LEASE
LEASE
In
consideration of the rents and covenants hereinafter set forth, Landlord
leases
to Tenant, and Tenant leases from Landlord, the Premises upon the terms and
conditions of this Lease ("Lease") entered into and dated _April 25, 2008
("Execution Date").
ARTICLE
1
FUNDAMENTAL
LEASE PROVISIONS
1.1
Landlord: XXXXXXX
X. XXXXXXX AND XXXXXX X. XXXXXXX AND XXXXXX DRIVE LIMITED PARTNERSHIP, an
Arkansas limited partnership
1.2
Tenant: UKARMA
CORPORATION, a Nevada corporation
1.3
Tenant's Trade Name: XFLOWSION
1.4
Premises:That
premises containing approximately six thousand three hundred sixty (6,360)
square feet of floor area on the first floor and second floor of the Building
located at 00000 Xxxxxxx Xxxxxxxxx, xx xxx Xxxx xx Xxx Xxxxxxx, Xxxxxx xx
Xxx
Xxxxxxx, Xxxxx xx Xxxxxxxxxx. The Premises is shown in that approximate
location crosshatched on Exhibit A. The
Premises are within a building (the “Building”) located on a part of a larger
property which is referred to herein as the “Project”. The approximate
boundaries of the Project are shown on Exhibit A.
1.5
Initial Term: Commencing
on the
date Landlord delivers possession of the Premises to Tenant, and expiring
on the
Expiration Date.
1.5A
Option to Extend: Provided
that (i) Tenant is not in default beyond all applicable cure periods, or
if so,
that Landlord has not waived such default (only by an express written waiver
executed by Landlord) and, (ii) Tenant is open and operating for business
for
the permitted use, both at the time of exercise and on the commencement of
the
option term, Landlord hereby grants to Tenant the right and option to extend
and
renew this Lease upon the same terms and conditions for two (2) additional
successive periods of five (5) years, (each an “Option Period" or collectively
"Option Periods”), each following the expiration of the Initial Term or
preceding Option Period, as the case may be that has been previously exercised.
Tenant shall exercise each of the two (2) Option Periods by giving Landlord
written notice of extension, not sooner than twelve (12) months but at least
six
(6) months prior to the date of expiration of the Initial Term as previously
extended. The foregoing options are personal to UKarma, Corporation;
accordingly, Tenant may only exercise an option to extend if it has not assigned
this Lease or sublet the Premises prior to the time of exercise.
1.6
Target Delivery
Date:
Upon
Lease execution.
1.7
Expiration
Date: The
last
day of the month containing the fifth (5th)
anniversary of the Minimum Rent Commencement Date.
1.8
Rent Commencement Date:
The
earlier of (i) August 23, 2008 or (ii) the date Tenant first opens for business
in the Premises. Notwithstanding the foregoing, Tenant shall have no obligation
to pay the Minimum Annual Rent until the earlier of (i) September 22, 2008
or
(ii) the date Tenant first opens for business from the Premises (“Minimum Rent
Commencement Date”), although Xxxxxx’s obligation to pay all Additional Rent
shall commence on the Rent Commencement Date.
1.9
Minimum Annual Rent:
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Months
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Monthly
Minimum Annual Rent
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Minimum
Rent
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Commencement
Date
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-12th
full calendar
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Page
1
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Month
following the
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$22,000.00
per month
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Execution
Date
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Each
subsequent
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Twelve
month
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period
of the
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Initial
Term:
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Monthly
Minimum Annual Rent shall be increased on each anniversary of the
Execution Date to an amount equal to the Monthly Minimum Annual
Rent
payable for the immediately preceding month, multiplied by 1.03.
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First
Option Period:
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For
the first twelve (12) months of the First Option Period, Monthly
Minimum
Annual Rent shall be increased effective the first day of the first
Option
Period to the greater of (i) the amount obtained by multiplying
the
Monthly Minimum Annual Rent payable for the immediately preceding
month by
1.03; and (ii) the Market Rent as hereinafter defined. For each
subsequent
twelve (12) month period of the First Option Period, Monthly Minimum
Annual Rent shall be increased on each anniversary of the Minimum
Rent
Commencement Date to an amount equal to the Monthly Minimum Annual
Rent
payable for the immediately preceding month, multiplied by
1.03.
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Second
Option
Period:
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For
the first twelve (12) months of the Second Option Period, Monthly
Minimum
Annual Rent shall be increased effective the first day of the Second
Option Period to the greater of (i) the amount obtained by multiplying
the
Monthly Minimum Annual Rent payable for the immediately preceding
month by
1.03, or (ii) the Market Rent as hereinafter defined. For each
subsequent
twelve (12) month period of the Second Option Period, Monthly Minimum
Annual Rent shall be increased on each anniversary of the Minimum
Rent
Commencement Date to an amount equal to the Monthly Minimum Annual
Rent
payable for the immediately preceding month, multiplied by
1.03.
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Subject
to the rights of the parties to negotiate the Market Rent as provided below,
the
term "Market Rent" shall mean the going market rental as of the date of the
commencement of the applicable Option Period following the expiration of
Term
(or preceding Option Period, as the case may be) for similar commercial space
in
the area where the Premises are located, taking into consideration the
location
of the Premises on Ventura Blvd. between Xxxxxxxxx Blvd. and Laurel Cyn Blvd.,
size, condition, building amenities, permitted uses
(including general retail, restaurant and health club uses), and improvements
(but excluding any alterations or personal property of Tenant installed in
the
Premises by Tenant at Tenant's expense) for a tenant proposing to sign a
lease
with a term equal to the term of the Option Period, but valuing the Premises
as
if it were a commercial space with parking sufficient to meet a parking ratio
of
10 spaces per 1,000 square feet of floor area.
(x) Negotiation».
Commencing from the date that the Option Notice respecting the applicable
Option
Period is delivered to Landlord, and continuing thereafter for thirty (30)
days
(the "Negotiation
Period"),
the
parties shall negotiate in good faith the Market Rent. If the parties are
unable
to agree on the Market Rent prior to the expiration of such Negotiation Period,
then the matter shall be submitted into arbitration pursuant to the terms
and
conditions set forth below.
(y) Arbitration.
(A) Two
Brokers. Within fifteen (15) days after the expiration of the
Negotiation Period, each party, at its own cost and by giving written notice
to
the other party, shall appoint a real estate broker, with at least five (5)
years' full-time commercial real estate brokerage experience in the area
where
the Premises are located, to appraise and determine the Market Rent. If,
in the
time provided, only one (1) party shall give written notice of appointment
of a
broker, then the single broker appointed shall determine the Market Rent.
If two
(2) brokers are appointed by the parties, then the two (2) brokers shall
each
independently, and without consultation, prepare an appraisal of the Market
Rent
within thirty (30) days after their appointment. Each broker shall seal its
respective appraisal after completion. After both appraisals are completed,
the
resulting appraisals of the Market Rent shall be opened and compared. Copies
of
both appraisals shall be concurrently delivered to Tenant and Landlord. If
the
higher of the appraisals is not more than one hundred five percent (105%)
of the
lower appraisal, then the Market Rent shall be the average of the two (2)
appraisals.
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2
(B) Three
Brokers»
.
If
the
higher of the two appraisals is more than one hundred five percent (105%)
of the
lower appraisal, then within ten (10) days after the date the appraisals
are
compared, the two (2) brokers selected by the parties shall appoint a third
similarly qualified broker. If the two (2) brokers fail to so select a third
broker, then a third similarly qualified broker shall be appointed at the
request of either Landlord or Tenant by the then Presiding Judge of the Superior
Court of the State of California for the County of Los Angeles. The two (2)
brokers shall each then submit his or her independent appraisal in simple
letter
form to the third broker stating his or her determination of the Market Rent
(which determination may not be changed from that which was set forth in
such
broker's sealed appraisal). The sole responsibility of the third broker shall
be
to determine which of the determinations made by the first two (2) brokers
is
most accurate. The third broker shall have no right to propose a middle ground
or any modification of either of the determinations made by the first two
(2)
brokers. The Market Rent shall be determined by the selection made by the
third
broker from the determinations submitted by the first two (2)
brokers.
(C) Costs»
.
Each
party shall pay the fees and expenses of its own broker, and fifty percent
(50%)
of the fees and expenses of, and the cost of appointing, the third broker.
(D) Criteria»
.
Subject
to the criteria set forth in subparagraph (C) above, the Market Rent shall
be
determined using the "market comparison approach." The brokers shall use
their
best efforts to fairly and reasonably appraise and determine the Market Rent
in
accordance with the terms of this Lease, and shall not act as advocates for
either Landlord or Tenant.
(E) Limitation
on Broker's Authority»
.
The
brokers shall have no power to modify the provisions of this Lease, and their
sole function shall be to determine the Market Rent in accordance with this
Section 1.9 of this Lease.
1.10
Percentage Rent:
None.
1.11
Addresses for Notices:
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To
Landlord:
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c/o
Xxxxxxx Xxxxxxx
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00000
Xxxxxxxxx Xxxx, #0000
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Calabasas,
CA 91302
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To
Tenant:
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At
the address of the Premises
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Section
1.1 1.12
Permitted Use: The
Premises shall be used for upscale Yoga/fitness instruction and for the
incidental sale of related yoga accessories, equipment, clothing and hot
and
cold snacks, beverages and other food products (provided no cooking which
generates grease, smoke or reasonably objectionable food odors (which reasonably
objectionable food odors can be experienced outside the Premises) shall be
done
on-Premises). In no event shall any portion of the Premises be used as a
restaurant whose Primary Use is the sale of “Mexican, South American, or
Southwestern Style food.” The terms “Mexican, South American, or Southwestern
Style” shall include, without limitation, tortillas, tacos, burritos,
quesadillas, fajitas, tortas, enchiladas, nachos, guacamole, frijoles, churros,
tortilla chips, and/or any other food items commonly known to be Mexican
(including food from regional subdivisions thereof such as Xxxx Xxxx, Baja,
Yucatan, etc.) in origin and/or style; and/or any food which has a
Mexican-related appellation, including without limitation “Fresh Mex”, “Tex-Mex”
and “Southwestern. “Primary Use” shall mean five (5%) percent or more of the Net
Sales or menu items of the business.
Page
3
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1.13
Security Deposit:
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$22,000.00
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1.14
Prepaid Rent:
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$22,000.00
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1.15
Guarantor:
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Xxxx
Xxxxxx
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1.16
Broker(s):
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Xxx
Xxxxx, LS Realty Group (for Tenant)
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1.17
Signage:
Tenant
shall have the right to erect on the front elevation of the exterior of the
building located on the Premises an internally illuminated, channel letter
prototypical sign of such dimensions as Tenant may desire, subject to Tenant
obtaining governmental approval therefor and the approval of Landlord therefor,
which approval shall not be unreasonably withheld. Tenant also shall have
the
right to erect its signage on the current rooftop sign located on the Premises
an internally illuminated, channel letter prototypical sign of such dimensions
as Tenant may desire, subject to Tenant obtaining governmental approval therefor
and the approval of Landlord therefor, which approval shall not be unreasonably
withheld. Tenant acknowledges that the current rooftop sign is grandfathered
in
under existing codes and ordinances, and Tenant shall take no action which
would
cause such rooftop sign to lose such grandfathered status.
The
provisions of this Article 1 summarize certain terms of this Lease which
are
more fully described in the balance of this Lease. In the event of a conflict
between the provisions of Article 1 and the balance of this Lease, the
provisions of the balance of this Lease shall control. Capitalized terms
shall
have the meanings set forth in Exhibit B or otherwise defined in the body
of
this Lease.
ARTICLE
2. PREMISES
2.1 Condition.
Tenant
acknowledges that it is in possession of the Premises and that Xxxxxx accepts
the Premises in its "AS-IS, WHERE IS" condition and in the state of repair
as
the Premises are in as of the date Landlord delivers the Premises to Tenant.
2.2 Delivery.
Landlord shall deliver possession of the Premises, and Tenant shall accept
delivery of possession of the Premises, on the Execution Date. In event that
Landlord does not deliver possession of the Premises to Tenant within ninety
(90) days after the Execution Date for any reason, either party may at any
time
thereafter (but prior to delivery of possession) terminate this Lease without
liability by delivering written notice to the other party with no further
obligations thereafter accruing from Landlord to Tenant.
