EXHIBIT 10.11
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
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1. BASIC PROVISIONS ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purpose only, May 12,
1997, us made by and between ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual with an
address c/o Boston Properties, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Lessor") and Restoration Hardware, Inc., a California corporation with
an address at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessee"),
(collectively the "Parties," or individually a "Party").
1.2(a) Premises: The approximately 160.213 square feet of space (the
"Premises") shown on Exhibit A attached hereto in the building (the "Building")
containing approximately 220,213 square feet of space located on land (the
"Property") commonly known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and
more particularly described in Exhibit B attached hereto.
In addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the "Industrial
Center." (Also see Paragraph 2.) See Rider Paragraph 51.
1.2(b) Parking: The unreserved vehicle parking spaces shown as "Lessee's
Parking Area" on Exhibit C attached hereto. ("Unreserved Parking Spaces"); (Also
see Paragraph 2.6.) See Rider Paragraphs 1 & 3.
1.5 Base Rent: See Rider Paragraphs 2 & 3. (Also see Paragraph 4.)
1.6(a) Base Rent Paid Upon Execution: $36,848.99 as Base Rent for the first
month after the Commencement Date.
1.6(b) Lessee's Share of Common Area Operating Expenses: seventy-two and
75/100 percent (75.75) ("Lessee's Share") as determined by pro rata square
footage of the Premises as compared to the total square footage of the Building.
1.7 Security Deposit: See Rider Paragraph 4.
1.8 Permitted Use: Distribution and warehousing and office uses ancillary
thereto. See Rider Paragraph 5. ("Permitted Use") (Also see Paragraph 6.)
1.9 Insuring Party. Lessor is the "Insuring Party." (Also see Paragraph 8.)
1.10(a) Real Estate Brokers. See Rider Paragraph 6.
1.12 Addenda and Exhibits. Attached hereto is a Rider and Exhibits all of
which constitute a part of this Lease.
2. Premises, Parking and Common Areas.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental and/or Common Area Operating Expenses, is
an approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and free of
debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at Lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
ninety (90) days after the Commencement Date, correction of that non-compliance
shall be See Rider Paragraph 53.
2.3 Compliance with Covenants, Restrictions and Building Code. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of records See Rider
Paragraph 8 and applicable building codes, regulations and ordinances in effect
on the Commence Date See Rider Paragraph 54. Lessor further warrants to Lessee
that Lessor has no knowledge of any claim having been made by any governmental
agency that a violation or violations of applicable building codes, regulations,
or ordinances exist with regard to the Premises as of the Commencement Date,.
Said warranties shall not apply to any Alterations or Utility installations
(defined in Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do
not comply with said warranties, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee and setting
forth with specificity the nature and extent of such non-compliance, take such
action, at Lessor's expense, as may be reasonable or appropriate to rectify the
non-compliance. Lessor makes no warranty that the Permitted Use in Paragraph 1.8
is permitted for the Premises under Applicable Laws (as defined in Paragraph
2.4).
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
satisfied itself with respect to the condition of the Premises (including by not
limited to the electrical and fire sprinkler systems, security, environmental
aspects, seismic and earthquake requirements, and compliance with the Americans
with Disabilities Act and applicable zoning, municipal, county, sate and federal
laws, ordinances and regulations and any covenants or restrictions of record
(collectively, "Applicable Laws") and the present and future suitability of the
Premises for Lessee's intended use; 9b) that Lessee has made such investigation
as it deems necessary with reference to such matters, is satisfied with
reference thereto, and assumes all responsibility therefore as the same relate
to Lessee's occupancy of the Premises and/or the terms of this Lease; and (c)
that neither Lessor, the Brokers nor any of Lessor's agents, has made any oral
or written representations or warranties with respect to said matters other than
as set forth in this Lease. See Rider Paragraph 52.
2.6 Vehicle. Lessee shall be entitled to use the Unreserved Parking Spaces on
those portions of the Common Areas designated as "Lessee's Parking Areas" on
Exhibit C attached hereto. Lessee shall not use more parking spaces than the
spaces in said Lessee's Parking Areas. Said parking spaces shall be used for
parking by vehicles no larger than full-size passenger automobiles or pick-up
trucks, herein called "Permitted Size Vehicles." Vehicles other than Permitted
Size Vehicles shall be parked and loaded or unloaded as directed by Lessor in
the Rules and Regulations (as defined in Paragraph 40) issued by Lessor. (Also
see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unleaded, or parked in areas other than
those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities described
in this Paragraph 2.6, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
(c) See Rider Paragraph 42.
2.7 Common AreasDefinition. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Industrial Center and interior utility raceways within the Premises that are
provided and designated by the Lessor from time to time for the general non-
exclusive use of Lessor, Lessee and other lessees of the Industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
2.8 Common AreasLessee's Rights. Lessor hereby grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. See Rider Paragraph 8.
Under no circumstances shall the right herein granted to use the Common Areas be
deemed to include the right to store any property, temporarily or permanently,
in the Common Areas. Any such storage shall be permitted only by the prior
written consent of Lessor or Lessor's designated agent,which consent may be
revoked at any time. In the event that any unauthorized storage shall occur then
Lessor shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove the property and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.
2.9 Common AreasRules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable Rules and Regulations with respect thereto in accordance
with Paragraph 40. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees of the Industrial Center. See Rider Paragraph 43.
2.10 Common AreasChanges. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Industrial Center
to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To ▇▇▇ the Common Areas while engaged in making improvements, repairs
or alterations to the Industrial Center, or any portion thereof; and
(f) To do and perform such other acts and make such other changes in, to or
with respect to the Common Areas and the Industrial Center as Lessor may, in the
exercise of sound business judgment, deem to be appropriate.
3. Term. See Rider Paragraph 1.
4. Rent
4.1 Base Rent. Lessee shall pay Base Rent and other rent or charges, as the
same may be adjusted from time to time, to Lessor in lawful money of the United
States, without offset 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 full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other address as Lessor may from time to
time designate in writing to Lessee.
4.2 Common Area Operating Expenses. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and operation
of the Industrial Center, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good order and
condition, of the following:
(aa) The Common Areas, including parking areas, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, parkways, driveways,
landscaped areas, striping, bumpers, irrigation systems, Common Area lighting
facilities, fences and gates, elevators, and subject to the terms of Rider
Paragraph 40, and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service the
Common Areas.
(iii) Trash disposal, property management and security services and the
costs of any environmental inspections.
(iv)
(v) Any increase above the Base Real Property Taxes (as defined in
Paragraph 10.2 (b)) for the Building and the Common Areas.
(vi) Any "Insurance Cost Increase) (as defined in Paragraph 8.1).
(vii)
(viii) Any deductible portion of an insured loss concerning the Building
or the Common Areas.
(ix) Any other services to be provided by Lessor that are stated
elsewhere in this Lease to be a Common Area Operating Expense. See Rider
Paragraph 44.
(b) Any Common Area Opearting Expenses and Real Property Taxes that are
specifically attributable to the Building or to any other building in the
Industrial Center or to the operation, repair and maintenance thereof, shall be
allocated entirely to the Building or to such other building.
(c) The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to
either have said improvements or facilities or to provide those services unless
Lessor has agreed elsewhere in this Lease to provide the same or some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be payable by
Lessee within thirty (30) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time of Lessee's Share of actual
Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, durinmg each 12-month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessor shall be credited the amount of such over
payment against Lessee's Share of Common Area Operating Expenses next becoming
due. If Lessee's payments under this Paragraph 4.2(d) during said preceding year
were less than Lessee's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within thirty (30) days after delivery by
Lessor to Lessee of said statement. See Rider Paragraph 40.
6. Use.
6.1 Permitted Use.
(a) Lessee shall use and occupy the Premises only for the Permitted Use set
forth in Paragraph 1.8, and for no other purpose. Lessee shall not use or permit
the use of the Premises in a manner that is unlawful, creates waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage to the
Premises or neighboring premises or properties.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used
in this Lease shall mean any product, substance, chemical, material or waste
whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (I) potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any governmental
authority; or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof. See Rider
Paragraph 9 shall not engage in any activity in or about the Premises which
constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances
without the express prior written consent of Lessor and compliance in a timely
manner (at Lessee's sole cost and expense) with all Applicable Requirements (as
defined in Paragraph 6.3). "Reportable Use" shall mean (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 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, and
(iii) the presence in, on or about the Premises of a Hazardous Substance with
respect to which any Applicable Laws required that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may, without Lessor's prior consent, but upon notice to
Lessor and in compliance with all Applicable Requirements, use any ordinary and
customary materials reasonably required to be used by Lessee in the normal
course of the Permitted Use, so long as such use is not a Reportable Use and
does not expose the Premises or neighboring properties to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor.
(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or the Building, other than as previously consented to by
Lessor, Lessee shall immediately give Lessor written notice thereof, together
with a copy of any statement, report notice, registration, application, permit,
business plan, license, claim, action, or proceeding given to, or received from,
any governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit See Rider Paragraph 55
(including, without limitation, through the plumbing or sanitary sewer system.
(c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and reasonable
attorneys' and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for See Rider Paragraph 10 Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee See Paragraph 11 and the cost of
investigation (including consultants and reasonable attorney's fees and
testing), removal, remediation, restoration and/or abatement therefor, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 Lessee's Compliance with Requirements. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record See Rider Paragraph 8 permits, the requirements of any
applicable fire insurance underwriter or rating bureau and Lessor's insurance
carriers and the recommendations of Lessor's engineers and/or consultants,
relating in any way to the Premises (including but not limited to matters
pertaining to (I) industrial hygiene, (ii) environmental conditions on, in,
under or about the Premises, including soil and groundwater conditions, and
(iii) the use, generation, manufacture, production, installation, maintenance,
removal, transportation, storage, spill, or release of any Hazardous Substance),
now in effect or which may hereafter come into effect. Lessee shall, within five
(5) days after receipt of Lessor's written request, provide Lessor with copies
of all documents and information, including but not limited to permits,
registrations, manifests, applications, reports and certificates, evidencing
Lessee's compliance with any Applicable Requirements specified by Lessor, and
shall immediately upon receipt, notify Lessor 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 Lessee or the
Premises to comply with any Applicable Requirements. See Rider Paragraph 5. See
Rider Paragraph 45.
6.4 Inspection; Compliance with Law. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lenders") 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 Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including but not limited to Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance 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 by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent. In such case, Lessee shall upon request reimburse Lessor or
Lessor'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 Lessee's Obligations.
