STANDARD INDUSTRIAL LEASE
(SINGLE TENANT; GROSS)
1. BASIC PROVISIONS ("Basic Provisions")
1.1 PARTIES. This Lease ("Lease"), dated for reference purposes only,
January 13, 1995 is made by and between STATE OF CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM ("Landlord"), and FORTUNE DOGS, INC. dba BIG DOG SPORTSWEAR, a
California corporation ("Tenant") (collectively, the "Parties" or individually,
a "Party").
1.2 PREMISES. That certain real property, including all improvements
therein or to be provided by Landlord under the terms of this Lease, commonly
known by the street address of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇ Gardens,
located in the County of Los Angeles, State of California, and generally
described as a concrete tilt up building containing 66,877 sq.ft. which is part
of a larger multi-tenant facility ("Premises"). The Premises are identified by
BEL-3A on the Site Plan attached as EXHIBIT A. (See paragraph 2 for further
provisions.)
1.3 TERM. Three (3) years and Six (6) months ("Original Term") commencing
February 15, 1995, subject to the First Addendum ("Commencement Date"), and
ending August 14, 1998 ("Expiration Date"). (See paragraph 3 for further
provisions.)
1.4 EARLY POSSESSION. N/A ("Early Possession Date"). (See paragraphs
3.2 and 3.3 for further provisions.)
1.5 RENT
(a) BASE RENT. Nineteen Thousand and no/100----- DOLLARS
($19,000.00) per month ("Base Rent"), payable in advance on the 1st day of each
month commencing April 15, 1995. Base Rent will be adjusted at the beginning of
the 31st month(s) of the term of this Lease (the "Adjustment Date(s)"), as
provided in paragraph 4.2. (See paragraph 4 for further provisions.)
(b) INITIAL MONTHLY CONTRACTUAL MAINTENANCE COSTS. Two Hundred
Nineteen and no/100--- DOLLARS ($219.00) per month. (See paragraphs 7.1(b) and
7.5 for further provisions.)
1.6 BASE RENT PAID UPON EXECUTION. Nineteen Thousand and no/100-----
DOLLARS ($19,000.00) as Base Rent for the period April 15, 1995 to May 14, 1995.
1.7 SECURITY DEPOSIT. Nineteen Thousand and no/100------------- DOLLARS
($19,000.00) ("Security Deposit"). (See paragraph 5 for further provisions.)
1.8 PERMITTED USE. Warehousing and distribution of garments and all
legally related activities related thereto. (See paragraph 6 for further
provisions.)
1.9 INSURING PARTY. Landlord is the "Insuring Party." Ten Thousand One
Hundred Eighty-two & No/100-- DOLLARS ($10,182.00) is the "Base Cost." (See
paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS. The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes): ▇▇▇▇▇▇▇▇ Properties
represents /XX/ Landlord exclusively ("Landlord's Broker"); / / both Landlord
and Tenant, and ▇▇▇▇ represents /X/ Tenant exclusively ("Tenant's Broker"); / /
both Tenant and Landlord. (See paragraph 15 for further provisions.)
1.11 GUARANTOR. The obligation of the Tenant under this Lease are to be
guaranteed by N/A ("Guarantor"). (See paragraph 37 for further provisions.)
1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of
paragraphs 50 through 59, a Hazardous Materials Lease Rider referred to in
paragraph 40, __________ and Exhibits A, Multi-Tenant Facility Lease Rider and
Option to Extend Lease Rider, all of which are incorporated into and constitute
a part of this Lease.
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2. PREMISES
2.1 LETTING. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises, for the term, at the rental rate, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless otherwise
specifically provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating rental, is an approximation
which Landlord and Tenant agree is reasonable and the rental based thereon is
not subject to revision whether or not the actual square footage is more or
less.
2.2 NO REPRESENTATIONS. Tenant acknowledges that: (a) it has been
advised by Landlord and the Brokers to satisfy itself with respect to the
condition of the Premises and the present and future fitness and suitability of
the Premises for Tenant's intended use; (b) Tenant has made such inspection and
investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to Tenant's occupancy of the
Premises and the term of this Lease; and (c) neither Landlord, nor any of
Landlord's agents, has made any oral or written representations or warranties
with respect to the condition, suitability or fitness of the Premises for the
conduct of Tenant's business other than as may be specifically set forth in this
Lease. (See First Addendum, Paragraph 56).
2.3 ACCEPTANCE OF PREMISES. Tenant accepts the Premises in the condition
existing on the date Tenant executes this Lease, subject to all matters of
record and Applicable Law. Tenant acknowledges that neither Landlord nor any of
Landlord's agents has agreed to undertake any alterations or additions or
perform any maintenance or repair of the Premises unless specifically provided
in this Lease.
3. TERM
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in paragraph 1.3, unless advanced or delayed under
any provision of this Lease.
3.2 EARLY POSSESSION. If Tenant totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease (including, but not limited to, the obligations to pay Real Property Taxes
and Insurance Cost Increases and to maintain the Premises) shall be in effect
during such period. Any such early possession shall not affect or advance the
Expiration Date of the Original Term.
3.3 DELAY IN POSSESSION. If for any reason Landlord cannot deliver
possession of the Premises to Tenant as agreed herein by the Early Possession
Date, if one is specified in paragraph 1.4, or, if no Early Possession Date is
specified, by the Commencement Date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the obligations of Tenant hereunder, or extend the term hereof, but in such
case, Tenant shall not, except as otherwise provided herein, be obligated to pay
rent or perform any other obligation of Tenant under the terms of this Lease
until Landlord delivers possession of the Premises to Tenant. If possession of
the Premises is not delivered to Tenant within Ten (10) days after the
Commencement Date, Tenant may, at its option, by notice in writing to Landlord
within ten (10) days thereafter, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder; provided, however, that if
such written notice by Tenant is not received by Landlord within said ten (10)-
day period, Tenant's right to cancel this Lease shall terminate and be of no
further force or effect. Except as may be otherwise provided, and regardless of
when the term actually commences, if possession is not tendered to Tenant when
required by this Lease and Tenant does not terminate this Lease, as aforesaid,
the period free of the obligation to pay Base Rent, if any, that Tenant would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Tenant would otherwise have enjoyed under
the terms hereof, but minus any days of delay caused by the acts, changes or
omissions of Tenant.
4. RENT
4.1 BASE RENT. Tenant shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by
Landlord in lawful money of the United States, without offset, demand, prior
notice or deduction, on or before the day on which it is due under the terms of
this Lease. Base Rent and all other rent and charges for any period during the
term hereof which is for less than one (1) full calendar month shall be prorated
based upon a thirty (30)-day month. Payment of Base Rent and other charges
shall be made to Landlord at Landlord's address for delivery of notices set
forth in paragraph 23 or to such other persons or at such other addresses as
Landlord may from time to time designate in writing to Tenant.
4.2 COST OF LIVING INCREASES. The Base Rent shall be increased at the
time(s) stated in paragraph 1.5(a) in proportion to the increase from the
date the term commenced in the Consumer Price Index published by the United
States Department of Labor, Bureau of Labor Statistics for Urban Wage Earners
and Clerical Workers, all items, for the Los Angeles - Anaheim - ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇-▇▇ = 100) (the "Index"). The increase in Base Rent
will be calculated as follows: The initial Base Rent, set forth in Paragraph
1.5(a), will be multiplied by a fraction, the numerator of which shall be the
Index for the calendar month which is four (4) calendar months prior to the
calendar month in which the increase is effective and the denominator of
which shall be the Index for the calendar month in which the Original Term
commences 4% minimum - 8% maximum per annum. The sum so calculated shall
constitute the adjusted Base Rent payable under this Lease. In no event
shall such adjusted Base Rent be less than the Base Rent payable for the
month immediately preceding the Adjustment Date in question. Tenant shall
pay the adjusted Base Rent from its effective date until the next periodic
increase. Landlord may notify Tenant of the adjusted Base Rent after the
Adjustment Date since the Index for the appropriate month may not be
available on the Adjustment Date. In such event, Tenant shall pay Landlord
the amount of the increase in Base Rent for the period elapsed between the
Adjustment Date and Landlord's notice of such increase within ten (10) days
after Landlord's notice. Landlord's failure to request payment of adjusted
Base Rent shall not constitute a waiver of the right to any adjustment
provided for in this Lease. If the Index is changed so that the base year
differs from that in effect when the term commences, the Index shall be
converted in accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics. If the Index is
discontinued or revised during the term of this Lease, such other government
index or computation with which it is replaced shall be used in order to
obtain substantially the same result as would be obtained if the Index had
not been discontinued or revised.
5. SECURITY DEPOSIT
Tenant shall deposit with Landlord upon execution hereof the Security
Deposit set forth in paragraph 1.7 as security for Tenant's faithful performance
of Tenant's obligations under this Lease. If Tenant fails to pay Base Rent or
other rent or charges due hereunder, or otherwise Defaults under this Lease (as
defined in paragraph 13.1), Landlord may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount due Landlord or to
reimburse or compensate Landlord for any liability, cost, expense, loss or
damage (including attorneys' fees) which Landlord may suffer or incur by reason
thereof. If Landlord uses or applies all or any portion of said Security
Deposit, Tenant shall, within ten (10) days after written request therefor,
deposit monies with Landlord sufficient to restore said Security Deposit to the
full amount required by this Lease. Any time the Base Rent increases during the
term of this Lease, Tenant shall promptly (and in no event more than ten (10)
days following the date the increase in Base Rent is effective) deposit
additional monies with Landlord sufficient to maintain the same ratio between
the Security Deposit and the Base Rent as those amounts are specified in the
Basic Provisions. Landlord shall not be required to keep all or any part of the
Security
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Deposit separate from its general accounts. Landlord shall, at the expiration
or earlier termination of the term hereof and after Tenant has vacated the
Premises, return to Tenant (or, at Landlord's option, to the last assignee, if
any, of Tenant's interest herein), that portion of the Security Deposit not used
or applied by Landlord. Unless otherwise expressly agreed in writing by
Landlord, no part of the Security Deposit shall be considered to be held in
trust, to bear interest or other increment for its use, or to be prepayment for
any monies to be paid by Tenant under this Lease.
6. USE
6.1 USE. Tenant shall use and occupy the Premises only for the purposes
set forth in paragraph 1.8, and for no other purpose. Tenant shall not use or
permit the use of the Premises in a manner that violates Applicable Law (as
defined in paragraph 6.3), creates waste or nuisance, or that disturbs owners or
occupants of, or causes damage to, neighboring premises or properties. Tenant
shall not place or permit to be placed any loads upon the floors, walls or
ceilings in excess of the maximum designed load specified by Landlord or which
might damage the Premises or any portion thereof.
6.2 HAZARDOUS MATERIALS.
(a) See attached Hazardous Materials Lease Rider for further
provisions.
(b) DUTY TO INFORM LANDLORD. If Tenant knows, or has reasonable
cause to believe, that a Hazardous Material or Toxic Substance (as
defined in the Hazardous Materials Lease Rider), or a condition
involving or resulting from same, has come to be located in, on, under
or about the Premises, other than as previously consented to by
Landlord, Tenant shall immediately give written notice of such fact to
Landlord. Tenant shall also immediately give Landlord a copy of any
statement, report, notice, registration, application, permit, business
plan, license, order, claim, action, proceeding or other communication
given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the
presence, spill, release, discharge of, or exposure to, any Hazardous
Material or Toxic Substance or contamination in, on or about the
Premises, including, but not limited to, all such documents as may be
involved in any Reportable Uses involving the Premises. "Reportable
Use" means (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Material or Toxic Substance
that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with,
any governmental authority. Reportable use shall also include
Tenant's being responsible for the presence in, on or about the
Premises of a Hazardous Material or Toxic Substance with respect to
which any Applicable Law requires that a notice be given to persons
entering or occupying the Premises or neighboring properties.
6.3 TENANT'S COMPLIANCE WITH LAW. Except as otherwise specifically
provided in this Lease, Tenant shall, at Tenant's sole cost and expense, fully,
diligently and in a timely manner comply with all "Applicable Law," which term
is used in this Lease to include all laws, rules, regulations, ordinances,
directives, covenants, easements and restrictions of record, permits, the
requirements of any applicable fire insurance underwriter or rating bureau, and
the recommendations of Landlord's engineers and/or consultants, relating in any
manner to the Premises (including, but not limited to, matters pertaining to (a)
industrial hygiene, (b) accessibility and use by individuals with disabilities,
(c) environmental conditions on, in, under or about the Premises, including air,
soil and groundwater conditions, and (d) the use, generation, manufacture,
production, installation, maintenance, removal, transportation, storage, spill
or release of any Hazardous Material or Toxic Substance or storage tank), now in
effect or which may hereafter come into effect, and whether or not reflecting a
change in policy from any previously existing policy. Tenant shall, within five
(5) days after receipt of Landlord's written request, provide Landlord with
copies of all documents and information, including, but not limited to, permits,
registrations, manifests, applications, reports and certificates, evidencing
Tenant's compliance with any Applicable Law specified by Landlord, and shall
immediately upon receipt notify Landlord in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Tenant or the
Premises or to comply with any Applicable Law. Tenant shall obtain and pay for
all permits, including a Certificate of Occupancy, required for Tenant's
occupancy of the Premises and shall promptly take all substantial and
nonsubstantial actions necessary to comply with all Applicable Law regulating
the use, condition or occupancy of the Premises (including structural or other
upgrading of or improvements to the Premises required as a result of Tenant's
activities or use of the Premises).
6.4 INSPECTION: COMPLIANCE. Landlord and Landlord's Lender(s) (as defined
in paragraph 8.3(a)) shall have the right to enter the Premises at any time, in
the case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Tenant
with this Lease and all Applicable Law (as defined in paragraph 6.3), and to
employ experts and consultants in connection therewith and to advise Landlord
with respect to Tenant's activities, including, but not limited to, the
installation, operation, use, monitoring, maintenance or removal of any
Hazardous Material or Toxic Substance or storage tank on or from the Premises.
The costs and expenses of any such inspections shall be paid by the Party
requesting same, unless a Default or Breach of this Lease, violation of
Applicable Law, or a contamination caused or permitted by Tenant, is found to
exist or be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In any such case, Tenant shall, upon request, reimburse
Landlord or Landlord's Lender, as the case may be, for the costs and expenses
of such inspections.
7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS
7.1 TENANT'S OBLIGATIONS.
(a) Subject to the provisions of this Lease, including, but not
limited to, paragraphs 7.2 (Landlord's obligations to repair), 9
(damage and destruction), and 14 (condemnation), Tenant shall, at
Tenant's sole cost and expense and at all times, keep the Premises and
every part thereof in good order, condition and repair (whether or not
such portion of the Premises requiring repair, or the means of
repairing the same, are reasonably or readily accessible to Tenant,
and whether or not the need for such repairs occurs as a result of
Tenant's use, any prior use, the elements or the age of such portion
of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as
plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire sprinkler
and/or standpipe and hose or other automatic fire extinguishing
system, including fire alarm and/or smoke detection systems and
equipment, fire hydrants, fixtures, interior and exterior walls
(including graffiti removal), ceilings, floors, windows, doors, plate
glass, landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, on, about the Premises as
further defined in the Multi-Tenant Facility Rider, but excluding
foundations, the exterior roof and the structural aspects of the
Premises. Tenant, in keeping the Premises in good order, condition
and repair, shall exercise and perform good maintenance practices.
