tenant. Tenant also shall pay to Landlord all
costs and expenses, including, without limitation, actual and customary
attorneys' fees and disbursements, incurred by Landlord in enforcing any of the
covenants and provisions of this Lease and incurred in any action brought by
Landlord against Tenant on account of the provisions hereof, and all such costs,
expenses and attorneys' fees and disbursements may be included in and form a
part of any judgment entered in any proceeding brought by Landlord against
Tenant on or under this Lease. All of the sums paid or obligations incurred by
Landlord as aforesaid, with interest and costs, shall be paid by Tenant to
Landlord on demand.
Section 12.12. If an Event of Default shall occur under this Lease and
Tenant shall fail to cure the same, Landlord may (a) perform the same for the
account of Tenant and/or (b) make any expenditure or incur any obligation for
the payment of money in connection with any obligation owed to Landlord,
including, but not limited to, reasonable attorneys' fees and disbursements in
instituting, prosecuting or defending any action or proceeding, with interest
thereon at the Default Rate and such amounts shall be deemed to be Additional
Rent hereunder and shall be paid by Tenant to Landlord immediately upon demand
therefor. Default Rate shall have the meaning ascribed to it in ARTICLE B of
this Lease; PROVIDED, HOWEVER, that for purposes of this ARTICLE 12, such
Default Rate shall never exceed the maximum non-usurious rate permitted by
applicable law.
Section 12.13. If Tenant shall fail to pay any installment of Fixed Rent
when due or any Additional Rent within ten (10) days after the date when such
payment is due, Tenant shall pay to Landlord, in addition to such installment of
Fixed rent or such Additional Rent, as the case may be, interest on the amount
unpaid at the Default Rate, computed from the date such payment was due to and
including the date of payment. If an Event of Default shall occur, Tenant agrees
that Landlord shall not be liable for any damages suffered by Tenant as a result
of Landlord's exercising its remedies under Section 12.2 CAUSED BY THE
NEGLIGENCE OF LANDLORD OR OTHERWISE.
ARTICLE 13
NO WAIVER
Section 13.1. No receipt of moneys by Landlord from Tenant after the
termination or cancellation of this Lease shall reinstate, continue or extend
the term, or affect any notice theretofore given to Tenant, or operate as a
waiver of the right of Landlord to enforce the payment of Fixed Rent or
Additional Rent then due, or thereafter falling due, or operate as a waiver of
the right of Landlord to recover possession of the Premises by proper suit,
action, proceeding or remedy; it being agreed that, after the service of notice
to terminate or cancel this Lease, or the commencement of suit, action or
summary proceedings, or any other remedy, or after a final order or judgment for
the possession of the Premises, Landlord may demand, receive and collect any
moneys due, or thereafter falling due, without, in any manner whatsoever,
affecting such notice,
25
proceeding, suit, action, order or judgment; and any and all such moneys
collected shall be deemed to be payments on account of the use and occupation of
the Premises or, at the election of Landlord, on account of Tenant's liability
hereunder.
Section 13.2. The failure of Landlord or Tenant to enforce any agreement,
condition, covenant or term, by reason of its breach by Tenant or Landlord, as
the case may be, shall not be deemed to void, waive or affect the right of
Landlord or Tenant to enforce the same agreement, condition, covenant or term on
the occasion of a subsequent default or breach.
Section 13.3. The specific remedies to which Landlord may resort under the
terms of this Lease are cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Landlord may be lawfully entitled in
case of any breach or threatened breach by Tenant of any of the terms, covenants
and conditions of this Lease. The failure of Landlord or Tenant to insist in any
one or more cases upon the strict performance of any of the terms, covenants and
conditions of this Lease, or to exercise any right or remedy herein contained,
shall not be construed as a waiver or relinquishment for the future performance
of such terms, covenants and conditions. The receipt by Landlord, or payment by
Tenant, of Rent with knowledge of the breach of any of such terms, covenants and
conditions shall not be deemed a waiver of such breach. The acceptance of any
check or payment bearing or accompanied by any endorsement, legend or statements
shall not, of itself, constitute any change in or termination of this Lease. No
surrender of the Premises by Tenant (prior to any termination of this Lease)
shall be valid unless consented to in writing by Landlord. In addition to the
other remedies in this Lease provided, Landlord or Tenant shall be entitled to
the restraint by injunction of the violation or attempted or threatened
violation of any of the terms, covenants and conditions of this Lease or to a
decree compelling performance of any of such terms, covenants and conditions.
ARTICLE 14
ESTOPPEL CERTIFICATE
Section 14.1. Tenant agrees that it shall, at any time and from time to
time upon not less than ten (10) days' prior notice by Landlord execute,
acknowledge and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there have been any
modifications, that the Lease is in full force and effect as modified and
stating the modifications), the dates to which the Fixed Rent and Additional
Rent have been paid, and stating whether or not Landlord is in default in
keeping, observing or performing any term, covenant, agreement, provision,
condition or limitation contained in this Lease and, if in default, specifying
each such default, the Commencement Date and Expiration Date for the current
Term and any other matters reasonably requested by Landlord; it being intended
that any such statement delivered pursuant to this ARTICLE 14 may be relied upon
by Landlord or any prospective purchaser of the Premises or any Mortgagee
thereof or any assignee of any Mortgage upon the Premises.
ARTICLE 15
QUIET ENJOYMENT
Section 15.1. Tenant, upon payment of the Rent herein reserved and upon the
due performance and observance of all the covenants, conditions and agreements
herein contained on Tenant's part to be performed and observed, shall and may at
all times during the Term peaceably and quietly have, hold and enjoy the
Premises without any manner of suit, trouble or hindrance of and from any person
claiming by, through or under Landlord, subject, nevertheless, to the terms and
provisions of this Lease. No failure by Landlord to comply with the foregoing
covenant shall give Tenant any right to cancel or terminate this Lease or to
xxxxx, reduce or make a deduction from or offset against the Fixed Rent or any
Additional Rent, or to fail to perform any other obligation of Tenant hereunder.
