LEASE AGREEMENT
(San Diego - Morena Blvd. - Xxxxxxxxx Xxxxx)
AGREEMENT made this 24th day of July, 1997, by and between PRICE
ENTERPRISES, INC., a Delaware corporation (referred to herein as "Landlord")
and XXXXXXXXX XXXXX, INC., a California corporation (referred to herein as
"Tenant").
RECITALS
A) Landlord is the fee owner of the real property legally
described on Exhibit A attached hereto which is comprised of approximately
twenty seven (27) acres of land, multiple adjoining buildings (the "Building
Complex") and other improvements thereon as shown on the Site Plan attached
hereto as Exhibit B (collectively referred to herein as the "Shopping
Center").
B) Landlord wishes to lease to Tenant and Tenant wishes to lease
from Landlord, a portion of a building located in the Shopping Center (the
"Building"), which portion contains approximately eighty seven thousand
(87,000) square feet of Floor Area (the "Building Premises"), shown on the
Site Plan attached hereto as Exhibit B together with the parking lot area
shown on Exhibit B (the "Parking Lot Premises"). The Building Premises and
the Parking Lot Premises are collectively referred to herein as the
"Premises".
NOW, THEREFORE, in consideration of the mutual covenants herein,
the Landlord and Tenant agree as follows:
ARTICLE I
DEFINITIONS, PREMISES, TERM
1.01 DEFINITIONS.
A) "Building" shall mean the building in which the Building
Premises is located which is depicted on Exhibit B attached hereto.
B) "Building Complex" is defined in Recital Paragraph (A).
C) "Commencement Date" shall mean the date the Term of this Lease
begins as provided in Section 1.04.
D) "Extension Term" is defined in Section 1.06.
E) "Floor Area" shall mean the aggregate number of.. square feet
of floor space, from time to time, of the ground floors only in any and all
buildings located in the Shopping Center available or held for the exclusive
use and occupancy of tenants or occupants or
future tenants or occupants, whether or not actually occupied, measured from
the exterior faces or the exterior lines of the exterior walls and from the
center of interior walls separating separate premises. Excluded from Floor
Area are any fire corridors
F) "Governing Interest Rate" shall mean the prime rate charged by
Xxxxx Fargo Bank of California, plus three (3) percentage points, determined
as of the date interest begins to accrue.
G) "Impositions" is defined in Section 4.01 (A).
H) "Initial Term" is defined in Section 1.05.
I) "Landlord" shall mean the Landlord named herein and its
successors and assigns.
J) "Landlord's Work" is defined in Exhibit D attached hereto.
K) "Law" shall mean any judicial decision, statute, constitution,
ordinance, regulation, rule, administrative order, or other requirements of
any municipal, county, state, federal, or other governmental agency or
authority having jurisdiction over the Landlord and Tenant or the Premises,
or both, in effect either at the time of execution of this Lease or at any
time during the Term, including, without limitation, any regulation or order
of a quasiofficial entity or body (e.g., Board of Fire Examiners or public
utilities).
L) "Lease" shall mean this lease agreement.
M) "Lease Date" is the date of this Lease.
N) "Lease Termination Date" shall mean the last day of the 'Term"
as provided herein or upon earlier termination of this Lease.
O) "Lease Year" shall mean every twelve (12) consecutive calendar
months during the Term commencing on the Rent Commencement Date, provided,
however, if the Rent Commencement Date is not the first day of a calendar
month, the first Lease Year shall consist of the twelve (12) full consecutive
calendar months following the Rent Commencement Date, plus the period from
the Rent Commencement Date to the first day of such twelve (12) calendar
month period.
P) "Minimum Rent" is defined in Section 3.02.
Q) "Mortgage" shall mean any mortgage, deed to secure debt,
trust indenture, or deed of trust which may now or hereafter affect, encumber,
or be a lien upon the Premises or
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Landlord's interest therein; and any renewals, modifications, consolidations
replacements, and extensions thereof.
R) "Mortgagee" shall mean the holder of any Mortgage, at any time.
S) "North Driveway Area" is defined in Section 1.03(A).
T) "Option Notice" is defined in Section 1.06(C)(2)(a).
U) "Parking Lot Premises" is defined in Recital Paragraph (B).
V) "Person" shall mean and include an individual, corporation,
partnership, unincorporated organization or government, or any agency or
political subdivision thereof.
W) "Premises" is defined in Recital Paragraph (B).
X) "Pro Rata Share" shall mean a fraction the numerator of which
is the Floor Area of the Building Premises and the denominator of which is
the Floor Area of the entire Shopping Center, including the Building
Premises, as determined from time to time.
Y) "Rent" shall mean Minimum Rent and all other amounts required
to be paid by Tenant to Landlord as provided herein.
Z) "Repairs" shall mean repairs, replacements, alterations,
changes, and improvements.
AA) "Rent Commencement Date" is defined in Section 3.01.
BB) "Restoration" is defined in Section 7.01.
CC) "Tenant" shall mean the Tenant named herein and its
successors and as-signs as permitted herein.
DD) "Tenant's Work" is defined in Exhibit D.
EE) "Term" shall mean the Initial Term or the Initial Term as
then extended pursuant to Section 1.06 herein.
1.02 EXHIBITS.
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The following exhibits are attached to and part of this Lease.
Exhibit A - Legal Description of Shopping Center.
Exhibit B - Site Plan of Shopping Center.
Exhibit C - Confirmation of Initial Term of Lease.
Exhibit D - Leasehold Improvements.
Exhibit E - Sign Requirements.
1.03 LEASE OF PREMISES.
A) Landlord leases to Tenant and Tenant leases from Landlord
the Premises, upon the terms and conditions of this Lease. Without limitation of
the foregoing, Landlord grants Tenant and its employees, agents, contractors,
invitees and suppliers the non-exclusive right to use the driveway entrance of
the Shopping Center to the north of the Premises (the "North Driveway Area"), as
shown on the Site Plan attached hereto as Exhibit B, for vehicular ingress only
from Morena Boulevard to the Premises. Vehicles may not exit the Premises
through the North Driveway Area.
B) The Premises are leased in their "AS IS" condition subject
to Landlord's Work and subject to Landlord's obligations under Section 2.04 and
6.02. Tenant acknowledges that it is relying on its own investigation of the
Premises, including, but not limited to, its physical condition of the Premises,
and further acknowledges that the Landlord makes no representation or warranty
with respect to the Premises or any other matter pertaining to this Lease,
except as specifically provided herein.
C) Landlord warrants that upon the Commencement Date the roof
of the Building Premises shall be reasonably watertight and Landlord has the
right to grant sole and exclusive possession of the Parking Lot Premises to the
Tenant.
D) This Lease of the Premises is subject to (i) all covenants,
conditions, restrictions, easements, liens and encumbrances, and other matters
of record affecting the Premises; (ii) all future covenants, conditions,
restrictions, easements, liens and encumbrances and other matters of record
affecting the Premises, provided they do not materially adversely affect
Tenant's rights or obligations herein; and (iii) all Laws. Except for the
matters shown in that certain title insurance policy as of December 16, 1994,
issued by Chicago Title Company, Policy No.: 970103 15, Reference: 984537 / #14,
Landlord represents and warrants that there are no covenants, conditions,
restrictions, easements, liens or encumbrances, or other matters of record,
which materially adversely (i) affect Tenant's use and enjoyment of the Premises
pursuant to this Lease, (ii) affect Tenant's exercise of its rights under this
Lease, and/or (iii) increase Tenant's obligations under this Lease.
E) Tenant has no right to park in or otherwise use any portion
of the Shopping Center other than the Premises and the North Driveway Area as
provided herein.
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1.04 LANDLORD'S WORK.
A) Landlord shall cause the construction of Landlord's Work in
accordance with applicable codes and laws as provided in Exhibit D, attached
hereto captioned "Leasehold Improvements". The term of this Lease shall begin
(the "Commencement Date") on the date (i) Landlord has substantially completed
that portion of Landlord's Work required to be completed prior to the
Commencement Date, as provided herein in paragraph 1 A) 1) of Exhibit D, other
than such "punch list" items which can be completed within thirty (30) days and
without material interference with Tenants efforts to ready the Premises for
Tenant's occupancy; and (ii) Landlord has given Tenant written notice that the
Premises is ready for Tenant's possession.
B) Landlord covenants to diligently rectify the items contained
in the "punch list" while minimizing interference with the performance of
Tenant's Work.
C) Promptly after the Lease Date, Landlord shall prepare
building plans for the Landlord's Work and submit same to the applicable
governmental authorities to obtain all necessary permits to construct Landlord's
Work (the "Landlord's Permits"). If Landlord does not obtain the Landlord's
Permits within sixty (60) days after the Lease Date, then either Landlord
(provided Landlord has diligently attempted to obtain Landlord's Permits) or
Tenant may terminate this Lease by giving notice of such termination to the
other party within ten (10) days after such sixty (60) day period.
D) Landlord's Architect shall determine the Floor Area of the
Building Premises upon completion of the Landlord's Work and notify both
Landlord and Tenant, in writing, of such measurements prior to the Rent
Commencement Date. Such determination by Landlord's Architect shall be binding
on Tenant, unless Tenant gives Landlord written notification of such
disagreement within fifteen (15) days after receiving such determination, in
which case, Landlord and Tenant shall agree on an independent architect (to be
paid in equal shares by Landlord and Tenant) to determine Floor Area which
determination shall be binding on Landlord and Tenant.
1.05 INITIAL TERM.
A) The term of this Lease shall commence on the Commencement
Date and terminate August 31, 2009 ("Initial Term").
B) When the Commencement Date and the Rent Commencement Date
have been determined, the Landlord and Tenant shall immediately execute a
confirmation of such dates in the form and content as set forth in Exhibit C
attached hereto.
1.06 OPTION TO EXTEND LEASE TERM.
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A) Subject to Paragraph E) below Tenant may, at Tenants option,
extend the Initial Term of this Lease for up to two (2) consecutive periods of
five (5) years each (each such period referred to as an "Extension Term"),
subject to all the provisions of this Lease, except for any further extensions
of the Term. The Extension Term shall commence at the expiration of the Initial
Term, or the previous Extension Term, as the case may be, and shall terminate on
the last day prior to the fifth anniversary of the date of commencement of the
Extension Term, unless sooner terminated as provided herein.
B) After the exercise of an option to extend, all references in
this Lease to the "Term" shall be considered to mean the Term as extended, and
all references to termination or to the end of the Term shall be considered to
mean the termination or end of the Extension Term.
C) Tenant's right to extend the Initial Term or such Initial
Term as previously extended, is subject to:
(1) the following conditions precedent:
a) This Lease shall be in full force and effect at
the time notice of exercise is given and on the last day of the Initial Term or
the then current Extension Term, as applicable.
b) Tenant shall not be in default with all periods of
time to cure such default having expired as provided in Section 13.01 herein:
(i) at the time notice of exercise is given; or (ii) on the last day of the
Initial Term, or the previous Extension Term as the case may be.
(2) compliance with the following procedure for exercising
the option:
a) At least one (1) year before the last day of the
Initial Term or the current Extension Term, as the case may be, Tenant shall
give Landlord written notice irrevocably exercising the option (the "Option
Notice").
b) Each party shall, at the request of the other,
execute a memorandum acknowledging the fact that the option in question has been
exercised.
D) Neither the foregoing option granted to Tenant to extend the
Term of this Lease, nor the exercise thereof by Tenant, shall prevent Landlord
from exercising any right granted or reserved to Landlord in this Lease or which
Landlord may have by virtue of any Law or otherwise, to terminate this Lease,
either during the Initial Term or during any Extension Term. Any lawful
termination of this Lease shall serve to terminate all Extension Terms, whether
or not Tenant shall have exercised same. Any right on the part of Landlord to
terminate this
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Lease shall continue during the Extension Term, and the foregoing option
granted to Tenant to extend the Term shall not be deemed to give Tenant any
further option to extend the Term.
E) A portion of the shopping center is currently leased to The
Price Company pursuant to a written lease dated August 29, 1994 between Price
Enterprises, Inc. ("Landlord") and The Price Company ("Tenant") (referred to
herein as the "Costco Lease"). The initial term of the Costco Lease expires
August 31, 2009. The tenant under the Costco Lease has an option to extend the
initial term of such lease for up to seven (7) periods of five (5) years each.
(1) In the event the Tenant herein exercises its option to
extend the term of this Lease for the first Extension Term commencing September
1, 2009, and the tenant under the Costco Lease does not exercise its option to
extend the term of the Costco Lease (beginning September 1, 2009) then the
Landlord, at its option, may declare Tenant's option to extend the Term of this
Lease null and void by giving written notice of such fact to Tenant within
thirty (30) days after the right of the tenant under the Costco Lease to extend
its lease term expires.
(2) In the event that the initial terms of both this Lease
and the Costco Lease are extended for the five year period beginning September
1, 2009, and in the event the Tenant herein exercises its option to further
extend the Term of this Lease for the second Extension Term commencing September
1, 2014, and the tenant under the Costco Lease does not exercise its further
option to extend the term of the Costco Lease, beginning September 1, 2014, then
the Landlord, at its option, may declare Tenant' s option to extend the Term of
this Lease null and void by giving written notice of such fact to the Tenant
within thirty (30) days after the right of the tenant under the Costco Lease to
extend its lease term expires.
