Exhibit 10.5
LEASE AGREEMENT
FORM
OPUS WEST CORPORATION,
a Minnesota corporation ("Landlord")
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation ("Tenant")
Dated: November __, 1997
|| TABLE OF CONTENTS
Page
ARTICLE 1 LEASE OF PREMISES AND LEASE TERM 4
1.1 Premises 4
1.2 Term of Lease 4
1.2.1 Acknowledgment of Commencement Date 4
1.2.2 Early Occupancy 4
1.3 Delivery of Premises 5
1.3.1 Acknowledgment of Delivery Date 5
ARTICLE 2 RENTAL AND OTHER PAYMENTS 5
2.1 Basic Rent 5
2.1.1 Free Rent Periods 5
2.2 Additional Rent 5
2.3 Rental Deposit 6
ARTICLE 3 PAYMENT OF PROPERTY TAXES AND ASSESSMENTS 6
3.1 Payment of Property Taxes 6
3.2 Property Taxes 6
3.3 Tenant's Right to Contest Property Taxes. 6
3.4 Landlord's Right to Contest Property Taxes 7
ARTICLE 4 USE 7
4.1 Permitted Use 7
4.2 Acceptance of Premises 7
4.3 Rules and Regulations 7
4.4 Tenant's Obligations 7
4.5 Condition of Premises 7
ARTICLE 5 HAZARDOUS MATERIALS 8
5.1 Hazardous Materials 8
5.2 Hazardous Materials Laws 8
5.2.1 Federal 8
5.2.2 California 8
5.2.3 Other Laws and Regulations 8
5.2.4 Phase I Environmental Analysis 8
5.3 Compliance with Hazardous Materials Laws 8
5.4 Notice of Actions 9
5.5 Disclosure and Warning Obligations 9
5.6 Tenant Indemnification 9
5.7 Landlord Indemnification 10
5.8 Environmental Audits 10
5.9 Assignment and Subletting 10
ARTICLE 6 SERVICES AND UTILITIES 10
ARTICLE 7 MAINTENANCE, REPAIR AND ALTERATION OF PREMISES 10
7.1 Construction Warranty and Landlord Obligations 10
7.2 Tenant's Maintenance 11
7.3 Tenant's Waiver of Claims Against Landlord 11
ARTICLE 8 CHANGES AND ALTERATIONS 11
8.1 Tenant's Changes and Alterations 11
8.2 Liens 12
8.3 Compliance with Laws 12
ARTICLE 9 RIGHTS RESERVED BY LANDLORD 13
9.1 Landlord's Entry 13
9.2 Landlord's Cure 13
ARTICLE 10 INDEMNITY AND INSURANCE 13
10.1 Tenant's Insurance Obligations 13
10.2 Insurance Coverage 13
10.3 Insurance Provisions 14
10.4 Waiver of Subrogation 14
10.5 Rental Abatement Insurance 14
10.6 Indemnification by Tenant 14
10.7 Indemnification by Landlord 15
ARTICLE 11 ASSIGNMENT AND SUBLETTING 15
11.1 Restriction on Other Transfers 15
11.2 Permitted Transfers 15
11.3 Sublease Requirements. 16
11.4 No Merger 16
11.5 Profits on Transfer 16
11.5.1 Tenant's Profit Statement 16
ARTICLE 12 DAMAGE OR DESTRUCTION 16
12.1 Destruction and Restoration 16
12.2 Application of Insurance Proceeds 16
12.3 Continuance of Tenant's Obligations 16
12.4 Damage or Destruction at End of Lease Term 17
12.5 Waiver of California Statutes 17
ARTICLE 13 CONDEMNATION 17
13.1 Condemnation of Entire Premises 17
13.2 Partial Condemnation/Termination of Lease 17
13.3 Partial Condemnation/Continuation of Lease 17
13.4 Continuance of Obligations 18
13.5 Tenant's Waiver 18
ARTICLE 14 DEFAULTS; REMEDIES 18
14.1 Events of Default 18
14.1.1 Failure to Pay 18
14.1.2 Failure to Perform 18
14.1.3 Other Defaults 18
14.2 Remedies 18
14.3 Right of Landlord to Re-Enter 19
14.4 Cumulative Remedies 19
14.5 Mitigation 19
14.6 Limitation on Remedies 19
14.7 Legal Costs 19
14.8 No Waiver 19
14.9 Waiver by Tenant 20
14.9.1 Delinquent Rental Payments 20
ARTICLE 15 PROTECTION OF CREDITORS 20
15.1 Subordination 20
15.2 Attornment 21
15.3 Estoppel Certificates 21
15.4 Mortgagee Protection Clause 21
15.5 Non-Disturbance 21
ARTICLE 16 TERMINATION OF LEASE 21
16.1 Surrender of Premises 21
16.2 Holding Over 22
ARTICLE 17 RENEWAL OPTIONS 22
17.1 Options to Renew 22
17.1.1 No Event of Default 22
17.1.2 Fair Market Rent 22
17.1.3 Exercise of Renewal Term(s) 22
17.1.4 Determination of Fair Market Rent 22
17.1.5 Arbitration 23
ARTICLE 18 EXPANSION OPTION 23
18.1 Option to Expand 23
18.2 No Event of Default 23
18.3 Exercise of Expansion Option 23
18.4 Expansion Terms 23
18.5 Expansion Space Basic Rent 24
18.6 Free Rent Period 24
18.7 Failure to Exercise Expansion Option 24
ARTICLE 19 MISCELLANEOUS PROVISIONS 24
19.1 Notices 24
19.2 Landlord's Continuing Obligations 25
19.3 Net Lease 25
19.4 Successors 25
19.5 Memorandum of Lease 25
19.6 Captions and Interpretation 25
19.7 Relationship of Parties 25
19.8 Entire Agreement 25
19.9 Severability 25
19.10 Landlord's Limited Liability 25
19.11 Survival 25
19.12 Attorneys' Fees 25
19.13 Broker 26
19.14 Governing Law 26
19.15 Time is of the Essence 26
19.16 Joint and Several Liability 26
19.17 Delivery of Corporate Documents 26
19.18 Tenant's Financial Condition 26
19.19 Provisions are Covenants and Conditions 26
19.20 Business Days 26
19.21 Force Majeure 26
19.22 No Continuous Operation 26
19.23 Waiver of Landlord's Lien 27
19.24 Submission of Lease 27
||
Lease Agreement
Summary of Basic Lease Information
10 Lease Date: November __, 1997
20 Landlord: Opus West Corporation
30 Address of Landlord Opus West Management Corporation
for Payment of Rent: 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
40 Address of Landlord Opus West Corporation
for Notices: 0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Opus U.S. Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With another copy to: Opus West Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx, President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
50 Tenant: PETCO Animal Supplies, Inc., a Delaware
corporation
60 Address of Tenant PETCO Animal Supplies, Inc.
for Notices: 0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx, Esq.
Attorney at Law
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
70 Premises The parcel of land situated in the County
of Riverside, State of California,
described on Exhibit "A," together with all
Improvements thereon (as defined in Section
1.1).
80 Landlord's The Landlord's Improvements to be
constructed by Landlord as
Improvements described in the Work Letter (See Exhibit
"B").
90 Lease Term Initial Lease Term: 86 months from the
Commencement Date
Renewal Terms: Two (2) Renewal Terms each
for five (5) years.
100 Rent: Basic Rent:
Lease Months: 1-2:
Monthly Rent for Premises: Basic
Rent is abated for first two (2)
months. Additional Rent is not
abated.
Lease Months: 3-62:
Monthly Rent for Premises:
$89,991.00 ($.2727 per square
foot)
Monthly Rent for Expansion Land:
Prior to Expansion Land
Commencement Date: $4,125
($.0125 per square foot of the
Building)
After Expansion Land Commencement
Date: Calculated pursuant to
Article 18
Lease Months: 63-86 (and Lease months 87-
122 if Extension Election under Article 18
is exercised):
Monthly Rent for the Premises:
$100,782 ($.3054 per square foot)
Monthly Rent for Expansion Land:
Prior to Expansion Land
Commencement Date: $4,125
($.0125 per square foot of the
Building)
After Expansion Land Commencement
Date: Calculated pursuant to
Article 18
Lease Months: 123-146: (if Extension
Election under Article 18 is exercised):
Monthly Rent for the Premises:
$112,860 ($.3420 per square foot)
Monthly Rent for Expansion Land:
Calculated pursuant to Article 18
Renewal Terms:
Calculated pursuant to Article 17.
The Basic Rent is subject to adjustment
pursuant to the provisions of Section 2.1
and 2.1.1 of this Lease.
The term "Basic Rent" as used in this Lease
includes the portion of the rent for the
Expansion Land.
Maximum Rate of Interest: Prime plus two
percent (2%) per annum. For purposes of
this Lease, the term "Prime" shall mean the
rate announced from time to time by Bank of
America, N.A., as its prime or reference
rate. If Bank of America shall cease to
use its prime or reference rate, then
Landlord shall select the rate of another
financial institution to be substituted
therefor, which shall be a major money
center commercial bank.
Late Charge: 2% of the overdue amount.
110 Use: General Office and Warehouse Uses
("Permitted Use")
120 Deposit: None
130 Rental Deposit: $196,482.00 applicable to third (3rd) and
fourth (4th) month's Basic Rent.
140 Brokers: Landlord's and Tenant's Broker: Xxx &
Associates
150 Exhibits: The following exhibits are attached hereto and
incorporated into this Lease:
Exhibit "A" Legal Description of Land
Exhibit "A-1" Legal Description of Expansion Land
Exhibit "A-2" Expansion Space
Exhibit "B" Work Letter
Schedule 1 to Work Letter Final Plans and Specifications
Exhibit "C" Preliminary Report
Exhibit "D" Commencement Date Acknowledgment
Exhibit "E" Delivery Date Acknowledgment
Exhibit "F" Subordination, Non-Disturbance and Attornment Agreement
The foregoing Basic Terms are hereby incorporated into and made a
part of this Lease. Each reference in this Lease to the Basic Terms shall
mean the information set forth above and shall be construed to incorporate
all of the terms provided under the particular Lease paragraph pertaining
to such information. In the event of a conflict between the Basic Terms
and the Lease, the Lease shall prevail.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a
Minnesota corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
LEASE AGREEMENT
This Lease Agreement (the "Lease"), which includes the Basic Terms
(as hereinafter defined), dated as of November __, 1997 ("Effective Date"),
is made by and between Landlord and Tenant.
ARTICLE 1
LEASE OF PREMISES AND LEASE TERM
1.1 Premises. Landlord, for and in consideration of the rents,
covenants and agreements hereinafter set forth, hereby leases to Tenant and
Tenant hereby leases from Landlord, upon and subject to the terms,
covenants and conditions hereinafter set forth, all that certain parcel of
land situated in the County of Riverside, and State of California
delineated on Exhibit "A" attached hereto and incorporated herein ("Land"),
together with those certain Landlord's Improvements as defined in the Work
Letter attached hereto as Exhibit "B" ("Work Letter") to be constructed by
Landlord, including an approximately three hundred thirty thousand
(330,000) square foot building ("Building") and all other improvements,
machinery, equipment, fixtures and other property (except Tenant's trade
fixtures), to be installed or located thereon and all additions,
alterations and replacements thereof (collectively "Improvements"). Herein
the Land and the Improvements are referred to collectively as the
"Premises". Tenant acknowledges that this Lease is subordinate and subject
to (a) all liens, encumbrances, deeds of trust, reservations, covenants,
conditions, restrictions and other matters affecting the Premises ("Title
Matters") (i) in effect on the Effective Date of this Lease as specified in
Exhibit "C" attached hereto and incorporated herein ("Preliminary Report")
or (ii) approved or deemed approved pursuant to this Section 1.1,
("Permitted Encumbrances") and (b) any law, regulation, rule, order or
ordinance of any governmental entity applicable to the Premises or the use
or occupancy thereof, in effect on the execution of this Lease or
thereafter promulgated. In the event that, after the Effective Date any
new Title Matters appear of record, such matters shall be subject to the
review and approval of Tenant which approval shall not be withheld so long
as the new Title Matter does not materially and adversely impair the use or
occupancy by Tenant of the Premises for its intended purpose. Tenant shall
deliver written notice to Landlord of its approval or disapproval of such
Title Matters within ten (10) days after delivery by Landlord to Tenant of
such new Title Matter. If Tenant fails to respond within such ten (10) day
period and Landlord delivers a written reminder notice to Tenant and Tenant
fails to respond within five (5) days of the delivery of the written
reminder notice, the new Title Matter shall be deemed approved.
1.2 Term of Lease. The initial term of this Lease ("Initial Term")
shall commence on the Delivery Date (defined in Section 1.3 below) as such
date may be extended until (i) the date of Substantial Completion of the
Landlord's Improvements (as defined in the Work Letter) ("Commencement
Date"); provided Tenant shall be permitted by the City to occupy and use
the Premises at such time. The Initial Term shall end on the date which is
eighty-six (86) months after the Commencement Date unless sooner terminated
pursuant to the terms of this Lease. Any reference to the Term of this
Lease or similar reference shall be a reference to the Initial Term
together with any renewal terms of this Lease specified in Article 17. Any
reference to Lease Year shall refer to each consecutive twelve (12) month
period during the Term commencing on the Commencement Date. For purposes
of this Lease, a "Lease Month" shall be defined as those successive
calendar month periods beginning with the Commencement Date and continuing
through the Initial Term or any Renewal Term of this Lease.
1.2.1 Acknowledgment of Commencement Date. Tenant shall,
within ten (10) business days of request therefor by Landlord, execute an
acknowledgment of the Commencement Date prepared by Landlord in the form of
Exhibit "D" attached hereto and incorporated herein ("Commencement Date
Acknowledgment"), provided, however, that the failure of Tenant to execute
such acknowledgment shall not affect any obligation of Tenant hereunder or
the Landlord's determination of the Commencement Date. If the Tenant fails
to execute and deliver such Commencement Date Acknowledgment or provide
written notice of Tenant's disagreement with the contents thereof, then
Landlord may deliver a written reminder notice. If Tenant fails to respond
in writing to the written reminder notice within five (5) days, Landlord
may deliver a second written reminder notice. If Tenant fails to respond
in writing to the second written reminder notice within five (5) days, then
Landlord and any prospective purchaser or encumbrancer may conclusively
presume and rely upon the fact that the Commencement Date is the date
specified in the Commencement Date Acknowledgment.
1.2.2 Early Occupancy. Tenant shall be entitled to early
occupancy of the Premises thirty (30) days prior to the Commencement Date
in accordance with this Section 1.2.2 and the Work Letter. Tenant's early
occupancy of the Premises for installation of furniture, fixtures and
equipment shall be subject to all the terms and conditions of this Lease,
other than the obligation to pay Basic Rent. Early occupancy of the
Premises shall not advance the expiration date of this Lease. Landlord
shall have the right to charge Tenant for any utility costs incurred as a
result of Tenant's early occupancy of the Premises. If during Tenant's
early occupancy of the Premises, Tenant desires to have security for the
Premises, Tenant shall provide such security at no cost to Landlord.
1.3 Delivery of Premises. Landlord shall use its commercially
reasonable efforts to deliver the Premises to Tenant on or before August 1,
1998 ("Delivery Date" with Landlord's Improvements) (as defined in the Work
Letter) Substantially Completed. If Landlord is unable to deliver the
Premises to Tenant by August 1, 1998, then Tenant shall be entitled to
receive from Landlord the amount of Five Thousand Dollars ($5,000) per day
for the first fifteen (15) days beyond August 1, 1998 that Landlord fails
to deliver the Premises (subject to force majeure as provided in
Section 19.21) and Ten Thousand Dollars ($10,000) per day for the fifteen
(15) days beyond August 15, 1998 that Landlord fails to deliver the
Premises (subject to force majeure as provided in Section 19.21) and the
Delivery Date shall be deemed to have occurred on such later date. If
Landlord fails to deliver the Premises on or before September 1, 1998
subject to extension for force majeure as provided in Section 19.21 of this
Lease, then Tenant shall, as Tenant's sole and exclusive remedy, have the
option to terminate this Lease by delivering written notice ("Termination
Note") to Landlord. If Tenant accepts delivery of the Premises, then
Tenant shall be deemed to have waived its right to terminate the Lease as
provided for under this Section 1.3. Notwithstanding anything herein to
the contrary, in the event Landlord tenders possession of the Premises to
Tenant in a substantially completed condition during that period of time
from October 1, 1998 through and including November 30, 1998 (the "Non-
Acceptance Period"), then, Tenant shall have the right not to accept
possession of the Premises during such period by notifying Landlord, within
five (5) days of the tender of possession of the Premises to Tenant, in
which case the Commencement Date shall not occur until December 1, 1998.
1.3.1 Acknowledgment of Delivery Date. Tenant shall, within
ten (10) business days of request therefor by Landlord, execute an
acknowledgment of the Delivery Date prepared by Landlord in the form of
Exhibit "E" attached hereto and incorporated herein ("Delivery Date
Acknowledgment"), provided, however, that the failure of Tenant to execute
such acknowledgment shall not affect any obligation of Tenant hereunder or
the Landlord's determination of the Delivery Date. If the Tenant fails to
execute and deliver such Commencement Date Acknowledgment or provide
written notice of Tenant's disagreement with the contents thereof, then
Landlord may deliver a reminder notice. If Tenant fails to respond to the
reminder notice within five (5) days, Landlord may deliver a second
reminder notice. If Tenant fails to respond to the second reminder notice
within five (5) days, then Landlord and any prospective purchaser or
encumbrancer may conclusively presume and rely upon the following facts:
(i) the Delivery Date is the date specified in the Delivery Date
Acknowledgment and (ii) that the Premises were in acceptable condition and
were delivered in compliance with all of the requirements of Work Letter.
ARTICLE 2
RENTAL AND OTHER PAYMENTS
2.1 Basic Rent. In consideration of the leasing of the Premises
and the construction of the Landlord's Improvements described in the Work
Letter, Tenant covenants to pay Landlord in advance, on the first day of
each and every calendar month during the Term, at the address of Landlord
as specified in Item 3 of the Basic Terms, or at such other place as
Landlord may from time to time designate in writing, a rental for the
Initial Term of this Lease calculated based upon the amounts specified in
Item 10 of the Basic Terms ("Basic Rent"). Upon Substantial Completion (as
defined in the Work Letter) of the Landlord's Improvements, Landlord shall
deliver to Tenant a certificate from Landlord's architect certifying the
square footage of the Premises ("Square Footage Certification") together
with a calculation of the Basic Rent. For purposes of calculating the
Basic Rent, the Premises shall be measured from the face of the exterior
walls. Tenant shall have the right to independently confirm such square
footage by an architect certified in the state of California. In the event
Tenant's confirmation of such square footage differs from the calculation
provided by Landlord, Tenant shall provide notice to Landlord within
fifteen (15) days after Landlord's delivery of its Square Footage
Certification. Landlord and Tenant shall have fifteen (15) days after
delivery of Tenant's notice to reach agreement on the final measurement of
the square footage of the Premises. In the event Landlord and Tenant fail
to reach agreement on the square footage of the Premises within such
fifteen-day period, then Landlord's architect and Tenant's architect shall
together select a third architect whose determination shall be binding on
the parties. Such selection shall be made within fifteen (15) days after
Landlord and Tenant determine that they cannot reach agreement on the
square footage of the Premises. In the event Landlord's architect and
Tenant's architect cannot reach agreement on a third architect, then the
matter shall be referred to the local office of the American Institute of
Architects who shall make such selection. The third architect so selected
shall then make a final determination of the square footage within fifteen
(15) days of such architect's selection and Landlord shall revise the
Square Footage Certification to reflect this final determination. The
parties shall each bear the costs of their own architect and shall share
the costs equally of any third architect. If the Square Footage
Certification differs from the approximate square footage of the Building
set forth in Section 1.1 above, then the Basic Rent shall be adjusted to
reflect the square footage set forth in the Square Footage Certification.
2.1.1 Free Rent Periods. During the first two (2) calendar
months of the Initial Term, Basic Rent shall be abated ("Free Rent
Period").
2.2 Additional Rent. Except as otherwise specifically provided in
Section 7.1 of this Lease, the Basic Rent shall be net to Landlord so that
this Lease shall yield, net to Landlord, the Basic Rent payable under this
Lease for each year of the Term of this Lease and that all charges payable
by Tenant under this Lease for Property Taxes, insurance premiums, utility
charges, maintenance, repair and replacement expenses, all expenses
relating to compliance with laws, and all other costs, fees, charges,
expenses, reimbursements and obligations of every kind and nature
whatsoever relating to the operation and use of the Premises, and/or the
Expansion Land (defined below) (whether or not Tenant has exercised the
Expansion Land Option) which may arise or become due during the Term or by
reason of events occurring during the Term of this Lease or which relate to
the performance by Tenant of all the terms, covenants, conditions and
agreements to be performed, paid or observed by Tenant hereunder shall be
paid or discharged by Tenant, at Tenant's sole cost and expense.
Notwithstanding anything to the contrary, Tenant shall not be responsible
for any property management fees or earthquake insurance premiums paid by
Landlord during the Term of this Lease. Except as otherwise provided in
Section 7.1 or 14.9 of this Lease, all payments of Basic Rent and
Additional Rent shall be payable without previous demand therefor and
without any right of setoff or deduction whatsoever. All charges payable
by Tenant other than Basic Rent, however denoted, are called "Additional
Rent." Unless this Lease provides otherwise, all Additional Rent shall be
paid with the next installment of Basic Rent falling due. Rent for any
partial month shall be prorated on the basis of the number of days within
such calendar month and paid within ten (10) days of the later of
(a) invoice from Landlord or (b) the Commencement Date. Basic Rent and
Additional Rent are sometimes collectively referred to as "Rent" or "rent."
2.3 Rental Deposit. Upon execution of this Lease, Tenant shall
deposit with Landlord the sum specified in the Basic Lease Provisions as
the Rental Deposit. The Rental Deposit shall be held by Landlord without
obligation or liability for payment of interest thereon as security for the
faithful payment of Basic Rent by Tenant, but shall be applicable to the
third (3rd) and fourth (4th) month's Basic Rent payments without offset or
deduction therefrom.
ARTICLE 3
PAYMENT OF PROPERTY TAXES AND ASSESSMENTS
3.1 Payment of Property Taxes. Provided Landlord delivers the
Property Tax xxxx to Tenant (if delivered to Landlord) promptly upon
receipt thereof, but no later than twenty (20) days prior to the day on
which any fine, penalty, interest or cost may be added thereto for the non-
payment thereof, Tenant covenants and agrees to pay during the Term of this
Lease, as Additional Rent, before any fine, penalty, interest or cost may
be added thereto for the nonpayment thereof, all Property Taxes (as defined
in Section 3.2 below), which become due and payable during the Term of this
Lease. Within ten (10) days of written request from Landlord, Tenant shall
furnish Landlord with satisfactory evidence that the Property Taxes have
been paid. If any Property Taxes shall cover any period of time prior to
or after the term of this Lease, Tenant's share of such Property Taxes
shall be equitably prorated to cover only the period of time within the tax
fiscal year during which this Lease shall be in effect.
3.2 Property Taxes. "Property Taxes" shall include general real
property and improvement taxes, any form of assessment, special assessment
or reassessment, license, permit or inspection fee or tax, commercial
rental tax (but only to the extent the same is in lieu of some existing
Property Taxes), levy, charge, penalty or similar imposition, whatsoever or
at all imposed by any authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, or any agency or public body, and all other charges or
burdens of whatsoever kind and nature incurred in the use, occupancy,
ownership, operation, leasing or possession of the Premises, and/or the
Expansion Land (whether or not Tenant has exercised the Expansion Land
Option) without particularizing by any known name or by whatever name
hereafter called, and whether any of the foregoing be general or special,
ordinary or extraordinary, foreseen or unforeseen. Property Taxes shall
include, without limitation, the following: (i) any tax imposed upon the
transaction or based upon a reassessment of the Premises, and/or the
Expansion Land (whether or not Tenant has exercised the Expansion Land
Option) due to a change in ownership or transfer of all or part of
Landlord's interest in the Premises the Land, and/or the Expansion Land
(whether or not Tenant has exercised the Expansion Land Option); (ii) any
assessments, taxes, fees, levies or charges in addition to, or in
substitution, partially or totally, for any items previously included
within the definition of Real Property Taxes; (iii) any tax or charge for
fire protection, street lighting streets, sidewalks, road maintenance,
refuse, sewer, water or other services provided to the Premises, and/or the
Expansion Land (whether or not Tenant has exercised the Expansion Land
Option) by any governmental agency; and (iv) capital levy, sales or use
tax, gross receipts tax or other tax on the rents received therefrom, or a
franchise tax, or an assessment, levy or charge measured by or based in
whole or in part upon such rents or value, now or hereafter imposed.
Property Taxes do not, however, include Landlord's state or federal income,
franchise, estate or inheritance taxes.
3.3 Tenant's Right to Contest Property Taxes. Tenant shall have
the right at its own expense, and upon prior notice to Landlord, to contest
the amount or validity, in whole or in part, of any Property Taxes by
appropriate proceedings diligently conducted in good faith, but only after
payment of such Property Taxes, unless such payment, or a payment thereof
under protest, would operate as a bar to such contest or interfere
materially with the prosecution thereof, in which event, notwithstanding
the provisions of Section 3.1 hereof, Tenant may defer payment of such
Property Taxes if neither the Premises, and/or the Expansion Land (whether
or not Tenant has exercised the Expansion Land Option)] nor any portion
thereof would, by reason of such deferment, be in danger of being forfeited
or lost and so long as such deferment will not otherwise materially and
adversely impact the Premises, and/or the Expansion Land (whether or not
Tenant has exercised the Expansion Land Option) or impair the value of the
Premises, and/or the Expansion Land (whether or not Tenant has exercised
the Expansion Land Option). Upon the termination of any such proceedings,
Tenant shall pay the amount of such Property Taxes as finally determined in
such proceedings, with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith.
Landlord shall not be required to join in any proceedings referred to in
this Section unless the provisions of any law, rule or regulation at the
time in effect shall require that such proceedings be brought by or in the
name of Landlord, in which event Landlord shall join in such proceedings.
Landlord shall not ultimately be subject to any liability for the payment
of any fees, including attorney's fees, costs and expenses in connection
with such proceedings and Tenant shall reimburse Landlord for all such fees
(including reasonable attorney's fees), costs and expenses on demand.
3.4 Landlord's Right to Contest Property Taxes. In addition to the
right of Tenant under Section 3.3 to contest the amount or validity of
Property Taxes, Landlord shall also have the right, but not the obligation,
to contest the amount or validity, in whole or in part, of any Property
Taxes not contested by Tenant. Any such contests by Landlord shall be at
Landlord's sole expense; provided, however, that if the amounts payable by
Tenant for Property Taxes are reduced (or if a proposed increase in such
amounts is avoided or reduced) by reason of Landlord's contest of Property
Taxes, Tenant shall reimburse Landlord for the costs incurred by Landlord
in contesting Property Taxes, but such reimbursements shall not be in
excess of the amount saved by Tenant by reason of Landlord's actions in
contesting such Property Taxes.
ARTICLE 4
USE
4.1 Permitted Use. Tenant may use the Premises only for the
Permitted Use specified in Item 11 of the Basic Terms. Tenant shall not
use or occupy the same, or knowingly permit them to be used or occupied,
contrary to any statute, governmental, quasi-governmental or administrative
rule, order, ordinance, requirement or regulation applicable thereto
("Regulatory Requirement"), or in any manner which would violate any
certificate of occupancy affecting the same, or which would make void or
voidable any insurance then in force with respect thereto or which would
cause structural injury to the Improvements or cause the value or
usefulness of the Premises, or any portion thereof, substantially to
diminish (reasonable wear and tear excepted), or which would constitute a
public or private nuisance or waste and Tenant agrees that it will
promptly, upon discovery of any such use, take all necessary steps to
compel the discontinuance of such use. Landlord represents that the
Premises are zoned for the Permitted Use.