2.3 Intentionally
Omitted.
2.4 Right
to Enter.
Upon
providing the Tenant with reasonable prior notice (other than in the event
of an
emergency), Landlord and/or Landlord's authorized representatives shall have
the
right to enter the Premises at all reasonable times for the purpose of showing
the Premises to prospective insurers, Governmental Authorities, purchasers
or
lenders, and potential occupants. Tenant additionally shall permit Landlord,
or
Xxxxxxxx's authorized representatives, to enter the Premises at all times
during
usual business hours to inspect the Premises, to perform Landlord's duties
under
this Lease, and to perform any work therein that Landlord may deem
necessary to prevent waste or deterioration of the Premises or Project, or
in
connection with the expansion, reduction, remodeling, maintenance, repair
or
renovation of any portion of the Project.
ARTICLE
3. LEASE
TERM
3.1 Duration.
This
Lease shall become fully effective and binding as of the Execution Date.
The
"Lease Term" means that period commencing on the Execution Date and continuing
through the Expiration Date, unless sooner terminated as provided in this
Lease
or by law.
3.2 Intentionally
Omitted.
3.3 Surrender
of the Premises.
At the
Expiration Date or earlier termination of this Lease, subject to Section
15.5
below, Tenant shall remove all of Tenant's personal property from the Premises,
repair any damage caused by such removal, and surrender possession of the
Premises to Landlord in broom clean condition and good state of repair, except
ordinary wear and tear, and damage or destruction covered by Article 18.
If
Xxxxxx does not surrender possession of the Premises to Landlord as set forth
herein, Tenant shall be in default and shall be deemed a holdover tenant
at
sufferance on the same terms and conditions except that Tenant Minimum Annual
Rent shall be two times the Minimum Annual Rent payable during the last month
of
the Lease Term.
Page
4
ARTICLE 4. RENT
4.1 Rent
Commencement Date.
Tenant's
obligation to pay Minimum Annual Rent (as defined in Section 1.9) shall commence
upon the Minimum Rent Commencement Date and Tenant’s obligation to pay
Additional Rent (as defined in Exhibit B) shall commence upon the Rent
Commencement Date (as defined in Section 1.8).
4.2 Minimum
Annual Rent.
Tenant
shall pay each monthly installment of Minimum Annual Rent during the Lease
Term,
in advance, on the first day of each calendar month, without setoff, deduction,
prior notice or demand. If the Rent Commencement Date is other than the first
day of a calendar month, then the Minimum Annual Rent for such fractional
month
shall be computed on a daily basis in an amount equal to one-thirtieth (1/30th)
of the monthly installment of Minimum Annual Rent.
4.3 Intentionally
Omitted.
4.4 Additional
Rent.
Tenant
shall pay all Additional Rent (as defined in Exhibit B) without setoff,
deduction or demand in the amounts and in the manner set forth in this Lease.
Tenant's payments of Additional Rent pursuant to Articles 5, 10 and 11 shall
be
payable in the following manner:
(a)
Estimate.
Commencing with the Rent Commencement Date and continuing throughout the
balance
of the Lease Term, Tenant shall pay Landlord, on the first day of each calendar
month, those amounts Landlord reasonably estimates to be Tenant's share of
the
aforementioned Additional Rent. Landlord may adjust in Landlord's reasonable
business judgment such monthly estimates at the end of any calendar quarter
on
the basis of Landlord's experience and reasonably anticipated
costs.
(b)
Reconciliation.
Following the end of each calendar year or property tax installment period,
as
applicable, Landlord shall furnish Tenant a statement covering the billing
period showing the total of the applicable Additional Rent expenses, Tenant's
share of such expenses for such billing period, and the total prior estimated
payments made by Tenant with respect to such period. If Xxxxxx's share of
the
Additional Rent expenses exceeds the total of Tenant's payments with respect
thereto, Tenant shall pay Landlord the deficiency within ten (10) days after
receipt of such statement. If said payments exceed Xxxxxx's share of the
specified Additional Rent expenses, such excess shall be offset against the
payments next due Landlord for the same Additional Rent expense. If Tenant
does
not raise objections to such statement within ninety (90) days after the
date
Tenant receives the same, such statement shall be conclusive and binding
upon
Tenant.
4.5 Failure
to Pay Rent When Due.
There
shall be an administrative fee as detailed below for any charge or payment
due,
including Minimum Rent and Additional Rent, not timely received at the office
designated as the location of the Landlord to which payments are to be
made.
FEE
SCHEDULE:
a.
Five
Percent (5%) of the unpaid amount if not received within ten (10) days of
due
date for each payment;
b.
An
additional Five Percent (5%) of the unpaid amount if not received within
thirty
(30) days of due date for each payment.
Page
5
The
above
fees are necessitated by the additional administrative and legal expenses
incurred in the handling, processing and collection of charges not received
when
due. Payment of any administrative fees incurred due to late payment shall
not
negate the fact that the Lease was in default due to the payments not having
been received when due. Additionally, it is understood that the above fees
relate to administrative expenses incurred prior to any litigation and are
not
in any manner an offset against legal fees to be borne by Tenant in the event
of
litigation of any kind and for any reason. Administrative fees shall be subject
to any limit imposed by Federal or State law.
4.6 Address
for Payments.
Tenant
shall pay all rent and other payments due Landlord at Landlord’s notice address
or at such place as Landlord may from time to time designate in writing.
If no
address is specified in this Section 4.6, all rent and other payments due
Landlord shall be paid to the address specified in Section 1.11 above for
notices sent to Landlord.
ARTICLE
5. TAX
AND INSURANCE EXPENSES
5.1
Taxes. Commencing
on the Execution Date, Xxxxxx agrees to pay to Landlord Xxxxxx’s share of
the amount of all Taxes levied for any reason on the Project and the
improvements thereon) and costs associated with challenging such Taxes which
Landlord may incur.
Tenant's
share of Taxes shall be that portion of Taxes on the Project equal to the
proportion thereof which the Floor Area of the Premises bears to the Floor
Area
of all the areas used and occupied by the tenants of the Project provided
an
equitable adjustment shall be made for buildings which are only partially
completed on the date such Taxes become a lien. It is expressly understood
that
the Premises shall not be separately assessed.
Tenant
shall pay before delinquency all Taxes (including sales and use taxes),
assessments, license fees and public charges levied, assessed or imposed
upon
Xxxxxx's business operation as well as upon Xxxxxx's merchandise, Improvements
and personal property. In the event such items of Xxxxxx's property are assessed
with property of Landlord, Landlord shall allocate such assessment between
Landlord and Tenant so that Tenant shall pay only Tenant's equitable
portion.
Taxes
means all taxes, assessments (special or otherwise), water, trash, sewer
or
other utility fees, fees related to environmental laws and regulations, and
any
other governmental or quasi-governmental levies, fees or charges of any kind,
nature or sort whatsoever, ordinary and extraordinary, foreseen or unforeseen,
and substitutes therefor related in any manner to the Project or any part
thereof, equipment used in connection therewith, rents or other amounts
receivable therefrom, sales therefrom, any use thereof, any facility located
therein or used in conjunction therewith, or to the business or activity
of
owning, leasing, managing or operating a Project, however same shall be labeled
and whether such Taxes be measured by way of rents, sales, use, usage, square
footage, traffic counts, car counts, parking usage, value or cost of land
or
improvements, sale or transfer price or measured in any other way. Taxes
shall
not include Landlord’s
income
or franchise taxes or any inheritance, estate, transfer, succession, gift,
franchise, corporation, income or profit tax or capital levy.
5.2 Insurance. Commencing
on the Execution Date, Xxxxxx agrees to pay Landlord Xxxxxx's share of the
cost
of all casualty or liability insurance required or elected to be maintained
by
Landlord on the buildings within the Project (Insurance). Tenant's share
of
Insurance shall be equal to the ratio of the Floor Area to the Premises to
the
Floor Area of all buildings covered by such Insurance.
ARTICLE
6. USE.
6.1 Use. Tenant
shall operate the entire Premises only under Xxxxxx's Trade Name and shall
use
the entire Premises for the Permitted Use, and under no other trade name
and for
no other use or purpose. Tenant shall at all times comply with all Legal
Requirements applicable to its use and/or occupancy of the Premises. Tenant
shall not use the Premises, or permit or fail to prevent the Premises to
be
used, (a) for any purpose or in any manner that violates any Legal Requirement
or which is a public or private nuisance, (b) for the sale or display of
pornography, nudity, graphic violence, drug paraphernalia, or any goods and/or
services that, in the sole and absolute discretion of Landlord, are inconsistent
with the image of a community or family-oriented Project, (c) as a massage
parlor, adult bookstore or second-hand store, or (d) to conduct an auction,
distress, fire, bankruptcy or going-out-of-business sale or similar sales.
Tenant shall not cause or permit any waste to occur in the Premises. Tenant
shall comply with all exclusive use rights of other tenants in the Project
of
which Landlord shall provide Tenant written notice.
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6
6.2 Hazardous
Materials.
(a) In
General. Landlord
represents and warrants to Tenant that, to its actual knowledge as of the
Execution Date the Premises, the Common Areas, and the Project are free from
Hazardous Materials. Tenant shall not use, generate, manufacture, produce,
store, transport, treat, dispose or permit the escape or release on, under,
about or from the Premises, or any part thereof, of any Hazardous Materials.
If
Tenant's Permitted Use requires the use and/or storage of any Hazardous
Materials on, under or about the Premises, Tenant shall fully and promptly
comply with all Hazardous Materials Laws at all times during the Lease Term,
and
at the expiration or earlier termination of the Lease Term, Tenant shall
remove
and dispose of all Hazardous Materials affecting the Premises and the Project
resulting from the use or occupancy thereof by Tenant or Tenant's agents,
employees, suppliers, contractors, subtenants, successors and assigns.
(b) Indemnity.
Tenant
shall indemnify, protect, defend and hold Landlord (and Xxxxxxxx's partners,
joint venturers, shareholders, members, affiliates and property managers,
and
their respective officers, directors, employees and agents) and Landlord's
Mortgagee harmless from and against any and all Claims arising out of, in
connection with, or directly or indirectly arising out of the use, generation,
manufacture, production, storage, treatment, release, disposal or transportation
of Hazardous Materials by Tenant, or any successor, assignee or sublessee
of
Tenant, or their respective agents, contractors, or employees, on, under,
about
or from the Premises or the Project. Any defense of Landlord pursuant to
the
foregoing indemnity shall be by counsel reasonably acceptable to Landlord.
Tenant's obligations hereunder shall survive the termination or expiration
of
this Lease- Landlord shall indemnify, protect, defend and hold Tenant (and
Tenant's partners, joint venturers, shareholders, members, affiliates and
property managers, and their respective officers, directors, employees and
agents) harmless from and against any and all Claims arising out of, in
connection with, or directly or indirectly arising out of the use, generation,
manufacture, production, storage, treatment, release, disposal or transportation
of Hazardous Materials by Landlord or its agents, contractors, or employees,
on,
under, about or from the Premises or the Project. Any defense of Tenant pursuant
to the foregoing indemnity shall be by counsel reasonably acceptable to Tenant.
Landlord's obligations hereunder shall survive the termination or expiration
of
this Lease.
(c) Reporting.
Each
party shall notify the other party in writing, immediately after any of the
following: (i) the party has knowledge, or has reasonable cause to believe,
that
any Hazardous Material(s) have been released, discharged or located on, under
or
about the Premises or the Project, or (ii) the party receives any warning,
notice of inspection, notice of violation or alleged violation, or the party
receives notice or knowledge of any proceeding, investigation, order or
enforcement action, under any Hazardous Materials Law regarding the Premises
or
the Project.