F) Landlord represents that the tenant under the Costco Lease
must exercise its options, if any to extend the term of such lease at least six
(6) months prior to the expiration of the then-existing lease term.
ARTICLE II
USE AND OPERATION OF PREMISES
2.01 USE OF PREMISES.
Tenant may use the Building Premises for offices, warehousing and a
merchandise distribution facility and for merchandise liquidation sales one (1)
day only during each calendar month and for no other purpose whatsoever; and may
use the Parking Lot Premises for parking vehicles and driveways and a trash
container and compact area and for no other purpose whatsoever.
2.02 OPERATION OF TENANT'S BUSINESS.
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A) In the event Tenant does not operate its business in the
Premises for more than six (6) months during any twelve (12) month period,
except if prevented by events of Force Majeure and except for days during which
Tenant is diligently making alterations or repairs to the Premises, then
Landlord, at its option, may terminate this Lease upon sixty (60) days prior
notice to the Tenant.
B) The following activities are prohibited on the Premises
except as otherwise provided in paragraph (A) above: auction, going out of
business, fire or bankruptcy sales; unreasonable noise or offensive odors; coin
operated vending machines or pay telephones, unless for the exclusive use of
employees of the Tenant. In addition, no radio or television antennas shall be
installed on the exterior of the Building Premises, and no aerial or any form of
satellite dish may be erected on the roof or otherwise on the exterior of the
Building, unless it is not visible to public view.
2.03 TENANT'S COMPLIANCE WITH LAWS.
Tenant shall comply with all Laws concerning the Premises and the use
thereof.
Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not (and Landlord shall) be required to comply with the provision of any
Law pertaining to the Premises and/or the use thereof if and to the extent that
the then need for such compliance is caused by or is legally required due to:
(i) work which Landlord or another tenant proposes to do with respect to the
Shopping Center or any part thereof or (ii) a use proposed to be conducted in
the Shopping Center (other than the Premises) by parties other than the Tenant.
2.04 WASTE - NUISANCE.
Tenant shall not use the Premises in any manner that will constitute waste
or a public or private nuisance.
2.05 TENANT SIGNS.
A) Tenant, at its cost, shall have the right to place,
construct and maintain an exterior sign on the outside of the Premises, as set
forth in the "Sign Requirements" in Exhibit E attached hereto, advertising the
name of its business.
B) Tenant shall not have the right to place, construct, or
maintain on the exterior walls or roof of the Building Premises, any signs,
advertisements, names, insignia, trademarks, descriptive material, or any other
similar item without Landlord's consent, except as allowed in Exhibit E attached
hereto. Landlord, at Tenant's cost, may remove any item placed, constructed, or
maintained that does not comply with the provisions of this paragraph.
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C) Tenant shall not, without Landlord's consent, place,
construct, or maintain outside of the Premises and within the Shopping Center
any advertisement media, including, without limitation, searchlights, flashing
lights, loudspeakers, phonographs, or other similar visual or audio media.
2.06 CANCELLATION OF INSURANCE; INCREASE IN INSURANCE RATES.
Tenant shall not do, bring, or keep anything in or about the
Premises that will cause a cancellation of any insurance covering the Building.
If the rate of any insurance carried by Landlord is increased solely as a result
of Tenant's use, Tenant shall pay to Landlord within thirty (30) days before the
date Landlord is obligated to pay a premium on the insurance, or within ten (10)
days after Landlord delivers to Tenant a certified statement from Landlord's
insurance carrier stating that the rate increase was caused solely by an
activity of Tenant of the Premises as permitted in this Lease, whichever date is
later, a sum equal to the difference between the original premium and the
increased premium.
2.07 LANDLORD'S ENTRY ON PREMISES.
A) Landlord and its authorized representatives shall have the
right to enter the Premises at all reasonable times during Tenant's normal
business hours, upon twelve (12) hours prior notice to Tenant, unless such entry
is required due to an emergency, for any of the following purposes:
(1) to determine the condition of the Premises and whether
Tenant is complying with its obligations under this Lease;
(2) to do, at its option, any Repairs to the Premises where
Tenant has failed to do so;
(3) to do any Repairs to the Premises which Landlord is
required to do as provided herein;
(4) to serve, post, or keep posted any notices required or
allowed under the provisions of this Lease; and
(5) to show the Premises to any prospective purchaser of
the Premises or any lender with respect to the Shopping Center.
B) Landlord shall conduct its activities on the Premises as
allowed in this section in a manner that will cause the least possible
inconvenience, annoyance, or disturbance to Tenant. Nothing in this Section
shall be deemed to impose any obligation on the part of Landlord to do anything
that is allowed by this Section.
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Notwithstanding anything to the contrary contained in this Lease,
in the event that due to any entry by or on behalf of Landlord into the
Premises, the Premises are rendered wholly or partially untenantable, then
during the period of such untenantability all Rent shall xxxxx in proportion to
the degree to which Tenant's use of the Premises is impaired.
ARTICLE III
RENT
3.01 RENT COMMENCEMENT DATE.
Tenant shall commence paying Minimum Rent, Rent, Impositions, and
all other Rent as provided herein on the earlier of (i) the date Tenant opens
for business on the Premises, or (ii) ninety (90) days after the Commencement
Date (the "Rent Commencement Date").
3.02 MINIMUM RENT.
A) Tenant shall pay to Landlord a monthly "Minimum Rent" during
each Lease Year, beginning on the Rent Commencement Date as follows:
(1) INITIAL TERM
LEASE YEAR MONTHLY RATE
---------- ------------
1- 3 $.47 per square foot of Floor Area.
4- 7 $-57 per square foot of Floor Area.
8-11 $-67 per square foot of Floor Area.
12 through end $.77 per square foot of Floor Area.
of Initial Term
(2) EXTENSION TERM
September 1, 2009 - August 31, 2014
The greater of $18 per square foot of
Floor Area or ninety five percent (95%)
of the Minimum Monthly Fair Market Value
Rental Rate as determined in paragraph
(B) below.
September 1, 2014 - August 31, 2019
The greater of $.78 per square foot of
Floor Area or ninety five percent (95%)
of the Minimum Monthly Fair
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Market Value Rental Rate as
determined in paragraph (B) below.
B) (1) The "Minimum Monthly Fair Market Rental Rate" shall be
determined as provided in this Section 3.02 (B).
(2) The parties shall have thirty (30) days after Landlord
receives an Option Notice in which to agree, in writing, on the Minimum
Monthly Fair Market Value Rental Rate during the Extension Term. If the
parties agree, in writing, on the Minimum Monthly Fair Market Value Rental
Rate for the Extension Term within the thirty (30) day period, they shall
immediately execute an amendment to this Lease, stating the Minimum Monthly
Fair Market Rental Rate for such Extension Term.
(3) If the parties are unable to agree on the Minimum Monthly
Fair Market Value Rental Rate for the Extension Term within the thirty (30)
day period, then within ten (10) days after expiration of that period each
party, at its cost and by giving notice to the other party, shall appoint a
real estate appraiser with at least five years' full-time commercial
appraisal experience in the area in which the Premises are located to
appraise and set the Minimum Monthly Fair Market Value Rental Rate for the
Extension Term. If a party does not appoint an appraiser within such ten (10)
day period, the single appraiser appointed shall be the sole appraiser and
shall set the Minimum Monthly Fair Market Value Rental Rate for the Extension
Term. If the two appraisers are appointed by the parties as stated in this
paragraph, they shall meet promptly and attempt to set the Minimum Monthly
Fair Market Value Rental Rate for the Extension Term. If the are unable to
agree within thirty (30) days after the second appraiser has been appointed,
they shall attempt to select a third appraiser meeting the qualifications
stated in this paragraph within seven (7) days after the last day the two
appraisers are given to set the Minimum Monthly Fair Market Value Rental
Rate. If they are unable to agree on the third appraiser, either of the
parties to this Lease by giving ten (10) days' notice to the other party may
file a petition with the American Arbitration Association solely for the
purpose of selecting a third appraiser who meets the qualifications stated in
this paragraph. Each party shall bear half the cost of the American
Arbitration Association's appointing the third appraiser and of paying the
third appraiser's fee. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either party.
(4) Within thirty (30) days after the selection of the third
appraiser, a majority of the appraisers shall set the Minimum Monthly Fair
Market Value Rental Rate for the Extension Term. If a majority of the
appraisers are unable to set the Minimum Monthly Fair Market Value Rental
Rate within the stipulated period of time, the three appraisals shall be
added together and their total divided by three; the resulting quotient shall
be the Minimum Monthly Fair Market Value Rental Rate for the Premises during
the Extension Term. If, however, the low appraisal and/or the high appraisal
are more than five percent (5%) lower and/or higher than the middle
appraisal, the low appraisal and/or the high appraisal shall be disregarded.
If only one appraisal is disregarded, the remaining two appraisals shall be
added together and their total
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divided by two; the resulting quotient shall be the Minimum Monthly Fair
Market Value Rental Rate for the Premises during the Extension Term. If both
the low appraisal and the high appraisal are disregarded as stated in this
paragraph, the middle appraisal shall be the Minimum Monthly Fair Market
Value Rental Rate for the Premises during the Extension Term.
(5) Minimum Monthly Fair Market Value Rental Rate shall be
the minimum rent a willing tenant would pay and a willing landlord would
accept for the Extension Term, subject to all of the other terms and
conditions of this Lease determined as of the date of which is one (1) year,
prior to the beginning of the Extension Term.
3.03 MONTHLY INSTALLMENTS.
The Minimum Rent for each Lease Year shall be paid in twelve (12)
equal monthly installments in advance on the Rent Commencement Date and on
the first day of each calendar month thereafter (referred to herein as
"Monthly Rent"). If the first Lease Year is longer than twelve (12) calendar
months, the annual Minimum Rent for the first Lease Year shall consist of the
annual Minimum Rent for twelve (12) calendar months, plus a pro-rated daily
amount for the period from the Rent Commencement Date until the last day of
the month in which the Rent Commencement Date occurs. If the last day of the
Term is other than the last day of a calendar month, then the Minimum Rent
for such short month shall be pro-rated on a daily basis based upon a thirty
(30) day month.
3.04 NO COUNTERCLAIM, ABATEMENT, ETC.
Except as otherwise specifically provided herein, Rent and all
other sums payable by Tenant hereunder shall be paid without notice, demand,
noncompulsory counterclaim, setoff, deduction or defense, and without
abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Tenant hereunder shall in no way be released,
discharged or otherwise affected by reason of (a) any damage to or
destruction of or any Taking (as hereinafter defined) of the Premises,
including improvements thereto or any part thereof; (b) any restriction or
prevention of or interference with any use of the Premises, including
improvements thereto or any part thereof other than by Landlord; (c) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Landlord; (d) any claim
which Tenant has or might have against Landlord; or (e) any failure on the
part of Landlord to perform or comply with any of the terms hereof or of any
other agreement with Tenant, whether or not Tenant shall have notice or
knowledge of any of the foregoing. Nothing contained in the preceding
sentence shall preclude Tenant from bringing an independent action against
Landlord. Except as expressly provided in this Lease, Tenant waives all
rights now or hereafter conferred by statute or otherwise to quit, terminate
or surrender this Lease or the Premises or any part thereof, or to any
abatement, suspension, deferment, diminution or reduction of rent or any
other sum payable by Tenant hereunder.
3.05 INTEREST ON RENT.
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Each late payment of Rent shall bear interest from its due date
until paid, at the Governing Interest Rate.
3.06 LATE CHARGE.
Notwithstanding anything to the contrary herein contained, in
order to cover the extra expenses involved in handling delinquent payments,
Tenant, at Landlord's option, shall pay a "late charge" of five percent (5%)
of the delinquent payment when such payment of Rent hereunder is paid more
than ten (10) days after the due date and more than three (3) days after
written demand for Rent by Landlord. It is understood and agreed that this
charge is for additional expense incurred by Landlord, and shall not be
considered interest.
3.07 PLACE FOR PAYMENT OF RENT.
All payments of Rent shall be made to the Landlord at 0000 Xxxxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, or such other address designated, in
writing, by Landlord.
ARTICLE IV
TAXES, ASSESSMENTS AND UTILITIES
4.01 IMPOSITIONS.
A) The term "Impositions" shall mean all real estate taxes,
duties or assessments (special or otherwise), water and sewer rents, whether
ordinary or extraordinary, general or special, foreseen or unforeseen, of any
kind and nature whatsoever, which, at any time during the Term of this Lease,
shall be assessed, levied, confirmed, imposed upon or grow out of, or become
due and payable in respect of, or become a lien on or be attributable in any
manner to the Shopping Center, or the rents receivable therefrom, or any part
thereof or any use thereon or any facility located therein or used in
connection therewith, whether or not any of the foregoing shall be a
so-called "real estate ta)e'. From and after the Rent Commencement Date,
Tenant shall pay to Landlord Tenant's Pro-Rata Share of all Impositions
attributable to the land and Improvements of the Shopping Center. All
Impositions or installments thereof payable with respect to the tax year in
which the Rent Commencement Date shall occur, and all Impositions or
installments thereof with respect to the tax year in which this Lease shall
terminate, shall be apportioned.