4.2 Acceptance of Premises. Tenant shall accept delivery of the
Premises with Landlord's Improvements, as set forth on Exhibit "B"
substantially completed. Within thirty (30) days of Substantial Completion
(as defined below) of Landlord's Improvements, Landlord and Tenant shall
provide a "punchlist" identifying the corrective work of the type commonly
found on an architectural punchlist with respect to Landlord's
Improvements, which list shall be based on whether such items were required
by the approved Final Plans and Specifications. Within ten (10) Business
Days after delivery of the punchlist, Landlord shall commence the
correction of punchlist items and diligently pursue such work to
completion. The punchlist procedure to be followed by Landlord and Tenant
shall in no way limit Tenant's obligation to occupy the Premises under the
Lease nor shall it in any way excuse Tenant's obligation to pay Rent as
provided under the Lease unless such punch list items preclude Tenant from
occupying the Premises as reasonably determined by Tenant. Nothing in this
Section 4.2 shall be deemed to diminish any obligation of Landlord under
Section 7.1. Tenant acknowledges, that except as specifically provided in
this Lease and the Work Letter, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises or the
Building or with respect to the suitability or fitness of either for the
conduct of Tenant's business or for any other purpose. Tenant shall comply
with the Permitted Encumbrances.
4.3 Rules and Regulations. Tenant shall comply with all rules and
regulations adopted by Landlord from time to time for the Project; provided
that such rules and regulations are applied in a non-discriminatory manner,
and do not adversely affect Tenant's hours of operation or otherwise
adversely affect the operation of Tenant's business. In the event of any
conflict between such rules and regulations and the provisions of this
Lease, this Lease shall prevail.
4.4 Tenant's Obligations. Tenant shall obtain and pay for all
permits, required for Tenant's occupancy of the Premises and shall promptly
take all substantial and non-substantial actions necessary to comply with
all applicable Regulatory Requirements regulating the particular type of
use by Tenant of the Premises, including, without limitation, the
Occupational Health and Safety Act and the Americans with Disabilities Act
4.5 Condition of Premises. Landlord shall deliver the Premises to
Tenant clean and free of debris on the Commencement Date, with Landlord's
Improvements Substantially Completed as provided in the Work Letter and,
except as disclosed in the Phase 1 Report, (defined below), the
improvements constructed by Landlord as Landlord's Improvements shall, as
of the Commencement Date, not contain Hazardous Materials (defined below)
in violation of any of the Hazardous Materials Laws (defined below).
ARTICLE 5
HAZARDOUS MATERIALS
5.1 Hazardous Materials. The term "Hazardous Material(s)" shall
mean any toxic or hazardous substance, material or waste or any pollutant
or contaminant or infectious or radioactive material, including but not
limited to those substances, materials or wastes regulated now or in the
future under any of the statutes or regulations listed in Section 5.2, and
any and all of those substances included within the definitions of
"hazardous substances," "hazardous materials," "hazardous waste,"
"hazardous chemical substance or mixture," "imminently hazardous chemical
substance or mixture," "toxic substances," "hazardous air pollutant,"
"toxic pollutant," or "solid waste" in the statutes or regulations in
Section 5.2. Hazardous Materials shall also mean any and all other similar
terms defined in other federal, state and local laws, statutes,
regulations, orders or rules, and materials and wastes which are, or in the
future become, regulated under applicable local, state or federal law for
the protection of health or the environment, or which are classified as
hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or
local law, regulation or order or by common law decision, including,
without limitation, (i) trichloroethylene, tetrachloroethylene, perchloro-
ethylene and other chlorinated solvents, (ii) oil or any petroleum products
or fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v)
flammable explosives, (vi) urea formaldehyde and (vii) radioactive
materials and waste, and (viii) infectious waste.
5.2 Hazardous Materials Laws. The term "Hazardous Materials
Law(s)" shall mean any federal, state or local laws, ordinances, codes,
statutes, regulations, administrative rules, policies and orders, and other
authority, existing now or in the future, which classify, regulate, list or
define hazardous substances, materials, wastes contaminants, pollutants
and/or the Hazardous Materials, including without limitation the following
statutes and regulations, and any other legal authority, regulations, or
policies relating to or implementing such statutes and regulations:
5.2.1 Federal. Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), as
amended by the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), 42 U.S.C. ' 9601 et seq.; Resource Conservation and Recovery Act
of 1976 ("RCRA"), 42 U.S.C. ' 6901 et seq.; Clean Water Act ("CWA"), 33
U.S.C. ' 1251 et seq.; Clean Air Act ("CAA"), 42 U.S.C. ' 78401 et seq.;
Toxic Substances Control Act ("TSCA"), 15 U.S.C. ' 2601 et seq.; The Refuse
Act of 1899, 33 U.S.C. ' 407; Occupational Safety and Health Act ("OSHA"),
29 U.S.C. ' 651 et seq.; Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) and the Environmental Protection Agency
Table (40 CFR Part 302 and amendments thereto);
5.2.2 California. Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous
Substance Account Act ("California Superfund"), Cal. Health & Safety Code
' 25300 et seq.; California Hazardous Waste Control Act, Cal. Health &
Safety Code Sections 25100 et seq.; Xxxxxx-Cologne Water Quality Control
Act ("Xxxxxx-Cologne Act"), Cal. Water Code ' 13000 et seq.; Hazardous
Waste Disposal Land Use Law, Cal. Health & Safety Code ' 25220 et seq.;
Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"),
Cal. Health & Safety Code ' 25249.5 et seq.; Hazardous Substances
Underground Storage Tank Law, Cal. Health & Safety Code ' 25280 et seq.;
California Hazardous Substance Act, Cal. Health & Safety Code ' 28740 et
seq.; Air Resources Law, Cal. Health & Safety Code ' 39000 et seq.; Hazard-
ous Materials Release Response Plans and Inventory, Cal. Health & Safety
Code '' 25500-25541; Toxic Pits Cleanup Act of 1984 ("TCPA"), Cal. Health &
Safety Code '' 25208-25208.17;
5.2.3 Other Laws and Regulations. All other regulations
promulgated pursuant to said foregoing laws or any amendments or
replacement thereof, provided such amendments or replacements shall in no
way limit the original scope and/or definition of Hazardous Materials
defined herein as of the execution date of this Lease.
5.2.4 Phase I Environmental Analysis. Landlord has delivered
to Tenant two (2) Phase I Environmental Analysis Reports ("Phase 1
Reports") covering the Premises, and the Expansion Land, respectively and
Tenant acknowledges that this shall be deemed satisfaction of any
obligation on the part of Landlord to disclose any and all Hazardous
Materials on or relating to the Premises, and the Expansion Land as
required hereunder or by any Hazardous Materials Laws.
5.3 Compliance with Hazardous Materials Laws. Tenant shall not
cause or knowingly and intentionally permit any Hazardous Materials to be
brought upon, kept, or used in connection with the Premises or by Tenant,
its agents, employees or contractors in a manner or for a purpose
prohibited by or which could result in liability under any applicable law,
regulation, rule or ordinance, including, without limitation, the Hazardous
Materials Laws. Tenant shall, at its own expense, at all times and in all
respects comply with all Hazardous Materials Laws relating to the
industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, presence, disposal or transportation of
any Hazardous Materials brought thereon by Tenant, its agents, employees,
or contractors. Tenant shall, at its own expense, procure, maintain in
effect and comply with all conditions of any and all permits, licenses and
other governmental and regulatory approvals relating to Hazardous Materials
that are brought upon, knowingly and intentionally permitted to be brought
upon, kept, or used in connection with the Premises and/or the Expansion
Land by Tenant or Tenant's agents, employees, or contractors ("Tenant's
Agents") and Tenant shall cause any and all said Hazardous Materials to be
removed from the Premises and/or the Expansion Land and transported in
accordance with and in compliance with all Hazardous Materials Laws.
Tenant shall in all respects, handle, treat, deal with and manage any and
all Hazardous Materials that are brought upon, knowingly and intentionally
permitted to be brought upon, kept, or used in connection with the Premises
by Tenant or Tenant's Agents, in complete conformity with all applicable
Hazardous Materials Laws and prudent industry practices regarding the
management of such Hazardous Materials. Upon expiration or earlier
termination of this Lease, Tenant shall at its own expense, cause all
Hazardous Materials (to the extent such Hazardous Materials are generated,
stored, released or disposed of during the Term of this Lease by Tenant or
Tenant's Agents) to be removed from the Premises and/or the Expansion Land
and transported for use, storage or disposal in accordance and in
compliance with all applicable Hazardous Materials Laws. Tenant shall not
take any remedial action in response to the presence of any Hazardous
Materials in, on, about or under the Premises and/or the Expansion Land or
in any Improvements situated on the Land and/or the Expansion Land, nor
enter into any settlement agreement, consent, decree or other compromise in
respect to any claims relating to any way connected with the Premises or
the Improvements on the Land and/or the Expansion Land without first
notifying Landlord of Tenant's intention to do so and affording Landlord
ample opportunity to appear, intervene or otherwise appropriately assert
and protect Landlord's interest with respect thereto.
5.4 Notice of Actions. Tenant shall immediately notify Landlord in
writing of (a) any enforcement, clean-up, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any
Hazardous Materials Laws; (b) any written claim made or threatened by any
person against Landlord, or the Premises, relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials; and (c) any written reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or about the Premises or with respect to any Hazardous
Materials removed from the Premises, including, any complaints, notices,
warnings, reports or asserted violations in connection therewith. Tenant
shall also provide to Landlord, as promptly as possible, and in any event
within five (5) business days after Tenant first receives or sends the
same, with copies of all written claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the Premises or
Tenant's use thereof. Upon written request of Landlord (to enable Landlord
to defend itself from any claim or charge related to any Hazardous
Materials Law), Tenant shall promptly deliver to Landlord notices of
hazardous waste manifests reflecting the legal and proper disposal of all
such Hazardous Materials removed or to be removed from the Premises and/or
the Expansion Land. All such manifests shall list the Tenant or its agent
as a responsible party only if such Hazardous Materials were caused or
knowingly and intentionally permitted to be brought upon the Premises or
Expansion Land by Tenant, its agent, employees, or contractors, and in such
case shall not attribute responsibility for any such Hazardous Materials to
Landlord.
5.5 Disclosure and Warning Obligations. Tenant shall also comply
with all laws, ordinances and regulations regarding warning obligations
with respect to the presence or danger of Hazardous Materials or as
otherwise may be required by law (to the extent Tenant has knowledge
thereof). Tenant acknowledges and agrees that it will promptly notify
Landlord prior to reporting to any governmental or quasi-governmental
agencies any matters relating to Hazardous Materials and Landlord shall
have the right to review such reports. So long as Tenant will not be in
violation of any laws requiring Tenant to make such reports, Landlord shall
have the right to assume control over the making of such reports to the
applicable governmental or quasi-governmental agencies. Tenant further
agrees to cooperate with Landlord in complying with all Hazardous Materials
Laws regarding the disclosure of, the presence or danger of Hazardous
Materials, including, with limitation, all notices or other requirements
under California Health and Safety Code Section 25919 et seq., and 25249.5
et seq. and California Code of Regulations Section 12000 et seq.
Notwithstanding the foregoing, Tenant shall prior to delivering any notices
required by this Section 5.5 to any governmental entity or agency, deliver
written notice to Landlord of the same so as to afford Landlord opportunity
to take over such obligation if Landlord so desires.
5.6 Tenant Indemnification. Tenant shall indemnify, defend (with
counsel reasonably acceptable to Landlord), protect and hold Landlord and
each of Landlord's officers, directors, partners, employees, agents,
attorneys, successors and assigns (collectively "Landlord's Indemnitees")
free and harmless from and against any and all claims, liabilities,
damages, costs, penalties, forfeitures, losses or expenses (including
reasonable attorneys' fees) for death or injury to any person or damage to
any property whatsoever (including water tables and atmosphere) ("Claims")
to the extent arising or resulting in whole or in part from the presence or
discharge of Hazardous Materials to the extent such Hazardous Materials are
in excess of legally permissible amounts under the Hazardous Materials Laws
by Tenant, Tenant's agents, employees, or contractors in, on, under, upon
or from the Premises and/or the Expansion Land or the Improvements located
thereon or from the transportation or disposal of Hazardous Materials to or
from the Premises and/or the Expansion Land to the extent caused by Tenant.
5.7 Landlord Indemnification. Landlord shall indemnify, defend
(with legal counsel reasonable acceptable to Tenant) and hold Tenant and
Tenant's officers, directors, partners, employees, agents, attorneys,
successors and assigns (collectively, "Tenant's Indemnitees") free and
harmless from and against any and all Claims to the extent arising or
resulting in whole or in part from the presence or discharge of Hazardous
Materials to the extent such Hazardous Materials are in excess of legally
permissible amounts under the Hazardous Materials Laws by Landlord, or its
employees, agents or contractors in, on, under, upon or for the Premises
and/or the Expansion Land or the Improvements thereon or from the
transportation or disposal of Hazardous Materials by Landlord or its
employees, agents, or contractors. Landlord's obligations hereunder shall
include, without limitation, and whether foreseeable or unforeseeable, all
costs of any required or necessary repairs, clean-up or detoxification or
decontamination of the Premises and/or the Expansion Land or the
Improvements, and the presence and implementation of any closure, remedial
action or other required plans in connection therewith, and shall survive
the expiration of or early termination of the term of this Lease and any
costs and fees incurred in the enforcement of the indemnity action. In
addition, with respect to any Hazardous Materials that are in excess of the
legally permissible amounts under the Hazardous Materials Laws that were on
the Land and/or the Expansion Land at the time that the Phase 1 Reports
were issued and which were not disclosed by the Phase 1 Reports ("Pre-
existing Hazardous Materials"), Landlord agrees to remediate such Pre-
existing Hazardous Materials if, as and when required by a governmental
agency to the extent required by such governmental agency. Landlord
further agrees to indemnify and hold Tenant harmless from any fines,
penalties or other fees imposed against Tenant by such governmental agency
as a result of such Pre-exiting Hazardous Materials. Notwithstanding the
foregoing, nothing in this Section 5.7 shall be deemed to impose any
obligation or liability on Landlord for remediation, indemnification or
payment of any fines, penalties or other fees if the same would not have
been imposed but for some act or omission of Tenant.
5.8 Environmental Audits. Landlord shall have the right, at any
time during the term of this Lease, to conduct an environmental audit. If
Landlord conducts such an audit, it shall be at Landlord's sole cost and
expense, except that if said audit discloses the presence of Hazardous
Materials on the Premises, or the Expansion Land in violation of Tenant's
obligations under this Article 5, then the cost of such audit shall be
borne by Tenant. If the audit confirms the presence of Hazardous Materials
in on or under the Premises, or the Expansion Land or the groundwater
thereunder in violation of Tenant obligations under this Article 5,
Landlord shall have the right to require Tenant to immediately commence all
necessary remediation, abatement, removal and cleanup actions to return the
Premises, and/or the Expansion Land and any other property of whatever
nature to their condition existing prior to the appearance of Hazardous
Materials. Any plan of remediation, abatement, removal and cleanup shall
be subject to the prior approval of Landlord, in its sole discretion.
Except as specified above, Tenant shall not perform or cause to be
performed, any Hazardous Materials surveys, studies, reports or
inspections, relating to the Premises, and/or the Expansion Land without
obtaining Landlord's advance written consent.
5.9 Assignment and Subletting. If (i) any anticipated use of the
Premises by any proposed assignee or sublessee involves the generation,
storage, use, treatment or disposal of Hazardous Materials in a manner or
for a purpose prohibited by any governmental agency or authority, or
(ii) the proposed assignee or sublessee is subject to an enforcement order
issued by any governmental activity in connection with the use, disposal,
or storage of Hazardous Materials, it shall not be unreasonable for
Landlord to withhold its consent to an assignment or subletting to such
proposed assignee or sublessee.
ARTICLE 6
SERVICES AND UTILITIES
During the Term of this Lease, Tenant will pay, when due, all charges
of every nature, kind or description (including, without limitation,
charges imposed by any utility company as a condition precedent to
furnishing or continuing to furnish utilities or services to the Premises)
for utilities furnished to the Premises or chargeable against the Premises,
including all charges for water, sewage, heat, gas, light, garbage,
electricity, telephone, steam, power, or other public or private utility
services and any charges or fees for present or future water or sewer
capacity to serve the Premises, any charges for the underground
installation of gas or other utilities or services, and other charges
relating to the extension of or change in the facilities necessary, and
requested by Tenant, to provide the Premises with adequate utility
services. Notwithstanding the foregoing, nothing contained herein shall be
deemed to limit Landlord's obligations to complete Landlord's Improvements
pursuant to the terms of the Work Letter.
ARTICLE 7
MAINTENANCE, REPAIR AND ALTERATION OF PREMISES
7.1 Construction Warranty and Landlord Obligations. Except to the
extent caused by Tenant's specific use of the Premises or the negligent
acts or intentional misconduct of Tenant, its agents, employees, or
contractors, or as otherwise provided under this Lease, Landlord shall
repair and maintain in good order, condition and repair the foundation,
exterior walls and structural portions of the roof of the Building
("Structural Portions of the Building"). However, Landlord shall not be
obligated to maintain or repair windows, doors, plate glass, surfaces of
exterior walls, or the membrane or other nonstructural elements of the roof
and the same shall not be deemed to be included within the definition of
the Structural Portions of the Premises Building. Landlord warrants, as
Landlord's sole and exclusive warranty concerning the Landlord's
Improvements and the Improvements (including the HVAC System), the
Landlord's Improvements and the Improvements (including the HVAC System)
against defective workmanship and/or materials for a period of one (1) year
from the date of Substantial Completion (as defined in the Work Letter) of
Landlord's Improvements and Landlord agrees, at its sole cost and expense,
to repair or replace any defective item occasioned by poor workmanship
and/or materials during said one-year period, and performance of such one-
year warranty shall be Landlord's sole and exclusive obligation with
respect to defective workmanship and/or materials, and Tenant's rights to
enforce such one-year warranty shall be Tenant's sole and exclusive remedy
with respect to such defective workmanship and/or materials in limitation
of any contract, warranty or other rights, whether express or implied, that
Tenant may otherwise have under applicable law. Landlord covenants that it
will obtain, as part of the costs of the Landlord's Improvements, a ten
(10) year roof warranty. Landlord shall assign to Tenant, to the extent
permitted under any such warranties provided to Landlord, on a non-
exclusive basis, all rights Landlord may have under any warranties provided
by contractors or subcontractors. From and after the expiration of the
one-year warranty of Landlord against defective workmanship and materials,
Landlord agrees to cooperate with Tenant in the enforcement by Tenant, at
Tenant's sole cost and expense, of any express warranties or guaranties of
workmanship or materials given by subcontractors or materialmen or any
service contracts that guarantee or warrant against defective workmanship
or materials or provide service or repair for a period of time in excess of
the one-year period described above. Notwithstanding anything to the
contrary, Landlord, at Landlord's sole cost and expense, shall be solely
responsible for repairing latent structural defects in the Structural
Portions of the Building during the Initial Term and any Renewal Terms
(provided that if Tenant has penetrated, attached any item to, or otherwise
damaged the same, Landlord shall not be responsible for, nor shall Landlord
remedy, any defects attributable to such actions or conditions). During
the Initial Term, Tenant shall be responsible for annual roof inspections
and clean out of gutters and down spouts and Landlord shall be responsible
for all other related maintenance of the roof structure (exclusive of the
roof membrane) including all roof leaks during the first five (5) years of
Initial Lease Term (provided that if Tenant has penetrated, attached any
item to, or otherwise damaged the same, Landlord shall not be responsible
for, nor shall Landlord remedy, any defects attributable to such actions or
conditions). Thereafter, Tenant's exposure shall be capped at Five
Thousand Dollars ($5,000.00) annually inclusive of inspections and clean
out of gutters and down spouts.
7.2 Tenant's Maintenance. Except as otherwise expressly provided
in this Lease, Tenant, at its sole cost and expense, throughout the Term of
this Lease, including the warranty period specified in Section 7.1 above,
whether Tenant is occupying or has vacated the Premises), shall take good
care of the Premises (including the Landlord's Improvements any
improvements hereafter erected or installed on the Land), and shall keep
the same in at least the same order, condition and repair (including
interior repainting and refurnishing, as needed), as when received and
shall make and perform all routine maintenance thereof and all necessary
repairs thereto, interior and exterior, structural and nonstructural,
ordinary and extraordinary, foreseen and unforeseen, of every nature, kind
and description. When used in this Article 7, "repairs" shall include all
necessary replacements, renewals, alterations, additions and betterments,
interior and exterior, structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen, of every nature, kind and
description, including, without limitation, any repairs, replacements,
renewals, alterations and additions required by any governmental law,
ordinance or regulations now or hereafter enacted relating to the Premises.
All repairs made by Tenant shall be at least equal in quality, workmanship
and cost to the original work and shall be made by Tenant in accordance
with all laws, ordinances and regulations whether heretofore or hereafter
enacted.
7.3 Tenant's Waiver of Claims Against Landlord. Except as
otherwise specifically provided in this Lease or the Work Letter or this
Lease, Landlord shall not be required to furnish any services or facilities
or to make any repairs or alterations in, about or to the Premises or any
improvements hereafter erected thereon.
ARTICLE 8
CHANGES AND ALTERATIONS
8.1 Tenant's Changes and Alterations. Tenant shall not make any
alterations, additions or improvements ("Alterations") to the Property,
without Landlord's prior written consent, which shall not be unreasonably
withheld, except for non structural alterations in the interior of the
Building that do not affect the Structural Portions of the Building or
exterior of the Building ("Permitted Alterations"). All Alterations shall
be done promptly and in a good and workmanlike manner and in compliance
with all laws, ordinances, orders, rules, regulations and requirements of
all federal, state and municipal governments and appropriate departments,
commissions, boards and officers thereof, and in accordance with the
orders, rules and regulations of the Board of Fire Underwriters where the
Premises are located, or any other body exercising similar functions. All
such Alterations which affect the Structural Portions of the Building or
the exterior of the Building ("Structural or Exterior Alterations") shall
be performed by a contractor approved by Landlord, in its reasonable
discretion. If required by Landlord, Tenant shall provide demolition
and/or lien and completion bonds in form and amount satisfactory to
Landlord in connection with any Structural or Exterior Alterations. Tenant
shall promptly remove any Alterations constructed in violation of this
Section upon Landlord's written request. All permanent Alterations (i.e.
other than Tenant's movable trade fixtures and equipment), including the
Permitted Alterations made or installed by Tenant shall immediately, upon
completion or installation thereof, become the property of Landlord without
payment therefor by Landlord, and shall be surrendered to Landlord on the
expiration of the Term of this Lease. Prior to commencement of the
Alterations, Tenant shall deliver Builder's All Risk Insurance, in an
amount acceptable to Landlord, in conformance with the requirements of
Article 10 of this Lease. Notwithstanding anything to the contrary set
forth herein, Tenant agrees, at Tenant's sole cost and expense, and within
ten (10) days request therefor by Landlord at the end of the Lease Term or
earlier termination thereof, to remove any of the following types of
Permitted Alterations and repair the Premises where such Permitted
Alterations were situated to the same or better condition than existed
prior to Tenant installation of said Permitted Alterations: racking,
Permitted Alterations to create manufacturing and/or office space, drop
ceilings, mezzanines, and demising walls. To the extent Tenant removes any
other Alterations, Tenant shall also, within ten (10) days of removal
thereof, restore the Premises to the condition that existed prior to
Tenant's installation of such Alterations.
8.2 Liens. Tenant shall keep the Premises free from any
mechanics', materialmen's, designer's or other liens arising out of any
work performed, materials furnished or obligations incurred by or for
Tenant or any person or entity claiming by, through or under Tenant.
Landlord shall have the right at all times to post and keep posted on the
Premises any notices which it deems necessary for protection from such
liens. If any such liens are filed and are not released of record by
payment or posting of a proper bond within thirty (30) days after such
filing, Landlord may, without waiving its rights and remedies based on such
breach by Tenant and without releasing Tenant from any obligations
hereunder, cause such liens to be released by any means it shall deem
proper, including payment of the claim giving rise to such lien or posting
security to cause the discharge of such lien, in which event all amounts
paid by Landlord shall immediately be due and payable by Tenant as
Additional Rent. Tenant hereby indemnifies, protects, defends and holds
Landlord and Landlord's Indemnitees and the Premises harmless from any
liability, cost, obligation, expense (including, without limitation,
reasonable attorneys' fees and expenses and attorneys' fees incurred in
enforcing of this indemnity), or claim of any mechanics', materialmen's,
design professional's or other liens in any manner relating to any work
performed, materials furnished or obligations incurred by or for Tenant or
any person or entity claiming by, through or under Tenant. Tenant shall
notify Landlord in writing fifteen (15) days prior to commencing any
Alterations so that Landlord shall have the right to record and post
notices of non-responsibility or any other notices deemed necessary by
Landlord on the Premises. Tenant shall not create, and shall within thirty
(30) days discharge and satisfy of record, any other lien, encumbrance,
charge, security interest, or other right or interest which shall be or
become a lien, encumbrance, charge or security interest upon the Premises,
or any portion thereof.
8.3 Compliance with Laws. Landlord warrants, that provided that
the Tenant Work, and any subsequent Alterations, is in compliance with all
present laws, codes, regulations and ordinances, upon completion of
Landlord's Improvements, the utilities, including without limitation the
HVAC, (as hereinafter defined), the structural portions, the interior and
the exterior of the Premises will meet with all laws, codes, regulations
and ordinances in effect at the time the Premises is delivered by Landlord
to Tenant and will be in good working condition and order (except for
punch-list items). If, at any time, the Premises or such utilities do not
meet with such laws, codes, regulations and ordinances as required by
regulations of governing authorities (other than as a result of Tenant's
negligent acts or the failure of Tenant Work or Tenant's Alterations to
comply with such laws, codes, regulations and ordinances), then, except for
work that is specifically required as a result of the business operation
being conducted by Tenant, the Premises will be brought up to the proper
standards at Landlord's expense. Landlord's receipt of all governmental
permits required for initial occupancy shall be deemed satisfaction of the
foregoing representations and obligations. Landlord shall also be
responsible for paying any and all fines or penalties assessed by any
governmental authority if the Premises fails to meet codes and regulations
of governmental authorities during the Term of this Lease, other than as a
result of the failure of the Tenant Work or Alterations and/or improvements
made by Tenant to comply with all laws, codes, regulations and ordinances
as required by regulations of governing authorities. Tenant shall be
responsible for paying any and all fines or penalties for the failure of
the Tenant Work and Alterations and/or improvements made by Tenant to
comply with all laws, codes, regulations and ordinances as required by
regulations of governing authorities during the Term of this Lease and
shall cause the Tenant Work and any Alterations and/or improvements made by
Tenant to be brought up to the proper standards at Tenant's expenses.
ARTICLE 9
RIGHTS RESERVED BY LANDLORD
9.1 Landlord's Entry. In addition to any other right of entry
provided to Landlord in this Lease, Landlord reserves the right, at all
reasonable times and upon twenty-four (24) hours prior notice to Tenant
except in case of emergency when no notice shall be required (but Landlord
will use reasonable efforts to give prior or contemporaneous notice), to
enter the Premises to: (i) inspect them; (ii) show the Premises to
prospective purchasers, mortgagees or tenants (provided that Landlord shall
only show the Premises to prospective tenants during the last (6) six
months of the Lease Term); (iii) post notices of non-responsibility or
other notices as may be customary in the State of California; (iv) for
performance of any of Landlord's repair and/or maintenance rights or
obligations; or (v) to exercise any other rights, obligations or remedies
that Landlord may have under this Lease. Landlord and its authorized
representatives may enter the Premises at any time in case of emergency and
shall have the right to use any and all means which Landlord may deem
proper to open such doors during an emergency in order to obtain entry to
the Premises. Any entry to the Premises obtained by Landlord in the event
of any emergency shall not, under any circumstances, be construed or deemed
to be a forcible or unlawful entry into, or detainer of, the Premises, or
to be an eviction of Tenant from the Premises or any portion thereof.