(a) Subject to the provisions of Rider Paragraph 7 (relating to Lessor's
improvements), Paragraphs 2.2 (Condition), 2.3 (Compliance with Covenants,
Restrictions and Building Code), 7.2 (Lessor's Obligations), 9 (Damage or
Destruction), and 14 (Condemnation), Lessee shall, at Lessee'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 Lessee, and whether or not the need for such repairs occurs as a
result of Lessee'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 specifically serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, telephone and other
communication, lighting facilities, boilers, fired or unfired pressure vessels,
fire hose connections if within the Premises, fixtures, interior walls, interior
surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and
skylights, but excluding any items which are the responsibility of Lessor
pursuant to Paragraph 7.2 below. Lessee, in keeping the Premises in good order,
condition and repair, shall exercise and perform good maintenance practices. See
Rider Paragraph 46.
(b) Lessee shall, at Lessee's sole cost and expense, procure and maintain a
contract, with copies to Lessor, in customary form and substance for and with a
contractor specializing and experienced in the inspection, maintenance and
service of the heating, air conditioning and ventilation system for the
Premises. However, Lessor reserves the right, upon notice to Lessee, to procure
and maintain the contract for the heating, air conditioning and ventilating
systems, and if Lessor so elects, Lessee shall reimburse Lessor, upon demand,
for the cost thereof. See Rider Paragraph 14
(c) If Lessee fails to perform Lessee's obligations under this Paragraph
7.1, See Rider Paragraph 56 Lessor may enter upon the Premises, perform such
obligations on Lessee's behalf, and put the Premises in good order, condition
and repair, in accordance with Paragraph 13.2 below.
7.2 Lessor's Obligations. Subject to the provisions of Rider Paragraph 7
(relating to Lessor's improvements), Paragraphs 2.2 (Condition), 2.3 (Compliance
with Covenants, Restrictions and Building Code), 4.2 (Common Area Operating
Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14
(Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, exterior roof, fire sprinkler
and/or standpipe and hose (if located in the Common Areas) or other automatic
fire extinguishing system including fire alarm and/or smoke detection
systems and equipment, fire hydrants, parking lots, walkways, parkways,
driveways, landscaping, fences, signs and utility systems serving the Common
Areas and all parts thereof, as well as providing the services for which there
is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not
be obligated to paint the interior surfaces of exterior walls nor shall Lessor
be obligated to maintain, repair or replace windows, doors or plate glass of the
Premises. Lessor may, but shall not be obligated, to pain the exterior surfaces
of exterior walls. Lessee expressly waives the benefit of any statue now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Building, Industrial Center or Common Areas in good order,
condition and repair. See Rider Paragraph 63.
7.3 Utility Installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. The term "Utility Installations" is used
in this Lease to refer to all air lines, power panels, electrical distribution,
security, fire protection systems, telephone and other communications systems,
lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term "Trade Fixtures"
shall mean Lessee's machinery and equipment which can be removed without doing
material damage to the Premises. The term "Alterations" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "Lessee-Owned Alterations and/or Utility Installations" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a).
(b) Consent. See Rider Paragraph 15. Lessee shall promptly upon completion
thereof furnish Lessor with as-built plans and specifications therefor.
(c) Lien Protection. Lessee shall pay when due all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein, Lessee shall
give Lessor not less than ten (10)) days' notice prior to the commencement of
any work in, on, or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, as its sole expense, defend and protect itself,
Lessor 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 Lessor or the Premises. If Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to one
and one-half times the amount of such contested lien claim or demand,
indemnifying Lessor against liability for the same, as required by law for the
holding of the Premises from the effect of such lien or claim, In addition,
Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is to its best interest
to do so. See Rider Paragraph 62.
7.4 Ownership, Removal, Surrender, and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal and to
cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations made to the Premises by
Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Lessor may, at any time and at its option, elect in writing to
Lessee to be the owner of all or any specified part of the Lessee-Owned
Alterations and Utility Installations. Unless otherwise instructed per
Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility
Installations shall, at the expiration or earlier termination of this Lease,
become the property of Lessor and remain upon the Premises and be surrendered
with the Premises by Lessee.
(b) Removal. Unless otherwise agreed in writing, Lessor may require that
any or all Lessee-Owned Alterations or Utility Installations be removed by the
expiration or earlier termination of this Lease, notwithstanding that their
installation may have been consented to by Lessor. Lessor may require the
removal at any time of all or any part of any Alterations or Utility
Installations made without the required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises by the end
of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair,
ordinary wear and tear See Rider Paragraph 47 excepted. Ordinary wear and tear
shall not include any damage or deterioration that would have been prevented by
good maintenance practice or by Lessee performing all of its obligations under
this Lease. Except as otherwise agreed or specified herein, the Premises, as
surrendered, shall include the Alterations and Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Lessee-Owned Alterations and Utility Installations, as well as
the removal of any storage tank installed by or for Lessee, and the removal,
replacement, or redemption of any soil, material or ground water contaminated by
Lessee, all as may then be required by Applicable Requirements and/or good
practice, Lessee's Trade Fixtures shall remain the property of Lessee and shall
be removed by Lessee subject to its obligation to repair and restore the
Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment of Premium Increases
(a) As used herein, the term "Insurance Cost Increase" is defined as any
increase in the actual cost of the insurance applicable to the Building, the
Property and the Industrial Center and required or permitted to be carried by
Lessor pursuant to Paragraphs 8.2(b), 8.3 (a) and 8.3(b), ("Required
Insurance"), over and above the Base Premium, as hereinafter defined, calculated
on an annual basis. "Insurance Cost Increase" shall include, but not be limited
to, requirements of the holder of a mortgage or deed of trust covering the
Premises, increased valuation of the Premises, and/or a general premium rate
increase. The term "Insurance Cost Increase" shall not, however, include any
premium increases resulting from the nature of the occupancy of any other lessee
of the Building. See Rider Paragraph 48.
(b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to
Paragraph 4.2. Premiums for policy periods commencing prior to, or extending
beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement Date or Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force during the
form of this Lease a Commercial General Liability policy of insurance protecting
Lessee, Lessor Lessor's managing agent and any Lenders(s) whose names have been
provided to Lessee in writing (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, the Building,
the Property and the Industrial Center and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit coverage in an
amount not less than $5,000,000 per occurrence with an "Additional Insured-
Managers or Lessors of Premises" endorsement and contain the "Amendment of the
Pollution Exclusion" endorsement 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 Lessee's indemnity obligations under this Lease. The limits of said insurance
required by this Lease or as carried by Lessee shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only.
(b) Carried by Lessor, Lessor shall also maintain liability insurance, in
addition to and not in lieu of, the insurance required to be maintained by
Lessee. Lessee shall not be named as an additional insured therein.
8.3 Property insurance-Builidng, Improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep in force during
the term of this Lease a policy or policies in the name of Lessor, with loss
payable to Lessor and to any Lender(s), insuring against loss or damage to the
Premises, the Building, the Property and the Industrial Center. Such insurance
shall be for full replacement cost, as the same shall exist from time to time,
or the amount required by any Lender(s), Lessee-Owned Alterations and Utility
Installations, Trade Fixtures and Lessee's personal property shall be insured by
Lessee pursuant to Paragraph 8.4. If the coverage is available and commercially
appropriate, Lessor's policy or policies shall insure against all risks of
direct physical loss or damage See Rider Paragraph 16, including coverage for
any additional costs resulting from debris removal and reasonable amount of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building 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 loss, but not
including plate glass insurance. Said policy or policies shall also contain an
agreed valuation provision in lieu of any co-insurance clause, waiver of
subrogation, See Rider Paragraph 18
(b) Rental Value. Lessor shall also obtain and keep in force during the
term of this Lease a policy or policies in the name of Lessor, with loss payable
to Lessor and any Lender(s), insuring the loss of the full rental and other
charges payable by all lessees of the Building to Lessor for one year (including
all Real Property Taxes, insurance costs, all Common Area Operating Expenses and
any scheduled rental increases). Said insurance may 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 one 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 an co-insurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income, Real
Property Taxes, insurance premium costs and other expenses, if any, otherwise
payable, for the next 12-month period. Common Area Opearting Expenses shall
include any deductible amount in the event of such loss.
(c) Adjacent Premises. Lessee shall pay for any increase in the premiums
for the property insurance of the Building and for the Common Areas or other
buildings in the industrial Center if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.
(d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall
not be required to insure Lessee-Owned Alterations and Utility Installations
unless the item in question has become the property of Lessor under the terms of
this Lease.
8.4 Lessee's Property Insurance. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Trade Fixtures, See Rider Paragraph 19 and
Lessee-Owned Alterations and Utility Installations in, on, or about the Premises
similar in coverage to that carried by Lessor as the insuring Party under
Paragraph 8.3(a). Such insurance shall be full replacement cost coverage with a
deductible not to exceed $1,000 per occurrence. The proceeds from any such
insurance shall be sued by Lessee for the replacement of personal property and
the restoration of Trade Fixtures and Lessee-Owned Alterations and Utility
Installations. Upon request from Lessor, Lessee shall provide Lessor with
written evidence that such insurance is in force. See Rider Paragraph 49.
8.5 Insurance Policies. Insurance required hereunder See Rider Paragraph 20
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-VIII or such other rating as may be required
by a Lender, as set forth in the must current issue of "Best's Insurance Guide."
Lessee shall not do or permit to be done anything which shall invalidate the
insurance policies referred to in this Paragraph 8. See Rider Paragraph 21.
Lessee shall cause to be delivered to Lessor, within seven (7) days after the
earlier of the Early Possession Date or the Commencement Date, certified copies
of, or certificates evidencing the existence and amounts of, the insurance
required under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or
subject to modification except after thirty (30) days' prior written notice to
Lessor. Lessee shall at least thirty (30) days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies.