26
ARTICLE 16
SURRENDER
Section 16.1. Tenant shall, on the last day of the Term, or upon the sooner
termination of the Term, quit and surrender to Landlord the Premises vacant,
free of all equipment, furniture and other movable personal property of Tenant,
and in the same good order and condition as on the Commencement Date, and Tenant
shall remove or demolish all of the fixtures, structures and other improvements
which Landlord shall have elected to cause Tenant to remove pursuant to and in
accordance with SECTION 5.7 hereof. Tenant's obligation to observe and perform
this covenant shall survive the expiration or earlier termination of the Term.
Notwithstanding the foregoing, if, on the last day of the Term, Landlord then
has a right pursuant to this Lease to use the Landlord's Storage Area, Tenant
shall only have an obligation to quit and surrender the Landlord's Storage Area
to Landlord in its condition existing on such day.
Section 16.2. Upon the expiration of the Term, all Fixed Rent and
Additional Rent and other items payable by Tenant under this Lease shall be
apportioned to the date of termination.
Section 16.3. Tenant acknowledges that possession of the Premises must be
surrendered to Landlord at the expiration or sooner termination of the term of
this Lease. Tenant agrees to indemnify Landlord against and save Landlord
harmless from all costs, claims, loss or liability excluding consequential
damages) resulting from the failure or delay by Tenant in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant founded on such failure or delay. The parties recognize and agree that
the damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises as aforesaid will be extremely substantial, will
exceed the amount of the Fixed Rent theretofore payable hereunder, and will be
impossible to accurately measure. Tenant therefore agrees that if possession of
the Premises is not surrendered to Landlord upon the expiration or sooner
termination of the Term, then Tenant shall pay to Landlord, as liquidated
damages for each month and for each portion of any month during which Tenant
holds over in the Premises after the expiration or sooner termination of the
Term, in addition to any sums payable pursuant to the foregoing indemnity, a sum
equal to the higher of the then fair market rental value of the Premises, taking
into account the effect of all material factors reasonably relevant to such
determination, or one and one-half (1 1/2) times the aggregate of the Fixed Rent
which was payable under this Lease with respect to the last month of the Term
hereof. Nothing herein contained shall be deemed to permit Tenant to retain
possession of the Premises after the expiration or sooner termination of the
Term. If Tenant holds over in possession after the expiration or termination of
the Term, such holding over shall not be deemed to extend the Term or renew this
Lease, but the tenancy thereafter shall continue as a tenancy from month to
month upon the terms and conditions of this Lease at the Fixed Rent as herein
increased. Tenant hereby waives the benefit of any law or statute in effect in
the state where the Premises is located which would contravene or limit the
provisions set forth in this SECTION 16.3. This provision shall survive the
expiration or earlier termination of this Lease.
ARTICLE 17
ACCESS
Section 17.1. In addition to Landlord's rights, if any, with respect to the
Landlord's Storage Area as provided in this Lease (including, without
limitation, SECTION 1.3 above), Landlord shall at all times during the Term have
the right and privilege to enter the Premises at reasonable times during
business hours for the purpose of inspecting the same or for the purpose of
showing the same to prospective purchasers or Mortgagees thereof. Landlord shall
also have the right and privilege at all times during the Term to post notices
of nonresponsibility for work performed by or on behalf of Tenant.
Section 17.2. In addition to Landlord's rights, if any, with respect to the
Landlord's Storage Area as provided in this Lease (including, without
limitation, SECTION 1.3 above), Landlord shall at all times during the Term have
the right to enter the Premises or any part thereof, following reasonable notice
from Landlord and so long as Landlord uses its reasonable best efforts to not
unduly interfere with Tenant's normal
27
business operations, for the purpose of making such repairs or Alterations
therein as Landlord deems necessary or advisable, but such right of access shall
not be construed as obligating Landlord to make any repairs to or replacements
to the Premises or as obligating Landlord to make any inspection or examination
of the Building. Notwithstanding the foregoing, in the event of an emergency,
Landlord shall have the right to enter the Premises or any part thereof without
prior notice to Tenant.
ARTICLE 18
ENVIRONMENTAL MATTERS
Section 18.1. Except for ordinary and general office supplies, such as
copier toner, liquid paper, glue, ink and common household and/or office
cleaning materials, Tenant will not use, generate, manufacture, produce, store,
release, discharge or dispose of on, under, from or about the Premises or
transport to or from the Premises any Hazardous Substance and will use its best
efforts not to allow or suffer any other person or entity (other than Landlord)
to do so.
Section 18.2. Tenant shall keep and maintain the Premises (other than the
Landlord's Storage Area if Landlord then has a right pursuant to this Lease to
use such area) in compliance with, and shall use its best efforts not to cause,
permit or suffer the Premises (other than the Landlord's Storage Area if
Landlord then has a right pursuant to this Lease to use such area) to be in
violation of any Environmental Law (as defined below).
Section 18.3. Tenant shall give prompt written notice to Landlord of:
(a) becoming aware of any use, generation, manufacture, production,
storage, release, discharge or disposal of any Hazardous Substance on, under,
from or about the Premises or the migration thereof to or from other property;
(b) the commencement, institution or threat of any proceeding, inquiry or
action by or notice from any local, state or federal governmental authority with
respect to the use or presence of any Hazardous Substance on the Premises or the
migration thereof from or to other property;
(c) all claims made or threatened by any third party against Tenant or the
Premises relating to any damage, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Substance;
(d) Tenant's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Premises that could cause the Premises or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of the Premises under any Environmental Law, or any
regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability or use of the Premises
under any Environmental Law; and
(e) obtaining knowledge of any incurrence of expense by any governmental
authority or others in connection with the assessment, containment or removal of
any Hazardous Substance located on, under, from or about the Premises or any
property adjoining or in the vicinity of the Premises.