9.2 Landlord's Cure. If Tenant shall default in the performance of
its obligations under this Lease and if such default is not cured within
the applicable periods provided in Article 14, Landlord upon twenty (20)
days prior notice to Tenant (except in emergency in which case no notice
shall be required) may, but shall not be obligated to, make any such
payment or perform any such act on Tenant's part without waiving its right
based upon any default of Tenant and without releasing Tenant from any
obligations hereunder. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, within twenty (20)
days after delivery by Landlord to Tenant of statements therefor, sums
equal to expenditures reasonably made and obligations reasonably incurred
by Landlord in connection with the remedying by Landlord of Tenant's
defaults. If there are any outstanding monetary obligations of Tenant
under this Lease attributable to the period prior to the expiration or
termination of this Lease, such obligations shall survive the termination
or expiration of this Lease and such amount shall be payable to Landlord
within ten (10) days after receipt of notice therefor from Landlord.
ARTICLE 10
INDEMNITY AND INSURANCE
10.1 Tenant's Insurance Obligations. Tenant, at its sole cost and
expense, shall obtain and continuously maintain in full force and effect
during the Term of this Lease, commencing with the earlier to occur of
(a) Commencement Date or (b) the date Tenant first occupies the Premises,
policies of insurance covering the Improvements constructed, installed or
located on the Premises naming the Landlord, as an additional insured,
against (a) loss or damage by fire; (b) loss or damage from such other
risks or hazards now or hereafter embraced by an "Extended Coverage
Endorsement," including, but not limited to, windstorm, hail, explosion,
vandalism, riot and civil commotion, damage from vehicles, smoke damage,
water damage and debris removal; (c) loss for damage by earthquake if
requested by Landlord (provided that Landlord shall reimburse Tenant for
the cost of insurance allocable to earthquake coverage); (d) loss from
so-called explosion, collapse and underground hazards; and (e) loss or
damage from such other risks or hazards of a similar or dissimilar nature
which are now or may hereafter be customarily insured against with respect
to improvements similar in construction, design, general location, use and
occupancy to the Improvements other than loss for flood. At all times,
such insurance coverage shall be in an amount equal to 100% of the then
"full replacement cost" of the Improvements exclusive of excavations,
foundations and footings "Full Replacement Cost" shall be interpreted to
mean the cost of replacing the improvements without deduction for
depreciation or wear and tear, and it shall include a reasonable sum for
architectural, engineering, legal, administrative and supervisory fees
connected with the restoration or replacement of the Improvements in the
event of damage thereto or destruction thereof. If a sprinkler system
shall be located in the Improvements, sprinkler leakage insurance shall be
procured and continuously maintained by Tenant at Tenant's sole cost and
expense. Prior to occupancy of the Premises, Tenant shall deliver to
Landlord a copy of such insurance policy.
10.2 Insurance Coverage. During the Term of this Lease, Tenant, at
its sole cost and expense, shall obtain and continuously maintain in full
force and effect comprehensive general liability insurance or commercial
liability insurance against any loss, liability or damage on, about or
relating to the Premises, or any portion thereof, with limits of not less
than Three Million Dollars ($3,000,000.00) combined single limit, per
occurrence and aggregate, coverage on an occurrence basis. Such insurance
shall specifically insure (by contractual liability endorsement) Tenant's
indemnity obligations under this Lease.
The insurance set forth in this Section 10.2 shall be maintained by
Tenant at not less than the limits set forth herein. To the extent it is
customary in the marketplace for insurance limits to be higher than those
specified in this Section 10.2, such limits may be increased, upon written
notice from Landlord to Tenant, at the end of each five (5) year period
during which this Lease is in effect ("Adjustment Date") based upon
increases (if any) in the Index (defined below). The most recent Index in
publication prior to the Commencement Date shall be the "Base Index." On
each Adjustment Date, the insurance limits shall be increased by the
percentage equal to the percentage increase (if any) in the most recent
Index in publication prior to the Adjustment Date ("Comparison Index") over
the Base Index. The term "Index" as used in this Lease shall mean the
United States Department of Labor, Bureau of Labor Statistics Consumer
Price Index for Urban Wage Earners and Clerical Workers, Los Angeles-Long
Beach-Anaheim Average Subgroup "All Items," (1982-84 = 100). If the
1982-84 base of the Index should hereafter be changed, then the new base
shall be converted to the 1982-84 base and the base as so converted shall
be used. If at any time the Index should not exist in the format recited
herein, Landlord shall substitute any official index published by the
Bureau of Labor Statistics, or successor or similar governmental agency, as
may then be in existence and shall, in Landlord's opinion, be most nearly
equivalent thereto.
10.3 Insurance Provisions. All policies of insurance required by
this Article shall provide that the proceeds thereof shall be payable to
Tenant and Landlord as their interests appear, and if Landlord so requests
shall also be payable to any contract purchaser of the Premises and the
holder of any mortgages now or hereafter becoming a lien on the fee of the
Premises, or any portion thereof, provided that any such mortgagee has
provided Tenant with the Non-Disturbance Agreement (defined below). Tenant
shall not, on Tenant's own initiative or pursuant to request or requirement
of any third party, take out separate insurance concurrent in form or
contributing in the event of loss with that required in Section 10.1
hereof, unless Landlord is named therein too as an additional insured with
loss payable as in said Section 10.1 provided. Tenant shall immediately
notify Landlord whenever any such separate insurance is taken out and shall
deliver to Landlord original certificates evidencing the same. Any such
insurance obtained and maintained by Tenant shall name Landlord, and, if
requested by Landlord, Landlord's mortgagee, as an additional insured
therein, provided that any such mortgagee has provided Tenant with the Non-
Disturbance Agreement (defined below), and such insurance shall be obtained
and maintained from and with a reputable and financially sound insurance
company authorized to issue such insurance in California. Each policy
required under this Article 10 shall have attached thereto (a) an
endorsement that such policy shall not be canceled or materially changed
without at least thirty (30) days prior written notice to Landlord, and (b)
an endorsement to the effect that the insurance as to the interest of
Landlord shall not be invalidated by any act or neglect of Landlord or
Tenant and an "agreed value" endorsement. All policies of insurance,
together with any endorsements reflecting the changes to the policy
required to comply with this Lease, shall be written in companies
reasonably satisfactory to Landlord and licensed in the state in which the
Premises are located. Such certificates of insurance shall be in a form
reasonably acceptable to Landlord, shall be delivered to Landlord upon
commencement of the Term and prior to expiration of such policy, new
certificates of insurance, shall be delivered to Landlord not less than
twenty (20) days prior to the expiration of the then current policy Term.
In the event Tenant shall fail to procure such insurance, or to deliver
such policies or certificates and appropriate endorsements, Landlord may,
at its option, procure such policies for the account of Tenant after five
(5) days' written notice, and the cost thereof shall be paid by Tenant to
Landlord as Additional Rent within fifteen (15) days after delivery to
Tenant of bills therefor.
10.4 Waiver of Subrogation. Tenant shall cause to be inserted in
the policy or policies of insurance required by this Article 10 hereof a
so-called "Waiver of Subrogation Clause" as to Landlord. Each party hereby
waives, releases and discharges the other party, its agents and employees
from all claims whatsoever arising out of loss, claim, expense or damage to
or destruction covered or coverable by insurance required under this
Article 10 notwithstanding that such loss, claim, expense or damage may
have been caused by such other party, its agents or employees, and each
party agrees to look to the insurance coverage only in the event of such
loss.
10.5 Rental Abatement Insurance. Landlord may maintain insurance
coverage (including loss of use and rental abatement coverage) upon
Tenant's business and upon all personal property of Tenant or the personal
property of others kept, stored or maintained on the Premises against loss
or damage by fire, windstorm or any other casualties or causes for such
amount as Landlord may desire. Tenant shall reimburse Landlord for the
actual and commercially reasonable costs of such rental abatement
insurance, covering a period not to exceed eighteen (18) months, on an
annual basis. Tenant shall pay such amounts to Landlord as Additional
Rent, no later than thirty (30) days after receipt of a statement therefor
from Landlord. Landlord shall have the right to require payments on a
semi-annual or annual basis. The failure of Landlord to deliver a
statement for such charges shall not constitute a waiver of Landlord's
rights to collect such amounts if delivered within six (6) months. Tenant
shall have the right, upon at least six (6) months prior notice, to elect
to carry its own business interruption or rental abatement insurance, in
amounts reasonably acceptable to Landlord and which satisfy the
requirements set forth in Section 10.3 and this Section 10.5 of this Lease.
In such case, Landlord shall cancel the rental abatement insurance. Tenant
agrees that such policies shall contain a waiver of subrogation clause as
to Landlord.
10.6 Indemnification by Tenant. To the fullest extent allowed by
law, Tenant shall at all times indemnify, protect, defend with legal
counsel reasonably acceptable to Landlord) and hold Landlord and Landlord's
shareholders, officers, directors, partners, employees, lender, managing
agent, successors and/or assigns (collectively, "Landlord's Indemnities")
harmless against and from any and all claims, costs, liabilities, actions
and damages (including, without limitation, attorneys' fees and costs and
costs related to the enforcement of this indemnity provision) arising
from or out of any occurrence in, upon or about the Premises or the
occupancy or use by Tenant of the Premises, or the condition of the
Premises to the extent caused by any act or omission of Tenant, its agents,
contractors, servants, tenants, invitees (i.e. persons directed or
requested by Tenant to enter the Premises) or licensees (collectively
"Tenant's Agents") or arising from any act or negligence of Tenant or
Tenant's Agents, or a default by Tenant under this Lease or, to the extent
covered by insurance Tenant is required to carry under this Lease, arising
from any accident, injury or damage whatsoever caused to any person, or
entity occurring during the Term of this Lease, in or about the Premises,
and from and against all costs, attorney's fees, expenses and liabilities
incurred in or about any such claim or action or proceeding brought
thereon. Notwithstanding the foregoing, Tenant shall not have any
liability hereunder or otherwise with respect to any claim, cost,
liability, action or damage caused by the negligence or wilful misconduct
of Landlord or any of Landlord's Indemnitees or Landlord's Agents or any
material default by Landlord under this Lease. In case any action or
proceeding be brought against Landlord by reason of any such claim, Tenant,
upon notice from Landlord, covenants to defend such action or proceeding by
counsel reasonably satisfactory to Landlord.
10.7 Indemnification by Landlord. To the fullest extent allowed by
law, Landlord shall at all times indemnify, protect, defend (with legal
counsel reasonably acceptable to Tenant) and hold Tenant and Tenant's
shareholders, officers, directors, partners, employees, affiliates,
successors and/or assigns (collectively, "Tenant's Indemnitees") harmless
against and from any and all claims, costs, liabilities, actions and
damages (including, without limitation, attorneys' fees and costs and costs
related to the enforcement of this indemnity provision) arising from or out
of any negligence or wilful misconduct by Landlord or any of the Landlord's
Indemnities or Landlord's Agents, in, on, or about the Premises or any
breach by Landlord of its obligations under this Lease, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in or
about any such claim or action or proceeding brought thereon; provided,
however, that in no event shall Landlord be obligated to indemnify, defend
and hold Tenant or any of Tenant's Indemnitees or Tenant's Agents harmless
to the extent of any claims, costs, liabilities, actions or damages arising
from or out of, or occasioned in whole or in part by, the negligence or
wilful misconduct of Tenant, Tenant's Indemnitees or Tenant's Agents or any
material default by Tenant under this Lease. In case any action or
proceeding be brought against Tenant by reason of any such claim, Landlord,
upon notice from Tenant, covenants to defend such action or proceeding by
counsel reasonably satisfactory to Tenant. Landlord shall cause the
obligations under this Section 10.7 to be covered under Landlords policy of
commercial general liability insurance.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
11.1 Restriction on Other Transfers. Except as specifically
permitted in Section 11.2 below, Tenant shall not assign, sublease,
mortgage, pledge, transfer, or otherwise encumber or dispose of this Lease,
or any interest therein, or in any manner assign, mortgage, pledge,
transfer or otherwise encumber or dispose of its interest or estate in the
Premises, or any portion thereof ("Transfer"), without obtaining Landlord's
prior written consent in each and every instance, which consent shall not
be unreasonably withheld, delayed or conditioned. If Landlord fails to
respond to any request by Tenant for Landlord's consent or approval within
twenty (20) days of such request, Tenant shall provide Landlord with a
second written request. If Landlord fails to respond to such second
written request within ten (10) days of Landlord's receipt thereof,
Landlord shall be deemed to have consented to such Transfer; provided that
such second written request specifically states that Landlord's failure to
respond within ten (10) days shall be deemed consent under this Section
11.1 of this Lease. No Transfer shall release Tenant from its liability
under this Lease. Tenant acknowledges and agrees that this covenant and
agreement is a material inducement to the decision of Landlord to lease the
Premises to Tenant and that Landlord may use its sole and absolute
discretion hereunder. Landlord shall have the right to withhold consent to
any sublessee in the event any of the conditions set forth in Section 5.8
of this Lease apply.
11.2 Permitted Transfers. Notwithstanding the provisions of
Section 11.1, Tenant shall have the right, without Landlord's prior
consent, to Transfer all or any portion of the Premises to a related entity
or affiliate of Tenant. Tenant may also Transfer the lease to any
successor entity, whether by merger, consolidation or otherwise, and to any
entity that purchases all or substantially all of Tenant's assets. Finally
Tenant shall be permitted to assign or sublease to an Affiliate (as
hereinafter defined) of Tenant. The foregoing Transfers described in this
Section 11.2 are referred to as "Permitted Transfers." No such Permitted
Transfer shall require Landlord's prior approval or consent, provided that
Tenant shall provide to Landlord written notice of the Transfer, within a
reasonable time thereafter, including the name of the transferee and the
terms of the Transfer, and an agreement executed by the transferee
acceptable to and in favor of Landlord whereby the transferee agrees to
assume Tenant's obligations under this Lease. No such Permitted Transfer
shall release Tenant from its liability under this Lease. As used herein,
the term "Affiliate" shall mean any person, directly or indirectly through
one or more intermediaries, controlling, controlled by, or under common
control with the person in question, which, in the case of a person which
is a partnership, shall include each of the partners thereof and each of
their Affiliates. The term "control," as used in the immediately preceding
sentence, means, with respect to a person that is a corporation, the right
to exercise, directly or indirectly, more than twenty percent (20%) of the
voting rights attributable to the shares of the controlled corporation,
and, with respect to a person that is not a corporation, the possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of the controlled person.
11.3 Sublease Requirements. Any sublease permitted under this
Article 11 shall contain provisions to the effect that, except as may
otherwise be specifically agreed to by Landlord in writing, (i) such
sublease is only for actual use and occupancy by the sublessee; (ii) such
sublease is subject and subordinate to all of the terms, covenants and
conditions of this Lease and to all of the rights of Landlord thereunder;
and (iii) Tenant shall continue to be and remain liable under the Lease.
In the case of a sublease, a copy of any sublease fully executed and
acknowledged by Tenant and the sublessee shall be mailed to Landlord ten
(10) days prior to the effective date of such sublease, which sublease
shall be in form and content reasonably acceptable to Landlord.
11.4 No Merger. No merger shall result from Tenant's sublease of
the Premises under this Article 11, Tenant's surrender of this Lease or the
termination of this Lease in any other manner.
11.5 Profits on Transfer. In the event that Tenant shall make a
permitted Transfer hereunder of all or any portion of the Premises (the
"Transfer Space"), then the following shall apply: Tenant shall pay
Landlord monthly, as Additional Rent, at the same time as the monthly
installment of Basic Rent required hereunder, fifty percent (50%) of the
"Profit" payable by the Transferee pursuant to the terms reserved in the
Transfer agreement, assignment or sublease. For purposes of this Section
11.5, "Profit" shall mean all rent and other amounts paid or payable by the
Transferee to Tenant pursuant to the terms of the Transfer which are in
excess of the applicable Basic Rent and Additional Rent (if the obligation
to pay Additional Rent is not passed through to or assumed by the
Transferee under this Lease) after deducting therefrom Tenant's actual and
reasonable costs incurred in connection with the Transfer, including but
not limited to reasonable real estate commissions, costs of renovations or
improvements, reasonable tenant improvement allowances, reasonable
attorneys fees and reasonable rent concessions.
11.5.1 Tenant's Profit Statement. Tenant shall and hereby
agrees that it will furnish to Landlord upon written request from Landlord
a complete statement, setting forth in detail the computation of all profit
derived and to be derived from such assignment or sublease, such
computation to be made in accordance with generally accepted accounting
principles. Tenant agrees that Landlord or its authorized representatives
shall be given access, at all reasonable times (at Tenant's Southern
California office) upon ten (10) business days advance notice, not to
exceed more than one (1) time per year per Transfer, to the books, records
and papers of Tenant relating directly to any such assignment or
subletting.
ARTICLE 12
DAMAGE OR DESTRUCTION
12.1 Destruction and Restoration. Tenant covenants and agrees that
in case of damage to or destruction of the Improvements after the
Commencement Date by fire or otherwise, Tenant at its sole cost and
expense, shall promptly restore, repair, replace and rebuild the same
("Restoration") as nearly as possible to the condition that the same were
in immediately prior to such damage or destruction with such changes or
alterations as may be reasonably acceptable to Tenant or required by law.
Tenant shall forthwith give Landlord written notice of such damage or
destruction upon the occurrence thereof and specify in such notice, in
reasonable detail, the extent thereof. The Restoration shall be carried on
and completed in accordance with the provisions and conditions of this
Lease. All insurance proceeds shall be held by Landlord and Tenant as co-
trustee. If the insurance moneys in the hands of Landlord and Tenant as
co-trustees shall be deemed to be insufficient by Landlord to pay the
entire costs of the Restoration, Tenant agrees, only to the extent Tenant
failed to maintain the insurance Tenant is required to maintain under this
Lease, to pay any deficiency promptly upon demand that would have been paid
by the insurance company had Tenant maintained the required insurance.
12.2 Application of Insurance Proceeds. All insurance moneys
recovered by Landlord or Tenant shall be held by Landlord and Tenant as
co-trustees on account of such damage or destruction, less the costs, if
any, to Landlord of such recovery, shall be applied to the payment of the
costs of the Restoration and shall be paid out from time to time as the
Restoration progresses, in accordance with requirements imposed by Landlord
or any mortgagee of record, provided that any such mortgagee has
theretofore or concurrently provided, Tenant with the Non-Disturbance
Agreement (defined below). Tenant shall furnish Landlord at the time of
any such payment with lien releases and evidence reasonably satisfactory to
Landlord that there are no unpaid bills in respect to any work, labor,
services or materials performed, furnished or supplied in connection with
such Restoration.
12.3 Continuance of Tenant's Obligations. No destruction of or
damage to the Premises, or any portion thereof, by fire, casualty or
otherwise shall permit Tenant to surrender this Lease or shall relieve
Tenant from its liability to pay to Landlord the Basic Rent and Additional
Rent payable under this Lease or from any of its other obligations under
this Lease, and Tenant waives any rights now or hereafter conferred upon
Tenant by present or future law or otherwise to quit or surrender this
Lease or the Premises, or any portion thereof, to Landlord or to any
suspension, diminution, abatement or reduction of rent on account of any
such damage or destruction.
12.4 Damage or Destruction at End of Lease Term. In the event the
damage or destruction occurs during the last eighteen (18) months of the
Lease Term, then, notwithstanding the provisions of Section 12.1 and 12.2,
Tenant shall not be obligated to complete such Restoration so long as
Tenant assigns to Landlord all insurance proceeds except those amortized
and allocable to Tenant's Work (as defined in the Work Letter) (including
the amount of any deductibles and any other amounts necessary) so that
Landlord can complete such Restoration.
12.5 Waiver of California Statutes. Tenant waives the protection of
any statute, code or judicial decision which grants a Tenant the right to
terminate a lease in the event of damage or destruction of the Premises,
including, but not limited to, the provisions of Sections 1932(2) and
1933(4) of the Civil Code or any successor statute or law. Tenant agrees
that the provisions of this Article shall govern the rights and obligations
of Landlord and Tenant in the event of any damage or destruction of the
Premises. Notwithstanding the foregoing, Basic Rent and Additional Rent
shall be abated proportionately during any period of repair under this
Article for a period not to exceed eighteen (18) months; provided that
Tenant has complied with the requirements of Section 10.5.
ARTICLE 13
CONDEMNATION
13.1 Condemnation of Entire Premises. If, during the Term of this
Lease, the entire Premises shall be taken as the result of the exercise of
the power of eminent domain (hereinafter referred to as the "Proceedings"),
this Lease shall terminate on the date of vesting of title pursuant to such
Proceedings. In any taking of the Premises, or any portion thereof,
whether or not this Lease is terminated as in this Article provided, Tenant
shall not be entitled to any portion of the award for the taking of the
Premises or damage to the Improvements, except as otherwise provided for in
Section 13.3 with respect to the restoration of the Improvements, or for
the estate or interest of Tenant therein, all such award, damages,
consequential damages and compensation being hereby assigned to Landlord,
and Tenant hereby waives any right it now has or may have under present or
future law to receive any separate award of damages for its interest in the
Premises, or any portion thereof, or its interest in this Lease, except
that Tenant shall have, nevertheless, the limited right to prove in the
Proceedings and to receive any award which may be made for damages to or
condemnation of Tenant's movable trade fixtures and equipment, and for
Tenant's relocation costs in connection therewith.
13.2 Partial Condemnation/Termination of Lease. If, during the Term
of this Lease, less than the entire Premises, but more than ten percent
(10%) of the floor area of the Building, or more than fifteen percent (15%)
of the land area of the Premises, shall be taken in any such Proceedings,
this Lease shall, upon vesting of title in the Proceedings, terminate as to
the portion of the Premises so taken, and Tenant shall have the right to
terminate this Lease if the business of Tenant conducted in the portion of
the Premises taken cannot reasonably be carried on with substantially the
same utility and efficiency in the remainder of the Premises and Tenant
cannot construct or secure substantially similar space to the space so
taken, on the Premises. Such termination as to the remainder of the
Premises shall be effected by notice in writing given not more than sixty
(60) days after the date of vesting of title in such Proceedings, and shall
specify a date not more than sixty (60) days after the giving of such
notice as the date for such termination.
13.3 Partial Condemnation/Continuation of Lease. If ten percent
(10%), or less, of the floor area of the Building, or fifteen percent
(15%), or less, of the Land, shall be taken in such Proceedings, or if more
than ten percent (10%) of the floor area of the Building or more than
fifteen percent (15%) of the Land is taken (but less than the entire
Premises), and this Lease is not terminated as in Section 13.2 hereof
provided, this Lease shall, upon vesting of title in the Proceedings,
terminate as to the parts so taken. The net amount of the award (after
deduction of all costs and expenses, including attorneys' fees), shall be
held by Landlord and Tenant as co-trustees and applied as hereinafter
provided. Tenant, in such case, covenants and agrees, at Tenant's sole
cost and expense (subject to reimbursement to the extent hereinafter
provided), promptly to restore that portion of the Improvements on the
Premises not so taken to a complete architectural and mechanical unit for
the use and occupancy of Tenant as in this Lease provided. In the event
that the net amount of the award (after deduction of all costs and
expenses, including attorney's fees) that may be received by Landlord and
held by Landlord and Tenant as co-trustees in any such Proceedings is
insufficient to pay all costs of such restoration work, Landlord may elect
to either (a) terminate the Lease in accordance with the provisions of
Section 13.1 or (b) continue the Lease and restore that portion of the
Improvements on the Premises not so taken to a complete architectural and
mechanical unit for the use and occupancy of Tenant as in this Lease
provided. If Landlord elects to terminate the Lease under this Section
13.3, Landlord shall deliver to Tenant written notice of Landlord's
election to terminate along with an estimate of the amount of the
deficiency between the costs of complete restoration and the award
("Deficiency Amount"), Tenant may continue the Lease in effect by delivery
written notice to Landlord, within fifteen (15) days of receipt of
Landlord's termination notice, of its election to continue the Lease and
pay the Deficiency Amount. If Tenant elects to continue the Lease, Tenant
shall deliver to Landlord and Tenant as co-trustees the Deficiency Amount
within fifteen (15) days of written request by Landlord. If the Premises
are restored, the award amounts shall be disbursed in accordance with the
same requirements set forth in Section 12.2 of this Lease. If the Lease is
terminated, the award amounts shall be disbursed in accordance with Section
13.1.
13.4 Continuance of Obligations. In the event this Lease is not
terminated, then from and after the date of vesting of title in such
Proceedings, Tenant shall continue to pay the Basic Rent and Additional
Rent and other charges payable hereunder, as in this Lease provided, to be
paid by Tenant, subject to an abatement of a just and proportionate part of
the Basic Rent according to the extent and nature of such taking as may be
mutually agreed upon by Tenant and Landlord.
13.5 Tenant's Waiver. Tenant waives the protection of any statute,
code or judicial decision which grants Tenant a right to any compensation
other than that set forth in this Article in the event of a taking,
including, but not limited to, California Code of Civil Procedure Section
1265.150 or any successor statute or law.
ARTICLE 14
DEFAULTS; REMEDIES
14.1 Events of Default. The occurrence of any of the following
shall constitute a default and breach of this Lease by Tenant:
14.1.1 Failure to Pay. If Tenant fails to pay such Rent or
such charge as and when due where such failure continues for ten (10) days
after written notice thereof by Landlord to Tenant.
14.1.2 Failure to Perform. If Tenant fails to perform any of
Tenant's nonmonetary obligations under this Lease for a period of thirty
(30) days after written notice from Landlord; provided that if more time is
required to complete such performance, Tenant shall not be in default if
Tenant commences such performance within the thirty (30)-day period and
thereafter diligently pursues its completion.
14.1.3 Other Defaults. (i) If Tenant makes a general
assignment or general arrangement for the benefit of creditors; (ii) a
petition for adjudication of bankruptcy or for reorganization or
rearrangement is filed by or against Tenant and is not dismissed within
sixty (60) days; (iii) if a trustee or receiver is appointed to take
possession of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in the Lease and possession is not restored to
Tenant within sixty (60) days; or (iv) if substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease is
subjected to attachment, execution or other judicial seizure which is not
discharged within sixty (60) days. If a court of competent jurisdiction
determines that any of the acts described in this Subsection is not a
default under this Lease, and a trustee is appointed to take possession (or
if Tenant remains a debtor in possession) and such trustee or Tenant
transfers Tenant's interest hereunder, then Landlord shall receive, as
Additional Rent, the difference between the Rent (or any other
consideration) paid in connection with such assignment or sublease and the
Rent payable by Tenant hereunder.
The notices required by this Section are intended to satisfy any and all
notice requirements imposed by law on Landlord and are not in addition to
any such requirement.