ARTICLE
7. TENANT'S
OPENING COVENANT
7.1 Opening
Covenant. Tenant
shall open for business for one (1) day in the entire Premises, fully stocked
and staffed for the Permitted Use and under Tenant’s Trade Name, within one
hundred twenty (120) days after the Delivery Date. Thereafter, if Tenant
shall
discontinue operating for business in substantially all of the Premises for
the
Permitted Use and under the Permitted Trade Name, and such discontinuance
continues for more than sixty (60) consecutive days, then Landlord shall
have
the right, at any time while such discontinuance continues, to terminate
this
Lease upon thirty (30) days prior written notice to Tenant. If Landlord so
terminates this Lease, then Tenant shall reimburse Landlord for the unamortized
portion of the Tenant Construction Allowance (amortized on a straight line
basis
over 10 years). Tenant shall not be considered to have “discontinued operations”
during any temporary disruptions in Tenant’s operations due to casualty,
condemnation, force majeure, repairs, or up to thirty (30) days in the aggregate
for making alterations.
7.2 INTENTIONALLY
OMITTED.
ARTICLE
8. IMPROVEMENTS
8.1 Intentionally
Omitted.
8.2 Improvements.
Tenant
may, from time to time after prior written notice to Landlord, make such
Improvements to Tenant's storefront and store interior as Tenant may desire,
at
Tenant's own expense and in accordance with plans and specifications approved
by
Landlord. Xxxxxxxx’s
approval shall not be unreasonably withheld, except that Xxxxxxxx’s
approval shall be in Landlord’s
sole
and absolute discretion for Improvements to the mechanical or electrical
systems, to the exterior walls or roof of the Premises, or to any storefront;
and any penetration into or through the roof, ceiling, demising walls, floor
or
structural elements of the Premises. Tenant shall reimburse Landlord for
all
costs and expenses (including, without limitation, any architect or engineer
fees) incurred by Landlord in approving or disapproving Tenant's plans for
Improvements. In the event such Improvements involve or require penetration
of
the roof of the Premises or involve or require utility lines, systems or
facilities Landlord may require that such portion of the Improvements be
performed by Landlord’s
contractor at Tenant’s
own
expense.
Page
7
8.3
Mechanics' Liens.
Tenant
shall pay or cause to be paid all costs of labor, services and materials
supplied in the prosecution of any work done in the Premises, and Tenant
shall
keep the Premises free and clear of all mechanics' liens and other liens
arising
out of any work done for Tenant or persons claiming under Tenant. Tenant
shall
promptly notify Landlord of any Claim or lien filed against the Premises
or the
commencement of any action affecting the title thereto, in which event Landlord
may (but shall not be obligated to) discharge said lien by (i) paying the
claimant an amount sufficient to settle and discharge the claim,
(ii) posting a release bond, or (iii) taking such action as Landlord
shall deem appropriate in Landlord's sole and absolute discretion, and Tenant
shall pay to Landlord on demand all costs incurred by Landlord in settling
and
discharging such lien (including reasonable attorney fees and bond
premiums).
Landlord
or Landlord's representatives shall have the right to go upon and inspect
the
Premises at all reasonable times upon reasonable advance notice, and shall
have
the right to post and keep posted thereon notices of non-responsibility or
such
other notices that Landlord may deem to be proper for the protection of
Xxxxxxxx's interest in the Premises. Tenant shall give Landlord at least
fifteen
(15) days advance written notice of Xxxxxx's intention to commence any work
that
might result in a lien described in this Article.
8.4 Title
to Improvements.
All
Improvements not removed by Tenant prior to the expiration or earlier
termination of this Lease shall become the property of Landlord upon expiration
or earlier termination of this Lease. Xxxxxxxx's reversionary interest in
the
Improvements shall at all times be prior and superior to any interest of
any
lender of Tenant, or of any other entity claiming any purchase money lien
or
other interest in the Improvements.
ARTICLE
9. REPAIRS;
MAINTENANCE
9.1 Tenant's
Obligations.
Tenant
agrees at all times from and after the Execution Date, at Xxxxxx's own cost
and
expense, to repair, maintain in good and tenantable condition and replace,
as
necessary, the Premises and every part thereof whether installed by Landlord
or
Tenant (except portions of the Premises expressly required to be maintained
by
Landlord pursuant to Section 9.2 of this Lease), including, without limitation,
exterior and interior glass; Tenant's Interior Demising Partitions; mechanical
and utility systems exclusively serving the Premises (including the heating
and
air conditioning system); signs; locks and closing devices, window sashes,
casements and frames; doors and door frames; floor coverings; drop ceilings;
any
grease traps and piping; the storefront; and all items of repair, maintenance,
alteration, improvement or reconstruction as may be required by any Legal
Requirement or the insurance underwriter(s) for the Project. All replacements
made by Tenant shall be of like size, kind and quality to the items replaced
as
such item or items existed when originally installed and shall be subject
to
Landlord's prior approval. Tenant, at its expense, shall install and maintain
fire extinguishers and other fire protection devices as may be required from
time to time by any agency having jurisdiction thereof or by
Landlord’s
insurance carrier.
9.2 Landlord's
Obligations.
Landlord
shall repair, maintain in good and tenantable condition and replace, as
necessary, the roof, exterior walls and structural parts of the Premises
(including the structural floor), and all Utility installations serving the
Premises on a nonexclusive basis (except where the appropriate utility company
performs such duties). In no event shall Landlord be required to make repairs
necessitated by the negligence or willful acts of Tenant or anyone claiming
under Tenant, because of the failure of Tenant to perform or observe any
term or
condition of this Lease, or because of Improvements made by Tenant. Landlord
shall be under no obligation to repair, replace or maintain the Premises
or the
mechanical equipment exclusively serving the Premises at any time, except
as
this Lease expressly provides. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall not in any way be liable to Tenant
for
failure to make repairs as herein specifically required of Landlord unless
Xxxxxx has previously notified Landlord of the need for such repairs and
Landlord has failed to commence and complete said repairs within a reasonable
period following receipt of Tenant's notification. The definition of Common
Area
Expenses includes all work performed by Landlord in accordance with this
Section, except as otherwise expressly provided for in this Lease.
9.3 Performance
of Work by Xxxxxxxx.
If
Tenant refuses or neglects to repair, replace, or maintain the Premises,
or any
part thereof, in a manner reasonably satisfactory to Landlord, Landlord shall
have the right but not the obligation, upon giving Tenant prior notice of
Landlord's election to do so (except for an emergency in which event no such
notice shall be required), to enter the Premises and make such repairs or
perform such maintenance or replacements on behalf of and for the account
of
Tenant. No exercise by Landlord of any rights herein reserved shall entitle
Tenant to any compensation, damages or abatement of rent from Landlord for
any
injury or inconvenience occasioned thereby. If Landlord performs any maintenance
or other obligations that Tenant is required to perform under the terms of
this
Lease, Tenant shall upon demand pay to Landlord the costs and expenses incurred
by Landlord's performance on behalf of Tenant (or shall deposit with Landlord
the anticipated amounts thereof), plus Landlord's Administrative
Fee.
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ARTICLE
10. UTILITIES,
AIR CONDITIONING, AND TRASH REMOVAL
10.1 Utilities.
Tenant
shall arrange with utility companies for the provision of such Utilities
to the
Premises and shall pay all utility hookup fees. Tenant shall pay for all
utilities consumed by the Premises directly to the utility company before
such
payment shall become delinquent. With respect to the air conditioning system,
Tenant shall contract with a qualified air conditioning service company approved
by Landlord for the monthly maintenance and the repair and replacement, as
necessary, of the air conditioning system.
10.2 Trash
Removal. Commencing
on the Execution Date, Tenant shall cause all trash, garbage and solid waste
generated by the Premises to be placed in a dumpster to be furnished by
Landlord, and cause the same to be removed on a regular basis so that trash,
garbage and solid waste does not accumulate within any portion of the Premises.
Landlord shall contract for the dumpster and trash removal and shall promptly
pay all costs in connection therewith, and such costs shall be included in
Common Area Expenses (prior to the Rent Commencement Date Tenant shall reimburse
Landlord directly for such costs).
ARTICLE
11. COMMON
AREA
11.1 Tenant's
License to Use.
Landlord
grants to Tenant and its employees, customers and invitees a license to use
the
Common Area during the Lease Term for the parking and passage of motor vehicles
and pedestrians, subject to the rights of Landlord, and the other tenants
of
Landlord to use the same in common with Tenant. Notwithstanding the foregoing,
Tenant shall not permit its employees to park in the Common Area. Tenant
shall
furnish the license plate numbers of its employees to Landlord immediately
upon
request, and if Tenant’s employees park in the Common Area, in addition to all
other remedies which Landlord may have at law or in equity, Landlord shall
be
entitled to tow or boot such automobiles and/or assess a fine against Tenant
of
$50.00 per violation. Landlord may designate some of the parking spaces within
the Common Area for short term use.
11.2 Common
Area Expenses.
(a)
In General.
"Common
Area Expenses" shall mean all reasonable costs and expenses of any kind or
nature in connection with the use, ownership, operation and maintenance of
the
Common Area as defined in Exhibit B, including without limitation, all general
maintenance, repairs and replacements deemed necessary by Landlord or as
may be
required by Governmental Authority, the costs and expenses of lighting the
Common Areas; the costs of cleaning, patching, resurfacing, replacing and
restriping the parking areas; trash removal; all Taxes assessed for any reason
on the improvements and land comprising the Common Area; all personal property
Taxes assessed for any reason and levied on any personalty for use on the
Common
Area; public liability insurance and All Risks insurance (including earthquake
and flood coverage if obtained by Landlord) on the Common Area; and the
Administrative Fee with respect to all Common Area expenses. Common
Area Expenses shall not include: (i) leasing commissions, (ii) rents payable
for
a leasing office, costs, disbursements, and other expenses incurred for leasing,
renovating, or improving space for tenants; (iii) costs (including permit,
license, and inspection fees) incurred in renovating, improving, decorating,
painting, or redecorating vacant space or space for tenants; (iv) depreciation
and amortization on the Project, except for the annual amortization (amortized
over the useful life) of costs of items considered capital repairs,
replacements, improvements and equipment under generally accepted accounting
principles consistently applied which are incurred by Landlord after the
Rent
Commencement Date; (v) except for the amortization costs permitted under
(iv)
above, costs of a capital nature including capital expenditures, capital
improvements, capital repairs, capital equipment, and capital tools, as
determined under generally accepted accounting principles
Page
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consistently
applied, including without limitation, those incurred due to the actions
of
other tenants in the Project; (vi) federal, state, or local income taxes,
franchise, gift, transfer, excise, capital stock, estate, succession, or
inheritance taxes, and penalties or interest for late payment of Common Area
Taxes; (vii) costs incurred because Landlord or another tenant violated the
terms of its lease (Tenant shall bear 100% of the costs incurred because
of
Tenant’s violation of its lease); (viii) overhead and profit paid to
subsidiaries or affiliates of Landlord for management or other services on
or to
the Project or for supplies or other materials, to the extent that the costs
of
the services, supplies, or materials were higher than the cost thereof if
they
had not been provided by a subsidiary or affiliate or to the extent such
sums
together with amounts paid to unrelated parties for the same or similar services
exceed the usual and customary charges for same in the local marketplace;
(ix)
interest on debt or amortization payments on mortgages or deeds of trust
or any
other debt for borrowed money; rentals and other related expenses incurred
in
leasing air conditioning systems, elevators, or other equipment ordinarily
considered to be of a capital nature; (x) items and services for which Tenant
reimburses Landlord or pays third parties or that Landlord provides selectively
to one or more tenants of the Project other than Tenant without reimbursement;
(xi) advertising and promotional expenditures other than costs related to
Project signage; (xii) nonrecurring costs incurred to remedy structural defects;
fines or penalties incurred because Landlord violated any governmental rule
or
authority in its initial construction; and (xiii) costs incurred to remediate
any Hazardous Material contaminating the Project which was not caused by
Tenant.
Furthermore, Common Area Costs shall not include any management or
administrative fees, costs or expenses of a partnership, or other entity,
which
constitutes Landlord not directly related to the Project (such as accounting
fees, tax returns, and income taxes of such entity), and expenses incurred
by
Landlord not directly related to the Project, or its operations including,
without limitation, compensation paid to officers, executives, or partners
of
Landlord, and in lieu thereof, Landlord shall be entitled to the Administrative
Fee as provided above.
(b) Calculation.