Section 18.4. Landlord shall have the right, but not the obligation, to
join and participate in, as a party if it so elects, any legal proceedings or
actions initiated with respect to the Premises in connection with any
Environmental Law and have its actual and customary attorneys' fees in
connection therewith paid by Tenant or be defended by Tenant from and against
any such proceedings or actions with counsel chosen by Landlord (provided that
Landlord and Tenant shall attempt, in good faith, to agree on one counsel to
represent both Landlord and Tenant, if in Landlord's good faith determination
such joint representation is feasible or appropriate under the circumstances),
and shall have the right to make inquiry of and disclose all information to
appropriate governmental authorities when advised by counsel that such
disclosure may be required under
28
applicable law; provided, however, that the foregoing obligations of Tenant
shall not apply to any legal proceedings or actions initiated with respect to
the Premises that result from any actions or inaction of Landlord with respect
to the Landlord's Storage Area.
Section 18.5. Without Landlord's prior written consent, which consent shall
not be unreasonably withheld or delayed, Tenant shall not take any remedial
action in response to the presence of any Hazardous Substance on, under, from or
about the Premises, nor enter into any settlement, consent or compromise which
might, in Landlord's reasonable judgment, impair the value of Landlord's
interest in the Premises under this Lease; PROVIDED, HOWEVER, that Landlord's
prior consent shall not be necessary if the presence of Hazardous Substance on,
under, from or about the Premises either poses an immediate threat to the
health, safety or welfare of any individual or is of such a nature that an
immediate remedial response is necessary and it is not practical or possible to
obtain Landlord's consent before taking such action. In such event Tenant shall
notify Landlord as soon as practicable of any action so taken. Landlord agrees
not to withhold its consent, where such consent is required hereunder, if either
(i) a particular remedial action is ordered by a court or any agency of
competent jurisdiction, or (ii) Tenant establishes to the reasonable
satisfaction of Landlord that there is no reasonable alternative to such
remedial action which would result in less impairment of Landlord's security
hereunder.
Section 18.6. Tenant shall protect, indemnify and hold harmless Landlord
and each Mortgagee, their respective directors, officers, partners employees,
agents, successors and assigns from and against any and all claim, loss, damage,
cost, expense, liability, fines, penalties, charges, administrative and judicial
proceedings and orders, judgments, remedial action requirements, enforcement
actions of any kind (including, without limitation, attorneys' fees and costs)
directly or indirectly arising out of or attributable to, in whole or in part,
the breach of any of the covenants, representations and warranties of this
ARTICLE 18 or the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence of a Hazardous Substance
on, under, from or about the Premises caused by Tenant or any employees, agents,
licensees, sublessees, contractors or subcontractors of Tenant during the Term,
or any other activity carried on or undertaken on or off the Premises during the
Term by Tenant, any employees, agents, licensees, sublessees, contractors or
subcontractors of Tenant, in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any Hazardous
Substance at any time located or present on, under, from or about the Premises,
including, without limitation: (i) all consequential damages; (ii) the costs of
any required or necessary repair, cleanup or detoxification of the Premises and
the preparation and implementation of any closure, remedial or other required
plans including, without limitation: (A) the costs of removal or remedial action
incurred by the United States Government or the state in which the Premises are
located, or response costs incurred by any other person, or damages from injury
to, destruction of, or loss of natural resources, including the costs of
assessing such injury, destruction or loss, incurred pursuant any Environmental
Law; (B) the clean-up costs, fines, damages or penalties incurred pursuant to
the provisions of applicable state law; and (C) the cost and expenses of
abatement, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any other statute, state or federal; and
(iii) liability for personal injury or property damage, including damages
assessed for the maintenance of the public or private nuisance, response costs
or for the carrying on of an abnormally dangerous activity; provided, however,
the foregoing indemnity shall not cover any matter arising as a result of, or in
connection with, the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence of a Hazardous Substance
on, under, from or about the Premises caused by Landlord or any employees,
agents, licensees, sublessees, contractors or subcontractors of Landlord during
the Term, or any other activity carried on or undertaken on or off the Premises
during the Term by Landlord, any employees, agents, licensees, sublessees,
contractors or subcontractors of Landlord, in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or disposal of
any Hazardous Substance at any time located or present on, under, from or about
the Premises.
Except as expressly limited above, the foregoing indemnity shall further
apply to any residual contamination on, under, from or about the Premises, or
affecting any natural resources arising in connection with the use, generation,
manufacturing, production, handling, storage, transport, discharge or disposal
of any such Hazardous Substance, and irrespective of whether any of such
activities were or will be undertaken in
29
accordance with Environmental Law or other applicable laws, regulations, codes
and ordinances. This indemnity is intended to be operable under 42 U.S.C.
Section 9607(e)(1), and any successor section thereof and shall survive
expiration or earlier termination of this Lease and any transfer of all or a
portion of the Premises by Tenant.
The foregoing indemnity shall in no manner be construed to limit or
adversely affect Landlord's rights under this ARTICLE 18, including, without
limitation, Landlord's rights to approve any Remedial Work (as defined below) or
the contractors and consulting engineers retained in connection therewith.
Notwithstanding anything to the contrary contained in this Lease, in no event
will Tenant have any liability or obligation under this Lease or with respect to
the Premises for Hazardous Substances existing in, on, under or about the
Premises on the Commencement Date or any violation of Environmental Laws prior
to or existing on the Commencement Date.
Section 18.7. In the event that any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of any kind or
nature (the "REMEDIAL WORK") is required by any applicable local, state or
federal law or regulation, any judicial order, or by any governmental entity or
person because of, or in connection with, the current or future presence,
suspected presence, release or suspected release of a Hazardous Substance in or
into the air, soil, groundwater, surface water or soil vapor at, on, about,
under or within the Premises (or any portion thereof other than the Landlord's
Storage Area if Landlord then has a right pursuant to this Lease to use such
area), Tenant shall within thirty (30) days after written demand for performance
thereof by Landlord (or such shorter period of time as may be required under any
applicable law, regulation, order or agreement), commence to perform, or cause
to be commenced, and thereafter diligently prosecute to completion within such
period of time as may be required under any applicable law, regulation, order or
agreement, all such Remedial Work at Tenant's sole expense in accordance with
the requirements of any applicable governmental authority or Environmental Law.