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages (whether in contract or in tort) against the
other, for loss or damage to their property arising out of or incident to the
periods required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limed by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.7 Indemnity. Lessee shall indemnify, protect, defend and hold harmless the
Premises, the Building, the Property and the Industrial Center, Lessor and its
agents, Lessor's master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, costs, liens, judgments,
penalties, loss of permits, attorneys' and consultant's fees, expenses and/or
liabilities arising out of, involving, or in connection with, the occupancy of
the Premises by Lessee, the conduct of Lessee's business, any act, omission or
neglect of Lessee, its agents, contractors, employees or invitees See Rider
Paragraph 11 and out of any Default or Breach by Lessee in the performance in a
timely manner of any obligation on Lessee's part to be performed under this
Lease. The foregoing shall include, but 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 Lessor) litigated and/or reduced to
judgment. In case any action or proceeding be brought against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury
or damage to the person or See Rider Paragraph 22 goods, wares merchandise or
other property of Lessee, Lessee's employees, contractors invitees, customers,
or any other person See Rider Paragraph 11 in or about the Premises, the
Building, the Property or the Industrial Center 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 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, from other resources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other lessee of Lessor nor from the failure by Lessor to enforce the
provisions of any other lease in the Industrial Center. Notwithstanding Lessor's
negligence or breach of this Lease. Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding the Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
(b) "Premises Total Destruction" shall mean damage or destruction to the
Premises, other than Lessee-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 (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction. In addition, damage or destruction to the Building, other than
Lessee-owned Alterations and Utility Installations and Trade Fixtures of any
lessees of the Building, the cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost ) excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures of any lessees of the
Building) of the Building shall, at the option of Lessor, be deemed to be
Premises Total Destruction.
(c) "Insured Loss" shall mean damage or destruction to the Premises, other
than Lessee-Owned Alterations and Utility Installations and Trade Fixtures,
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 Lessor 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
Substance as defined in Paragraph 6.29a), in, on, or under the Premises.
9.2 Premises Partial DamageInsured Loss. If Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. 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 shall be made available for repairs if made by
either Party.
9.3 Partial DamageUninsured Loss. If Premises Partial Damage that is not an
insured Loss occurs, unless caused by a negligent or willful act of Lessee. (In
which event Lessee shall make the repairs at Lessee's expense and this Lease
shall continue in full force and effect), Lessor may at Lessor's option, either
(I) repair such damage as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within forty-five (45) days after receipt by Lessor of
knowledge of the occurrence of such damage of Lessor's desire to terminate this
Lease See Rider Paragraph 23. In the event Lessor elects to give such notice of
Lessor's intention to terminate this Lease. Lessee shall have the right within
ten (10) days after the receipt of such notice to give written notice to Lessor
of Lessee's commitment to pay for the repair of such damage totally at Lessee's
expense and without reimbursement from Lessor. Lessee shall provide Lessor with
the required funds or satisfactory assurance thereof within thirty (30) days
following such commitment from Lessee. In such even this Lease shall continue in
full force and effect, and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds are available. If Lessee 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 Lessor's
notice of termination.
9.4 Total Destruction. Notwithstanding any other provision hereof, if
Premises total Destruction occurs (including any destruction required by any
authorized public authority), See Rider Paragraph 24.
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
month's Base Rent, whether or not an insured Loss, Lessor may, at Lessor's
option, terminate this Lease See Rider Paragraph 23 by giving written notice to
Lessee of Lessor's election to do so within thirty (30) days after the date of
occurrence of such damage. Provided, however, if Lessee at that time has an
exercisable option to extend this Lease or to purchase the Premises, then Lessee
may preserve this Lease by (a) exercising such option, and (b) providing Lessor
with any shortage in insurance proceeds (or adequate assurance thereof) needed
to make the repairs on or before the earlier of (I) the date which is ten (10)
days after Lessee's receipt of Lessor's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercise such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor's expense repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If
Lessee fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate as of the date set forth in the
first sentence of this Paragraph 9.5.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in Paragraphs 9.2 or 9.4 the Base
Rent, Common Area Operating Expenses and other charges, if any, payable by
Lessee hereunder for the period during which such damage or condition, its
repair, redemption or restoration continues, shall be abated in proportion to
the degree to which Lessee's use of the Premises is impaired, but not in excess
of proceeds from insurance required to be carried under Paragraph 8.3(b). Except
for abatement of Base Rent, Common Area Operating Expenses and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be performed
by Lessee, and Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair, redemption or restoration.
(b) If Lessor shall be obligated to repair 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 sixty (60) days
after such obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any Lenders of which Lessee has actual notice of Lessee's election to terminate
this Lease on a date not less than thirty (30) days following the giving of such
notice. If Lessee gives such notice to Lessor and such Lenders and such repair
ore 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
Lessor or a Lender commences the repair or restoration of the Premises within
thirty (30) days after the receipt of such notice, this Lease shall continue in
full force and effect. "Commence" as used in this Paragraph 9.6 shall mean
either the unconditional authorization of the preparation of the required plans,
or the beginning of the actual work on the Premises, whichever occurs first.
9.8 TerminationAdvance Payments. Upon termination of this Lease pursuant to
this Paragraph 9, Lessor shall return to Lessee any advance payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms of this Lease.
9.9 Waiver of Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises and the
Building with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent it is inconsistent
herewith.
10.1 Real Property Taxes. See Rider Paragraph 25.
10.1 Payment of Taxes. Lessor shall pay the Real Property Taxes, as defined
in Paragraph 10.2(a), applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any increases in such amounts over the
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.
10.2 Real Property Tax Definitions.
(a) 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 or
tax (other than inheritance, personal income or estate taxes) imposed upon the
Industrial Center by any authority having the direct or indirect power to fax,
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 Lessor in the Industrial Center or
any portion thereof, Lessor's right to rent or other income therefrom, and/or
Lessor's business of leasing the Premises. The term "Real Property Taxes" shall
also include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in Applicable Law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Industrial Center or in the improvements thereon, the
execution of this Lease, or any modifications, amendment or transfer thereof,
and whether or not contemplated by the Parties. See Rider Paragraph 50.
(b) As used herein, the term "Base Real Property Taxes" shall be the amount
of Real Property Taxes, which are assessed against the Premises, Building or
Common Areas. See Rider Paragraph 57. In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year based
upon the number of days which such calendar year and tax year have in common.
10.3 Additional Improvements. Common Area Opearting Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Opearting Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.
10.4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building 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 Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 Lessee's Property Taxes. Lessee shall pay prior to delinquency all taxes
assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center. When
possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.
11. Utilities. Lessee shall pay directly for all utilities and services supplied
to the Premises, including but not limited to electricity, telephone, security,
gas and cleaning of the Premises, together with any taxes thereon. If any such
utilities or services are not separately metered to the Premises or separately
billed to the Premises, Lessee shall pay to Lessor a reasonable proportion to be
determined by Lessor of all such charges jointly metered or billed with other
premises in the Building, in the manner and within the time periods set forth in
Paragraph 4.2(d).
12. Assignment and Subletting. See Rider Paragraph 27
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $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 Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee 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 Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy same, or
the abandonment of the Premises. See Rider Paragraph 58.
(b) Except as expressly otherwise provided in this Lease, the failure by
Lessee to make any payment of Base Rent, Lessee's Share of Common Area Operating
Expenses, or any other monetary payment required to be made by Lessee hereunder
See Rider Paragraph 59., the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required under this Lease.
(c) Except as expressly otherwise provided in this Lease, the failure by
Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (I) compliance with Applicable Requirements per
Paragraph 6.3 See Rider Paragraph 60. (ii) the inspection, maintenance and
service contracts required under Paragraph 7.19b), (iii) the rescission of an
unauthorized assignment or subleasing per Rider Paragraph 27, (iv) a Tenancy
Statement per Paragraphs 16 or 37, (v) the subordination or non-subordination of
this Lease per Paragraph 30, (vi) the guaranty of the performance of Lessee's
obligations under this Lease if required under Paragraphs 1.11 and 37, (vii) the
execution of any document requested under Paragraph 42 (easements), or where any
such failure continues for a period of twenty (20) days following written notice
by or on behalf of Lessor to Lessee.
(d) A Default by Lessee 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 Lessee, other than those
described in Subparagraphs 13.1(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 Lessor to Lessee; provided, however, that if the nature of Lessee'
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 Lessee if
Lessee 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 Lessee
of any general arrangement or assignment for the of creditors; (ii) Lessee's
becoming a "debtor" as defined in 11 U.S. Code Section 101 or any successor
statute thereto *unless, in the case of a petition filed against Lessee, the
same is dismissed within sixty (60) days; (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee'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 13.19e) is contrary to any applicable law, such
provision shall be of no force or effect, and shall not affect the validity of
the remaining provisions.
(f) The discovery by Lessor that any financial statement of Lessee or of
any Guarantor, given to Lessor by Lessee or any Guarantor, was materially false.
See Rider Paragraph 28.
13.2 Remedies. If Lessee fails to perform any affirmative duty or obligation
of Lessee under this Lease, within ten (10) days after written notice to Lessee
(or in case of an emergency, without notice), Lessor may at its option (but
without obligation to do so), perform such duty or obligation on Lessee'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 Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the Bank upon which it is drawn, Lessor, at its own
option, may require all future payments to be made under this Lease by Lessee to
be made only by cashier's check. In the event of a Breach of this Lease by
Lessee (as defined in Paragraph 13.1), with or without further notice or demand,
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor, in such event
Lessor shall be entitled to recover from Lessee: (I) the worth at the time of
the award of the unpaid rent which had been earned at the time of termination;
(ii) the worst 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 Lessee 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 Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee'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 any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (ii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco or the Federal Reserve Bank District in which the Premises
are located at the time of award plus one count rate of the Federal Reserve Bank
of San Francisco or the Federal Reserve Bank District in which the Premises are
located at the time of award plus one percent 91%). Efforts by Lessor to
mitigate damages caused by Lessee's Default or Breach of this Lease shall not
waive Lessor's right to recover damages under this Paragraph 13.2. If
termination of this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such pro-
ceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve 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 Subparagraph
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 Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also constitute
the applicable notice for grace period under the unlawful detainer statue shall
run concurrently after the one such statutory notice, and the failure of Lessee
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 Lessor
to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
recover the rent as it becomes due, provided Lessee has the right to sublet or
assign, subject only to reasonable limitation, Lessor and Lessee agree that the
limitations on assignment and subletting in this Lease are reasonable. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Lessor's interest under this Lease, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and other sums due hereunder will cause Lessor 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 Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10)) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such later charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in not even t be less than thirty (30) days after receipt by Lessor,
and by any Lender'(s) whose name and address shall have been furnished to Lessee
in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in
breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
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 apart so taken as of the date the condemning authority takes title or
possession whichever first occurs See Rider Paragraph 29 if more than twenty-
five percent (25%) of the floor area of the Premises, or more than twenty-five
percent (25%) of the portion of the Common Areas designated for Lessee's
parking, is taken by condemnation, Lessor or Lessee may, at such party's option,
to be exercised in writing within ten (10) days after Lessor shall have given
Lessee 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 possession.