Tenant's obligations shall include restorations, replacements or
renewals when necessary to keep the Premises and all improvements
thereon or a part thereof in good order, condition and state of repair.
(b) Landlord shall, at Tenant's sole cost and expense payable in
accordance with paragraph 7.5 below, procure and maintain contracts on
terms consistent with those maintained on behalf of other Tenants in
the ▇▇▇▇ Gardens Industrial Park, for the inspection, maintenance and
service of the following equipment and improvements, if any, located
on the Premises and the property of which the Premises are a part; (i)
heating, air-conditioning and ventilating equipment; (ii) fire
sprinkler and/or standpipe and hose or other automatic fire
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extinguishing systems; including fire alarm and/or smoke detection;
(iii) landscaping and irrigation systems; (iv) roof membrane
maintenance; and (v) asphalt and parking lot maintenance.
Notwithstanding any provision of this paragraph 7.1 to the contrary,
if maintenance, repair or replacement of a portion of the Premises
which is the subject of a service contract described in this paragraph
7.1(b) is needed, Tenant shall promptly so notify Landlord. Following
receipt of such notice, Landlord will cause the necessary maintenance,
repair or replacement to be performed on behalf of Tenant and at
Tenant's sole cost by a contractor of Landlord's selection. Tenant
agrees to reimburse Landlord upon demand for all costs and expenses of
such performance.
(c) Tenant shall, at Tenant's expense, repair any damage to the
foundations, exterior roof and structural aspects of the Premises
caused by or resulting from any negligent act or omission of Tenant,
Tenant's agents, employees, contractors, invitees or others using the
Premises with Tenant's expressed or implied permission.
7.2 LANDLORD'S OBLIGATIONS. Following receipt of written notice of the
need for such repairs and subject to paragraph 13.5, Landlord shall, at
Landlord's expense, keep the foundations, exterior roof and structural aspects
of the Premises in good order, condition and repair. Landlord shall not,
however, be obligated to paint the exterior surface of the exterior walls or to
maintain the windows, doors or plate glass or the interior surface of exterior
walls. Landlord shall not, in any event, have any obligation to repair damage
caused by any negligent act or omission of Tenant, Tenant's agents, employees,
contractors, invitees or others using the Premises with Tenant's expressed or
implied permission, or to make any repairs until Landlord receives written
notice of the need for such repairs. It is the intention of the Parties that
the terms of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises. Tenant expressly waives the benefit of
any statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease with respect to, or which affords Tenant the right to, make
repairs at the expense of Landlord or to terminate this Lease by reason of the
condition of the Premises or any needed repairs. (See First Addendum, Paragraph
57)
7.3 UTILITY INSTALLATION; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "Utility
Installations" is used in this Lease to refer to all carpeting, window
coverings, air lines, power panels, electrical distribution, security,
fire protection systems, communication systems, lighting fixtures,
heating, ventilating and air-conditioning equipment, plumbing, and
fencing in, on or about the Premises. The term "Trade Fixtures" shall
mean Tenant's machinery, racking, and equipment that can be removed
without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements on the Premises from
those which are provided by Landlord under the terms of this Lease,
other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "Tenant Owned Alterations and/or Utility
Installations" are defined as Alterations and/or Utility Installations
made by Tenant that are not yet owned by Landlord as defined in
paragraph 7.4(a). Tenant shall not make any Alterations or
Utility Installations in, on, under or about the Premises without
Landlord's prior written consent. Tenant may, however, make
non-structural Utility Installations to the interior of the Premises
(excluding the roof), as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof,
foundation or any existing walls, and the cumulative cost thereof
during the term of this Lease as extended does not exceed FIVE
THOUSAND DOLLARS ($5,000.00).
(b) CONSENT. Any Alterations or Utility Installations that
Tenant shall desire to make and which require the consent of Landlord
shall be presented to Landlord in written form with proposed detailed
plans. All consents given by Landlord, whether by virtue of paragraph
7.3(a) or by subsequent specific consent, shall be deemed conditioned
upon: (i) Tenant's acquiring all applicable permits required by
governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Landlord prior to commencement
of the work thereon; and (iii) the compliance by Tenant with all
conditions of said permits in a prompt and expeditious manner. Any
Alterations or Utility Installations by Tenant during the term of this
Lease shall be done in a good and workmanlike manner, with new, good
and sufficient materials, by contractors approved by Landlord, and in
compliance with all Applicable Law. Tenant shall promptly upon
completion thereof furnish Landlord with as-built plans and
specifications therefor. Landlord may (but without obligation to do
so) condition its consent to any requested Alteration or Utility
Installation that costs FIVE THOUSAND DOLLARS ($5,000.00) or more upon
Tenant's providing Landlord with a lien and completion bond in form
and with a surety approved by Landlord in an amount equal to one and
one-half (1.5) times the estimated cost of such Alteration or Utility
Installation and/or upon Tenant's posting an additional Security
Deposit with Landlord under paragraph 36 hereof.
(c) INDEMNIFICATION. Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or
for Tenant at or for use on the Premises, which claims are or may be
secured by any mechanics' or materialmen's lien against the Premises
or any interest therein. Tenant shall give Landlord not less than ten
(10) days' notice prior to the commencement of any work in, on or
about the Premises, and Landlord shall have the right to post notices
of nonresponsibility in or on the Premises as provided by law. If
Tenant shall, in good faith, contest the validity of any such lien,
claim or demand, then Tenant shall, at its sole expense, defend and
protect itself, Landlord and the Premises against the same and shall
pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof against the Landlord or the Premises.
If Landlord shall require, Tenant shall furnish to Landlord a surety
bond satisfactory to Landlord in an amount equal to one and one-half
(1.5) times the amount of such contested lien claim or demand,
indemnifying Landlord against liability for the same, as required by
law for the holding of the Premises free from the effect of such lien
or claim. In addition, Landlord may require Tenant to pay Landlord's
attorneys' fees and costs in participating in such action if Landlord
shall decide it is to its best interest to do so.
7.4 OWNERSHIP; REMOVAL; SURRENDER AND RESTORATION.
(a) OWNERSHIP. Subject to Landlord's right to require their
removal or become the owner thereof as hereinafter provided in this
paragraph 7.4, all Alterations and Utility Additions made to the
Premises by Tenant shall be the property of and owned by Tenant, but
considered a part of the Premises. Landlord may, at any time and at
its option, elect in writing to Tenant to be the owner of all or any
specified part of the Tenant Owned Alterations and Utility
Installations. Unless otherwise instructed per paragraph 7.4(b)
hereof, all Tenant Owned Alterations and Utility Installations shall,
at the expiration or earlier termination of this Lease, become the
property of Landlord and remain upon and be surrendered by Tenant with
the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Landlord may
require that any or all Tenant Owned Alterations or Utility
Installations be removed by the expiration or earlier termination of
this Lease, notwithstanding their installation may have been consented
to by Landlord. Landlord may require the removal at any time of all
or any part of any Tenant Owned Alterations or Utility Installations
made without the required consent of Landlord.
(c) SURRENDER/RESTORATION. Tenant shall surrender the Premises
by the end of the last day of the Lease term or any earlier
termination date, with all of the improvements, parts and surfaces
thereof clean and free of debris and in good operating order,
condition and state of repair, ordinary wear and tear excepted.
"Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice or by
Tenant performing all of its obligations under this Lease. Except as
otherwise
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agreed or specified in writing by Landlord, the Premises, as
surrendered, shall include the Utility Installations. The
obligations of Tenant shall include the repair of any damage
occasioned by the installation, maintenance or removal of Tenant's
Trade Fixtures, furnishings, equipment and Alterations and/or
Utility Installations, as well as the removal of any storage tank
installed by or for Tenant; the removal of all Hazardous Materials
and Toxic Substances brought upon, kept, used or permitted in or
about the Premises by Tenant, its agents, employees, contractors or
invitees; and the removal, replacement or remediation of any soil,
material or ground water contamination caused or permitted by
Tenant, all as may then be required by Applicable Law and/or good
practice. Tenant's Trade Fixtures shall remain the property of
Tenant and shall be removed by Tenant subject to its obligations to
repair and restore the Premises per this Lease.
7.5 ITEMIZED CONTRACTUAL MAINTENANCE COSTS. Tenant shall pay Landlord for
Itemized Contractual Maintenance Costs (as defined below) in accordance with
this paragraph 7.5:
(a) DEFINITION OF ITEMIZED CONTRACTUAL MAINTENANCE COSTS.
Itemized Contractual Maintenance Costs means all sums actually
expended by Landlord for the service contracts described in
paragraph 7.1(b).
(b) TENANT'S OBLIGATION TO PAY. Commencing on the date that
the first payment of Base Rent is due for the first full calendar
month of the Lease term, Tenant shall pay to Landlord, at the time
and in the manner that Base Rent is payable, am amount estimated by
Landlord to be Tenant's share of Itemized Contractual Maintenance
Costs. The initial monthly charge payable by Tenant is Two Hundred
Eighteen and no/100 DOLLARS ($218.00) and is subject to increase in
accordance with paragraph 7.5(c), below.
(c) ADJUSTMENT OF ITEMIZED CONTRACTUAL MAINTENANCE CHARGES.
Landlord may adjust the monthly charge payable by Tenant at the end
of each accounting period on the basis of Landlord's reasonably
anticipated Itemized Contractual Maintenance Costs for the
following accounting period. An accounting period is a calendar
year, except that the first accounting period shall commence on
the date the Lease term commences and the last accounting period
shall end on the date the Lease term expires or terminates.
(d) STATEMENT OF ITEMIZED CONTRACTUAL MAINTENANCE CHARGES.
Landlord shall furnish to Tenant a statement showing the total
Itemized Contractual Maintenance Costs for the accounting period,
and the payments made by Tenant with respect to each accounting
period, within ninety (90) days after the end of each accounting
period, covering the accounting period just ended. Each statement
shall be prepared, signed and certified to be correct by the
authorized agent of Landlord.
(e) DEFICIENCY. If Tenant's share of Itemized Contractual
Maintenance Costs for the accounting period exceeds the payments
made by Tenant, Tenant shall pay Landlord the deficiency within ten
(10) days after the receipt of the statement. If Tenant's payments
made during the accounting period exceed Tenant's share of Itemized
Contractual Maintenance Costs, the excess will be credited against
the next monthly payment due from Tenant, or paid to Tenant if the
Lease has terminated and Tenant has no outstanding financial
obligations to Landlord.
(f) RECORDS. Landlord shall keep full and accurate books of
account covering the Itemized Contractual Maintenance Costs, and
the statement to Tenant shall accurately reflect the total Itemized
Contractual Maintenance Costs for the accounting period. Tenant
shall have the right at reasonable times during normal business
hours for a period of one (1) year after receipt of a statement of
Itemized Contractual Maintenance Costs to inspect the books of
account upon which that statement is based.
(g) TERMINATION OF OCCUPANCY. If the Lease expires or
terminates on a date other than the end of a calendar year,
Landlord will submit a current statement of Itemized Contractual
Maintenance Costs for the partial calendar year and Tenant will be
obligated to pay for Itemized Contractual Maintenance Costs through
the date of termination. If Tenant's Share of Itemized Contractual
Maintenance Costs for the accounting period in which the Lease
expires or terminates exceeds the payments made by Tenant for that
period, Tenant shall pay Landlord the deficiency within ten (10)
days after receipt of the statement. If Tenant's payments made
during the accounting period in which the Lease expires or
terminates exceed Tenant's share of Itemized Contractual
Maintenance Costs for that period, the excess will be refunded to
the Tenant.
8. INSURANCE; INDEMNITY
8.1 PAYMENT OF COST INCREASES.
(a) Tenant shall pay to Landlord any Insurance Cost Increase
(as defined below) occurring during the term of this Lease.
"Insurance Cost Increase" is defined as any increase in the cost of
insurance applicable to the Premises, over and above the Base Cost,
as hereinafter defined, calculated on an annual basis. Insurance
Cost Increase shall include, increases resulting from the nature of
Tenant's occupancy, any act or omission of Tenant, increased
valuation of the Premises, and/or a rate increase. If the Parties
insert a dollar amount in paragraph 1.9, such amount shall be
considered the "Base Cost." In lieu thereof, if the Premises have
been previously occupied, the "Base Cost" shall be the annual cost
of the insurance applicable to the most recent occupancy.
(b) Tenant shall pay any such Insurance Cost Increase to
Landlord either within fifteen (15) days after receipt by Tenant of
an invoice or other reasonable evidence of the amount due or, at
Landlord's option, in advance, as provided in paragraph 8.9. If the
applicable insurance covers other property besides the Premises,
Landlord shall also deliver to Tenant a statement of the amount of
such Insurance Cost Increase attributable only to the Premises,
showing in reasonable detail the manner in which such amount was
computed. The Insurance Cost Increase for any period extending
beyond the term of this Lease shall be prorated to coincide with
the corresponding Expiration Date of the Lease term.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY TENANT. Tenant shall obtain and keep in force
during the term of this Lease, at Tenant's expense, a Commercial
General Liability policy of insurance protecting Tenant and naming
Landlord (STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM)
and Landlord's appointed Property Manager as additional insureds
against claims for bodily injury, personal injury and property
damage based upon, involving or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant
thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than TWO MILLION FIVE
HUNDRED THOUSAND DOLLARS ($2,500,000.00) per occurrence with an
"Additional Insured-Managers or Landlords of Premises" Endorsement
and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy
shall not contain any intra-insured exclusions as between insured
persons or organizations, but shall include coverage for liability
assumed under this Lease as an "insured contract" for the
performance of Tenant's indemnity obligations under this Lease. The
limits of said insurance required by this Lease or as carried by
Tenant shall not, however, limit the liability of Tenant or
relieve Tenant of any obligation hereunder. All insurance to be
carried by Tenant shall be primary to and not contributory with any
similar insurance carried by Landlord, whose insurance shall be
considered excess insurance only.
(b) CARRIED BY LANDLORD. If Landlord is the Insuring Party,
Landlord shall also maintain liability insurance for at least the
minimum coverages described in paragraph 8.2(a). Such insurance
shall be in addition to, and
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not in lieu of, the insurance required to be maintained by Tenant.
Landlord may elect to self-insure for this coverage. Tenant shall
not be named as an additional insured on any policy of liability
insurance maintained by Landlord.