All Remedial Work shall be performed by one or more contractors, approved in
advance in writing by Landlord, and under the supervision of a consulting
engineer approved in advance in writing by Landlord. All costs and expenses of
such Remedial Work shall be paid by Tenant, including, without limitation, the
charges of such contractor(s) and/or the consulting engineer, and Landlord's
actual and customary attorneys' fees and costs incurred in connection with
monitoring or review of such Remedial Work. In the event Tenant shall fail to
timely commence, or cause to be commenced, or fail to complete the Remedial Work
within the time required above, Landlord may, but shall not be required to,
cause such Remedial Work to be performed and all costs and expenses thereof, or
incurred in connection therewith shall become part of the indebtedness secured
hereby.
Section 18.8. All costs and expenses incurred by Landlord under this
Article 18 shall be immediately due and payable as Additional Rent upon demand
and shall bear interest at the Default Rate from the date of notice of such
payment by Landlord and the expiration of any grace period provided herein until
repaid.
Section 18.9. "ENVIRONMENTAL LAWS" shall mean any federal, state or local
law, statute, ordinance or regulation pertaining to health, industrial hygiene,
hazardous waste or the environmental conditions on, under, from or about the
Premises, including, without limitation, the laws listed in the definition of
Hazardous Substances below.
Section 18.10. "HAZARDOUS SUBSTANCES" shall mean any element, compound,
chemical mixture, contaminant, pollutant, material, waste or other substance
which is defined, determined or identified as a "hazardous substance",
"hazardous waste" or "hazardous material" under any federal, state or local
statute, regulation or ordinance applicable to a Real Property, as well as any
amendments and successors to such statutes and regulations, as may be enacted
and promulgated from time to time, including, without limitation, the following:
(i) the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (codified in scattered sections of 26 U.S.C., 33 U.S.C., 42 U.S.C. and 42
U.S.C. ss. 9601 ET SEQ.); (ii) the Resource Conservation and Recovery Act of
1976 (42 U.S.C. ss. 6901 ET. SEQ.); (iii) the Hazardous Materials Transportation
Act (49 U.S.C. ss. 1801 ET. SEQ.); (vi) the Toxic Substances Control Act (15
U.S.C. ss. 2601 ET. SEQ.); (v) the Clean Air Act (33 U.S.C. ss. 1251 ET. SEQ.);
(vi) the Clean Air Act (42 U.S.C. ss. 7401 ET. SEQ.);
30
(vii) the Safe Drinking Water Act (21 U.S.C. ss. 349; 42 U.S.C. ss. 201 and ss.
300f ET. SEQ.); (viii) the National Environmental Policy Act of 1969 (42 U.S.C.
ss. 3421); (ix) the Superfund Amendment and Reauthorization Act of 1986
(codified in scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42
U.S.C.); and (x) Title III of the Superfund Amendment and Reauthorization Act
(40 U.S.C. ss. 1101 ET. SEQ.).
Section 18.11. All representations, warranties, covenants and indemnities
of Tenant in this ARTICLE 18 shall continue to be binding upon Tenant, and its
successors and assigns, after the expiration or earlier termination of this
Lease.
ARTICLE 19
MISCELLANEOUS PROVISIONS
Section 19.1. It is mutually agreed by and between Landlord and Tenant that
the respective parties shall and they hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Lease, Tenant's use or occupancy of the Premises, and/or any
claim of injury or damage excluding any claim for personal injury or property
damage.
Section 19.2. Tenant and the other parties occupying a part of the Premises
pursuant to a lease or license arrangement with Tenant may place a sign on the
Premises to indicate the nature of the business of Tenant and such parties. The
sign shall be lawful under applicable sign codes and subdivision covenants.
Section 19.3.
(a) The term "LANDLORD" as used herein shall mean only the owner or the
mortgagee in possession for the time being of the Premises, so that in the event
of any sale, transfer or conveyance of the Premises Landlord shall be and hereby
is entirely freed and relieved of all agreements, covenants and obligations of
Landlord thereafter accruing hereunder, and it shall be deemed and construed
without further agreement between the parties or their successors in interest or
between the parties and the purchaser, transferee or grantee at any such sale,
transfer or conveyance that such purchaser, transferee or grantee has assumed
and agreed to carry out any and all agreements, covenants and obligations of
Landlord hereunder.
(b) The term "TENANT" as used herein shall mean the tenant named herein,
and from and after any valid assignment or transfer in whole of said Tenant's
interest under this Lease pursuant to the provisions of ARTICLE 9, shall mean
only the assignee or transferee thereof; but the foregoing shall not release the
assignor or transferor from liability under this Lease.
(c) The words "ENTER", "RE-ENTER", "ENTRY" and "RE-ENTRY" as used in this
Lease shall not be restricted to their technical legal meaning.
(d) The use herein of the neuter pronoun in any reference to Landlord or
Tenant shall be deemed to include any individual Landlord or Tenant, and the use
herein of the words "SUCCESSOR AND ASSIGNS" or "SUCCESSORS OR ASSIGNS" of
Landlord or Tenant shall be deemed to include the heirs, executors,
administrators, representatives and assigns of any individual Landlord or
Tenant.
Section 19.4. The headings herein are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of this Lease nor in any way affect this Lease.
Section 19.5. This Lease shall be governed by and construed in accordance
with the laws of the state in which the Premises are located.
31
Section 19.6. This Lease contains the entire agreement between the parties
and may not be extended, renewed, terminated or otherwise modified in any manner
except by an instrument in writing executed by the party against whom
enforcement of any such modification is sought. All prior understandings and
agreements between the parties and all prior working drafts of this Lease are
merged in this Lease, which alone expresses the agreement of the parties. The
parties agree that no inferences shall be drawn from matters deleted from any
working drafts of this Lease.
Section 19.7. The agreements, terms, covenants and conditions herein shall
bind and inure to the benefit of Landlord and Tenant and their respective heirs,
personal representatives, successors and, except as is otherwise provided
herein, their assigns.