Tenant
shall pay its share of Common Area Expenses in the manner provided in Section
4.4. Tenant's share of Common Area Expenses shall be calculated as follows:
Tenant's share of Common Area expenses for the previous calendar quarter
or year
shall be the proportion of all such expenses that the Floor Area of the Premises
bears to the total Floor Area of all premises in the Project that are occupied
and open for business.
11.3
Direct Expenses.
Notwithstanding anything to the contrary contained in this Lease, in the
event
that Landlord determines, in Landlord’s
sole
discretion, at any time during the Lease Term that it is more appropriate
and/or
equitable that all or any portion of the Common Area Expenses set forth in
Section 11.2 be chargeable exclusively to the Occupants of a particular
building or to a particular Occupant or group of Occupants rather than to
all
Occupants of the Project, then such charges shall be excluded in determining
the
aggregate amount of the Common Area Expenses and shall be referred to herein
as
"Direct Expenses". Tenant shall pay its share of Direct Expenses and
Administrative Fee, at Landlord's option, either in estimated monthly
installments in accordance with Section 4.4 or within ten (10) days of receipt
of a bill for same. Tenant's proportionate share of Direct Expenses shall
be a
fraction, the numerator of which is the Floor Area of the Premises, and the
denominator of which is the total Floor Area of the premises (including the
Premises) of all Occupants comprising the group to which the Direct Expenses
relate.
11.4 Control
of Common Area.
Landlord
shall at all times have the right (as described in Section 23.3) to make
such
changes to the Common Area as Landlord shall elect, including without limitation
the location and relocation of driveways, entrances, exits and automobile
parking spaces, the direction and flow of traffic, and the installation and
designation of prohibited areas, landscaped areas and Utility installations,
provided that the access to, visibility of, the Premises is not materially
and
adversely affected. Landlord shall at all times have the sole and exclusive
control of the Common Area, including, without limitation, the right to lease
space within the Common Area to tenants for the sale of merchandise and/or
services and the right to permit advertising displays, educational displays
and
entertainment in the Common Area, including kiosks, carts and other temporary
or
permanent stands; provided that the access to, visibility of, the Premises
is
not materially and adversely affected. Landlord shall also have the right
at any
time and from time to time to exclude and restrain any person from the use
or
occupancy thereof or to temporarily close the Common Areas as Landlord
reasonably determines shall be reasonably necessary to prevent the accrual
of
prescriptive rights. Landlord shall use reasonable, good faith efforts to
minimize interference with Xxxxxx's business when Landlord performs any
maintenance, repairs and replacements of the Common Areas.
11.5 Rules
and Regulations.
Landlord
shall have the right to establish additional reasonable, non-discriminatory
and
equitable Rules and Regulations for the proper and/or efficient operation
and
maintenance of the Common Area or any portion thereof, and Tenant shall comply
with the same, provided Landlord has furnished written notice to Tenant
specifying such reasonable, non-discriminatory and equitable Rules and
Regulations.
11.6
Valet
Parking.
Landlord may, at its option, develop and implement a valet parking system
on all
or any portion of the Property and Landlord and Tenant agree to cooperate
with
each other and with the valet parking operator to develop and implement a
mutually satisfactory program. On a monthly basis, upon receipt of Landlord’s
invoice, Tenant shall reimburse Landlord for fifty percent (50%) of the costs
incurred by Landlord to develop, implement and operate the valet parking
system
(net of any net proceeds earned by Landlord from such valet parking
program).
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ARTICLE
12. INSURANCE
OBLIGATIONS
12.1 Tenant's
Insurance Obligations.
At all
times from and after the Execution Date, Tenant shall procure and maintain,
at
Tenant's sole cost and expense, the following policies of
insurance:
(a) Liability.
Comprehensive general liability insurance with broad form contractual liability
coverage and with coverage limits of not less than One Million Dollars
($1,000,000) combined single limit, per occurrence, and Two Million Dollars
($2,000,000) combined single limit in the aggregate, specifically including
product liability insurance. Such policy shall insure Tenant's performance
of
the indemnity provisions of this Lease.
(b) Workers'
Compensation.
Workers'
compensation insurance in the amount required by the State of California
for the
benefit of Tenant's employees.
(c) Plate
Glass.
Insurance covering the full replacement cost of all plate glass on the Premises;
Tenant may self-insure such risk upon prior approval of Landlord.
(d) Equipment.
Boiler
and machinery insurance on the air conditioning system (or any part thereof)
with coverage limits of not less than One Million Dollars ($1,000,000) per
occurrence.
(e) Tenant's
Personal Property and Improvements.
Property
insurance covering any peril generally included in the classification "all
risks" covering all merchandise, Improvements, and Xxxxxx’s
personal property, in an amount not less than one hundred percent (100%)
of
their full replacement cost.
(f) Business
Interruption Insurance. Business
interruption insurance covering Tenant’s
business operated in the Premises.
12.2 Policy
Requirements; Right to Adjust Requirements.
All
policies of insurance provided for herein shall be issued by insurance companies
that have a general policyholder's rating of not less than "A+V", as rated
in
the most current available "Best's" Insurance Reports, and licensed to do
business in the State of California All policies of insurance provided for
herein (with the exception of workers' compensation insurance) shall name
Landlord, Landlord's property manager, all Mortgagees and such other individuals
or entities as Landlord may from time to time designate, as "additional named
insureds." Certificates of all insurance required of Tenant hereunder shall
be
delivered to Landlord at least ten (10) days prior to the Execution Date.
All
certificates of insurance delivered to Landlord shall contain an agreement
by
the company issuing said policy to give Landlord thirty (30) days' advance
written notice of any cancellation, expiration, lapse, reduction or other
adverse change respecting such insurance. All public liability, property
damage
or other casualty policies shall be written as primary policies, not
contributory with or secondary to coverage that Landlord may carry. Landlord,
at
any time, and from time to time, may require the insurance limits set forth
herein to be increased to reflect the then-prevailing standards in the industry
as to businesses of the type being operated at the time in the
Premises.
12.3 Mutual
Waivers of Rights.
Landlord
(for Landlord and Xxxxxxxx's insurer), waives any rights, including rights
of
subrogation, and Tenant (for Tenant and Xxxxxx's insurer), waives any rights,
including rights of subrogation, each may have against the other, and Tenant
(for Tenant and Xxxxxx's insurer) waives any rights, including rights of
subrogation, for compensation of any loss or damage occasioned to Landlord
or
Tenant arising from any risk generally covered by the All Risks insurance
required to be carried by Landlord and Tenant. The foregoing waivers shall
be
operative only so long as available in the State of California.
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ARTICLE
13. INDEMNITY. Tenant
shall indemnify, protect, defend and hold Landlord (and Xxxxxxxx's partners,
joint venturers, shareholders, Mortgagee, affiliates and property managers,
and
their respective officers, directors, employees and agents) harmless from
and
against any and all Claims arising out of or in connection with loss of life,
personal injury, property damage, economic loss or other damages arising
from
(a) the use, occupation, improvement or maintenance of the Premises or any
act
or omission, work or activity in or about the Premises or Project by Tenant
or
Xxxxxx's assignees or subtenants or their respective agents, employees, or
contractors, or (b) any breach or failure to perform any obligation imposed
on
Tenant under this Lease after notice and expiration of applicable cure periods.
Upon notice and request from Landlord, Tenant shall, at Xxxxxx's sole expense
and by counsel satisfactory to Landlord, defend any action or proceeding
brought
against Landlord by reason of any such Claim. Tenant assumes all risk of,
and
waives all Claims against Landlord for, loss of life, personal injury, property
damage, economic loss or other damages in, upon or about the Premises, from
any
cause whatsoever, except to the extent caused by Xxxxxxxx's negligence or
wilful
misconduct. Landlord shall indemnify, protect, defend and hold Tenant (and
Xxxxxx's partners, joint venturers, shareholders, affiliates and property
managers, and their respective officers, directors, employees and agents)
harmless from and against any and all Claims arising out of or in connection
with loss of life, personal injury, property damage, economic loss or other
damages arising from (a) the use, occupation, improvement or maintenance
of the
Common Areas or any act or omission, work or activity in or about the Premises
(subject to the immediately preceding sentence) or the Project by Landlord
or
its respective agents, employees, contractors, or (b) any breach or failure
to
perform any obligation imposed on Landlord under this Lease after notice
and
expiration of applicable cure periods. Upon notice and request from Xxxxxx,
Landlord shall, at Landlord's sole expense and by counsel satisfactory to
Tenant, defend any action or proceeding brought against Tenant by reason
of any
such Claim. The obligations of this Article 13 shall survive the expiration
or
earlier termination of this Lease.
ARTICLE
14. ASSIGNMENT
OR SUBLETTING
14.1 Restrictions.
Tenant
shall not make, consent to, or suffer any Encumbrance. Tenant shall not Assign
this Lease or sublet any portion of the Premises without first obtaining
Landlord's written consent, which Landlord shall not withhold unreasonably.
Landlord may withhold its consent on any reasonable ground, including, without
limitation, if in Landlord's reasonable business judgment: (i) the Transferee's
contemplated use of the Premises is not identical to the Permitted Use, (ii)
the
Transferee lacks sufficient business reputation or experience to operate
a
successful business of the type and quality permitted under this Lease, (iii)
the net worth of the Transferee are less than that of Tenant at the Execution
Date or at the date of request (whichever is higher), or (iv) Tenant is then
in
default of Tenant’s
obligations under this Lease.
In
the
event the Assignment consists of or includes a change of control in which
Xxxx
Xxxxxx ceases to be the person in control of Tenant, then as a condition
to
Landlord’s consent to such Assignment, Landlord may require the person or entity
acquiring control of Tenant to provide Landlord a guaranty in the form attached
as Exhibit E (with paragraph 18 deleted) or to provide such other collateral
as
Landlord may reasonably require.
14.2 Procedures.
Tenant
shall request Xxxxxxxx's consent to each such transaction in writing at least
sixty (60) days before the effective date of any such transaction. Within
twenty
(20) business days after receipt of Xxxxxx's request for consent (together
with
such background information as Landlord may reasonably request), Landlord
may
(a) consent to or disapprove the proposed Assignment or subletting, or (b)
exercise Landlord's rights under Section 14.4. Xxxxxxxx’s
failure
to respond within such twenty (20) business day period shall be deemed
disapproval. Tenant shall remain fully liable to perform its duties under
this
Lease following the assignment or subletting. The acceptance of Rent by Landlord
from any person other than Tenant shall not be deemed to be a consent to
any
Assignment or subletting.
14.3 Consideration
to Landlord.
In the
event of an Assignment or sublease, Landlord shall be entitled to one-half
(1/2)
of the "bonus rent" as a result of such assignment or sublease. "Bonus rent"
shall mean, (i) in the case of an Assignment, the value of all consideration
paid by the Transferee for the Assignment, net of all reasonable costs,
including without limitation reasonable commissions incurred by Tenant in
connection with the Assignment, and (ii) in the case of a sublet, the value
of
all consideration paid to Tenant together with the excess, if any, in subrentals
(including percentage rent) received by Tenant relating to the portion of
the
Premises being sublet over that portion of the corresponding payments of
Minimum
Annual Rent, Percentage Rent and Additional Rent for the same period made
by
Tenant to Landlord under this Lease, such excess being thereafter netted
by the
amount of all reasonable costs, including without limitation reasonable
commissions incurred by Tenant in connection with the sublease.
14.4 INTENTIONALLY
OMITTED.
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14.5
No
Release.
Tenant
shall not be released upon assignment but shall remain primarily liable,
jointly
and severally with the assignee, under this Lease.
ARTICLE
15. DEFAULTS
BY TENANT; LANDLORD REMEDIES
15.1 Events
of Default.
The
occurrence of any of the following shall constitute a default by Xxxxxx and
a
breach of this Lease.
(a) Failing
or refusing to pay any amount of Minimum Annual Rent or Additional Rent when
due
in accordance with the provisions of this Lease, should Tenant fail to cure
same
within five (5) days after receipt of written notice of such default;
or
(b) Failing
or refusing to perform fully and promptly any covenant or condition of this
Lease, should Tenant fail to cure the same within a reasonable period of
time
(not to exceed thirty (30) days) after receipt of written notice of such
default
or, when more than thirty (30) days shall be required because of the nature
of
the failure, if Tenant shall fail to either commence to cure such failure
within
such thirty (30) day period or thereafter fail to cure such failure within
such
longer period as shall be reasonable under the circumstances.