8.3 PROPERTY INSURANCE--BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain
and keep in force during the term of this Lease a policy or policies
in the name of Landlord, with loss payable to Landlord and to the
holders of any mortgages, deeds of trust or ground leases on the
Premises ("Lender(s)"), insuring loss or damage to the Premises. If
Landlord is the Insuring Party, Landlord may elect to self-insure for
this coverage. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to
time, or the amount required by Lenders, but in no event more than the
commercially reasonable and available insurance value thereof if, by
reason of the unique nature or age of the improvements involved, such
latter amount is less than full replacement cost. However, Tenant Owned
Alterations and Utility Installations shall be insured by Tenant under
paragraph 8.4. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of
direct physical loss or damage, including coverage for any additional
costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating
the reconstruction or replacement of any undamaged sections of the
Premises required to be demolished or removed by reason of the
enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss, but not including plate
glass insurance. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance clause,
waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor
Consumer Price Index for All Urban Consumers for the city nearest
to where the Premises are located. Landlord may (but shall not be
required to) maintain earthquake and flood insurance with the
endorsements referred to above on the Premises. If Landlord elects
to maintain such coverage, the cost of such insurance shall be
allocated to paragraph 8.1.
(b) RENTAL VALUE. The Insuring Party shall, in addition, obtain
and keep in force during the term of this Lease a policy or
policies in the name of Landlord, with loss payable to Landlord
and Lender(s), insuring the loss of the full rental and other
charges payable by Tenant to Landlord under this Lease for not
less than one (1) year (including all real estate taxes, Insurance
Cost increases and any scheduled rental increases). If Landlord is
the Insuring Party, Landlord may elect to self-insure for this
coverage. Said insurance shall provide that in the event the Lease
is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of
the completion of repairs or replacement of the Premises, to
provide for not less than one (1) full year's loss of rental
revenues from the date of any such loss. Said insurance shall
contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to
reflect the projected rental income, property taxes, Insurance
Cost increases and other expenses, if any, otherwise payable by
Tenant, for the next twelve (12)-month period.
(c) ADJACENT PREMISES. If the Premises are part of a
larger building, or if the Premises are part of a group of
buildings owned by Landlord which are adjacent to the Premises,
the Tenant shall pay for any increase in the cost of the property
insurance applicable to such building or buildings if said
increase is caused by Tenant's acts, omissions, use or occupancy
of the Premises.
(d) TENANT'S IMPROVEMENTS. If Landlord is the Insuring Party,
Landlord shall not be required to insure Tenant Owned Alterations
and Utility installations unless the item in question has become the
property of Landlord under the terms of this Lease.
8.4 TENANT'S PROPERTY INSURANCE. Subject to the requirements of paragraph
8.5, Tenant, at its cost, shall either by separate policy or, at Landlord's
option, by endorsement to a policy already carried, maintain insurance
coverage on all of Tenant's personal property, Tenant Owned Alterations and
Utility installations in, or or about the Premises similar in coverage to that
carried by the Insuring Party under paragraph 8.3. Such insurance shall be
full replacement cost coverage with a deductible of not to exceed ONE
THOUSAND DOLLARS ($1,000.00) per occurrence. The proceeds from any such
insurance shall be used by Tenant for the replacement of personal property or
the restoration of Tenant Owned Alterations and Utility installations. Tenant
shall be the Insuring Party with respect to the insurance required by this
paragraph 8.4 and shall provide Landlord with written evidence that such
insurance is in force in accordance with paragraph 8.5.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies
duly licensed to transact business in the State where the Premises are
located, and maintaining during the policy term a "General Policyholders
Rating" of at least A-:VII, or such other rating as may be required by a
Lender having a lien on the Premises, as set forth in the most current issue
of "BEST'S INSURANCE GUIDE." Tenant shall not do or permit to be done
anything which shall invalidate the insurance policies referring to in this
paragraph 8. Tenant shall, at Tenant's sole cost and expense, comply with any
and all requirements pertaining to the Premises of any insurance provider or
fire department necessary for the maintenance of the insurance described in
this paragraph 8. At the time Tenant executes this Lease, Tenant shall cause
to be delivered to Landlord certified copies of, or certificates evidencing
the existence and amounts of, the insurance, and with the additional
insureds, required under paragraphs 8.2 and 8.4. Each policy shall contain an
endorsement providing that it is not cancellable or subject to modification
except after thirty (30) days' prior written notice from the insurance
company to Landlord. Tenant shall, at least thirty (30) days prior to the
expiration of such policies, furnish Landlord with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Landlord may (but shall
not be obligated to) order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord upon demand.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Tenant and Landlord ("Waiving Party") each hereby releases and relieves the
other, and waives their entire right to recover damages (whether in contract
or in tort) against the other, for loss of or damage to the Waiving Party's
property arising out of or incident to the perils required to be insured
against under paragraph 8. The effect of such releases and waivers of the
right to recover damages shall not be limited by the amount of insurance
carried or required, or by any deductible applicable thereto.
8.7 INDEMNITY. Except for Landlord's negligence and/or breach of express
warranties, if any, Tenant shall indemnify, protect, defend and hold harmless
the Premises, Landlord and its trustees, agents (including Landlord's
Property Manager), Landlord's master or ground lessor, partners and Lenders,
from and against any and all claims, loss or rents and/or damages, costs,
liens, judgments, penalties, permits, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving or in dealing with, the
occupancy of the Premises by Tenant, the conduct of Tenant's business, any
negligent act, omission or neglect of Tenant, its agents, contractors,
employees or invitees, and out of any Default or Breach by Tenant in the
performance in a timely manner of any obligation on Tenant's part to be
performed under this Lease. The foregoing shall include, but shall not be
limited to, the defense or pursuit of any claim or any action or proceeding
involved therein, and whether or not (in the case of claims made against
Landlord) litigated and/or reduced to judgment, and whether well founded or
not. In case any action or proceeding being brought against Landlord by
reason of any of the foregoing matters, Tenant, upon notice from Landlord,
shall defend the same at Tenant's expense by counsel reasonably satisfactory
to Landlord, and Landlord shall cooperate with Tenant in such defense or, at
Landlord's election, Tenant shall reimburse Landlord for any and all
reasonable legal fees and costs incurred by Landlord in connection with any
such claim.
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8.8 EXEMPTION OF LANDLORD FROM LIABILITY. Other than due to an ______
constituting a breach of the Lease, negligent, or willful misconduct by Landlord
or its' agents (and then only to the ex____ that any injury or damage would not
be covered by insurance required under this lease), Landlord shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Tenant, Tenant's employees, contractors, invitees, customers or any
other person in or about the Premises, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air-conditioning or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is accessible or
not. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of Landlord. Notwithstanding Landlord's negligence
or breach of this Lease, Landlord shall not be liable under any circumstances
for injury to Tenant's business or for any loss of income or profit therefrom.
8.9 ADVANCE PAYMENT. Landlord reserves the right, at Landlord's option,
to estimate the annual Insurance Cost Increase payable by Tenant, and to require
such annual Insurance Cost Increase to be paid to Landlord by Tenant monthly, in
advance, with the payment of Base Rent. If Landlord elects to require payment
monthly in advance, the monthly payment shall be one-twelfth (1/12) of the
annual Insurance Cost Increase payable by Tenant under this Lease, as reasonably
estimated by Landlord. Landlord may adjust the monthly payment of Insurance Cost
Increase from time to time as Landlord reasonably deems necessary based on
Landlord's reasonable estimate of the annual Insurance Cost Increase. If the
amounts paid to Landlord by Tenant under the provisions of this paragraph are
insufficient to discharge the obligation of Tenant to pay such Insurance Cost
Increase, Tenant shall pay to Landlord, upon demand, such additional sums as are
necessary to pay such obligation. All monies paid to Landlord under this
paragraph may be intermingled with other monies of Landlord and shall not
bear interest. In the event of a Breach by Tenant in the performance of the
obligations of Tenant under this Lease, then any balance of funds paid to
Landlord under the provisions of this paragraph may, subject to proration as
provided in paragraph 8.1, at the option of Landlord, be treated as an
additional Security Deposit under paragraph 5.
9. DAMAGE OR DESTRUCTION
9.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean damage or destruction
to the improvements on the Premises, other than Tenant Owned
Alterations and Utility Installations, the repair cost of which damage
or destruction is less than fifty percent (50%) of the than
Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and
Tenant Owned Alterations and Utility Installations.
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than Tenant Owned Alterations and
Utility Installations, the repair cost of which damage or destruction
is fifty percent (50%) or more of the then Replacement Cost of the
Premises immediately prior to such damage or destruction, excluding
from such calculation the value of the land and Tenant Owned
Alterations and Utility Installations.
(c) "Insured Loss" shall mean damage or destruction to
improvements on the Premises, other than Tenant Owned Alterations and
Utility Installations, which was caused by an event required to be
covered by the insurance described in paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild
the improvements owned by Landlord at the time of the occurrence to
their condition existing immediately prior thereto, including
demolition, debris removal and upgrading required by the operation of
applicable building codes, ordinances or laws, and without deduction
for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination
by, a Hazardous Material or Toxic Substance (as defined in the
Hazardous Materials Lease Rider) in, on, under or about the Premises.
9.2 PARTIAL DAMAGE--INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Landlord shall, at Landlord's expense, repair such
damage (but not Tenant's Trade Fixtures or Tenant Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds are not sufficient to effect such
repair, the Insuring Party shall promptly contribute the shortage in proceeds as
and when required to complete said repairs. In the event, however, the shortage
in proceeds was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurance coverage was not commercially
reasonable and available, Landlord shall have no obligation to pay for the
shortage in insurance proceeds or to fully restore the unique aspects of the
Premises unless Tenant provides Landlord with the funds to cover same, or
adequate assurance thereof, within ten (10) days following receipt of written
notice of such shortage and request therefor. If Landlord receives said funds
or adequate assurance thereof within said ten (10)-day period, the Party
responsible for making the repairs shall complete them as soon as reasonably
possible and this Lease shall remain in full force and effect. If Landlord does
not receive such funds or assurance within said period, Landlord may
nevertheless elect by written notice to Tenant within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Landlord
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If in such case Landlord does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed in writing, or caused by a negligent or
willful act or omission of Landlord or its' agents, Tenant shall in no event
have any right to reimbursement from Landlord for any funds contributed by
Tenant to repair any such damage or destruction. Premises Partial Damage due to
flood or earthquake shall be subject to paragraph 9.3 rather than paragraph 9.2,
notwithstanding that there may be some insurance coverage, but the net proceeds
of any such insurance shall be made available for the repairs if made by either
Party. Tenant shall notify Landlord in writing immediately upon the occurrence
of any damage or destruction to the Premises. If repair or restoration by
Landlord or Tenant shall exceed a twelve (12) month period as determined by
Landlord, Landlord shall so notify Tenant and either party shall have the right
to cancel this Lease by providing written notice to the other party within 30
days of Landlord's notice, and the Lease will terminate 30 days following such
written notice.
9.3 PARTIAL DAMAGE--UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act or
omission of Tenant (in which event Tenant shall make the repairs at Tenant's
expense and this Lease shall continue in full force and effect, but subject to
Landlord's rights under paragraph 13), Landlord may, at Landlord's option,
either: (a) repair such damage as soon as reasonably possible at Landlord's
expense, in which event this Lease shall continue in full force and effect; or
(b) give written notice to Tenant within thirty (30) days after receipt by
Landlord of knowledge of the occurrence of such damage of Landlord's desire to
terminate this Lease as of the date sixty (60) days following the giving of
such notice. In the event Landlord elects to give such notice of Landlord's
intention to terminate this Lease, Tenant shall have the right within ten (10)
days after the receipt of such notice to give written notice to Landlord of
Tenant's commitment to pay for the repair of such damage totally at Tenant's
expense and without reimbursement from Landlord. Tenant shall provide Landlord
with the required funds or satisfactory assurance thereof within thirty (30)
days following Tenant's said commitment. In such event, this Lease shall
continue in full force and effect, and Landlord shall proceed to make such
repairs as soon as reasonably possible and the required funds are available. If
Tenant does not give such notice and provide the funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Landlord's notice of termination. If repair or restoration by
Landlord or Tenant shall exceed a twelve (12) month period as determined by
Landlord, Landlord shall so notify Tenant and either party shall have the right
to cancel this Lease by providing written notice to the other party within 30
days of Landlord's notice, and the Lease will terminate 30 days following such
written notice.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following
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the date of such Premises Total Destruction, whether or not the damage or
destruction is an Insured Loss or was caused by a negligent or willful act or
omission of Tenant. In the event, however, that the damage or destruction was
caused by Tenant, Landlord shall have the right to recover Landlord's damages
from Tenant except as released and waived in paragraph 8.6. However, if the
Premises can be rebuilt within twelve (12) months after the date of the
destruction, Landlord may elect to rebuild the Premises at Landlord's expense,
in which case this Lease shall remain in full force and effect. Landlord shall
notify Tenant of its election within sixty (60) days after the occurrence of the
Premises Total Destruction. If the destruction was caused by a negligent or
willful act or omission of Tenant, Tenant shall pay Landlord upon demand the
difference between the actual cost of rebuilding the Premises and any insurance
proceeds received by Landlord.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured loss, Landlord may,
at Landlord's option, terminate this Lease effective sixty (60) days following
the date of occurrence of such damage by giving written notice to Tenant of
Landlord's election to do so within thirty (30) days after the date of
occurrence of such damage. Provided, however, if Tenant at that time has an
exercisable option to extend this Lease or to purchase the Premises, then Tenant
may preserve this Lease by, within twenty (20) days following the occurrence of
the damage, or before the expiration of the time provided in such option for its
exercise, whichever is earlier ("Exercise Period"), (a) exercising such option,
and (b) providing Landlord with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs. If Tenant duly exercises such
option during said Exercise Period and provides Landlord with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Landlord shall,
at Landlord's expense, repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Tenant fails to exercise
such option and provide such funds or assurance during said Exercise Period,
then Landlord may at Landlord's option terminate this Lease as of the expiration
of said sixty (60)-day period following the occurrence of such damage by giving
written notice to Tenant of Landlord's election to terminate within ten (10)
days after the expiration of the Exercise Period, notwithstanding any term or
provision in the grant of option to the contrary.
9.6 ABATEMENT OF RENT: TENANT'S REMEDIES.
(a) In the event of damage described in paragraph 9.2 (Partial
Damage--Insured), or damages described in paragraph 9.3, whether or not
Landlord or Tenant repairs or restores the Premises, the Base Rent,
Real Property Taxes, Insurance Cost Increases, and other charges, if
any, payable by Tenant hereunder for the period during which such
damage, its repair or the restoration continues, shall be abated in
proportion to the degree to which Tenant's use of the Premises is
impaired. Except for abatement of Base Rent, Real Property Taxes,
Insurance Cost Increases, and other charges, if any, as aforesaid, all
other obligations of Tenant hereunder shall be performed by Tenant,
and Tenant shall have no claim against Landlord for any damage
suffered by reason of the damage or destruction or any such repair or
restoration (including investigation and remediation of any Hazardous
Substance Condition pursuant to paragraph 9.7) unless such loss was due
to a negligent or willful act or omission of Landlord or its' agents
and would not otherwise be covered by insurance required to be in
effect under this Lease. Also, Landlord shall not be responsible for
any injury to Tenant's business, loss of income or profit therefrom.
