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EXHIBIT 10.16
Southern California Chapter of the
Society of Industrial and Office Realtors, Inc.
Industrial Real Estate Lease
(Single-Tenant Facility)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of
the Lease referred to in this Article One explain and define the Basic Terms
and are to be read in conjunction with the Basic Terms.
Section 1.01. Date of Lease: August 5, 1988
Section 1.02. Landlord (include legal entity): CalMat Properties,
Inc., a California corporation
Address of Landlord: 0000 Xxx Xxxxxxxx Xxxx, Xxx Xxxxxxx,
XX 00000
Section 1.03. Tenant (include legal entity): Health Valley Natural
Foods, Inc., a California corporation
Address of Tenant: 000 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000
Section 1.04. Property: (include street address, approximate
square footage and description)
00000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxxxx 00000 (Los Angeles
County) consisting of an Industrial Building of approximately
155,000 Sq. Ft., on a land parcel of approximately 7.51 acres
Section 1.05. Lease Term: Five (5) years ------ months beginning
on October 1, 1988 or such other date as is specified in this Lease, and ending
on September 30, 1993
Section 1.06. Permitted Uses: (See Article Five) Offices and the
Sales Production, Packaging, Distribution and Retail Sale of Food Products
Section 1.07. Tenant's Guarantor: (If none, so state) Xxxxxx
Xxxxxxxx, Xx.
Section 1.08. Brokers: (See Article Fourteen) (If none, so state)
Landlord's Broker: Xxxxx/Xxxxxxx & Associates
Tenant's Broker: Xxxxx & Xxxxx Company
Section 1.09. Commission Payable to Landlord's Broker: (See
Article Fourteen) $ Per Agreement
Section 1.10. Initial Security Deposit: (See Section 3.03)
$47,233.00
Section 1.11. Vehicle Parking Spaces Allocated to Tenant: All
parking spaces
Section 1.12. Rent and Other Charges Payable by Tenant:
(a) BASE RENT: Forty-Seven Thousand Two Hundred
Thirty-Three ($47,233.00) per month for the first Thirty (30) months, as
provided in Section 3.01, and shall be increased on the first day of the
Thirty-First (31st) month(s) after the Commencement Date, either (i) as
provided in Section 3.02, but in no event shall such increase be greater than
five percent (5%) per annum.
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(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes
(See Section 4.02; (ii) Utilities (See Section 4.03); (iii) Insurance Premiums
(See Section 4.04); (iv) Impounds for Insurance Premiums and Property Taxes
(See Section 4.07); (v) Maintenance, Repairs and Alterations (See Article Six).
Section 1.13. Xxxxxxxx's Share of Profit on Assignment or Sublease:
(See Section 9.05)
Seventy-five percent (75%) of the Profit (the "Landlord's
Share")
Section 1.14. Riders: The following Riders are attached to and
made a part of this Lease. (If none, so state)
Additional Provisions Rider, Option to Extend Term, Guaranty
of Lease
ARTICLE TWO: LEASE TERM
Section 2.01. Lease of Property For Lease Term. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the
beginning or end of the Lease Term is changed under any provision of this
Lease. The "Commencement Date" shall be the date specified in Section 1.05
above for the beginning of the Lease Term, unless advanced or delayed under any
provision of this Lease.
Section 2.02. Delay in Commencement. Landlord shall not be liable
to Tenant if Landlord does not deliver possession of the Property to Tenant on
the Commencement Date. Landlord's non-delivery of the Property to Tenant on
that date shall not affect this Lease or the obligations of Tenant under this
Lease except that the Commencement Date shall be delayed until Landlord
delivers possession of the Property to Tenant and the Lease Term shall be
extended for a period equal to the delay in delivery of possession of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of a month. If Landlord does not deliver possession of the
Property to Tenant within sixty (60) days after the Commencement Date, Tenant
may elect to cancel this Lease by giving written notice to Landlord within ten
(10) days after the sixty (60) day period ends. If Tenant gives such notice,
the Lease shall be cancelled and neither Landlord nor Tenant shall have any
further obligations to the other. If Tenant does not give such notice,
Xxxxxx's right to cancel the Lease shall expire and the Lease Term shall
commence upon the delivery of possession of the Property to Tenant. If
delivery of possession of the Property to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure
to execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.
Section 2.03. Early Occupancy. If Tenant occupies the Property
prior to the Commencement Date, Xxxxxx's occupancy of the Property shall be
subject to all of the provisions of this Lease. Early occupancy of the
Property shall not advance the expiration date of this Lease. Tenant shall pay
Base Rent and all other charges specified in this Lease for the early occupancy
period.
Section 2.04. Holding Over. Tenant shall vacate the Property upon
the expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from Xxxxxx's delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Xxxxxx's occupancy of the Property shall
be a "month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Base Rent then in
effect shall be increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
Section 3.01. Time and Manner of Payment. Upon execution of this
Lease, Tenant shall pay Landlord the Base Rent in the amount stated in
Paragraph 1.12(a) above for the first month of the Lease Term. On the first
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day of the second month of the Lease Term and each month thereafter, Tenant
shall pay Landlord the Base Rent, in advance, without offset, deduction or
prior demand. The Base Rent shall be payable at Landlord's address or at such
other place as Landlord may designate in writing.
Section 3.02. Cost of Living Increases. The Base Rent shall be
increased on each date (the "Rental Adjustment Date") stated in Paragraph
1.12(a) above in accordance with the increase in the United States Department
of Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban
Consumers (all items for the geographical Statistical Area in which the
Property is located on the basis of 1982-1984 = 100) (the "Index") as follows:
(a) The Base Rent (the "Comparison Base Rent") in effect
immediately before each Rental Adjustment Date shall be increased by the
percentage that the Index has increased from the date (the "Comparison Date")
on which payment of the Comparison Base Rent began through the month in which
the applicable Rental Adjustment Date occurs. The Base Rent shall not be
reduced by reason of such computation. Landlord shall notify Tenant of each
increase by a written statement which shall include the Index for the
applicable Comparison Date, the Index for the applicable Rental Adjustment
Date, the percentage increase between those two indices, and the new Base Rent.
Any increase in the Base Rent provided for in this Section 3.02 shall be
subject to any minimum or maximum increase, if provided for in Paragraph
1.12(a).
(b) Tenant shall pay the new Base Rent from the applicable Rental
Adjustment Date until the next Rental Adjustment Date. Landlord's notice may
be given after the applicable Rental Adjustment Date of the increase, and
Tenant shall pay Landlord's accrued rental adjustment for the months elapsed
between the effective date of the increase and Landlord's notice of such
increase within ten (10) days after Landlord's notice. If the format or
components of the Index are materially changed after the Commencement Date,
Landlord shall substitute an index which is published by the Bureau of Labor
Statistics or similar agency and which is most nearly equivalent to the Index
in effect on the Commencement Date. The substitute index shall be used to
calculate the increase in the Base Rent unless Tenant objects to such index in
writing within fifteen (15) days after receipt of Landlord's notice. If Tenant
objects, Landlord and Tenant shall submit the selection of the substitute index
for binding arbitration in accordance with the rules and regulations of the
American Arbitration Association at its office closest to the Property. The
costs of arbitration shall be borne equally by Landlord and Tenant.
Section 3.03. Security Deposit; Increases.
(a) Upon the execution of this Lease, Tenant shall deposit with
the Landlord a cash Security Deposit in the amount set forth in Section 1.10
above. Landlord may apply all or part of the Security Deposit to any unpaid
rent or other charges due from Tenant or to cure any other defaults of Tenant.
If Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit to its full amount within ten (10) days after Landlord's
written request. Tenant's failure to do so shall be a material default under
this Lease. No interest shall be paid on the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts
and no trust relationship is created with respect to the Security Deposit.
(b) Each time the Base Rent is increased, Tenant shall deposit
additional funds with Landlord sufficient to increase the Security Deposit to
an amount which bears the same relationship to the adjusted Base Rent as the
initial Security Deposit bore to the initial Base Rent.
Section 3.04. Termination Advance Payments. Upon the termination of
this Lease under Article Seven (Damage or Destruction), Article Eight
(Condemnation) or any other termination not resulting from Tenant's default,
and after Tenant has vacated the Property in the manner required by this Lease,
Landlord shall refund or credit to Tenant (or Tenant's successor) the unused
portion of the Security Deposit, any advance rent or other advance payments
made by Tenant to Landlord, and any amounts paid for real property taxes and
other reserves which apply to any time periods after termination of the Lease.