15.2 No
Waiver. The
waiver by Landlord of any breach of any term, covenant or condition contained
in
this Lease shall not be deemed to be a waiver of such term, covenant or
condition for any prior or subsequent breach thereof, or of any other term,
covenant or condition contained in this Lease. Xxxxxxxx's consent to or approval
of any act by Tenant requiring Landlord's consent or approval shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of
any
prior or subsequent similar act by Xxxxxx. Xxxxxxxx's acceptance of partial
Rent
or performance by Tenant shall not be deemed to be an accord and satisfaction
or
a waiver of any preceding breach by Tenant of any term, covenant or condition
of
this Lease or of any right of Landlord to a forfeiture of this Lease by reason
of such breach, regardless of Landlord's knowledge of such preceding breach
at
the time of Landlord's acceptance. No term, covenant or condition of this
Lease
shall be deemed to have been waived by Landlord unless such waiver is in
writing
and executed by Landlord.
15.3 Landlord's
Rights and Remedies.
A.
In the
case of such default or defaults described in Section 15.1 above, then Landlord,
besides other rights or remedies Landlord may have, shall have the immediate
rights of re-entry onto the property to remove all persons and property from
the
Premises; and such property may be removed and stored in a public warehouse
or
elsewhere at the cost of, and for the account of, Tenant.
B.
Should
Landlord elect to re-enter, as herein provided, or should Landlord take
possession pursuant to legal proceedings or pursuant to any notice provided
for
by law, Landlord may either terminate this Lease or may from time to time,
without terminating this Lease, re-let the Premises or any part thereof for
such
term or terms (which may be for a term extending beyond the Term of this
Lease)
and at such rent or rents and upon such other terms and conditions as Landlord
in its sole discretion may deem advisable, with the right to make alterations
and repairs to said Premises.
C.
Upon
such re-letting:
(I)
Tenant shall be immediately liable to pay to Landlord, in addition to any
indebtedness other than rent due hereunder, the cost and expenses of such
re-letting and of such alteration and repair, incurred by Xxxxxxxx, and the
amount, if any, by which the rent reserved in this Lease for the period of
such
re-letting (up to but not beyond the Term of this Lease) exceeds the amount
agreed to be paid as rent for the Premises for such period of such re-letting;
or
(II)
At
the option of Landlord, rents received by Landlord from such re-letting shall
be
applied as follows: first, to the payment of any indebtedness, other than
rent,
due hereunder from Tenant to Landlord; second, to the payment of any costs
and
expenses of such re-letting and of such alterations and repairs; third, to
the
payment of rent due and unpaid hereunder and the residue, if any, shall be
held
by Xxxxxxxx and applied in payment of future rent as the same may become
due and
payable hereunder. If Xxxxxx has been credited with any rent to be received
by
such re-letting and such rent shall not be promptly paid to Landlord by the
new
tenant, or if such rents received from re-letting during any month shall
be less
than that to be paid during the month by Tenant hereunder, Tenant shall pay
any
such deficiency to Landlord. Such deficiency shall be calculated and paid
monthly.
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C.
No
such re-entry or taking possession of said Premises by Landlord shall be
construed as an election of Xxxxxxxx's part to terminate this Lease unless
a
written notice of such intention, specifically containing the word FORFEITURE,
be given to Tenant by Landlord, or unless the termination thereof be decreed
by
a court of competent jurisdiction.
D.
In the
event of any default as set forth in Section 15.1 by Tenant, then in addition
to
any other remedies available to Landlord at law or in equity, Landlord shall
have the immediate option to terminate this Lease and all rights of Tenant
hereunder by giving Tenant written notice of such intention to terminate.
In the
event that Landlord shall elect to so terminate this Lease then Landlord
may
recover from Tenant, as provided for by California Civil Code Section 1951.2,
which is incorporated herein by reference, the following:
(a)
The
worth at the time of award of any unpaid rent which has been earned at the
time
of such termination; plus
(b)
The
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount
of
such rental loss Tenant proves could have been reasonably avoided;
plus
(c)
The
worth at the time of award of the amount by which the unpaid rent for the
balance of the Term after the time of award exceeds the amount of such rental
loss that the Tenant proves could be reasonably avoided; plus
(d)
Any
other amount necessary to compensate Landlord for all the detriment
approximately caused by Xxxxxx's failure to perform his obligations under
this
Lease of which in the ordinary course of things would be likely to result
therefrom; and
(e)
At
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable state
law.
The
term
"rent" or "rental" as used in this Lease, shall be deemed to be and to mean
the
minimum rental, Community Area Charges, Promotional Assessments and all other
sums required to be paid by Tenant to Landlord pursuant to the terms of this
Lease and pursuant to California Civil Code Section 1951.
As
used
in subparagraphs (a), (b) and (c) above, the "worth at the time of award"
is
computed by allowing interest at the Interest Rate.
E.
In
addition to the remedies set forth hereinabove, Landlord may pursue any other
remedy now or hereafter available to Landlord under the laws or judicial
decisions of the State of California. It is further agreed that the rights
and
remedies given to Landlord in this Lease are distinct, separate and cumulative
remedies, and that no one of them, whether or not exercised by Landlord,
shall
be deemed to be in exclusion of any of the others.
F.
In the
event of any breach of this Lease by Xxxxxx, Landlord may (but shall not
be
obligated to) at any time, after five (5) days' written notice, cure such
breach
for the account and at the expense of Tenant. If Landlord at any time so
elects
or is compelled by any other person to cure such breach or is compelled to
incur
any other expense arising out of such breach by Tenant (including, without
limitation, reasonable attorneys' fees and disbursements in instituting,
prosecuting or defending any suits, actions or proceedings to enforce Landlord's
rights under this or any other Article or Section of this Lease or otherwise)
the sum or sums so paid by Landlord, with all interest, costs and damages,
shall
be paid by Tenant to Landlord within five (5) days following written demand.
Such expenses may be recovered in the same action or proceeding forming the
basis of default.
G.
Any
amount due from Tenant to Landlord under this Lease which is not paid within
ten
(10) days after written notice that such amount was not received when due
(including, without limitation, amounts due as reimbursement for costs incurred
in performing obligations of Tenant upon its failure to so perform) shall
bear
interest at the lesser of (i) the highest amount permitted by law, and (ii)
five
percent (5%) over the prime rate of Bank of America N.A. ("Interest Rate")
from
the date due until paid, unless otherwise specifically provided herein, but
the
payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
Page
14
15.4
Waiver of Certain Rights.
Tenant
expressly waives its right to plead any noncompulsory counterclaims or offset,
in any action or proceeding brought by Landlord against Tenant for a default
under Section 15.1(a) above; although Tenant shall be entitled to assert
any
such claims in a separate action brought by Xxxxxx. Tenant hereby waives
its
right to jury trial in the event of any legal action relating to or affecting
the rights of Landlord or Tenant under this Lease. Tenant hereby waives any
right of redemption it may have either by statute or otherwise.
ARTICLE
16.
DEFAULTS BY LANDLORD .
If
Landlord fails to perform or observe any of the terms, covenants or conditions
contained in this Lease on Landlord's part to be performed or observed within
thirty (30) days after written notice of such failure from Tenant or, when
more
than thirty (30) days shall be required because of the nature of the failure,
if
Landlord shall fail to cure such failure within such longer period as shall
be
reasonable under the circumstances after written notice of such failure from
Tenant, said failure shall constitute a default by Landlord under this Lease.
In
the event of the continuation of a default by Landlord under this Lease after
the expiration of all applicable cure periods provided for under this Lease,
Tenant shall then have the right to pursue all available rights and remedies
at
law or in equity arising out of or pertaining to such default of Landlord.
So
long as Landlord has previously provided written notice to Tenant identifying
Landlord’s Mortgagee and has included in such notice a notice address for such
Landlord’s Mortgagee, Tenant shall send a copy of such written notice of failure
to Landlord's Mortgagee, which shall have the same cure period as Landlord,
which cure period shall begin upon Landlord’s Mortgagee’s receipt of such
written notice, and Xxxxxx’s rights and remedies shall not accrue unless the
Landlord’s Mortgagee’s cure period has expired without the failure having been
cured.
ARTICLE
17.
RECONSTRUCTION
17.1
Casualty.
Upon the
occurrence of casualty to the Premises, Landlord shall have the election,
and
shall within thirty (30) days following the date of such damage give Tenant
written notice of Landlord’s
election, either (A) to commence reconstruction of the Premises excluding
Tenant’s
Work
(“Landlord’s
Reconstruction Work”)
and use
diligent efforts to complete such reconstruction within one hundred eighty
(180)
days after the date of such written notice, or (B) to not perform such
reconstruction, in which event this Lease shall cease and terminate not later
than sixty (60) days after Xxxxxxxx’s
notice
of Landlord’s
election to terminate. If Landlord elects to perform such reconstruction,
Tenant
shall commence reconstruction of Tenant's Work promptly upon substantial
completion of Landlord's Reconstruction Work and shall diligently prosecute
the
same to completion. If Landlord elects to perform such reconstruction and
fails
to complete the same within the above one hundred eighty (180) day period,
then
Tenant may terminate this Lease upon thirty (30) days prior written notice
to
Landlord, but if Landlord substantially completes the Reconstruction Work
within
such thirty (30) day period, Xxxxxx’s termination notice shall be null and void.
If Landlord notifies Tenant within thirty (30) days following the date of
such
damage that the Reconstruction Work will take more than one hundred eighty
(180)
days to complete (which notice shall set forth the length of time which Landlord
believes will be required to complete the Reconstruction Work), then Tenant
may
terminate this Lease within fifteen (15) days after receipt of Landlord’s
notice, and if Tenant does not so terminate, then the one hundred eighty
(180)
day reconstruction period shall be extended to be the length of time set
forth
in Landlord’s notice. Reconstruction shall substantially conform to the
provisions of Exhibit C and shall cover Landlord's Reconstruction Work and
Tenant's Work. Landlord shall reconstruct the Premises only to the extent
of
Landlord's Reconstruction Work; Tenant, at Tenant's sole cost and expense,
shall
reconstruct Tenant's Work and shall replace Xxxxxx's merchandise, Improvements
and personal property to a condition at least equal to that prior to the
occurrence of the casualty.
17.2
Release of Liability.
Upon any
termination of this Lease under any of the provisions of this Article, the
parties shall be released thereby without further obligation to the other
party,
coincident with the surrender of possession of the Premises to Landlord,
except
the indemnification provisions contained in this Lease which shall survive
the
termination, and except for items which have theretofore accrued and are
then
unpaid. In the event of termination, all proceeds from Tenant's insurance
(including self-insurance and deductibles), covering Tenant's Improvements,
but
excluding proceeds from Tenant's merchandise, the unamortized net cost to
Tenant
of Tenant's Improvements with a straight-line amortization schedule and an
amortization period equal to the Lease Term, and personal property, shall
be
disbursed and paid to Landlord.
17.3
Additional Provisions.
There
shall be no abatement of Minimum Annual Rent or other charges with respect
to
any period of reconstruction of the Premises or any other part of the Project,
and Tenant shall look solely to the business interruption insurance with
respect
thereto. Tenant hereby waives any statutory rights of termination which may
arise by reason of any partial or total destruction of the Premises which
Landlord is obligated to restore or may restore under any of the provisions
of
this Lease.
Page
15
ARTICLE
18.
EMINENT DOMAIN
181
Total Taking.
If all
or a portion of the Premises shall be appropriated or taken under the power
of
eminent domain or by transfer in lieu of thereof (hereinafter, "taken" or
"taking") such that the remainder is not suitable for the operation of
Tenant’s
business as contemplated hereunder, this Lease shall terminate as of the
date of
such taking, and Landlord and Tenant shall have no further liability or
obligation, except as otherwise provided for in this Lease, arising under
this
Lease after such date.
18.2
Award.
Landlord
shall be entitled to the entire condemnation award for any taking of the
Premises, the Project or any part thereof. Xxxxxx's right to receive any
amounts
separately awarded to Tenant directly from the condemning authority for the
taking of Tenant's merchandise, personal property, relocation expenses and/or
interests in other than the real property taken shall not be affected in
any
manner by the provisions of this Section, provided Xxxxxx's award does not
reduce or affect Xxxxxxxx's award.