If either party does not terminate 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 bears to the total
rentable floor area of the Premises. No reduction of Base Rent shall occur if
the condemnation does not apply to any portion of the Premises. Any award for
the taking of all oar 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 Lessor, whether such award shall be made as compensation for
diminution of value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation expenses
and/or loss of Lessee's Trade Fixtures See Rider Paragraph 30. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above Lessee's share of
the legal and other expenses incurred by Lessor in the condemnation matter,
repair any damage to the Premises caused by such condemnation authority. Lessee
shall be responsible for the payment of any amount in excess of such net
severance damages required to complete such repair. See Rider Paragraph 31.
15. Broker's Fees. See Rider Paragraph 6.
16. Tenancy and Financial Statements.
16.1 See Rider Paragraph 32.
16.2 Financial Statement. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor Lessee's
financial statements for the past three (3) years. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and shall
be used only for the purposes herein set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner
or owners at the time in question f the fee title to the Premises. In the event
of a transfer of Lessor's title or interest in the Premises or in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Upon such transfer or assignment the prior Lessor shall be relieved
of all liability with respect to the obligations and/or covenants under this
Lease thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall
be binding only upon the Lessor as hereinabove defined. See Rider Paragraph 33.
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in now way affect the validity of
any other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10) days
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the date in which
the Premises are located plus two percent (2%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.14.
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 Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior to 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.
23. Notices. See Rider Paragraph 34.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent default or Breach by Lessee
of the same or any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwistanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of
such payment.
25. Recording. Either Lessor or Lessee 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 Holdover. See Rider Paragraph 35.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initialed in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease 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 Lessor 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, Lessee agrees that the Lenders holding any
such Security Device shall have no duty, liability or obligation to perform any
of the obligations of Lessor under this Lease, but that in the event of Lessor's
default with respect to any such obligation, Lessee will give any Lender whose
name and address have been furnished Lessee in writing for such purpose notice
of Lessor's default pursuant to Paragraph 13.5. If any Lender shall elect to
have this Lease superior to the lien of its Security Device and shall give
written notice thereof to Lessee, this Lease shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of Paragraph 30.3,
Lessee agrees to attorn to a Lender or any other party who acquires owner-ship
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: (I) be liable for any act
or omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership, (ii) be subject to any offsets of defenses which
Lessee might have against any prior lessor, or (iii) be bound by prepayment of
more than one month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor
after the execution of this lease, Lessee's subordination of this Lease shall be
suggest to receiving assurance (a "non-disturbance agreement') from the Lender
that Lessee's possession and this Lease, including any options to extend the
term hereof, will not be disturbed so long as Lessee is not in Breach hereof and
attorns to the record owner of the Premises.
30.4 Self-Executing. Upon written request from Lessor or a lender in
connection with a sale, financing or refinancing of Premises, Lessee and Lessor
shall execute such further writings as may be reasonably required to separately
document any such subordination or non-subordination, attornment and/or non-
disturbance agreement as is provided for herein.
31. Attorney's Fees. If any party brings an action or proceeding to enforce
the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter
defined) in any such proceeding, 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, judgement, or the abandonment by the other
Party of its claim or defense. The attorney's fee award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorney's fees reasonably incurred. Lessor shall be entitled to
attorney's fees, costs and expenses incurred in 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. Lessor' Access; Showing Premises; Repairs. See Rider Paragraph 61. Lessor
and Lessor'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
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building, as Lessor may reasonably deem necessary. Lessor may at any time place
on or about the Premises or Building any ordinary "For Sale" signs and Lessor
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 Lessor shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the exterior of the Premises
or the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the roof) such signs as are reasonably required to identify
the Building as containing space leased to Lessee so long as such signs are in a
location designated by Lessor and comply with Applicable Requirements and the
signage criteria established for the Industrial Center by Lessor. The
installation of any sign on the Premises by or for agreed herein, Lessor
reserves all rights to the use of the roof of the Building, and the right to
install advertising signs on the Building, including the roof, which do not
unreasonably interfere with the conduct of Lessee's business; Lessor shall be
entitled to all revenues from such advertising signs. See Rider Paragraph 56.
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lessor estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) 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 Lessor's election to have such
event constitute the termination of such interest.
36. Consents.
(a) Lessor's actual reasonable out-of-pocket costs and expenses (including but
not limited to architects', attorneys', engineers', and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to an assignment a subletting or the presence or use
of a Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. Lessor's consent to any act
assignment of this Lease or subletting of the Premises by Lessee shall not
constitute an acknowledgment that no Default or Breach by Lessee 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 Lessor
at the time of such consent.
(b) All conditions to Lessor's consent authorized b this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the impositions by
lessor at the time of consent of such further on other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
38. Quiet Possession. Upon Payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quirt
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.
39. Options. See Rider Paragraph 3.
40. Rules and Regulations. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations (Rules and Regulations") which
Lessor 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 the Building and the Industrial Center and their invitees.
41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service of other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
it's agents and invitees and their property for the acts of third parties.
42. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restriction do not reasonably
interfere with the use of the Premises by Lessee. Lessee agrees to assign any
documents reasonably requested by Lessee to effectuate any such easement rights,
dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
44. Authority. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessee evidence satisfactory to Lessee of such authority.
45. 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.
46. Offer. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan. Lender in
connection with the obtaining of formal financing or refinancing of the property
of which the Premises are a part.
48. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESS 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 AGREED THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM
THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: New York, NY Executed at: Corte Madera, CA
On: May 12, 1997 on: 5/7/97
By LESSOR: By LESSEE:
/s/ ▇. ▇▇▇▇▇▇▇▇▇ RESTORATION HARDWARE, INC.
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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By:
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Name Printed:
-----------------------------------
Title:
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By:
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Name Printed: ▇▇▇▇▇▇ ▇▇▇
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Title: SVP CFO
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NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are
utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION, ▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇-▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (213) 687-
8777.
RIDER TO LEASE BETWEEN
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, AS LESSOR,
AND RESTORATION HARDWARE, INC. AS LESSEE
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
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1. LEASE TERM. The term (the "Term") of this Lease shall be for that
period of time commencing on the "Commencement Date" (as hereinafter
defined) and expiring (the "Expiration Date") on the last day of the
eighty-fourth (84th) month following the Commencement Date (plus the
partial month, if any, immediately following the Commencement Date)
(the "Original Lease Term"), unless extended as provided in Rider
Paragraph 3 or sooner terminated as provided in this Lease. The
"Commencement Date" shall be the first to occur of (a) the later of
(i) June 1, 1997 and (ii) the date "Lessor's Work" (as defined in
Rider Paragraph 7(A)) is "Substantially Complete" (as defined in Rider
Paragraph 7(A)) and (b) the date on which Lessee commences beneficial
use of the Premises for the conduct of Lessee's normal business
operations. Lessee, in all events, shall be treated as having
commenced beneficial use of the Premises for the conduct of Lessee
normal business operations when it begins to move goods, wares,
merchandise or other property into the Premises, provided that Lessee
and Lessee's employees, agents and contractors shall be permitted to
install Lessee's trade fixtures, equipment, furniture, cabling and
related communications systems in such a manner as to not interfere
with the performance by Lessor and Lessor's contractors of "Lessor's
Work" (as defined in Rider Paragraph 7), and such installation alone
shall not constitute beneficial use of the Premises by Lessee. Any
such entry by Lessee or Lessee's employees, agents or contractors
shall be on the terms and conditions of this Lease, except for the
obligations to pay Base Rent and Common Area Operating Expenses other
than as set forth in Rider Paragraph 7 As soon as may be convenient
after the Commencement Date has been determined, Lessor and Lessee
agree to join with each other in the execution, in the form of Exhibit
E attached hereto, of a written Declaration in which the Commencement
Date and specified Term of this Lease shall be stated.
2. (A) ORIGINAL LEASE TERM-INITIAL BASE RENT. For each month within the
period beginning on the Commencement Date and ending on the last day
of the seventh (7th) month following the month in which the
Commencement Date occurs (plus the partial month, if any, in which the
Commencement Date occurs). Lessee shall pay to Lessor as monthly Base
Rent for the Premises, payments of Thirty-Six Thousand Eight Hundred
Forty-Eight and 99/100 Dollars ($36,848.99) (sometimes called the
"Original Monthly Base Rent"). All payments of monthly
Base Rent (during both the Original Lease Term and the Extended Term,
if exercised, and at the monthly Base Rent provided for in this Rider)
shall be paid in legal tender of the United States and shall be paid
in advance on the first day of each and every calendar month,
provided, however, that appropriate adjustment shall be made at the
beginning and end of the Term of this Lease as it may be extended and
at the end of any period immediately preceding an adjustment date
during the Lease Term as it may be extended. Monthly Base Rent shall
commence to be paid on the Commencement Date.
2. (B) ORIGINAL LEASE TERM- FIRST RENT ADJUSTMENT. The monthly Base Rent
payable by Lessee for the period beginning on first day of the eighth
(8th) month following the Commencement Date (plus the partial month,
if any, immediately following the Commencement Date) and ending on the
last day of the thirtieth (30th) month following the Commencement Date
(plus the partial month, if any, immediately following the
Commencement Date) shall be Fifty-Two Thousand Eight Hundred Seventy
and 29/00 Dollars ($52,870.29).
2. (C) ORIGINAL LEASE TERM- SECOND RENT ADJUSTMENT. The monthly Base Rent
payable by Lessee for the period beginning on first day of the thirty-
first (31st) month following the Commencement Date (plus the partial
month, if any, immediately following the Commencement Date) and ending
on the last day of the sixtieth (60th) month following the
Commencement Date (plus the partial month, if any, immediately
following the Commencement Date) shall be Fifty-Four Thousand Four
Hundred Seventy-Two and 42/00 Dollars ($54,472.42).
2. (B) ORIGINAL LEASE TERM- THIRD RENT ADJUSTMENT. The monthly Base Rent
payable by Lessee for the period beginning on first day of the sixty-
first (61st) month following the Commencement Date (plus the partial
month, if any, immediately following the Commencement Date) and ending
on the last day of the eighty-fourth (84th) month following the
Commencement Date (plus the partial month, if any, immediately
following the Commencement Date) (being the expiration of the Original
Lease Term) shall be Fifty-Seven Thousand Six Hundred Seventy-Six and
68/00 Dollars ($57,676.68).