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ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01. Additional Rent. All charges payable by Tenant other
than Base Rent are called "Additional Rent." Unless this Lease provides
otherwise, Tenant shall pay all Additional Rent then due with the next monthly
installment of Base Rent. The term "rent" shall mean Base Rent and Additional
Rent.
Section 4.02. Property Taxes.
(a) Real Property Taxes. Tenant shall pay all real property taxes
on the Property (including any fees, taxes or assessments against, or as a
result of, any tenant improvements installed on the Property by or for the
benefit of Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and
Section 4.07 below, such payment shall be made at least ten (10) days prior to
the delinquency date of the taxes. Within such ten (10) day period, Tenant
shall furnish Landlord with satisfactory evidence that the real property taxes
have been paid. Landlord shall reimburse Tenant for any real property taxes
paid by Tenant covering any period of time prior to or after the Lease Term.
If Tenant fails to pay the real property taxes when due, Landlord may pay the
taxes and Tenant shall reimburse Landlord for the amount of such tax payments
as Additional Rent.
(b) Definition of "Real Property Tax." "Real property tax" means:
(i) any fee, license fee, license tax, business license fee, commercial rental
tax, levy, charge, assessment, penalty or tax imposed by any taxing authority
against the Property; (ii) any tax on the Landlord's right to receive, or the
receipt of, rent or income from the Property or against Landlord's business of
leasing the Property; (iii) any tax or charge for fire protection, streets,
sidewalks, road maintenance, refuse or other services provided to the Property
by any governmental agency; (iv) any tax imposed upon this transaction or based
upon a reassessment of the Property due to a change of ownership, as defined by
applicable law, or other transfer of all or part of the Landlord's interest in
the Property; and (v) any charge or fee replacing any tax previously included
within the definition of real property tax. "Real property tax" does not,
however, include Landlord's federal or state income, franchise, inheritance or
estate taxes.
(c) Joint Assessment. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real property tax
payable by Tenant under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written
statement.
(d) Personal Property Taxes.
(i) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property
belonging to Xxxxxx. Tenant shall try to have personal property taxed
separately from the Property.
(ii) If any of Tenant's personal property is taxed with
the Property, Tenant shall pay Landlord the taxes for the personal
property within fifteen (15) days after Xxxxxx receives a written
statement from Landlord for such personal property taxes.
(e) Tenant's Right to Contest Taxes. Tenant may attempt to have
the assessed valuation of the Property reduced or may initiate proceedings to
contest the real property taxes. If required by law, Landlord shall join in
the proceedings brought by Xxxxxx. However, Tenant shall pay all costs of the
proceedings, including any costs or fees incurred by Landlord. Upon the final
determination of any proceeding or contest, Xxxxxx shall immediately pay the
real property taxes due, together with all costs, charges, interest and
penalties incidental to the proceedings. If Tenant does not pay the real
property taxes when due and contests such taxes, Tenant shall not be in default
under this Lease for nonpayment of such taxes if Tenant deposits funds with
Landlord or opens an interest-bearing account reasonably acceptable to Landlord
in the joint names of Landlord and Xxxxxx. The amount of such deposit shall be
sufficient to pay the real property taxes plus a reasonable estimate of the
interest, costs, charges and penalties which may accrue if Tenant's action is
unsuccessful, less any applicable tax impounds previously paid by Tenant to
Landlord. The deposit shall be applied to the real property taxes due, as
determined
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at such proceedings. The real property taxes shall be paid under protest from
such deposit if such payment under protest is necessary to prevent the Property
from being sold under a "tax sale" or similar enforcement proceeding.
Section 4.03. Utilities. Tenant shall pay, directly to the
appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Property. However, if any services or utilities are jointly
metered with other property, Landlord shall make a reasonable determination of
Tenant's proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after receipt
of Landlord's written statement.
Section 4.04. Insurance Policies.
(a) Liability Insurance. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known as
broad form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, property damage (including loss of use of
property) and personal injury arising out of the operation, use or occupancy of
the Property. Tenant shall name Landlord as an additional insured under such
policy. The initial amount of such insurance shall be One Million Dollars
($1,000,000.00) per occurrence and shall be subject to periodic increase based
upon inflation, increased liability awards, recommendation of Landlord's
professional insurance advisers and other relevant factors. The liability
insurance obtained by Tenant under this Paragraph 4.04(a) shall (i) be primary
and non-contributing; (ii) contain cross-liability endorsements; and (iii)
insure Landlord against Tenant's performance under Section 5.05, if the matters
giving rise to the indemnity under Section 5.05 result from the negligence of
Tenant. The amount and coverage of such insurance shall not limit Tenant's
liability nor relieve Tenant of any other obligation under this Lease.
Landlord may also obtain comprehensive public liability insurance in an amount
and with coverage determined by Landlord insuring Landlord against liability
arising out of ownership, operation, use or occupancy of the Property. The
policy obtained by Landlord shall not be contributory and shall not provide
primary insurance.
(b) Property and Rental Income Insurance. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall
contain an inflation Guard Endorsement and shall provide protection against all
perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, special extended perils (all risk), sprinkler
leakage and any other perils which Landlord deems reasonably necessary.
Landlord shall have the right to obtain flood and earthquake insurance if
required by any lender holding a security interest in the Property. Landlord
shall not obtain insurance for Tenant's fixtures or equipment or building
improvements installed by Tenant on the Property. During the Lease Term,
Landlord shall also maintain a rental income insurance policy, with loss
payable to Landlord, in an amount equal to one year's Base Rent, plus estimated
real property taxes and insurance premiums. Tenant shall be liable for the
payment of any deductible amount under Xxxxxxxx's or Tenant's insurance
policies maintained pursuant to this Section 4.04, in an amount not to exceed
Ten Thousand Dollars ($10,000). Tenant shall not do or permit anything to be
done which invalidates any such insurance policies.
(c) Payment of Premiums. Subject to Section 4.07, Tenant shall
pay all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained by Landlord or Tenant) within fifteen (15) days after
Xxxxxx's receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). If insurance policies maintained by Landlord
cover improvements on real property other than the Property, Landlord shall
deliver to Tenant a statement of the premium applicable to the Property showing
in reasonable detail how Tenant's share of the premium was computed. If the
Lease Term expires before the expiration of an insurance policy maintained by
Landlord, Tenant shall be liable for Tenant's prorated share of the insurance
premiums. Before the Commencement Date, Tenant shall deliver to Landlord a
copy of any policy of insurance which Tenant is required to maintain under this
Section 4.04. At least thirty (30) days prior to the expiration of any such
policy, Tenant shall deliver to Landlord a renewal of such policy. As an
alternative to providing a policy of insurance, Tenant shall have the right to
provide Landlord a certificate of insurance, executed by an authorized officer
of the insurance company, showing that the insurance which Tenant is required
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to maintain under this Section 4.04 is in full force and effect and containing
such other information which Landlord reasonably requires.
(d) General Insurance Provisions.
(i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which requires the
insurance carrier to give Landlord not less than thirty (30) days'
written notice prior to any cancellation or modification of such
coverage.
(ii) If Tenant fails to deliver any policy, certificate or
renewal to Landlord required under this Lease within the prescribed
time period or if any such policy is cancelled or modified during the
Lease Term without Landlord's consent, Landlord may obtain such
insurance, in which case Tenant shall reimburse Landlord for the cost
of such insurance within fifteen (15) days after receipt of a
statement that indicates the cost of such insurance.
(iii) Tenant shall maintain all insurance required under
this Lease with companies holding a "General Policy Rating" of A-12 or
better, as set forth in the most current issue of "Best Key Rating
Guide". Landlord and Tenant acknowledge the insurance markets are
rapidly changing and that insurance in the form and amounts described
in this Section 4.04 may not be available in the future. Tenant
acknowledges that the insurance described in this Section 4.04 is for
the primary benefit of Landlord. If at any time during the Lease
Term, Tenant is unable to maintain the insurance required under the
Lease, Tenant shall nevertheless maintain insurance coverage which is
customary and commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may change from time to
time. Xxxxxxxx makes no representation as to the adequacy of such
insurance to protect Xxxxxxxx's or Xxxxxx's interests. Therefore,
Tenant shall obtain any such additional property or liability
insurance which Tenant deems necessary to protect Landlord and Tenant.