B) With respect to Impositions which by law may be paid over a
period of time, Landlord shall be deemed to have elected (the "Installment
Election") to pay such Impositions over the longest period of time permitted
by law, regardless of whether Landlord has in fact so elected. With respect
to each year in which the Installment Election is effective and with respect
to the Impositions subject to the Installment Election, Tenant's share of
such
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Imposition(s) for each year shall be the amount which would be required to be
paid to the collecting authority as if Landlord had in fact made the
Installment Election, plus interest and/or penalties resulting from the
Installment Election.
4.02 OTHER GOVERNMENTAL CHARGES.
Tenant shall pay, before any fine, penalty, interest, or cost may
be added thereto or become due or be imposed by operation of law for the
nonpayment thereof, all excises, levies, licenses, and permit fees, and other
governmental charges, general and special, ordinary and extraordinary,
unforeseen and foreseen, of any kind and nature whatsoever attributable
solely to (a) the Premises, or (b) Tenant, which, at any time prior to or
during the Term of this Lease, may be assessed, levied, confirmed, imposed
upon, or grow or become due and payable out of or in respect of or become a
lien on, the Premises or any part thereof or any appurtenance thereto as the
result of or in connection with the use to which the Premises are put by
Tenant (notwithstanding that such use may be for the purposes herein
permitted or may have been consented to by Landlord).
4.03 EXCEPTIONS FROM IMPOSITIONS; CHARGES IN LIEU OF IMPOSITIONS.
Tenant shall not be required to pay any municipal, county, state,
or federal income or franchise taxes of Landlord, business license fee of
Landlord, or any municipal, county, state, or federal estate, succession,
inheritance, or transfer taxes of Landlord. If, at any time during the term,
the State in which the Property is locate or any political subdivision of the
state, including any county, city and county, public corporation, district,
or any other political entity or public corporation of the state, levies or
assesses against Landlord a tax, fee, or excise on (1) rents, (2) the square
footage of the Premises, (3) the act of entering into this Lease, or (4) the
occupancy of Tenant, however described, including, without limitation, a
socalled value-added tax, as a direct substitution in whole or in part for,
or in addition to, any real property taxes, Tenant shall pay before
delinquency that tax, fee, or excise. Tenant's share of any such tax, fee, or
excise shall be substantially the same as Tenant's proportionate share of
real property taxes as provided in this Lease.
4.04 PAYMENT OF IMPOSITIONS.
Landlord shall submit to Tenant, with respect to each real estate
fiscal tax period for which Impositions are payable, a xxxx for Tenant's Pro
Rata Share of the Impositions, together with a true copy of the tax xxxx.
Tenant shall pay Impositions to Landlord within thirty (30) days after
receipt of such tax xxxx.
4.05 CONTEST OF TAXES.
Except as provided below, Tenant shall not institute any proceeding with
respect to the assessed valuation of the Premises or any part thereof or the
Impositions thereon. If Landlord has
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not instituted such proceeding for any year or fiscal period, and if at least
forty-five (45) days prior to the last day for the institution thereof, Ten '
ant requests Landlord to institute such proceeding, Landlord may, within
fifteen (15) days after such request, file with the appropriate authority
having jurisdiction thereover, an application for reduction and correction of
the tax assessment for such year or fiscal period, failing which, Tenant may
file such application on behalf of Landlord. In the event that there should
be an increase in Impositions as a result of a proceeding instituted at the
request of or by Tenant, then Tenant shall pay the full amount of (a) such
increase each year during the Term, and (b) the expenses incurred in
connection therewith; provided, however, that if any such Imposition which
was increased as a result of a proceeding instituted by or at the request of
Tenant for any tax year, shall, for such tax year, subsequently be reduced,
Tenant shall receive the benefit of such reduction. If Landlord shall receive
a refund of an Imposition for which Tenant has made payment, Tenant shall
receive such refund thereof after deducting the costs, fees and expenses
incurred by Landlord in connection with obtaining such refund. Landlord shall
provide Tenant with copies of notices received by Landlord from the taxing
authorities of any assessments or reassessments of the Premises in sufficient
time to enable Tenant to contest same in accordance with the provision of
this Section 4.05.
4.06 PERSONAL PROPERTY TAX.
Tenant shall pay before delinquency all taxes, assessments,
license fees, and other charges ("taxes") that are levied and assessed
against Tenant's personal property installed or located in or on the
Premises, and that become payable during the term. On demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments.
If any taxes on Tenant's personal property are levied against Landlord or ,
Landlord's property, or if the assessed value of the Building or the Shopping
Center is increased by the inclusion of a value placed on Tenant's personal
property, and if Landlord pays the taxes on any of these items or the taxes
based on the increased assessment of these items, Tenant, on demand, shall
immediately reimburse Landlord for the sum of the taxes levied against
Landlord, or the proportion of the taxes resulting from the increase in
Landlord's assessment. Landlord shall have the right to pay these taxes
regardless of the validity of the levy.
4.07 UTILITIES.
Tenant agrees to make its own arrangements, at Tenant's sole cost
and expense, for any gas, electricity, and any other utility required in
connection with the use and operation of the Premises. Tenant shall pay
before delinquency, directly to the appropriate company or governmental
agency, all charges for all utilities consumed on the Premises.
ARTICLE V
SHOPPING CENTER - USE AND OPERATION
5.01 LANDLORD'S MANAGEMENT AND OPERATIONAL RIGHTS.
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A) Landlord shall have the right to:
(1) Change the size, location or nature of the buildings
and other improvements in the Shopping Center (other than the Premises),
including, but not limited to multi-deck, subterranean or elevated parking
facilities.
(2) Increase the size of the Shopping Center by additional
land, buildings and other structures.
B) Notwithstanding anything in paragraph A) above to the
contrary, Landlord shall not voluntarily: (i) close off or eliminate either
of the two curb cuts which presently permit direct access to the Premises off
of Morena Boulevard; or (ii) close off or eliminate the North Driveway Area;
except if due to an emergency or due to making repairs.
5.02 HILLSIDE MAINTENANCE.
Tenant shall reimburse Landlord monthly for Tenant's Pro-Rata
Share of all reasonable costs incurred by Landlord in the periodic repair,
maintenance and clean-up of the hillside along the northern and eastern
boundaries of the Shopping Center; provided, however, Tenant's Pro Rata Share
may never exceed Five Thousand Dollars ($5,000) in any Lease Year.
ARTICLE VI
REPAIR, MAINTENANCE AND ALTERATIONS OF PREMISES
6.01 TENANT'S REPAIRS AND MAINTENANCE.
Except as provided in Section 2.04 and 6.02, and Articles VII and
XII, throughout the Term, Tenant, at its sole cost and expense, shall
maintain the Premises and keep same in good order and condition, and make all
necessary Repairs thereto, interior and exterior, ordinary and extraordinary,
and unforeseen and foreseen, all in accordance with applicable Laws. All
Repairs made by Tenant shall be equal in quality and class to the original
work. Tenant shall have the benefit of all warranties in force with respect
to portions of the Premises Tenant is obligated to repair and maintain as
provided herein.
6.02 LANDLORD'S REPAIRS AND MAINTENANCE.
Landlord, at its sole cost and expense, shall maintain in its
current condition and in accordance with applicable Laws, the following:
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A) The structural parts of the Building which structural parts
include only the foundations, bearing walls (excluding glass and doors)
sub-flooring and roof (excluding skylights after the first Lease Year).
B) The unexposed electrical, plumbing and sewage systems located
within the Premises.
C) Gutters and downspouts which are part of the Building.
If Landlord refuses or neglects to repair the Premises properly as
required in this Section 6.02 and Section 2.04 within a reasonable time after
written notice by Tenant to Landlord, (except that no notice shall be
required in case of emergency, and except that such "reasonable time" shall
not be more than ten (10) days, unless such repairs cannot be reasonably
completed within such ten (10) day period and Landlord shall have commenced
the repair within a reasonable period of time after receipt of Tenant's
notice and thereafter diligently proceeded therewith to completion), Tenant
may make such repairs, at Landlord's expense, and upon completion thereof
Tenant may deduct its reasonably incurred costs occasioned by such repairs
from Rent next becoming due.
6.03 STRUCTURAL AND EXTERIOR REPAIRS.
Tenant shall not make any structural or exterior changes or
Repairs in or to the Premises, including any Restoration without (except in
an emergency situation), first obtaining Landlord's written consent, not to
be unreasonably withheld, delayed or conditioned, subject, however, in all
cases, to the following additional requirements:
A) Any structural work shall be completed under the supervision
of a licensed architect or engineer, and no such structural or exterior
changes or Repairs shall be made, except in accordance with detailed plans
and specifications, all of which shall be submitted to Landlord for prior
approval (which shall not be unreasonably withheld, delayed or conditioned).
Plans and specifications submitted to Landlord shall be deemed approved
unless, within twenty (20) days of Landlord's receipt thereof, Landlord
notifies Tenant of its disapproval and specifies the reason therefor. Tenant
shall perform all changes and Repairs in accordance with the approved plans
and specifications.
B) Any Repairs shall, when completed, be of such character as
not to reduce the value of the Premises below its value immediately before
such change or alteration.
C) Neither the height of the Building Premises, nor the Floor
Area of the Premises, nor the footprint of the Building Premises may be
changed.
D) The Building Premises may not be subdivided.
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E) No buildings or other structures may be built in the Parking
Lot Premises.
Subject to all other provisions of this Section 6.03, upon
obtaining Landlord's prior written consent, which shall not be unreasonably
withheld, delayed or conditioned, Tenant shall have the right to make changes
and alterations to the Parking Lot Premises, including without limitation the
installation of lighting, signage and security cameras, and the right to
enclose the Parking Lot Premises by the use of fencing or other reasonable
means; provided, however, the Parking Lot Premises may only be used for
parking of vehicles ingress and egress driveways, liquidation sales referred
to in Section 2.01, and a trash container and compactor area. In addition,
Tenant shall have the right without Landlord's consent to install a satellite
dish or antenna on or about the Premises (other than the roof) so long as
such dish or antenna is not readily visible to public view.
6.04 REPAIRS - GENERAL CONDITIONS.
All Repairs to the Premises which the Tenant desires or is required
to make are subject to the following:
A) The Repairs shall be made promptly and in a good and
workmanlike manner in compliance with all applicable permits and
authorizations and Laws. Upon Landlord's request, Tenant shall furnish
evidence that Tenant has obtained all required permits and authorizations.
B) The cost of Repairs which are Tenant's obligation shall be
promptly paid by Tenant so that the Premises shall at all times be free of
mechanics' liens for labor and materials supplied or claimed to have been
supplied to the Premises by or on behalf of Tenant.
C) In the event the Tenant's net worth at the time Repairs are
to be made is less than Fifteen Million Dollars ($15,000,000), then prior to
the commencement of Repairs the estimated aggregate cost of which exceeds One
Hundred Thousand Dollars ($100,000), Tenant shall deliver evidence to
Landlord that Tenant has obtained: (i) workmen's compensation insurance,
covering all persons employed in connection with Repairs and with respect to
whom death or bodily injury claims could be asserted against Landlord,
Landlord's designee(s), Tenant or the Premises and all policies or
certificates therefor issued by the respective insurers, bearing notations
that such insurance is in good standing; and (ii) "builder's risk" insurance.
D) In the event the Tenant's net worth at the time Repairs are
to be made is less than Fifteen Million Dollars ($15,000,000)and the
estimated aggregate cost of such Repairs exceeds One Hundred Thousand Dollars
($100,000), then before the commencement of the Repairs, Tenant, at its cost,
shall furnish to Landlord a performance and completion bond in a form
reasonably acceptable to Landlord, issued by an insurance company qualified
and licensed to do business in California, in a sum equal to the cost of the
Repairs guaranteeing the
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completion of the Repairs free and clear of all liens and other charges and in
accordance with plans and specifications.
6.05 FIXTURES.
Subject to governmental permits and approvals first having been
received, Tenant may, at its own cost and expense, place or install or cause
to be placed or installed in or upon the Premises such equipment, furniture,
and fixtures as Tenant, in its sole discretion, shall deem necessary or
appropriate to the conduct of Tenant's business. Tenant may, at its own
expense, thereafter, at any time, substitute, replace, or cause to be
substituted or replaced any or all of said signs, equipment, furniture, and
fixtures. All of said signs, equipment, furniture and fixtures shall, for
the purpose of this Lease, be treated as personal property, no matter how
affixed, and at no time shall Landlord have any rights therein unless and
until granted by a written instrument executed by both Tenant and Landlord.