(b) If Landlord shall be obligated to repair or restore the
Premises under the provisions of this paragraph 9 and shall not
commence, in a substantial and meaningful way, the repair or
restoration of the Premises within ninety (90) days after such
obligation shall accrue, Tenant may, at any time prior to the
commencement of such repair or restoration, give written notice to
Landlord and to any Lenders of which Tenant has actual notice of
Tenant's election to terminate this Lease on a date not less than sixty
(60) days following the giving of such notice. If Tenant gives such
notice to Landlord and such Lenders and such repair or restoration is
not commenced within thirty (30) days after receipt of such notice,
this Lease shall terminate as of the date specified in said notice. If
Landlord or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this
Lease shall continue in full force and effect. "Commence" as used in
this paragraph shall mean either the unconditional authorization of the
preparation of the required plans or the beginning of the actual work
on the Premises, whichever first occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
(as defined in paragraph 9.1(e)) occurs, unless Tenant is legally responsible
therefor (in which case Tenant shall make the investigation and remediation
thereof required by Applicable Law and this Lease shall continue in full force
and effect, but subject to Landlord's rights under paragraph 13 and the
Hazardous Materials Lease Rider), Landlord may at Landlord's option either (a)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Landlord's expense, in which event this Lease
shall continue in full force and effect, or (b) if the estimated cost to
investigate and remediate such condition exceeds twelve (12) times the then
monthly Base Rent or ONE HUNDRED THOUSAND DOLLARS ($100,000.00), whichever is
greater, give written notice to Tenant within thirty (30) days after receipt by
Landlord of knowledge of the occurrence of such Hazardous Substance Condition of
Landlord's desire to terminate this Lease as of the date sixty (60) days
following the giving of such notice. In the event Landlord elects to give such
notice of Landlord's intention to terminate this Lease, Tenant shall have the
right, within ten (10) days after the receipt of such notice, to give written
notice to Landlord of Tenant's commitment to pay for the investigation and
remediation of such Hazardous Substance Condition totally at Tenant's expense
and without reimbursement from Landlord except to the extent of an amount
equal to twelve (12) times the then monthly Base Rent or ONE HUNDRED THOUSAND
DOLLARS ($100,000.00), whichever is greater. Tenant shall provide Landlord with
the funds required of Tenant or satisfactory assurance thereof within thirty
(30) days following Tenant's said commitment. In such event this Lease shall
continue in full force and effect, and Landlord shall proceed to make such
investigation and remediation as soon as reasonably possible and the required
funds are available. If Tenant does not give such notice and provide the
required funds or assurance thereof within the times specified above, this
Lease shall terminate as of the date specified in Landlord's notice of
termination. If a Hazardous Substance Condition occurs for which Tenant is not
legally responsible, there shall be abatement of Tenant's obligations under this
Lease to the same extent as provided in paragraph 9.6(a) for a period of not to
exceed twelve (12) months.
9.8 TERMINATION--ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Tenant to Landlord.
Landlord shall, in addition, return to Tenant so much of Tenant's Security
Deposit as has not been, or is not then required to be, used by Landlord under
the terms of this Lease.
9.9 WAIVE STATUTES. Landlord and Tenant agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES
10.1 (a) PAYMENT OF TAXES. Landlord shall pay the Real Property
Taxes, as defined in paragraph 10.2, applicable to the Premises;
provided, however, that Tenant shall pay, in addition to rent, the
amount, if any, by which Real Property Taxes applicable to the
Premises increase over the fiscal tax year during which the
Commencement Date occurs ("Tax Increase"). Subject to paragraph
10.1(b), payment of any such Tax Increase shall be made by Tenant
within fifteen (15) days after receipt of Landlord's written statement
setting forth the amount due. Tenant shall promptly furnish Landlord
with satisfactory evidence that such taxes have been paid. If any
such taxes to be paid by Tenant shall cover any period of time prior
to or after the expiration
PAGE 8
or earlier termination of the term hereof, Tenant's share of such
taxes shall be equitably prorated to cover only the period of time
within the tax fiscal year this Lease is in effect, and Landlord shall
reimburse Tenant for any overpayment after such proration.
(b) ADVANCE PAYMENT. In order to insure payment when due and
before delinquency of any or all Real Property Taxes, Landlord
reserves the right, at Landlord's option, to estimate the current Real
Property Taxes applicable to the Premises, and to require such current
year's Tax Increase to be paid in advance to Landlord by Tenant,
either: (i) in a lump sum amount equal to the amount due, at least
twenty (20) days prior to the applicable delinquency date: or (ii)
monthly, in advance, with the payment of the Base Rent. If Landlord
elects to require payment monthly in advance, the monthly payment
shall be that equal monthly amount which, over the number of months
remaining before the month in which the applicable tax installment
would become delinquent (and without interest thereon), would provide
a fund large enough to fully discharge before delinquency the
estimated Tax Increase to be paid. When the actual amount of the
applicable Tax Increase is known, the amount of such equal monthly
advance payment shall be adjusted as required to provide the fund
needed to pay the applicable Tax Increase before delinquency. If the
amounts paid to Landlord by Tenant under the provisions of this
paragraph are insufficient to discharge the obligation of Tenant to
pay such Tax Increase as the same becomes due, Tenant shall pay to
Landlord, upon Landlord's demand, such additional sums as are
necessary to pay such obligation. All monies paid to Landlord under
this paragraph may be intermingled with other monies of Landlord and
shall not bear interest. In the event of a Breach by Tenant in the
performance of the obligations of Tenant under this Lease, then any
balance of funds paid to Landlord under the provisions of this
paragraph may, subject to proration as provided in paragraph 10.1(a),
at the option of Landlord, be treated as an additional Security
Deposit under paragraph 5.
(c) ADDITIONAL IMPROVEMENTS. Notwithstanding paragraph 10.1(a)
hereof, Tenant shall pay to Landlord upon demand therefor the entirety
of any increase in Real Property Taxes assessed by reason of
Alterations or Utility Installations placed upon the Premises by or on
behalf of Tenant or at Tenant's request.
10.2 DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy, charge or tax (other than
inheritance, personal income or estate taxes) imposed upon the Premises by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, levied against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, Landlord's right to rent or other income therefrom,
and/or Landlord's business of leasing the Premises. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment of charge, or any
increase therein, imposed by reason of events occurring, or changes in
applicable law taking effect, before or during the term of this Lease,
including, but not limited to, a change in the ownership of the Premises or in
the improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.
The STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM is an agency of
the State of California, and as such is exempt from the payment of ad valorem
real property taxes under Section 3(a) of Article XIII of the California
Constitution. However, Tenant's possessory interest in the Premises may be
subject to property taxation and to the payment of property taxes levied on
that interest. The full cash value, as defined in Sections 110 and 110.1 of
the Revenue and Taxation Code, of the possessory interest upon which property
taxes will be based shall equal the greater of (a) the full cash value of the
possessory interest of (b) if Tenant has leased less than all of the property
of which the Premises are a part, the Tenant's allocable share of the full
cash value of such property that would have been enrolled if such property
had been subject to property taxation upon acquisition by Landlord. Tenant's
allocable shall be Tenant's leasable square feet divided by the total leasable
square feet of such property. For the purposes of this Lease, the term "Real
Property Tax" shall also include (in addition to the matters described above)
possessory interest taxes and Tenant shall pay such possessory interest taxes
and in the manner and at the times required under paragraph 10.
10.3. JOINT ASSESSMENT. If the Premises are not separately assessed,
Tenant's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Landlord from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonable available. Landlord's reasonable determination thereof, in good
faith, shall be conclusive.
10.4. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Tenant contained in the Premises or elsewhere. When possible, Tenant shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Landlord. If any
of Tenant's said personal property shall be assessed with Landlord's real
property. Tenant shall pay Landlord the taxes attributable to Tenant within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Tenant's property or, at Landlord's option, as provided in
paragraph 10.1(b). Landlord's reasonable determination thereof, in good faith,
shall be conclusive.
11. UTILITIES
Tenant shall make all arrangements and pay for all water, gas, heat, light,
power, telephone, trash disposal, and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are not
separately metered to Tenant, Tenant shall pay a reasonable proportion, to be
determined by Landlord, of all charges jointly metered with other premises.
12. ASSIGNMENT AND SUBLETTING
12.1 LANDLORD'S CONSENT REQUIRED.
(a) Tenant shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"assignment") or sublet all or any part of Tenant's interest in this
Lease or in the Premises without Landlord's prior written consent
given under and subject to the terms of paragraph 36.
(b) A change in the control of Tenant shall constitute an
assignment requiring Landlord's consent. Any transfer of the voting
control of Tenant shall constitute a change in control for this
purpose. See First Addendum Paragraph 58.
(c) The involvement of Tenant or its assets in any transaction,
or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise),
whether or not a formal assignment or hypothecation of this Lease or
Tenant's assets occurs, which results or will result in a reduction of
the Net Worth of Tenant, as hereinafter defined, by an amount equal to
or greater than twenty-five percent (25%) of such Net Worth of Tenant
as it was represented to Landlord at the time of the execution by
Landlord of this Lease or at the time of the most recent assignment to
which Landlord has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at
whichever time said Net Worth of Tenant was or is greater, shall be
considered an assignment of this Lease by Tenant to which Landlord
may reasonably withhold its consent. "Net Worth of Tenant" for
purposes of this Lease shall be the net worth of Tenant (excluding any
guarantors) established under generally accepted accounting principles
consistently applied.
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(d) An assignment or subletting of Tenant's Interest in this
Lease without Landlord's specific prior written consent shall be void
and shall, at Landlord's option, be a Default curable after notice per
paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Landlord elects to treat such unconsented
to assignment or subletting as a noncurable Breach, Landlord shall
have the right to either: (i) terminate this Lease; or (ii) upon
thirty (30) days' written notice ("Landlord's Notice"), increase the
monthly Base Rent to fair market rental value or one hundred ten
percent (110%) of the Base Rent then in effect, whichever is greater.
Pending determination of the new fair market rental value, if disputed
by Tenant, Tenant shall pay the amount set forth in Landlord's Notice,
with any overpayment credited against the next installment(s) of Base
Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately
upon the determination thereof. Further, in the event of such Breach
and market value adjustment, (i) the purchase price of any option to
purchase the Premises held by Tenant shall be subject to similar
adjustment to the then fair market value (without the Lease being
considered an encumbrance or any deduction for depreciation or
obsolescence, and considering the Premises at its highest and best use
and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (ii) any index-oriented
rental or price adjustment formulas contained in this Lease shall be
adjusted to require that the base index be determined with reference
to the index applicable to the time of such adjustment, and (iii) any
fixed rental adjustments scheduled during the remainder of the Lease
term shall be increased in the same ratio as the new market rental
bears to the Base Rent in effect immediately prior to the market value
adjustment.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Landlord's consent, any assignment or
subletting shall not: (i) be effective without the express written
assumption by such assignee or subtenant of the obligations of Tenant
under this Lease; (ii) release Tenant of any obligations hereunder; or
(iii) alter the primary liability of Tenant for the payment of Base
Rent and other sums due Landlord hereunder or for the performance of
any other obligations to be performed by Tenant under this Lease.
(b) Landlord may accept any rent or performance of Tenant's
obligations from any person other than Tenant pending approval or
disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of any rent or
performance shall constitute a waiver or estoppel of Landlord's right
to exercise its remedies for the Default or Breach by Tenant of any of
the terms, covenants or conditions of this Lease.
(c) The consent of Landlord to any assignment or subletting
shall not constitute a consent to any subsequent assignment or
subletting by Tenant or to any subsequent or successive assignment or
subletting by the subtenant. However, Landlord may consent to
subsequent sublettings and assignments of the sublease or any
amendments or modifications thereto without notifying Tenant or anyone
else liable on the Lease or sublease and without obtaining their
consent, and such action shall not relieve such persons from liability
under this Lease or sublease.
(d) In the event of any Default or Breach of Tenant's
obligations under this Lease, Landlord may proceed directly against
Tenant, any Guarantors or any one else responsible for the performance
of the Tenant's obligations under this Lease, including the subtenant,
without first exhausting Landlord's remedies against any other person
or entity responsible therefor to Landlord, or any security held by
Landlord or Tenant.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Landlord's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or subtenant, including, but
not limited to, the name, business and financial condition of the
proposed assignee or subtenant, financial details of the proposed
transfer and the intended use and/or required modification of the
Premises, if any.
(f) Any assignee of, or subtenant under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Landlord, to have assumed and agreed to
conform and comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Tenant during the
term of said assignment or sublease, other than such obligations as
are contrary to or inconsistent with provisions of an assignment or
sublease to which Landlord has specifically consented in writing.
(g) The occurrence of a transaction described in paragraph
12.1(c) shall give Landlord the right (but not the obligation) to
require that the Security Deposit be increased to an amount equal to
six (6) times the then monthly Base Rent, and Landlord may make the
actual receipt by Landlord of the amount required to establish such
Security Deposit a condition to Landlord's consent to such
transaction.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's Interest in all rentals and income arising from any sublease
of all or a portion of the Premises heretofore or hereafter made by
Tenant, and Landlord may collect such rent and income and apply same
toward Tenant's obligations under this Lease; provided, however, that
until a Breach (as defined in paragraph 13.1) shall occur in the
performance of Tenant's obligations under this Lease, Tenant may,
except as otherwise provided in this Lease, receive, collect and enjoy
the rents accruing under such sublease. Landlord shall not, by reason
of this or any other assignment of such sublease to Landlord, nor by
reason of the collection of the rents from a subtenant, be deemed
liable to the subtenant for any failure of Tenant to perform and
comply with any of Tenant's obligations to such subtenant under such
sublease. Tenant hereby irrevocably authorizes and directs any such
subtenant, upon receipt of a written notice from Landlord stating that
a Breach exists in the performance of Tenant's obligations under this
Lease, to pay to Landlord the rents and other charges due and to
become due under the sublease. Subtenant shall rely upon any such
statement and request from Landlord and shall pay such rents and other
charges to Landlord without any obligation or right to inquire as to
whether such Breach exists and notwithstanding any notice from or
claim from Tenant to the contrary. Tenant shall have no right or
claim against said subtenant, or, until the Breach has been cured,
against Landlord, for any such rents and other charges so paid by said
subtenant to Landlord.