(iv) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby waive any and all
rights of recovery against the other, or against the officers,
employees, agents or representatives of the other, for loss or damage
to its property or the property of others under its control, if such
loss or damage is covered by any insurance policy in force (whether or
not described in this Lease) at the time of such loss or damage. Upon
obtaining the required policies of insurance, Landlord and Tenant
shall give notice to the insurance carriers of this mutual waiver of
subrogation.
Section 4.05 Late Charges. Xxxxxx's failure to pay rent promptly
may cause Landlord to incur unanticipated costs. The exact amount of such
costs are impractical or extremely difficult to ascertain. Such costs may
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by any ground lease, mortgage or trust
deed encumbering the Property. Therefore, if Landlord does not receive any
rent payment within ten (10) days after it becomes due, Tenant shall pay
Landlord a late charge equal to ten percent (10%) of the overdue amount. The
parties agree that such late charge represents a fair and reasonable estimate
of the costs Landlord will incur by reason of such late payment.
Section 4.06 Interest on Past Due Obligations. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate
of fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this
Lease is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law.
Section 4.07. Impounds for Insurance Premiums and Real Property
Taxes. If requested by any ground lessor or lender to whom Landlord has
granted a security interest in the Property, or if Tenant is more than ten (10)
days late in the payment of rent more than once in any consecutive twelve (12)
month period, Tenant shall pay
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Landlord a sum equal to one-twelfth (1/12) of the annual real property taxes
and insurance premiums payable by Tenant under this Lease, together with each
payment of Base Rent. Landlord shall hold such payments in a non-interest
bearing impound account. If unknown, Landlord shall reasonably estimate the
amount of real property taxes and insurance premiums when due. Tenant shall
pay any deficiency of funds in the impound account to Landlord upon written
request. If Tenant defaults under this Lease, Landlord may apply any funds in
the impound account to any obligation then due under this Lease.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. Permitted Uses. Tenant may use the Property only for
the Permitted Uses set forth in Section 1.06 above.
Section 5.02. Manner of Use. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance or governmental regulation or order, which annoys or interferes with
the rights of other tenants of Landlord, or which constitutes a nuisance or
waste. Tenant shall obtain and pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act.
Section 5.03. Hazardous Materials. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state
or local laws or regulations, including, without limitation, petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing, inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to
be generated, produced, brought upon, used, stored, treated or disposed of in
or about the Property by Tenant, its agents, employees, contractors, sublessees
or invitees without the prior written consent of Landlord. Landlord shall be
entitled to take into account such other factors or facts as Landlord may
reasonably determine to be relevant in determining whether to grant or withhold
consent to Tenant's proposed activity with respect to Hazardous Materials. In
no event, however, shall Landlord be required to consent to the installation or
use of any storage tanks on the Property.
Section 5.04. Signs and Auctions. Tenant shall not place any signs
on the Property without Landlord's prior written consent. Tenant shall not
conduct or permit any auction or sheriff's sales at the Property.
Section 5.05. ILLEGIBLE shall indemnity Landlord against and hold
Landlord harmless from any and ILLEGIBLE (a) Tenant's use of the Property; (b)
the conduct of Tenant's business or ILLEGIBLE to be done in or about the
Property, including any contamination of the Property or any other property
resulting from the presence or use of Hazardous Material caused or permitted by
Tenant; (c) any breach or default in the performance of Tenant's obligations
under this Lease; (d) any misrepresentation or breach of warranty by Tenant
under this Lease; or (e) other acts or omissions of Tenant. Tenant shall
defend Landlord against any such cost, claim or liability at Xxxxxx's expense
with counsel reasonably acceptable to Landlord or, at Landlord's election,
Tenant shall reimburse Landlord for any legal fees or costs incurred by
Landlord in connection with any such claim. As a material part of the
consideration to Landlord, Xxxxxx assumes all risk of damage to property or
injury to persons in or about the Property arising from any cause, and Tenant
hereby waives all claims in respect thereof against Landlord, except for any
claim arising out of Landlord's gross negligence or willful misconduct. As
used in this Section, the term "Tenant" shall include Tenant's employees,
agents, contractors and invitees, if applicable.
Section 5.06 Landlord's Access. Landlord or its agents may
enter the Property at all reasonable times to show the Property to potential
buyers, investors or tenants or other parties; to do any other act or to
inspect
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and conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall
give Tenant prior notice of such entry, except in the case of an emergency.
Landlord may place customary "For Sale" or "For Lease" signs on the Property.
Section 5.07. Quiet Possession. If Tenant pays the rent and
complies with all other terms of this Lease, Tenant may occupy and enjoy the
Property for the full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. Existing Conditions. Tenant accepts the Property in
its condition as of the execution of the Lease, subject to all recorded
matters, laws, ordinances, and governmental regulations and orders. Except as
provided herein, Xxxxxx acknowledges that neither Xxxxxxxx nor any agent of
Landlord has made any representation as to the condition of the Property or the
suitability of the Property for Xxxxxx's intended use. Tenant represents and
warrants that Tenant has made its own inspection of and inquiry regarding the
condition of the Property and is not relying on any representations of Landlord
or any Broker with respect thereto. If Landlord or Landlord's Broker has
provided a Property Information Sheet or other Disclosure Statement regarding
the Property, a copy is attached as an exhibit to the Lease.
Section 6.02. Exemption of Landlord from Liability. Landlord shall
not be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from: (a)
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures or any other cause; (c) conditions
arising in or about the Property or from other sources or places; or (d) any
act or omission of any other tenant of Landlord. Landlord shall not be liable
for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Tenant. The provisions
of this Section 6.02 shall not, however, exempt Landlord from liability for
Landlord's gross negligence or willful misconduct.
Section 6.03. Landlord's Obligations. Subject to the provisions of
Article Seven (Damage or Destruction) and Article Eight (Condemnation),
Landlord shall have absolutely no responsibility to repair, maintain or replace
any portion of the Property at any time. Tenant waives the benefit of any
present or future law which might give Tenant the right to repair the Property
at Landlord's expense or to terminate the Lease due to the condition of the
Property.
Section 6.04. Tenant's Obligations.
(a) Except as provided in Article Seven (Damage or Destruction)
and Article Eight (Condemnation), Tenant shall keep all portions of the
Property (including structural, nonstructural, interior, exterior, and
landscaped areas, portions, systems and equipment) in good order, condition and
repair (including interior repainting and refinishing, as needed). If any
portion of the Property or any system or equipment in the Property which Tenant
is obligated to repair cannot be fully repaired or restored, Tenant shall
promptly replace such portion of the Property or system or equipment in the
Property, regardless of whether the benefit of such replacement extends beyond
the Lease Term; but if the benefit or useful life of such replacement extends
beyond the Lease Term (as such term may be extended by exercise of any
options), the useful life of such replacement shall be prorated over the
remaining portion of the Lease Term (as extended), and Tenant shall be liable
only for that portion of the cost which is applicable to the Lease Term (as
extended). Tenant shall maintain a preventive maintenance contract providing
for the regular inspection and maintenance of the heating and air conditioning
system by a licensed heating and air conditioning contractor. If any part of
the Property is damaged by any act or omission of Tenant, Tenant shall pay
Landlord the cost of repairing or replaced such damaged property, whether or
not Landlord would otherwise be obligated to pay the cost of maintaining or
repairing such property. It is the intention of Landlord and Tenant that
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at all times Tenant shall maintain the portions of the Property which Tenant is
obligated to maintain in an attractive, first-class and fully operative
condition.
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or
replace the Property as required by this Section 6.04, Landlord may, upon ten
(10) days' prior notice to Tenant (except that no notice shall be required in
the case of an emergency), enter the Property and perform such maintenance or
repair (including replacement, as needed) on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
Section 6.05. Alterations, Additions, and Improvements.