6.06 NO CONSTRUCTION BEFORE NOTICE; NOTICE OF NONRESPONSIBILITY.
No Repairs of any kind, in excess of Thirty Thousand Dollars
($30,000.00), shall be commenced, and no building or other materials shall be
delivered for any Repairs until at least ten (10) days after written notice
has been given by Tenant to Landlord of the commencement of such work or the
delivery of such materials. Landlord shall, at any and all reasonable times
during the term of this Lease, have the right to post and maintain on the
Premises, and to record as required by Law, any notice or notices of
nonresponsibility provided for by the mechanics' lien laws of the State in
which the Premises are located. The work prohibited by this Section, until
ten (10) days written notice thereof has been given to Landlord, includes, as
well as actual construction work, any site preparation work, installation of
utilities, street construction or improvement work, or any grading or filling
of said Premises.
6.07 CLAIMS AGAINST LANDLORD.
Nothing contained in this Lease shall constitute any consent or
request by Landlord, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of
the Premises or any part thereof, or as giving Tenant any right, power or
authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Landlord.
6.08 MECHANICS' LIENS.
At all times during the Term, Tenant shall keep said Premises
free and clear of all liens and claims of liens for labor, services,
materials, supplies or equipment performed on or furnished to said Premises
by or on behalf of Tenant or other occupant of the Premises. However, Tenant
may, in good faith and at Tenant's own expense, contest the validity of any
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such asserted lien, claim or demand, provided Tenant pursues such contest
diligently and, if Landlord so requests of Tenant in writing, Tenant shall
furnish a bond freeing the Premises from any such lien. If Tenant does not
cause to be recorded the bond described as aforementioned or otherwise
protect the property within twenty (20) days after service on Tenant of
written request from Landlord to do so, Landlord may, at its option, in
addition to any other right or remedy, pay, adjust, compromise and discharge
any such lien or claim of lien on such terms and manner as Landlord may deem
appropriate. In such event, Tenant shall, on or before the first day of the
next calendar month following any such payment by Landlord, reimburse
Landlord for the full amount paid by Landlord in paying, adjusting,
compromising, and discharging such lien or claim of lien, including any
attorneys' fees or other cost expended by Landlord, together with interest at
the Governing Interest Rate from the date of payment by Landlord to the date
of repayment by Tenant.
ARTICLE VII
CASUALTY DAMAGE - RESTORATION
7.01 DAMAGE DUE TO RISK COVERED BY INSURANCE.
If after the Lease Date, the Premises or the Building are totally
or partially destroyed from a risk covered or required to be covered by the
insurance described in Section 8.03 , then Landlord shall diligently restore
the Premises and the Building to substantially the same condition as they
were in immediately before the destruction (the "Restoration"). Except as
otherwise provided herein, such destruction shall not terminate the Lease. If
the existing laws do not permit the Restoration, either party may terminate
the Lease by giving notice to the other party.
7.02 DESTRUCTION DUE TO RISK NOT COVERED BY INSURANCE.
A) If during the Term, the Premises or the Building are totally
or partially destroyed from a risk not covered or required to be covered by
the insurance described in Section 8.03 or any other insurance policy
maintained by Landlord, Landlord shall restore the Premises and the Building
to substantially the same condition as they were in immediately before
destruction. Except as otherwise provided herein, such destruction shall not
terminate the Lease. If the existing Laws do not permit Restoration, either
party can terminate this Lease by giving notice to the other party.
B) Notwithstanding anything in paragraph (A) above to the
contrary, if the cost of Restoration pursuant to this Section 7.02 exceeds
thirty-five percent (35%) of the then replacement value of the Premises or
the Building. Landlord may elect to terminate this Lease by giving notice to
Tenant within fifteen (15) days after determining the Restoration cost and
replacement value.
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C) In the case of destruction to the Premises only, if Landlord
elects to terminate this Lease Tenant, within fifteen (15) days after
receiving Landlord's notice to terminate, can elect to pay to Landlord, at
the time Tenant notifies Landlord of its election, the difference between
thirty-five percent (35%) of the then replacement value of the Premises and
the actual cost of Restoration, in which case Landlord shall diligently
complete Restoration of the Premises and Building. Landlord shall give Tenant
satisfactory evidence that all sums contributed by Tenant as provided in this
paragraph have been expended by Landlord in paying the cost of Restoration.
D) If Landlord elects to terminate this Lease and Tenant does not
elect to perform the Restoration or contribute toward the cost of Restoration
as provided in this Section, this Lease shall terminate.
7.03 EXTENT OF LANDLORD'S OBLIGATION TO RESTORE.
If Landlord is required or elects to restore the Premises as
provided in Section 7.01 or 7.02, Landlord shall not be required to restore
alterations or improvements made by Tenant (except to the extent covered by
Landlord's insurance), tenants trade fixtures, and tenant's other personal
property.
7.04 SUBSTANTIAL DESTRUCTION.
A) For purposes of this Section 7.04 "Substantial Destruction"
shall mean damage or destruction of the Building Complex where the cost to
repair or replace same exceeds forty percent (40%) of the replacement value
of the Building Complex just prior to the damage or destruction.
B) Notwithstanding anything in the Lease to the contrary, but
subject to Section 7.08, in the event that at any time there is Substantial
Destruction of the Building Complex, the Landlord may, at its option,
relocate the Tenant within the Shopping Center to other premises within the
Shopping Center (the "New Premises"), provided the New Premises are at least
as large and have comparable utility to Tenant as the Premises described
herein, provided Tenant shall not be required to vacate the Premises, which
are tenantable, until the New Premises are ready for occupancy by Tenant.
7.05 DAMAGE NEAR END OF TERM.
If the Premises are totally or partially destroyed during the
last year of the Term which destruction makes more than thirty percent (30%)
of the Floor Area of the Building Premises untenantable, either Landlord or
Tenant may terminate this Lease by giving notice to the other party not more
than thirty (30) days after the date of such destruction. However, if the
destruction occurs during the last year of the Term and if within thirty (30)
days after the date of such destruction Tenant elects to extend the Term, as
permitted under Section 1.06 (if the time
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within which the option can be exercised has not expired), Landlord may not
terminate this Lease as aforementioned, subject, however to the Landlord's
rights under Section 1.06 (E)(2).
7.06 ABATEMENT OF RENT.
In the event of any damage or destruction of the Premises
rendering the same partially or completely untenantable, then thereafter the
Rent shall equitably xxxxx, until Restoration of the damaged Premises, based
upon the Floor Area of the Premises and/or portion of the Parking Lot
Premises rendered untenantable or inadequate for Tenant's use.
7.07 WAIVER OF STATUTE.
Landlord and Tenant waive the provisions of California Civil Code
Section 1932(2) and Civil Code Section 1933(4) with respect to any
destruction of the Premises or the Building.
7.08 TENANT'S RIGHT OF TERMINATION.
Notwithstanding anything to the contrary contained in this Lease,
in the event the Premises is damaged by any casualty and based upon a
reasonable estimate the Premises is not likely to be restored within two
hundred and forty (240) days after the date of the casualty nor is New
Premises as defined in Section 7.04 (B) likely to be provided to Tenant
within two hundred forty (240) days after the date of the casualty, then
Tenant shall have the right to terminate this Lease by notice to Landlord
given within thirty (30) days after the date of the casualty.
ARTICLE VIII
INDEMNITY - EXCULPATION - INSURANCE
8.01 EXCULPATION OF LANDLORD.
Landlord shall not be liable to Tenant for any damage to Tenant
or Tenant's property from any cause, and Tenant waives all claims Tenant may
have in the future against Landlord for damage to person or property arising
for any reason, except that Landlord shall be liable to Tenant for damage to
Tenant resulting from the negligent acts or omissions of Landlord or its
employees or agents.
8.02 INDEMNITY OF LANDLORD.
From and after the Lease Date, Tenant hereby indemnifies and
agrees to hold Landlord and its Mortgagee harmless from and against any and
all claims, liability, demands, causes of action, proceedings, damages, costs
and expenses (including, but not limited to reasonable attorneys' fees which:
(1) arise from or are in connection with Tenant's use,
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occupation, control, management or repair of the Premises; (2) arise from or
are in connection with any act or omissions of Tenant or Tenant's employees
or agents; (3) result from any default by Tenant of any provision of this
Lease; or (4) arise from any injury to person or property sustained in the
Premises (except to the extent contributed to by the negligence of the
Landlord or its agents or employees); provided, however, that prior to the
Commencement Date, Tenant's indemnity with respect to injury to person or
property shall only apply if caused by Tenant, its agents, employees or
independent contractors. Tenant shall defend any action and proceeding which
may be brought against Landlord or Mortgagee with respect to the foregoing or
in which they are impleaded.
8.03 FIRE AND CASUALTY INSURANCE PREMISES.
A) Landlord shall maintain on the Building and other
improvements in which the Premises are located a policy of Special Form
property insurance and difference in conditions insurance to the extent of
full replacement value and rent interruption insurance for a period not to
exceed one (1) year. The insurance policy shall be issued in the name of the
Landlord, Tenant, and Landlord's lender as their interests appear. The
insurance policy shall provide that any proceeds shall be made payable to
Landlord. If this Lease is terminated, the insurance policy and all rights
under it or the insurance proceeds shall belong to Landlord. The insurance
shall not cover Tenants furniture, fixtures, equipment and other personal
property nor other improvements made by the Tenant to the Premises after the
Rent Commencement Date.
B) Tenant shall reimburse Landlord for Tenant's Share of the
reasonable premiums paid by Landlord for maintaining the insurance required
by Section 8.3 within thirty (30) days after Tenant receives a copy of the
premium notice with a computation of Tenant's Share of such premium cost.
Tenant's obligation to reimburse Landlord for insurance cost shall be
prorated for any partial Lease Year at the commencement and expiration of the
Term. Tenant's Share shall mean a fraction the numerator of which is the
Floor Area of the Premises and the denominator of which is the Floor Area of
all buildings covered by such insurance policy, including the Floor Area of
the Premises.
8.04 TENANT PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE.
A) Tenant, at its sole cost, shall maintain public liability and
property damage insurance (and product liability insurance) with a single
combined limit of Two Million Dollars ($2,0 00,000) and property damage
limits of not less than Two Million Dollars ($2,000,000) insuring against all
liability of Tenant and its authorized representatives arising out of and in
connection with Tenant's use and occupancy of the Premises. All public
liability and product liability insurance and property damage insurance shall
insure performance by Tenant of the indemnity provisions of Section 8.02.
Both Landlord and Tenant shall be named insureds and the policy shall contain
cross liability endorsements. Notwithstanding anything to the contrary
contained in this Lease, Tenant may satisfy any of its insurance requirements
under the Lease by means of a blanket, excess liability and/or umbrella
policy(ies).\
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B) Not more frequently than once every five (5) years and not
prior to the fifth (5th) anniversary of the Rent Commencement Date, at the
request of Landlord, Tenant must increase the amount of public liability
insurance coverage as reasonably determined by Landlord; provided, however
the percentage of such increase every five (5) years may not exceed the
percentage increase in the Consumer Price Index (base year 1982-1984=100) San
Diego, published by the United States Department of Labor for such five (5)
year period.
8.05 WAIVER OF SUBROGATION.
The parties release each other and their respective authorized
representatives from any claims for damage to the Premises or the Building
Complex and for damage to Tenant's fixtures, equipment and other personal
property in or on the Premises and the Building that are caused by or result
from risks insured against under any insurance policies carried or required
to be carried by the parties. Each party shall cause each insurance policy
obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by any policy. Neither party shall be liable to the other for
any damage caused by fire or any of the risks insured against under any
insurance policy required by this Lease. If any insurance policy cannot be
obtained with a waiver of subrogation, or is obtainable only by the payment
of an additional premium charge above that charged by insurance companies
issuing policies without waiver of subrogation, the party undertaking to
obtain the insurance shall notify the other party of this fact. The other
party shall have a period of ten (10) days after receiving the notice either
to place the insurance with a company that is reasonably satisfactory to the
other party and that will carry the insurance with a waiver of subrogation,
or to agree to pay the additional premium if such a policy is obtainable at
additional cost. If the insurance cannot be obtained or the party n whose
favor a waiver of subrogation is desired refuses to pay the additional
premium charged, the other party is relieved of the obligation to obtain a
waiver of subrogation rights with respect to the particular insurance
involved.
8.06 GENERAL INSURANCE MATTERS.
All the insurance required under this Lease shall:
A) Be issued by insurance companies authorized to do business in
the State of California, with a financial rating of at least an A + 3A status
as rated in the most recent edition of Best's Insurance Reports.
B) Be issued as a primary policy.
C) Contain an endorsement requiring at least ten (10) days
written notice from the insurance company to both parties and Landlord's
lender before cancellation or change in the coverage, scope, or amount of any
policy.
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Each policy, or a certificate of the policy, together with
evidence of payment of premiums, shall be deposited with the other party at
the commencement of the Term, and on renewal of the policy not less than
thirty (30) days before expiration of the Term of the policy.