(b) In the event of a Breach by Tenant in the performance of its
obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord,
in which event Landlord shall undertake the obligations of the
sublandlord under such sublease from the time of the
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exercise of said option to the expiration of such sublease;
provided, however, Landlord shall not be liable for any prepaid
rents or security deposit paid by such subtenant to such sublandlord
or for any other prior Defaults or Breaches of such sublandlord
under such sublease.
(c) Any matter or thing requiring the consent of the
sublandlord under a sublease shall also require the consent of
Landlord herein.
(d) No subtenant shall further assign or sublet all or any
part of the Premises without Landlord's prior written consent.
(e) Landlord shall deliver a copy of any notice of Default or
Breach by Tenant to the subtenant, who shall have the right to cure
the Default of Tenant within the grace period, if any, specified in
such notice. The subtenant shall have a right of reimbursement and
offset from and against Tenant for any such Defaults cured by the
subtenant.
13. DEFAULT; BREACH; REMEDIES
13.1 DEFAULT; BREACH. Landlord and Tenant agree that if an attorney is
consulted by Landlord in connection with a Tenant Default or Breach (as
hereinafter defined), THREE HUNDRED FIFTY DOLLARS ($350.00) is a reasonable
minimum sum per such occurrence for legal services and costs in the preparation
and service of a notice of Default, and that Landlord may include the cost of
such services and costs in said notice as rent due and payable to cure said
Default. A "Default" is defined as a failure by the Tenant to observe, comply
with or perform any of the terms, covenants, conditions or rules applicable to
Tenant under this Lease. A "Breach" is defined as the occurrence of any one or
more of the following Defaults, and, where a grace period for cure after notice
is specified herein, the failure by Tenant to cure such Default prior to the
expiration of the applicable grace period, and shall entitle Landlord to pursue
the remedies set forth in paragraphs 13.2 and 13.3:
(a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.
(b) The failure by Tenant to make any payment of Base Rent or
any other monetary payment required to be made by Tenant hereunder,
whether to Landlord or to a third party, as and when due; the
failure by Tenant to provide Landlord with reasonable evidence of
insurance or surety bond required under this Lease; or the failure
of Tenant to fulfill any obligation under this Lease which endangers
or threatens life or property or the environment, where such failure
continues for a period of three (3) days following written notice
thereof by or on behalf of Landlord to Tenant.
(c) The failure by Tenant to provide Landlord with reasonable
written evidence (in duly executed original form, if applicable) of
(i) compliance with Applicable Law per paragraph 6.3, (ii) the
rescission of an unauthorized assignment or subletting per paragraph
12.1(d) (if Landlord elects to treat such assignment or subletting
as a curable Default), (iii) a Tenancy Statement per paragraph 16 or
37, (iv) the subordination or nonsubordination of this Lease per
paragraph 30, (v) the guaranty of the performance of Tenant's
obligations under this Lease if required under paragraph 1.11 and
37, (vi) the execution of any document requested under paragraph 42
(easements), or (vii) any other documentation or information which
Landlord may reasonably require of Tenant under the terms of this
Lease, where any such failure continues for a period of twenty (20)
days following written notice by or on behalf of Landlord to Tenant.
(d) A Default by Tenant as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under paragraph
40 hereof, that are to be observed, complied with or performed by
Tenant, other than those described in subparagraph (a), (b) or (c),
above, where such Default continues for a period of thirty (30) days
after written notice thereof by or on behalf of Landlord to Tenant;
provided, however, that if the nature of Tenant's Default is such
that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease by
Tenant if Tenant commences such cure within said thirty (30)-day
period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the
making by Tenant of any general arrangement or assignment for the
benefit of creditors; (ii) Tenant's becoming a "debtor" as defined
in 11 U.S.C. Section 101 or any successor statute thereto (unless,
in the case of a petition filed against Tenant, the same is
dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where possession is not restored to Tenant within thirty
(30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure
is not discharged within thirty (30) days; provided, however, in the
event that any provision of this subparagraph (e) is contrary to any
applicable law, such provision shall be of no force or effect, and
not affect the validity of the remaining provisions.
(f) The discovery by Landlord that any representation,
warranty or financial statement given to Landlord by Tenant or any
Guarantor of Tenant's obligations hereunder was materially false or
misleading.
(g) If the performance of Tenant's obligations under this
Lease is guaranteed: (i) the death of a guarantor; (ii) the
termination of a guarantor's liability with respect to this Lease
other than in accordance with the terms of such guaranty; (iii) a
guarantor's becoming insolvent or the subject of a bankruptcy
filing; (iv) guarantor's refusal to honor the guaranty; or (v) a
guarantor's breach of its guaranty obligation on an anticipatory
breach basis, and Tenant's failure, within sixty (60) days following
written notice by or on behalf of Landlord to Tenant of any such
event, to provide Landlord with written alternative assurance or
security, which, when coupled with the then existing resources of
Tenant, equals or exceeds the combined financial resources of Tenant
and the guarantors that existed at the time of execution of this
Lease.
13.2 REMEDIES. If Tenant fails to perform any affirmative duty or
obligation of Tenant under this Lease, within ten (10) days after written notice
to Tenant (or in case of an emergency, without notice), Landlord may, at its
option (but without obligation to do so), perform such duty or obligation on
Tenant's behalf, including, but not limited to, the obtaining of reasonably
required bonds, insurance policies or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Landlord
(including penalties, interest and attorneys' fees incurred in connection
therewith) shall be due and payable by Tenant to Landlord upon invoice therefor.
If any check given to Landlord by Tenant shall not be honored by the bank upon
which it is drawn, Landlord, at its option, may require all future payments to
be made under this Lease by Tenant to be made only by cashier's check. In the
event of a Breach of this Lease by Tenant, as defined in paragraph 13.1, with or
without further notice or demand, and without limiting Landlord in the exercise
of any right or remedy which Landlord may have by reason of such Breach,
Landlord may:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall
terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event Landlord shall be entitled to
recover from Tenant: (i) the worth at the time of the award of the
unpaid rent which had been earned at the time of termination; (ii)
the worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that the Tenant
proves could have been reasonably avoided; (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance
of the term after the time of award exceeds the amount of such
rental loss that the Tenant proves could be reasonably avoided; and
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(iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by the Tenant's failure to perform its
obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom, including, but not
limited to, the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys' fees, and that portion of the
leasing commission paid by Landlord applicable to the unexpired term
of this Lease. The worth at the time of award of the amount
referred to in provisions (i) and (ii) of the prior sentence shall
be computed by allowing interest at the rate of twelve percent (12%)
per annum, but not exceeding the maximum rate then allowed by law.
The worth at the time of award of the amount referred to in
provision (iii) of the first sentence of this subparagraph (a) shall
be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). Efforts by Landlord to mitigate damages caused by
Tenant's Default or Breach of this Lease shall not waive Landlord's
right to recover damagers under this paragraph. If termination of
this Lease is obtained through the provisional remedy of unlawful
detainer, Landlord shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein,
or Landlord may reserve therein the right to recover all or any part
thereof in a separate suit for such rent and/or damages. If a
notice and grace period required under paragraph 13.1(b), (c) or (d)
was not previously given, a notice to pay rent or quit, or to
perform or quit, as the case may be, given to Tenant under any
statute authorizing the forfeiture of leases for unlawful detainer
shall also constitute the applicable notice for grace period
purposes required by paragraph 13.1(b), (c) or (d). In such case,
the applicable grace period under paragraph 13.1(b), (c) or (d) and
under the unlawful detainer statute shall run concurrently after the
one (1) such statutory notice, and the failure of Tenant to cure the
Default within the greater of the two (2) such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease
entitling Landlord to the remedies provided for in this Lease and/or
by said statute.
(b) Continue the Lease and Tenant's right to possession in
effect under California Civil Code Section 1951.4 after Tenant's
Breach and abandonment and recover the rent as it becomes due,
provided Tenant has the right to sublet or assign, subject only to
reasonable limitations. See paragraphs 12 and 36 for the
limitations on assignment and subletting, which limitations Tenant
and Landlord agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises or the appointment of a
receiver to protect the Landlord's interest under the Lease shall
not constitute a termination of the Tenant's right to possession.
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which
the Premises are located.
(d) The expiration or termination of this Lease and/or the
termination of Tenant's right to possession shall not relieve Tenant
from liability under any indemnity provisions of this Lease as to
matters occurring or accruing during the term hereof or by reason of
Tenant's occupancy of the Premises.
(e) Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law in the event
Tenant is evicted or Landlord takes possession of the Premises by
reason of a Breach.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by
Landlord for free or abated rent or other charges applicable to the Premises,
or for the giving or paying by Landlord to or for Tenant of any cash or other
bonus, inducement or consideration for Tenant's entering into this Lease, all
of which concessions are hereinafter referred to as "Inducement Provisions,"
shall be deemed conditioned upon Tenant's full and faithful performance of
all of the terms, covenants and conditions of this Lease to be performed or
observed by Tenant during the term hereof as the same may be extended. Upon
the occurrence of an uncured Breach of this Lease by Tenant, as defined in
paragraph 13.1, any such Inducement Provision shall automatically be deemed
deleted from this Lease and of no further force or effect, and any rent,
other charge, bonus, inducement or consideration theretofore abated, given or
paid by Landlord under such an Inducement Provision shall be immediately due
and payable by Tenant to Landlord, and recoverable by Landlord as additional
rent due under this Lease, notwithstanding any subsequent cure of said Breach
by Tenant. The acceptance by Landlord of rent or the cure of the Breach
which initiated the operation of this paragraph shall not be deemed a waiver
by Landlord of the provisions of this paragraph unless specifically so stated
in writing by Landlord at the time of such acceptance.
13.4 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums 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
upon Landlord by the terms of any ground lease, mortgage or trust deed
covering the Premises. Accordingly, if any installment of rent or any other
sum due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to six percent (6%) 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 or Breach with respect to such overdue amount, or prevent Landlord
from exercising any of the other rights and remedies granted hereunder. In
the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding
paragraph 4.1 or any other provision of this Lease to the contrary, Base
Rent shall, at Landlord's option, become due and payable quarterly in
advance. Landlord's failure to promptly enforce Landlord's right to any late
charge shall not be a waiver of Landlord's right to collect such late charge
or any subsequent late charge.
13.5 BREACH BY LANDLORD. Landlord shall not be deemed in breach of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord. For purposes of this
paragraph 13.5 [ILLEGIBLE] Paragraph 5.7 of the First Addendum a reasonable
time shall in no event be less than thirty (30) days after receipt by
Landlord, and by the holders of any ground lease, mortgage or deed of trust
covering the Premises whose name and address shall have been furnished Tenant
in writing for such purpose, of written notice specifying wherein such
obligation of Landlord has not been performed; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days after
such notice are reasonably required for its performance, then Landlord shall
not be in Breach of this Lease if performance is commenced within such thirty
(30)-day period and thereafter diligently pursued to completion. If Tenant
obtains a money judgment against Landlord resulting from any breach or other
claim arising under this Lease, that judgment shall be satisfied only out of
Landlord's right, title and interest in the Premises and out of rent or other
income from the Premises receivable by Landlord. No other real, personal or
mixed property of Landlord, wherever situated, shall be subject to levy to
satisfy such judgment. Neither Landlord nor any of its trustees, directors
or officers, employees or agents shall ever be personally liable for any such
judgment. Tenant shall not have the right to withhold, reduce or offset any
amount against any payments of rent or any other charges due and payable
under this Lease by reason of a breach of this Lease by Landlord.
14. CONDEMNATION
If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of said power (all of which are
herein called "condemnation"), this Lease shall terminate as to the part so
taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than twenty
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percent (20%) of the floor area of the Premises, or more than twenty percent
(20%) of the land area not occupied by any building, is taken by condemnation,
either Landlord or Tenant may, at its option, to be exercised in writing 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 have
taken possession), terminate this Lease as of the date the condemning authority
takes such possession. If neither Landlord nor Tenant terminates this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises taken
(less any addition thereto by reason of any reconstruction) bears to the
original rentable floor area of the Premises. No reduction of Base Rent shall
occur if the only portion of the Premises taken is land on which there is no
building. Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of such
power shall be the property of Landlord, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Tenant shall be entitled
to any compensation separately awarded to Tenant for Tenant's relocation
expenses and/or loss of Tenant's Trade Fixtures. In the event that this Lease
is not terminated by reason of such condemnation, Landlord shall, to the extent
of its net severance damages received, over and above the legal and other
expenses incurred by Landlord in the condemnation matter, repair any damage to
the Premises caused by such condemnation, except to the extent that Tenant has
been reimbursed therefor by the condemning authority. Tenant shall be
responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.
15. BROKER'S FEE
15.1 The Brokers named in paragraph 1.10 are the procuring causes of this
Lease.
15.2 Upon full execution of this Lease by both Parties, Landlord shall pay
to Landlord's Broker named in paragraph 1.10 a fee as set forth in a separate
written agreement between Landlord and said Broker for brokerage services
rendered to Landlord in this transaction. If a Tenant's Broker is named in
paragraph 1.10, Landlord's Broker shall pay an appropriate portion of its fee to
Tenant's Broker if so provided in any agreement between Landlord's Broker and
Tenant's Broker. Nothing contained in this Lease shall impose any obligation on
Landlord to pay a commission or fee to any party other than Landlord's Broker.
15.3 Tenant and Landlord each represents and warrants to the other that it
has had no dealings with any person, firm, broker or finder (other than the
Brokers, if any, named in paragraph 1.10) in connection with the negotiation of
this Lease and/or the consummation of the transaction contemplated hereby, and
that no broker or other person, firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said transaction.
Tenant and Landlord do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges which
may be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the Indemnifying Party, including any
costs, expenses and attorneys' fees reasonably incurred with respect thereto.
15.4 Landlord and Tenant hereby consent to and approve all agency
relationships, including any dual agencies, indicated in paragraph 1.10.
16. TENANCY STATEMENT
16.1 Each Party (as "Responding Party") shall, within ten (10) days after
written notice from the other Party (the "Requesting Party"), execute,
acknowledge and deliver to the Requesting Party a statement in writing
certifying: (i) that this Lease is unmodified and in full force and effect (or
in full force and effect as modified, as stating the modifications); (ii) the
amount of, and date to which Base Rent and other charges have been paid in
advance; (iii) the amount of any security deposit; (iv) acknowledging that the
Requesting Party is not in default under this Lease (or, if the Requesting Party
is claimed to be in default, stating the nature of the default); and (v) such
additional information, confirmation and/or statements as may be reasonably
requested by the Requesting Party.