ARTICLE
19
SUBORDINATION; ATTORNMENT; ESTOPPEL
19.1
Subordination to Mortgage.
Landlord
shall use its commercially reasonable, good faith efforts to cause any Mortgagee
of the Project to provide Tenant with an executed recordable subordination,
non-disturbance and attornment agreement in reasonable form and approved
by
Tenant providing generally that, provided Tenant is not in default under
this
Lease, the mortgagee, trustee, or any purchaser at the foreclosure of the
mortgage or deed of trust will not disturb Tenant’s possession of the Premises
and that Tenant will attorn to such mortgagee, trustee, or purchaser at
foreclosure as Landlord under the terms and conditions of this Lease upon
receiving written notice that such party has succeeded to the interest of
Landlord under this Lease(“SNDA”).
Tenant shall bear any costs imposed upon Landlord by its Mortgagee to make
changes to the Mortgagee’s standard form of SNDA requested by Xxxxxx. This Lease
and all of Tenants' rights hereunder are and shall be automatically subject
and
subordinate to all currently existing and future Mortgages affecting the
Premises. Within ten (10) days after the receipt of a request from Landlord
or
any Mortgagee, Tenant shall confirm such subordination by executing a recordable
subordination agreement in form and content reasonably satisfactory to Tenant,
Landlord and Landlord's Mortgagee; provided, however, that the foregoing
provision shall only be applicable with respect to those mortgages or deeds
of
trust to which Xxxxxx has been provided an SNDA. If Landlord sells, transfers,
or conveys Landlord's interest in the Premises or this Lease, or if the same
is
foreclosed judicially or nonjudicially, or otherwise acquired, by a Mortgagee,
upon the request and at the sole election of Landlord's successor, Tenant
shall
attorn to said successor, provided said successor accepts the Premises subject
to this Lease. Tenant shall, upon request of Landlord or any Mortgagee, execute
an attornment agreement confirming the same, in form and substance reasonably
acceptable to Landlord or Landlord's successor and Xxxxxx.
19.2
Subordination to REA.
So long
as Landlord has previously provided written notice to Tenant identifying
the
REA, this Lease and all of Tenant's rights hereunder are and shall be subject
and subordinate to the REA and any amendments or modifications thereof; provided
that no amendments or modifications to the REA will materially and adversely
affect the the access to, visibility of, or Tenant's Permitted Use of the
Premises without Tenant’s prior written consent, not to be unreasonably
withheld.
19.3
Estoppel Certificate.
Within
ten (10) business days after request from either party, the non-requesting
party
shall execute and deliver to the requesting party an estoppel certificate
in the
form attached as Exhibit
C
with any
exceptions thereto noted in writing by the non-requesting party.
ARTICLE
20.
QUIET ENJOYMENT.
Xxxxxxxx
agrees that Xxxxxx, upon paying the rent and performing the terms, covenants
and
conditions of this Lease, may quietly have, hold and enjoy the Premises from
and
after Landlord's delivery of the Premises to Tenant and until the end of
the
Lease Term, subject, however, to any Mortgage to which this Lease is or shall
become subordinate.
Page
16
ARTICLE
21.
NOTICES.
Wherever
in this Lease it shall be required or permitted that any notice, request,
report, communication or demand be given, served or transmitted by either
party
to this Lease to or on the other, such notice or demand shall be in writing
and
shall be personally delivered or forwarded by certified mail, return receipt
requested, or by nationally recognized courier service providing written
confirmation of delivery, to the addresses of the parties specified in
Article 1. Notice shall be deemed to have been given or served on the
delivery date indicated by the United States Postal Service or courier service
on the return receipt or on the date such delivery is refused, unless Xxxxxx
is
served personally, in which event the date of personal delivery shall be
deemed
the effective date of notice. Either party may change its address by providing
written notice as specified herein; provided, however, that all addresses
provided must be the actual street address of a residence or business
establishment.
ARTICLE
22.
ATTORNEY FEES .
If
either Landlord or Tenant institutes any action or proceeding against the
other
relating to the provisions of this Lease or any default hereunder, the
nonprevailing party in such action or proceeding shall reimburse the prevailing
party for all reasonable attorney's fees and costs.
ARTICLE
23
GENERAL PROVISIONS
23.1
Binding Effect.
The
parties hereto agree that all the provisions of this Lease are to be construed
as covenants and agreements and, except as otherwise specified, that said
provisions shall bind and inure to the benefit of the parties hereto and
their
respective heirs, legal representatives, permitted successors and
assigns.
23.2
Right to Lease.
Landlord
shall have the absolute right to lease or permit the use or occupancy of
space
in the Project as Landlord shall determine in Landlord's sole and absolute
judgment. Tenant does not rely on the fact, nor does Landlord represent,
that
there shall be any specific occupants or minimum occupancy level of space
in the
Project at any time.
23.3
Project Configuration.
Tenant
acknowledges that Exhibit A is for the purposes of convenience only and that
Landlord reserves the right at any time and from time to time, without
Tenant’s
consent
or approval, to expand, reduce, remove, demolish, change, renovate or construct
any existing or new improvements at the Project. Tenant further acknowledges
that Landlord may change the name of the Project or the designation of
Tenant’s
space
number (without relocation of Tenant’s
premises except in accordance with the terms of this Lease) from time to
time,
and upon notice to Tenant, Tenant shall use such new name (and as applicable,
space designation) in its correspondence, advertising and promotional
materials.
23.4
Brokers.
Except
as specified in Section 1.16 above, each party warrants to the other that
it has
not had any dealings with any brokers or finders, and each party indemnifies
the
other against any Claims asserted by a broker or finder arising out of the
indemnifying party's communications with such broker or finder. The obligations
of this Section 23.4 shall survive the expiration or earlier termination
of this
Lease. Tenant acknowledges that neither Landlord nor any of Landlord’s
employees, agents, representatives, contractors nor brokers has made any
representation or warranty of any kind respecting (a) the condition of the
Premises or the Project, (b) the suitability thereof for Tenant’s
use and
the conduct of Tenant’s
business, (c) occupancy or operation within the Project of any other person
or
entity, (d) occupancy costs (it being understood that any estimates of occupancy
costs contained in this Lease are estimates only and are not binding upon
Landlord).
23.5
Entire Agreement; Amendment.
There
are no oral or written agreements or representations between the parties
hereto
affecting this Lease not contained herein. This Lease supersedes and cancels
any
and all previous negotiations, arrangements, representations, brochures,
displays, projections, estimates, agreements and understandings, if any,
made
by, to, or between Landlord and Tenant and their respective agents and employees
with respect to the subject matter thereof, and none shall be used to interpret,
construe, supplement or contradict this Lease. This Lease, and all amendments
thereto, shall be considered to be the only agreement between the parties
hereto
and their representatives and agents. To be effective and binding on Landlord
and Tenant, any amendment to the provisions of this Lease must be in writing
and
executed by both parties in the same manner as this Lease itself. Any amendment
to this Lease shall be prepared by Landlord. Tenant shall reimburse Landlord
on
demand for Landlord's reasonable costs, including attorney fees, incurred
in the
preparation and handling of any amendment to this Lease requested by
Xxxxxx.
23.6
Force Majeure.
The
occurrence of any of the following events shall excuse such obligations of
Landlord or Tenant as are thereby rendered impossible or reasonably
impracticable for so long as such event continues: strikes, lockouts, labor
disputes, acts of God, inability to procure materials, governmental
restrictions, war, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform. Notwithstanding
the foregoing the occurrence of such events shall not delay the Rent
Commencement Date nor excuse Tenant's obligations to pay Minimum Annual Rent
or
Additional Rent.
Page
17
23.7
Choice of Law and Venue.
The laws
of the State of California shall govern the validity, performance and
enforcement of this Lease. Tenant consents to personal jurisdiction and venue
in
the State of California and judicial district in which the Project is
located.
23.8
No Presumption.
Although
the provisions of this Lease were drafted primarily by Landlord, the parties
hereto agree that such fact shall not create any presumption, construction
or
implication favoring the position of either Landlord or Tenant. The captions
of
the Articles and Sections of this Lease are for convenience only, are not
operative parts of this Lease and do not in any way limit or amplify the
terms
and provisions of this Lease.
23.9
Guarantor.
In the
event a Guarantor is specified in Section 1.15 of this Lease, this Lease
shall
not be effective unless and until Tenant shall deliver a guaranty executed
by
Guarantor in the form attached hereto as Exhibit E.
23.10
Relationship of the Parties.
Nothing
contained in this Lease shall be deemed or construed as creating a partnership,
joint venture, principal-agent, or employer-employee relationship between
Landlord and any other person or entity (including, without limitation, Tenant)
or as causing Landlord to be responsible in any way for the debts or obligations
of such other person or entity.
23.11
Sale or Mortgage by Landlord.
If
Landlord, at any time, sells, conveys, transfers or otherwise divests itself
or
is divested of Landlord's interest ("transfer") in the Premises, other than
a
transfer for security purposes only, Landlord shall be relieved of all
obligations and liabilities accruing hereunder after the effective date of
said
transfer, provided that any Security Deposit or other funds of Tenant then
being
held by Landlord are delivered to Landlord's successor. The obligations to
be
performed by Landlord hereunder shall be binding on Landlord's successors
and
assigns only during their respective periods of ownership.
23.12
Severability.
If any
provision of this Lease shall be determined to be void by any court of competent
jurisdiction, then such determination shall not affect any other provision
of
this Lease, and all such other provisions shall remain in full force and
effect.
It is the intention of the parties hereto that, if any provision of this
Lease
is capable of two constructions, one of which would render the provision
void
and the other of which would render the provision valid, then the provision
shall have the meaning that renders it valid.
23.13
Time of Essence.
Time is
of the essence in the performance of all covenants and conditions of this
Lease.
23.14
Warranty of Authority.
If
Tenant is a corporation, the person or persons executing this Lease on behalf
of
Tenant covenant and warrant as of the date Tenant executes and delivers this
Lease that: (a) Tenant is a duly constituted corporation, qualified to do
business in the State of California in good standing, and (b) the signatories
signing on behalf of Tenant have the requisite authority to bind Tenant pursuant
to Tenant's bylaws or a certified copy of a resolution authorizing the same
by
Xxxxxx's board of directors.
IN
WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Lease as of the date first written
above.
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LANDLORD:
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XXXXXXX
X. XXXXXXX
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XXXXXX
X. XXXXXXX
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XXXXXX
DRIVE LIMITED PARTNERSHIP
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BY:
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NAME:
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ITS:
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General
Partner
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Page
18
TENANT:
UKARMA
CORPORATION, a Nevada corporation
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BY:
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||
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NAME:
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Xxxx
Xxxxxx
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ITS:
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CEO
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Page
19
EXHIBIT
B
DEFINED
TERMS
"Additional
Rent" means all sums of money required to be paid by Tenant under this Lease
with the exception of Minimum Annual Rent.
"Administrative
Fee" means an amount equal to ten percent (10%) of the amount of applicable
expenses.
"Assignment"
means any Transfer, Encumbrance, change of control, or other arrangement
whereby
the identity of the person or persons using, occupying or possessing the
Premises changes or may change.
"Claims"
means any claim, demand, investigation, proceeding, action, suit, judgment,
award, fine, lien, loss, damage, expense, charge or cost of any kind or
character and liability (including reasonable attorney fees, discovery costs
and
court costs).
"Common
Area" means all improved and unimproved areas within the boundaries of the
Project which are now or hereafter from time to time made available for the
nonexclusive use, convenience and benefit of the Landlord, the Project occupants
and/or their customers, patrons, employees and invitees.
"Encumbrance"
means any conditional, contingent or deferred assignment, sublease or conveyance
voluntarily made by Tenant of some or all of Tenant's interest, rights or
duties
in this Lease or the Premises, including, without limitation, any mortgage.
“Encumbrance”
shall
not include financing secured by Tenant’s
furniture, fixtures and equipment.