Section 19.8. Notice whenever provided for herein shall be in writing and
shall be given either by personal delivery, overnight express mail or by
certified or registered mail, return receipt requested, to Landlord and Tenant
at their respective addresses set forth in Article A above, or to such other
persons or at such other addresses as may be designated from time to time by
written notice from either party to the other. Notices shall be deemed given (i)
when delivered personally if delivered on a business day (or if the same is not
a business day, then the next business day after delivery), (ii) three (3)
business days after being sent by United States mail, registered or certified
mail, postage prepaid, return receipt requested or (iii) if delivery is made by
Federal Express or a similar, nationally recognized overnight courier service
for 9:00 a.m. delivery, then on the date of delivery (or if the same is not a
business day, then the next business day after delivery), if properly sent and
addressed in accordance with the terms of this SECTION 19.8.
Section 19.9. If any provision of this Lease shall be invalid or
unenforceable, the remainder of the provisions of this Lease shall not be
affected thereby and each and every provision of this Lease shall be enforceable
to the fullest extent permitted by law.
Section 19.10. Tenant represents and warrants to Landlord that Tenant has
not dealt with any real estate broker in connection with this Lease. Tenant
agrees to indemnify Landlord and save Landlord harmless from any and all claims
for brokerage commissions by any other person, firm, corporation or other entity
claiming to have brought about this Lease transaction. Landlord represents and
warrants to Tenant that Landlord has not dealt with any real estate broker in
connection with this Lease. Landlord agrees to indemnify Tenant and save Tenant
harmless from any and all claims for brokerage commissions by any other person,
firm, corporation or other entity claiming to have brought about this Lease
transaction. The provisions of this SECTION 19.10 shall survive the expiration
or earlier termination of this Lease.
Section 19.11. Tenant is and shall be in exclusive control and possession
of the Premises, and Landlord shall not, in any event whatsoever, be liable for
any injury or damage to any property or to any person happening in, on or about
the Premises, nor for any injury or damage to any property of Tenant, or of any
other person or persons contained therein unless the same is caused by
Landlord's negligent acts or omissions. The provisions hereof, including without
limitation ARTICLE 17, permitting Landlord to enter and inspect the Premises are
made for the purpose of enabling Landlord to be informed as to whether Tenant is
complying with the agreements, terms, covenants and conditions hereof, and if
Landlord so desires, to do such acts as Tenant shall fail to do.
Section 19.12. A memorandum of this Lease as set forth on EXHIBIT "B"
attached hereto and incorporated herein by this reference shall be recorded by
Tenant at its sole cost and expense. Tenant shall also execute and deliver to
Landlord, in recordable form, a properly acknowledged quitclaim deed with
Landlord as the transferee, which quitclaim deed shall (i) extinguish all of the
Tenant's rights and interest in and to the Premises, and (ii) be held in trust
by Landlord on the condition that it may only be recorded by Landlord after the
expiration or any earlier termination of this Lease (but not prior thereto).
Landlord covenants and agrees to so hold such quitclaim deed and not to record
the same prior to the expiration or earlier termination of this Lease.
32
Section 19.13. The parties took equal part in drafting this Lease and no
rule of construction that would cause any of the terms hereof to be construed
against the drafter shall be applicable to the interpretation of this Lease.
Section 19.14. In the event of a default by Tenant, following the
expiration of the applicable cure period, if any, Tenant shall and hereby does
appoint Landlord the attorney-in-fact of Tenant, irrevocably, to execute and
deliver any documents provided for in SECTION 14.1 for and in the name of
Tenant, such power, being coupled with an interest, being irrevocable.
Section 19.15. Time is strictly of the essence with respect to each and
every term and provision of this Lease.
Section 19.16. The time within which either party hereto shall be required
to perform any act under this Lease, other than the payment of money, shall be
extended by a period of time equal to the number of days during which
performance of such act is delayed by strikes, lockouts, acts of God,
governmental restrictions, failure or inability to secure materials or labor by
reason of priority or similar regulation or order of any governmental or
regulatory body, enemy action, civil disturbance, fire, unavoidable causalities
or any other cause beyond the reasonable control of either party hereto (but
excluding delays due to financial inability) (all of the foregoing are herein
collectively called "FORCE MAJEURE DELAYS").
Section 19.17. The provisions of this Section shall not apply to nor
operate to excuse Tenant from the payment of Rent strictly in accordance with
this Lease. If Landlord shall be in default under this Lease and, if as a
consequence of such default, Tenant shall recover a money judgement against
Landlord, such judgment shall be satisfied only out of right, title and interest
of Landlord in the Premises as the same may then be encumbered and neither
Landlord nor any person or entity comprising Landlord shall be liable for any
deficiency. In no event shall Tenant have the right to levy execution against
any property of Landlord nor any person or entity comprising Landlord other than
its interests in the Premises as herein expressly provided. Notwithstanding
anything to the contrary contained herein, in no event shall Landlord be liable
for consequential or special damages for a breach of or default under this
Lease.
ARTICLE 20
RENEWAL OPTIONS
Section 20.1. Section 20.1. Subject to and upon terms and conditions set
forth herein, Landlord hereby grants to Tenant two (2) consecutive options (the
"RENEWAL OPTIONS") to extend the Initial Term and the Expiration Date for a
period of one year for the First Renewal Term (as defined in the EXHIBIT "C"
attached hereto) and five years for the Second Renewal Term (as defined in
EXHIBIT "C"), each such period commencing upon the then current Expiration Date
upon the same terms and conditions set forth in this Lease except for the amount
of Fixed Rent payable under this Lease (which amount shall be computed based on
the applicable provisions of EXHIBIT "C"). The terms and conditions of the
Renewal Options are more particularly set forth in the EXHIBIT "C" attached
hereto.
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE
PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE AND, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, TENANT'S OBLIGATION TO PAY RENT
HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE
BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS LEASE, TENANT SHALL CONTINUE TO PAY FIXED RENT AND ALL
ADDITIONAL RENT, WITHOUT ABATEMENT, SETOFF OR DEDUCTION NOTWITHSTANDING ANY
BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR
IMPLIED.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
33
The parties hereto have executed this Lease as of the day and year first
above set forth.