(a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written consent, except
for non-structural alterations which do not exceed Ten Thousand Dollars
($10,000) in cost cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part, Landlord may
require Tenant to provide demolition and/or lien and completion bonds in form
and amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord's written request. All alteration, additions,
and improvements shall be done in a good and workmanlike manner, in conformity
with all applicable laws and regulations, and by a contractor approved by
Landlord. Upon completion of any such work, Tenant shall provide Landlord with
"as built" plans, copies of all construction contracts, and proof of payment
for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Xxxxxxxx's consent to such work is required. Landlord
may elect to record and post notices of non-responsibility on the Property.
Section 6.06. Condition upon Termination. Upon the termination of
the Lease, Xxxxxx shall surrender the Property to Landlord, broom clean and in
the same condition as received except for ordinary wear and tear which Tenant
was not otherwise obligated to remedy under any provision of this Lease.
However, Tenant shall not be obligated to repair any damage which Landlord is
required to repair under Article Seven (Damage or Destruction). In addition,
Landlord may require Tenant to remove any alterations, additions or
improvements (whether or not made with Xxxxxxxx's consent) prior to the
expiration of the Lease and to restore the Property to its prior condition, all
at Tenant's expense. All alterations, additions and improvements which
Landlord has not required Tenant to remove shall become Landlord's property and
shall be surrendered to Landlord upon the expiration or earlier termination of
the Lease, except that Tenant may remove any of Tenant's machinery or equipment
which can be removed without material damage to the Property. Tenant shall
repair, at Tenant's expense, any damage to the Property caused by the removal
of any such machinery or equipment. In no event, however, shall Tenant remove
any of the following materials or equipment (which shall be deemed Landlord's
property) without Landlord's prior written consent: any power wiring or power
panels; lighting or lighting fixtures; wall coverings; drapes, blinds or other
window coverings; carpets or other floor coverings; heaters, air conditioners
or any other heating or air conditioning equipment; fencing or security gates;
or other similar building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. Partial Damage to Property.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable as
a result of such damage or less than fifty percent (50%) of Tenant's operations
are materially impaired) and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are
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sufficient to pay for the necessary repairs, this Lease shall remain in effect
and Landlord shall repair the damage as soon as reasonably possible. Landlord
may elect (but is not required) to repair any damage to Tenant's fixtures,
equipment, or improvements.
(b) If the insurance proceeds received by Landlord are not
sufficient to pay the entire cost of repair, or if the cause of the damage is
not covered by the insurance policies which Landlord maintains under Paragraph
4.04(b), Landlord may elect either to (i) repair the damage as soon as
reasonably possible, in which case this Lease shall remain in full force and
effect, or (ii) terminate this Lease as of the date the damage occurred.
Landlord shall notify Tenant within thirty (30) days after receipt of notice of
the occurrence of the damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage, Tenant shall pay
Landlord the "deductible amount" (if any) under Landlord's insurance policies
and, if the damage was due to an act or omission of Tenant, or Tenant's
employees, agents, contractors or invitees, the difference between the actual
cost of repair and any insurance proceeds received by Landlord. If Landlord
elects to terminate this Lease, Tenant may elect to continue this Lease in full
force and effect, in which case Tenant shall repair any damage to the Property
and any building in which the Property is located. Tenant shall pay the cost
of such repairs, except that upon satisfactory completion of such repairs,
Landlord shall deliver to Tenant any insurance proceeds received by Landlord
for the damage repaired by Tenant. Tenant shall give Landlord written notice
of such election within ten (10) days after receiving Landlord's termination
notice.
(c) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more than thirty (30)
days to repair, either Landlord or Tenant may elect to terminate this Lease as
of the date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Xxxxxx's notice to Landlord of the occurrence of the damage.
Section 7.02. Substantial or Total Destruction. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease
shall terminate as of the date the destruction occurred. Notwithstanding the
preceding sentence, if the Property can be rebuilt within six (6) months after
the date of the destruction, Landlord may elect to rebuild the Property at
Landlord's own expense, in which case this Lease shall remain in full force and
effect. Landlord shall notify Tenant of such election within thirty (30) days
after Xxxxxx's notice of the occurrence of total or substantial destruction.
If Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord.
Section 7.03. Temporary Reduction of Rent. If the Property is
destroyed or damaged and Landlord or Tenant repairs or restores the Property
pursuant to the provisions of this Article Seven, any rent payable during the
period of such damage, repair and/or restoration shall be reduced according to
the degree, if any, to which Xxxxxx's use of the Property is impaired.
However, the reduction shall not exceed the sum of one year's payment of Base
Rent, insurance premiums and real property taxes. Except for such possible
reduction in Base Rent, insurance premiums and real property taxes, Tenant
shall not be entitled to any compensation, reduction, or reimbursement from
Landlord as a result of any damage, destruction, repair, or restoration of or
to the Property.
Section 7.04. Waiver. Tenant waives the protection of any statute,
code or judicial decision which grants a tenant the right to terminate a lease
in the event of the substantial or total destruction of the leased property.
Tenant agrees that the provisions of Section 7.02 above shall govern the rights
and obligations of Landlord and Tenant in the event of any substantial or total
destruction to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on
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the date the condemning authority takes title or possession, whichever occurs
first. If more than twenty percent (20%) of the floor area of the building in
which the Property is located, or which is located on the Property, is taken,
either Landlord or Tenant may terminate this Lease as of the date the
condemning authority takes title or possession, by delivering written notice to
the other within ten (10) days after receipt of written notice of such taking
(or in the absence of such notice, within ten (10) days after the condemning
authority takes title or possession). If neither Landlord nor Tenant
terminates this Lease, this Lease shall remain in effect as to the portion of
the Property not taken, except that the Base Rent and Additional Rent shall be
reduced in proportion to the reduction in the floor area of the Property. Any
Condemnation award or payment shall be distributed in the following order: (a)
first, to any ground lessor, mortgagee or beneficiary under a deed of trust
encumbering the Property, the amount of its interest in the Property; (b)
second, to the Tenant, only the amount of any award specifically designated for
loss of or damage to Tenant's trade fixtures or removable personal property;
and (c) third, to Landlord, the remainder of such award, whether as
compensation for reduction in the value of the leasehold, the taking of thee
fee, or otherwise. If this Lease is not terminated, Landlord shall repair any
damage to the Property caused by the Condemnation, except that Landlord shall
not be obligated to repair any damage for which Tenant has been reimbursed by
the condemning authority. If the severance damages received by Landlord are
not sufficient to pay for such repair, Landlord shall have the right to either
terminate this Lease or make such repair at Landlord's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. Xxxxxxxx's Consent Required. No portion of the
Property or of Tenant's interest in this Lease may be acquired by any other
person or entity, whether by sale, assignment, mortgage, sublease, transfer,
operation of law, or act of Tenant, without Xxxxxxxx's prior written consent,
except as provided in Section 9.02 below. Landlord has the right to grant or
withhold its consent as provided in Section 9.05 below. Any attempted transfer
without consent shall be void and shall constitute a non-curable breach of this
Lease. If Tenant is a partnership, any cumulative transfer of more than twenty
percent (20%) of the partnership interests shall require Landlord's consent.
If Tenant is a corporation, any change in the ownership of a controlling
interest of the voting stock of the corporation shall require Landlord's
consent.
Section 9.02. Tenant Affiliate. Tenant may assign this Lease or
sublease the Property, without Landlord's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume in
writing all of Tenant's obligations under this Lease.
Section 9.03. No Release of Tenant. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release Tenant
or change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Xxxxxxxx's acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If Xxxxxx's
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee. Landlord may consent
to subsequent assignments or modifications of this Lease by Xxxxxx's
transferee, without notifying Tenant or obtaining its consent. Such action
shall not relieve Xxxxxx's liability under this Lease.
Section 9.04. Offer to Terminate. If Tenant desires to assign the
Lease or sublease the Property, Tenant shall have the right to offer, in
writing, to terminate the Lease as of a date specified in the offer. If
Landlord elects in writing to accept the offer to terminate within twenty (20)
days after notice of the offer, the Lease shall terminate as of the date
specified and all the terms and provisions of the Lease governing termination
shall apply. If Landlord does not so elect, the Lease shall continue in effect
until otherwise terminated and the provisions of Section 9.05 with respect to
any proposed transfer shall continue to apply.
Section 9.05. Landlord's Consent.