"Floor
Area" means (i) with respect to the Premises, the square footage of the Premises
set forth in Section 1.4 ; and (ii) with respect to any other leasable area
of
the Project, the total square footage measured from the exterior surface
of
building walls or from the center line of Interior Demising Partitions, without
deduction for columns, sprinkler risers, roof drains, structural braces,
expansion joints and/or shear walls .
"Governmental
Authority" means any federal, state, county, city or local governmental or
quasi-governmental board, body or agency having jurisdiction over the Premises
or the Project or any part thereof.
"Hazardous
Materials" means any chemical, compound, material, substance or other matter:
(a) defined as a hazardous substance, hazardous material or waste, or toxic
substance under any Hazardous Materials Law, (b) regulated, controlled or
governed by any Hazardous Materials Law or other Legal Requirement, (c)
petroleum or a petroleum product, or (d) asbestos, formaldehyde, or radioactive
material.
"Hazardous
Materials Laws" means any and all Legal Requirements relating to Hazardous
materials or environmental conditions on, under or about the Premises or
the
Project.
"Improvements"
means all structural and nonstructural fixtures, installations, alterations,
replacements, additions, changes and/or improvements to the
Premises.
"Interest
Rate" means the lesser of (i) the maximum lawful rate permitted by law, or
(ii)
four percent (4%) above the prime rate charged by Chase Manhattan
Bank.
"Interior
Demising Partitions" means partitions separating the Premises from the premises
of adjacent tenants.
"Legal
Requirement" means, to the extent applicable, (i) any law, statute, ordinance,
regulation, rule, requirement, order, court decision or procedural requirement
of any Governmental Authority, (ii) the requirements of the REA, and (iii)
the
requirements of any Mortgagee.
"Mortgage"
means any mortgage, deed of trust, assignment, security agreement, conditional
sale contract or other encumbrance or hypothecation of any of Landlord's
interest in the real and personal property comprising the Project.
Page
20
"Mortgagee"
means the holder, beneficiary or assignee of any Mortgage, or any lessor
under
any ground lease or similar instrument.
"REA"
means all restrictions of record.
"Rent"
means all amounts of Minimum Annual Rent and Additional Rent required to
be paid
by Tenant under this Lease.
"Transfer"
means any voluntary, unconditional and present (i) assignment of some or
all of
Tenant's interest, rights and duties in this Lease and the Premises, including
Xxxxxx's right to use, occupy and possess the Premises, or (ii) sublease
of
Tenant's right to use, occupy and possess the Premises, in whole or in
part.
"Transferee"
means the proposed assignee, sublessee, mortgagee, beneficiary, pledgee or
other
recipient of Tenant's interest, rights or duties in this Lease or the Premises
in an Assignment.
"Utilities"
means the services of (including, without limitation) sewage removal, delivery
of water, electricity, natural gas (if permitted by Landlord) and telephone
service provided to the Premises and otherwise for Tenant's
benefit.
EXHIBIT
"C"
TENANT’S
CONSTRUCTION OBLIGATION AND ALLOWANCE
I. GENERAL
REQUIREMENTS
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X.
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Xxxxxx
acknowledges that the Premises have been inspected by Xxxxxx and
Xxxxxx
accepts the Leased Premises in its current "As Is, Where Is"
condition.
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B.
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Intentionally
Omitted.
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II. DESIGN
|
X.
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Xxxxxx's
Work shall be performed by Tenant in accordance with all governmental
requirements and the Final Landlord Approved Tenant Plans, as herein
after
defined. Tenant agrees to provide Landlord, for Landlord's prior
written
approval (not to be unreasonably withheld), the full plans and
specifications for such Tenant’s Work, including without limitation:
initial interior improvements, exterior modifications and/or changes,
exterior signage construction, roof penetrations, sprinkler system
modifications, HVAC work, electrical, gas, sewer, water or cable
utility
work or any other utility work shall be performed by
Tenant.
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B.
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Tenant
shall employ a registered architect to prepare the plans and
specifications referred to in IIA above. Xxxxxx's architect is
to be
licensed in the State where the work is to be performed. Construction
shall not commence unless and until Xxxxxx has received Landlord's
written
approval of the final finish plans and specifications. A complete
set of
"As-Built" drawings furnished by the contractor must be forwarded
to
Landlord for its records.
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C.
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Three
(3) stamped sets of the plans and specifications referred to in
IIA above
shall be submitted to the Landlord for review and approval. Tenant
shall
allow two weeks for the initial review
process.
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1. All
specifications shall be typed and placed on the architectural drawings or
on a
separate 24" x 36" plan sheet.
2. All
revisions are to be made by change to the drawings and not by
addendum.
3. Design
of
exterior and interior components shall be in accordance with Landlord’s Minimum
Specifications governing Tenant’s work, which shall be available at Landlord’s
office for viewing and/or copying.
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D.
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It
is suggested that Xxxxxx’s plans be reviewed and approved by the Landlord
prior
to
any applications for permits or any other application prerequisites;
as
this should prevent reapplication if contract drawings require
revisions.
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E.
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One
(1) set of the final revised plans and specifications shall be
returned to
the Tenant and marked "Approved for Construction". These drawings
shall be
the basis for final acceptance of all work performed by the Tenant
and his
contractor. The final approved plans and specifications for the
Tenant's
Work shall be referred to in this Lease as the "Final Tenant Plans".
Such
final Tenant plans must remain on the jobsite at all times for
the use of
the Landlord or any designated representative. Approval of the
Final
Tenant Plans by Landlord shall not constitute the assumption of
any
responsibility for their accuracy, efficacy, or
sufficiency.
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EXHIBIT
B
Page
1
III. CONSTRUCTION
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A.
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Construction
of the finish of Xxxxxx's building shall be the responsibility
of Tenant.
Tenant shall secure bids from or negotiate with a general contractor
or
contractors for the construction of the Tenant’s Work for Tenant’s
Premises. Tenant shall obtain Landlord's prior written approval
of
Xxxxxx's general contractor chosen, approval of whom shall not
be
unreasonably withheld. In order to be considered, the Tenant's
general
contractor must be licensed in the city, county or state where
the work is
to be performed. Such contractor must also submit for review and
written
approval a completed AIA Contractor's Qualification Statement form.
Tenant
must also provide Landlord with a copy of the construction contract
and
construction schedule before construction commences.
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B.
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Once
the Final Tenant Plans are approved, no mobilization of construction
onto
the property shall occur until the following items have been released
to
Landlord:
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1. Tenant’s
Certificate of Liability insurance naming and endorsing Landlord as additional
insured. Limits of at least One Million ($1,000,000) Dollars for each person
and
One Million ($1,000,000) Dollars for each occurrence for bodily injury and
in
limits of One Million ($1,000,000) Dollars aggregate for property
damage.
2. Tenant’s
Certificate of Worker’s Compensation verifying coverage amounts of One Hundred
Thousand ($100,000) Dollars for all Tenant’s employees to be engaged in work at
this location under this Lease.
2. Contractor’s
Certificate of Liability insurance naming and endorsing Landlord as additional
insured. Limits of at least One Million ($1,000,000) Dollars for each person
and
One Million ($1,000,000) Dollars for each occurrence for bodily injury and
in
limits of One Million ($1,000,000) Dollars aggregate for property damage.
4. Contractor’s
Certificate of Worker’s Compensation verifying amounts of One Hundred Thousand
($100,000) Dollars for all of Contractor’s employees to be engaged in work on
this project under this Lease.
5. A
copy of
the Demolition (if necessary) and Building Permit.
6. Tenant
Acceptance Form executed by Xxxxxx officially and unconditionally accepting
the
Premises.
7. Intentionally
omitted.
8. Copy
of
Tenant’s contract with their general contractor and the construction
schedule.
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C.
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Tenant
shall Indemnify Landlord for all liens filed as a result of Xxxxxx's
construction. Tenant shall be required to bond out any liens filed
against
Landlord or Landlord's property resulting from Xxxxxx's work within
ten
(10) days of the date the lien is filed.
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D.
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Construction
shall not commence unless and until Xxxxxx has received a written
Notice
to Proceed. Landlord reserves the right to approve all staging
areas, work
areas, and actual job site. Tenant must also keep all such areas
clean and
safe on a daily basis.
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E.
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Landlord
may require Tenant to use Landlord’s original roofing or termite
subcontractor and any other necessary subcontractors, if any, in
order to
maintain existing warranties. Tenant must determine from Landlord
if this
requirement applies to Tenant’s work before Xxxxxx’s work commences. The
roof system has recently been installed and is under warranty.
The
Landlord’s contractor. All roof penetrations MUST be coordinated with
Landlord’s roofing contractor (at Tenant’s expense) to avoid violating the
warranty. PLEASE
NOTIFY TENANT’S DESIGN TEAM TO SPECIFY THESE TERMS AND SPECIFICATIONS TO
AVOID ANY MISUNDERSTANDINGS.
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F.
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Landlord
shall contribute a total Tenant Construction Allowance of up to
$165,000.00 for the hard costs of construction of Tenant’s leasehold
improvements in the Premises. In the event the hard costs to construct
Tenant’s leasehold improvements is less than $165,000.00, the Tenant
Construction Allowance will be reduced to the actual cost to construct
Tenant’s leasehold improvements. Construction payments to the contractor
for the work, together with payments for any other items that are
Tenant's
responsibility, shall be the sole obligation of
Tenant.
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EXHIBIT
B
Page
2
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X.
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Xxxxxx
is to notify Landlord in writing that the construction is complete,
that
the Tenant's architect (if other than that of the Landlord's) has
inspected and approved such work within thirty (30) days of completion
of
Leased Premises, and that the work has been performed in accordance
with
Tenant’s Final Plans and all governmental requirements.
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G.
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Upon
completion of Xxxxxx’s construction and Landlord’s receipt of Tenant’s
notice under Section
III G., Xxxxxxxx’s Project Manager will make final inspection of Tenant’s
buildout in conjunction with Xxxxxx’s architect and/or construction
administrator. At that time, Landlord will require the following
additional information be made available to Landlord’s Project
Manager.
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1
. Xxxxxx
having furnished to Landlord an architect’s AIA Certificate of Completion that
the Premises have been constructed in accordance with the Tenant’s Final Plans
and all government requirements and are one hundred percent (100%) complete.
Xxxxxx also having furnished to Landlord as-built plans.
2. Copy
of
Tenant’s Certificate of Occupancy.
3. Final
approval letter and inspection certificate from the State Fire Marshal’s
Office.
4. Any
construction contrary to the Final Tenant Plans be corrected prior to the
Tenant
receipt of Tenant Construction Allowance. If Tenant does not make the necessary
corrections, after receiving written notice of same from Landlord, Landlord
has
the option to make the necessary repairs and Tenant, within ten (10) days
after
demand, shall reimburse Landlord for the actual costs incurred, plus twenty
percent (20%) of that amount.
5. Copy
of
all new and/or modified sprinkler as-built drawings.
X. Xxxxx
to
release of Tenant Construction Allowance the above five (5) conditions and
the
following additional conditions must be satisfied by Xxxxxx. Landlord shall
pay
the specified Tenant Construction Allowance to Tenant within ten (10) business
days after verification of the following:
1. Tenant
being open and operating for business in the Premises in accordance with
the
terms and provisions of this Lease and not otherwise in default under this
Lease.
2. Tenant
having paid the Security Deposit.
3. Acceptance
by Landlord of Xxxxxx’s finished construction and all punchlist items completed.
4. A
recorded copy of the Notice of Completion and a copy of Certificate of Final
Xxxx Xxxxxx from Tenant’s general contractor and all subcontractors and the
expiration of the statutory period in which liens may be filed.
5. A
final
accounting of the hard and soft costs actually incurred by Tenant to construct
the interior finish of Xxxxxx’s leasehold improvements to Premises (but not
Tenant’s furniture, trade fixtures and equipment), together with any supporting
documentation reasonably requested by Landlord.
6. The
cost
of any additional work performed by Landlord at Tenant’s request for the benefit
of Tenant, as well as any rentals owing under this Lease shall be documented
and
deducted from the Tenant Construction Allowance before the Tenant Construction
EXHIBIT
B
Page
3
Allowance
is paid to Tenant.