3. (A) EXTENSION OPTION. Provided that at the time of the exercise of the
option to extend (i) there shall not be existing any Lessee Default or
Breach (defined in Paragraph 13.1), (ii) this Lease is still in full
force and effect and (iii) Lessee has neither assigned this Lease nor
sublet more than fifty thousand (50,000) square feet of the Premises
in the aggregate (except for an assignment or subletting permitted
under Paragraph 27.2 of this Rider), Lessee shall have the right to
extend the Term of this Lease in the manner hereinafter provided upon
all of the same terms, conditions, covenants and agreements contained
in this Lease (except for the monthly Base Rent which shall be
adjusted during the option period as
-2-
herein below set forth and except, further, that there shall be no
option to extend the Term of this Lease beyond the extension option
herein provided) for one (1) period of five (5) years. The option
period is sometimes herein referred to as an "Extended Term" and
sometimes hereinafter referred to as an "Extension Option".
Notwithstanding anything contained in the Lease and this Rider to the
contrary, in no event shall the Term be extended for more than five
(5) years beyond the expiration of the Original Lease Term.
3. (B)(1) EXERCISE OF EXTENSION OPTION AND BASE RENT FOR EXTENDED TERM.
If Lessee desires to exercise the Extension Option, then Lessee shall
give notice to Lessor not earlier than twelve (12) months nor later
than nine (9) months prior to the expiration of the Original Lease
Term of Lessee's request for Lessor's quotation of the "Market Rent"
for the Premises as of the commencement date of the Extended Term. For
the purposes of this Rider Paragraph 3 the term "Market Rent" shall
mean the monthly amount per square foot in the Premises that a
willing, non-equity, tenant would pay and a willing landlord would
accept at arm's length from a comparable tenant for space in a
comparable building or buildings, with comparable tenant improvements,
in a comparable location, giving appropriate consideration to monthly
rental rates per square foot, the presence or absence of rent
escalation clauses such as operating expense and tax pass-throughs,
length of lease term, size and location of premises being leased, if
any, and other generally applicable terms and conditions of tenancy
for a similar building or buildings; provided, that the value of any
improvements made or to be made to the Premises by Lessee at Lessee's
expense shall not be considered for the purpose of valuing the Market
Rent of the Premises and in no event shall the Market Rent for the
Extended Term be less than the monthly Base Rent for the last month of
the Original Lease Term.
3. (B)(2) In order to exercise its rights hereunder Lessee shall, within fifteen
(15) days after receipt of Lessor's quotation, by written notice to
Lessor either:
(a) accept such quotation of the Market Rent as quoted by Lessor and
give notice that it exercises its option to extend the Term of
this Lease for the Extended Term and Lessee's occupancy of the
Premises during the Extended Term shall be upon all of the same
terms, conditions, covenants and agreements herein contained
except that there shall be no further option to extend the Term
of this Lease and except, further, that the monthly Base Rent
shall be equal to and be the Market Rent.
(b) make a request to Lessor for a broker determination (the "Broker
Determination") of the Market Rent for the Extended Term, which
Broker Determination shall be made in the manner set forth in
Rider Paragraph 3(B)(3) below.
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3. (B)(3) If Lessee timely shall have requested the Broker Determination, then
in order to exercise its right to extend the Term of this Lease for
the Extended Term, Lessee shall, within fifteen (15) days after
receipt of the Broker Determination, give written notice to Lessor of
Lessee's exercise of the Extended Term, and Lessee's occupancy of the
Premises during the Extended Term shall be upon all of the same terms,
conditions, covenants and agreements herein contained except that
there shall be no further option to extend the Term of this Lease and
except, further, that the monthly Base Rent shall be the monthly base
rent determined by the Broker Determination in accordance with the
provisions of Rider Paragraph 3(B)(4).
3. (B)(4) If Lessee shall have requested the Broker Determination as provided in
Rider Paragraph 3(B)(2)(b) then the following procedures shall be
followed. Lessee's notice requesting a Broker Determination of the
Market Rent shall include the name of a commercial real estate
brokerage firm selected by Lessee with at least ten (10) years
experience dealing in properties of a nature and type generally
similar to the Premises located in the Hayward area. Within ten (10)
days after Lessor's receipt of Lessee's notice requesting a Broker
Determination and stating the name of such a commercial real estate
brokerage firm, Lessor shall give written notice to Lessee of Lessor's
selection of a commercial real estate brokerage firm having at least
the experience referred to above. Within (10) days thereafter the two
(2) first so selected shall select a third such commercial real estate
brokerage firm also having at least the experience referred to above.
Within thirty (30) days after the selection of the third commercial
real estate brokerage firm, the three (3) firms so selected, by
majority opinion, shall notify both Lessor and Lessee in writing of
their determination of the Market Rent for the Extended Term which may
include provision of annual increases in rent during said term if so
determined, provided, however, that if there shall be no majority
option then the determination of the broker between the other two (2)
brokers shall be deemed to be the determination of the brokers
hereunder. However, notwithstanding anything contained in the Lease
and Rider to the contrary, in no event shall the Market Rent for the
Extended Term be less than the monthly Base Rent for the last month of
the Original Lease Term and the Broker Determination shall be bound by
the provisions of this sentence. Lessor shall pay the costs and
expenses of the broker selected by it; Lessee shall pay the costs and
expenses of the broker selected by it; and each of Lessor and Lessee
shall pay fifty percent (50%) of the costs and expenses of the third
broker.
4. SECURITY DEPOSIT Concurrently with the execution of this Lease,
Lessee shall pay to Lessor a security deposit (the "Security Deposit")
in the amount of Fifty-Seven Thousand Six Hundred Seventy-Six Dollars
and 68/100 ($57,676.68) and Lessor shall hold the same, throughout the
Term of this Lease (including the Extended Term, if applicable),
unless sooner returned to Lessee as provided in this Rider Paragraph
4, as security for the performance by Lessee of all obligations on
-4-
the part of Lessee to be performed under this Lease. At the option of
Lessee the Security Deposit shall be in the form of either cash or an
unconditional irrevocable letter of credit (the "Letter of Credit")
drawn on a bank satisfactory to Lessor and otherwise upon terms
satisfactory to Lessor, which Letter of Credit shall permit one or
more draws thereunder to be made accompanied only by certification by
Lessor that pursuant to the terms of this Lease, Lessor is entitled to
apply such Letter of Credit and the proceeds thereof to Lessor's
damages due to a default of Lessee under the terms and provisions of
this Lease. Any Letter of Credit shall be for a term of no less than
one (1) year and shall be renewed by Lessee each year thereafter and
each renewal shall be delivered to and received by Lessor not later
than thirty (30) days before the expiration of the then current Letter
of Credit (herein called a "Renewal Presentation Date"). In the event
of a failure to so deliver such renewal Letter of Credit on or before
the applicable Renewal Presentation Date, Lessor shall be entitled to
present the then existing Letter of Credit for payment and to receive
the proceeds thereof, which proceeds shall be held by Lessor as
Lessee's Security Deposit, subject to the terms of this Rider
Paragraph 4. Lessor shall have the right from time to time without
prejudice to any other remedy Lessor may have on account thereof, to
apply the Security Deposit, or any part thereof, to Lessor's damages
arising from any Default or Breach on the part of Lessee under the
terms of this Lease and if the Security Deposit is in the form of the
Letter of Credit, the Letter of Credit may be drawn upon by Lessor in
the event of such a Default or Breach and the proceeds thereof may be
so applied to such damages of Lessor. Provided that Lessee is not then
in Default or Breach (without benefit of any grace periods), on the
expiration of the Lease Term (as extended) and on the surrender of
possession of the Premises by Lessee to Lessor at such time in the
condition and manner provided for in this Lease, Lessor shall return
to Lessee the Security Deposit or so much thereof as shall not have
heretofore been applied in accordance with the terms of this Rider
Paragraph 4. While Lessor holds the Security Deposit, Lessor shall
have no obligation to pay interest on the same and Lessor shall have
the right to commingle the same with Lessor's other funds. No part of
the Security Deposit shall be considered to be prepayment for any
monies to be paid by Lessee under this Lease. If Lessor conveys
Lessor's interest under this Lease, the Security Deposit, or any part
thereof not previously applied, shall be turned over by Lessor to
Lessor's grantee for proper application of the Security Deposit in
accordance with the terms of this Paragraph and the return thereof in
accordance herewith.
Neither the holder of a mortgage nor the lessor in a ground lease on
property which includes the Premises shall ever be responsible to
Lessee for the return or application of the Security Deposit, whether
or not it succeeds to the position of Lessor hereunder, unless the
same shall have been received in hand by such holder or ground lessor.
-5-
If the Lessor uses or applies all or any portion of the Security
Deposit, Lessee shall within ten (10) days after written demand
therefor deposit cash with Lessor in an amount sufficient to restore
the Security Deposit to the full amount and Lessee's failure to do so
shall be a Breach of this Lease.
5. USE. Notwithstanding anything contained in this Lease, Lessee shall be
solely responsible for obtaining and maintaining in full force and
effect such permits, licenses, approvals, special permits and other
governmental authorizations, if any, as shall be required for Lessee's
use of the Property, the Building, the Premises and the Industrial
Center by Applicable Requirements (except that Lessor shall be
responsible for obtaining any applicable certificate of occupancy
required for Lessee's initial occupancy of the Premises, except for
any requirements necessitated because of Lessee Improvements) and the
failure or inability of Lessee to obtain any such permits, licenses,
approvals, special permits and other governmental authorizations shall
in no way (i) constitute a breach or default of Lessor, (ii) give
Lessee any right to an abatement, offset or other reduction in monthly
Base Rent, other rent or other charges payable under this Lease or
(iii) give Lessee any right to terminate this Lease.
6. BROKERAGE. Lessor and Lessee each warrants and represents for the
benefit of the other that it has had no dealings with any real estate
broker or agent in connection with the negotiation of this Lease, and
that it knows of no real estate broker or agent who is or might be
entitled to a real estate brokerage commission or finder's fee in
connection with this Lease, except for BT Commercial Real Estate and
Warehouse Properties, Inc. (collectively, the "Broker"). Each party
shall indemnify and hold harmless the other from and against any and
all liabilities or expenses arising out of claims made by any broker
or individual other than the Broker for commissions or fees resulting
from the actions of the indemnifying party in connection with this
Lease. Lessor agrees that it shall be solely responsible for the
payment of a brokerage commission to the Broker in connection with
this Lease.