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(a) Xxxxxx's request for consent to any transfer described in
Section 9.01 shall set forth in writing the details of the proposed transfer,
including the name, business and financial condition of the prospective
transferee, financial details of the proposed transfer (e.g., the term of and
the rent and security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant. Landlord shall
have the right to withhold consent, if reasonable, or to grant consent, based
on the following factors: (i) the business of the proposed assignee or
subtenant and the proposed use of the Property; (ii) the net worth and
financial reputation of the proposed assignee or subtenant; (iii) Tenant's
compliance with all of its obligations under the Lease; and (iv) such other
factors as Landlord may reasonably deem relevant. If Landlord objects to a
proposed assignment solely because of the net worth and/or financial reputation
of the proposed assignee, Tenant may nonetheless sublease (but not assign), all
or a portion of the Property to the proposed transferee, but only on the other
terms of the proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under
the Lease the Landlord's Share (stated in Section 1.13) of the Profit
(defined below) on such transaction as and when received by Xxxxxx,
unless Xxxxxxxx gives written notice to Xxxxxx and the assignee or
subtenant that Landlord's Share shall be paid by the assignee or
subtenant to Landlord directly. The "Profit" means (A) all amounts
paid to Tenant for such assignment or sublease, including "key" money,
monthly rent in excess of the monthly rent payable under the Lease,
and all fees and other consideration paid for the assignment or
sublease, including fees under any collateral agreements, less (B)
costs and expenses directly incurred by Tenant in connection with the
execution and performance of such assignment or sublease for real
estate broker's commissions and costs of renovation or construction of
tenant improvements required under such assignment or sublease.
Tenant is entitled to recover such costs and expenses before Tenant is
obligated to pay the Landlord's Share to Landlord. The Profit in the
case of a sublease of less than all the Property is the rent allocable
to the subleased space as a percentage on a square footage basis.
(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of
the Property within thirty (30) days after the transaction
documentation is signed, and Landlord may inspect Tenant's books and
records to verify the accuracy of such statement. On written request,
Tenant shall promptly furnish to Landlord copies of all the
transaction documentation, all of which shall be certified by Tenant
to be complete, true and correct. Xxxxxxxx's receipt of Landlord's
Share shall not be a consent to any further assignment or subletting.
The breach of Tenant's obligations under this Paragraph 9.05(b) shall
be a material default of the Lease.
Section 9.06. No Merger. No merger shall result from Xxxxxx's
sublease of the Property under this Article Nine, Xxxxxx's surrender of this
Lease or the termination of this Lease in any other manner. In any such event,
Landlord may terminate any or all subtenancies or succeed to the interest of
Tenant as sublandlord under any or all subtenances.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. Covenants and Conditions. Xxxxxx's performance of
each of Tenant's obligations under this Lease is a condition as well as a
covenant. Xxxxxx's right to continue in possession of the Property is
conditioned upon such performance. Time is of the essence in the performance
of all covenants and conditions.
Section 10.02. Defaults. Tenant shall be in material default under
this Lease:
(a) If Xxxxxx abandons the Property or if Xxxxxx's vacation of the
Property results in the cancellation of any insurance described in Section
4.04;
(b) If Tenant fails to pay rent or any other charge when due;
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(c) If Tenant fails to perform any of Tenant's non-monetary
obligations under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30) days are required
to complete such performance, Tenant shall not be in default if Tenant
commences such performance within the thirty (30)- day period and thereafter
diligently pursues its completion. However, Landlord shall not be required to
give such notice if Xxxxxx's failure to perform constitutes a non-curable
breach of this Lease. The notice required by this Paragraph is intended to
satisfy any and all notice requirements imposed by law on Landlord and is not
in addition to any such requirement.
(d)(i) If Tenant makes a general assignment or general arrangement
for the benefit of creditors; (ii) if a petition for adjudication of bankruptcy
or for reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant's assets located at the
Property or of Tenant's interest in this Lease and possession is not restored
to Tenant within thirty (30) days; or (iv) if substantially all of Tenant's
assets located at the Property or of Tenant's interest in this Lease is
subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent jurisdiction
determines that any of the acts described in this subparagraph (d) is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession) and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the excess, if any, of the rent (or any other consideration) paid in connection
with such assignment or sublease over the rent payable by Tenant under this
Lease.
(e) If any guarantor of the Lease revokes or otherwise terminates,
or purports to revoke or otherwise terminate, any guaranty of all or any
portion of Tenant's obligations under the Lease. Unless otherwise expressly
provided, no guaranty of the Lease is revocable.
Section 10.03. Remedies on the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Xxxxxx's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination; (ii) the worth at the time
of the award of the amount by which the unpaid Base Rent, Additional Rent and
other charges which Xxxxxxxx would have earned after termination until the time
of the award exceeds the amount of such rental loss that Tenant proves Landlord
could have reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid Base Rent, Additional Rent and other charges which
Xxxxxx would have paid for the balance of the Lease term after the time of
award exceeds the amount of such rental loss that Tenant proves Landlord could
have reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Xxxxxx's failure to
perform its obligations under the Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, any
costs or expenses Landlord incurs in maintaining or preserving the Property
after such default, the cost of recovering possession of the Property, expenses
of reletting, including necessary renovation or alteration of the Property,
Landlord's reasonable attorney's fees incurred in connection therewith, and any
real estate commission paid or payable. As used in subparts (i) and (ii)
above, the "worth at the time of the award" is computed by allowing interest on
unpaid amounts at the rate of fifteen percent (15%) per annum, or such lesser
amount as may then be the maximum lawful rate. As used in subpart (iii) above,
the "worth at the time of the award" is computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1%). If Tenant has abandoned the Property,
Landlord shall have the option of (i) retaking possession of the Property and
recovering from Tenant the amount specified in this Paragraph 10.03(a), or (ii)
proceeding under Paragraph 10.03(b);
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(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant has abandoned the
Property. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent as it becomes due:
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Property is
located.
Section 10.04. Repayment of "Free" Rent. If this Lease provides for
a postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated
Rent". Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Xxxxxx has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Property in the physical condition
required by this Lease. Tenant acknowledges that its right to receive credit
for the Abated Rent is absolutely conditioned upon Tenant's full, faithful and
punctual performance of its obligations under this Lease. If Tenant defaults
and does not cure within any applicable grace period, the Abated Rent shall
immediately become due and payable in full and this Lease shall be enforced as
if there were no such rent abatement or other rent concession. In such case
Abated Rent shall be calculated based on the full initial rent payable under
this Lease.
Section 10.05. Automatic Termination. Notwithstanding any other
term or provision hereof to the contrary, the Lease shall terminate on the
occurrence of any act which affirms the Landlord's intention to terminate the
Lease as provided in Section 10.03 hereof, including the filing of an unlawful
detainer action against Tenant. On such termination, Xxxxxxxx's damages for
default shall include all costs and fees, including reasonable attorneys' fees
that Landlord incurs in connection with the filing, commencement, pursuing
and/or defending of any action in any bankruptcy court or other court with
respect to the Lease; the obtaining of relief from any stay in bankruptcy
restraining any action to evict Tenant; or the pursuing of any action with
respect to Landlord's right to possession of the Property. All such damages
suffered (apart from Base Rent and other rent payable hereunder) shall
constitute pecuniary damages which must be reimbursed to Landlord prior to
assumption of the Lease by Tenant or any successor to Xxxxxx in any bankruptcy
or other proceeding.
Section 10.06. Cumulative Remedies. Xxxxxxxx's exercise of any
right or remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. Subordination. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease. Tenant
shall execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Xxxxxx's right to quiet possession of the Property during the Lease Term shall
not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior to or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
Section 11.02. Attornment. If Xxxxxxxx's interest in the Property
is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee,
or purchaser at a foreclosure sale. Tenant shall attorn to the transferee of
or successor to Xxxxxxxx's interest in the Property and recognize such
transferee or successor as Landlord under this Lease. Tenant waives the
protection of any statute or rule of law which gives or purports to
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give Tenant any right to terminate this Lease or surrender possession of the
Property upon the transfer of Landlord's interest.