EXHIBIT
B
Page
4
EXHIBIT
D
TENANT'S
ESTOPPEL CERTIFICATE
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Date:
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,
20
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Address:
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To
whom
it may concern:
The
undersigned, as Tenant, has entered into that certain Lease described on
Exhibit
A attached hereto for the leasing of certain Premises at the Project commonly
known as
(all
documents on Exhibit A are collectively referred to herein as the "Lease").
Tenant
understands that you have offered or committed to enter into a transaction
with
Landlord with respect to an interest in Landlord and/or this Lease and/or
the
Premises and/or the realty underlying the Premises and/or a portion of or
interest in the realty or improvements in the Project owned or hereafter
acquired by Landlord. You have requested this Certificate from Tenant as
a
condition precedent to consummation of one of the following transactions:
sale,
purchase, exchange, transfer, assignment, lease, conveyance, encumbrance,
pledge, mortgage or hypothecation. Landlord, you and your lender shall be
entitled to rely thereon.
In
accordance with the terms of this Lease, Tenant ratifies this Lease and
certifies that:
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(1)
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The
undersigned has accepted the Premises and entered into occupancy
of the
Premises described in said Lease on ,
20 ;
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(2)
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The
undersigned is presently open and conducting business with the
public in
the Premises;
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(3)
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The
current Minimum Annual Rent in the annual amount of $
was payable from ,
20 ;
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(4)
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Exhibit
A contains an accurate description of the Lease which constitutes
the
entire agreement between Landlord and Tenant regarding the Premises
and
Tenant's occupancy thereof. Said Lease is in full force and effect
and has
not been assigned, modified, supplemented or amended in any way,
and
neither party thereto is in default thereunder, nor are there existing
conditions which, upon the giving of notice or the lapse of time
or both,
would constitute a default under the Lease; nor are there any existing
defenses, offsets, counterclaims, causes of action, or deductions
against
rental that the undersigned has against the enforcement of the
Lease by
Landlord;
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(5)
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The
same represents the entire agreement between the parties as to
this
leasing;
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(6)
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The
Lease Term expires on ,
20 ;
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(7)
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All
conditions under said Lease to be performed by Landlord have been
satisfied, including, without limitation, all co-tenancy requirements
thereunder;
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(8)
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All
required contributions by Landlord to Tenant on account of Xxxxxx's
improvements have been received;
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(9)
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Tenant
has not received any rental concessions or inducements which are
presently
in effect or will in the future be in effect in connection with
renting
the Premises except as expressly set forth in the Lease, and on
this date
there are no existing offsets, deductions or credits against rentals
or
other charges due under the
Lease.
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EXHIBIT
B
Page
5
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(10)
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No
rental has been paid more than one (1) month in advance and no
security
(other than a security deposit in the amount of $ )
has been deposited with Landlord;
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(11)
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The
Minimum Annual Rent for ,
20 ,
has been paid;
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(12)
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The
operation and use of the Premises does not involve the generation,
transportation, treatment, storage, disposal or release of Hazardous
Material(s) or solid waste into the environment and that the Premises
are
being operated in accordance with all applicable environmental
laws,
zoning ordinances and building
codes;
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(13)
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Landlord
and Tenant have completed all construction and tenant improvements
required under the terms of the Lease in accordance with plans
and
specifications approved by Tenant, and all required contributions
by
Landlord to Tenant on account of Tenant’s
improvements have been received;
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(14)
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Tenant
has no options or rights of first refusal with respect to renting
additional space in the Premises or the Project that are not set
forth in
the Lease; and Tenant has no options or rights of first refusal
with
respect to acquiring any additional interest in the Premises or
the
Project that are not set forth in the
Lease;
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(15)
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Tenant
has no notice of any prior assignment, hypothecation, or pledge
of the
Lease or the rents due thereunder.
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Very
truly yours,
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(Tenant)
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By:
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Title:
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EXHIBIT
B
Page
6
EXHIBIT
E
LEASE
GUARANTY
THIS
LEASE GUARANTY is provided as of this 25th
day of
April, 2008, by XXXX XXXXXX ("Guarantor"), having as his primary place of
business, 000 Xxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, XX 00000 to XXXXXXX
X. XXXXXXX AND XXXXXX X. XXXXXXX AND XXXXXX DRIVE LIMITED PARTNERSHIP, an
Arkansas limited partnership
("Landlord").
RECITALS:
This
Lease Guaranty is given on the basis of the following facts and understandings
of the parties:
A.
UKARMA
CORPORATION, a Nevada corporation (hereinafter called "Tenant"), is leasing
from
Landlord approximately six thousand three hundred sixty (6,360) square feet
of
floor area, located at 00000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx,
under a Lease dated as of April 25, 2008 (the "Lease").
B.
As a
condition to Xxxxxxxx's execution of the Lease, Xxxxxxxx has required that
Guarantor execute this Lease Guaranty guaranteeing performance of all of
the
covenants on Tenant's part to be performed pursuant to the Lease.
X.
Xxxxxxxxx will be a recipient of a portion of the benefits which may accrue
to
Tenant from the Lease and Landlord's execution of the Lease.
NOW,
THEREFORE, in order to induce Landlord to make the Lease and in consideration
thereof, Xxxxxxxxx agrees as follows:
1.
Guarantor unconditionally guarantees the timely payment of all monies owed
by
Tenant under the Lease, including, without limitation, minimum rent and
additional rent (as those terms are defined in the Lease) and the prompt
performance of all other obligations of Tenant under the Lease (including,
without limitation, the construction of the Tenant's improvements) in accordance
with the terms thereof, and at the times and places specified therein. All
of
said payments and obligations, together with interest which may have accrued
thereon, are hereafter called the "Indebtedness".
2.
The
obligations of Guarantor hereunder are in addition to any other obligations
of
Guarantor under any other guaranties of the Indebtedness of Tenant or any
other
person, heretofore or hereafter given to Landlord, and this Guaranty shall
not
affect any such other guaranties.
3.
The
obligations of Guarantor hereunder are independent of the obligations of
Tenant;
a separate action or actions may be brought against Guarantor hereon; whether
or
not action is brought against Tenant or Tenant may be joined in any such
action
or actions. Guarantor waives the benefit of any statute of limitations affecting
its liability hereunder or the enforcement hereof.
4.
Guarantor authorizes Landlord without notice or demand and without affecting
Guarantor's liability hereunder, from time to time, to (a) renew, extend,
accelerate or otherwise change the Indebtedness or any part thereof, including
increase or decrease the payment of the Indebtedness or any part thereof,
including increase or decrease the rate of interest thereon; (b) take and
hold
security for the payment of the Indebtedness and exchange, enforce, waive
and
release any such security; and (c) apply such security in whole or in part
and
direct the order or manner of sale thereof as Landlord, in its discretion,
may
determine.
5.
Guarantor authorizes Xxxxxxxx and Xxxxxx and their respective successors
and
assigns, without notice or demand and without affecting Guarantor's liability
hereunder, from time to time, to amend, modify or change the terms, covenants
and conditions of the Lease.
6.
Landlord may without notice assign this Guaranty or its interest hereunder
in
whole or in part in connection with its assignment or other transfer of the
Lease.
EXHIBIT
B
Page
7
7.
Guarantor waives any right to require Landlord to (a) proceed against Tenant;
(b) proceed against or exhaust any security held from Tenant; or (c) pursue
any
remedy in Landlord's power whatsoever. Guarantor waives any defense arising
by
reason of any disability or other defense of Tenant or by reason of the
cessation from any cause whatsoever of the liability of Tenant other than
full
payment of the Indebtedness. Guarantor waives any defense it may acquire
by
reason of Landlord's election of any remedy against Guarantor or Tenant or
both.
8.
Until
the Indebtedness shall have been paid in full, Guarantor shall have no right
of
subrogation, and waives any right to enforce any remedy which Landlord now
has
or may hereafter have against Tenant (including, without limitation, the
remedies of reimbursement, indemnity and contribution), and waives the benefit
of, and any right to participate in, any security now or hereafter held by
Landlord from Tenant except to the extent such security remains after payment
of
the Indebtedness in full. If and to the extend such waiver is unenforceable,
Guarantor hereby agrees that all such rights of subrogation, reimbursement,
indemnity and contribution shall be junior and subordinate to the right of
Landlord to obtain payment and performance of the Indebtedness and to all
rights
of Landlord in any security now or hereafter held by Landlord from
Tenant.
9.
Guarantor waives all presentments, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor and notices
of acceptance of this Guaranty and of the existence, creation or incurring
of
all or any part of the Indebtedness now existing or hereafter
arising.
10.
Guarantor warrants that:
A.
All
financial reports heretofore furnished to Landlord by Guarantor are correct,
Guarantor has title to all assets referred to in such reports, and there
has
been no material adverse change in Guarantor's financial condition since
the
date of the last report so furnished;
B.
There
are no actions, suits or proceedings pending, or, so far as Guarantor is
advised, threatened against Guarantor which might result in any material
adverse
change in Guarantor's financial condition; and
C.
Neither execution nor delivery of this Guaranty, nor compliance with the
terms
hereof, will conflict with or result in the breach of any law or statute
or will
constitute a breach or default under any agreement or instrument to which
Guarantor may be a party, or result in the creation or imposition of any
charge
or lien upon any of the Guarantor's property or assets.
11.
Until
payment of the indebtedness in full, Guarantor shall promptly advise Landlord
in
writing of:
A.
All
actions, suits or proceeding, pending, or of its knowledge threatened, at
law or
before any federal, state, municipal or other court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
involving the possibility of judgments, penalties or liabilities against
it,
which might, in the aggregate, exceed ten percent (10%) of the net worth
of
Guarantor shown by the financial reports referenced in Paragraph 10A above
and
which are not adequately covered by insurance; and
B.
Any
material adverse change in its business or financial condition.
12.
This
Guaranty shall be enforceable by Landlord in accordance with the laws of
the
State of California and shall be construed in accordance therewith. Guarantor
agrees to pay Xxxxxxxx's reasonable attorneys fees and all other costs and
expenses incurred by Landlord in the enforcement of this Guaranty.
13.
No
failure on the part of Landlord to pursue any remedy hereunder or under the
Lease shall constitute a waiver on its part of the right to pursue said remedy
on the basis of the same or a subsequent breach.
14.
Guarantor acknowledges that its undertakings given hereunder are given in
consideration of Xxxxxxxx's acceptance of the Lease and that Landlord would
not
consummate the Lease and accept said documents were it not for execution
and
delivery of this Guaranty.
EXHIBIT
B
Page
8
15.
The
liability of Guarantor hereunder shall in no way be affected or diminished
by an
Assignment or Transfer of the Lease by Tenant.
16.
The
liability of Guarantor hereunder shall in no way be affected or diminished
by
the release or discharge of Tenant in any creditors' insolvency, receivership
or
bankruptcy proceeding, including the rejection or termination of the Lease
in
bankruptcy, it being intended that Guarantor's liability hereunder shall
be
determined as if the Lease continues in full force and effect without regard
to
such rejection or termination in bankruptcy. In the event that any amount
at any
time paid on account of obligations guaranteed hereby is required to restored
or
returned by Landlord as a result of any such insolvency, receivership or
bankruptcy, Guarantor shall be liable under this Guaranty with respect to
such
amount as if such amount was never paid.
17.
Tenant hereby waives Sections 2809, 2810, 2819, 2845, 2849, 2850, and 3433
of
the California Civil Code as the same may be hereafter amended, modified,
revised, renumbered or replaced.
18.
So
long as Tenant is in good standing and is not in default under the Lease
at any
time during the first thirty-six (36) months full calendar months of the
Lease
Term following the Minimum Rent Commencement Date, this Guaranty shall expire
on
the last day of the thirty-sixth (36th)
full
calendar month of the Lease Term following the Minimum Rent Commencement
Date.
IN
WITNESS WHEREOF, the undersigned have jointly and severally executed this
Xxxxx
Xxxxxxxx as of the date first written above.
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BY
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||
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NAME:
|
XXXX XXXXXX | |
|
SSN:
|
###-##-####
|
|
|
ADDRESS
|
00000
Xxxxxxx Xx.
|
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|
Los
Angeles, CA 90049
|
||
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PHONE
#:
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000-000-0000
|
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DRIVER’S
LICENSE X0000000
|
||
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DRIVER’S
LICENSE STATE CA
|
||
1