TENANT:
MARKETING SPECIALISTS SALES COMPANY, a Texas corporation
By: ____________________________________________________
Name: ____________________________________________
Title: ____________________________________________
LANDLORD:
IPT PARTNERS, LLC, a California limited liability company
By: XXXXX XXXXX XXXXXX, Trustee of the Xxxxx Xxxxx Xxxxxx
Trust Est. 6/25/92, its managing member
By: _______________________________________________
Name: Xxxxx Xxxxx Xxxxxx
Title: Trustee
34
EXHIBIT "A"
DESCRIPTION OF THE LAND
PARCEL A:
PARCEL 1, IN XXX XXXX XX XXXXXX, XXXXXX XX XXXXXX, XXXXX OF CALIFORNIA, AS SHOWN
ON EXHIBIT "B" ATTACHED TO THAT CERTAIN LOT LINE ADJUSTMENT NO. LL-98-6,
RECORDED JUNE 2, 1989 AS INSTRUMENT NO. 89-291942 OF OFFICIAL RECORDS OF ORANGE
COUNTY, CALIFORNIA.
PARCEL B:
AN EASEMENT FOR INGRESS AND EGRESS, AND FOR THE PURPOSE OF CONSTRUCTING AND
MAINTAINING SEWER MAIN, WATER MAINS, GAS MAINS, AND/OR ELECTRIC OR TELEPHONE
CONDUITS, OVER THE SOUTHERLY 7.00 FEETOF:
THAT PORTION OF LOTS 6 AND 7 OF THE GLASSELL AND XXXXXXX TRACT, AS SHOWN ON A
MAP RECORDED IN BOOK 5, PAGE 408 OF MISCELLANEOUS RECORDS IN THE OFFICE OF THE
COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE NORTH LINE OF SAID TRACT, SAID LINE ALSO BEING THE
SOUTH LINE OF THE XXXXXX TRACT, AS PER MAP RECORDED IN BOOK 5, PAGE 120 OF
MISCELLANEOUS RECORDS IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES
COUNTY, CALIFORNIA, NORTH 89 (degree) 45' 00" WEST 935.22 FEET FROM THE
NORTHEAST CENTER OF LOT 5 OF SAID GLASSELL AND XXXXXXX TRACT; THENCE NORTH 89
(degree) 45' 00" WEST 192.72 FEET TO A POINT ON THE EAST BANK OF SANTA ANA
RIVER, SAID POINT BEING THE NORTHEASTERLY CORNER OF THE LAND DESCRIBED IN A
DECREE OF PARTIAL DISTRIBUTION, RECORDED NOVEMBER 2, 1909 IN BOOK 000, XXXX 00
XX XXXXX, XXXXXXX XX XXXXXX XXXXXX; THENCE ALONG SAID DISTRIBUTION LINE, SOUTH
38 (degree) 45' 00" WEST 309.54 FEET TO THE NORTHEASTERLY LINE OF THE LAND
DESCRIBED IN A DEED TO THE CALIFORNIA CENTRAL RAILWAY CO., RECORDED SEPTEMBER
13, 1889 IN BOOK 2, PAGE 108 OF DEEDS; THENCE CONTINUING ALONG SAID DISTRIBUTION
LINE, SOUTH 22 (degree) 00' 00" WEST 309.54 FEET TO THE NORTHEASTERLY LINE OF
THE LAND DESCRIBED IN A DEED TO THE CALIFORNIA CENTRAL RAILWAY CO., RECORDED
SEPTEMBER 13, 1889 IN BOOK 2, PAGE 105 OF DEEDS; THENCE CONTINUING ALONG SAID
DISTRIBUTION LINE, SOUTH 22 (degree) 00' 00" WEST 179.52 FEET; THENCE SOUTH 0
(degree) 30' 00" WEST 708.18 FEET TO THE INTERSECTION OF SAID DISTRIBUTION LINE
WITH A LINE PARALLEL WITH AND NORTHERLY 12.00 FEET FROM THE SOUTHERLY LINE OF
SAID TRACT; THENCE ALONG SAID PARALLEL LINE, SOUTH 89 (degree) 45' 00" EAST
448.80 FEET TO A POINT WHICH IS DISTANT NORTH 12.00 FEET AND WEST 99.00 FEET
FROM THE NORTHEAST CORNER OF THE XXXX X. XXXXXX TRACT, AS PER MAP RECORDED IN
BOOK 5, PAGE 168 OF MISCELLANEOUS RECORDS IN THE OFFICE OF THE COUNTY RECORDER
OF LOS ANGELES COUNTY, CALIFORNIA; THENCE NORTH 0 (degree) 30' 00" EAST 1120.02
FEET TO THE POINT OF BEGINNING.
EXCEPT THAT PORTION THEREOF LYING WITHIN ICKHOFF STREET, AS DESCRIBED IN THE
FINAL ORDER OF CONDEMNATION RECORDED MARCH 20, 1967 IN BOOK 8203, PAGE 278 OF
OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEEDS TO THE CITY OF ORANGE
RECORDED MARCH 23, 1973 IN BOOK 10609, PAGE 249 OF OFFICIAL RECORDS, AND
RECORDED AUGUST 21, 1975 IN BOOK 10862, PAGE 054 OF OFFICIAL RECORDS.