Section 11.03. Signing of Documents. Tenant shall sign and deliver
any instrument or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so. If Tenant fails to do so
within ten (10) days after written request, Tenant hereby makes, constitutes
and irrevocably appoints Landlord, or any transferee or successor of Landlord,
the attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
Section 11.04. Estoppel Certificates.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement certifying: (i) that
none of the terms or provisions of this Lease have been changed (or if they
have been changed, stating how they have been changed); (ii) that this Lease
has not been cancelled or terminated; (iii) the last date of payment of the
Base Rent and other charges and the time period covered by such payment; (iv)
that Landlord is not in default under this Lease (or, if Landlord is claimed to
be in default, stating why); and (v) such other representations or information
with respect to Tenant or the Lease as Landlord may reasonably request or which
any prospective purchaser or encumbrancer of the Property may require. Tenant
shall deliver such statement to Landlord within ten (10) days after Xxxxxxxx's
request. Landlord may give any such statement by Tenant to any prospective
purchaser or encumbrancer of the Property. Such purchaser or encumbrancer may
rely conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within
such ten (10)-day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts: (i)
that the terms and provisions of this Lease have not been changed except as
otherwise represented by Landlord; (ii) that this Lease has not been cancelled
or terminated except as otherwise represented by Landlord; (iii) that not more
than one month's Base Rent or other charges have been paid in advance; and (iv)
that Landlord is not in default under the Lease. In such event, Tenant shall
be estopped from denying the truth of such facts.
Section 11.05. Tenant's Financial Condition. Within ten (10) days
after written request from Landlord, Tenant shall deliver to Landlord such
financial statements as Landlord reasonably requires to verify the net worth of
Tenant or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant
shall deliver to any lender designated by Landlord any financial statements
required by such lender to facilitate the financing or refinancing of the
Property. Tenant represents and warrants to Landlord that each such financial
statement is a true and accurate statement as of the date of such statement.
All financial statements shall be confidential and shall be used only for the
purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. Legal Proceedings. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any costs
or expenses that the Nondefaulting Party incurs in connection with any breach
or default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award to
the party in whose favor a judgment is entered, a reasonable sum as attorneys'
fees and costs. The losing party in such action shall pay such attorneys' fees
and costs. Tenant shall also indemnify Landlord against and hold Landlord
harmless from all costs, expenses, demands and liability Landlord may incur if
Landlord becomes or is made a party to any claim or action (a) instituted by
Tenant against any third party, or by any third party against Tenant, or by or
against any person holding any interest under or using the Property by license
of or agreement with Tenant; (b) for foreclosure of any lien for labor or
material furnished to or for Tenant or such other person; (c) otherwise arising
out of or resulting from any act or transaction of Tenant or such other person;
or (d) necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of
15
(Single-Tenant Net Form)
16
the United States Code, as amended. Tenant shall defend Landlord against any
such claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.
Section 12.02. Landlord's Consent. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with Xxxxxx's request for
Xxxxxxxx's consent under Article Nine (Assignment and Subletting), or in
connection with any other act which Xxxxxx proposes to do and which requires
Xxxxxxxx's consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. Non-Discrimination. Tenant promises, and it is a
condition to the continuance of this Lease, that there will be no
discrimination against, or segregation of, any person or group of persons on
the basis of race, color, sex, creed, national origin or ancestry in the
leasing, subleasing, transferring, occupancy, tenure or use of the Property or
any portion thereof.
Section 13.02. Landlord's Liability; Certain Duties.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or the leasehold
estate under a ground lease of the Property at the time in question. Each
Landlord is obligated to perform the obligations of Landlord under this Lease
only during the time such Landlord owns such interest or title. Any Landlord
who transfers its title or interest is relieved of all liability with respect
to the obligations of Landlord under this Lease to be performed on or after the
date of transfer. However, each Landlord shall deliver to its transferee all
funds that Tenant previously paid if such funds have not yet been applied under
the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure.
Landlord shall not be in default if such cure is commenced within such thirty
(30)-day period and thereafter diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary,
the liability of Landlord for the performance of its duties and obligations
under this Lease is limited to Landlord's interest in the Property, and neither
the Landlord nor its partners, shareholders, officers or other principals shall
have any personal liability under this Lease.
Section 13.03. Severability. A determination by a court of
competent jurisdiction that any provision of this Lease or any part thereof is
illegal or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.
Section 13.04. Interpretation. The captions of the Articles or
Sections of this Lease are to assist the parties in reading this Lease and are
not a part of the terms or provisions of this Lease. Whenever required by the
context of this Lease, the singular shall include the plural and the plural
shall include the singular. The masculine, feminine and neuter genders shall
each include the other. In any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Property with
Xxxxxx's expressed or implied permission.
Section 13.05. Incorporation of Prior Agreements; Modifications.
This Lease is the only agreement between the parties pertaining to the lease of
the Property and no other agreements are effective. All amendments to this
Lease shall be in writing and signed by all parties. Any other attempted
amendment shall be void.
16
(Single-Tenant Net Form)
17
Section 13.06. Notices. All notices required or permitted under
this Lease shall be in writing and shall be personally delivered or sent by
certified mail, return receipt requested, postage prepaid. Notices to Tenant
shall be delivered to the address specified in Section 1.03 above, except that
upon Xxxxxx's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to
the other party.
Section 13.07. Waivers. All waivers must be in writing and signed
by the waiving party. Landlord's failure to enforce any provision of this
Lease or its acceptance of rent shall not be a waiver and shall not prevent
Landlord from enforcing that provision or any other provision of this Lease in
the future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord, Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.
Section 13.08. No Recordation. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or
Tenant may require that a "Short Form" memorandum of this Lease executed by
both parties be recorded. The party requiring such recording shall pay all
transfer taxes and recording fees.
Section 13.09. Binding Effect; Choice of Law. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord
or Tenant. However, Landlord shall have no obligation to Xxxxxx's successor
unless the rights or interests of Xxxxxx's successor are acquired in accordance
with the terms of this Lease. The laws of the state in which the Property is
located shall govern this Lease.
Section 13.10. Corporate Authority; Partnership Authority. If
Tenant is a corporation, each person signing this Lease on behalf of Tenant
represents and warrants that he has full authority to do so and that this Lease
binds the corporation. Within thirty (30) days after this Lease is signed,
Tenant shall deliver to Landlord a certified copy of a resolution of Tenant's
Board of Directors authorizing the execution of this Lease or other evidence of
such authority reasonably acceptable to Landlord. If Tenant is a partnership,
each person or entity signing this Lease for Tenant represents and warrants
that he or it is a general partner of the partnership, that he or it has full
authority to sign for the partnership and that this Lease binds the partnership
and all general partners of the partnership. Tenant shall give written notice
to Landlord of any general partner's withdrawal or addition. Within thirty
(30) days after this Lease is signed, Xxxxxx shall deliver to Landlord a copy
of Xxxxxx's recorded statement of partnership or certificate of limited
partnership.
Section 13.11. Joint and Several Liability. All parties signing
this Lease as Tenant shall be jointly and severally liable for all obligations
of Tenant.
Section 13.12. Force Majeure. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Xxxxxxxx's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
Section 13.13. Execution of Lease. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Xxxxxxxx's delivery of this
Lease to Tenant shall not be deemed to be an offer to lease and shall not be
binding upon either party until executed and delivered by both parties.
Section 13.14. Survival. All representations and warranties of
Landlord and Tenant shall survive the termination of this Lease.
17
(Single-Tenant Net Form)
18
ARTICLE FOURTEEN: BROKERS
Section 14.01. Broker's Fee. When this Lease is signed by and
delivered to both Landlord and Tenant, Landlord shall pay a real estate
commission to Landlord's Broker amend in Section 1.08 above, if any, as
provided in the written agreement between Landlord and Xxxxxxxx's Broker, or
the sum stated in Section 1.09 above for services rendered to Landlord by
Landlord's Broker in this transaction. Landlord shall pay Landlord's Broker a
commission if Tenant exercises any option to extend the Lease Term or to buy
the Property, or any similar option or right which Landlord may grant to
Tenant, or if Landlord's Broker is the procuring cause of any other lease or
sale entered into between Landlord and Tenant covering the Property. Such
commission shall be the amount set forth in Landlord's Broker's commission
schedule in effect as of the execution of this Lease. If a Tenant's Broker is
named in Section 1.08 above, Xxxxxxxx's Broker shall pay an appropriate portion
of its commission to Tenant's Broker if so provided in any agreement between
Xxxxxxxx's Broker and Xxxxxx's Broker. Nothing contained in this Lease shall
impose any obligation on Landlord to pay a commission or fee to any party other
than Xxxxxxxx's Broker.