16.2 If Landlord desires to finance, refinance or sell the Premises, any
part thereof or the building of which the Premises are a part, Tenant and all
Guarantors of Tenant's performance hereunder shall deliver to any potential
lender or purchaser designated by Landlord such financial statements of Tenant
and such Guarantors as may be reasonably required by such lender or purchaser,
including, but not limited to, Tenant's financial statements for the past three
(3) years. All such financial statements shall be received by Landlord and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. LANDLORD'S LIABILITY
The term "Landlord" as used herein shall mean the owner or owners at the
time in question of the fee title to the Premises or, if this is a sublease, of
the Tenant's interest in the prior lease. In the event of a transfer of
Landlord's title or interest in the Premises or in this Lease, Landlord shall
deliver to the transferee or assignee (in cash or by credit) any unused Security
Deposit held by Landlord at the time of such transfer or assignment. Upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Landlord shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be performed by the
Landlord. Subject to the foregoing, the obligations and/or covenants in this
Lease to be performed by the Landlord shall be binding only upon the Landlord as
hereinabove defined.
18. SEVERABILITY
The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other
provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS
Except as expressly otherwise provided in this Lease, any monetary payment
due Landlord hereunder, other than late charges, which is not received by
Landlord on the date on which it was due, shall bear interest from the day after
it was due at the rate of twelve percent (12%) per annum, but not exceeding the
maximum rate then allowed by law, in addition to the late charge provided for in
paragraph 13.4.
20. TIME OF ESSENCE
Time is of the essence with respect to the performance of all obligations
to be performed or observed by the Parties under this Lease.
21. RENT DEFINED
All monetary obligations of Tenant to Landlord under the terms of this
Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS
This Lease contains all agreements between the Parties with respect to any
matter mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective.
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PAGE 13
23. NOTICES
All notices required or permitted by this Lease shall be in writing and may
be delivered in person (by hand or by messenger or courier service) or may be
sent by regular, certified or registered mail or U.S. Postal Service Express
Mail, with postage prepaid, or by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this paragraph 23.
Notices shall be addressed as follows:
Landlord: State of California Public Employees'
Retirement System
c/▇ ▇▇▇▇▇▇▇▇ Properties Limited, Inc.
Attn: Property Manager, Southern
California Industrial
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT: Fortune Dogs, Inc., dba Big Dog Sportswear
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
copy: Equity Real Estate ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3510 Torrance Blvd#209 (805) 963-8727
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Either Party may, by written notice to the other, specify a different address
for notice purposes, except that upon Tenant's taking possession of the
Premises, the Premises shall constitute Tenant's address for the purpose of
mailing or delivering notices to Tenant. A copy of all notices required or
permitted to be given to Landlord hereunder shall be concurrently transmitted to
such party or parties at such addresses as Landlord may from time to time
hereafter designate by written notice to Tenant.
Any notice sent by registered or certified mail, return receipt requested,
shall be deemed given on the date of delivery shown on the receipt card, or if
no delivery date is shown, the postmark thereon. If sent by regular mail, the
notice shall be deemed given forty-eight (48) hours after the same is addressed
as required herein and mailed with postage prepaid. Notices delivered by United
States Express Mail or overnight courier that guarantees next-day delivery shall
be deemed given twenty-four (24) hours after delivery of the same to the United
States Postal Service or courier. If any notice is transmitted by facsimile
transmission or similar means, the same shall be deemed served or delivered upon
telephone confirmation of receipt of the transmission thereof, provided a copy
is also delivered via delivery or mail. If notice is received on a Sunday or
legal holiday, it shall be deemed received on the next business day.
24. WAIVERS
No waiver by Landlord of the Default or Breach of any term, covenant or
condition hereof by Tenant shall be deemed a waiver of any other term, covenant
or condition hereof, or of any subsequent Default or Breach by Tenant of the
same or of any other term, covenant or condition hereof. Landlord's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to, or approval of, any subsequent or similar act by
Tenant, or be construed as the basis of an estoppel to enforce the provision or
provisions of this Lease requiring such consent. Regardless of Landlord's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Landlord shall not be a waiver of any preceding Default or Breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular rent so accepted. Any payment given Landlord by Tenant may be
accepted by Landlord on account of monies or damages due Landlord,
notwithstanding any qualifying statements or conditions made by Tenant in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Landlord
at or before the time of deposit of such payment.
25. RECORDING
Either Landlord or Tenant shall, upon request of the other, execute,
acknowledge and deliver to the other a short form memorandum of this Lease for
recording purposes. The Party requesting recordation shall be responsible for
payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLD OVER
Tenant has no right to retain possession of the Premises or any part
thereof beyond the expiration or earlier termination of this Lease. Tenant
shall indemnify, defend and hold Landlord harmless of and from any and all
claims, demands, liabilities, losses, costs, expenses (including attorneys'
fees) and damages incurred by Landlord as a result of any delay by Tenant in
vacating the Premises. If Tenant does not vacate the Premises upon the
expiration of termination of the term and Landlord thereafter accepts rent from
Tenant, Tenant's occupancy of the Premises shall be a tenancy from month-to-
month only, subject to all of the terms and conditions of this Lease applicable
to a month-to-month tenancy, except that Base Rent shall be increased to one
hundred fifty percent (150%) of the Base Rent in effect during the last month of
the term.
27. CUMULATIVE REMEDIES
No remedy or election of Landlord hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other rights and remedies at
law or in equity.
28. COVENANTS AND CONDITIONS
All provisions of this Lease to be observed or performed by Tenant are both
covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW
This Lease shall be binding upon the parties, their personal
representatives and permitted successors and assigns. This Lease shall be
governed by the laws of the State of California. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. SUBORDINATION; ATTORNMENT; NONDISTURBANCE
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Landlord upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Tenant
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Landlord under this
Lease, but that in the event of Landlord's default with respect to any such
obligation, Tenant will give any Lender whose name and address has been
furnished Tenant in writing for such purpose, notice of Landlord's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Tenant may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Tenant, this
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PAGE 14
Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the documentation or recordation thereof.
30.2 ATTORNMENT. Subject to the nondisturbance provisions of paragraph
30.3, Tenant agrees to attorn to and recognize as the Landlord under this Lease
a Lender or any other party who acquires ownership of the Premises by reason of
a foreclosure of a Security Device, and that in the event of such foreclosure,
such new owner shall not be: (a) liable for any act or omission of any prior
landlord or with respect to events occurring prior to acquisition of ownership;
(b) subject to any offsets or defenses which Tenant might have against any prior
landlord; or (c) bound by prepayment of more than one (1) month's rent.
30.3 NONDISTURBANCE. With respect to Security Devices entered into by
Landlord after the execution of this Lease, Landlord agrees to use diligent
efforts to obtain assurance (a "nondisturbance agreement") from the Lender that
Tenant's possession and this Lease, including any Options to extend the term
hereof, will not be disturbed so long as Tenant is not in Breach hereof and
attorns to the record owner of the Premises.
30.4 SELF-EXECUTING. The agreements contained in this paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Landlord or a Lender in connection with a sale,
financing or refinancing of the Premises, Tenant and Landlord shall execute such
further writings as may be reasonably required to separately document any such
subordination or nonsubordination, attornment and/or nondisturbance agreement as
is provided for herein.
31. ATTORNEYS' FEES
If either Party brings an action or proceeding for Breach of this Lease, to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action or appeal thereon, shall be
entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment or the
abandonment by the other Party of its claim or defense. The attorneys' fee
award shall not be computed in accordance with any court fee schedule, but shall
be such as to fully reimburse all attorneys' fees reasonably incurred. Landlord
shall be entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach.
32. LANDLORD'S ACCESS; SHOWING PREMISES; REPAIRS
Landlord and Landlord's agents shall have the right to enter the Premises
at any time, in the case of an emergency, and otherwise at reasonable times for
the purpose of inspecting the same, showing the same to prospective purchasers,
lenders or tenants, and making such alterations, repairs, improvements or
additions to the Premises or to the building of which they are a part as
Landlord may reasonably deem necessary or prudent. Landlord may, at any time,
place on or about the Premises or building any ordinary "For Sale" signs and
Landlord may, at any time during the last one hundred eighty (180) days of the
term hereof, place on or about the Premises any ordinary "For Lease" signs. All
such activities of Landlord shall be without abatement of rent or liability to
Tenant.
33. AUCTIONS
Tenant shall not conduct, or permit to be conducted, either voluntarily or
involuntarily, any auction upon the Premises without first having obtained
Landlord's prior written consent. Notwithstanding anything to the contrary in
this Lease, Landlord shall not be obligated to exercise any standard of
reasonableness in determining whether to grant such consent.
34. SIGNS
Tenant shall not place any sign upon the Premises, except that Tenant may,
with Landlord's prior written consent, install (but not on the roof) such signs
as are reasonably required to advertise Tenant's own business in the location
designated by Landlord, in Landlord's sole discretion. The installation of any
sign on the Premises by or for Tenant shall be subject to the provisions of
paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations). Unless otherwise expressly agreed herein, Landlord reserves all
rights to the use of the roof and the right to install, and all revenues from
the installation of, such advertising signs on the Premises, including the roof,
as do not unreasonably interfere with the conduct of Tenant's business.
35. TERMINATION; MERGER
Unless specifically stated otherwise in writing by Landlord, the voluntary
or other surrender of this Lease by Tenant, the mutual termination or
cancellation hereof, or a termination hereof by Landlord for Breach by Tenant,
shall automatically terminate any sublease or lesser estate in the Premises;
provided, however, Landlord shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Landlord's failure within thirty (30) days following any
such event to make a written election to the contrary by written notice to the
holder of any such lesser interest, shall constitute Landlord's election to have
such event constitute the termination of such interest.
36. CONSENTS
36.1 Except for paragraph 33 (Auctions), 34 (location of signs) or as
otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be
unreasonably withheld or delayed. Landlord's actual reasonable costs and
expenses (including, but not limited to, architects', attorneys', engineers' or
other consultants' fees) incurred in the consideration of, or response to, a
request by Tenant for and Landlord consent pertaining to this Lease or the
Premises, including, but not limited to, consents to an assignment, a subletting
or the presence or use of a Hazardous Material or Toxic Substance, practice or
storage tank, shall be paid by Tenant to Landlord upon receipt of an invoice and
supporting documentation therefor. Subject to paragraph 12.2(e) (applicable to
assignment or subletting), Landlord may, as a condition to considering any such
request by Tenant, require that Tenant deposit with Landlord an amount of money
(in addition to the Security Deposit held under paragraph 5) reasonably
calculated by Landlord to represent the cost Landlord will incur in considering
and responding to Tenant's request. Except as otherwise provided, any unused
portion of said deposit shall be refunded to Tenant without interest.
Landlord's consent to any act, assignment of this Lease or subletting of the
Premises by Tenant shall not constitute an acknowledgment that no Default or
Breach by Tenant of this Lease exists, nor shall such consent be deemed a waiver
of any then existing Default or Breach, except as may be otherwise specifically
stated in writing by Landlord at the time of such consent.
36.2 All conditions to Landlord's consent authorized by this Lease are
acknowledged by Tenant as being reasonable. The failure to specify herein any
particular condition to Landlord's consent shall not preclude the imposition by
Landlord at the time on consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
PAGE 15 Initials [ILLEGIBLE]
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37. GUARANTOR
37.1 If there are to be any Guarantors of this Lease per paragraph 1.11,
the guaranty shall be on a form provided by Landlord, and each said Guarantor
shall have the same obligations as Tenant under this Lease, including, but not
limited to, the obligation to provide the Tenancy Statement and information
called for by paragraph 16.
37.2 It shall constitute a Default of the Tenant under this Lease if any
such Guarantor fails or refuses, upon reasonable request by Landlord, to give:
(a) evidence of the due execution of the guaranty called for by this Lease,
including the authority of the Guarantor (and of the party signing on
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including,
in the case of a corporate guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signatures of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may, from
time to time, be requested by Landlord, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
38. QUIET POSSESSION
Upon payment by Tenant of the rent for the Premises and the observance and
performance of all of the covenants, conditions and provisions on Tenant's part
to be observed and performed under this Lease, Tenant shall have quiet
possession of the Premises for the term hereof as against any person claiming
the same by, through or under Landlord, subject to all of the provisions of this
Lease.
39. OPTIONS
39.1 DEFINITION. As used in this paragraph 39, the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Tenant has on other property of
Landlord; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Landlord or the right of first offer to lease other property of
Landlord; and (c) the right to purchase the Premises, or the right of first
refusal to purchase the Premises, or the right of first offer to purchase the
Premises, or the right to purchase other property of Landlord, or the right of
first refusal to purchase other property of Landlord, or the right of first
offer to purchase other property of Landlord.
39.2 OPTIONS PERSONAL TO ORIGINAL TENANT. Each Option granted to Tenant in
this Lease is personal to the original Tenant named in paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Tenant and any assignee the transfer to which
Lessor's consent is not required hereunder or as to which such consent was
given. No Option may be separated from this Lease in any manner, by reservation
or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Tenant has any multiple Options
to extend or renew this Lease, a later option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Tenant shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary:
(i) during the period commencing with the giving of any notice of
Default under paragraph 13.1 and continuing until the noticed Default
is cured; or (ii) during the period of time any monetary obligation
due Landlord from Tenant is unpaid (without regard to whether notice
thereof is given Tenant); or (iii) during the time Tenant is in Breach
of this Lease; or (vi) in the event that Landlord has given to Tenant
three (3) or more notices of Default under paragraph 13.1, whether or
not the Defaults are cured, during the twelve (12)-month period
immediately preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Tenant's inability to
exercise an Option because of the provision of paragraph 39.4(a).
(c) All rights of Tenant under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding
Tenant's due and timely exercise of the Option, if, after such
exercise and during the term of this Lease, (i) Tenant fails to pay to
Landlord a monetary obligation of Tenant for a period of thirty (30)
days after such obligation becomes due (without any necessity of
Landlord to give notice thereof to Tenant), or (ii) Landlord gives to
Tenant three (3) or more notices of Default under paragraph 13.1
during any twelve (12)-month period, whether or not the Defaults are
cured, or (iii) if Tenant commits a Breach of this Lease.
40. MULTIPLE BUILDINGS
If the Premises are part of a group of buildings controlled by Landlord,
Tenant agrees that it will abide by, keep and observe all reasonable rules and
regulations which Landlord may make from time to time for the management,
safety, care and cleanliness of the grounds, the parking and unloading of
vehicles and the preservation of good order, as well as for the convenience of
other occupants or tenants of such other buildings and their invitees, and that
Tenant will pay its fair share of common expenses incurred in connection
therewith.
41. SECURITY MEASURES
Tenant hereby acknowledges that the rental payable to Landlord hereunder
does not include the cost of guard service or other security measures, and that
Landlord shall have no obligation whatsoever to provide same. Tenant assumes
all responsibility for the protection of the Premises, Tenant, its agents and
invitees and their property from the acts of third parties.
42. RESERVATIONS
Landlord reserves to itself the right, from time to time, to grant, without
the consent or joinder of Tenant, such easements, rights and dedications that
Landlord deems necessary or desirable, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Tenant. Tenant agrees to sign any documents reasonably requested by Landlord to
effectuate any such easement rights, dedication, map or restrictions.