14.2 Remedies. On the occurrence of any default by Tenant, Landlord
may, at any time thereafter, with or without any additional notice or
demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have:
(a) Terminate Tenant's right to possession of the
Property at any time by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Property
to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default,
including (i) the worth at the time of the award of the unpaid Rent and
other charges which Landlord had earned at the time of the termination;
(ii) the worth at the time of the award of the amount by which the unpaid
Basic Rent, Additional Rent and other charges which Landlord would have
earned after termination until the time of the award exceeds the amount of
such rental loss that Tenant proves Landlord could have reasonably avoided;
(iii) the worth at the time of the award of the amount by which the unpaid
Basic Rent, Additional Rent and other charges which Tenant would have paid
for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves Landlord could have
reasonable avoided; and (iv) any other amount, including court costs
necessary to compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under the Lease or which in
the ordinary course of things would be likely to result therefrom,
including, but not limited to, any costs or expenses Landlord incurs in
maintaining or preserving the Property after such default, the cost of
recovering possession of the Property, expenses of reletting, including
necessary renovation or alteration of the Property, Landlord's reasonable
attorneys' fees incurred in connection therewith, and any real estate
commission paid or payable. As used in subparts (i) and (ii) above, the
"worth at the time of the award" is computed by allowing interest on unpaid
amounts at the Maximum Rate of Interest set forth in Item 10 of the Basic
Terms. As used in subpart (iii) above, the "worth at the time of the
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). If Tenant has abandoned the Property, Landlord shall have
the option of (i) retaking possession of the Property and recovering from
Tenant the amount specified in this Paragraph 14.1.5(a), or (ii) proceeding
under Paragraph 14.1.5(b) or (c);
(b) Maintain Tenant's right to possession, in which
case this Lease shall continue in effect whether or not Tenant has
abandoned the Property. Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to
recover the Rent as it becomes due. This remedy is intended to and is
hereby declared to be that described in California Civil Code
Section 1951.4. During the period Tenant is in default, Landlord may enter
the Premises and relet them, or any part of them, to third parties for
Tenant's account. Tenant shall be liable immediately to Landlord for all
costs Landlord incurs in reletting the Premises, including brokers'
commissions, expenses of remodeling the Premises required by the reletting,
and like costs. Reletting can be for a period shorter or longer than the
remaining Term of this Lease. Tenant shall pay to Landlord the Rent due
under this Lease on the dates the Rent is due, less the Rent Landlord
receives from reletting. No act by Landlord allowed by this Section
14.2(b) will terminate this Lease unless Landlord notifies Tenant in
writing that Landlord elects to terminate this Lease. After Tenant's
default and for so long as Landlord does not terminate Tenant's right to
possession of the Premises, if Tenant obtains Landlord's consent, Tenant
will have the right to assign or sublet its interest in this Lease, but
Tenant will not be released from liability. If Landlord elects to relet
the Premises as provided in this Section 14.2(b), Rent that Landlord
receives from reletting will be applied to the payment of: (i) first, any
indebtedness from Tenant to Landlord other than Rent due from Tenant; (ii)
second, all costs, including for maintenance, incurred by Landlord in
reletting; and (iii) third, Rent due and unpaid under the Lease. After
deducting the payments referred to in this Section 14.2(b), any sum
remaining from the Rent Landlord receives from reletting will be held by
Landlord and applied in payment of future Rent as Rent becomes due under
this Lease. If, on the date Rent is due under this Lease, the Rent
received from the reletting is less than the Rent due on that date, Tenant
will pay to Landlord, in addition to the remaining Rent due, all costs,
including for maintenance, Landlord incurred in reletting which remain
after applying the Rent received from the reletting; and/or
(c) Pursue any other remedy now or hereafter available
to Landlord under the laws or judicial decisions of the state in which the
Property is located.
14.3 Right of Landlord to Re-Enter. In the event of any termination
of this Lease, Landlord shall have the immediate right to enter upon and
repossess the Premises, and any personal property of Tenant may be removed
from the Premises and stored in any public warehouse at the risk and
expense of Tenant.
14.4 Cumulative Remedies. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
14.5 Mitigation. Landlord shall have the obligation to use all
reasonable efforts to mitigate any loss or damages suffered by Landlord on
account of any default by Tenant.
14.6 Limitation on Remedies. Notwithstanding anything to the
contrary in this Article 14, Landlord shall not be permitted to accelerate
the payment of Rent for the remainder of the Lease Term unless there has
been a monetary default by Tenant for over 60 days. Except as otherwise
specifically provided in this Lease, neither Landlord nor Tenant shall not
be entitled to recover consequential and/or punitive damages from the other
as a result of the breach of this Lease.
14.7 Legal Costs. Each party shall reimburse the other party, upon
demand, for any reasonable costs or expenses incurred by such other party
in connection with any actual breach or default of the non-performing party
under this Lease, whether or not suit is commenced or judgment entered.
Such costs shall include reasonable legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise. Tenant
shall also indemnify, protect, defend and hold Landlord harmless from all
costs, expenses, demands and liability (including, without limitation,
attorneys' fees and costs, including attorneys fees as a result of the
enforcement of this indemnity) incurred by Landlord if Landlord becomes or
is made a party to any claim or action (a) instituted by Tenant (other than
against Landlord), or by any third party against Tenant, or by or against
any person holding any interest under or using the Premises by license of
or agreement with Tenant; (b) for foreclosure of any lien for labor or
material furnished to or for Tenant or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Tenant or such
other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended. Tenant shall defend Landlord against any
such claim or action at Tenant's expense with counsel reasonably acceptable
to Landlord or, at Landlord's election, Tenant shall reimburse Landlord for
any legal fees or costs incurred by Landlord in any such claim or action.
14.8 No Waiver. No failure by Landlord or by Tenant to insist upon
the performance of any of the terms of this Lease or to exercise any right
or remedy consequent upon a breach thereof, and no acceptance by Landlord
of full or partial rent from Tenant or any third party during the
continuance of any such breach, shall constitute a waiver of any such
breach or of any of the terms of this Lease. None of the terms of this
Lease to be kept, observed or performed by Landlord or by Tenant, and no
breach thereof, shall be waived, altered or modified except by a written
instrument executed by Landlord and/or by Tenant, as the case may be. No
waiver of any default of either party herein shall be implied from any
omission by the other party to take any action on account of such default.
One or more waivers by either party shall not be construed as a waiver of a
subsequent breach of the same covenant, term or condition. No statement on
a payment check from Tenant or in a letter accompanying a payment check
shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
14.9 Waiver by Tenant. Tenant hereby waives all claims by
Landlord's re-entering and taking possession of the Premises and removing
and storing the property of Tenant as permitted under this Article 14 and
will save Landlord harmless from all losses, costs or damages occasioned
Landlord thereby. No such reentry shall be considered or construed to be a
forcible entry by Landlord. If Landlord fails to perform any of Landlord's
obligations under this Lease, which failure continues for more than fifteen
(15) days after Tenant's delivery of written notice to Landlord specifying
such failure, or if such failure is of a nature that it requires more than
fifteen (15) days to remedy and continues beyond the time reasonably
necessary to cure (and Landlord has not undertaken procedures to cure the
failure withing such fifteen (15) day period and diligently pursued such
efforts to complete such cure), Tenant may deliver a reminder notice
("Reminder Notice"). If Landlord fails to commence to cure such failure
within fifteen (15) days of receipt of Tenant's Reminder Notice and
diligently pursue the same to completion, then Tenant may incur reasonable
expenses necessary to perform the obligation of Landlord specified in such
notice and invoice Landlord therefor. If Landlord fails to reimburse
Tenant within fifteen (15) days following receipt of such invoice, then
Tenant may deliver a reminder notice ("First Reminder Notice"). If
Landlord fails to reimburse Tenant within fifteen (15) days of receipt of
Tenant's First Reminder Notice, Tenant may deliver a second reminder notice
("Second Reminder Notice"). If Landlord fails to reimburse Tenant within
fifteen (15) days of receipt of Tenant's Second Reminder Notice, then
Tenant may apply the cost of such repairs against the next Basic Rent
obligations due hereunder, and invoice Landlord therefor.
Notwithstanding anything contained herein to the contrary, Tenant's
rights to deduct from Basic Rent shall be restricted to any amount per
month not in excess of the sum of twenty-five percent (25%) of the Basic
Rent; provided, however, that the sum which was not capable of offset as a
result of such cap shall bear interest at the Maximum Rate of Interest from
thirty (30) days after the date Tenant first invoiced Landlord for such
expenses to be offset until the date Tenant actually recovers such costs
through offset. It is further agreed that, if any default by Landlord
cannot be cured by Tenant by the expenditure of a sum that is recoverable
from future offsets as authorized in this Lease by the end of the then
applicable Term, the aforesaid twenty-five percent (25%) figure shall be
increased to such percentage of the Basic Rent as is necessary in order to
assure that such sum is recoverable from future offsets.
14.9.1 Delinquent Rental Payments. Any installment of Basic
Rent or Additional Rent or any other charges payable by Tenant under the
provisions hereof which shall not be paid when due or within ten (10) days
thereafter shall be subject to a late payment fee of two percent (2%) of
the unpaid amount per month commencing on the date said payment is due
("Late Payment Fee"). Tenant acknowledges that Tenant's failure to pay
Basic Rent or Additional Rent when due may cause Landlord to incur
unanticipated costs. The exact amount of such costs are impractical or
extremely difficult to ascertain. The parties agree that such charge
specified above represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment and acceptance of such
late charge does not constitute a waiver of Tenant's default or limit any
other remedy of Landlord. The late charge shall be deemed Rent and the
rights to require it shall be in addition to all of Landlord's rights and
remedies hereunder or at law. Notwithstanding the foregoing, Tenant shall
not be subject to the late payment fee specified herein unless Landlord has
given Tenant ten (10) days written notice of any payment of Additional Rent
or Basic Rent that is past due ("Late Payment Notice"); provided that after
Tenant's receipt of two (2) such Late Payment Notices in any Lease Year,
Landlord shall no longer be required to deliver a Late Payment Notice in
order to collect the late payment fee during said Lease Year.
Notwithstanding the foregoing, Landlord waives its right to collect the
Late Payment Fee the first time Landlord would otherwise be entitled to
such a Late Payment Fee in any Lease Year.
ARTICLE 15
PROTECTION OF CREDITORS
15.1 Subordination. This Lease and all rights of Tenant therein,
and all interest or estate of Tenant in the Premises, or any portion
thereof, shall be subject and subordinate to the lien of any mortgage, deed
of trust, or other document of like nature ("Mortgage"), which at any time
may be placed upon the Premises, or any portion thereof, by Landlord, and
to any replacements, renewals, amendments, modifications, extensions or
refinancing thereof, and to each and every advance made under any Mortgage.
Tenant agrees at any time hereafter, and from time to time on demand of
Landlord, to execute and deliver to Landlord a Subordination, Non-
Disturbance and Attornment Agreement in the form of Exhibit "F" attached
hereto and incorporated herein ("SNDA") and any other instruments, releases
or other documents that may be reasonably required for the purpose of
subjecting and subordinating this Lease to the lien of any such Mortgage
and which are reasonably acceptable to Tenant. It is agreed, nevertheless,
that so long as Tenant is not in default in the payment of Basic Rent and
Additional Rent and the performance and observance of all covenants,
conditions, provisions, terms and agreements to be performed and observed
by Tenant under this Lease, that such SNDA or other instrument, release or
document shall not interfere with, hinder or molest Tenant's right to quiet
enjoyment under this Lease, nor the right of Tenant to continue to occupy
the Premises, and all portions thereof, and to conduct its business thereon
in accordance with the covenants, conditions, provisions, terms and
agreements of this Lease. The lien of any such Mortgage shall not cover
Tenant's trade fixtures or other personal property located in or on the
Premises.
15.2 Attornment. If Landlord's interest in the Premises is acquired
by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale or by any new person or entity as a result
of any transfer by Landlord, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Premises and recognize such
transferee or successor as Landlord under this Lease if all obligations and
liabilities accruing under this Lease after such acquisition are assumed in
writing by such transferee or successor. Tenant waives the protection of
any statute or rule of law which gives or purports to give Tenant any right
to terminate this Lease or surrender possession of the Premises upon the
transfer of Landlord's interest.
15.3 Estoppel Certificates.
15.3.1 Within fifteen (15) business days after Landlord's or
Tenant's written request (the "Requesting Party"), the non-requesting party
(the "Responding Party") shall execute, acknowledge and deliver to the
Requesting Party a written statement certifying: (i) that this Lease (and
all guaranties, if any) is unmodified and in full force and effect (or, if
there have been any modifications, that the same is in full force and
effect, as modified, and stating the modifications); (ii) that this Lease
has not been canceled or terminated; (iii) the last date of payment of the
Basic Rent and other charges and the time period covered by such payment;
(iv) whether or not there are then existing any breaches or defaults by
such party or the other party known by such party under this Lease, and
specifying such breach or default, if any, or any setoffs or defenses
against the enforcement of any such breach of this Lease (or of any
guaranties) upon the part of Landlord or Tenant (or any guarantor), as the
case may be, to be performed or complied with (and, if so, specifying the
same and the steps being taken to remedy the same) and (v) such other
statements as reasonably required by The Requesting Party, or any lender or
prospective lender, investor or purchaser. the Responding Party shall
deliver such statement to the Requesting Party within fifteen (15) business
days after the Requesting Party's request. Any such statement by Tenant
may be given by Landlord to any prospective purchaser or encumbrancer of
the Premises. Such purchaser or encumbrancer may rely conclusively upon
such statement as true and correct.
15.3.2 If the Responding Party, does not deliver such statement
to the Requesting Party within such fifteen (15) business day period, then
the Requesting Party may deliver a second request and if the Responding
Party does not deliver such statement to Landlord within five (5) business
days after receipt of such second request, then the Requesting Party, and
any prospective purchaser or encumbrancer, may conclusively presume and
rely upon the following facts: (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by the
Requesting Party; (ii) that this Lease has not been canceled or terminated
except as otherwise represented by the Requesting Party; (iii) that not
more than one month's Base Monthly Rent or other charges have been paid in
advance; and (iv) that the Requesting Party is not in default under this
Lease. In such event, the Responding Party shall be estopped from denying
the truth of such facts.
15.4 Mortgagee Protection Clause. Tenant agrees to give any
mortgagees and/or trust deed holders, by registered mail, a copy of any
notice of default, served upon the Landlord, provided that prior to
delivery of such notice Tenant has been notified in writing (by way of
Notice of Assignment of Rents and Leases, or otherwise) of the addresses of
such mortgagees and/or trust deed holders and the same have executed a Non-
Disturbance Agreement as provided and defined below. Tenant further agrees
that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then the mortgagees and/or trust deed holders
shall have an additional fifteen days (15) within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be necessary if within such fifteen days (15) any
mortgagee and/or trust deed holder has commenced and is diligently pursuing
the remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings if necessary to effect such cure),
in which event this Lease shall not be terminated while such remedies are
being so diligently pursued.
15.5 Non-Disturbance. Landlord represents that as of the Effective
Date of this Lease, there is no mortgage encumbering the Land. With
respect to any future Mortgages, Tenant's subordination is expressly
conditioned upon Landlord's delivery to Tenant of a fully executed
Recognition and Non-Disturbance Agreement substantially in the form of the
SNDA or in such other form and substance as may be reasonably acceptable to
Tenant with respect to such Mortgage ("Non-Disturbance Agreement").
ARTICLE 16
TERMINATION OF LEASE
16.1 Surrender of Premises. At the expiration of the Term of this
Lease or earlier termination of this Lease, Tenant shall surrender the
Premises together with all alterations placed thereon by Tenant (except
Alterations Tenant elects to remove or Alterations Landlord, in the
exercise of reasonable discretion, informed Tenant, in connection with
Landlord=s approval of the installation thereof, that Landlord would
require Tenant to remove upon the expiration of the Lease) in the same
condition as the same were in upon delivery of possession thereto at the
Commencement Date of the term of this Lease, reasonable wear and tear
excepted, and shall surrender all keys to the Premises to Landlord at the
place then fixed for the payment of Basic Rent and shall inform Landlord of
all combinations on locks, safes and vaults, if any. Tenant shall at such
time remove all of its property therefrom and all alterations and
improvements placed thereon by Tenant unless Landlord requires Tenant to
leave the same. Tenant shall repair any damage to the Premises caused by
such removal, and any and all such property not so removed shall, at
Landlord's option, after five (5) business days notice to Tenant, become
the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant.
If the Premises be not surrendered as above set forth, Tenant shall
indemnify, protect, defend and hold Landlord harmless against loss or
liability resulting from the delay by Tenant in so surrendering the
Premises, including, without limitation, any claim made by any succeeding
occupant founded on such delay. All property of Tenant not removed within
thirty (30) days after the last day of the Term of this Lease shall be
deemed abandoned. Tenant hereby appoints Landlord its agent to remove, at
Tenant's cost, all property of Tenant from the Premises left thirty (30)
days or longer after termination of this Lease and to cause its
transportation and storage for Tenant's benefit, all at the sole cost and
risk of Tenant and Landlord shall not be liable for damage, theft,
misappropriation or loss thereof and Landlord shall not be liable in any
manner in respect thereto.
16.2 Holding Over. In the event Tenant remains in possession of the
Premises after expiration of this Lease, and without the execution of a new
lease, it shall be deemed to be occupying the Premises as a tenant from
month to month, subject to all the provisions, conditions and obligations
of this Lease insofar as the same can be applicable to a month-to-month
tenancy, except that the Basic Rent shall be escalated to one hundred
twenty-five percent (125%) of the then current Basic Rent for the Premises.
ARTICLE 17
RENEWAL OPTIONS
17.1 Options to Renew. Tenant shall have the right, to be exercised
as hereinafter provided, to extend the term of this Lease ("Renewal
Option") for up to two (2) periods of five (5) years each (each such five
(5) year period is sometimes hereinafter referred to as a "Renewal Term")
upon the following terms and conditions and subject to the limitations set
forth below.
17.1.1 No Event of Default. At the respective times
hereinafter set forth for the exercise of each Renewal Option and at the
time of the commencement of each Renewal Term, this Lease shall be in full
force and effect and there shall be no uncured Event of Default under this
Lease, but Landlord shall have the right, at its sole discretion, to waive
any such condition regarding an Event of Default.
17.1.2 Fair Market Rent. The Premises shall be leased to
Tenant on an "as is" basis on the same terms, covenants and conditions
contained in this Lease, except that the annual Basic Rent for the
Premises, including all buildings, structures and fixtures erected thereon,
together with all additions, alterations and replacements thereof (except
Tenant's moveable trade fixtures, machinery and equipment) shall be
adjusted to reflect ninety-five percent (95%) of the Fair Market Rent (as
hereinafter defined) for the Premises, as of the date of commencement of
such Renewal Term ("Adjusted Basic Rent"); provided that in no event shall
such Adjusted Basic Rent be less than the Basic Rent for the Lease Year
immediately prior to the Renewal Term.
17.1.3 Exercise of Renewal Term(s). Tenant shall exercise its
right to extend the Term of this Lease for any Renewal Term set forth in
this Article 17, if at all, by notifying Landlord, in writing, of its
election to exercise the right to renew and extend the term of this Lease
at least nine (9) months prior to the expiration of the Initial Term or the
applicable Renewal Term, as the case may be.
17.1.4 Determination of Fair Market Rent. In calculating the
Fair Market Rent, the Premises shall be deemed to include all buildings,
structures and fixtures erected thereon, together with all additions and
replacements thereof (except Tenant's moveable trade fixtures, machinery
and equipment). Not earlier than eighteen (18) months prior to the
expiration of the Initial Term and each Renewal Term, Tenant may notify
Landlord of its desire to consider renewal of this Lease. Thereafter,
Landlord and Tenant shall make a good faith effort to agree upon the "Fair
Market Rent" of the Premises for the ensuing Renewal Term. In the event
Landlord and Tenant fail to agree within sixty (60) days after delivery of
Tenant's notice ("Initial Rent Determination Period"), the "Fair Market
Rent" shall be determined by arbitration in accordance with the process
described below. Without limiting the foregoing, in determining the Fair
Market Rent, the following factors shall be considered: the amount per
rentable square foot that a willing, comparable, non-equity tenant would
pay, and a willing landlord of a comparable property in the marketplace (as
set forth above) would accept in an arm's-length transaction giving
appropriate consideration to rental rates per rentable square foot,
escalation clauses (including, but not limited to, operating expenses and
real estate taxes), abatement provisions reflecting free rent, if any,
length of lease term, size and location of premises being leased, tenant
improvement allowances, if any, and any other generally applicable terms
and conditions of tenancy for the subject space.
17.1.5 Arbitration. All arbitrators appointed by or on behalf
of either party or appointed pursuant to the provisions hereof shall be MAI
members of the American Institute of Real Estate Appraisers with not less
than ten (10) years of experience in the appraisal of improved commercial
and industrial real estate in the Riverside, California area and be
devoting a substantial amount of time to professional appraisal work at the
time of appointment and be in all respects impartial and disinterested. If
the parties are unable to agree upon the Fair Market Base Rent during the
Initial Rent Determination Period, then within fifteen (15) days after
termination of the Initial Rent Determination Period, each party shall
deliver to the other party a notice specifying the name, address and
professional qualifications of the person designated to act as arbitrator
on its behalf. The two (2) arbitrators so selected shall select a third
arbitrator no later than thirty (30) days after the Initial Rent
Determination Period. If the party receiving a request for arbitration
fails to appoint its arbitrator within the time above specified, or if the
two (2) arbitrators so selected cannot agree on the selection of the third
arbitrator within the time above specified, then either party, on behalf of
both parties, may request such appointment of such second or third
arbitrator, as the case may be, by application to any Judge of the District
Court of the County of Riverside, State of California, upon ten (10) days
prior written notice to the other party of such intent. The decision of
the arbitrators so chosen shall be given within a period of thirty (30)
days after the appointment of such third arbitrator. The arbitrators so
selected shall have all rights and power conferred on him or her by the
California Code of Civil Procedure Sections 1280 et seq. or any successor
statute or law, and except as otherwise provided for herein, the
arbitration proceedings shall be carried on and governed by such statute.
No discovery shall be permitted by the Landlord and Tenant in the
arbitration except that all parties shall make available to the arbitrators
such information as may be requested by such arbitrators. Acting
independently of each other and without consultation with each other, each
of said three arbitrators, within sixty (60) days after appointment of the
third appraiser, and his or her acceptance of such appointment, shall make
their appraisal and submit to Landlord and Tenant a written report and
appraisal setting forth the appraiser's opinion as to the fair market value
of the Premises. The two appraisals of all of the appraisals reported by
the three appraisers that are closest in amount shall be averaged (or if
the appraisal is less than one of the other appraisals and more than the
other appraisal by the same amount, all three appraisals shall be
averaged). Such averaged amount shall be the Fair Market Rent of the
Premises. All arbitrators appointed by or on behalf of either party or
appointed by the Presiding Judge of the Superior Court of Riverside County,
California as hereinafter provided, shall be in all respects impartial and
disinterested. Each party shall pay the fees and expenses of the
arbitrator appointed by or on behalf of such party and the fees and
expenses of the third arbitrator shall be borne equally by both parties.
Landlord and Tenant shall then execute an amendment recognizing the Fair
Market Rent for the Renewal Term and the fact Tenant shall pay ninety-five
percent (95%) of such Fair Market Rent or the Basic Rent for the Previous
Lease Year, whichever is greater.
ARTICLE 18
EXPANSION OPTION
18.1 Option to Expand. Tenant shall have the right, to be exercised
as hereinafter provided, to expand the Premises ("Expansion Option") into
space to be constructed on the Land adjacent to the Premises, which land is
more particularly described on Exhibit "A-1" attached hereto and
incorporated herein ("Expansion Land") together with certain improvements
to be constructed thereon, including an approximately ninety-five thousand
(95,000) square foot addition to the Building, depicted as the Expansion
Space on Exhibit "A-2" ("Expansion Space"), upon the following terms and
conditions and subject to the limitations set forth below.
18.2 No Event of Default. At the respective times hereinafter set
forth for the exercise of the Expansion Option and the delivery of the
Expansion Space, this Lease shall be in full force and effect and there
shall be no uncured Event of Default (as defined below) under this Lease.
18.3 Exercise of Expansion Option. Tenant may exercise its right to
expand by notifying Landlord, in writing, of its election to exercise the
Expansion Option ("Notice of Exercise") at least nine (9) months prior to
the desired occupancy date for the Premises, which Notice of Exercise shall
specify the exact desired occupancy date ("Desired Occupancy Date");
provided that, subject to the provisions below, there will still be at
least five (5) years remaining in the Initial Term after the Desired
Occupancy Date. In the event that there will not be at least five (5)
years remaining in the Initial Term at the time Tenant desires to exercise
its Expansion Option, Tenant may still exercise its Expansion Option up
until nine (9) months prior to the end of the Initial Term ("Expansion
Option Termination Date") if, in Tenant's Notice of Exercise, Tenant
indicates that it is also electing to extend the Initial Term by the number
of days necessary to cause there to be exactly five (5) years between the
Desired Occupancy Date and the expiration of the Initial Term ("Extension
Election"). In the event, Tenant exercises the Extension Election, the
commencement date for the Expansion Space shall occur upon Substantial
Completion of the Expansion Space Landlord's Improvements (as described in
the Work Letter) ("Expansion Space Commencement Date"). The term of the
Lease for the Expansion Space shall terminate concurrently with the Term of
the Lease for the balance of the Premises.
18.4 Expansion Terms. The Expansion Space shall be leased to Tenant
on the same terms, covenants and conditions contained in this Lease, except
as provided in this Article and except that the Basic Rent for the
Expansion Space due and payable each month shall be computed in accordance
with Section 18.5 below and paid along with the Basic Rent provided in Item
10 of the Basic Terms. The Basic Rent per rentable square foot for the
Expansion Space shall be increased from time to time in accordance with any
proportionate increases to the Basic Rent provided under Item 10 of the
Basic Terms and under Section 18.3 above (provided that increases in the
Expansion Space Rent shall not occur until the sixty-third (63rd) month
after the Expansion Space Commencement Date). If Tenant exercises any
Expansion Option, Landlord and Tenant shall enter into an amendment of this
Lease setting forth the adjusted Basic Rent and other relevant provisions
based on the increase in the area of the Premises effective on the
Expansion Space Commencement Date. If Tenant exercises its Expansion
Option, then (a) all references to the Premises shall include the Expansion
Space and Expansion Land, and all references to the Land shall include the
Expansion Land, effective as of the Expansion Space Commencement Date; (b)
Landlord shall be subject to the same monetary penalties for failure to
deliver the Expansion Space by the Desired Occupancy Date as are (provided
in Section 1.3 for failure to deliver the Premises by August 1, 1998
provided that Tenant shall not have the termination rights set forth in
Section 1.3); and (c) Tenant shall be entitled to the same early occupancy
rights for the Expansion Space as those set forth in Section 1.2.2 and in
the Work Letter for the Premises.
18.5 Expansion Space Basic Rent. Commencing on the Expansion Space
Commencement Date, Tenant shall pay Basic Rent for the Expansion Space in
the amount provided in this Section 18.5 at which time Tenant shall no
longer be required to pay the portion of the Basic Rent described as
"Monthly Rent for Expansion Land" in Item 10 of the Basic Terms. The Basic
Rent, paid monthly, for the Expansion Space shall be the product of ten and
one half percent (102%), multiplied by the following costs ("Expansion
Space Basic Rent"):
(1) The Expansion Land valued at $525,000;
(2) The cost of building the Expansion Space (inclusive of a
tenant improvement allowance not to exceed Five Dollars
($5.00) per square foot) as determined by (a) the lowest
competitive bid by general contractors acceptable to
both parties or (b) Landlord's in-house general
contractor at a fee of five percent (5%) of Hard Costs
(defined below);
(3) Commercially reasonable and standard Architectural and
engineering fees, permit fees, governmental charges,
soil testing costs and surveying costs incurred by
Landlord in connection with the Expansion Space
building;
(4) A three percent (3%) development fee on all Hard Costs.
As used herein, the term "Hard Costs" shall mean the
actual costs paid by Landlord to construct the
Improvements, including without limitation, all amounts
paid to the contractors, suppliers, and all general
contractors, all architectural, engineering and other
design consultants and on-site overhead costs directly
attributable to the Expansion Space, all standard fees
paid to the governmental agencies for the construction
of the Improvements, and other costs commonly included
in what is customarily known as "Hard Costs";
(5) The best available interim financing costs, not to
exceed the Maximum Rate of Interest specified in Item 10
of the Basic Terms; and
(6) Any standard real estate commission paid or due and
payable by Landlord in connection with the Expansion
Space or Expansion Land.
18.6 Free Rent Period. The first two (2) calendar months of the
Expansion Space Basic Rent shall be abated.
18.7 Failure to Exercise Expansion Option. In the event Tenant
fails to exercise the Expansion Option during the Initial Term only, for so
long as there has been no Expansion Space Commencement Date, Tenant shall
continue to pay the portion of the Basic Rent described as "Monthly Rent
for Expansion Land." In the event that Tenant has not exercised the
Expansion Option as of the Expansion Option Termination Date, then
notwithstanding anything to the contrary contained herein, commencing on
the first day following the Expansion Option Termination Date, Tenant shall
no longer be required to pay the Monthly Rent for Expansion Land or any
Taxes or other Additional Rent attributable to the Expansion Land.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 Notices. All notices, demands and requests which may be or are
required to be given, demanded or requested by either party to the other
shall be in writing. All notices, demands and requests shall be sent by
United States registered or certified mail, postage prepaid or by Federal
Express or other reputable independent overnight courier service, addressed
at the addresses specified in the Basic Terms or at such other place as
either party may designate to the other party by written notice, and shall
be deemed to have been delivered on the date the same is (i) postmarked, if
sent by certified mail, or (ii) deposited, if sent by Federal Express or
such other reputable overnight courier service, but shall not be deemed
received until (a) one (1) business day following deposit with Federal
Express or other reputable overnight courier service, or (b) three (3) days
following deposit in the United States Mail if sent by certified mail.