ARTICLE IX
ENVIRONMENTAL MATTERS
9.01 DEFINITION.
[GRAPHIC]
A) For purposes of this Article IX, the term "Hazardous
Substance" means any (a) substance, product, waste or other material of any
nature whatsoever which is or becomes listed, regulated, or addressed
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. ("CERCLA"); the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. ("RCRN'); the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Water
Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control
Act, Health and Safety Code Section 25100, et seq.; the California Hazardous
Substance Account Act, Health and Safety Code Section 25330, et seq.; the
California Safe Drinking Water and Toxic Enforcement Act, Health and Safety
Code Section 25249.5, et
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seq.; California Health and Safety Code Section 25280, et seq. (Underground
Storage of Hazardous Substances); the California Hazardous Waste Management
Act, Health and Safety Code Section 25170.1, et seq.; California Health and
Safety Code Section 25501, et seq. (Hazardous Materials Response Plans and
Inventory); or the California Xxxxxx-Cologne Water Quality Control Act, Water
Code Section 13000, et seq., all as amended (the above-cited California state
statutes are hereinafter collectively referred to as "the State Toxic
Substances Laws"), or any other federal, state or local statute, law,
ordinance, resolution, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time hereafter in effect; (b) any substance, product, waste or other material
of any nature whatsoever which may give rise to liability under any of the
above statutes or under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under
any reported decisions of a state or federal court; (c) petroleum or crude
contamination of the Premises with Hazardous Substances, (vii) estimated
costs of removing any Hazardous Substances; and (viii) any other information
or recommendations Landlord may reasonably require.
B) If the presence, release, threat of release, placement on,
under or about the Premises, or the use, generation, manufacture, storage,
treatment, discharge, release, burial or disposal on, under or about the
Premises or transportation to or from the Premises of any Hazardous Substance
is caused by Tenant and: (i) gives rise to liability, costs or damages
(including, but not limited to, a response action, remedial action, or
removal action) under RCRA, CERCLA, the State Toxic Substance Laws, or any
statutory or common law theory based on negligence, trespass, intentional
tort, nuisance or strict liability or under any reported decision of a state
or federal court; (ii) causes or threatens to cause a significant public
health effect; or (iii) pollutes or threatens to pollute the environment,
Tenant shall, subject to subsection (F) of this Section 9.02, promptly take
any and all response, remedial and removal action necessary to clean up the
Premises and any other affected property and mitigate exposure to liability
arising from the Hazardous Substance, whether or not required by law or by
any governmental entity.
C) Tenant shall comply with all federal, state and local laws,
ordinances and regulations relating to any such response, remedial or removal
action.
D) Tenant shall indemnify, defend with counsel selected by
Landlord, protect and hold harmless Landlord, its directors, officers,
employees, agents, assigns and any successor or successors to Landlord's
interest in the Premises from and against all claims, actual damages
(including, but not limited to, special and consequential damages), punitive
damages, injuries, costs, response costs, losses, demands, debts, liens,
liabilities, causes of action, suits, legal or administrative proceedings,
interest, fines, charges, penalties and expenses [including, but not
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limited to: (1) attorneys', engineers', consultants' and expert witness fees
and costs incurred in connection with defending against any of the foregoing
or in enforcing this indemnity and (2) any diminution in the value of the
Premises] of any kind whatsoever paid, incurred or suffered by, or asserted
against, the Premises or any indemnified party directly or indirectly arising
from or attributable to (i) any breach by Tenant of any of its agreements,
warranties or representations set forth in this Article IX or (ii) any
repair, cleanup or detoxification, or preparation and implementation of any
removal, remedial, response, closure or other plan concerning any Hazardous
Substance introduced by Tenant on, under or about the Premises, regardless of
whether undertaken due to governmental action. To the fullest extent
permitted by law, the foregoing indemnification shall apply regardless of the
fault, active or passive negligence, breach of warranty or contract of
Landlord. The foregoing indemnity is intended to operate as an agreement
pursuant to Section 107(e) of CERCLA, 42 U.S.C. Section 9607(e) and
California Health and Safety Code Section 25364, to insure, protect, hold
harmless and indemnify Landlord from any liability pursuant to such section.
E) Tenant shall promptly give Landlord (i) a copy of any written
notice, correspondence or information it receives from any federal, state or
other government authority regarding Hazardous Substances on, under or about
the Premises or Hazardous Substances which affect or may affect the Premises,
or regarding any actions instituted, completed or threatened by any such
governmental authority concerning Hazardous Substances which affect or may
affect the Premises; (ii) written notice of any knowledge or information
Tenant obtains in writing regarding Hazardous Substances on, under or about
the Premises or expenses or losses incurred or expected to be incurred by
Tenant, third party or any government agency to study, assess, contain or
remove any Hazardous Substances on, under, about or near the Premises for
which expense or loss Tenant may be liable; (iii) written notice of any
knowledge or information Tenant obtains regarding the release or discovery of
Hazardous Substances on, under or about the Premises, and; (iv) written
notice of all written claims made or threatened by any third party against
Tenant or the Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Substance.
F) Without Landlord's prior written consent, which 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 or about the
Premises, nor enter into any settlement agreement, consent decree, or other
compromise in respect to any claims referred to in subsection (E) of this
Section 9.02, which remedial action, settlement, consent or compromise might,
in Landlord's reasonable judgment, impair the value of the Premises;
provided, however, that Landlord's prior consent shall not be necessary in
the event that the presence of any Hazardous Substance on, under 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 possible to obtain Landlord's consent before taking
such action, provided that 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 of competent jurisdiction, or (ii) Tenant
established to the reasonable
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satisfaction of Landlord that there is no reasonable alternative to such
remedial action which would result in less impairment of the value of the
Premises.
9.02 LANDLORD'S INDEMNITY.
Landlord shall indemnify, defend and hold Tenant harmless from: (i)
any claims by third parties for damages to property or injury to persons arising
out of Landlord's release of Hazardous Substances from the Premises and from
(ii) damages, penalties, and clean-up costs claimed or imposed by any
governmental authority arising out of Hazardous Substances existing on or under
the Shopping Center as of the Commencement Date or Hazardous Substances on the
Shopping Center caused by the Landlord after the Commencement Date.
ARTICLE X
ASSIGNMENT AND SUBLETTING
10.01 ASSIGNMENT AND SUBLETTING.
A) Except as otherwise provided in this Section, Tenant shall
not voluntarily assign or encumber its interest in this Lease, or in the
Premises, or sublease all or any part of the Premises, or allow any other Person
to occupy or use all or any part of the Premises, without first obtaining
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Any assignment, encumbrance, or sublease without Landlord's consent
shall be void. No consent to any assignment, encumbrance, or sublease shall
constitute a further waiver of the provisions of this paragraph.
B) Anything contained in this Article X to the contrary, Tenant
shall have the right to assign this Lease or sublet the Premises, without
obtaining Landlord's prior written consent thereto: (1) to an entity which is a
parent, subsidiary, or affiliate (as defined in Securities Act of 1933 and the
regulations thereunder) of Tenant for so long as such relationship to Tenant
under this Lease exists; or (2) to a corporation which is a successor to Tenant
and its subsidiaries and affiliates, by way of merger, consolidation or
corporate reorganization, or to any entity which has succeeded to the interest
of Tenant by the purchase of substantially all of the assets or shares of stock
of Tenant and its subsidiaries and affiliates, provided: (a) Tenant is not then
in default under the terms of Section 13-01 of this Lease; (b) promptly after
the execution of any such assignment or subletting, a fully executed and
acknowledged original assignment or sublease agreement, is delivered to
Landlord, which assignment shall contain an assumption agreement by the assignee
in favor of Landlord of the terms and provisions of this Lease; and (c) Tenant
shall remain liable under this Lease.
C) In the event Tenant wishes Landlord's consent referred to in
paragraph (A) above, Tenant shall forward to Landlord:
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(1) The names and addresses of all principals of the
proposed assignee or sublessee.
(2) Financial statements of the proposed assignee or
sublessee.
(3) The proposed business activity to be conducted by the
assignee or sublessee.
(4) A copy of the proposed assignment, pursuant to which
assignment such assignee shall assume all obligations on Tenant's part to be
performed hereunder.
(5) A check payable to the Landlord in the amount of Seven
Hundred Fifty Dollars ($750.00) to compensate Landlord for its fees and costs in
reviewing the request for its consent and all documents related thereto.
D) No assignment by Tenant of its interest under this Lease,
which is permitted herein, shall be valid or effective unless in writing and
unless and until there is delivered to Landlord a copy of a written assignment
and assumption agreement executed by the Tenant and the assignee, pursuant to
which such assignee agrees to assume and be bound by all of the obligations of
this Lease to be performed by Tenant from and after the effective date of such
assignment. Any sublease of the Premises shall be subject to all of the terms,
covenants, and conditions of this Lease.
E) The Tenant shall continue to remain liable for all past and
future Rent and all other obligations and covenants of the Tenant hereunder
notwithstanding any assignment or sublease. Notwithstanding the aforementioned
in the event of an assignment of this Lease by the Tenant, the assignor-tenant
shall be relieved of tenant obligations thereafter accruing if: the "net worth"
of the assignee at the date of the assignment is at least equal to the greater
of (i) Twenty Million Dollars ($20,000,000) or (ii) the "net worth" of the
assignor at the date of the assignment. The "net worth" of both the assignor and
the assignee must be determined according to generally accepted to accounting
principles as set forth in certified financial statements of independent
certified public accountants licensed to do business in the State of California.
ARTICLE XI
SUBORDINATION AND ATTORNMENT
11.01 SUBORDINATION.
A) At Landlord's election, this Lease shall be subordinate or
superior to the lien of any present or future Mortgage irrespective of the time
of recording of such Mortgage. If, from time to time, Landlord shall elect that
this Lease be subordinate to the lien of any Mortgage,
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Landlord may exercise such election by giving notice thereof to Tenant. The
exercise of any of the elections provided in this paragraph shall not exhaust
Landlord's right to elect differently thereafter, from time to time. At the
election of Landlord, this clause shall be self-operative, and no further
instrument shall be required. Upon Landlord's request, from time to time,
Tenant shall (1) confirm in writing and in recordable form that this Lease is
so subordinate or so paramount (as Landlord may elect) to the lien of any
Mortgage; and/or (2) execute an instrument making this Lease so subordinate
or so paramount (as Landlord may elect) to the lien of any Mortgage, in such
form as may be reasonably required by an applicable Mortgagee.
B) This Lease shall not be subordinate to any present or future
Mortgage unless the holder of any such Mortgage executes and delivers to Tenant
a non-disturbance and attornment agreement, which agreement shall provide, inter
alia, that, notwithstanding any foreclosure of such Mortgage or deed in lieu of
foreclosure, such Mortgagee shall recognize this Lease, including all of
Tenant's rights hereunder.
11.02 ATTORNMENT.
If the Premises are encumbered by a Mortgage, and such Mortgage is
foreclosed, or if the Premises are sold pursuant to such foreclosure or by
reason of a default under said Mortgage, then notwithstanding such foreclosure,
such sale or such default (1) Tenant shall not disaffirm this Lease or any of
its obligations hereunder, and (2) at the request of the applicable Mortgagee or
purchaser at such foreclosure or sale, Tenant shall attorn to such Mortgagee or
purchaser and execute a new lease for the Premises setting forth all of the
provisions of this Lease, except that the term of such new lease shall be for
the balance of the Term.
ARTICLE XII
CONDEMNATION
12.01 ENTIRE PREMISES TAKEN.
If the whole of the Premises shall be acquired by eminent domain or
condemned by eminent domain, then the Term shall cease and terminate as; of the
date on which possession of the Premises is actually surrendered to the
condemning authority, and on such date all Rent shall be paid up to that date
and thereupon this Lease sh ' all terminate. Tenant shall in no event have any
claim against Landlord or the condemning authority for the value of any
unexpired Term.
12.02 PARKING LOT PREMISES.
A) If more than ten percent (10%) of the area of the Parking
Lot Premises shall be acquired by eminent domain then the Tenant may terminate
this Lease by giving Landlord at least sixty (60) days prior written notice of
termination no later than thirty (30) days
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after possession of the Parking Lot Premises is acquired by the condemning
governmental authority.
B) If either the most northern curb cut which provides direct
access to the Parking Lot Premises from Morena Boulevard or the North Driveway
Area is permanently taken by eminent domain and no reasonably substitute curb
cut is provided in its place so that Tenant has reasonable ingress and egress to
and from the Premises, then the Tenant may terminate this Lease by giving
Landlord at least sixty (60) days prior written notice of termination no later
than thirty (30) days after such curb cut or North Driveway Area is taken and
thus, rendered unavailable by the condemning governmental authority.
12.03 PORTION OF BUILDING PREMISES TAKEN.
If any part of the Building Premises shall be acquired by eminent
domain or condemned by eminent domain, then in any such event the Term shall, at
Tenant's option, be terminated by written notice to Landlord within sixty (60)
days after any such taking. The Lease shall cease and terminate sixty (60) days
after the Tenant gives Landlord the notice of termination as aforementioned, and
on such date all Rent shall be paid up to that date, and thereupon this Lease
shall terminate. Tenant shall in no event have any claim against Landlord or the
condemning authority for the value of the unexpired Term. In the event of a
partial taking or condemnation of the Building Premises, and Tenant does not so
elect to terminate this Lease, then Landlord shall use the net condemnation
proceeds allocable to the Building Premises for the Restoration of the Building
Premises in accordance with the provisions of Paragraph 7.01 hereof, to a
condition comparable to their condition at the time immediately prior to the
condemnation or taking; less, however, the portion lost in the taking, and this
Lease shall continue in full force and effect pursuant to the terms and
conditions hereof; provided, however, that the Minimum Rent shall xxxxx in
proportion to the Floor Area of the Building Premises taken. If the condemnation
award is insufficient to pay the entire cost of the Restoration, then
notwithstanding any provision of this Lease to the contrary, Landlord shall have
no obligation to repair or pay for the repair of such damage, and Tenant, if it
fails to terminate this Lease in accordance with this paragraph, shall supply
the amount of any deficiency and repair the damage. For purposes of determining
the amount of the funds available for Restoration of the Building Premises from
the condemnation award, said amount will be deemed to be that part of the award
which remains after payment of Landlord's reasonable expenses incurred in
recovering same and which represents a portion of the total sum so available
(excluding any award or other compensation for land), which is equitably
allocable to the Building Premises.