43. AUTHORITY
If Tenant is a corporation, trust, or general or limited partnership, each
individual executing this Lease on behalf of Tenant represents and warrants that
he or she is duly authorized to execute and deliver this Lease on its behalf and
that this Lease is binding upon Tenant in accordance with its terms. If Tenant
is a corporation, trust or partnership, Tenant shall, within thirty (30) days
after request by Landlord, deliver to Landlord evidence satisfactory to Landlord
of such authority.
44. CONFLICT
Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
PAGE 16 Initials [ILLEGIBLE]
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EXECUTED AT Santa Barbara, California, on January 30, 1995.
TENANT:
FORTUNE DOGS, INC. dba BIG DOG SPORTSWEAR.
-------------------------------------------
a California corporation
--------------------------------------
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Its President
--------------------------------------
President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Its S. Vice President & Secretary
--------------------------------------
Senior Vice President and Secretary
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------
---------------------------------
(▇▇▇) ▇▇▇-▇▇▇▇
----- --- ----
FAX: (____) ___-____
PAGE 18 Initials______
45. OFFER
Preparation of this Lease by Landlord or Landlord's agent and submission of
same to Tenant shall not be deemed an offer to lease to Tenant. This Lease is
not intended to be binding and shall not be effective until executed by all
Parties hereto.
46. AMENDMENTS
This Lease may be modified only in writing, signed by the Parties in
interest at the time of the modification. As long as they do not materially
adversely affect Tenant's obligations hereunder, Tenant agrees to make such
reasonable nonmonetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the
property of which the Premises are a part.
47. MULTIPLE PARTIES
If more than one person or entity is named herein as Tenant, the obligations
imposed on each such person or entity shall be the joint and several
responsibility of all persons or entitles so named.
48. INTERPRETATION
The paragraph headings and captions of this Lease, the Hazardous Materials
Lease Rider and any and all other documents attached to and made a part of this
Lease are for convenience only and shall not be used to define or limit any
provision hereof or thereof. The language in all parts of this Lease shall be
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant. When the context of this Lease requires, the
neuter gender includes the masculine, the feminine, a partnership, corporation
or joint venture, the singular includes the plural, and the plural includes the
singular.
49. UNAVOIDABLE DELAY
If Landlord is delayed or prevented from performing any of its
obligations due to events beyond Landlord's reasonable control (including,
without limitation acts of God, war, civil commotion, labor disputes,
strikes, fire, flood, earthquake or other casualty, inability to procure
labor or materials, government regulation or restriction and adverse weather
conditions), the time provided for performing such obligations shall be
extended by a period of time equal to such delay.
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE
CONSULTED TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE
PRESENCE OF ASBESTOS, STORAGE TANKS OR HAZARDOUS MATERIALS OR TOXIC
SUBSTANCES.
The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
EXECUTED AT SACRAMENTO, California, on February 7, 1995.
LANDLORD:
STATE OF CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: LA SALLE ADVISORS LIMITED PARTNERSHIP
Its: As Advisor and Duly Authorized Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its Vice President
----------------------------------
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its Vice President
----------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
--AND--
PAGE 17 Initials______
HAZARDOUS MATERIALS LEASE RIDER
This Rider is attached to and made part of that certain Lease (the "Lease")
dated January 13, 1995, between STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM ("Landlord") and Fortune Dogs, Inc., dba Big Dog Sportswear, a California
corporation ("Tenant"), covering the premises commonly known as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ (the "Premises"). Capitalized terms not otherwise
defined in this Rider shall have the meaning given them in the Lease. The
provisions of this Rider shall supersede any inconsistent or conflicting
provisions of the Lease.
1. HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials and Toxic Substances on
or about the Premises:
A. As used herein, the terms "Hazardous Materials and/or Toxic
Substances" mean (1) any hazardous or toxic substance, material or waste
which is or becomes regulated by any local, state or federal government or
special district, (2) designated as a "hazardous substance" pursuant to
Section 1311 of the Federal Water Pollution Control Act (33 USC
Section 1317), (3) defined as a "hazardous waste" pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 USC Section 6901,
ET SEQ. (42 USC Section 6903), (4) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC Section 9601, ET SEQ. (42 USC
Section 9601), (5) defined as a "hazardous waste" or as a "hazardous
substance" pursuant to Section 25117, 25316 or 25821(d) of the California
Health and Safety Code, or (6) any infectious wastes or substances.
References herein to specific statutes or laws shall also be references to
any amendments of or applicable successor statutes or laws.
B. Tenant shall not cause or permit any Hazardous Materials or Toxic
Substances to be brought upon, kept or used in or about the Premises or the
real property of which the Premises are a part (the "Project") by Tenant,
its agents, employees, contractors or invitees, without the prior written
consent of Landlord. Landlord shall not unreasonably withhold such consent
as long as Tenant demonstrates to Landlord's reasonable satisfaction and
covenants to Landlord that such Hazardous Materials or Toxic Substances are
necessary or useful to Tenant's business and will be used, kept and stored
in a manner that complies with all laws relating to any such Hazardous
Materials or Toxic Substances so brought upon or used or kept in or about
the Premises or the Project. If Tenant breaches the obligations stated in
the preceding sentence, or if the presence of Hazardous Materials or Toxic
Substances on the Premises or the Project caused or permitted by Tenant
results in contamination of the Premises or the Project, or if
contamination of the Premises or the Project by Hazardous Materials or
Toxic Substances otherwise occurs for which Tenant is legally liable to
Landlord for damage resulting therefrom, then Tenant shall indemnify,
defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the Premises or the Project, damages for
the loss or restriction on use of rentable or usable space or of any
amenity of the Premises or the Project, damages arising from any adverse
impact on marketing of space in the Project, and sums paid in settlement of
claims, actual attorneys' fees, consultant fees and expert fees), which
arise during or after the term of the Lease as a result of such
contamination. This indemnification of Landlord by Tenant includes,
without limitation, costs incurred in connection with any investigation of
site conditions, including regular inspections, or any clean-up, remedial,
removal or restoration work required or recommended by any federal, state
or local governmental agency or political subdivision because of Hazardous
Materials or Toxic Substances present in the soil or ground water on or
under the Premises and/or the Project. The indemnity, defense and hold
harmless obligations of Tenant under this Rider shall survive any
termination of this Lease. Without limiting the foregoing, if the presence
of any Hazardous Materials or Toxic Substances on the Premises or the
Project caused or permitted by Tenant results in any contamination of the
Premises or the Project, Tenant shall promptly take all actions at its sole
expense as are necessary to return the Premises and the Project to the
condition existing prior to the introduction of any such Hazardous
Materials or Toxic Substances; provided that, Landlord's approval of such
actions shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions, in Landlord's sole and absolute
discretion, would not potentially have any material adverse long-term or
short-term effect on the Premises or the Project.
C. Landlord shall have the right, at any time, to cause testing
▇▇▇▇▇ to be installed on or about the Premises and/or the Project, and may,
at its option, cause the ground water, soil and air to be tested to detect
the presence of Hazardous Materials or Toxic Substances at least once every
twelve (12) months during the term of the Lease by the use of such tests as
are then customarily used for such purposes. If Tenant so requests,
Landlord shall supply Tenant with copies of such test results. The cost of
such tests and of the maintenance, repair and replacement of such ▇▇▇▇▇
shall be fully paid for by Tenant within ten (10) days after receiving a
statement of charges from Landlord.
D. Landlord and Landlord's agents shall have the right to inspect
the Premises for the purposes of ascertaining Tenant's compliance with this
Rider. The cost of such inspections shall be reimbursed to Landlord by
Tenant. In the event of a spill or mishandling of Hazardous Materials or
Toxic Substances, Tenant shall immediately inform Landlord verbally and in
writing. Such notice shall identify the Hazardous Materials or Toxic
Substances involved and the emergency procedures taken.
E. It shall not be unreasonable for Landlord to withhold its consent
to any proposed assignment or sublease if: (1) the proposed assignee's or
sublessee's anticipated use of the Premises or the Project involves the
generation, storage, use, treatment or disposal of Hazardous Materials or
Toxic Substances; (2) the proposed assignee or sublessee has been required
by any prior landlord, lender or governmental authority to take remedial
action in connection with Hazardous Materials or Toxic Substances
contaminating a property if the contamination resulted from such assignee's
or sublessee's actions or use of the property in question; or (3) the
proposed assignee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal or storage of
any Hazardous Materials or Toxic Substances.
F. If Tenant presently uses in its business materials which may be
Hazardous Materials or Toxic Substances as defined in this Rider, Tenant
shall, prior to execution of the Lease, deliver to Landlord (1) a list of
all such Hazardous Materials and Toxic Substances, (2) a plan for use,
handling, storage and disposal of Hazardous Materials and Toxic Substances,
(3) the name, address, telephone number and qualifications of a licensed
company that will handle emergency clean-up for Tenant, and (4) a written
contingency plan for any emergency involving Hazardous Materials and Toxic
Substances. During the term of the Lease, Tenant shall immediately deliver
to Landlord (1) a new list of all such Hazardous Materials and Toxic
Substances, each time Tenant adds or changes the materials or substances it
uses and each time a material or substance used by Tenant becomes included
within the definition of Hazardous Materials or Toxic Substances under this
Lease (due to new or revised laws or otherwise), and (2) copies of all
reports required by any and all regulator agencies governing the use,
handling, storage and disposal of Hazardous Materials or Toxic Substances.
G. Landlord agrees that Tenant may use the Hazardous Materials and
Toxic Substances specifically consented to by Landlord as required by
paragraph 1B above, subject to the terms of this Lease and this Rider.
Tenant shall immediately notify Landlord in writing of any other materials
which may be used by Tenant or stored by Tenant on or about the Premises
which may be hazardous or toxic, and shall obtain Landlord's written
consent prior to such use or storage.
H. Any increase in the premium for insurance carried by Landlord or
required of Tenant under this Lease on the Premises or the Project which
arises from Tenant's use and/or storage of these materials shall be solely
at Tenant's expense. Tenant shall procure and maintain at its sole expense
such additional insurance as may be necessary to comply with any
requirement of any federal, state or local governmental agency or special
district with jurisdiction.
I. It is the intent of the parties hereto that the provisions of
this Lease Rider regarding the use and handling of Hazardous Materials and
Toxic Substances shall also apply to Tenant's storage upon the Premises of
any substances, including, but not limited to, gasoline and diesel fuels,
in above- or below-ground storage tanks.
J. Except as may be disclosed in the Phase II Environmental Report
for ▇▇▇▇ Gardens Industrial Park, Prentiss Properties, Limited, Inc., has
no actual knowledge of any Hazardous Material on the Premises in violation
of any Applicable Law. Tenant shall not be responsible for any Hazardous
Material contamination existing prior to the Commencement of this Lease
unless Tenant intentionally or negligently causes, permits or exacerbates
such contamination.
2. EXCULPATORY CLAUSE. The obligations of Landlord herein are intended
to be binding only upon the financial assets of the entity acting as Landlord
and shall not be personally binding, nor shall any resort be had to the
financial assets of any of its trustees or board of directors and officers, as
the case may be, its investment manager or any employees or agents of Landlord
or the investment manager.
LANDLORD:
LA SALLE ADVISORS LIMITED PARTNERSHIP,
As Advisor and Duly Authorized Agent for the
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its Vice President
------------------------------------------
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its Vice President
------------------------------------------
TENANT:
FORTUNE DOGS, INC., dba BIG DOG SPORTSWEAR
a California corporation
---------------------------------------------
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Its President
------------------------------------------
President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its S. Vice President & Secretary
------------------------------------------
Senior Vice President and Secretary
PAGE 2
MULTI-TENANT FACILITY
LEASE RIDER
This Rider is attached to and made part of that certain Lease (the "Lease")
dated January 13, 1995 between STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM, as Landlord, and FORTUNE DOGS, INC. dba BIG DOG SPORTSWEAR, a California
corporation, as Tenant, covering the premises commonly known as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ (the "Premises"). Capitalized terms not otherwise
defined in this Rider shall have the meaning given them in the Lease. The
provisions of this Rider shall prevail over any inconsistent or conflicting
provisions of the Lease.
1. PROJECT. The Premises are part of a multi-tenant industrial/commercial
real property development described in Exhibit "A" attached hereto and
incorporated herein by this reference (the "Project"). The Project includes the
land, the buildings and all other improvements located thereon, and the common
areas described in paragraph 2 below.
2. COMMON AREAS: USE, MAINTENANCE AND COSTS.
A. COMMON AREAS. As used in this Rider, "Common Areas" shall mean
all areas within the Project which are available for the common use of
tenants of the Project and which are not leased or held for the exclusive
use of Tenant or other tenants, including, but not limited to, parking
areas, driveways, sidewalks, loading areas, access roads, corridors,
landscaping and planted areas. Landlord may from time to time change the
size, location, nature and use of any of the Common Areas, including
converting Common Areas into leasable areas, constructing additional
parking facilities (including parking structures) in the Common Areas, and
increasing or decreasing Common Area land and/or facilities but no change
shall be made in Tenant's parking spaces unless required by applicable
governmental agency. Tenant acknowledges that such activities may result in
occasional inconvenience to Tenant from time to time. Such activities and
changes shall be expressly permitted if they do not materially affect
Tenant's use of the Premises.
B. USE OF COMMON AREAS. Tenant shall have the nonexclusive right (in
common with other tenants and all others to whom Landlord has granted or
may grant such rights) to use the Common Areas for the purposes intended,
subject to such reasonable rules and regulations as Landlord may establish
from time to time. Tenant shall abide by such rules and regulations and
shall use its best effort to cause others who use the Common Areas with
Tenant's expressed or implied permission to abide by Landlord's rules and
regulations. At any time, Landlord may close any Common Areas to perform
any acts in and to the Common Areas as, in Landlord's judgment, may be
desirable to improve the Project. Tenant shall not, at any time, interfere
with the rights of Landlord, other tenants, or any other person entitled to
use the Common Areas.
C. SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled
to use N/A vehicle parking spaces in the Project without paying any
additional rent. Tenant's parking shall not be reserved and shall be
limited to vehicles no larger than standard size automobiles or pickup
utility vehicles. Tenant shall not cause large trucks or other large
vehicles to be parked within the Project or on the adjacent public streets.
Temporary parking of large delivery vehicles in the Project may be
permitted by the rules and regulations established by Landlord. Vehicles
shall be parked only in striped parking spaces and not in driveways,
loading areas or other locations not specifically designated for parking.
If Tenant parks more vehicles in the parking area than the number set forth
in this paragraph, such conduct shall be a material breach of the Lease. In
addition to Landlord's other remedies under the Lease, Tenant shall pay a
reasonable daily charge for each such additional vehicle.