19.2 Landlord's Continuing Obligations. The term "Landlord," as
used in this Lease so far as covenants or obligations on the part of
Landlord are concerned, shall be limited to mean and include only the owner
or owners at the time in question of the fee of the Premises, and in the
event of any transfer or transfers or conveyance the then grantor shall be
automatically freed and relieved from and after the date of such transfer
or conveyance of all liability as respects the performance of any covenants
or obligations on the part of Landlord contained in this Lease thereafter
to be performed, provided (a) that such liability is assumed in writing by
the transferee and (b) that any funds in the hands of such landlord or the
then grantor at the time of such transfer, in which Tenant has an interest,
shall be turned over to the grantee, and any amount then due and payable to
Tenant by Landlord or the then grantor under any provision of this Lease
shall be paid to Tenant.
19.3 Net Lease. Landlord and Tenant do each state and represent
that it is the intention of each of them that, except as otherwise
provided herein, this Lease be interpreted and construed as a net lease
and, except as otherwise provided in this Lease, all Basic Rent and
Additional Rent shall be paid by Tenant to Landlord without abatement,
deduction, diminution, deferment, suspension, reduction or setoff.
19.4 Successors. The covenants and agreements herein contained
shall bind and inure to the benefit of Landlord, its successors and
assigns, and Tenant and its permitted successors and assigns.
19.5 Memorandum of Lease. Upon not less than fifteen (15) business
days prior written request by Landlord or Tenant, the other party agrees to
execute and deliver to the requesting party a Memorandum of Lease, in
recordable form, setting forth the following: (a) the date of this Lease;
(b) the parties to this Lease; (c) the term of this Lease; and (d) the
legal description of the Premises.
19.6 Captions and Interpretation. The captions of the Articles or
Sections of this Lease are to assist the parties in reading this Lease and
are not a part of the terms or provisions of this Lease. Whenever required
by the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter
genders shall each include the other. In any provision relating to the
conduct, acts or omissions of Tenant, the term "Tenant" shall include
Tenant's agents, employees, contractors, invitees, successors or others
using the Premises with Tenant's expressed or implied permission.
19.7 Relationship of Parties. This Lease does not create the
relationship of principal and agent, or of partnership, joint venture, or
of any association or relationship between Landlord and Tenant, the sole
relationship between Landlord and Tenant being that of landlord and tenant.
19.8 Entire Agreement. Any exhibits, addenda and schedules attached
hereto shall be incorporated herein as though fully set forth herein. All
preliminary and contemporaneous negotiations are merged into and
incorporated in this Lease. This Lease Agreement together with the
Exhibits contains the entire agreement between the parties. No subsequent
alteration, amendment, change or addition to this Lease shall be binding
upon Landlord or Tenant unless reduced to writing and signed by the party
to be charged with their performance.
19.9 Severability. If any covenant, condition, provision, term or
agreement of this Lease shall, to any extent, be held invalid or
unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Lease shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Lease shall be valid and in
force to the fullest extent permitted by law.
19.10 Landlord's Limited Liability. Tenant agrees to look solely to
Landlord's interest in the Premises and any income derived directly
therefrom for recovery of any judgment from Landlord, it being agreed that
Landlord (and if Landlord is a partnership, its partners, whether general
or limited, and if Landlord is a corporation, its directors, officers or
shareholders) shall never be personally liable for any personal judgment or
deficiency decree or judgment against it.
19.11 Survival. All obligations of Landlord and Tenant (together
with interest or money obligations at the Maximum Rate of Interest)
accruing prior to expiration of the Term of this Lease shall survive the
expiration or other termination of this Lease.
19.12 Attorneys' Fees. In the event of any litigation or judicial
action in connection with this Lease or the enforcement thereof or the
enforcement of any indemnity obligation hereunder, the prevailing party in
any such litigation or judicial action shall be entitled to recover all
costs and expenses of any such judicial action or litigation (including,
but not limited to, reasonable attorneys' fees, costs and expenditures
fees) from the other party.
19.13 Broker. Each party represents and warrants that it has not had
any dealings with any realtors, brokers or agents in connection with the
negotiation of this Lease except for Xxx & Associates, whose commission
shall be payable by Landlord, and each party agrees to hold the other party
harmless from and against the failure to pay any realtors, brokers or
agents and from any cost, expense or liability for any compensation,
commission or changes claimed by any other realtors, brokers or agents
claiming by, through or on behalf of such party with respect to this Lease
and/or the negotiation hereof.
19.14 Governing Law. This Lease shall be governed by the laws of the
State of California. All covenants, conditions and agreements of Tenant
arising hereunder shall be performable in the county wherein the Premises
are located. Any suit arising from or relating to this Lease shall be
brought in the county wherein the Premises are located, and the parties
hereto waive the right to be sued elsewhere.
19.15 Time is of the Essence. Time is of the essence with respect to
the performance of every provision of this Lease in which time of
performance is a factor.
19.16 Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
19.17 Delivery of Corporate Documents. In the event that Tenant is a
corporation, Tenant shall, without charge to Landlord, at any time and from
time to time within fifteen (15) days after written request by Landlord, if
required by a prospective lender or purchaser, deliver to Landlord, in
connection with any proposed sale or mortgage of the Premises, the
following instruments and documents:
(a) Certificate of Good Standing in the state of
incorporation of Tenant and in the state in which the
Premises are located issued by the appropriate state
authority and bearing a current date;
(b) A copy of Tenant's articles of incorporation and bylaws,
and any amendments or modifications thereof certified by
the secretary or assistant secretary of Tenant.
19.18 Tenant's Financial Condition. Prior to the Effective Date, and
within fifteen (15) business days after written request from Landlord (so
long as Landlord has a reasonable basis for requesting such information
based upon Tenant's financial condition) and not more than one (1) time per
twelve month period, Tenant shall deliver to Landlord financial statements
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP") as are reasonably required by Landlord to
verify the net worth of Tenant, or any assignee, subtenant or guarantor of
Tenant provided that Tenant shall not be required to provide any
information that would constitute a violation of the rules and regulations
of the Securities Exchange Commission. In addition, Tenant shall deliver
to any lender or proposed purchaser of the Premises, Project, Land and/or
Expansion Land or any portion thereof designated by Landlord any financial
statements prepared in accordance with GAAP required by any lender or
purchaser to facilitate the sale, financing or refinancing of the Premises
or Project or any portion thereof. Tenant represents and warrants to
Landlord that (a) each such financial statement is a true and accurate
statement as of the date of such statement; and (b) at all times after the
date of any such statement during the Lease Term or any extension thereof,
Tenant's net worth, as stated therein, shall not be reduced. All financial
statements shall be confidential and shall be used only for the purposes
set forth herein. Each such financial statement shall be executed by
Tenant and shall, if requested by Landlord, be certified by Tenant to be
true and correct. Notwithstanding the foregoing, if Tenant is a publicly
traded company. Tenant may provide Landlord with copies of Tenant's latest
10-Q and 10-K filings with the Securities Exchange Commission in lieu of
the above referenced financial statements.
19.19 Provisions are Covenants and Conditions. All provisions,
whether covenants or conditions, on the part of the Landlord, or on the
part of Tenant, shall be deemed to be both covenants and conditions.
19.20 Business Days. As used herein, the term "business days" shall
mean any day which is not a Saturday, Sunday or a legal holiday in the
State of California.
19.21 Force Majeure. If either party shall be delayed or prevented
from the performance of any act required hereunder, other than the payment
of Rent, Additional Rent or any other sums required to be paid hereunder,
by reason of acts of God, strikes, lockouts, labor troubles, inability to
procure materials, respect of governmental laws or regulations, or by
reason of any order or direct of any legislative, administrative or
judicial body, or any government department, or by reason of not being able
to obtain any licenses, permissions or authorities required therefor, or
other causes without fault or beyond the reasonable control of such party,
then notwithstanding anything to the contrary contained herein, performance
of such acts by such party shall be excused for the period of the delay and
the period of the performance of any such acts shall be extended for a
period equivalent to the period of such delay; (herein such delays are
sometimes referred to as AForce Majeure@.)
19.22 No Continuous Operation. Notwithstanding anything in this
Lease to the contrary, nothing herein shall be construed as an obligation
for Tenant to open or operate its business in the Premises. Tenant shall
have the right to remove Tenant's personal property and cease operations in
the Premises at any time and at Tenant's sole discretion. However, the
right to cease to operate its business shall not affect Tenant's obligation
to pay all amounts due hereunder and to perform all covenants and
obligations hereunder. Tenant agrees, at such time it is operating its
business in the Premises, to conduct its business in a first-class manner,
consistent with reputable business standards and practices.
19.23 Waiver of Landlord's Lien. Landlord hereby waives any
contractual, statutory or other Landlord's lien on Tenant's furniture,
moveable trade fixtures, supplies, equipment and inventory. Tenant shall
have the absolute right from time to time during the Term hereof and
without Landlord's further approval, written or otherwise, to grant and
assign a mortgage or other security interest Tenant's furniture, fixtures,
supplies, equipment and inventory to Tenant's lenders in connection with
Tenant's financing arrangement. Landlord agrees to execute such
confirmation certificates and other documents (except amendments to this
Lease unless Landlord hereafter consents in its sole and absolute
discretion) as Tenant's lenders may reasonably request in connection with
any such financing.
19.24 Submission of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
an option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all
Exhibits and Addenda which are attached to or incorporated by reference in
this Lease.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a
Minnesota corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBITS
Page First
Appearing
Exhibit "A" - Legal Description of Land 1
Exhibit "A-1" - Legal Description of Expansion Land 18
Exhibit "A-2" - Expansion Space 18
Exhibit "B" - Work Letter 1
Schedule 1 to Work Letter - Final Plans and Specification N/A
Exhibit "C" - Preliminary Report 1
Exhibit "D" - Commencement Date Acknowledgment 1
Exhibit "E" - Delivery Date Acknowledgment 1
Exhibit "F" - Subordination, Non-Disturbance and Attornment Agreement 15
EXHIBIT "A"
Legal Description of Land
[To Be Attached]
EXHIBIT "A-1"
Legal Description of Expansion Land
[To Be Attached]
EXHIBIT "A-2"
Depiction of Expansion Space
[To Be Attached]
EXHIBIT "B"
WORK LETTER
OPUS WEST CORPORATION, a Minnesota corporation, ("Landlord") and
PETCO ANIMAL SUPPLIES, INC., a Delaware corporation ("Tenant") as of this
___ day of November, 1997, are executing simultaneously with this Work
Letter Agreement ("Work Letter"), a written lease (the "Lease") covering
the Premises described in the Lease.
This Work Letter defines the scope of Landlord's Improvements (as
defined below) which Landlord shall be obligated to construct or install on
the Premises. It there is a conflict between the terms and provisions of
this Work Letter and the Lease, this Work Letter shall control. Terms
which have initial capital letters and are not otherwise defined in this
Letter shall have the meaning set forth in the Lease.
This Work Letter is a part of the Lease and shall be subject to all
of its terms and condition, including all definitions contained therein.
Unless the context otherwise requires, any references to the Lease shall
include the Work Letter and the obligations contained herein shall, to the
extent applicable, continue during the Lease Term.
In consideration of the mutual covenants hereinafter contained,
Landlord and Tenant mutually agree as set forth below.
CONSTRUCTION OF IMPROVEMENTS
1. Improvements. Landlord agrees to furnish, at Landlord's sole
cost and expense, all of the material, labor, and equipment for the
construction on the Land of the improvements ("Landlord's Improvements")
designated on the Final Plans and Specifications attached hereto and as
Schedule 1 and incorporated herein ("Final Plans and Specifications" or
"Construction Documents"). When Landlord requests Tenant to specify
details or layouts, Tenant shall specify same, subject to the provisions of
the Final Plans and Specifications, so as not to delay completion of the
Landlord's Improvements. Except as specifically set forth in this Lease
and delineated on the Final Plans and Specifications, Landlord shall not
provide or pay for any other improvements related to the Premises.
Landlord's Improvements shall be constructed in a good and workmanlike
manner in accordance with the Final Plans and Specifications and Landlord
agrees to complete the construction thereof in accordance with the
applicable building code as it is presently interpreted and enforced by the
governmental bodies having jurisdiction thereof. By execution of the
Lease, Tenant hereby approves of the attached Final Plans and
Specifications. Tenant shall pay to Landlord all increased costs or
damages incurred by Landlord attributable to delays caused by Tenant.
1.1 Premises Furnishings. Tenant shall be solely responsible
for the performance and expense of the design, layout, provision, delivery
and installation of any furniture, furnishings, telephone systems, computer
systems, office equipment, and any other personal property Tenant will use
at the Premises. In arranging for the performance of any of the work
referred to in the preceding sentence, Tenant shall adopt a schedule in
conformance with the schedule(s) of Landlord's Contractor(s) (defined
below) and conduct its work in such a manner as to maintain harmonious
labor relations and so as not to interfere unreasonably with or delay the
work of Landlord's Contractor(s) in substantially completing the Landlord's
Improvements.
2. Construction of Landlord's Improvements. A contractor
selected by Landlord in Landlord's sole discretion ("Landlord's
Contractor") shall use its commercially reasonable efforts (a) to
Substantially Complete (as defined below) the Landlord's Improvements on or
before August 1, 1998 and (b) to ensure that the structural and exterior
portions of the Premises, including without limitation the roof
(hereinafter, the "Structural Portions of the Demised Premises"), the
plumbing, electrical, gas, and other utilities, including without
limitation the HVAC (hereinafter, the "Utilities") servicing same are in
good working condition and order on the Commencement Date and are in
compliance with all existing law, codes, regulations and ordinances of any
governmental authorities, including seismic requirements and the Americans
with Disabilities Act, as evidenced by a Certificate of Occupancy issued by
the City.
3. Completion of Landlord's Improvements. Landlord shall be
responsible for the construction of the Landlord's Improvements in
accordance with the approved Final Plans and Specifications. Within thirty
(30) days of Substantial Completion (as defined below) of the Landlord's
Improvements, Landlord and Tenant shall provide a "punchlist" identifying
the corrective work of the type commonly found on an architectural
punchlist with respect to the Landlord's Improvements, which list shall be
in Landlord's reasonable discretion based on whether such items were
required by the approved Final Plans and Specifications. Within ten (10)
Business Days after delivery of the punchlist, Landlord shall commence the
correction of punchlist items and diligently pursue such work to
completion. The punchlist procedure to be followed by Landlord and Tenant
shall in no way limit Tenant's obligation to occupy the Premises under the
Lease nor shall it in any way excuse Tenant's obligation to pay Rent as
provided under the Lease unless such punch list items preclude Tenant from
occupying the Premises as reasonably determined by Landlord and Tenant.
4. Substantial Completion. "Substantial Completion" or
"Substantially Completed" as used herein shall mean delivery of written
notice to Tenant of the completion of construction of the Landlord's
Improvements in the Premises pursuant to the approved Final Plans and
Specifications with the exception of minor details of construction,
installation, decoration, or mechanical adjustments and punchlist items as
certified to by Landlord. Substantial Completion shall be deemed to have
occurred, and completion of the Landlord's Improvements shall be deemed to
have occurred upon issuance of a temporary or permanent certificate of
occupancy, notwithstanding the requirement to complete "punchlist" items or
similar corrective work. Tenant agrees that if Landlord shall be delayed
in causing such work to be Substantially Completed as a result of any of
the events as defined below (referred to herein as a "Tenant Delay"), then
such delay shall be the responsibility of Tenant, and will result in the
Commencement Date of the Term being the earlier of: (i) Tenant's opening
of the Premises for business; (ii) the date of Substantial Completion or
(iii) the date when Substantial Completion would have occurred if there had
been no Tenant Delay, providing that Landlord shall not be required to work
on an overtime basis in order to bring the Premises to Substantial
Completion. For the purposes of this Work Letter, a Tenant Delay is
defined as follows: (a) Tenant's failure to comply with any time frames
set forth herein or in the Lease, (b) any changes in the Final Plans and
Specifications requested by Tenant after execution of this Lease, or (c)
Tenant's failure to perform any act or obligation imposed on Tenant by the
Lease or this Work Letter as and when requested thereunder or hereunder, or
(d) any other delay otherwise caused by Tenant, its agents, employees or
contractors which operates to delay Landlord's Substantial Completion of
the Landlord's Improvements, as reasonably determined by Landlord.
5. Force Majeure. Landlord shall diligently proceed with the
construction of the Landlord's Improvements and complete the same and
deliver possession thereof to Tenant in accordance with the project
schedule to be submitted by Landlord to Tenant within fifteen (15) days
after the Effective Date of the Lease; provided, however, if delay is
caused or contributed to by act or neglect of Tenant, Tenant delays as
described in Section 4 above or those acting for or under Tenant, change
orders requested by Tenant, labor disputes, casualties, acts of God or the
public enemy, governmental embargo restrictions, shortages of fuel, labor,
or building materials, action or non-action of public utilities, or of
local, state or federal governments affecting the work, or other causes
beyond Landlord's reasonable control, then the time of completion of said
construction shall be extended for the additional time caused by such
delay. Such delays are each hereinafter referred to as an "Excused Delay."
Landlord shall notify Tenant in writing of any Excused Delay that is due to
a Tenant Delay.
6. Possession of Premises. Tenant shall, within five (5) business
days after request therefrom by Landlord, advise Landlord of required color
selections. Tenant shall be responsible for Landlord's increased cost of
labor and materials if any, and loss of Rent, arising out of delay in the
completion of the Premises caused by Tenant's failure to comply in a timely
manner with the foregoing schedule. Landlord shall notify Tenant at least
thirty (30) days prior to its estimated date of Substantial Completion and
Tenant shall during such thirty (30) day period have the right to access
the warehouse portion of the Premises to install fixtures and equipment
("Fixturization Period") provided that Tenant does not thereby interfere
with the completion of construction or occasion any labor dispute as a
result of such installations and provided further that Tenant does hereby
agree to assume all risk of loss or damage to such machinery, equipment,
fixtures and other personal property. Tenant shall adopt a schedule in
conformance with the schedule of Landlord and conduct its work in such a
manner as to maintain harmonious labor relations so as not to interfere
unreasonably with or delay the work of Landlord. Tenant shall not be
liable to Landlord for the payment of Basic Rent or taxes during such
Fixturization Period but Tenant shall be subject to the other terms and
provisions of this Lease, including the insurance and indemnity obligations
and the obligation to maintain the Premises free of mechanic liens. Basic
Rent and the payment and performance of all other obligations to be paid by
Tenant shall commence upon the Commencement Date; provided, however, in the
event that Landlord's Improvements are partially completed and partially
ready for occupancy, and are occupied by Tenant, or Tenant is required to
occupy same, the terms of such occupancy or use of the Premises shall apply
and a pro rata portion of the Basic Rent and the pro rata portion of all
other obligations to be paid by Tenant shall be payable commencing with
such date of partial occupancy, and shall be equitably adjusted from time
to time based upon the area and value of the portion of Landlord's
Improvements substantially completed and ready for Tenant's occupancy. The
failure of Tenant to take possession of or to occupy the Premises or any
portion thereof which Tenant is required to occupy on or after the date
Landlord's Improvements or such applicable portion thereof are
substantially complete and ready for occupancy by Tenant shall not serve to
relieve Tenant of said obligations or delay payments by Tenant to Landlord.
7. Tenant Work.
7.1 Finish Work. All finish work and decoration and other
work desired by Tenant and not included within the Landlord's Improvements
as set forth in the approved Construction Documents, including
specifically, without limitation, all computer systems, telephone systems,
telecommunications systems and other items (the "Tenant Work") shall be
furnished and installed by Tenant at Tenant's sole expense.
7.1.1 Consent of Landlord. If any Tenant Work is not set
forth on the approved Construction Documents, Tenant shall secure
Landlord's prior consent for such Tenant Work in the same manner and
following the same procedures provided for in the Lease. Tenant shall not
commence the construction or installation of any improvements on the
Premises, including, specifically, the Tenant Work, without Landlord's
prior written approval which shall not be unreasonably withheld of: (i)
Tenant's contractor, (ii) detailed plans and specifications for the Tenant
Work, and (iii) certificate(s) of insurance accurately showing that
Tenant's contractor maintains insurance coverage in amounts, types, form
and with companies reasonably acceptable to Landlord. All such
certificates or policies shall be endorsed to show Landlord as an
additional insured and such insurance shall be maintained by Tenant or
Tenant's contractor at all times during the performance of the Tenant Work.
7.2 Landlord's Obligations. Landlord is under no obligation
to construct or supervise construction of any of the Tenant Work and any
inspection by Landlord shall not be construed as a representation that the
Tenant Work is in compliance with the final plans and specifications
therefor or that the construction will be free from faulty material or
workmanship, or that the Tenant Work is in conformance with any building
codes or other applicable requirements. All of the Tenant Work shall be
undertaken and performed in strict accordance with the provisions of the
Lease and this Work Letter.
8. Risk of Loss. All materials, work, installations and
decorations of any nature brought upon or installed in the Premises before
the Commencement Date shall be at the risk of the party who brought such
materials or items onto the Premises. Neither Landlord nor any party
acting on Landlord's behalf shall be responsible for any damage or loss or
destruction of such items brought to or installed in the Premises by Tenant
prior to such date, except in the event of Landlord's gross negligence or
willful misconduct.
9. Expansion Space. If Tenant exercises its Expansion Option to
lease the Expansion Space (as defined in the Lease), then the terms of this
Work Letter, to the extent applicable, shall apply with respect to the
Expansion Space; provided that an amendment to the Lease and/or this Work
Letter shall be executed by the parties which shall set forth more
specifically the provisions hereof that shall apply to the Expansion Space.
If Tenant acquires the Expansion Space, Landlord shall furnish the
material, labor and equipment for the construction of improvements similar
to the Landlord's Improvements described in Schedule 1, which shall be
agreed upon and incorporated into the amendment ("Expansion Space
Landlord's Improvements"). With respect to Expansion Space Landlord's
Improvements, Substantial Completion of such improvements shall be deemed
to have occurred in accordance with the same criteria for Substantial
Completion provided under Section 4 of this Work Letter.
10. Conformance with Laws. All work performed by Tenant, including
the Tenant Work, shall be done in conformity with applicable codes and
regulations of governmental authorities having jurisdiction over the
Project and the Premises and valid building permits and other necessary
authorizations from appropriate governmental agencies when required, shall
be obtained by Tenant for the Tenant Work at Tenant's expense.
Notwithstanding any failure by Landlord to object to any such Tenant Work,
Landlord shall have no responsibility therefor.
11. Tenant's Representative. Tenant has designated Xxxx Xxxxx as
its sole representative with respect to the matters set forth in this Work
Letter, who shall have full authority and responsibility to act on behalf
of Tenant as required in this Work Letter. Tenant may change its
representative under this Work Letter at any time by providing five (5)
days prior written notice to Landlord. All inquiries, requests,
instructions, authorizations and other communications with respect to
matters covered by this Work Letter from Landlord will be made to Tenant's
Representative.
12. Landlord's Representative. Landlord has designated Xxxx
Xxxxxxxxx as its sole representative with respect to the matters set forth
in this Work Letter, who shall have full authority and responsibility to
act on behalf of Landlord as required in this Work Letter. Landlord may
change its representative under this Work Letter at any time by providing
five (5) days prior written notice to Tenant. All inquiries, requests,
instructions, authorizations and other communications with respect to the
matters covered by this Work Letter from Tenant will be made to Landlord's
representative. Tenant will communicate solely with Landlord's
Representative and will not make any inquiries of or requests to, and will
not give any instructions or authorizations to, any other employee or agent
of Landlord, including Landlord's architect, engineers, and contractors or
any of their agents or employees, with regard to matters covered by this
Work Letter.
13. Miscellaneous.
13.1 Sole Obligations. Except as herein expressly set forth
with respect to the Landlord's Improvements, Landlord has no agreement
with Tenant and has no obligation to do any work with respect to the
Premises. Any other work in the Premises which may be permitted by
Landlord pursuant to the terms and conditions of the Lease, including any
alterations or improvements as contemplated in the Lease, shall be done at
Tenant's sole cost and expense and in accordance with the terms and
conditions of the Lease.
13.2 Applicability. This Work Letter shall not be deemed
applicable to: (a) any additional space added to the original Premises at
any time, whether by the exercise of any options under the Lease or
otherwise, or (b) any portion of the original Premises or any additions
thereto in the event of a renewal or extension of the original Lease Term,
whether by the exercise of any options under the Lease or any amendment or
supplement thereto. The construction of any additions or improvements to
the Premises not contemplated by this Work Letter shall be effected
pursuant to a separate work letter agreement, in the form then being used
by Landlord and specifically addressed to the allocation of costs relating
to such construction.
13.3 Authority; Counterparts. Any person signing this Work
Letter on behalf of Tenant warrants and represents that such person has
authority to do so. This Work Letter may be executed in counterparts, each
of which shall be deemed an original, but all of which together constitute
one instrument.
13.4 Binding on Successors. Subject to the limitations on
assignment and subletting contained in the Lease, this Work Letter shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
13.5 Time of the Essence. Time is of the essence as to each
and every term and provision of this Work Letter. In all instances where
Tenant is required to approve an item, if no written notice of disapproval
is given within the stated time period at the end of said period the item
shall automatically be deemed approved and the next succeeding time period
shall commence. Except as otherwise provided, all references herein to a
"number of days" shall mean and refer to calendar days.
13.6 Attorneys' Fees. In any action to enforce or interpret
the terms of this Work Letter, the party prevailing in that action shall be
entitled to recover its reasonable attorneys' fees and costs of suit, both
at trial and on appeal.
13.7 Incorporation. This Work Letter is and shall be
incorporated by reference in the Lease and all of the terms and provisions
of the Lease are incorporated herein for all purposes. Any default by
Tenant hereunder also constitutes a default under the Lease.
[Remainder of Page Intentionally Left Blank]
14. Tenant's Acceptance of Premises. Within a period of sixty (60)
days after commencement of the Initial Term, Tenant shall notify Landlord,
in writing, of all portions of the Landlord's Improvements which are
incomplete and Landlord shall forthwith complete such items. Failure to
deliver such notice shall constitute an acknowledgment that the Landlord's
Improvements are complete.
Dated:_____________________ LANDLORD:
OPUS WEST CORPORATION, a
Minnesota corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Dated:_____________________ TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
SCHEDULE 1
Plans and Specification
[To Be Attached]
EXHIBIT "C"
Preliminary Report
EXHIBIT "D"
Commencement Date Acknowledgment
TO: Opus West Corporation
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
("Landlord")
FROM: PETCO Animal Supplies
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
("Tenant")
RE: Lease Agreement dated ___________________, 1997 ("Lease")
covering the premises described therein ("Premises") located in
the County of Riverside, State of California.
Pursuant to the term of the Lease, Tenant has agreed to provide this
Commencement Date Acknowledgment ("Acknowledgment") to Landlord within ten
(10) business days after Landlord's request therefor. This Acknowledgment
is not in any way intended to modify any of the terms of the Lease.
1. Commencement Date. The term of the Lease commenced on
___________________, is presently in force, and, unless Tenant exercises
its renewal or extension options, will expire on
__________________________. Tenant has two (2) five (5) year Renewal
Options exercisable pursuant to Article 17 the Lease and an Extension
Election exercisable pursuant to Article 18 of the Lease.
2. Amendments. The Lease has not been modified, altered or
amended in any respect, except for (indicate "None" if
none)______________________________________.
The information set forth in this Acknowledgment is true and correct
as of the date hereof. This Acknowledgment shall be binding upon the
successors and assigns of Tenant.