12.04 LANDLORD'S AWARD.
Except to the extent hereinabove provided with respect to the
Restoration of the Premises, in the event of any condemnation or taking as
hereinbefore provided, whether whole or partial, the Tenant shall not be
entitled to any part of the award, as damages or otherwise, for such
condemnation, and the Landlord and any mortgagee of Landlord are to receive
the full
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amount of such award as their respective interests may appear, the Tenant
hereby expressly waiving any right or claim to any part thereof and assigning
to Landlord any such right or claim to which it might be entitled.
12.05 TENANT'S AWARD.
Tenant shall have the right to claim and recover from the
condemning authority, but not from Landlord or any Mortgagee, such compensation
as may be separately awarded or recovered by Tenant in Tenant's own right for or
on account of, and limited solely to any cost to which Tenant might be put in
removing Tenant's merchandise, furniture, fixtures, and equipment from the
Premises, loss of business and any other damages, excluding the value of -the
Shopping Center, the Premises, and the value, if any, of the Tenant's Leasehold
Estate, provided, in any event, no such claim by Tenant reduces the award
Landlord would otherwise be entitled to.
ARTICLE XIII
DEFAULT
13.01 TENANT'S DEFAULT.
The occurrence of any of the following shall constitute a default
by Tenant:
A) failure to pay Rent, when due, if the failure continues for
ten (10) days after written notice has been given to Tenant by Landlord;
B) failure by Tenant to pay any monetary obligation provided
herein, except as provided in paragraph (A) above or any breach of any other
provision of this Lease if the breach is not cured within thirty (30) days after
written notice; provided, however, with respect to a non-monetary breach, if
Tenant cannot reasonably cure the breach within such thirty (30) day period,
Tenant shall not be in default of this Lease if Tenant commences to cure the
breach within the thirty (30) day period and diligently and in good faith
continues to cure the breach.
13.02 LANDLORD'S REMEDIES CUMULATIVE.
Landlord shall have the following remedies set forth in subsections
(A) through (H) below if Tenant commits a default. These remedies are not
exclusive and may be exercised concurrently or successively; they are cumulative
in addition to any remedies now or later allowed by law.
A) BRING SUIT FOR PERFORMANCE. Landlord may bring suit for the
collection of the Rent or other amounts for which Tenant is then in default, or
for the performance of any other covenant or agreement devolving upon Tenant,
all without having to enter into possession or terminate this Lease;
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B) RE-ENTRY WITHOUT TERMINATION. Landlord may re- enter the
Premises, by summary proceedings or otherwise, and take possession thereof,
without thereby terminating this Lease, and thereupon Landlord may expel all
persons and remove all property therefrom, either peaceably or by force,
without becoming liable to prosecution therefor, and relet the Premises and
receive the rent therefrom, applying the same first to the payment of the
reasonable expenses of such re-entry and the reasonable cost of such
reletting, and then to the payment -of the Rent and other amounts for which
Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any
deficiency, it is agreed that the commencement and prosecution of any action
by Landlord in forcible entry and detainer, ejectment, or otherwise, or the
appointment of a receiver, or any execution of any decree obtained in any
action to recover possession of the Premises, or obtained in any action to
recover possession of the Premises, or any re-entry, shall not be construed
as an election to terminate this Lease unless Landlord shall, in writing,
expressly exercise its election to declare the Term hereunder ended and to
terminate this Lease, and unless this Lease be expressly terminated, such
re-entry or entry by Landlord, whether had or taken under summary proceedings
or otherwise, shall not be deemed to have absolved or discharged Tenant from
any of its obligations and liabilities for the remained of the Term of this
Lease. Notwithstanding anything to the contrary or other provisions of this
Lease, if the Landlord elects the remedy provided in this Section 13.02(B),
Tenant shall have the right to sublet the Premises, assign its interest in
the Lease, or both, with the written consent of the Landlord, which consent
shall not be unreasonably withheld.
C) TERMINATION OF LEASE AND TENANT'S RIGHT TO POSSESSION.
Landlord may terminate this Lease and Tenant's right to possession by giving
Tenant five (5) days' written notice of such termination. No act by Landlord,
other than giving Tenant written notice of termination of this Lease, shall
in fact terminate the Lease. Upon termination of the Lease, neither the
Landlord nor the Tenant shall have any future rights or obligations under the
Lease, except that Landlord shall have the right to recover from the Tenant
the following:
(1) the worth, at the time of the award, of the unpaid Rent
that had been earned at the time of termination of this Lease;
(2) the worth, at the time of the award, of the amount by
which the unpaid Rent that would have been earned after the date of termination
of this Lease until the time of award exceeds the amount of the loss of Rent
that Tenant proves could have been reasonably avoided;
(3) the worth, at the time of the award, of the amount by
which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of the loss of Rent that Tenant proves could have been
reasonably avoided; and
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(4) any other amount, and court costs, necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure to
perform his obligations under the Lease or which, in the ordinary course of
things, would be likely to result therefrom.
D) DEFINITIONS. As used herein, the following phrases shall be
interpreted as follows:
(1) "The worth, at the time of the award," as used in
subsections 13.02(C)(1) and (2) above, is to be computed by allowing interest at
the maximum lawful rate. "The worth, at the time of the award," as referred to
in subsection 13.02(C)(3) above, is to be computed by discounting the amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1 %).
(2) As used herein, the term "time of award" shall mean
either the date upon which Tenant pays to Landlord the amount recoverable by
Landlord as hereinabove set forth or the date of entry of any determination,
order, or judgment of any court or other legally constituted body determining
the amount recoverable, whichever first occurs.
E) Promptly after notice of termination, Tenant shall surrender
and vacate the Premises and all improvements in broom-clean condition, and
Landlord may re-enter and take possession of the Premises and all remaining
improvements and eject all parties in possession or eject some and not others,
or eject none. Termination under subsection 13.02(C) shall not relieve Tenant
from the payment of any sum due to Landlord or from any claim for damages
previously accrued or then accruing against Tenant.
F) ASSIGNMENT OF SUBRENTS. Tenant assigns to Landlord all
subrents and other sums falling due from subtenants, licensees, and
concessionaires (herein called subtenants) during any period in which Landlord
has the right under this Lease, whether exercised or not, to re-enter the
Premises for Tenant's default, and Tenant shall not have any right to such sums
during that period. Landlord may, at Landlord's election, re-enter the Premises
and improvements with or without process of law, without terminating this Lease,
and either or both collect these sums or bring action for the recovery of the
sums directly from such obligors. Landlord shall receive and collect all
subrents and avails from reletting, applying them: first, to the payment of
reasonable expenses (including attorneys' fees or brokers' commissions or both)
paid or incurred by or on behalf of Landlord in recovering possession and
placing the Premises and improvements in good condition; second, to the
reasonable expense of securing new lessees; third, to the fulfillment of
Tenant's covenants to the end of the Term; and fourth, to Tenant. Tenant shall
nevertheless pay to Landlord on the due dates specified in this Lease the
equivalent of all sums required of Tenant under this Lease, plus Landlord's
expenses, less the avails of the sums assigned and actually collected under this
provision. Landlord may proceed to collect either the assigned sums or Tenant's
balances, or both, or any installment or installments of the, either before or
after expiration of the Term, but the period of limitations shall not begin to
run on Tenant's payments until the due date of the final installment to which
Landlord is entitled, nor
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shall it begin to run on the payments of the assigned sums until the due date
of the final installment due from the respective obligors.
G) APPOINTMENT OF RECEIVER. If Tenant fails to perform any of
the obligations set forth in Section 13.01, and such failure or violation is not
cured within the time periods set forth in Section 13.01, then Landlord shall
have the right to have a receiver appointed to collect rent for any subtenants.
Neither the filing of a petition for the appointment of a receiver nor the
appointment itself shall constitute an election by Landlord to terminate this
Lease.
H) Landlord's Right to Cure Tenant's Default. Landlord, at any
time after Tenant commits a default, can cure the default at Tenant's cost if
Tenant fails to perform any of the obligations set forth in Section 13.01, and
such failure or violation is not cured within the time periods provided in
Section 13.01. If Landlord, at any time, by reason of Tenant's default, pays any
sum or does any act that requires the payment of any sum, the sum paid by Lessor
shall be immediately reimbursed from Tenant to Landlord, and if paid at a later
date shall bear interest at the Governing Interest Rate from the date the sum is
paid by Landlord until Landlord is reimbursed by Tenant.
13.03 TENANT'S WAIVER OF STATUTORY RIGHTS.
In the event of any termination of this Lease or re-entry by
Landlord without termination as provided under this Article XIII, Tenant, so far
as permitted by law, waives (a) any notice of re-entry or of the institution of
legal proceedings to that end; (b) any right of redemption, re-entry, or
repossession; and (c) any right to trial by jury.
13.04 LANDLORD'S DEFAULT.
A) Landlord shall be in default under this Lease if Landlord
fails to perform any covenant of Landlord and such failure is not cured within
thirty (30) days after receipt of written notice from Tenant of such failure;
provided, however, if Landlord can not reasonably cure such failure within such
thirty (30) day period Landlord shall not be in default if Landlord commences to
cure the failure within the thirty (30) day period and diligently and in good
faith continues to cure the failure.
B) In the event of Landlord's default, Tenant may seek
injunctive relief or damages against the Landlord.
ARTICLE XIV
END OF TERM
14.01 SURRENDER OF PREMISES.
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A) On the Lease Termination Date the Tenant shall quit and
surrender the Premises into the possession and use of Landlord without delay,
broom-clean and in good order, condition and repair (reasonable wear and tear
excepted), free and clear of all occupancies or subleases, and free and clear of
all liens and encumbrances other than those, if any, created by Landlord. At the
end of the Term or earlier termination of this Lease, despite any options or
privileges herein contained, the title to and/or ownership of tenant leasehold
improvements, if not therefor vested in Landlord, shall automatically; vest in
Landlord without the execution of any further instrument, free and clear of all
liens and encumbrances other than those, if any, created by Landlord. However,
Tenant shall, on demand, execute any further assurances of title to the tenant
leasehold improvements.
B) Any alterations made to the Premises shall remain on and be
surrendered with the Premises on the Lease Termination Date.
14.02 TENANT'S TRADE FIXTURES.
All trade fixtures and equipment (not including plumbing and
electrical fixtures that are a part of the Building and not including heating,
ventilating, and air conditioning equipment) installed by or for Tenant or its
subtenants or licensees in the Premises, regardless of the manner -of
attachment, shall be and remain the property of Tenant or its subtenants or
licensees. Landlord hereby waives any lien rights with respect to said trade
fixtures, equipment, and merchandise inventory granted by or under any present
or future law. Said trade fixtures, equipment, and merchandise inventory may be
removed by Tenant or its subtenants; or licensees at any time during the Lease
Term, and shall be removed on or before the Lease Termination Date, but Tenant
shall promptly repair all damage to the Premises caused thereby. Any of said
trade fixtures remaining on the Premises after the Lease Termination Date shall
be deemed abandoned and shall become the property of Landlord without payment
therefor.
14.03 ABANDONED PERSONAL PROPERTY.
Any personal property of Tenant or any subtenant or occupant which
shall remain in or on the Premises after the Lease Termination Date, may, at the
option of Landlord and without notice, be deemed to have been abandoned by
Tenant or such subtenant or occupant and may either be retained by Landlord as
its property or be disposed of, without accountability, in such manner as
Landlord may see fit, or, if Landlord may give written notice to Tenant to such
effect, such property shall be removed by Tenant, at Tenant's cost and expense.
Any property not removed after the Lease Termination Date may be stored by
Landlord, at Tenant's expense.
14.04 HOLDOVER.
If the Premises are not surrendered as provided in this Article
XIV, Tenant shall indemnify and hold Landlord harmless against loss and
liability (including attorneys' fees) resulting from the delay by Tenant or
Tenant's assignee of this Lease or any sub-tenants in so
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surrendering the Premises, including, without limitation, any claims made by
any succeeding occupant founded on such delay. If Tenant or Tenant's assignee
of this Lease or any subtenant's shall hold over after the end of the Lease
Termination Date, such holding over shall be construed as a tenancy at
sufferance and Tenant shall pay Landlord for the use and occupancy of the
Premises during such holdover period, an amount equal to shall be one hundred
and fifty percent (150%) of the Monthly Rent payable for the last month of
the Term of this Lease.