PARCEL C:
AN EASEMENT FOR INGRESS AND EGRESS AND FOR THE PURPOSE OF CONSTRUCTING AND
MAINTAINING SEWER MAIN, WATER MAINS, GAS MAINS AND/OR ELECTRIC OR TELEPHONE
A-1
CONDUITS OVER THAT PORTION OF LOT 6 OF THE GLASSELL AND XXXXXXX TRACT AS SHOWN
ON A MAP RECORDED IN BOOK 5, PAGE 408 OF MISCELLANEOUS RECORDS IN THE OFFICE OF
THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SAID XXX 0, XXXX XXXXX XXXXX
XXXXXXX XXXXX 00 (xxxxxx) 45' 00" EAST 1242.78 FEET (18.83 CHAINS) FROM THE
SOUTHEASTERLY CORNER OF LOT 8 IN SAID GLASSELL AND XXXXXXX TRACT; THENCE NORTH 0
(degree) 30' 00" EAST 12.00 FEET TO THE SOUTHERLY LINE OF THE LAND DESCRIBED IN
DEED TO XXXXX XXXXXXXX, RECORDED APRIL 14, 1900 IN BOOK 48, PAGE 145 OF DEEDS,
RECORDS OF ORANGE COUNTY, CALIFORNIA; THENCE SOUTH 89 (degree) 45' 00" EAST
ALONG SAID SOUTHERLY LINE OF THE LAND OF XXXXXXXX, 316.80 FEET (4.80 CHAINS) TO
THE SOUTHEASTERLY CORNER OF SAID LAND OF XXXXXXXX; THENCE SOUTH 0 (degree) 30'
00" EAST 12.00 FEET TO THE SOUTHERLY LINE OF SAID LOT 6; THENCE SOUTH 89
(degree) 45" 00" WEST ALONG SAID SOUTHERLY LINE OF LOT 6, A DISTANCE OF 316.80
FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN THE LAND DESCRIBED IN DEED TO
THE COUNTY OF ORANGE RECORDED AUGUST 31, 1966 IN BOOK 8035, PAGE 546 OF OFFICIAL
RECORDS.
ALSO EXCEPTING THEREFROM THAT PORTION DESCRIBED IN DEED TO THE CITY OF ORANGE
RECORDED DECEMBER 28, 1973 IN BOOK 11044, PAGE 682 OF OFFICIAL RECORDS.
PARCEL D:
AN EASEMENT FOR INGRESS AND EGRESS, AND FOR THE PURPOSE OF CONSTRUCTING AND
MAINTAINING SEWER DRAIN, WATER MAINS, GAS MAINS, AND/OR ELECTRIC OR TELEPHONE
CONDUITS OVER THAT PORTION OF LOTS 6 AND 7 OF THE GLASSELL AND XXXXXXX TRACT, AS
SHOWN ON A MAP RECORDED IN BOOK 5, PAGE 408 OF MISCELLANEOUS RECORDS IN THE
OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS
FOLLOWS:
BEGINNING AT A POINT OF THE SOUTHERLY LINE OF SAID XXX 0, XXXX XXXXX XXXXX
XXXXXXX XXXXX 00 (xxxxxx) 48' 00" EAST 1242.78 FEET (18.83 CHAINS) FROM THE
SOUTHEASTERLY CORNER OF LOT 8 IN SAID GLASSELL AND XXXXXXX TRACT; THENCE NORTH 0
(degree) 30' 00" EAST 12.00 FEET TO THE SOUTHERLY LINE OF THE LAND DESCRIBED IN
DEED TO XXXXX XXXXXXXX, RECORDED APRIL 14, 1900 IN BOOK 48, PAGE 145 OF DEEDS,
RECORDS OF ORANGE COUNTY, CALIFORNIA; THENCE NORTH 89 (degree) 45' 00" WEST
132.00 FEET; THENCE SOUTH 0 (degree) 30' 00" WEST 12.00 FEET TO THE SOUTHERLY
LINE OF SAID LOT 7; THENCE SOUTH 89 (degree) 45' 00" EAST 132.00 FEET ALONG SAID
SOUTHERLY LINE OF LOTS 7 AND 6 TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THAT PORTION, IF ANY, LYING WESTERLY OF THE SOUTHERLY
PROLONGATION OF THE WESTERLY LINE OF SAID LAND OF XXXXX XXXXXXXX.
A-2
EXHIBIT "B"
IPT PARTNERS, LLC, a California limited liability company ("LANDLORD"), and
MARKETING SPECIALISTS SALES COMPANY, a Texas corporation ("TENANT"), have
entered into that certain Lease Agreement (the "LEASE") dated as of May 2, 2000,
for the lease of property located at 744 and 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000. This Exhibit "B" (this "EXHIBIT") is attached to the Lease.
Except to the extent otherwise indicated herein, the initially capitalized terms
used in this Exhibit shall have the meanings assigned to them in the Lease.
MEMORANDUM OF LEASE
The Lease is for a term of forty-eight (48) months and will commence on May
2, 2000, and end on May 2, 2004. The Lease provides that Tenant may, under
certain circumstances, have a right to extend the Initial Term of the Lease for
up to two (2) additional periods, for one (1) year and for five (5) years,
respectively.
The Premises includes the real property located in Orange County,
California and more particularly described in the EXHIBIT A attached hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Lease effective as of the 2nd day of May, 2000.
TENANT:
MARKETING SPECIALISTS SALES COMPANY, a Texas corporation
By: ____________________________________________________
Name: ____________________________________________
Title: ____________________________________________
LANDLORD:
IPT PARTNERS, LLC, a California limited liability company
By: XXXXX XXXXX XXXXXX, Trustee of the Xxxxx Xxxxx
Xxxxxx Trust Est. 6/25/92, its managing member
By: _______________________________________________
Name: Xxxxx Xxxxx Xxxxxx
Title: Trustee
[ACKNOWLEDGMENTS TO COME]
B-1
EXHIBIT "C"
IPT PARTNERS, LLC, a California limited liability company ("LANDLORD"), and
MARKETING SPECIALISTS SALES COMPANY, a Texas corporation ("TENANT"), have
entered into that certain Lease Agreement (the "LEASE") dated as of May 2, 2000,
for the lease of property located at 744 and 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000. This Exhibit "C" (this "EXHIBIT") is attached to the Lease.
Except to the extent otherwise indicated herein, the initially capitalized terms
used in this Exhibit shall have the meanings assigned to them in the Lease.
RENEWAL OPTIONS
1. Tenant shall have the right to renew and extend the Initial Term with
respect to the Premises upon and subject to the terms and conditions set forth
below.