Section 14.02. Protection of Brokers. If Landlord sells the
Property, or assigns Landlord's interest in this Lease, the buyer or assignee
shall, by accepting such conveyance of the Property or assignment of the Lease,
be conclusively deemed to have agreed to make all payments to Landlord's Broker
thereafter required of Landlord under this Article Fourteen. Xxxxxxxx's Broker
shall have the right to bring a legal action to enforce or declare rights under
this provision. The prevailing party in such action shall be entitled to
reasonable attorneys' fees to be paid by the losing party. Such attorneys'
fees shall be fixed by the court in such action. This Paragraph is included in
this Lease for the benefit of Landlord's Broker.
Section 14.03. Broker's Disclosure of Agency. Xxxxxxxx's Broker
hereby discloses to Landlord and Tenant and Landlord and Tenant hereby consent
to Xxxxxxxx's Broker acting in this transaction as the agent of (check one):
[x] Landlord exclusively; or
[ ] both Landlord and Tenant.
Section 14.04. No Other Brokers. Tenant represents and warrants to
Landlord that the brokers named in Section 1.08 above are the only agents,
brokers, finders or other parties with whom Xxxxxx has dealt who are or may be
entitled to any commission or fee with respect to this Lease or the Property.
ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED
HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED,
PLEASE DRAW A LINE THROUGH THE SPACE BELOW.
18
(Single-Tenant Net Form)
19
Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all
Riders which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on 9/9/88, 19__ CalMat Properties Company, a California
at Irwindale, CA Corporation
----------------------------------------
By: /S/ X. X. XXXXX
------------------------------------
X. X. Xxxxx
Its: Vice President
-----------------------------------
By:
-----------------------------------
Its:
----------------------------------
"TENANT"
Signed on Sept. 9, 1988 Health Valley Natural Foods, Inc., a
at Irwindale, Calif. California Corporation
----------------------------------------
By: /S/ XXXXXX XXXXXXXX, XX.
-----------------------------------
Its: President
----------------------------------
By:
-----------------------------------
Its:
----------------------------------
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT
WITH A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER
PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING
THE POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE
DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND
OFFICE REALTORS, INC. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE REALTORS,
INC., ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR
EMPLOYEES OR AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD
RETAIN LEGAL COUNSEL TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE
ADVICE OF SUCH LEGAL COUNSEL.
19
(Single-Tenant Net Form)
20
OPTION TO EXTEND TERM
LEASE RIDER
This Rider is attached to and made part of that certain Lease (the
"Lease") dated August 5, 1988 between CalMat Properties Co., as Landlord, and
Health Valley Natural Foods, Inc., as Tenant, covering the Property commonly
known as 00000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxxxx (the "Property"). The
terms used herein shall have the same definitions as set forth in the Lease.
The provisions of this Rider shall supersede any inconsistent or conflicting
provisions of the Lease.
A. Option(s) to Extend Term.
1. Grant of Option.
Landlord hereby grants to Tenant Two (2) option(s) (the "Option(s)")
to extend the Lease Term for additional term(s) of Five (5) years each (the
"Extension(s)"), on the same terms and conditions as set forth in the Lease,
but at an increased rent as set forth below. Each Option shall be exercised
only by written notice delivered to Landlord at least one hundred twenty (120)
days before the expiration of the Lease Term or the preceding Extension of the
Lease Term, respectively. If Tenant fails to deliver Landlord written notice
of the exercise of an Option within the prescribed time period, such Option and
any succeeding Options shall lapse, and there shall be no further right to
extend the Lease Term. Each Option shall be exercisable by Tenant on the
express conditions that (a) at the time of the exercise, and at all times prior
to the commencement of such Extension, Tenant shall not be in default under any
of the provisions of the Lease and (b) Tenant has not been ten (10) or more
days late in the payment of rent more than a total of three (3) times during
the Lease Term and all preceding Extensions.
2. Personal Options.
The Option(s) are personal to the Tenant named in Section 1.03 of the
Lease or any Tenant's Affiliate described in Section 9.02 of the Lease. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest under the Lease to an entity other than a Tenant Affiliate prior
to the exercise of an Option (whether with or without Landlord's consent), such
Option and any succeeding Options shall lapse. If Tenant subleases any portion
of the Property or assigns or otherwise transfers any interest of Tenant under
the Lease to an entity other than a Tenant Affiliate after the exercise of the
Option but prior to the commencement of the respective Extension (whether with
or without Landlord's consent), such Option and any succeeding Options shall
lapse and the Lease Term shall expire as if such Option were not exercised. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest of Tenant under the Lease in accordance with Article 9 of the
Lease after the exercise of an Option and after the commencement of the
Extension related to such Option, then the term of the Lease shall expire upon
the expiration of the Extension during which such sublease or transfer occurred
and only the succeeding Options shall lapse.
B. Calculation of Rent.
The Base Rent during the Extension(s) shall be determined by one or a
combination of the following methods (INDICATE METHOD UPON EXECUTION OF THE
LEASE):
[x] 1. Cost of Living Adjustment (Section B.1 below)
Rental Adjustment Date(s): The first day of the first
month(s) of the first Extension(s) of the Lease Term.
(Single-Tenant Net Form)
21
[x] 2. Fair Rental Value Adjustment (Section B.2, below) as
determined by appraiser [x] or broker [ ]. Rental Adjustment
Date(s): The first day of the first month(s) of the second
Extension(s) of the Lease Term.
[ ] 3. Fixed Adjustment
The Base Rent shall be increased to the following amounts (the
"Adjusted Base Rent(s)") on the dates (the "Rental Adjustment
Date(s)") set forth below:
Rental Adjustment Date(s) Adjusted Base Rent(s)
------------------------- ---------------------
$
------------------------------------------- ----------------------------------------------------
$
------------------------------------------- ----------------------------------------------------
$
------------------------------------------- ----------------------------------------------------
$
------------------------------------------- ----------------------------------------------------
1. Cost of Living Adjustment.
The Base Rent shall be increased on the dates specified in Section
B.1. above (the "Rental Adjustment Date(s)") by reference to the Index defined
in Section 3.02 of the Lease or the substitute index described in Paragraph
3.02(b) of the Lease, as follows: The Base Rent in effect immediately prior to
the applicable Rental Adjustment Date (the "Comparison Base Rent") shall be
increased by the percentage that the index has increased from the month in
which the payment of the Comparison Base Rent commenced through the month in
which the applicable Rental Adjustment Date occurs. In no event shall the Base
Rent be reduced by reason of such computation.
2. Fair Rental value Adjustment.
The Base Rent shall be increased on the date(s) specified in section
B.2. above (the "Rental Adjustment Date(s)") to the "fair rental value" of the
Property, determined in the following manner:
(a) Not later than one hundred (100) days prior to any applicable
Rental Adjustment Date, Landlord and Tenant shall meet in an effort to
negotiate, in good faith, the fair rental value of the Property as of such
Rental Adjustment Date. If Landlord and Tenant have not agreed upon the fair
rental value of the Property at least ninety (90) days prior to the applicable
Rental Adjustment Date, the fair rental value shall be determined by appraisal,
by one or more appraisers or brokers (herein called "Appraiser(s)"), as
provided in Section B.2(b), below. If appraiser(s) are used, such appraiser(s)
shall have at least five (5) years' experience in the appraisal of
commercial/industrial real property in the area in which the Property is
located and shall be members of professional organizations such as MAI or
equivalent. If broker(s) are used, such broker(s) shall have at least five (5)
years' experience in the sales and leasing of commercial/industrial real
property in the area in which the Property is located and shall be members of
professional organizations such as the Society of Industrial and Office
Realtors or equivalent.
(b) If Landlord and Tenant are not able to agree upon the fair
rental value of the Property within the prescribed time period, then Landlord
and Tenant shall attempt to agree in good faith upon a single Appraiser not
later than seventy-five (75) days prior to the applicable Rental Adjustment
Date. If Landlord and Tenant are unable to agree upon a single Appraiser
within such time period, then Landlord and Tenant shall each appoint one
Appraiser not later than sixty-five (65) days prior to the applicable Rental
Adjustment Date. Within ten (10) days thereafter, the two (2) appointed
Appraisers shall appoint a third (3rd) Appraiser. If either Landlord or Tenant
fails to appoint its Appraisers within the prescribed time period, the single
Appraiser appointed shall determine the fair
2
(Single-Tenant Net Form)
22
rental value of the Property. If both parties fail to appoint Appraisers
within the prescribed time periods, then the first Appraiser thereafter
selected by a party shall determine the fair rental value of the Property.