DATED:
TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT "E"
Delivery Date Acknowledgment
TO: Opus West Corporation
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
("Landlord")
FROM: PETCO Animal Supplies
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
("Tenant")
RE: Lease Agreement dated ___________________, 1997 ("Lease")
covering the premises described therein ("Premises") located in
the County of Riverside, State of California.
Pursuant to the term of the Lease, Tenant has agreed to provide this
Delivery Date Acknowledgment ("Acknowledgment") to Landlord within ten (10)
business days after Landlord's request therefor. This Acknowledgment is
not in any way intended to modify any of the terms of the Lease.
1. Acceptance of Premises. Tenant has accepted possession of the
Premises, is the actual occupant in possession of the Premises and has not
sublet, assigned or otherwise transferred its interest in the Premises.
All improvements to be constructed on the Premises by Landlord have been
completed and accepted by Tenant (with the exception of any identified
punch list items). The Premises were in acceptable condition and were
delivered in compliance with all of the requirement of the Work Letter (as
defined in the Lease) and the Lease.
2. Delivery Date. The Delivery Date under the Lease is and the
Premises were delivered from Landlord to Tenant on ___________________
3. Substantial Completion. The date of Substantial Completion of
the Premises (as defined in the Lease) is ________________________.
4. Amendments. The Lease has not been modified, altered or
amended in any respect, except for (indicate "None" if
none)______________________________________.
The information set forth in this Acknowledgment is true and correct
as of the date hereof. This Acknowledgment shall be binding upon the
successors and assigns of Tenant.
DATED:
TENANT:
PETCO ANIMAL SUPPLIES, INC., a
Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT "F"
RECORDED AT THE REQUEST OF )
)
AND )
)
WHEN RECORDED MAIL TO: )
______________________________ )
______________________________ )
______________________________ )
______________________________ )
)
Space Above This Line for Recorder's Use
SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made and entered into this ___ day of October,
1997, by and among ___________________("Lender"), whose address
is_______________, PETCO ANIMAL SUPPLIES, INC., a Delaware corporation (the
"Tenant") and OPUS WEST CORPORATION, a Minnesota corporation (ALandlord@).
RECITALS
1. Lender is the owner and holder of that certain ____________
(Promissory Note or Loan Agreement) dated ____________, in the principal
sum of
($_____________). The ___________________ is secured by a deed of trust,
assignment and security agreement recorded prior to or contemporaneously
with the recording hereof in the records of San Diego County, California,
which Deed of Trust constitutes a lien or encumbrance on that real property
more particularly described on Schedule "A" attached hereto and by this
reference incorporated herein.
2. Tenant is the holder of a leasehold estate (the "Leased
Premises") included in the real property described on Schedule "A" attached
hereto and by this reference incorporated herein, pursuant to the terms of
that lease (the "Lease") dated _______, and executed by Tenant and
Landlord. The Lease includes without limitation all right, title and
interest that Tenant may have in all or any portion of the Leased Premises.
3. Tenant and Lender desire to confirm their understanding with
respect to the Lease and the Deed of Trust.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree and covenant as
follows:
1. So long as Tenant is not in default (beyond any period given
Tenant to cure such default) in the payment of rent or in the performance
of any of the terms, covenants or conditions of the Lease to be performed
by Tenant, Lender shall not disturb or interfere with Tenant's possession
and occupancy of the Leased Premises during the term of the Lease or any
extension thereof duly exercised by Tenant.
2. If the interests of Tenant shall be transferred to and owned by
Lender by judicial foreclosure, private trustee sale or any other manner,
and Lender succeeds to the interest of Landlord under the Lease, Tenant
shall be bound to Lender under all of the covenants, conditions and
provisions of the Lease for the remaining term thereof, and any extension
thereof duly exercised by Tenant, with the same force and effect as if
Lender were the Landlord under the Lease. Tenant hereby attorns to Lender
as its Landlord, and that attornment shall be self-operative and shall be
effective immediately upon Lender's succeeding to the interest of Landlord
under the Lease without the execution of any further instruments by any of
the parties hereto.
3. If the interests of Landlord shall be transferred to and owned
by Lender by judicial foreclosure, private trustee sale or any other
manner, and Lender succeeds to the interest of Landlord under the Lease,
Lender shall be bound to Tenant under all of the terms, covenants and
conditions of the Lease except that Lender shall not be:
(a) Liable for any act or omission of any prior landlord
(including Landlord);
(b) Subject to any offsets or defenses that Tenant might have
against any prior landlord (including Landlord) unless Lender has been
given notice and an opportunity to cure in accordance with the terms of the
Lease;
(c) Bound by any rent or additional rent or advance rent that
Tenant might have paid for more than the current month to any prior
landlord (including Landlord) and all such rent shall remain due and owing
notwithstanding such advance payment;
(d) Bound by any amendment or modification of the Lease made
without its consent and written approval;
(e) Liable for any security deposit Tenant might have paid to
any prior landlord (including Landlord), except to the extent Lender has
actually received said security deposit;
(f) Personally liable under the Lease. Lender's liability
under the Lease shall be limited to the ownership interest of Lender in the
Leased Premises and any income derived therefrom by Lender.
In addition, Lender shall not have any liability or responsibility under or
pursuant to the terms of the Lease or this Agreement after it ceases to own
an interest in or to the property described on Schedule "A."
4. The Lease is now, and shall at all times continue to be,
subject and subordinate in each and every respect to the Deed of Trust and
to all extensions, modifications, renewals, replacements, substitutions
and/or consolidations thereof; but only to the extent that such extensions,
modifications, renewals, replacements, substitutions, and/or consolidations
thereof do not materially and detrimentally alter Tenant's rights and
obligations under the Lease. Nothing contained herein shall be deemed or
construed as limiting or restricting the enforcement by Lender of any of
the covenants, conditions, provisions or remedies of the Deed of Trust,
whether or not consistent with the Lease.
5. Tenant shall give written notice to Lender of any failure by
Landlord to perform or observe any of the covenants, conditions or
provisions of the Lease, and Lender shall have the right, but not the
obligation, to cure such failure. In the event of any such failure by
Landlord, Tenant shall not take any action with respect to such failure,
including without limitation any action to terminate, rescind or avoid the
Lease or to withhold any rent thereunder, for a period of fifteen (15) days
after notice thereof to Lender; provided, however, that if such failure
cannot reasonably be remedied within that fifteen (15) day period, Tenant
shall not take any action with respect to such failure, including without
limitation any action to terminate, rescind or avoid the Lease or to
withhold any rent thereunder, so long as Lender shall commence to remedy
the failure within the fifteen (15) day period and thereafter shall
diligently prosecute the remedy to completion.
6. All notices, demands and requests which may be or are required
to be given, demanded or requested by either party to the other shall be in
writing. All notices, demands and requests shall be sent by United States
registered or certified mail, postage prepaid or by Federal Express or
other reputable independent overnight courier service, addressed at the
addresses specified at the beginning of this Agreement or at such other
place as either party may designate to the other party by written notice,
and shall be deemed to have been delivered on the date the same is
(i) postmarked, if sent by certified or registered United States mail, or
(ii) deposited, if sent by Federal Express or such other reputable
overnight courier service, but shall not be deemed received until (a) one
(1) business day following deposit with Federal Express or other reputable
overnight courier service, or (b) three (3) days following deposit in the
United States Mail if sent by certified or registered mail.
7. The term "Lender" shall be deemed to include _________, a
__________, and its successors and assigns, including anyone who shall have
succeeded to Landlord's interest by or through judicial foreclosure,
private trustee's sale, or other proceedings brought pursuant to the Deed
of Trust or deed in lieu of such foreclosure or proceedings.
8. Each covenant, condition and provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law but if any covenant, condition or provision of this Agreement shall be
held to be void or invalid, the same shall not affect the remainder hereof
which shall be effective as though the void or invalid covenant, condition
or provision had not been contained herein.
9. This Agreement may not be modified orally or in any other
manner than by an agreement in writing signed by the parties hereto or
their respective successors in interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, their successors and
assigns.
10. This Agreement shall be governed by and construed according to
the laws of the State of California.
11. This Agreement may be executed in any number of counterparts,
and each counterpart executed by any of the undersigned, together with all
other counterparts so executed, shall constitute a single instrument and
agreement of the parties.
IN WITNESS WHEREOF, these presents are executed as of the date
indicated above.
_____________________________, a
__________________________________
By:
Name:
Title:
Lender
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation
By:
Name:
Title:
Tenant
OPUS WEST CORPORATION,
a Minnesota corporation
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
Landlord
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
STATE OF CALIFORNIA )
) ss.
County of San Diego )
On _____________ before,____________________, personally appeared
________________ personally, known to me (or proved to me on the basis of
satisfactory evidence) to the person whose name(s) are/is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity, and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS, my hand and official seal.
Notary Public
My commission expires:_____________
[SEAL]
SCHEDULE "A"
Legal Description
[TO BE ATTACHED]
ARTICLE ONE: BASIC TERMS
The following terms used in this lease shall have the meanings set forth
below.
1.01 Date Of Lease: June __, 1997
1.02 Landlord (legal entity) Xxxxxxxxxxxxx Industrial
Properties East, L.P.
1.03 Tenant (legal entity) Petco Animal Supplies, Inc.
1.04 Tenant's Guarantor: None
1.05 Address of Premises: 000 Xxxxxx Xxxxxxxxx Xxxx,
Xxxxx Xxxxxxxxx, Xxx Xxxxxx
1.06 Intentionally deleted
1.07 Approximate Size of
Building: 211,450 square feet.
1.08 Tenant's Initial
Prorata Share: 100%
1.09 Lease Term; Commencing on the Lease
Commencement Date and expiring on
June 30, 2002.
1.10 (a) Lease Commencement Date:July 1, 1997
(b) Rent Commencement Date: August 1, 1997
1.11 Permitted Uses; Warehouse and ancillary offices
1.12 Broker(s): Colliers Houston & Co.
1.13 Intentionally Omitted
1.14 Parking Spaces Allocated
to Tenant: 100%
1.15 Base Rent:
(i) August 1, 1997 through
June 30, 2000 the Base
Rent shall be $761,220 per
year, in equal monthly
installments of $63,435.00
(ii) July 1, 2000 through
June 30, 2002 the Base
Rent shall be $845,800 per
year in equal monthly
installments of $70,483.53
1.16 Other Charges Payable
by Tenant: (i) Real Property Taxes
(Article Five)
(ii) Utilities (Article Six)
(iii) Insurance Premiums (Article
Seven)
(iv) CAM Expenses (Article
Eight)
1.17 Address of Landlord
for Notices: c/o Cabot Partners Limited
Partnership
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
1.18 Address of Tenant
for Notices: 0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Property Manager
1.19 Exhibits: A: The Premises
B: Rules & Regulations
C: Memorandum of Acceptance
D: Landlord's Release and
Waiver
E: Additional Provisions
Relating to Parking Spaces
ARTICLE TWO: PREMISES
2.01 Premises. The Premises are described in Exhibit A. The Premises
includes the building thereon (the "Building"), including the racking
system located therein.
2.02 Condition of Premises. Prior to the Lease Commencement Date,
Landlord will broom clean the Building and ensure that the gas unit heaters
and loading docks are in good working order and that the roof is
watertight. Except as provided in the preceding sentence or as otherwise
expressly provided herein, Tenant shall accept the Premises in its "as-is"
condition on the Lease Commencement Date, and Landlord shall have no
obligation to perform any work therein to prepare the Premises for Tenant.
ARTICLE THREE: LEASE TERM
3.01 Lease of Premises for Lease Term. Landlord leases the Premises to
Tenant and Tenant leases the Premises from Landlord for the Lease Term,
commencing on the Lease Commencement Date, subject to all terms and
provisions of this Lease, except for the payment of Base Rent (which shall
commence on the Rent Commencement Date). The Lease Term shall be the
period stated in Article One and shall begin on the Lease Commencement Date
set forth in Article One.
3.02 Options to Extend Term. Tenant shall have two (2) options to
extend the term of this Lease, each for a five (5) year period (an "Option
Period"), provided (a) Tenant shall give notice to Landlord of its exercise
of an option not less than nine (9) months prior to the expiration of the
Lease Term or the first Option Period, as the case may be, (b) no default
beyond any applicable grace period in the obligations of Tenant under this
Lease shall exist at the time such notice is given and (c) Tenant shall not
have been in default under this Lease beyond any applicable grace period on
more than two (2) occasions during the entire preceding Lease Term. All of
the terms and provisions of this Lease shall be applicable during each
Option Period except that (a) Tenant shall have no option to extend the
term of this Lease beyond the second Option Period and (b) the Base Rent
for each Option Period shall be the greater of (i) the Base Rent for the
last year of the Lease Term or the first Option Period, as the case may be,
or (iii) Market Rent, as defined below, as of the first day of such Option
Period.
"Market Rent" shall be computed as of the applicable date at the
then current rentals being charged to new tenants for comparable space
located in comparable buildings, taking into account and giving effect to,
in determining comparability, without limitation, such considerations as
size, location and condition of premises and lease term.
Landlord shall designate Market Rent for the next Option Period
within thirty (30) days after Tenant's written request therefor (such
request to be made no earlier than one (1) year before such Option Period).
If Landlord shall not have previously designated Market Rent, after
Tenant shall exercise an option to extend for an Option Period, Landlord
shall initially designate Market Rent and shall furnish data in support of
such designation. If Tenant shall have exercised its option to extend for
the Option Period but shall disagree with Landlord's designation of the
Market Rent, then Tenant shall have the right, by notice given within
fourteen (14) days after Tenant's receipt of Landlord's designation, to
submit such Market Rent to arbitration as follows. Market Rent shall be
determined by arbitrators, one chosen by Tenant, one chosen by Landlord and
a third selected, if necessary, as below provided. All arbitrators
selected under this Section shall be experienced real estate appraisers
with substantial experience with properties in the vicinity of the
Premises. If within fourteen (14) days after Tenant's notice the parties
shall agree upon a single arbitrator or if one party shall fail to select
an arbitrator, the arbitrator selected by the other shall be the sole
arbitrator, and Market Rent shell be determined by such arbitrator. The
unanimous written decision of the two first chosen (or the decision of the
first, if a second arbitrator is not chosen) without selection and
participation of a third arbitrator, or otherwise the written decision of a
majority of the three arbitrators chosen and selected as provided herein,
shall be conclusive and binding upon Landlord and Tenant. Landlord and
Tenant shall each notify the other of its chosen arbitrator within fourteen
(14) days following the call for arbitration, and, unless such two
arbitrators shall have either reached a unanimous decision within thirty
(30) days after their designation or jointly selected a third arbitrator,
they shall so notify the then President of the local Real Estate Board and
request him to select an impartial third arbitrator to act hereunder, or if
such individual does not exist or is unavailable, then they shall apply to
a court of competent jurisdiction to select an impartial third arbitrator.
Such third arbitrator and the first two chosen shall hear the parties and
their evidence and render their decision within thirty (30) days following
the conclusion of such hearing and notify Landlord and Tenant thereof.
Landlord and Tenant shall bear the expense of the third arbitrator (if any)
equally. If the dispute between the parties as to Market Rent shall not
have been resolved before the commencement of Tenant's obligation to pay
rent based upon Market Rent, then Tenant shall pay rent based upon the
Market Rent designated by Landlord until either the agreement of the
parties as to the Market Rent or the decision of the arbitrators, as the
case may be, at which time Tenant shall pay any underpayment of rent to
Landlord or Landlord shall refund any overpayment of rent to Tenant.
3.03 Intentionally Omitted.
3.04 Holding Over. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages, costs, liabilities
and expenses, including attorneys' fees, which Landlord shall incur on
account of Tenant's delay in so vacating the Premises. If Tenant shall not
vacate The Premises upon the expiration or earlier termination of this
lease, the Base Rent shall be increased to 250% of the Base Rent then in
effect and Tenant's obligation to pay Additional Rent shall continue, but
nothing herein shall limit any of Landlord's rights or Tenant's obligations
arising from, Tenant's failure to vacate the Premises, including, without
limitation, Landlord's right to repossess the Premises and remove Tenant
therefrom at any time after the expiration or earlier termination of this
Lease and Tenant's obligation to reimburse and indemnify Landlord as
provided in the preceding sentence.
3.05 Tenant's Termination Option. Tenant shall have the right, to
terminate this Lease effective June 30, 2000 (Tenant's Termination Option),
provided that (i) Tenant shall give notice to Landlord of the exercise of
Tenant's option ("Tenant's Termination Notice") not later than January 1,
2000, the time of exercise being of the essence; (ii) Tenant shall pay to
Landlord, as an early termination penalty, the sum of one month's Base
Rent, simultaneously with the delivery of Tenant's Termination Notice;
(iii) this Lease shall be in full force and effect as of the date of
Tenant's Termination Notice and on June 30, 2000; and (iv) Tenant shall not
be in default hereunder, beyond any applicable notice or grace period on
the date Tenant sends the Tenant Termination Notice and on June 30, 2000.
If Tenant shall have complied with the foregoing provisions of this Article
3.05, this Lease and the Lease Term shall expire on June 30, 2000, with the
same force and effect as though said date were the expiration date.
ARTICLE FOUR: RENT
4.01 Base Rent. On the first day of each month during the Lease Term,
Tenant shall pay to Landlord the Base Rent as described in Section 1.15 in
lawful money of the United States, in advance and without offset,
deduction, or prior demand. The Base Rent shall be payable at Landlord's
address or at such other place or to such other person as Landlord may
designate in writing from time to time.
4.02 Additional Rent. All sums payable by Tenant under this Lease other
than Base Rent shall be deemed "Additional Rent;" the term "Rent" shall
mean Base Rent and Additional Rent. Landlord shall estimate in advance and
charge to Tenant the following costs, to be paid with the Base Rent on a
monthly basis throughout the Lease Term: (i) all Real Property Taxes for
which Tenant is liable under Section 5.01 and 5.02 of the Lease, (ii) all
utility costs (if utilities are not separately metered) for which Tenant is
liable under Section 6.01 of the Lease, (iii) all insurance premiums for
which Tenant is liable under Sections 7.01 and 7.08 of the Lease, (iv) all
CAM Expenses for which Tenant is liable under Section 8.04 of the Lease.
Collectively, the aforementioned Real Property Taxes, insurance, utility,
and CAM Expenses shall be referred to as the "Total Operating Costs."
Landlord may adjust its estimate of Total Operating Costs at any time based
upon Landlord's experience and reasonable anticipation of costs. Such
adjustments shall be effective as of the next Rent payment date after
notice to Tenant. Within 120 days after the end of each fiscal year (which
shall be the calendar year for this Lease) during the Lease Term, Landlord
shall deliver to Tenant a statement prepared in accordance with generally
accepted accounting principles setting forth, in reasonable detail, the
Total Operating Costs paid or incurred by Landlord during the preceding
fiscal year and Tenant's Pro Rata Share of such expenses. Within thirty
(30) days after Tenant's receipt of such statement, there shall be an
adjustment between Landlord and Tenant, with payment to or credit given by
Landlord (as the case may be) in order that Landlord shall receive the
entire amount of Tenant's share of such costs and expenses for such period.
In addition to its obligation to pay Base Rent and its Pro Rata Share of
Total Operating Expenses, Tenant is required hereunder to pay directly to
suppliers, vendors, carriers, contractors. etc. certain insurance premiums,
utility costs, personal property taxes, maintenance and repair costs and
other expenses, collectively "Additional Expenses." If Landlord pays for
any Additional Expenses in accordance with the terms of this Lease,
Tenant's obligation to reimburse such costs shall be an Additional Rent
obligation payable in full with the next monthly Rent payment. Unless this
Lease provides otherwise, Tenant shall pay all Additional Rent then due
with the next monthly installment of Base Rent.
4.03 Late Charge. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Rent and other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but
are not limited to, processing and accounting charges, and late charges
which may be imposed on Landlord by the terms of any loan secured by the
Building. Accordingly, if any installment of Rent or any other sums due
from Tenant shall not be received by Landlord within five days following
the due date, Tenant shall pay to Landlord a late charge equal to five
percent of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge
by Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder.
4.04 Interest. Any Rent or other amount due to Landlord, if not paid
when due, shall bear interest from the date due until paid at the rate of
15% per annum or the highest rate permitted by law, whichever is less,
provided that interest shall not be payable on late charges incurred by
Tenant nor on any amounts upon which late charges are paid by Tenant to the
extent such interest would cause the total interest to be in excess of that
legally permitted. Payment of interest shall not excuse or cure any
default hereunder by Tenant.
4.05 Tenant's Pro Rata Share. Tenant's Pro Rata Share shall be 100%.
ARTICLE FIVE: PROPERTY TAXES
5.01 Real Property Taxes. Tenant shall pay Tenant's Pro Rata Share of
Real Property Taxes on the Premises payable during the Lease Term. Tenant
shall make such payments in accordance with Section 4.02. If Landlord
shall receive a refund of any Real Property Taxes with respect to which
Tenant shall have paid Tenant's Pro Rata Share, Landlord shall refund to
Tenant Tenant's Pro Rata Share of such refund after deducting therefrom the
costs and expenses incurred in connection therewith.
5.02 Definition of "Real Property Tax." "Real Property Tax" shall mean
taxes, assessments (special, betterment, or otherwise), levies, fees, rent
taxes, excises, impositions, charges water and sewer rents and charges, and
all other government levies and charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are imposed or levied upon or
assessed against the Premises or any Rent or other sums payable by any
tenants or occupants thereof. Real Property Tax shall include Landlord's
costs and expenses of contesting any Real Property Tax. If at any time
during the term the present system of ad valorem taxation of real property
shall be changed so that in lieu of the whole or any part of the ad valorem
tax on real property, or in lieu of increases therein, there shall be
assessed on Landlord a capital levy or other tax on the gross rents
received with respect to the Premises or a federal, state, county,
municipal, or other local income, franchise, excise or similar tax,
assessment, levy, or charge (distinct from any now in effect) measured by
or based, in whole or in part, upon gross rents, then all of such taxes,
assessments, levies, or charges, to the extent so measured or based
("Substitute Taxes"), shall be deemed to be a Real Property Tax.
5.03 Personal Property Taxes. Tenant shall pay directly all taxes
charged against trade fixtures furnishings, equipment, inventory, or any
other personal property belonging to Tenant. Tenant shall use its best
efforts to have personal property taxed separately from the Premises. If
any of Tenant's personal property shall be taxed with the Premises, Tenant
shall pay Landlord the taxes for such personal property within fifteen (15)
days after Tenant receives a written statement from Landlord for such
personal Property taxes.
ARTICLE SIX: UTILITIES
6.01 Utilities. Tenant shall promptly pay, directly to the appropriate
supplier, the cost of all natural gas, heat, cooling energy, light, power,
sewer service, telephone, water, refuse disposal and other utilities and
services supplied to the Premises, allocable to the Lease Term together
with any related Installation or connection charges or deposits
(collectively "Utility Costs"). Landlord shall not be liable for damages,
consequential or otherwise, nor shall there be any rent abatement arising
out of any curtailment or interruption whatsoever in utility services.
ARTICLE SEVEN: INSURANCE
7.01. Liability Insurance. From the time Tenant shall first enter the
Premises, throughout the Lease Term and thereafter as long as Tenant shall
remain in the Premises (collectively, "the Occupancy Period"), Tenant shall
maintain in effect commercial general liability insurance insuring Tenant
against liability for bodily injury, property damage (including loss of use
of Premises) and personal injury at the Premises, including contractual
liability. Such insurance shall name Landlord, its Premises manager, any
mortgagee, and Cabot Partners Limited Partnership, as additional insureds.
The initial amount of such insurance shall be Three Million Dollars
($3,000,000) per occurrence and shall be subject to increase once during
the Option Period specified by Landlord based upon inflation, increased
liability awards, recommendation of Landlord's professional insurance
advisers, and other relevant factors. The liability insurance obtained by
Tenant under this Section 7.01 shall (i) be primary; and (ii) insure
Tenant's obligations to Landlord under Section 7.09. The amount and
coverage of such insurance shall not limit Tenant's liability nor relieve
Tenant of any other obligation under this Lease. Landlord may also obtain
commercial general liability insurance in an amount and with coverage
determined by Landlord insuring Landlord against liability with respect to
the Premises. The policy obtained by Landlord shall not provide primary
insurance, shall not be contributory and shall be excess over any insurance
maintained by Tenant.
7.02 Worker's Compensation Insurance. During the Occupancy Period,
Tenant shall maintain in effect Worker's Compensation Insurance (including
Employers' Liability Insurance) in the statutory amount covering all
employees of Tenant employed or performing services at the Premises, in
order to provide the statutory benefits required by the laws of the state
in which the Premises are located.
7.03 Automobile Liability Insurance. During the Occupancy Period,
Tenant shall maintain in effect Automobile Liability Insurance, including
but not limited to, passenger liability, on all owned, non-owned, and hired
vehicles used in connection with Tenant's use of the Premises, with a
combined single limit per occurrence of not less than One Million Dollars
($1,000,000) per vehicle for injuries or death of one or more persons or
loss or damage to property.
7.04 Personal Premises Insurance. During the Occupancy Period, Tenant
shall maintain in effect Personal Property Insurance covering leasehold
improvements paid for by Tenant and Tenant's personal property and fixtures
from time to time in, on, or at the premises, in an amount not less than
100% of the full replacement cost, without deduction for depreciation,
providing protection against events protected under Direct Risk of Physical
Loss (All Risk), as well as against sprinkler damage, vandalism, and
malicious mischief. Any proceeds from the Personal Property insurance
shall be used for the repair or replacement of the property damaged or
destroyed, unless this Lease is terminated under an applicable provision
herein. Tenant may satisfy the requirement for insurance under this
Section 7.04 by self insuring, provided that at all times while so self
insuring (i) Tenant maintains a net worth of at least $150,000,000 and
(ii) promptly upon written request from Landlord (which may be given from
time to time), Tenant shall deliver to Landlord evidence reasonably
satisfactory to Landlord that Tenant has such net worth.
7.05 Intentionally Deleted.
7.06 Premises and Rental Income Insurance. During the Lease Term,
Landlord shall maintain in effect Direct Risk of Physical Loss (all risk)
insurance covering loss of or damage to the Premises in the amount of its
replacement value with such endorsements and deductibles as Landlord shall
determine from time to time. Landlord shall have the right to obtain
flood, and such other insurance as Landlord shall determine from time to
time or shall be required by any lender holding a security interest in the
Premises. Landlord shall not obtain insurance for Tenant's fixtures or
equipment or building improvements installed by Tenant. During the Lease
Term, Landlord shall also maintain a rental income insurance policy, with
loss payable to Landlord, in an amount equal to one (1) year's Base Rent,
plus estimated Real Property Taxes, CAM Expenses, Utility Costs and
insurance premiums for one (1) year. Tenant shall be liable for the
payment of any deductible amount under Landlord's insurance maintained
pursuant to this Article Seven, in an amount not to exceed Twenty-Five
Thousand Dollars ($25,000). Tenant shall not do or permit anything to be
done which shall invalidate any such insurance.
7.07 Payment of Insurance Premiums. Landlord shall pay the premiums of
the insurance policies maintained by Landlord under Section 7.06 and
Section 7.01 (if applicable), and Tenant shall reimburse Landlord for
Tenant's Pro Rata Share of such premiums in accordance with Section 4.02.
Tenant shall pay directly the premiums of the insurance policies maintained
by Tenant under Sections 7.01, 7.02, 7.03, 7.04, and 7.05.
7.08 General Insurance Provisions.
7.08(a) Any insurance which Tenant shall be required to maintain
under this Lease shall include a provision which requires the
insurance carrier to give Landlord not less than thirty (30) days'
written notice prior to any cancellation or modification of such
coverage.