2. Provided that, at such time, no Event of Default has occurred and is
continuing, Tenant may renew the term of the Lease for two (2) additional
periods of time (each renewal term is herein referred to as a "RENEWAL TERM") on
the same terms provided in the Lease (except as set forth below) by delivering
written notice of the exercise thereof to Landlord ("TENANT'S NOTICE OF
EXERCISE") not later than nine (9) months prior to the expiration of the Initial
Term or, if applicable, the First Renewal Term (as defined below). If Tenant
fails to deliver Tenant's Notice of Exercise at least nine (9) months prior to
the expiration of the Initial Term, Tenant's rights under this Exhibit shall
terminate. The first Renewal Term (the "FIRST RENEWAL TERM") shall commence
immediately upon the scheduled expiration of the Initial Term and shall expire
(if not thereafter renewed) on the last day of the twelfth (12th) full calendar
month thereafter, and upon Tenant's exercise of the second renewal option set
forth in this Exhibit, the second Renewal Term (the "SECOND RENEWAL TERM") shall
commence immediately upon the expiration of the First Renewal Term and expire on
the last day of the sixtieth (60th) full calendar month thereafter.
3. The exercise by Tenant of either of the renewal options set forth herein
must be made, if at all, by Tenant's timely delivery to Landlord of Tenant's
Notice of Exercise during the time period required by the preceding paragraph.
Once Tenant exercises either renewal option, Tenant may not thereafter revoke
such exercise. Tenant's failure, for any reason whatsoever, to timely exercise
either of the renewal options set forth herein shall conclusively be deemed a
waiver of the applicable renewal option, time being of the essence with respect
to Tenant's exercise of the same.
4. If Tenant timely exercises the first renewal option provided in this
Exhibit, Landlord and Tenant shall, on or before the commencement date of the
First Renewal Term, execute an amendment to the Lease extending the Initial Term
on the same terms provided in the Lease, except as follows:
(a) The Fixed Rent payable for each month during the First Renewal Term
shall be $44,581.00 per month; and
(b) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, tenant improvement allowance, construction allowance, and the like)
or other tenant inducements in connection with the First Renewal Term.
5. If Tenant timely exercises the second renewal option provided in this
Exhibit, Landlord and Tenant shall, on or before the commencement date of the
Second Renewal Term, execute an amendment to the Lease extending the First
Renewal Term on the same terms provided in the Lease, except as follows:
(a) The Fixed Rent payable for each month during the Second Renewal Term
shall be equal to the prevailing fair market rental rate for leases at
comparable buildings in the Orange Area (as hereinafter defined) at the
commencement of the Second Renewal Term (such rate is herein referred to as the
"FMV RENEWAL RATE") for space of equivalent quality, size, utility and location,
with the length of the Second Renewal Term and the credit standing and financial
condition of Tenant to be taken into account; and
(b) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, tenant improvement allowance, and the like)
or other tenant inducements in connection with the Second Renewal Term.
C-1
6. As used herein, the term "ORANGE AREA" shall mean the area within a ten
(10) mile radius of the Building.
7. Within thirty (30) days after Landlord's receipt of Tenant's Notice of
Exercise for the Second Renewal Term, Landlord shall deliver to Tenant
Landlord's determination of the FMV Renewal Rate (such determination by Landlord
of the FMV Renewal Rate is herein referred to as "LANDLORD'S ASSESSMENT").
Tenant shall, within thirty (30) days after Tenant's receipt of Landlord's
Assessment, notify Landlord in writing whether Tenant accepts or rejects
Landlord's Assessment. The failure of Tenant to so notify Landlord shall be
deemed to be an acceptance by Tenant of Landlord's Assessment and the same shall
be the FMV Renewal Rate. If Tenant timely delivers to Landlord written notice
that Tenant does not accept Landlord's Assessment ("TENANT'S OBJECTION NOTICE"),
the FMV Renewal Rate shall be determined as provided in the following paragraph.
Tenant's Objection Notice must identify Tenant's determination of the FMV
Renewal Rate ("TENANT'S ASSESSMENT") to trigger the following appraisal process.
8. If Tenant timely delivers to Landlord Tenant's Objection Notice in which
Tenant's Assessment has been identified, Landlord shall have the right to accept
Tenant's Assessment by giving Tenant written notice thereof within five (5) days
after Landlord's receipt of Tenant's Objection Notice. If Landlord does not so
accept Tenant's Assessment, then Landlord and Tenant shall, within ten (10)
business days after the expiration of such five (5) day period, jointly appoint
an independent real estate broker or other person with at least ten (10) years'
commercial real estate experience in Orange County, California (an "APPRAISER")
to determine the FMV Renewal Rate. If the parties are unable to agree upon an
Appraiser within such ten (10) business day period, either party may request
that the Orange County, California office of the American Arbitration
Association designate, within five (5) business days of such request, a broker
with at least ten (10) years' commercial real estate experience in Orange
County, California to be the Appraiser for the purposes of this paragraph;
provided, however, in no event shall such designated Appraiser be employed, or
have been employed, by either Landlord or Tenant. Such designation shall be
binding on Landlord and Tenant. Within five (5) business days after the
selection of an Appraiser, each of Landlord and Tenant shall submit to the
Appraiser such party's determination of the FMV Renewal Rate (revised, if
applicable, from any earlier determination), together with such supporting data
used to make such determination. Within ten (10) business days after the
selection of the Appraiser, the Appraiser shall select the determination of the
FMV Renewal Rate for the Second Renewal Term which is closest to such
Appraiser's determination of the FMV Renewal Rate, and such determination shall
be averaged with such Appraiser's determination of the FMV Renewal Rate for the
purpose of determining the Fixed Rent for the Second Renewal Term. The entire
cost for the Appraiser's services shall be borne equally by Landlord and Tenant.
9. Tenant's rights under this Exhibit shall terminate following the
occurrence of the following events: (a) a termination of Tenant's right to
possess all or any portion of the Premises; (b) the failure of Tenant to timely
exercise its right to renew the Initial Term as provided in this Exhibit, time
being of the essence with respect to Tenant's exercise thereof; (c) Tenant
assigns all or any of its interest in the Lease or sublets all or any portion of
the Premises (other than to a transferee following a Permitted Transfer); and/or
(d) a termination of the Lease.
C-2
EXHIBIT "D"
DEPICTION OF TENANT'S WAREHOUSE SPACE AND LANDLORD'S STORAGE AREA
[See the attached]
D-1