Each party shall bear the cost of its own Appraiser and the parties shall share
equally the cost of the single or third Appraiser, if applicable.
(c) For the purposes of such appraisal, the term "fair market
value" shall mean the price that a ready and willing tenant would pay, as of
the applicable Rental Adjustment date, as monthly rent to a ready and willing
landlord of property comparable to the Property if such property were exposed
for lease on the open market for a reasonable period of time and taking into
account all of the purposes for which such property may be used. If a single
Appraiser is chosen, then such Appraiser shall determine the fair rental value
of the Property. Otherwise, the fair rental value of the Property shall be the
arithmetic average of the two (2) of the three (3) appraisals which are
closest in amount, and the third appraisal shall be disregarded. In no event,
however, shall the Base Rent be reduced by reason of such computation.
Landlord and Tenant shall instruct the Appraiser(s) to complete the
determination of the fair rental value not later than thirty (30) days prior to
the applicable Rental Adjustment Date. If the fair rental value is not
determined prior to the applicable rental Adjustment Date, then Tenant shall
continue to pay to Landlord the Base Rent applicable to the Property
immediately prior to such Extension, until the fair rental value is determined.
When the fair rental value of the Property is determined Landlord shall deliver
notice thereof to Tenant, and Tenant shall pay to Landlord, within ten (10)
days after receipt of such notice, the difference between the Base Rent
actually paid by Tenant to Landlord and the new Base Rent determined hereunder.
3
(Single-Tenant Net Form)
23
ADDITIONAL PROVISIONS
LEASE RIDER
This Rider is attached to and made a part of that certain Lease dated August 5,
1988 between CalMat Properties Company, as Landlord, and Health Valley Natural
Foods, Inc., as Tenant, covering the Property commonly known as 00000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx (the "Lease"). The terms used in this Rider
shall have the same definitions as set forth in the Lease. The provisions of
this Rider shall prevail over any inconsistent or conflicting provisions of the
Lease.
A. ARTICLE SIX. Sections 6.03 and 6.04 are hereby partially modified to
state that subject to the provisions of Article Seven (Damage or
Destruction) and Article Eight (Condemnation), and except for damage
caused by any act or omission of Tenant, or Tenant's employees,
agents, contractors or invitees, Landlord shall keep the foundation,
roof and structural portions of exterior walls of the improvements on
the Property in good order, condition and repair. However, Landlord
shall not be obligated to maintain or repair windows, doors, plate
glass or the surfaces of walls. Landlord shall not be obligated to
make any repairs under this provision until a reasonable time after
receipt of a written notice from Tenant of the need for such repairs.
Tenant waives the benefit of any present or future law which might
give Tenant the right to repair the Property at Landlord's expense or
to terminate the Lease because of the condition of the Property. It
is understood that the full provisions of Section 6.02 of Article Six
apply to this partial modification.
B. Certification of Roof: Landlord shall have provided Tenant, prior to
Lease execution a certification of the exterior roof, including roof
membrane, showing such roof areas to be in a good state of repair.
C. Landlords Preparation of Property: Landlord shall, at Landlord's
expense, do the following construction and repair items ("the work")
on or about the Property. Landlord shall commence the work
immediately upon execution of the Lease agreement and complete the
work as soon as possible thereafter. Xxxxxxxx's commencement of the
work shall be conditioned upon Tenant providing Landlord with all
information as stated below:
(1) Painting: Paint all walls in the office areas.
(2) Carpeting: Remove and replace carpet in the office areas
where presently carpeted. Xxxxxxxx's expense for new carpet
and installation thereof shall be no more than $12 per square
yard.
(3) Floor Sealant: Apply floor sealant to approximately 70,000
sq. ft. of the Warehouse area (area to be sealed as designated
by Tenant). Expense to Landlord shall not exceed $26,000,00
with any excess to be paid by Tenant prior to such
application. Sealant specification to be as defined in
Exhibit B attached hereto and thereby made a part hereof.
Xxxxxxxx's obligation hereunder is conditioned upon Tenant
providing Landlord with a floor plan showing the floor area to
be sealed.
(4) Fire Protection Items: Landlord's obligation to install the
following work is conditioned upon Tenant providing Landlord
plans and/or specifications of the work as approved by the Los
Angeles County fire Department and/or any other governmental
authority having jurisdiction thereof.
(a) Hose Racks: Landlord to install and connect to water
system piping to positions in the building (as
designated by Tenant) where Tenant shall install hose
and hose racks at Tenant's expense. Such expense to
Landlord shall exceed $10,000,000.00 with any excess
to be paid by Xxxxxx.
(b) Draft Curtains: Landlord to install Draft Curtains
within the building where designated by Tenant. Such
expense to Landlord shall not exceed $20,500.00 with
any excess to be paid by Tenant.
D. Improvements By Tenant: It is understood that Tenant, at its expense,
intends to make certain improvements on or about the Property in
accordance with certain plans and specifications ("the work")
24
attached hereto as Exhibit "C" and incorporated herein by this
reference. Landlord hereby approves the plans and specifications
attached hereto as Exhibit "C" with such approval subject to the
provisions (other than Landlord's approval) of Section 6.05 and 6.06
of this Lease agreement, excepting Tenant shall not be obligated to
remove floor drains.
E. Improvements by Tenant - Landlords Financial Participation: Landlord
hereby agrees to contribute up to $300,000.00 toward the improvements
stated in D, above under the following terms and conditions:
(1) Any contribution by Landlord shall be amortized over the
initial five (5) year Lease term at an interest rate of 12%
with such sum to be paid monthly as additional rent.
(2) Xxxxxxxx agrees to pay Tenant Xxxxxxxx's contribution upon all
the following occurrences:
(a) The completion of the work.
(b) Tenant provides Landlord with copies of all lien
releases related to the work.
(c) Tenant provides Landlord with all invoices related to
the work.
(3) The full amount of Landlord contribution to be determined
prior to commencement date of Lease.
F. Right of First Refusal to Purchase:
(1) Landlord shall not, at any time prior to the expiration of the
term of this Lease, sell the Property without first giving
written notice thereof to Tenant, which notice is hereinafter
referred to as "Notice of Sale".
(2) The Notice of Sale shall include the exact and complete terms
of the proposed sale and shall have attached thereto a
photocopy of a bona fide offer and counteroffer, any, duly
executed by both Landlord and the prospective purchaser.
(3) For a period of Seven (7) days after receipt by Tenant of the
Notice of Sale, Tenant shall have the right to give written
notice to Landlord of Tenant's exercise of Tenant's right to
purchase the Property on the same terms, price and conditions
as set forth in the Notice of Sale. In the event that
Landlord does not receive written notice of Xxxxxx's exercise
of the right herein granted within said seven (7) day period,
there shall be a conclusive presumption that Xxxxxx has
elected not to exercise Xxxxxx's right hereunder, and Landlord
may sell the Property on the same terms set forth in the
Notice of Sale.
(4) In the event that Tenant declines to exercise its right of
first refusal after receipt of the Notice of Sale, and,
thereafter the sale is not consummated then Xxxxxx's right of
first refusal shall be reinstated. Should such sale be
consummated, Xxxxxx's rights hereunder shall be void and of no
further force or effect.
(5) Tenant's rights hereunder shall not apply, and shall be
subordinate, to any sale of the Property by Landlord that
includes any other of its real Properties in a group sale, or
a sale of the Landlord Corporate entity.
25
G. Tax Increase Protection: During the initial five (5) year Lease Term,
Xxxxxx's payments to Landlord associated with all real property taxes
concerning the Property shall not be increased due to any sale by
Landlord to a third party, causing a reassessment of said Property's
assessed valuation. Such protection for Tenant shall not apply to any
Lease Extension Options which Tenant may exercise.
/s/ [Illegible] /s/ [Illegible]
----------------------------------- -----------------------------------
Initials Initials