7.08(b) Prior to the earlier of Tenant's entry into the Premises or
the commencement of the Lease Term, Tenant shall deliver to
Landlord an insurance company certificate that Tenant maintains the
insurance required by Sections 7.01, 7.02, 7.03, 7.04 and 7.05 and
not less than thirty (30) days prior to the expiration or
termination of any such insurance, Tenant shall deliver to Landlord
renewal certificates therefor. Tenant shall provide Landlord with
copies of the policies promptly upon request from time to time. If
Tenant shall fail to deliver any certificate or renewal certificate
to Landlord required under this Lease within the prescribed time
period or if any such policy shall be canceled or modified during
the Lease Term without Landlord's consent, Landlord may obtain such
insurance, in which case Tenant shall reimburse Landlord, as
Additional Rent, for 110% of the cost of such insurance within ten
(10) days after receipt of a statement of the cost of such
insurance.
7.08(c) Tenant shall maintain all insurance required under this
Lease with companies legally qualified to issue such insurance in
New Jersey and reasonably acceptable to Landlord.
7.08 (d) Landlord and Tenant, on behalf of themselves and their
insurers, each hereby waive any and all rights of recovery against
the other, or against the officers, partners, employees, agents, or
representatives of the other, for loss of or damage to its property
or the property of others under its control, if such loss or damage
shall be covered by any insurance policy in force (whether or not
described in this Lease) at the time of such loss or damage, or
required to be carried under this Article Seven. All property
insurance carried by either party shall contain a waiver of
subrogation against the other party to the extent such right shall
have been waived by the insured party prior to the occurrence of
loss or injury.
7.09 Indemnity. As such waiver does not violate public policy and
insurance is available to protect it, Tenant hereby waives all claims
against Landlord, its agents, employees, officers, directors, partners end
shareholders, (collectively "the Indemnitees") for damage to any property
or injury to or death of any person in, upon or about the Premises arising
at any time and from any cause, and Tenant shall hold Indemnitees harmless
from and defend Indemnitees from and against all claims, liabilities,
judgments, demands, causes of action, losses, damages, costs and expenses
including seasonable attorney's fees for damage to any property or injury
to or death of any person arising in or from the negligence or willful
misconduct of Tenant, its employees, agents, contractors, or invitees in,
upon or about the Premises. The foregoing shall include investigation
cost; and all the costs and expenses incurred by Landlord from the first
notice that any claim or demand is to be made or may be made. The
provisions of this Section 7.08 shall survive the expiration or termination
of this Lease with respect to any damage, injury, or death occurring prior
to such time.
7.10 Landlord's Indemnity. Landlord shall defend, with counsel
reasonably approved by Tenant, all actions against Tenant, its agents,
employees, officers, directors, partners and shareholders (collectively
"the Indemnitees") with respect to, and shall pay, protect, indemnify and
save harmless to the extent permitted by law the Indemnitees from and
against, all liabilities, losses, damages, costs and expenses (including
reasonable attorneys' fees and expenses), causes of action, suits, claims,
demands or judgments of any nature arising from injury to or death of any
person or damage to or loss of property occurring at the Property caused by
the negligence or willful misconduct of Landlord to the extent the same
shall not be covered by any insurance maintained or required to be
maintained by any of the Indemnitees.
ARTICLE EIGHT: COMMON AREAS
8.01 Common Areas. As used in this Lease, "Common Areas" shall mean
all areas within the Premises outside the Building, including, but not
limited to, parking areas, driveways, sidewalks, access roads, landscaping,
and planted areas.
8.02 Use of Common Areas. The Common Areas are part of the Premises,
and Tenant shall have the exclusive right to use the Common Areas for the
purposes intended, subject to such reasonable rules and regulations ("Rules
and Regulations") as Landlord may establish or modify from time to time and
as initially set forth in Exhibit "B". Tenant shall abide by all such
Rules and Regulations and shall use its best efforts to cause others who
use the Common Areas with Tenant's express or implied permission to abide
by Landlord's Rules and Regulations.
8.03 Vehicle Parking. Tenant shall be entitled to use all vehicle
parking spaces on the Premises, without paying any additional rent.
Vehicles shall be parked only in striped parking spaces and not in
driveways, other locations not specifically designated for parking.
Handicapped spaces shall only be used by those legally permitted to use
them. The additional spaces shall be in locations designated by Landlord
subject to the approval of Tenant, which approval shall not unreasonably be
withheld. Tenant, at its expense, may construct additional parking spaces
on the Premises provided (a) Tenant shall first obtain Landlord's approval
of plans and specifications therefor, (b) such additional parking shall
comply with all legal requirements, including, without limitation, zoning
requirements, and (c) the construction of such additional parking spaces
shall comply with Section 10.05 hereof. See Exhibit E for additional
provisions, if any, relating to parking spaces.
8.04 Common Area Maintenance. Subject to Articles Eleven and Twelve,
Landlord shall maintain the Common Areas in good order, condition, and
repair. Common Area Maintenance expenses ("CAM Expenses") are all costs
and expenses associated with the operation and maintenance of the Common
Areas and the repair and maintenance of the heating, ventilation, air
conditioning, plumbing, electrical, utility, and safety systems (to the
extent not performed by Tenant), including, but not limited to, the
following: gardening and landscaping; snow removal; utility. water and
sewage services for the Common Area; maintenance of signs (other than
Tenant's signs); worker's compensation insurance; personal property taxes;
rental or lease payments paid by Landlord for rented or leased personal
property used in the operation or maintenance of the Common Areas; fees for
required licenses and permits; routine maintenance and repair of roof
membrane, flashings, gutters, downspouts, roof drains, skylights and
waterproofing; maintenance of paving [including sweeping, striping,
repairing, resurfacing, and repaving); general maintenance Painting;
lighting; cleaning; refuse removal; security and similar items; reserves
for roof replacement, exterior painting and other appropriate reserves; and
a property management fee (not to exceed three percent (3%) of the gross
rents of the Premises for the calendar year). Landlord may cause any or
all of such services to be provided by third parties and the cost of such
services shall be included in CAM Expenses with respect to any CAM Expenses
which are included for the benefit of the Premises and other property,
Landlord shall make a reasonable allocation of such cost between the
Premises and such other property. CAM Expenses shall not include: (a) the
cost of capital repairs and replacements, provided, however, that the
annual depreciation (based on the useful life of the item under generally
accepted accounting principles) of any such capital repair or replacement
to the Common Areas or the heating, ventilating, air-conditioning,
plumbing, electrical, utility and safety systems serving the Premises shall
be included in the CAM Expenses each year during the term of this Lease;
and (b) the cost of capital improvements, provided, however, that the
annual depreciation (based on the useful life of the item under generally
accepted accounting principles) of any capital improvement undertaken to
reduce CAM Expenses or made in order to comply with legal requirements
shall be included in CAM Expenses each year during the term of this Lease.
8.05 Tenant's Payment of CAM Expense. Tenant shall pay Tenant's Pro
Rata Share (100%) of all CAM Expenses in accordance with Section 4.02.
ARTICLE NINE: USE 0F PREMISES
9.01 Permitted Uses. Tenant may use the Premises only for the Permitted
uses set forth in Section 1.11 above.
9.02 Manner of Use. Tenant shall not cause or permit the Premises to be
used in any way which shall constitute a violation of any law, ordinance,
restrictive covenants, governmental regulation or order, or which shall
constitute a nuisance or waste. Tenant shall obtain and pay for all
permits, including a certificate of occupancy and shall promptly take all
actions necessary to comply with all applicable statutes, ordinances,
notes, regulations, orders and requirements regulating the use by Tenant of
the Premises, including the Occupational Safety and Health Act.
9.03 Hazardous Materials. As used In this Lease, the term "Hazardous
Material" shall mean any flammable items, explosives, radioactive
materials, oil, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials" or "toxic substances" now or subsequently regulated under any
applicable federal, state or local laws or regulations, including without
limitation petroleum-based products, paints, solvents, lead, cyanide, DDT,
printing inks, acids, pesticides, ammonia compounds and other chemical
products, asbestos, PCBs and similar compounds, and including any different
products and materials which are subsequently found to have adverse effects
on the environment or the health and safety of persons. Tenant shall not
cause or permit any Hazardous Material to be generated, produced, brought
upon, used, stored, treated or disposed of in or about the Premises by
Tenant, its agents, employees, contractors, sublessees or invitees without
complying with all applicable Federal, State and Local laws or ordinances
pertaining to the transportation, storage, use or disposal of such
Hazardous Materials, including but not limited to obtaining proper permits.
In no event, however, shall Tenant install or use any storage tanks on the
Premises.
If Tenant's transportation, storage, use or disposal of Hazardous Materials
on the Premises results in the contamination of the soil or surface or
ground water or loss or damage to person(s) or property, then Tenant agrees
to: (a) notify Landlord immediately of any contamination, claim of
contamination, loss or damage, (b) after consultation with the Landlord,
clean up the contamination in full compliance with all applicable statutes,
regulations and standards and (c) indemnify, defend and hold Landlord
harmless from and against any claims, suits, causes of action, costs and
fees, including reasonable attorney's fees and costs, arising from or
connected with any such contamination, claim of contamination, loss or
damage. Tenant agrees to fully cooperate with Landlord and provide such
documents, affidavits and information as may be requested by Landlord
(i) to comply with any environmental law, (ii) to comply with the request
of any lender, purchaser or tenant, and/or (iii) for any other reason
deemed necessary by Landlord in its sole discretion. Tenant shall notify
Landlord promptly in the event of any spill or other release of any
Hazardous Material at, in, on, under or about the Premises which is
required to be reported to a governmental authority under any environmental
law, will promptly forward to Landlord copies of any notices received by
Tenant relating to alleged violations of any environmental law and will
promptly pay when due any fine or assessment against Landlord, Tenant or
the Premises relating to any violation of an environmental law during the
term of this Lease. If a lien is filed against the Premises by any
governmental authority resulting from the need to expend or the actual
expending of monies arising from an act or omission, whether intentional or
unintentional, of Tenant, its agents, employees or invitees, or for which
Tenant is responsible, resulting in the releasing, spilling, leaking,
leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous
Material into the water or onto land located within the State where the
Premises is located, then Tenant shall, within thirty (30) days from the
date that Tenant is first given notice that such lien has been placed
against the Premises (or within such shorter period of time as may be
specified by Landlord if such governmental authority has commenced steps to
cause the Premises to be sold pursuant to such lien) either (i) pay the
claim and remove the lien, or (ii) furnish a cash deposit, bond, or such
other security with respect thereto as is satisfactory in all respects to
Landlord and is sufficient to effect a complete discharge of such lien on
the Premises. The provisions of this Section 9.03 shall survive the
expiration or earlier termination of this Lease.
Notwithstanding anything to the contrary herein, any environmental
remediation or response action required in or around the Premises resulting
directly or indirectly from any acts or omissions of other parties for whom
Tenant is not responsible prior to the Lease Commencement Date or during
the term of this Lease shall not be the obligation, duty or responsibility
of Tenant.
Notwithstanding the foregoing, Landlord shall indemnify Tenant
against and hold Tenant harmless from any and all costs, claims,
liabilities or damages, including reasonable attorneys' fees and expenses,
arising from the presence or use of Hazardous Materials caused by Landlord,
its agents or employees.
9.04 Signs and Auctions. Tenant shall not place any signs on the
Premises without Landlord's prior written consent, which shall not be
unreasonably withheld (subject to the Park Covenants and Landlord's sign
standards). Tenant shall not conduct or permit any auctions or sheriff's
sales at the Premises.
9.05 Landlord's Access. Landlord or its agents may enter the Premises
upon prior notice (which may be oral) at all reasonable times to show the
Premises to potential buyers, investors or tenants or other parties; to do
any other act or to inspect and conduct tests in order to monitor Tenant's
compliance with all applicable environmental laws and all laws governing
the presence and use of Hazardous Material; or for any other purpose
Landlord deems necessary. Landlord shall give Tenant prior notice (which
may be oral) of such entry, except in the case of an emergency, in which
event Landlord shall make reasonable efforts to notify Tenant. Landlord
may place customary "For Sale" or "For Lease" signs on the Premises.
ARTICLE TEN: CONDITION AND MAINTENANCE OF PREMISES
10.01 Existing Conditions. Tenant shall accept the Premises in its
condition as of the execution of the Lease, subject to all recorded
matters, laws, ordinances, and governmental regulations and orders. Except
as provided herein, Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation as to the condition of the Premises
or the suitability of the Premises for Tenant's intended use. Tenant
represents and warrants that Tenant has made its own inspection of and
inquiry regarding the condition of the Premises Tenant agrees to execute
promptly a memorandum of Acceptance of Premises in the form set forth in
Exhibit "C" to this Lease.
10.02 Exemption of Landlord from Liability. Tenant shall insure its
personal property under an all risk full replacement cost property
insurance policy. Landlord shall not be liable for any damage or injury to
the person, business (or any loss of income therefrom), goods, wares,
merchandise or other property of Tenant, Tenant's employees, invitees,
customers or any other person or about the Premises, whether such damage or
injury is caused by or results from: (a) fire, steam, electricity, water,
gas or rain; (b) the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in or about
Premises, or from other sources or places. Landlord shall not be liable
for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Tenant. The
provisions of this Section 10.02 shall not, however, exempt Landlord from
liability for Landlord's gross negligence or willful misconduct.
10.03 Landlord's Obligations. Subject to the provisions of Article
Eleven (Damage or Destruction) and Article Twelve (Condemnation), and
except for damages caused by any act or omission of Tenant, or Tenant's
employees, agents, contractors or invitees, Landlord at its expense
(subject to Section 4.02) shall keep the foundation, roof, building systems
(other than the heating, ventilating and air conditioning system),
structural supports and exterior walls of the improvements on the Premises
in good order, condition and repair. However, Landlord shall not be
obligated to maintain or repair windows, doors, plate glass or the surfaces
of xxxxx. Tenant shall promptly report in writing to Landlord any
defective condition known to it which Landlord is required to repair.
Notwithstanding anything to the contrary contained in Section 10.01 above,
or Section 10.04(a) below, Landlord shall deliver the Premises to Tenant
with all operating and mechanical systems (including heating, ventilating
and air conditioning) in good working order and shall maintain the same in
said condition for one (1) year.
10.04 Tenant's Obligations
10.04 (a) Repair and Maintenance. Except as provided in Section
10.03, Article Eleven (Damage or Destruction) and Article Twelve
(Condemnation), and the last sentence of Section 10.03 above,
Tenant shall keep all portions of the Premises (including systems
and equipment) and the heating, ventilating and air conditioning
system in good order, condition and repair (including repainting
and refinishing, as needed). If any portion of the Premises or any
system or equipment in the Premises which Tenant shall be obligated
to repair can not be fully repaired or restored, Tenant shall
promptly replace such portion of the Premises or system or
equipment, regardless of whether the benefit of such replacement
extends beyond the Lease Term; but if the benefit or useful life of
such replacement extends beyond the Lease Term, the useful life of
such replacement shall be prorated over the remaining portion of
the Lease Term. Tenant shall maintain a preventive maintenance
contract providing for the regular inspection and maintenance of
the heating and air conditioning system by a heating and air
conditioning contractor, such contract and such contractor to be
approved by Landlord. Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility for maintenance
of the heating and air conditioning system at Tenant's expense.
Landlord shall, at Tenant's expense, repair any damage to the
portions of the Premises Landlord shall be required to maintain
caused by Tenant's acts or omissions.
10.04 (b) Tenant's Expense. Tenant shall fulfill all of Tenant's
obligations under this Section 10.04 at Tenant's sole expense. If
Tenant shall fail to maintain, repair or replace the Premises as
required by this Section 10.04, Landlord may, upon ten (10) days'
prior notice to Tenant (except that no notice shall be required in
the case of an emergency), enter the Premises and perform such
maintenance or repair (including replacement, as needed) on behalf
of Tenant. In such case, Tenant shall reimburse Landlord for ail
costs reasonably incurred in performing such maintenance, repair or
replacement within ten (10) days after demand.
10.05 Alterations, Additions, and Improvements
10.05 (a) Tenant's Work. Tenant shall not make any installations,
alterations, additions, or improvements in or to the Premises,
including, without limitation, any apertures in the walls,
partitions, ceilings or floors, without on each occasion obtaining
the prior consent of Landlord. Landlord agrees that it will not
unreasonably withhold, condition or delay its consent to any
alterations, improvements or installations which do not affect the
structure of the Building or any systems serving the Building. Any
such work so approved by Landlord shall be performed only in
accordance with plans and specifications therefor approved by
Landlord. Tenant shall procure at Tenant's sole expense all
necessary permits and licenses before undertaking any work on the
Premises and shall Perform all such work in a good and workmanlike
manner employing materials of good quality and so as to conform
with all applicable zoning, building, fire, health and other codes,
regulations, ordinances and laws and with all applicable insurance
requirements. If requested by Landlord, Tenant shall furnish to
Landlord prior to commencement of any such work a bond or other
security acceptable to Landlord assuring that any work by Tenant
will be completed in accordance with the approved plans and
specifications and that all subcontractors will be paid. Tenant
shall employ for such work only contractors approved by Landlord
and shall require all contractors employed by Tenant to carry
worker's compensation insurance in accordance with statutory
requirements and commercial general liability insurance covering
such contractors on or about the Premises with a combined single
limit not less than $3,000,000 and shall submit certificates
evidencing such coverage to Landlord prior to the commencement of
such work. Tenant shall indemnify and hold harmless Landlord from
all injury, loss, claims or damage to any person or Premises
occasioned by or growing out of such work. Landlord may inspect
the work of Tenant at reasonable times and given notice of observed
defects. Upon completion of any such work, Tenant shall provide
Landlord with "as built" plans, copies of all construction
contracts and proof of payment for all labor and materials.
10.05 (b) No Liens. Tenant shall pay when due all claims for
labor and material furnished to the Premises and shall at all times
keep the Premises free from liens for labor and materials. Tenant
shall give Landlord at least twenty (20) days' prior written notice
of the commencement of any work on the Premises, regardless of
whether Landlord's consent to such work is required. Landlord may
record and post notices of non-responsibility on the Premises.
10.06 Condition upon Termination. Upon the expiration or termination of
this Lease, Tenant shall surrender the Premises to Landlord broom clean and
in the condition which Tenant shall have been required to maintain the
Premises under this Lease. Tenant shall not be obligated to repair any
damage which Landlord is required to repair under Article Seven (Damage or
Destruction). Landlord (by so designating at the time it approves the
same) may require Tenant to remove any alterations, additions or
improvements at the expiration of the Lease and to restore the Premises to
their prior condition, all at Tenant's expense. Any alterations, additions
or improvements not required to be removed by Tenant shall become
Landlord's property and shall be surrendered to Landlord upon the
expiration or earlier termination of the Lease, except that Tenant may
remove any of Tenant's machinery or equipment which can be removed without
damage to the Premises. Tenant shall repair, at Tenant's expense, any
damage to the Premises caused by the removal of any such machinery or
equipment. In no event, however, shall Tenant remove any of the following
materials or equipment (which shall be deemed Landlord's property), without
Landlord's prior written consent; unless the same shall have been installed
by Tenant at its expense; any power wiring or wiring panels; lighting or
lighting fixtures; wall coverings; drapes, blinds or other window
coverings; carpets or other floor coverings; heaters, air conditioners or
any other heating or air conditioning equipment; fencing or security gates;
or other similar building operating equipment.
10.07 Landlord's Contribution. Landlord shall reimburse Tenant in
accordance with this Section 10.07 for its initial cost of improving or
remodeling existing office space within the Building or expanding such
office space ("Tenant's Initial Office Work") as approved by Landlord in
accordance with Section 10.05 above. Landlord shall reimburse Tenant for
the costs of Tenant's Initial Work upon completion of such work, to the
extent of the lesser of (i) $20,000.00, or (ii) the actual out of pocket
cost to Tenant for such work ("Landlord's Contribution"). Landlord shall
make such payment within 30 days after its receipt of (a) receipts (or such
other proofs of payment as Landlord shall reasonably require) from Tenant
for work done in connection with Tenant's Initial Office Work, (b) a
written statement from Tenant's architect, engineer, contractor, or any
other person employed by Tenant to perform work, that the work described on
any such invoices has been completed in accordance with the final plans and
specifications approved by Landlord pursuant to Section 10.05 above and
(c) a lien waiver executed by the contractors, material men and suppliers
engaged by or on behalf of Tenant in connection with Tenant's Initial
Office Work. Landlord shall not be required to make any payment hereunder
to Tenant during the continuation of any default by Tenant hereunder beyond
any applicable notice and grace periods.
ARTICLE ELEVEN: DAMAGE OR DESTRUCTION
11.01 Damage to Premises
11.01 (a) If the Premises shall be destroyed or rendered
untenantable, either wholly or in part, by fire or other casualty
("Casualty"). Tenant shall immediately notify Landlord in writing
upon the occurrence of such Casualty. In the event of any
Casualty, Landlord may elect either to (i) repair the damage caused
by such casualty as soon as reasonably possible, in which case this
Lease shall remain in full force and effect, or (ii) terminate this
Lease as of the date the casualty occurred. Landlord shall notify
Tenant within thirty (30) days after receipt of notice of the
occurrence of the casualty whether Landlord elects to repair the
damage or terminate this Lease. If Landlord shall elect to repair
the damage, Tenant shall pay Landlord the portion of the
"deductible amount" (if any) under Landlord's insurance allocable
to the damage to the Premises and, if the damage shall have been
due to an act or omission of Tenant, or Tenant's employees, agents,
contractors or Invitees, the difference between the actual cost of
repair and any insurance proceeds received by Landlord.
11.01 (b) If the casualty to the Premises shall occur during the
last six (6) months of the Lease Term and the damage shall be
estimated by Landlord to require more than thirty (30) days to
repair, either Landlord or Tenant may elect to terminate this Lease
as of the date the casualty shall have occurred, regardless of the
sufficiency of any insurance proceeds. The party electing to
terminate this lease shall give written notification to the other
Party of such election within ten (1O) days after Tenant's notice
to Landlord of the occurrence of the casualty.
11.01 Temporary Reduction of Rent. If the Premises shall be destroyed or
damaged by casualty and Landlord shall determine to repair or restore the
Premises pursuant to the provisions of this Article Eleven, any Rent
payable during the period of such damage, repair and/or restoration shall
be reduced according to the degree, if any, to which Tenant's use of the
Premises shall be impaired. Such reduction shall not exceed the sum of one
year's payment of Base Rent, insurance premiums and Real Property Taxes.
Except for such possible reduction in Base Rent, insurance premiums and
Real Property Taxes. Tenant shall not be entitled to any compensation,
reduction or reimbursement from Landlord as a result of any damage,
destruction, repair, or restoration of the Premises.
11.03 Waiver. Tenant waives the protection of any statute, code or
judicial decision which shall grant a tenant the right to terminate a lease
in the event of the damage or destruction of the leased property and the
provisions of this Article Eleven shall govern the rights and obligations
of Landlord and Tenant in the event of any damage or destruction of or to
the Premises.
ARTICLE TWELVE: CONDEMNATION
12.01 Condemnation. If more than twenty percent (20%) of the floor area of
the building or more than twenty-five percent (25%) of the parking on the
Premises, shall be taken by eminent domain either Landlord or Tenant may
terminate this Lease as of the date the condemning authority takes title or
possession, by delivering notice to the other within ten (10) days after
receipt of written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall take title or
possession). If neither Landlord nor Tenant shall terminate this Lease,
this Lease shall remain in effect as to the portion of the Premises not
taken, except that the Bass Rent shall be reduced in proportion to the
reduction in the floor area of the Building. If this Lease shall be
terminated, any condemnation award or payment shall be distributed to the
Landlord. Tenant shall have no claim against landlord for the value of the
unexpired lease term or otherwise, except that Tenant may file a separate
claim for moving expenses and removal of trade fixtures and other personal
property as long as such claim does not reduce Landlord's award.
ARTICLE THIRTEEN: ASSIGNMENT AND SUBLETTING
13.01 Landlord's Consent Required. No portion of the Premises or of
Tenant's interest in this Lease shall be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer,
operation of law, or act of Tenant, without Landlord's prior written
consent, except as provided in Section 13.02 below. Landlord, acting
reasonably, shall have the right to grant or withhold its consent as
provided in Section 13.04 below, which consent shall not be unreasonably
withheld or delayed. Any attempted transfer without consent shall be void
and shall constitute a non curable breach of this Lease.
13.02 No Release of Tenant. No assignment or transfer shall release
Tenant or change Tenant's primary liability to pay the Rent and to perform
all other obligations of Tenant under this Lease. Landlord's acceptance of
Rent from Tenant or any other person shall not be a waiver of any provision
or this Article Thirteen. Consent to one transfer shall not be deemed a
consent to any subsequent transfer or a waiver of the obligation to obtain
consent on subsequent occasions. If Tenant's assignee or transferee shall
default under this Lease, Landlord may proceed directly against Tenant
without pursuing remedies against the assignee or transferee. Landlord may
consent to subsequent assignments or modifications of this Lease by
Tenant's transferee without notifying Tenant or obtaining its consent, and
such action shall not release Tenant from any of its obligations or
liabilities under this Lease as so assigned or modified.
13.03 Offer to Terminate. If Tenant shall desire to assign this Lease or
sublease all or any part of the Premises, Tenant shall offer to Landlord in
writing, the right to terminate this Lease as of the date specified in the
offer. If Landlord shall elect in writing to accept the offer to terminate
within twenty (20) days after receipt of notice of the offer, this Lease
shall terminate as of the date specified in such offer and all the terms
and provisions of this Lease governing termination shall apply. If
Landlord shall not so elect, Tenant shall then comply with the provisions
of this Article Thirteen applicable to such assignment of sublease.
13.04 Landlord's Consent. Tenant's request for consent under
Section 13.01 shall set forth the details of the proposed sublease,
assignment or transfer, including the name, business and financial
condition of the prospective transferee, financial details of the proposed
transaction (e.g., the term of and the rent and security deposit payable
under any proposed assignment or sublease), and any other information
Landlord deems relevant. Landlord shall have the right to withhold
consent, reasonably exercised, or to grant consent, based on the following
factors: (i) the business of the proposed assignee or subtenant and the
proposed use of the Premises; (ii) the net worth and financial condition of
the proposed assignee or subtenant; (iii) Tenant's compliance with all of
its obligations under this Lease; and (iv) such other factors as Landlord
may reasonably deem relevant. If Tenant shall assign or sublease, the
following shall apply: Tenant shall pay to Landlord as Additional Rent
fifty percent (50%) of the Profit (defined below) on such transaction such
amount being Landlord's sharer as and when received by Tenant, unless
Landlord shall give notice to Tenant and the assignee or subtenant that
Landlord's Share shall be paid by the assignee or subtenant to Landlord
directly. Profit shall mean (a) all rent and all fees and other
consideration paid for or in respect of the assignment or sublease,
including fees under any collateral agreements less (B) the rent and other
sums payable under this Lease (in the case of a sublease of less than all
of the Premises, allocable to the subleased premises) and all costs and
expenses directly incurred by Tenant in connection with the execution and
performance of such assignment or sublease for reasonable real estate
broker's commissions and reasonable costs of renovation or construction of
tenant improvements required under such assignment or sublease. Tenant
shall be entitled to recover such reasonable costs and expenses before
Tenant shall be obligated to pay Landlord's Share to Landlord. Tenant
shall provide Landlord a written statement certifying all amounts to be
paid from any assignment or sublease of the Premises within thirty (30)
days after the transaction shall be signed and from time to time thereafter
on Landlord's request, and Landlord may inspect Tenant's books and records
to verify the accuracy of such statement. On written request, Tenant shall
promptly furnish to Landlord copies of all the transaction documentation,
all of which shall be certified by Tenant to be complete, true and correct.
ARTICLE FOURTEEN: DEFAULTS AND REMEDIES
14.01 Covenants and Conditions. Tenant's performance of each of Tenant's
obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Premises is conditioned
upon such performance. Time is of the essence in the performance by Tenant
of all covenants and conditions.
14.02 Defaults. Each of the following shall be an event of default under
this Lease:
14.02(a) Tenant shall abandon the Premises;
14.02(b) Tenant shall fail to Pay Rent or any other sum payable
under this Lease within five (5) days after notice of non-payment:
14.02(c) Tenant shall fail to perform any of Tenant's other
obligations under this Lease and such failure shall continue for a
period of fifteen (15) days after notice from Landlord; provided
that if more than fifteen (15) days shall be required to complete
such performance, Tenant shall not be in default if Tenant shall
commence such performance within the fifteen (15) day period and
shall thereafter diligently pursue its completion.