7. (A) IMPROVEMENTS. Subject to delays due to governmental regulation,
unusual scarcity of or inability to obtain labor or materials, labor
difficulties, casualty or other causes reasonably beyond Lessor's
control (collectively "Lessor's Force Majeure") or attributable to
Lessee's action or inaction (including, without limitation, the
activities of Lessee prior to the Commencement Date permitted by Rider
Paragraph 1), Lessor shall use reasonable speed and diligence in the
construction of the work for and respecting the Premises described in
Exhibit F attached hereto ("Lessor's Work"), but Lessee shall have no
claim against Lessor for Lessor's failure so to complete Lessor's
Work, except for the right to terminate this Lease, without further
liability to either party, in accordance with the provisions of Rider
Paragraph 7(B).
-6-
The Premises shall be treated as having been "Substantially Complete"
on the date on which Lessor's Work has been completed except for items
of work and adjustment of equipment and fixtures which can be
completed after occupancy has been taken without causing substantial
interference with Lessee's use of the Premises (i.e. so-called "punch
list items").
Lessor shall complete as soon as conditions practically permit all
punch list items and Lessee shall cooperate with Lessor in providing
access as may be required to complete such work in a normal manner.
Lessee agrees that no delay by it, or anyone employed by it, in
performing work to prepare the Premises for occupancy (including,
without limitation, the activities of Lessee prior to the Commencement
Date permitted by Rider Paragraph 1) shall delay commencement of the
Term or the obligation to pay rent, regardless of the reason for such
delay or whether or not it is within the control of Lessee or any such
employee. No such delay caused by Lessee or anyone employed by it
shall be deemed to have occurred unless and until Lessor has given
written notice to Lessee specifying the action or inaction which
Lessor contends constitutes such a delay. If such action or inaction
is not cured within one (1) business day after Lessee's receipt of
such notice, then a Lessee delay, as set forth in such notice, shall
be deemed to have occurred commencing as of the date Lessee received
such notice and continuing for the number of days the Substantial
Completion of the Premises was in fact delayed as a direct result of
such action or inaction.
7. (B) If Lessor shall have failed substantially to complete Lessor's Work on
or before the date which is one hundred twenty (120) days subsequent
to the date of this. Lease set forth in Paragraph 1.1 of this Lease
(which date shall be extended automatically for such periods of time
as Lessor is prevented from proceeding with or completing the same by
reason of "Lessor's Force Majeure" (as defined in Rider Paragraph 7
(A)) or any act or failure to act of Lessee which interferes with
Lessor's construction of the Lessor's Work, including, without
limitation, the activities of Lessee prior to the Commencement Date
permitted by Rider Paragraph 1, without limiting Lessor's other rights
on account thereof), Lessee shall have the right to terminate this
Lease by giving notice to Lessor of Lessee's desire so to do within
thirty (30) days after such date; and, upon the giving of such notice,
the term of this Lease shall cease and come to an end without further
liability or obligation on the party of either party unless, within
thirty (30) days after receipt of such notice, Lessor Substantially
Completes Lessor's Work; and such right of termination shall be
Lessee's sole and exclusive remedy for Lessor's failure so to complete
such work within such time.
7. (C) Except as provided in this Rider Paragraph 7 and in Paragraphs 2.2 and
2.3 of the Lease, the Premises shall be delivered to Lessee and Lessee
hereby accepts the
-7-
Premises in their condition as of the Commencement Date, subject to
Applicable Requirements and the terms and provisions of this Lease and
the Exhibits attached hereto and all matters disclosed thereby and
Lessor shall have no obligations to perform any additions,
alterations, improvements or demolition in the Premises.
7. (D) Lessor, at Lessor's expense, shall be responsible for (i) Lessor's
Work complying on the Commencement Date with the requirements of Title
III of the Federal Americans With Disabilities Act of 1993 (the "ADA")
in effect on the Commencement Date and (ii) performing any other
alterations, improvements or modifications required by Title III of
the ADA in effect as of the Commencement Date because of the
performance of Lessor's Work; provided, however, that notwithstanding
the foregoing, Lessee, at Lessee's expense, shall be responsible for
(i) any improvements performed by or for Lessee or any assignee or
subtenant of Lessee other than Lessor's Work (collectively "Lessee
Improvements") complying with Title III of the ADA and (ii) compliance
with the ADA required because of "Lessee's Specific Use of the
Premises" (as defined below) or Lessee Improvements. The term
"Lessee's Specific Use of the Premises" as used in this Lease shall
not refer to the general warehouse and distribution and ancillary
office use of the Premises, but shall refer to the specific products
and operations Lessee and any assignee and subtenant of Lessee use in
the Premises and the manner in which Lessee and any assignee and
subtenant of Lessee use such products and conduct such operations.
7. (E) Notwithstanding the foregoing, Lessor shall only perform those
portions of Lessor's Work described in Exhibit F-l ("Lessee's Special
Work") if within seven (7) days after the date of this Lease Lessee
authorizes Lessor to perform Lessee's Special Work for a price which
is reasonably acceptable to Lessee ("Lessee's Special Work Cost").
Lessor's Work shall be performed at Lessor's expense, except for
Lessee's Special Work, for which Lessee shall reimburse Lessor, as
rent, Lessee's Special Work Cost on or before the date which is thirty
(30) days subsequent to the Commencement Date.
8. INSERT TO PARAGRAPHS 2.3, 2.8 AND 6.3: ", including, without
limitation, the Declaration of Covenants and Restrictions attached
hereto as Exhibit D (the "Exhibit D Covenants"),"
9. INSERT TO PARAGRAPH 6.2 (a); "Neither Lessee nor any assignee,
subtenant, agent, independent contractor, contractor, employee,
servant, invitee, customer, client, supplier, shipper or any other
individual or entity that enters upon the Premises, the Building, the
Property or the Industrial Center by, through or under Lessee
(individually, a "Lessee Party", collectively, "Lessee Parties")"
-8-
10. INSERT TO PARAGRAPH 6.2(c): "Lessee or any Lessee Party or under the
control of Lessee or any Lessee Party."
11. INSERT TO PARAGRAPH 6.2(c) PARAGRAPH 8.7 AND PARAGRAPH 8.8:
"or any Lessee Party"
12. INTENTIONALLY OMITTED.
13. INTENTIONALLY OMITTED.
14. INSERT TO PARAGRAPH 7.1(b): "If Lessor reasonably determines that any
such contract fails to satisfy the requirements of this Lease, within
fifteen (15) business days after Lessor notifies Lessee of such
failure, Lessee shall deliver to Lessor a substitute contract which
complies with such requirements."
15. INSERT TO PARAGRAPH 7.3(b): "Lessee shall not make any Alterations or
Utility Installations in, on, under or about the Premises, whether
before or during the Term of this Lease, except in each instance in
accordance with plans and specifications therefore first submitted to
and approved by Lessor, which approval shall not be withheld
unreasonably or delayed. Lessor shall not be deemed unreasonable for
withholding its approval of any alterations, improvements or additions
which (a) would involve or affect any structural or exterior element
of the Building, the Premises or the Industrial Center: (b) increase
or decrease the size of the Building, the Premises or the Industrial
Center or otherwise change the exterior of the Building or the
Premises; (c) adds any other buildings, structures or improvements;
(d) would affect any Utility Installation or utility service, line or
conduit serving the Building, the Premises or the Industrial Center;
or (e) will require unusual expense to readapt the Building, the
Premises or the Industrial Center to normal warehouse and/or
distribution use upon the termination of this Lease. Lessor's review
and approval of any such plans and specifications and consent to
perform work described therein shall not be deemed an agreement by
Lessor that such plans, specifications and work conform with
Applicable Requirements nor deemed a waiver of Tenant's obligations
under this Lease with respect to Applicable Requirements nor impose
any liability or obligation upon Lessor with respect to the
completeness, design sufficiency or compliance of such plans,
specifications and work with Applicable Requirements. All consents
given by Lessor shall be deemed conditioned on Lessee prior to
commencing any such work, (i) acquiring all requisite permits,
licenses and approvals to do so from appropriate governmental
authorities and bodies and other bodies; (ii) delivering to Lessor a
statement of the names and addresses of all its contractors and
subcontractors and evidence satisfactory to Lessor that all of such
contractors and subcontractors are currently licensed by the
appropriate governmental authorities to perform such work and the
estimated costs of all labor and materials to be
-9-
furnished by them; (iii) causing each contractor and subcontractor to
carry workmen's compensation insurance in statutory amounts covering
all contractor's and subcontractor's employees and comprehensive
general liability insurance with such limits as Lessor may require
reasonably, but in no event less than $2,000,000.00 combined single
limit (and property damage) with such insurance to be written in
companies approved reasonably by Lessor and insuring Lessor and Lessee
as well as the contractors and subcontractors and delivering to Lessor
certificates of all such insurance; and (iv) complying with all
conditions and requirements of said permits, licenses and approvals in
a prompt and expeditious manner. Lessee covenants and agrees that any
Alterations and Utility Installations made by it to or upon the
Premises shall be done in a good and workmanlike manner and in
compliance with all Applicable Requirements now or hereafter in force
and that materials of first and otherwise good and sufficient quality
shall be employed therein."
16. INSERT TO PARAGRAPH 8.3(a): "(including, without limitation, the peril
of flood and, at Lessor's option, the peril of earthquake, provided
that only fifty percent (50%) of increases in the premium for
earthquake insurance above the Base Premium shall be included in the
Insurance Cost Increase)"
17. INTENTIONALLY OMITTED.
18. INSERT TO PARAGRAPH 8.3(a): "Lessor may also maintain such other
insurance as may be required by any ground lessor or the holder of any
mortgage or deed of trust upon the Building, the Property, the
Premises or the Industrial Center or Lessor's interest therein and any
such insurance shall be deemed to be "Required Insurance.""