D. TENANT'S SHARE AND PAYMENT. Tenant's share of Common Areas
maintenance costs shall be paid as itemized Contractual Maintenance Costs
pursuant to paragraphs 7.1(b) and 7.5 of the Lease
(See First Addendum Paragraph 59)
Landlord warrants that Itemized Contractual Maintenance Costs have been
averaging approximately $0.06 per square foot during the prior two years
and that the computation of Itemized Contractual Maintenance Costs has
been and will remain the same for all tenants.
EXHIBIT "A"
[MAP]
OPTION TO EXTEND TERM
LEASE RIDER
This Rider is attached to and made part of that certain Lease (the
"Lease") dated January 13, 1995, between STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM, as Landlord, and FORTUNE DOGS, INC., dba Big
Dog Sportswear, a California corporation, as Tenant, covering the premises
commonly known as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
(the "Premises"). Capitalized terms not otherwise defined in this Rider shall
have the meaning given them in the Lease. The provisions of this Rider shall
supersede any inconsistent or conflicting provisions of the Lease.
1. OPTION(S) TO EXTEND TERM.
A. Landlord hereby grants to Tenant 1 option(s) (the "Option(s)")
to extend the Lease Term for additional term(s) of four (4) years each
(the "Extension(s)"), on the same terms and conditions as set forth in
the Lease, but at an increased rent as set forth below. Each Option
shall be exercised only by written notice delivered to Landlord at
least one hundred twenty (120) days before the expiration of the
Original Term or the preceding Extension of the Original Term,
respectively. If Tenant fails to deliver Landlord written notice of
the exercise of an Option within the prescribed time period, such
Option and any succeeding Options shall lapse, and there shall be no
further right to extend the Original Term. Each Option shall be
exercisable by Tenant on the express conditions that (a) at the time
of the exercise, and at all times prior to the commencement of such
Extension, Tenant shall not be in default under any of the provisions
of this Lease and (b) Tenant has not been ten (10) or more days late in
the payment of rent more than a total of three (3) times during the
Original Term and all preceding Extensions.
B. PERSONAL OPTIONS. The Option(s) are personal to the Tenant
named in paragraph 1.1 of the Lease. If Tenant subleases any portion of
the Premises or assigns or otherwise transfers any interest under the
Lease prior to the exercise of an Option (whether with or without
Landlord's consent), such Option and any succeeding Options shall lapse.
If Tenant subleases any portion of the Premises or assigns or otherwise
transfers any interest of Tenant under the Lease after the exercise of
an Option but prior to the commencement of the respective Extension
(whether with or without Landlord's consent), such Option and any
succeeding Options shall lapse and the Original Term shall expire as if
such Option were not exercised. If Tenant subleases any portion of the
Premises or assigns or otherwise transfers any interest of Tenant under
the Lease in accordance with paragraph 12 of the Lease after the
exercise of an Option and after the commencement of the Extension
related to such Option, then the term of the Lease shall expire upon the
expiration of the Extension during which such sublease or transfer
occurred and only the succeeding Options shall lapse.
2. CALCULATION OF RENT.
The Base Rent during the Extension(s) shall be determined by one or
combination of the following methods (INDICATE YOUR CHOICE UPON
EXECUTION OF THE LEASE):
(1) Cost of Living Adjustment (▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇) /X/
(2) Fair Rental Value Adjustment (paragraph 2B, below) / /
(3) Fixed ▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇) /X/
A. COST OF LIVING ADJUSTMENT. The Base Rent shall be increased
on the first day of the 31st month(s) of the 1st Extension(s) of the
Original Term (the "Rental Adjustment Date") by reference to the Index
or substitute Index defined in paragraph 4.2 of the Lease, as follows:
The Base Rent in effect immediately prior to the applicable Rental
Adjustment Date (the "Comparison Base Rent") shall be increased by the
percentage that the Index has increased from the month in which the
payment of the Comparison Base Rent commenced through the month in
which the applicable Rental Adjustment Date occurs Minimum 4% Maximum
8% per annum. In no event shall the Base Rent be reduced by reason of
such computation.
B. FAIR RENTAL VALUE ADJUSTMENT. The Base Rent shall be
increased on the first day of the N/A month(s) of the _______________
Extension(s) of the Lease Term (the "Rental Adjustment Date(s)") to the
"fair rental value" of the Premises, determined in the following manner:
(1) Not later than one hundred (100) days prior to any
applicable Rental Adjustment Date, Landlord and Tenant shall meet in an
effort to negotiate, in good faith, the fair rental value of the Premises
as of such Rental Adjustment Date. If Landlord and Tenant have not agreed
upon the fair rental value of the Premises at least ninety (90) days prior
to the applicable Rental Adjustment Date, the fair rental value shall be
determined by appraisal, as follows (INDICATE YOUR CHOICE UPON EXECUTION
OF THE LEASE):
Appraisal by Appraiser / / Appraisal by Broker / /
(2) If Landlord and Tenant are not able to agree upon the
fair rental value of the Premises within the prescribed time period, then
Landlord and Tenant shall attempt to agree in good faith upon a single
appraiser or broker, as indicated above, not later than seventy-five
(75) days prior the applicable Rental Adjustment Date. If Landlord and
Tenant are unable to agree upon a single appraiser/broker within such
time period, then Landlord and Tenant shall each appoint one appraiser
or broker, as indicated above, not later than sixty-five (65) days prior
to the applicable Rental Adjustment Date. Within ten (10) days thereafter,
the two (2) appointed appraisers/brokers shall appoint a third appraiser
or broker, as indicated above. If either Landlord or Tenant fails to
appoint its appraiser/broker within the prescribed time period, the single
appraiser/broker appointed shall determine the fair rental value of the
Premises. If both parties fail to appoint appraisers/brokers within the
prescribed time periods, then the first appraiser/broker thereafter
selected by a party shall determine the fair rental value of the Premises.
Each party shall bear the cost of its own appraiser or broker and the
parties shall share equally the cost of the single or third appraiser or
broker, if applicable. If appraisers are used, such appraisers shall have
at least five (5) years' experience in the appraisal of
commercial/industrial real property in the area in which the Premises is
located and shall be members of professional organizations such as MAI or
equivalent. If brokers are used, such brokers shall have at least five
(5) years' experience in the sales and leasing of commercial/industrial
real property in the area in which the Premises is located and shall be
members of professional organizations such as the Society of Industrial
Realtors or equivalent.
(3) For the purposes of such appraisal, the term "fair market
value" shall mean the price that a ready and willing tenant would pay,
as of the applicable Rental Adjustment Date, as monthly rent
Initials ILLEGIBLE
---------
ILLEGIBLE
---------
to a ready and willing landlord of property comparable to the Premises
if such property were exposed for lease on the open market for a
reasonable period of time and taking into account all of the purposes
for which the Premises may be used. If a single appraiser/broker is
chosen, then such appraiser/broker shall determine the fair rental value
of the Premises. Otherwise, the fair rental value of the Premises
shall be the arithmetic average of the two (2) of the three (3)
appraisals which are closest in amount, and the third appraisal shall
be disregarded. In no event, however, shall the Base Rent be reduced
by reason of such computation. Landlord and Tenant shall instruct
the appraiser(s)/ broker(s) to complete their determination of the
fair rental value not later than thirty (30) days prior to the
applicable Rental Adjustment Date. If the fair rental value is not
determined prior to the applicable Rental Adjustment Date, then
Tenant shall continue to pay to Landlord the Base Rent applicable
to the Property immediately prior to such Extension, until the fair
rental value is determined. When the fair rental value of the Property
is determined, Landlord shall deliver notice thereof to Tenant, and
Tenant shall pay to Landlord, within ten (10) days after receipt
of such notice, the difference between the Base Rent actually paid
by Tenant to Landlord and the new Base Rent determined hereunder.
C. FIXED ADJUSTMENT. The Base Rent shall be increased to the
following amounts on the following dates: August 15, 1998 - $22,000 per
month
Page 2
GROSS LEASE FORM
FIRST ADDENDUM TO LEASE
This Addendum to Lease dated January 13, 1995, by and between The State of
California Public Employees' Retirement System, Landlord, and Fortune Dogs,
Inc., A California Corporation, DBA: Big Dog Sportswear, Tenant, recites
provisions which are in addition to or in amendment of the Lease form and shall
be deemed to be a part of said Lease as if incorporated in the same Lease form
thereof, to wit: The provisions of this First Addendum to Lease shall prevail
over any inconsistent or conflicting provisions of the Lease, including the
riders attached to and made part thereof.
50) TENANT IMPROVEMENT - Tenant agrees to accept the premises in their "as is"
condition, subject to the following improvements to be made at the
Landlord's expense. Landlord shall at its sole costs and expense:
a) Paint, recarpet and retile the existing office and office
restrooms. Tenant shall select all paint and carpet colors from
Landlord's specifications.
b) Landlord shall install 10 foot chain link fencing in the parking
area. Location of fencing is to be mutually agreed to by both
Tenant and Landlord.
51) RENTAL ABATEMENT - Base rent only shall be abated for the first two (2)
months of both the original lease term and option period. During the
abatement period(s), Tenant shall remain liable for all cost associated
with Common Area Maintenance (CAM).
52) LEASE COMMENCEMENT - For the purpose of this agreement Lease Commencement
shall 3 days after Landlord substantially completes the Tenant Improvements
(as defined in paragraph 1) or when Tenant takes possession of the
warehouse area, whichever occurs first. Should Landlord not be able to
deliver possession of the premises to Tenant by February 15, 1995, Tenant
shall have the right to terminate this Lease Agreement in it's entirety by
providing written notice to Landlord within ten (10) days of such date.
53) RIGHT OF FIRST REFUSAL - If Tenant is not in default under any of the terms
of this Lease, Landlord shall grant to Tenant the Right of First Offer to
lease the adjacent 50,563 square feet, commonly known as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇., ▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Additional Premises"). Should a
Proposal to lease all or part of the Additional Premises be procured from a
third party, Landlord and Tenant shall have five (5) days from the date of
Landlord's notice to agree on a rental rate for the Additional Premises.
If Tenant and Landlord cannot agree as to the rent and any other terms of
the Additional Premises within the time period provided herein, This right
of first offer shall be of no further force and effect, and Landlord may
lease the Additional Premises to others under terms and conditions as
Landlord, in his sole discretion, may determine. If Tenant and Landlord
agree to the rent and terms of the Additional Premises, Tenant and Landlord
shall immediately execute an Amendment to Lease to confirm the rental and
to modify this Lease Agreement to include the following terms and
conditions:
A) The Additional Premises shall be part of the leased premises for the
remainder of the lease term, including any extension.
B) Landlord shall deliver the Additional Premises to the Tenant on such
date as may be agreed by Landlord and Tenant.
54) ROOF MAINTENANCE - Landlord shall maintain the building structure: roof,
walls, and foundation. Landlord shall remain liable for all cost
associated with the roof maintenance in excess of the preventative
maintenance contract payable by Tenant as part of common Area Maintenance
(CAM).
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55) EXISTING IMPROVEMENTS - Landlord shall assign it's interest, if any, in the
phone, alarm, paging systems and warehouse racking to Tenant upon execution
of the Lease Agreement. However, as previously stated, Landlord currently
has no interest in said improvements and has no control over the
disposition of said improvements. Landlord shall endeavor to obtain these
improvements for Tenant's usage, but in no way guarantees delivery of the
aforementioned items. Tenant's full performance under the Lease is not
contingent upon Landlord's delivery of such improvements for Tenant's use.
Furthermore, Tenant releases Landlord from any liability associated with
the usage of the aforementioned improvements.
56) CONDITION OF PREMISES -
(a) Landlord shall deliver the Premises to Tenant clean and free of debris
on the Commencement Date and warrants to Tenant that the existing plumbing,
electrical systems, fire sprinkler system, lighting, HVAC and loading doors
in the Premises shall be in god operating condition and that the roof is
water tight on the Commencement Date. If a non-compliance with said
warranty exists as of the Commencement Date, Landlord shall, except as
otherwise expressly provided in this Lease, promptly after receipt of
written notice from Tenant setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Landlord's expense. If
Tenant does not give Landlord notice of non-compliance within thirty days
after the Commencement Date, correction of that non-compliance shall be at
the cost of the Tenant, except as otherwise expressly provided herein.
(b) If as of the Commencement Date the Premises do not comply with current
Applicable Law as required by the appropriate governmental authorities,
Landlord shall promptly, after receipt of notice from Tenant, take such
action, at Landlord's expense, as may be required to rectify the non-
compliance. Tenant's notice shall specify the nature and extent of such
non-compliance and be provided to Landlord within 180 days of the
Commencement Date. However, Landlord shall not be responsible for
rectifying any non-compliance that is a result of Tenant's use or
modification of the Premises. Landlord makes no warranty that the
permitted use in paragraph 1.8 is permitted for the Premises under
Applicable Law.
57) Notwithstanding the foregoing or paragraph 13.5, in the event a roof leak
occurs which results or is likely to result in damage to Tenant's property,
harm to personnel or shutdown or slowdown of all or part of Tenant's
business and such leak is not covered by the maintenance contract referred
to in 7.1(b), Landlord shall use its' best efforts to cause roof repairs to
commence within 48 hours or as soon thereafter as reasonably practicable.
In the event Landlord does not cause such repairs to commence within such
time period, Tenant shall be entitled to hire a contractor to perform such
work and Landlord will reimburse Tenant for the cost thereof within thirty
days of presentment of a ▇▇▇▇.
58) Notwithstanding the foregoing, a change in control of Tenant shall not
constitute an assignment of this Lease if securities of Tenant become
registered under the Securities Exchange Act of 1934 or if such change in
control results from (i) an initial public offering of securities of
Tenant, (ii) a transfer of stock of Tenant from one stockholder to another
stockholder or tenant or (iii) a transfer of stock by any stockholder of
Tenant to an immediate family member or any trust or other entity the
ultimate beneficial owners of which are immediate family members.
59) Landlord shall indemnify and save Tenant free and harmless from all
liability for injury or damage to any person(s) or property, occurring on
or about the Common Areas arising solely out of the negligence or willful
misconduct of Landlord or its' agents.
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IN WITNESS WHEREOF, the parties have executed this First Addendum effective as
of the date first set forth above.
EXECUTED AT SACRAMENTO, California, on 2-7-95
---------------- -------------
LANDLORD:
LA SALLE ADVISORS LIMITED PARTNERSHIP,
As Advisor and Duly Authorized Agent for the
STATE OF CALIFORNIA PUBLIC EMPLOYEES
RETIREMENT SYSTEM
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its Vice President
-----------------------------------------------
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its Vice President
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
EXECUTED AT Santa Barbara, California, on Jan. 30, 1995
------------------ ------------------
TENANT:
FORTUNE DOGS, INC., DBA: Big Dog Sportswear
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a California corporation
------------------------------------------------
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its
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President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its /s/ Senior Vice President & Secretary
-----------------------------------------------
Senior Vice President and Secretary
Address: ▇▇▇ ▇▇▇▇ ▇▇▇.
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
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( 805 ) 963 - 8727
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