14.05 SURVIVAL OF OBLIGATIONS.
All obligations and liabilities which have accrued as of the Lease
Termination Date shall survive such date.
14.06 SURVIVAL.
The provisions of this Article XIV shall survive any termination of
this Lease.
ARTICLE XV
MISCELLANEOUS
15.01 ATTORNEYS' FEES.
Should any action or proceeding be commenced between the parties to
this Lease concerning the Premises, this Lease, or the rights and duties of
either in relation thereto, the party, Landlord or Tenant, prevailing in such
litigation shall be entitled, in addition to other relief as may be granted in
the action or proceeding, to a reasonable sum as and for its attorneys' fees and
costs in such litigation which shall be determined by the court in such
litigation or in a separate action brought for that purpose.
15.02 NOTICES.
All waivers, elections, options, notices, demands, and consents
which either party may be required or may desire to give under this Lease
("Notice") shall be in writing and shall be effective upon receipt or attempted
delivery by Federal Express or other 24-hour express courier service, personal
delivery or by certified or registered mail, posted prepaid, return receipt
requested, addressed as follows:
To Tenant: XXXXXXXXX XXXXX, INC.
Attn: CEO
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Prior to the Rent Commencement Date, notice to Tenant shall be sent to:
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XXXXXXXXX XXXXX, INC.
Attn: CEO
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
To Landlord: PRICE ENTERPRISES, INC.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
or such other address as either party may hereafter indicate by written notice
to the other.
15.03 FORCE MAJEURE.
Each Party shall be excused from performing any obligation or
undertaking provided in this Agreement, except any obligation to pay any sum of
money under the applicable provisions hereof, in the event and so long as the
performance of any such obligation is prevented or delayed, retarded, or
hindered by the following "Force Majeure" events: act of God, fire, earthquake,
floods, explosion, actions of the elements, war, invasion, insurrection, riot,
mob violence, sabotage, inability to procure or general shortage of labor,
equipment, facilities, materials, or supplies in the ordinary course on the open
market; failure of normal transportation, strikes, lockouts, action of labor
unions, condemnation, requisition, laws, orders of governmental or civil or
military authorities; the inability to obtain governmental approvals or permits
despite the exercise of due diligence and best efforts by a Party; or any other
cause, whether similar or dissimilar to the foregoing, not within the reasonable
control of such Party, other than the lack of or inability to obtain funds.
15.04 GOVERNING LAW.
This Lease and all matters relating to this Lease shall be governed
by the laws of the State of California in force at the time any need for
interpretation of this Lease or any decision or holding concerning this Lease
arises.
15.05 BINDING ON HEIRS AND SUCCESSORS.
This Lease shall be binding on and shall inure to the benefit of
the heirs, executors, administrators, successors, and assigns of the parties
hereto, Landlord and Tenant, but nothing in this Section shall be construed as a
consent by Landlord to any assignment of this Lease or any interest therein by
Tenant, except as may be specifically provided herein.
15.06 PARTIAL INVALIDITY.
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Should any provision of this Lease be held by a court of competent
jurisdiction to be either invalid, void or unenforceable, the remaining
provisions of this Lease shall remain in full force and effect, unimpaired by
the holding.
15.07 ENTIRE AGREEMENT.
This Lease and the exhibits attached set forth the entire agreement
between the parties. Tenant covenants that it has examined the Premises and
knows the area and condition thereof. Tenant enters into this Lease on the basis
of its own independent investigation only and not any statement or
representation of anyone else. Except as specifically set forth herein, there
are no agreements, representations or warranties whatsoever as to any matter,
including, but not limited to, the physical condition, layout, leases, footage,
rents, income, expenses, operation, and zoning relating to the Premises. Any
prior conversations or writings are merged herein, superseded hereby and
extinguished. No subsequent amendment of this Lease shall be binding upon
Landlord or Tenant unless reduced to writing and signed by Landlord and Tenant.
15.08 WAIVER.
No term, covenant, or condition of this Lease can be waived, except
in writing, signed by the party making the waiver, Landlord or Tenant, as the
case may be. No waiver of any default hereunder shall be implied from any
omission by either party to take any action on account of such default if such
default persists or is repeated, and no express waiver shall affect any default
other than the default specified in the express waiver, and that only for the
time and to the extent therein stated. The payment or acceptance of Rent or
partial Rent with knowledge of the breach of any of the covenants of this Lease
by Tenant or Landlord, as the case may be, shall not be deemed a waiver of any
such breach. One or more waivers of any breach of any covenant, term or
condition of this Lease shall not be construed as a waiver of any. subsequent
breach of the same covenant, term or condition. The consent or approval by
either party to or of any act requiring consent or approval of the other party
shall not be deemed to waive or render unnecessary that party's consent or
approval to or of any subsequent similar act.
15.09 SALE OR TRANSFER OF PREMISES.
If Landlord sells, transfers, or assigns all or any portion of this
Lease or the Premises, including improvements thereon, Landlord, on consummation
of the sale, transfer or assignment, shall be released from any liability
thereafter accruing under this Lease if Landlord's successor has assumed in
writing, for the benefit of Tenant, Landlord's obligations thereafter accruing
under this Lease, and Tenant has received a copy of such writing. Any prepaid
Rent may be transferred to Landlord's successor, and on such transfer Landlord
shall be discharged from any further liability in reference to the prepaid Rent.
15.10 TIME OF THE ESSENCE.
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Time is expressly declared to be the essence of this Lease.
15.11 ESTOPPEL CERTIFICATE.
Tenant shall, within ten (10) days notice from Landlord, execute
and deliver to Landlord in recordable form, a certificate stating that is Lease
is unmodified and in full force and effect, or in full force and effect as
modified, and stating the modifications. The certificate also shall state the
amount of current monthly Rent, the dates to which the Rent has been paid in
advance, the amount of prepaid Rent, and any other information with respect to
this Lease requested by Landlord. Failure to deliver the certificate within the
ten (10) days shall be conclusive upon the party failing to deliver the
certificate for the benefit of the party requesting the certificate and any
successor to the party requesting the certificate, that this Lease is in full
force and effect, and has not been modified, except as may be represented by the
party requesting the certificate, and that Rent and other charges have not been
paid for any period after date of Notice of Request.
15.12 BROKER.
The Landlord and the Tenant each represent that it has not had any
dealings with any broker, finder, or other person with respect to this Lease.
Each party shall hold harmless and indemnify and defend the other party from all
damages resulting from any claims that may be asserted against the other party
by any broker, finder, or other person with whom the other party has purportedly
dealt in connection with this Lease.
15.13 RIGHT OF FIRST REFUSAL.
A) Provided Tenant is not in default of any of its obligations
under this Lease, Tenant shall have the First Right of Refusal, during the
Initial Term, only to lease from the Landlord the entire "Adjacent Office Space"
as defined in paragraph (B) below, pursuant to the following terms and
conditions:
(1) In the event the Landlord wishes to accept a bona fide offer
from a third party (the "Third Party") to Lease the entire Adjacent Office Space
it shall send a written notice to the Tenant, together with a proposed lease, in
duplicate, which contains all of the terms and conditions of the bona fide
offer.
(2) If Tenant wishes to lease the Adjacent Office Space from the
Landlord it shall execute the proposed lease and return the duplicate
counterparts within seven (7) days after receipt of same from Landlord.
(3) If the Tenant does not execute and return the duplicate
counterparts of the Lease to Landlord within such seven (7) day period, then the
Landlord may enter into the
-40-
Lease with the Third Party within thirty (30) days after the expiration of said
seven (7) day period, in which case this Section 15.13 shall forever be null
and void.
B) The "Adjacent Office Space" shall mean that approximately
50,000 square feet of Floor Area shown on Exhibit B.
C) Notwithstanding anything in this Section 15.13 to the
contrary, the Tenant shall have no rights under this Section 15.13 in the event:
(1) Landlord leases less than the entire Adjacent Office Space.
(2) Landlord leases the Adjacent Office Space: (i) to a
subsidiary corporation or entity in which the Landlord has a direct or indirect
equity interest; or (ii) to a corporation that was a former subsidiary of
Landlord.
(3) Landlord wishes to transfer rights in the Adjacent Office
Space other than by lease, including, but not limited to a sale of the Shopping
Center or any portion thereof, or if the Landlord is involved in a merger or
other form of reorganization.
15.14 HEADINGS.
The headings of the articles and sections of this Lease are for
convenience of reference only and are not a part of this Lease.
15.15 NUMBER AND GENDER.
Whenever the context requires the singular number, it shall include
the plural, the plural the singular, and the use of any gender shall include all
genders.
15.16 CORPORATE AUTHORITY.
Each individual executing this Lease on behalf of a corporation
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said corporation in accordance with a duly adopted
resolution of the board of directors or in accordance with the by-laws of said
corporation; and that this Lease is binding upon said corporation in accordance
with its terms.
15.17 ACCORD AND SATISFACTION.
A) Payment by Tenant or receipt by Landlord of a lesser amount
than the Rent or other charges herein stipulated shall be deemed to be on
account of the earliest due -stipulated Rent or other charges, and no
endorsement or statement on any check or any letter accompanying any check or
payment as Rent or other charges shall be deemed an accord and satisfaction, and
-41-
Landlord shall accept such check or payment without prejudice to Landlord's
right to recover the balance of such Rent or other charges or to pursue any
other remedy provided in this Lease or by Law.
B) No endorsement or statement on any check or any letter
accompanying any check from Landlord to Tenant shall be deemed an accord and
satisfaction, and Tenant shall accept such check or payment without prejudice to
Tenant's right to recover any amount due Tenant or to pursue any other remedy
provided in this Lease or by Law.
15.18 SUBMISSION OF LEASE TO TENANT.
The submission of this Lease to Tenant not signed by Landlord shall
be for examination purposes only, and does not and shall not constitute an offer
by Landlord to lease the Premises to Tenant or otherwise create any interest by
Tenant in the Premises. Execution of this Lease by Tenant and return to Landlord
shall not be binding upon Landlord, notwithstanding any time interval, unless
and until Landlord has in fact executed and delivered this Lease to Tenant.
Executed in San Diego, California, as of the date first written
above.
LANDLORD: TENANT:
PRICE ENTERPRISES, INC. XXXXXXXXX XXXXX, INC.
by /s/ XXXXXX XXXXX by /s/ XXXXXXX XXXXXXXX
----------------------- -----------------------
its President its CEO and President
----------------------- -----------------------
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EXHIBIT A
DESCRIPTION
Page 1 Policy No. 970103 15
LOT I OF ROSE CANYON WAREHOUSE SUBDIVISION, IN THE CITY OF SAN DIEGO, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 3787, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COMM, JANUARY 22, 1958.
PARCEL B:
THAT PORTION OF PUEBLO XXX 0000 XX XXX XXXXXX XXXXX XX XXX XXXXX, XX THE CITY OF
SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF
MADE BY XXXXX XXXXXX IN 1870, A COPY OF WHICH SAID MAP WAS FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AND IS KNOWN AS MISCELLANEOUS MAP
NO. 36, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEAST CORNER OF PUEBLO LOT 1787; THENCE SOUTH
75 34' 10" WEST ALONG THE NORTHERLY LINE THEREOF 889-03 FEET TO THE SOUTHEAST
CORNER OF PUEBLO XXX 0000, XXX XXX XXXX XXXXX XX XXXXXXXXX; THENCE SOUTHERLY
ALONG THE SOUTHERLY PROLONGATION OF THE FIRST LINE OF PUEBLO LOT 1778, A
DISTANCE OF 80.00 FEET; THENCE SOUTH 47 11' 30" WEST, 190.00 FEET, MORE OR
LESS, TO A POINT IN A LINE PARALLEL WITH AND DISTANT 225.00 FEET NORTHEASTERLY,
MEASURED AT RIGHT ANGLES FROM THE NORTHEASTERLY RIGHT OF WAY LINE OF THE
XXXXXXXX, TOPEKA AND SANTA FE RAILWAY COMPANY (FORMERLY CALIFORNIA SOUTHERN
RAILROAD COMPANY) ; THENCE SOUTH 42 48' 30" EAST 87.40 FEET TO THE SOUTH-
EASTERLY LINE OF LAND DESCRIBED IN DEED TO XXXX X. XXXX, XX. RECORDED MARCH 15,
1941 IN BOOK 1151, PAGE 168 OF OFFICIAL RECORDS; THENCE NORTH 47 19' 00" EAST TO
AN INTERSECTION WITH THE FOURTH LINE OF PUEBLO LOT 1787; THENCE SOUTH 75 34' 10"
WEST AL0NG SAID NORTHERLY LINE TO THE TRUE POINT OF BEGINNING.