19. INSERT TO PARAGRAPH 8.4: "and other fixtures and equipment, goods,
wares, merchandise, products"
20. INSERT TO PARAGRAPH 8.5: "to be maintained by Lessee"
21. INSERT TO PARAGRAPH 8.5: "With respect to any insurance required to be
maintained by Lessee under this Lease,"
22. INSERT TO PARAGRAPH 8.8: "Trade Fixtures and other fixtures and
equipment, Lessee Owned Alterations and Utility Installations,
products"
23. INSERT TO PARAGRAPH 9.3 AND 9.5: "as of the date specified in Lessor's
notice, which shall not be less than thirty (30) days nor more than
sixty (60) days after the giving of such notice"
-10-
24. INSERT TO PARAGRAPH 9.4: "Lessor may, at Lessor's option by written
notice to Lessee given within forty five (45) days after the
occurrence of such damage or destruction, either elect (i) to repair
such damage as soon as reasonably practicable under the circumstances
with (but only to the extent of) the insurance proceeds, in which case
this Lease shall continue in force or (ii) to cancel and terminate
this Lease as of a date set forth in said notice which shall be not
earlier than thirty (30) days nor later than sixty (60) days from the
date of said notice, in which case this Lease shall terminate as of
the date so set forth in Lessor's notice."
25. INSERT AT END OF PARAGRAPH 9.9:
"9.10 COMPLETION OF RESTORATION. Where Lessor is obligated or elects
to effect restoration of the Premises pursuant to the
provisions of any subdivisions of Paragraph 9 of this Lease,
unless such restoration is completed within one hundred fifty
(150) days after the date of the occurrence of the damage or
destruction, such period to be subject, however, to extensions
of (i) no more than sixty (60) days in the aggregate where the
delay in completion of such work is due to Lessor's Force
Majeure and (ii) one (1) day for each day after the tenth
(10th) day but prior to the thirtieth (30th) day after the
effective date of "Lessor's Restoration Notice" (as described
below) that Lessee does not notify Lessor that Lessee waives
"Lessee's Restoration Notice Termination Right" (as described
below), Lessee shall have the right to terminate this Lease
exercised by the giving of notice to Lessor at any time within
the time period from the expiration of such one hundred fifty
(150) day period (as extended pursuant to the provisions of
this Paragraph 9.10)) until the date which is thirty (30) days
subsequent to the expiration of such one hundred fifty (150)
day period (as so extended), such termination to take effect as
of the thirtieth (30th) day after the date of receipt by Lessor
of Lessee's notice, with the same force and effect as if such
date were the date originally established as the expiration
date hereof unless, within such thirty (30) day period such
restoration is substantially completed, in which case Lessee's
notice of termination shall be 6f no force and effect and this
Lease and the Lease Term shall continue in full force and
effect. If Lessor shall determine within such one hundred fifty
(150) day (as extended) period that such restoration shall not
be substantially completed within such one hundred fifty (150)
day (as extended) period, Lessor shall notify ("Lessor's
Restoration Notice") Lessee within thirty (30) days after such
determination and Lessor may with such notice elect to
terminate this Lease as of a date set forth in such notice
which shall not be earlier than thirty (30) days nor later than
sixty (60) days from the date of said notice, in which case
this Lease shall terminate as of the date so set forth in
Lessor's notice. If Lessor shall give Lessor's Restoration
Notice but shall
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not so terminate this Lease, Lessee shall have the right
("Lessee's Restoration Notice Termination Right") by notice to
Lessor within thirty (30) days after Lessor's notice to
terminate this Lease, whereupon this Lease shall terminate as of
the date of Lessee's notice with the same force and effect as if
such date were the date originally established as the expiration
date hereof For the purposes of this Paragraph 9.10, a
restoration shall be substantially completed if it is
"Substantially Complete" except for "punch list items" (as such
terms are defined in Rider Paragraph 7.
9.11 GENERAL. Notwithstanding anything contained in this Paragraph 9
or any other provision of this Lease to the contrary, (i) if
there is damage or destruction to the Premises, the Building,
the Property or the Industrial Center which is caused by Lessee
or any Lessee Party, Lessor shall have the right to recover
Lessor's damages from Lessee, except as released and waived in
Paragraph 8.6, (ii) Lessor's obligation to restore or repair
shall be subject to the rights of any ground lessor or the
holders of any mortgage or deed of trust on the Premises, the
Building, the Property or the Industrial Center or Lessor's
interest therein, (iii) Lessor shall not be obligated to expend
for any repair or restoration any amount in excess of the net
insurance proceeds available to Lessor plus any deductible
amount applicable to such insurance proceeds, (iv) Lessor's
obligations for any repair or restoration, including, without
limitation, the commencement of any repair or restoration as
required by Paragraph 9.6(b), shall be subject to, and Lessor's
time for performance shall be extended by, delays due to
governmental regulation, unusual scarcity of or inability to
obtain labor or materials, labor difficulties, casualty or other
causes reasonably beyond Lessor's control (collectively,
"Lessor's Force Majeure") and (v) Lessee shall in no event have
any right to reimbursement from Lessor for any funds spent by
Lessee to repair any damage or destruction."
26. INTENTIONALLY OMITTED.
27. ASSIGNMENT AND SUBLETTING.
27.1 RESTRICTIONS ON TRANSFER. Except as otherwise expressly provided
herein, Lessee covenants and agrees that it shall not assign,
mortgage, pledge, hypothecate or otherwise transfer this Lease and/or
Lessee's interest in this Lease or sublet (which term, without
limitation, shall include granting of concessions, licenses or the
like) the whole or any part of the Premises without the prior written
consent of Lessor, which consent shall not be unreasonably withheld or
delayed in accordance with the provisions of Rider Paragraphs 27.1
through 27.7. Any assignment, mortgage, pledge, hypothecation,
transfer or subletting not expressly
-12-
permitted in or consented to by Lessor in accordance with Rider
Paragraphs 27.1 through 27.7 shall be void, ab initio; shall be of no
force and effect; and shall confer no rights on or in favor of third
parties. In addition, Lessor shall be entitled to seek specific
performance of or other equitable relief with respect to the
provisions hereof
27.2 EXCEPTIONS FOR PARENT OR SUBSIDIARY. Notwithstanding the foregoing
provisions of Rider Paragraph 27.1 above and the provisions of Rider
Paragraphs 27.3, 27.4 and 27.6 below, but subject to the provisions of
Rider Paragraphs 27.5 and 27.7 below, Lessee shall have the right to
assign this Lease or to sublet the Premises (in whole or in part) to
any parent or subsidiary corporation of Lessee or to any corporation
into which Lessee may be converted or with which it may merge,
provided that the entity to which this Lease is so assigned or which
so sublets the Premises has a credit worthiness (e.g. assets and
capitalization) and net worth (which shall be determined on a pro
forma basis using generally accepted accounting principles
consistently applied and using the most recent financial statements)
which is sufficient to perform the obligations of Lessee under the
Lease applicable to the Premises in the case of an assignment and
applicable to the portion of the Premises proposed to be sublet in the
case of a sublease.
27.3 SUBLEASE OF A PORTION OF SPACE. Notwithstanding the provisions of
Rider Paragraph 27.1 above but subject to the provisions of this Rider
Paragraph 27.3 and the provisions of Rider Paragraphs 27.5, 27.6 and
27.7 below, Lessee may sublease less than fifty thousand (50,000)
square feet of the floor area of the Premises in the aggregate
provided that in each instance Lessee first obtains the express prior
written consent of Lessor, which consent shall not be unreasonably
withheld or delayed. Lessor shall not be deemed to be unreasonably
withholding its consent to such a proposed subleasing if:
(a) the proposed sublessee is not of a character consistent with the
operation of the Building, or
(b) the proposed sublessee is not of good character and reputation,
or
(c) the proposed sublessee does not possess adequate financial
capability to perform the Lessee's obligations as and when due or
required with respect to the portion of the Premises proposed to
be sublet, or
(d) the sublessee proposes to use the Premises (or part thereof) for
a purpose other than the purpose for which the Premises may be
used as stated in Paragraph 1.8 hereof, or
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(e) the nature of the proposed subtenant's use of the Premises would
involve any increased risk of the use, release or mishandling of
Hazardous Substances, or
(f) there shall be existing any Default or Breach of Lessee (defined
in Paragraph 13.1).
27.4 SUBSTANTIAL SUBLEASING OR ASSIGNMENT. Notwithstanding the provisions
of Rider Paragraph 27.1 above, but subject to the provisions of this
Rider Paragraph 27.4 and the provisions of Rider Paragraphs 27.5, 27.6
and 27.1 below, Lessee covenants and agrees not to assign this Lease
or sublet fifty thousand (50,000) square feet of more of the floor
area of the Premises in the aggregate (which shall be deemed to
include, without limitation, any proposed subleasing which together
with prior subleasings would result in an area equal to or greater
than fifty thousand (50,000) square feet of the floor area of the
Premises in the aggregate being the subject of one or more subleases)
without, in each instance, having first obtained the prior written
consent of Lessor, which consent shall not be unreasonably withheld or
delayed. Lessor shall not be deemed to be unreasonably withholding its
consent to such a proposed assignment or subleasing if:
(a) the proposed assignee or sublessee is not of a character
consistent with the operation of the Building, or
(b) the proposed assignee or sublessee is not of good character and
reputation, or
(c) the proposed assignee or sublessee does not possess adequate
financial capability to perform the Lessee's obligations as and
when due or required, or
(d) the assignee or sublessee proposes to use the Premises (or part
thereof) for a purpose other than the purpose for which the
Premises may be used as stated in Paragraph 1.8 hereof, or
(e) the nature of the proposed assignee of subtenant's use of the
Premises would involve any increased risk of the use, release or
mishandling of Hazardous Substances, or
(f) there shall be existing any Default or Breach of Lessee (defined
in Paragraph 13.1), or
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(g) in the case of a proposed assignment (not including any
assignment pursuant to Rider Paragraph 27.2), Lessor elects, at
its option, by notice given within thirty (30) days after receipt
of Lessee's notice given pursuant to Paragraph 27.5 below, to
terminate this Lease as of the proposed effective date of such
assignment as set forth in Lessee's notice to Lessor pursuant to
Rider Paragraph 27.5; provided, however, that upon such
termination date, all of Lessor's and Lessee's obligations
relating to the period after such termination date (but not those
relating to the period before such termination date) shall cease,
or
(h) in the case of a proposed subleasing which together with prior
subleasings would result in an area equal to fifty thousand
(50,000) square feet or more of the Premises in the aggregate
being the subject of one or more subleases (not including any
subleases pursuant to Rider Paragraph 27.2), Lessor elects, at
its option, by notice given within thirty (30) days after receipt
of Lessee's notice given pursuant to Rider Paragraph 27.5 below,
to terminate this Lease as to such portions of the Premises
proposed to be sublet which would, if sublet, result in an area
greater than fifty thousand (50,000) square feet of the Premises
being sublet (herein called the "Terminated Portion of the
Premises") as of the proposed effective date of such sublease as
set forth in Lessee's notice to Lessor pursuant to Rider
Paragraph 27.5; provided, however that upon such termination
date, all of Lessor's and Lessee's obligations as to the
Terminated Portion of the Premises relating to the period after
such termination date (but not those relating to the period
before such termination date) shall cease and provided, further,
that this Lease shall remain in full force and effect as to the
remainder of the Premises, except that from and after the
termination date the floor area of the Premises shall be reduced
to be the floor area of the remainder of the Premises and the
definition of floor area of the Premises shall be so amended and
after such termination all references in this Lease to the
"Premises" or the "floor area of the Premises" shall be deemed to
be references to the remainder of the Premises and accordingly
Lessee's payments for monthly Base Rent and Lessee's Share of
Common Area Operating Expenses shall be reduced on a pro rata
basis to reflect the size of the remainder of the Premises, and
provided further that Lessor shall have the right to make such
alterations and improvements as may be required to separately
demise the Terminated Portion of the Premises.