14.02(d)(i) Tenant shall make a general assignment or general
arrangement for the benefit of creditors: (ii) a petition for
adjudication of bankruptcy or for reorganization or rearrangement
shall be filed by or against Tenant and shall not be dismissed
within sixty (60) days; (iii) a trustee or receiver shall be
appointed to take possession of substantially all of Tenant's
assets located at the Premises or Tenant's interest in this Lease
and possession shall be subjected to attachment, execution or other
judicial seizure which shall not be discharged within sixty (60)
days. If a court of competent jurisdiction shall determine that
any of the acts described in this subsection (d) is not a default
under this Lease, and a trustee shall be appointed to take
possession (or if Tenant shall remain a debtor in possession) and
such trustee or Tenant shall assign, sublease, or transfer Tenant's
interest hereunder, then Landlord shall receive, as Additional
Rent, the excess, if any, of The rent for any other consideration)
paid in connection with such assignment, transfer or sublease over
the rent payable by Tenant under this Lease.
14.03 Remedies. On the occurrence of an event of default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand
(except as provided in Section 14.02) and without limiting Landlord in the
exercise of any right or remedy which Landlord may have:
14.03(a) Terminate this Lease by written notice to Tenant or by
entry, at Landlord's option. Tenant shall then immediately quit
and surrender the Premises to Landlord, but Tenant shall remain
liable as hereinafter provided. Following termination, without
prejudice to other remedies Landlord may have by reason of Tenant's
default or of such termination, Landlord may (i) peaceably reenter
the Premises upon voluntary surrender by Tenant or remove Tenant
therefrom and any other persons occupying the Premises, using such
legal proceedings as may be available; (ii) repossess the Premises
or relet the Premises or any part thereof for such term (which may
be for a term extending beyond the Lease Term), at such rental and
upon such other terms and conditions as Landlord in Landlord's sole
discretion shall determine, with the right to make alterations and
repairs to the Premises; and (iii) remove all personal property
therefrom. Following termination, Landlord shall have all the
rights and remedies of a landlord provided at law and in equity.
The amount of damages Tenant shall pay to Landlord following
termination shall include all Rent unpaid up to the termination of
this Lease, costs and expenses incurred by Landlord due to such
Event of Default and, in addition, Tenant shall pay to Landlord as
damages, at the election of Landlord (if Landlord shall elect
subsection (y) below, it may cease such election at any time),
either (x) the discounted present values (at the then Federal
Reserve Bank discount rate) of the aggregate Rent and other charges
due during the period commencing with such termination and ending
on the expiration date of this Lease, or (y) amount equal to the
Rent and other charges which would have been payable by Tenant had
this Lease or Tenant's right to Possession not been so terminated,
payable upon the due dates therefor specified herein following such
termination and until the expiration date Of this Lease, provided,
however, that if Landlord shall re-let the Premises during such
period, Landlord shall credit Tenant with the net rents received by
Landlord from such re-letting, such net rents to be determined by
first deducting from the gross rents as and when received by
Landlord from such re-letting the expenses incurred or paid by
Landlord in terminating this Lease, and the expenses of reletting,
including, without limitation, altering and preparing the premises
for new tenants, brokers' commissions, legal fees and all other
similar and dissimilar expenses properly chargeable against the
Premises and the rental therefrom, it being understood that any
such reletting may be for a period equal to or shorter or longer
than the remaining Lease Term; and provided, further, that (i) in
no event shall Tenant be entitled to receive any excess of such net
rents over the sums payable by Tenant to Landlord hereunder and
(ii) in no event shall Tenant be entitled in any suit for the
collection of damages pursuant to this subsection (y) to a credit
in respect of any net rents from a re-letting except to the extent
that such net rents are actually received by Landlord prior to the
commencement of such suit. If the Premises or any part thereof
should be re-let in combination with other space, then proper
apportionment on a square foot area basis shall be made of the rent
received from such re-letting and of the expenses of re-letting.
In calculating the Rent and other charges under subsection (x)
above, there shall be included, in addition to the Rent other
considerations agreed to be paid or performed by Tenant on the
assumption that all such considerations would have remained
constant (except as herein otherwise provided) for the balance of
the full term hereby granted. Landlord may, but need not, re-let
the Premises or any part thereof for such rent and on such terms as
it shall determine (including the right to re-let the Premises for
a greater or lesser term than the Lease Term, the right to re-let
the Premises as part of a larger area and the right to change the
character or use made of the Premises). Suit or suits for the
recovery of such damages, or any installments thereof, may be
brought by Landlord from time to time at its election, and nothing
contained herein shall be deemed to require Landlord to postpone
suit until the date when the Term of this Lease would have expired
if it had not been terminated hereunder.
14.03(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant has abandoned
the Premises. In such event, Landlord shall be enticed to enforce
all of Landlord's rights and remedies under this Lease, including
the right to recover the rent as it becomes due.
14.03(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which
the Premises is located.
14.04 Landlord's Waiver. Landlord agrees to execute and deliver a
Landlord's Release and Waiver in the form of Exhibit D promptly upon
Tenant's request with respect to any equipment installed at the Premises by
Tenant, which equipment Tenant finances with an unaffiliated lender and
which equipment is pledged to such lender.
14.05 Automatic Termination: Damages. Notwithstanding any other term or
provision hereof to the contrary, this Lease shall terminate on the
occurrence of any act which affirms the Landlord's intention to terminate
the Lease as provided in Section 14.03 hereof, including the filing of an
unlawful detainer action against Tenant. On any termination, Landlord's
damages for default shall include all costs and fees, including reasonable
attorneys' fees that Landlord shall incur in connection with the filing,
commencement, pursuing and/or defending of any action in any bankruptcy
court or other court with respect to the Lease the obtaining of relief from
any stay in bankruptcy restraining any action to evict Tenant or the
pursuing of any action with respect to Landlord's right to possession of
the Premises. All such damages suffered (apart from Base Rent and other
Rent payable hereunder) shall constitute pecuniary damages which shall be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceedings.
14.06 Cumulative Remedies. Except as otherwise expressly provided
herein, any and all rights and remedies which Landlord may have under this
Lease and at law and equity shall be cumulative and shall not be deemed
inconsistent with each other, and any two or more of all such rights and
remedies may be exercised at the same time to the greatest extent permitted
by law.
ARTICLE FIFTEEN: PROTECTION OF LENDERS
15.01 Subordination. Landlord shall have the right to subordinate this
Lease to any ground lease, deed of trust or mortgage encumbering the
Premises, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any
lender which shall acquire a security interest in the Premises or the
Lease. Tenant shall execute such further documents and assurances as such
lender may require, provided that Tenant's obligations under this Lease
shall not be increased in any material way (the performance of ministerial
acts shall not be deemed material), and Tenant shall not be deprived of its
rights under this Lease and Tenant's use or Possession of the Premises
shall not be disturbed thereby. If any ground lessor, beneficiary or
mortgagee elects to have this Lease prior to the lien of its ground lease,
deed of trust or mortgage and gives written notice thereof to Tenant, this
Lease shall be deemed prior to such ground lease, deed of trust or mortgage
whether this Lease is dated prior or subsequent to the date of said ground
lease, deed of trust or mortgage or the date of recording thereof.
15.02 Attornment. If Landlord's interest in the Premises is acquired by
any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of
or successor to Landlord's interest in the Premises and recognize such
transferee or successor as Landlord under this Lease.
15.03 Signing of Documents. Tenant shall sign and deliver any instrument
or documents reasonably satisfactory to Tenant necessary or appropriate to
evidence any such attornment or subordination or agreement to do so.
15.04 Estoppel Certificates. Within ten (10) days after Landlord's
request, Tenant shall execute, acknowledge and deliver to Landlord a
written statement certifying: (i) that none of the terms or provisions of
this Lease have been changed (or if they have been changed, stating how
they have been changed); (ii) that this Lease has not been canceled or
terminated; (iii) the last date of payment of the Base Rent and other
charges and the time period covered by such payment; (iv) that Landlord is
not in default under this Lease (or if Landlord is claimed to be in
default, setting forth such default in reasonable detail) and (v) such
other information with respect to Tenant or this Lease as Landlord may
reasonably request or which any prospective purchaser or encumbrancer of
the Premises may require. Landlord may deliver any such statement by
Tenant to any prospective purchaser or encumbrancer of the Premises, and
such purchaser or encumbrancer may rely conclusively upon such statement as
true and correct If Tenant shall not deliver such statement to Landlord
within such ten (10) day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts:
(i) that the terms and provisions of this Lease have not been changed
except as otherwise represented by Landlord; (ii) that this Lease has not
been canceled or terminated except as otherwise represented by Landlord;
(iii) that not more than one month's Base Rent or other charges have been
paid in advance; and (iv) that Landlord is not in default under this Lease.
In such event, Tenant shall be estopped from denying the truth of such
facts.
15.05 Tenant's Financial Condition. Within ten (10) days after request
from Landlord from time to time, Tenant shall deliver to Landlord Tenant's
audited financial statements for the latest available fiscal year. Such
financial statements shall be delivered to Landlord's mortgagees and
lenders and prospective mortgagees, lenders and purchasers. Tenant
represents and warrants to Landlord that each such financial statement
shall be true and accurate as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes
set forth in this Lease.
ARTICLE SIXTEEN: LEGAL COSTS
16.01 Legal Proceedings. In the event of any litigation between the
parties, the prevailing party shall be entitled to its legal fees and
expenses.
16.02 Landlord's Consent. Tenant shall pay Landlord's reasonable fees
and expenses, including, without limitation, legal, engineering and other
consultants' fees and expenses, incurred in connection With Tenant's
request for Landlord's consent under Article Thirteen (Assignment and
Subletting) or in connection with any other act by Tenant which requires
Landlord's consent or approval under This Lease.
ARTICLE SEVENTEEN: MISCELLANEOUS PROVISIONS
17.01 Non-Discrimination. Tenant agrees that it will not permit any
discrimination against, or segregation of, any person or group of persons
on the basis of race, color, sex, creed. national origin or ancestry in
the leasing, subleasing, transferring, occupancy, tenure or use of the
Premises or any portion thereof.
17.02 Landlord's Liability; Certain Duties.
17.02(a) Bind and Inure; Limitation of Landlord's Liability. The
obligations of this Lease shall run with the land, and this Lease
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No owner of
the Premises shall be liable under this Lease except for breaches
of Landlord's obligations occurring while owner of the Premises.
The obligations of Landlord shall be binding upon the assets of
Landlord which comprise the Premises but not upon other assets of
Landlord. No individual partner, trustee, stockholder, officer,
director, employee, or beneficiary of Landlord shall be personally
liable under this Lease and Tenant shall look solely to Landlord's
interest in the Premises in pursuit of its remedies upon an event
of default hereunder, and the general assets of Landlord and its
partners, trustees, stockholders, officers, employees or
beneficiaries of Landlord shall not be subject to levy, execution
or other enforcement procedure for the satisfaction of the remedies
of Tenant.
17.02 (b) Notice. Tenant shall give notice of any failure by
Landlord to perform any of its obligations under this Lease to
Landlord and to any ground lessor, mortgagee or beneficiary under
any deed of trust encumbering the Premises whose name and address
shall have been furnished to Tenant. Landlord shall not be in
default under this Lease unless Landlord (or such ground lessor,
mortgagee or beneficiary) shall fail to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However,
if such non-performance shall reasonably require more than
thirty (30) days to cure, Landlord shall not be in default if such
cure shall be commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
17.03 Severability. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is
illegal or unenforceable shall not cancel or invalidate the remainder of
such provision of this Lease, which shall remain in full force and effect.
17.04 Interpretation. The captions of the Articles or Sections of this
Lease are not a part of the terms or provisions of this Lease. Whenever
required by the context of this Lease, the singular shall include the
plural and the plural shall include the singular. The masculine, feminine
and neuter ganders shall each include the other, in any provision relating
to the conduct, acts or omissions of Tenant, the term "Tenant" shall
include Tenant's agents, employees, contractors, invitees, successors or
others using the Premises with Tenant's expressed or implied permission.
17.05 Incorporation of Prior Agreements; Modifications. This Lease is
the only agreement between the parties pertaining to the lease of the
Premises and no other agreements shall be effective. All amendments to
this Lease shall be in writing and signed by all parties. Any other
attempted amendment shall be void.
17.06 Notices. All notices, requests and other communications required
or permitted under this Lease shall be in writing and shall be personally
delivered or sent by certified mail, return receipt requested, postage
prepaid or by a national overnight delivery service which maintains
delivery records. Notices to Tenant shall be delivered to the address
specified in Section 1.18 above. Notices to Landlord shall be delivered to
the address specified in Section 1.17 above. All notices shall be
effective upon delivery (or refusal to accept delivery). Either party may
change its notice address upon written notice to the other party.
17.07 Waivers. All waivers shall be in writing and signed by the waiving
party. Landlord's failure to enforce any provision of this Lease or its
acceptance of Rent shall not be a waiver and shall not prevent Landlord
from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord. Landlord may,
with or without notice to Tenant, negotiate such check without being bound
by to the conditions of such statement.
17.08 No Recordation. Tenant shall not record this Lease. Either
Landlord or Tenant may require that a notice, short form or memorandum of
this Lease executed by both parties be recorded. The party requiring such
recording shall pay all transfer taxes and recording fees.
17.09 Binding Effect; Choice of Law. This Lease shall bind any party who
shall legally acquire any rights or interest in this Lease from Landlord or
Tenant, provided that Landlord shall have no obligation to Tenant's
successor unless the rights or interests of Tenant's successor are acquired
in accordance with the terms of this Lease. The laws of the state in which
the Premises is located shall govern this Lease.
17.10 Corporate Authority; Partnership Authority. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents
and warrants that (s)he has full authority to do so and that this Lease
binds the corporation. Within thirty (30) days after this Lease is signed,
Tenant shall deliver to Landlord a certified copy of a resolution of
Tenant's Board of Directors authorizing the execution of this Lease or
other evidence of such authority reasonably acceptable to Landlord. If
Tenant is a partnership, each person or entity signing this Lease for
Tenant represents and warrants that he or it is a general partner of the
partnership, that he or it has full authority to sign for the partnership
and that this Lease binds the partnership and all general partners of the
partnership. Tenant shall give prompt notice to Landlord of any general
partner's withdrawal or addition from time to time. Within thirty (30)
days after this Lease is signed, Tenant shall deliver to Landlord a copy of
Tenant's recorded statement of partnership or certificate of limited
partnership.
17.11 Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
17.12 Force Majeure. If Landlord can not perform any of its obligations
due to events beyond Landlord's reasonable control, the time provided for
performing such obligations shall be extended by a period of time equal to
the duration of such events. Events beyond Landlord's reasonable control
include, but are not limited to, acts of God, war, civil commotion, labor
disputes, strikes, fire, flood or other casualty, shortages of labor or
material, government regulation or restriction and weather conditions.
17.13 Execution of Lease. This Lease may be executed in counterparts
and, when all counterpart documents are executed, the counterparts shall
constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be
binding upon either party until executed and delivered by both parties.
17.14 Survival. All representations and warranties of Landlord and
Tenant shall survive the termination of this Lease.
17.15 Examination of Lease. Submission of this Lease to Tenant shall not
constitute an option to lease, and this Lease shall not be effective until
execution and delivery by both Landlord and Tenant.
17.16 Intentionally Deleted.
17.17 Limitation of Warranties. LANDLORD AND TENANT EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE N0 IMPLIED WARRANTIES OF MERCHANTABILITY,
SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING
OUT OF THIS Lease, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE
EXPRESSLY SET FORTH IN THIS LEASE. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, TENANT EXPRESSLY ACKNOWLEDGES THAT LANDLORD HAS MADE NO
WARRANTIES OR REPRESENTATIONS CONCERNING ANY HAZARDOUS Materials OR OTHER
ENVIRONMENTAL MATTERS AFFECTING ANY PART OF THE Premises AND LANDLORD
HEREBY EXPRESSLY DISCLAIMS AND TENANT WAIVES ANY EXPRESS OR IMPLIED
WARRANTIES WITH RESPECT TO ANY SUCH MATTERS.
17.18 No Other Brokers. Tenant represents and warrants to Landlord that
the brokers named in Section 1.12 above are the only agents, brokers,
finders or other parties with whom Tenant has dealt who may be entitled to
any commission or fee with respect to this Lease or the Premises or the
Premises. Tenant agrees to indemnify and hold Landlord harmless from any
claim, demand, cost or liability, including, without limitation, attorneys'
fees and expenses, asserted by any party other than the brokers named in
Section 1.12 based upon dealings of that party with Tenant.
Signed on _____________, 1997 LANDLORD
at ___________________________
XXXXXXXXXXXXX INDUSTRIAL
PROPERTIES EAST, L.P.
By: Xxxxxxxxxxxxx
Properties, Inc. XVIII,
its General Partner
By:__________________________
Its: ________________________
Signed on _____________, 1997 TENANT
at __________________________ PETCO ANIMAL SUPPLIES, INC.
By:__________________________
Xxxxxxx St. Xxxxx
Its: Executive Vice President &
CFO
EXHIBIT "B" - RULES AND REGULATIONS
1. No advertisements, pictures or signs of any sort shall be displayed
on or outside the Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld (subject
to the Park Covenants and Landlord's sign standards). This
prohibition shall include any portable signs or vehicles placed
within the parking lot, common areas or on streets adjacent thereto
for the purpose of advertising or display. Landlord shall have the
right to remove any such unapproved item without notice and at
Tenant's expense.
2. Intentionally Omitted..
3. Tenant shall not use any method of heating or air-conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings and window films or coatings installed by
Tenant and visible from outside of the building require the prior
written approval of Landlord. Except for dock shelters and seals as
may be expressly permitted by Landlord, no awnings or other
projections shall be attached to the outside walls of the building.
5. Tenant shall use, keep or permit to be used or kept any foul or
noxious gas or substance on, in or around the Premises unless
approved by Landlord. Tenant shall not use, keep or permit to be
used or kept any flammable or combustible materials without proper
governmental permits and approvals.
6. Tenant shall not use, keep or permit to be used or kept food or
other edible materials in or around the Premises in such a manner as
to attract rodents, vermin or other pests. Tenant shall not permit
cooking in or about the Premises other than in microwave ovens.
7. Tenant shall not use or permit the use of the Premises for lodging
or sleeping, for public assembly, or for any illegal or immoral
purpose.
8. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior written consent of
Landlord. Tenant agrees not to make any duplicate keys without the
prior consent of Landlord.
9. Tenant shall park motor vehicles in paved areas only and shall not
block any emergency entrances or exits. During loading and
unloading of vehicles or containers, Tenant shall not unreasonably
interfere with traffic flow within the industrial park and loading
and unloading areas of other tenants.
10. Storage of propane tanks, whether interior or exterior, shall be in
secure and protected storage enclosures approved by the local fire
department and, if exterior, shall be located in areas specifically
designated by Landlord. Safety equipment, including eye wash
stations and approved neutralizing agents, shall be provided in
areas used for the maintenance and charging of lead-acid batteries.
Tenant shall protect electrical panels and building mechanical
equipment from damage from forklift trucks.
11. Tenant shall not disturb, solicit or canvas any occupant of the
Building or industrial park and shall cooperate to prevent same.
12. No person shall go on the roof of the Premises without Landlord's
Permission except to perform obligations under its lease.
13. Intentionally Deleted.
14. Machinery, equipment and apparatus belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the
Building to such a degree as to be objectionable to Landlord or
other tenants or to cause harm to the Building shall be placed and
maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate the transmission of such
noise and vibration. Tenant shall cease using any such machinery
which causes objectionable noise and vibration which can not be
sufficiently mitigated.
15. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises as
soon as reasonably possible.
16. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood
blocks of sufficient size to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted
in the auto parking areas of the industrial park or on streets
adjacent thereto.
17. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall use only tires that do not damage the
asphalt.
18. Tenant shall be responsible for the safe storage and removal of all
pallets. If pallets are stored within the Premises, storage shall
comply with safe practices as described in Factory Mutual Loss
Prevention Data Sheet 8-24.
19. Tenant shall be responsible for the safe storage and removal of all
trash and refuse. All such trash and refuse shall be contained in
suitable receptacles stored behind screened enclosures at locations
approved by Landlord, provided that dumpsters need not be screened.
Landlord reserves the right to remove, at Tenant's expense and
without further notice, any trash or refuse left elsewhere outside
of the Premises or in the industrial park.
20. No displays or sales of merchandise shall be allowed in the parking
lots or other common areas.
21. Tenant shall appoint an Emergency Coordinator who shall be
responsible for assuring notification of the local fire department
in the event of an emergency, assuring that sprinkler valves are
kept open and implementing the Factory Mutual "Red Tag Alert" system
including weekly visual inspection of all sprinkler system valves on
or within the Premises.
_________________ Landlord
_________________ Tenant
EXHIBIT "C" - ACCEPTANCE OF PREMISES
As of this date, Tenant acknowledges and accepts delivery of
possession of the Premises as described in the Lease dated
________________, 1997 in their as is condition as of the date hereof,
subject to all recorded matters, laws, ordinances, and governmental
regulations and orders. Except as provided in the Lease, Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty as to the condition of the Premises or the
suitability at the Premises for Tenant's intended use. Tenant represents
and warrants that Tenant has made its own inspection of and inquiry
regarding the condition of the Premises and is not relying on any
representations or warranties of Landlord or any broker with respect
thereto. Tenant further acknowledges that the Lease is in full force and
effect as of this date.
TENANT
Date: __________, 1996 PETCO ANIMAL SUPPLIES, INC.
By:________________________
Its Vice President-Real Estate
EXHIBIT "D"
Landlord's Release and Waiver
Re:
Tenant's Lender
Gentlemen:
The undersigned, owner of certain premises located at
_______________________, in the County of _____________, State of
__________________, legally described as follows:
(hereinafter called the "Premises"), and Landlord of said Premises to
(hereinafter called the "Tenant"), pursuant to that certain Lease dated
____________________, agrees as follows with respect to the various
equipment to be installed at the Premises:
1. The undersigned hereby subordinates any all right, title
and interest of the undersigned in and to the personal property, described
in Exhibit A attached hereto, now or hereafter located upon or installed in
or upon said Premises to you and your successors and assigns interest
thereby, and the undersigned hereby consents to the locating or installing
of said personal property in or upon said Premises.
2. The undersigned further authorizes you, your successors
or assigns, at your election, provided you shall give the undersigned
reasonable notice (in no event less than two (2) business days) and an
opportunity to be present during such entry, to enter upon said Premises
during business hours during the Lease term and to remove said personal
property therefrom, committing only such injury to said Premises as may be
necessary to effect such removal, provided that you shall reimburse the
undersigned for the cost of repair of any physical injury to the Premises
caused by removal of personal property and provided that in no event shall
you commit, or permit to be committed, any structural damage to said
Premises or damages any systems, or to any building or improvement of which
said Premises are a part; provided, however that the undersigned shall have
the right to purchase said personal property from you at such time as you
shall elect to remove the same from said Premises, paying therefore such
sum as may be agreed upon between you and the undersigned. If the
undersigned is interested in considering this right to purchase, he shall
provide you with a non-binding notice of such interest within the
referenced two (2) business days notice period. Thereafter, you will allow
the undersigned ten (10) days in which to make a final decision, and you
shall not remove the property during this ten (10) day period.
The undersigned further agrees that any lien obtained by the
undersigned for non-payment of rent or any other debt now due or hereafter
becoming due to the undersigned from Tenant, or any subsequent tenant shall
be subject and subordinate to your interest.
This Release and Waiver shall remain in effect so long as you,
your successors or assigns, shall have any interest in said personal
property by virtue of a chattel mortgage, or otherwise.
The undersigned executes this Release and Waiver upon the
express condition that this Release and Waiver shall not be effective
unless you agree to all of the terms hereinabove contained, and further, on
the condition that you agree (a) that the removal of any roof mounted
equipment shall be done under the direct supervision of the undersigned or
its agent and any openings or penetrations shall be repaired in accordance
with plans approved in writing by the undersigned, (b) that any air
conditioning and heating or ventilation equipment, chap ceiling, electric
conduit and ceiling lighting installed shall become and remain a part of
the real property, (c) to provide the undersigned with no less than two (2)
business days written notice in the event of entry for repossession, and an
opportunity to be present during such entry, (d) to remove the personal
property on or before the expiration or earlier termination of this Lease,
and if you fail to do so on or before fifteen (1.5) days following your
receipt of written request so to remove such personal property, then as
between you and the undersigned you shall be deemed to have waived any and
all rights which you have had to such property. If you remove the personal
property in accordance herewith, you will store and dispose of or sell the
personal property at some place other than the Premises, unless the same
shall be purchased by the undersigned as provided above, (e) to indemnify,
hold harmless and defend the undersigned from any liability, cost, demand,
cause of action and claim which may arise or be asserted by reason of or
attributable to any actions, activities or omissions in connection with the
entry upon said Premises as hereinabove provided, including, without
limitation damage to property and injury to persons.
Please indicate your acceptance and approval of the forgoing by
signing, dating and returning four (4) copies of this document to the
undersigned, upon receipt of which this document shall be deemed effective.
ACKNOWLEDGED AND AGREED:
Owner/Landlord:
By:
Its:
Date:
*************************************
IN THE STATE OF ________________
IN THE COUNTY OF _______________
On ________________, before me, _________________ personally
appeared _____________________________ personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
SEAL
63210.059 #2662
INDUSTRIAL REAL ESTATE LEASE
TABLE OF CONTENTS
Article Page
One Basic Terms 1
Two Premises 3
Three Lease Term 3
Four Rent 6
Five Property Taxes 7
Six Utilities 8
Seven Insurance 9
Eight Common Areas 12
Nine Use of Premises 14
Ten Condition and Maintenance of Premises 16
Eleven Damage or Destruction 21
Twelve Condemnation 22
Thirteen Assignment and Subletting 22
Fourteen Defaults and Remedies 24
Fifteen Protection of Lenders 28
Sixteen Legal Costs 29
Seventeen Miscellaneous Provisions 30
INDUSTRIAL REAL ESTATE LEASE
between
XXXXXXXXXXXXX INDUSTRIAL PROPERTIES EAST, L.P.
Landlord
and
PETCO ANIMAL SUPPLIES, INC.
Tenant
Dated as of June __, 1997
EXHIBIT A
All that certain tract or parcel of land and premises situate in the
Township of South Brunswick, County of Middlesex, and State of New Jersey,
and more particularly described as follows:
BEGINNING at a point in the northwesterly side line of Jamesburg Road, also
known as Dayton-Jamesburg Road (33 feet in width), at the division point
between lands herein conveyed (Lot 8 in Block 18) and lands now or formerly
of Xxxxxxx X. Xxxxxxx, Xx., et ux (Lot 9.02 in Block 18); thence
(1) North 23 degrees 09 minutes 24 seconds West, along the line of said
Xxxxxxx, 781.44 feet; thence
(2) South 79 degrees 45 minutes 38 seconds East 1834.66 feet; thence
(3) South 56 degrees 32 minutes 32 seconds East 421.29 feet to a point
in the northerly side line of Jamesburg Road; thence
(4) in a general southwesterly direction, along the said northerly and
northwesterly side line of Jamesburg Road, on a curve to the left
with a radius of 1176.50 feet, an arc distance of 998.15 feet to a
point of reverse curve therein; thence
(5) in a general southwesterly direction, along the said northwesterly
side line of Jamesburg Road, on a curve to the right with a radius
of 1383.50 feet, an arc distance of 424.81 feet to a point of
tangency therein; thence
(6) still along the said northwesterly side line of Jamesburg Road,
South 83 degrees 33 minutes 36 seconds West, 475.90 feet to the
place of BEGINNING.
The aforesaid premises being also known as Dayton Industrial Park, South
Brunswick, New Jersey, and designated as Block 18, Lot 8 on the Official
Tax Map of South Brunswick, Middlesex, New Jersey.