-43-
EXHIBIT B
[DIAGRAM]
"SHOPPING CENTER"
ADJACENT OFFICE SPACE
50.000 SF
220'
COSTCO 147,578 SF
PI11CE IRELF STORAGE 85,000 SF
'Ir r". IN
MORENA BOULEVARD 46
0 BUILDING
CONCEPTUAL SITE PLAN 0000 Xxxxxx Xxxx., Xxx Xxxxx, XX
-MAP
4405-4842 Utrome 8~4 Sm Ditoo. CA 02117
PRICE SELF STORAGE 29.2DO Sr
EXHIBIT B Page I of 2
[DIAGRAM]
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I
I
9 18 817
1121
J21
RAMP
000 0
XXXX XXXXXXXXXX 540'
120' PRICE
0
SELFSTORAGE
80 1
44
0 0 4 0 " 0 4p 0 0 9 0 0 0 9
. 0 - nv 0- & 0 -A 99 :-
CURB CUT BUILDING PREMISES NORTH DRIVEWAY AREA
0---- PARKING LOT PREMISES
CONCEPTUAL SITE PLAN
&--I . - - -
CURBCUT
NOT TO F""ALE
EXHIBIT B Pagle A' )f 2
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EXHIBIT C
CONFIRMATION OF INITIAL TERM OF LEASE
(San Diego/Morena Blvd. - Xxxxxxxxx Xxxxx)
This confirmation of term of lease is made on _______________ 19__, between
PRICE ENTERPRISES, INC., a Delaware corporation ("Landlord") and
____________________, a ("Tenant"), who agree as follows:
1. Landlord and Tenant entered into a Lease dated _______________, 19__, in
which Landlord leased to Tenant and Tenant leased from Landlord the Premises
described in Section ____ ("Premises").
2. Landlord and Tenant agree to confirm the commencement and expiration dates
of the term, and the Rent Commencement Date as follows:
a) _______________, 19__, is the Commencement Date of the
Initial Term of the Lease;
b) _______________, 19__, is the expiration date of the Initial
Term of the Lease; and
c) _______________, 19__, is the Rent Commencement Date.
TENANT
__________________________
LANDLORD
__________________________
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EXHIBIT D
LEASEHOLD IMPROVEMENTS
(San Diego/Morena Blvd. - Xxxxxxxxx Xxxxx)
I. LANDLORD'S WORK
A) Landlord, at its sole cost and expense, shall cause the
following work to be performed on the Premises, in accordance with applicable
building codes (the "Landlord's Work"):
1) The following Landlord's Work shall be substantially
completed before the Commencement Date.
a) All areas of the parking lot that have failed will be
replaced. The parking lot will be overlayed or slurryed sealed (at Landlord's
option) to provide positive drainage.
b) Install a concrete receiving-well to accommodate seven (7) -
10 foot wide dock doors on +/- 12 foot centers. Dock height shall be 4' 0". The
receiving well shall have adequate drainage so that there will be no standing
water.
c) Install seven (7) - 10' wide x 10' high, 20 gauge steel,
manually operated dock doors with dock seals, including any required structural
modifications.
d) Install ten (10) 500 waft quartz exterior light fixtures or
equivalent for parking lot security lighting. Light fixtures, conduits and wires
to be run to new electric switch gear location. Final electrical connections to
be made by Tenant.
e) Build a 12 foot wide asphalt ramp from the parking lot into
the building. Provide a 14 foot high by 10 foot wide, 20 gauge steel, manually
operated roll-up door, including any required structural modifications. Ramp and
door to be located on the north side of the building next to the receiving well.
f) The north and west sides of the building will be painted to
match the existing Price Self Storage facility, located immediately adjacent to
the Premises.
g) The current existing maintenance shed to be removed.
h) The current existing gasoline pumps and tanks, if any, on
north side of Parking Lot Premises to be removed.
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i) Remove the existing switch gear currently located within the
Premises and install a clean, flat integral slab at the location of existing
switch gear. Install a new amp meter section on the exterior of the west wall,
200 feet south of the northwest corner of the building.
j) The existing fire corridor on the east wall will be
shortened to +/- 150 feet long starting at Price Self Storage and running in the
northerly direction.
k) Landlord to remove the existing loading dock on the north
and west sides. Existing dock doors in these areas to be removed and filled in
with metal siding as close as reasonably possible to existing siding. Existing
exit door awnings to be removed.
l) The perimeter fence along Morena Boulevard is to be removed.
The fence which currently runs in a northerly direction from the Building
Premises to the North Driveway Area will be relocated to the eastern boundary
line of the Parking Lot Premises.
m) Remove any and all asbestos, if any, in the Building
Premises, in accordance with applicable laws and regulations.
n) Install landscaping and irrigation along the existing public
sidewalk which is on the western boundary of the Premises, along Morena
Boulevard. Such landscaping to be similar to the existing landscaping.
2) The following Landlord's Work ("Phase 2 Work") shall be
substantially completed after the Commencement Date:
a) Stripe the parking lot per Tenant's plan.
b) Build a secondary exit from the Building Premises, if
required by the City of San Diego.
c) Build a handicap ramp to meet the current building codes at
the Tenant's main entrance to the Building Premises on the west side. Remove
existing ramp.
d) The fence along the northerly boundary of the Premises will
contain a break so that vehicles may make a right hand turn off the North
Driveway Area.
Tenant shall submit plans to Landlord ("Tenant's Plans") showing:
(i) the parking lot striping plan; (ii) the location of the secondary exit for
the Building if required; (iii) the location of Tenant's main entrance to the
Building Premises and the break in the fence along with northern boundary of the
Premises. Landlord shall commence Phase 2 Work within thirty (30) days after the
date: (i) Landlord has obtained Landlord's Permits; (ii) Tenant has delivered
complete Tenant's Plans to the Landlord; and (iii) the current tenant in the
Premises has vacated
-49-
same, subject to extension of time for Force Majeure under Section 15.03 and
thereafter, diligently proceed to complete such Landlord's Work.
Landlord shall substantially complete Phase 2 Work (other than such
"punch list" items which can be completed within thirty (30) days and without
material interference with Tenant's efforts to ready the Premises for Tenant's
occupancy) within sixty (60) days after the date: (i) Landlord has obtained
Landlord's Permits; (ii) Tenant has delivered complete Tenant's Plans to the
Landlord; and (iii) the current tenant in the Premises has vacated same, subject
to extension of time for Force Majeure under Section 15.03 (referred to as the
Phase 2 Completion Date). If the Phase 2 Work is not completed by the Phase 2
Completion Date, then the ninety (90) day period referred to in Section 3.01,
captioned "Rent Commencement Date" shall be increased by the number of days from
the Phase 2 Completion Date until the date the Phase 2 Work has been
substantially completed.
B) LANDLORD'S PLANS.
Landlord shall prepare plans (the "Work Plans") for Landlord's
Work which is to be completed before the Commencement Date and submit same for
Tenant's reasonable approval. Tenant shall approve the Work Plans within five
(5) business days after receipt of same. If Tenant does not give Landlord
written approval or disapproval within such five (5) day period, the Work Plans
shall be deemed approved. Tenant may disapprove the Work Plans only if they are
contrary to the outline specifications of paragraph (A) above. In the event
there is a dispute with respect to Tenant's disapproval of the Work Plans, such
dispute shall be settled by binding arbitration pursuant to the rules and
procedures of the American Arbitration Association.
II. TENANT'S WORK
A) CONSTRUCTION
(1) Tenant, at its sole cost and expense, subject to
reimbursement by Landlord under paragraph E below, shall make all leasehold
alterations and improvements to the Premises, other than Landlord's Work, which
are necessary or required for Tenant's use and occupancy of the Premises (the
"Tenant's Work").
B) TENANT'S BUILDING PLANS
(1) Tenant shall prepare complete working drawings and
specifications, (the "Building Plans") which shall govern the performance of
"Tenant's Work", which shall mean and include the repairs, renovations and
alterations to the Premises, other than Landlord's Work. The Building Plans
shall in any case conform to applicable governmental requirements and to sound
and generally accepted engineering practices.
-50-
(2) When completed, the Building Plans shall be submitted to
Landlord for its approval, which Landlord agrees shall not be unreasonably
withheld. Within twenty (20) days after the receipt of the Building Plans,
Landlord shall give Tenant written notice of such approval or of disapproval
based upon any reasonable objections. Landlord's failure to approve or to
disapprove within that period of time shall constitute approval. If Landlord
disapproves, Tenant shall revise the Building Plans and shall re-submit them
to Landlord, Landlord agrees to approve or disapprove in the case of any such
re-submission or resubmissions in the same manner and within twenty (20) days
of receipt of such revised Building Plans. Landlord's failure to approve or
to disapprove within that period shall constitute approval.
C) PERMITS AND APPROVALS
(1) Within thirty (30) days after the Building Plans are
approved by Landlord, Tenant shall apply for any necessary building permits and
approvals in connection with the construction of Tenant's Work (collectively,
the "Permits"). Tenant shall, in a timely manner, keep Landlord reasonably
informed of the status of all applications for Permits and of the time and place
of all meetings or hearings with governmental agencies and representatives with
respect thereto. Landlord shall have the right to attend and participate in such
meetings. In the event changes to the Building Plans are required by any
governmental authority, Tenant may make any changes which are minor in nature
without Landlord's consent. Any other changes in the Building Plans prior to the
issuance of the Permits shall require Landlord's consent which shall not be
unreasonably withheld. For the purpose of this paragraph C), Landlord's failure
to approve or disapprove such changes within twenty (20) days after receipt of
such request shall constitute approval. Upon issuance of the Permits, including,
without limitation, the building permit, Tenant shall submit to Landlord, a
final set of Building Plans reflecting all changes, if any, as approved by
Landlord (or not requiring the approval of Landlord) hereunder (the "Approved
Building Plans").
(2) In the event Tenant wishes to make changes to the Approved
Building Plans, it may do so pursuant to the same approval process and standard
as is set forth in paragraph C)(1), except that the deemed approval period for
Landlord's consent shall be twenty (20) days after receipt of such request. In
the event that any change to the Approved Building Plans requires any change to
any portion of Tenant's Work which has been completed, the total cost of
installation and removal of such completed work shall be the sole responsibility
of the Tenant and shall not be included within the term "Building Costs" (as
defined in paragraph E) for purposes of reimbursement by Landlord. If any
changes by Tenant under this paragraph (2) result, in the aggregate, in a net
increase or decrease in the cost of Tenant's Work, Tenant shall notify Landlord
of such fact as soon after such changes are required as is reasonably possible
together with a good faith estimate of the estimated net increase or decrease in
the cost of Tenant's Work. On written request therefor, Tenant shall deliver to
Landlord, reasonably satisfactory evidence substantiating in detail the changes
in the cost of Tenant's Work resulting from Tenant's changes under this
paragraph C).
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D) CONSTRUCTION CONTRACTS. Promptly after Tenant obtains the
Permits, Tenant shall retain a general contractor for Tenant's Work.
E) OWNERSHIP. All leasehold improvements shall be the property
of the Landlord. All such leasehold improvements shall be free of any and all
liens and encumbrances.
F) CONTRACTOR'S GUARANTIES AND WARRANTIES. Each contractor and
subcontractor participating in the construction of Tenant's Work shall be
duly licensed, and each contract and sub-contract shall contain the guaranty
of the contractor or sub-contractor that the portion of Tenant's Work covered
thereby will be free from all defects in workmanship and materials for the
period of time which customarily applies in good contracting practices, but
in no event less than one (1) year after the completion of Tenant's Work. The
aforesaid guaranties shall include the obligation to repair or replace, in a
thoroughly workmanlike manner and without any additional charge, all of
Tenant's Work done or furnished by said contractor or sub-contractor, or by
any of his sub-contractors, employees or agents, which shall be or become
defective because of faulty materials or workmanship within the period
covered by such guaranty (and of which notice is given to such contractor or
sub-contractor within such period); and the correction, as aforesaid, of any
such matter shall include, without any additional charge therefore, all
expense and damages in connection with the removal, replacement and/or repair
in a thoroughly workmanlike manner of any other part of Tenant's Work which
may be damaged or disturbed thereby. All warranties or guaranties as to
materials or workmanship on or with respect to Tenant's Work shall be written
so that they shall inure to the benefit of Landlord and Tenant as their
respective interests may appear and can be directly enforced by either, and
Tenant shall give to Landlord, any assignment or other assurance necessary to
effectuate the same.
G) WORK PROCEDURES. Each contractor and sub-contractor
participating in Tenant's Work shall:
(1) Store all building materials, tools and equipment within the
Premises or such other locations as may be specifically designated by Landlord,
in advance of the commencement of construction by Tenant;
(2) Make appropriate arrangements for temporary utility
connections as available within the Shopping Center, and shall pay the cost of
said connections and of proper maintenance and removal of the same, and shall
pay all utility charges incurred by such contract or sub-contractors;
(3) Remove all trash, debris and rubbish as reasonably necessary
and, upon completion of Tenant's Work, shall remove all temporary structures,
surplus materials, debris and rubbish of whatever kind remaining in the
Premises, the building or the Shopping Center;
(4) Properly protect Tenant's Work with lights, guard rails and
barricades, and secure all parts of Tenant's Work against accident, storm and
any other hazard.
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-53-
EXHIBIT E
SIGN REQUIREMENTS
(San Diego/Morena Blvd. - Xxxxxxxxx Xxxxx)
1. Tenant shall pay for all signs, sign installation (including final
connection, transformers, and all other labor and materials) and maintenance.
2. Tenant shall obtain all necessary permits, prior to installing any signs.
3. There shall be no flashing or moving signs.
-54-