27.5 LESSEE'S NOTICE. Lessee shall give Lessor notice of any proposed
sublease or assignment, and said notice shall specify the provisions
of the proposed assignment or subletting, including (a) the name and
address of the proposed assignee or sublessee, (b) in the case of a
proposed assignment or subletting pursuant to Rider Paragraphs 27.3 or
27.4, such information as to the proposed assignee's or
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proposed sublessee's net worth and financial capability and standing
as may reasonably be required for Lessor to make the determination
referred to in Rider Paragraphs 27.3 or 27.4 above (provided, however,
that Lessor shall hold such information confidential having the right
to release same to its officers, accountants, attorneys and mortgage
lenders on a confidential basis), (c) all of the terms and provisions
upon which the proposed assignment or subletting is to be made,
including, without limitation, the proposed effective date of such
assignment or subletting, (d) in the case of a proposed assignment or
subletting pursuant to Rider Paragraphs 27.3 or 27.4, all other
information necessary to make the determination referred to in Rider
Paragraphs 27.3 or 27.4 above and (e) in the case of a proposed
assignment or subletting pursuant to Rider Paragraph 27.2, such
information as may be reasonably required by Lessor to determine that
such proposed assignment or subletting complies with the requirements
of said Rider Paragraph 27.2.
If Lessor shall consent to the proposed assignment or subletting, as
the case may be, then, in such event, Lessee may thereafter sublease
the Premises (in whole or part) or assign pursuant to Lessee's notice,
as given hereunder; provided, however, that if such assignment or
sublease shall not be executed and delivered to Lessor within ninety
(90) days after the date of Lessors consent, the consent shall be
deemed null and void and the provisions of Rider Paragraphs 27.3 and
27.4 shall be applicable.
27.6 PROFIT ON SUBLEASING OR ASSIGNMENT. In addition, in the case of any
assignment or subleasing as to which Lessor may consent (other than an
assignment or subletting permitted under Rider Paragraph 27.2 hereof)
such consent shall be upon the express and further condition, covenant
and agreement, and Lessee hereby covenants and agrees that, in
addition to the monthly Base Rent, other rent (including, without
limitation, payments for insurance premiums and real estate taxes) and
other charges to be paid pursuant to this Lease, fifty percent (50%)
of the "Assignment/Sublease Profits" (hereinafter defined), if any,
shall be paid to Lessor.
The "Assignment/Sublease Profits" shall be the excess, if any, of (a)
the "Assignment/Sublease Net Revenues" as hereinafter defined over (b)
the monthly Base Rent, other rent (including without limitation,
payments for insurance premiums and real estate taxes) and other
charges provided in this Lease (provided, however, that for the
purpose of calculating the Assignment/Sublease Profits in the case of
a sublease, appropriate proportions in the applicable monthly Base
Rent, other rent (including, without limitation, payments for
insurance premiums and real estate taxes) and other charges under this
Lease shall be made based on the percentage of the Premises subleased
and on the terms of the sublease). The "Assignment/Sublease Net
Revenues" shall be the monthly Base
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Rent, other rent (including, without limitation, payments for
insurance premiums and real estate taxes) and all other charges and
sums payable either initially or over the term of the sublease or
assignment plus all other profits and increases to be derived by
Lessee as a result of such subletting or assignment, less the
reasonable costs of Lessee incurred for brokerage commissions, legal
fees and tenant improvements in connection with such subleasing or
assignment amortized over the term of the sublease or assignment.
All payments of the Assignment/Sublease Profits due to Lessor shall be
made within ten (10) business days of receipt of same by Lessee.
27.7 ADDITIONAL CONDITIONS. (A) It shall be a condition of the validity of
any assignment or subletting of right under Rider Paragraph 27.2
above, or consented to under Rider Paragraph 27.4 above, that the
assignee or sublessee agrees directly with Lessor, in form reasonably
satisfactory to Lessor, to be bound by all the obligations of the
Lessee hereunder, including, without limitation, the obligations to
pay the monthly Base Rent, other rent, (including, without limitation,
payments for insurance premiums and real estate taxes), and other
amounts provided for under this Lease (but in the case of a partial
subletting, such sublessee shall agree on a pro rata basis to be so
bound) including the provisions of Rider Paragraphs 27.1 through 27.7
hereof but such assignment or subletting shall not relieve the Lessee
named herein of any of the obligations of the Lessee hereunder, and
Lessee shall remain fully and primarily liable thereof.
(B) As other rent, Lessee shall reimburse Lessor promptly for
reasonable out of pocket legal and other expenses incurred by Lessor
in connection with any request by Lessor for consent to assignment or
subletting.
(C) If this Lease be assigned, or if the Premises or any part thereof
be sublet or occupied by anyone other than Lessee, after the
occurrence of a Lessee Breach or Default Lessor may upon prior notice
to Lessee, at any time and from time to time, collect monthly Base
Rent, other rent (including, without limitation, payments for
insurance premiums and real estate taxes), and other charges from the
assignee, sublessee or occupant and apply the net amount collected to
the monthly Base Rent, other rent (including, without limitation,
payments for insurance premiums and real estate taxes), and other
charges herein reserved, but no such assignment, subletting, occupancy
or collection shall be deemed a waiver of this covenant, or a waiver
of the provisions of Rider Paragraphs 27.1 through 27.7 hereof or the
acceptance of the assignee, sublessee or occupant as a lessee or a
release of Lessee from the further performance by Lessee of covenants
on the part of Lessee herein contained, the Lessee herein named to
remain primarily liable under this Lease.
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(D) The consent by Lessor to an assignment or subletting under any of
the provisions of Rider Paragraphs 27.2 or 27.4 shall in no way be
construed to relieve Lessee from obtaining the express consent in
writing to Lessor to any further assignment or subletting.
(E) Lessor shall have no liability to Lessee or to any proposed
transferee in damages if it is adjudicated that Lessor's consent has
been unreasonably withheld and such unreasonable withholding of
consent constitutes a breach of this Lease or other duty to Lessee,
the proposed transferee or any other person on the part of Lessor. In
such event, Lessee shall not have the right to terminate this Lease,
and Lessee's sole remedy shall tie to have the proposed transfer
declared valid as if Lessor's consent had been duly and timely given.
28. INSERT TO PARAGRAPH 13.1: "(h) Any other matter deemed to be a Breach
by the terms of this Lease."
29. INSERT TO PARAGRAPH 14: ",but this Lease shall terminate only as to
the portion so taken and this Lease shall continue in full force and
effect as to that portion not so taken except as hereinafter
provided."
30. INSERT TO PARAGRAPH 14: ", provided that such award does not affect
the amount of the award otherwise recoverable by Lessor from the
condemning authority if such authority's method of calculation of the
award results in Lessor's award being reduced because of any award to
Lessee."
31. INSERT TO PARAGRAPH 14: "Notwithstanding anything contained in this
Paragraph 14 or any other provisions of this Lease to the contrary,
(i) Lessor's obligations to repair or restore in the event of a
condemnation are subject to (i) the rights of and the availability of
any condemnation award from, any ground lessor or the holder of any
mortgage or deed of trust covering the Premises, the Building, the
Property or the Industrial Center or Lessor's interest therein and
(ii) Lessor's Force Majeure."
32. INSERT TO PARAGRAPH 16.1. "(a) Lessee shall at any time upon not less
than fifteen (15) days prior written notice from Lessor execute,
acknowledge and deliver to Lessor a statement in writing (i)
certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and
effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to
Lessee's knowledge, any uncured defaults or breaches on the part of
Lessor hereunder, or specifying such defaults or breaches if any are
claimed. Any such statement may be conclusively relied upon by any
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prospective purchaser, financier, ground lessor or encumbrancer of the
Premises, the Building, the Land or the Industrial Center or Lessor's
interest therein.
(b) At Lessor's option, Lessee's failure to deliver such statement
within such time shall be a Breach by Lessee under this Lease and/or
shall be conclusive upon Lessee (i) that this Lease is in full force
and effect, without modification except as may be represented by
Lessor, (ii) that there are no uncured defaults or breaches in
Lessor's performance, and (iii) that not more than one (1) month's
rent has been paid in advance."
33. INSERT TO PARAGRAPH 17: "In addition to the foregoing provisions,
Lessee specifically agrees to look solely to Lessor's then equity
interest in the Property and the income therefrom at the time owned,
or in which Lessor holds an interest as ground lessee, for recovery of
any judgment from Lessor, it being specifically agreed that neither
Lessor (original or successor), nor any partner of Lessor nor any
trustee or beneficiary of any trust of which any person holding
Lessor's interest is trustee, shall ever be personally liable for any
such judgment, or for the payment of any monetary obligation to
Lessee. Further, Lessor shall not be liable for any indirect or
consequential damages."
34. NOTICES AND TIME FOR ACTION. Whenever, by the terms of this Lease,
notice shall or may be given either to Lessor or to Lessee such
notices shall be in writing and shall be sent by hand, registered or
certified mail, or overnight or other commercial courier, postage or
delivery charges, as the case may be, prepaid as follows:
If intended for Lessor, addressed to Lessor at the address set
forth in Paragraph 1.1 of this Lease (or to such other address or
addresses as may from time to time hereafter be designated by
Lessor by like notice).
If intended for Lessee, addressed to Lessee at the address set
forth in Paragraph 1.1 of this Lease (or to such other address or
addresses as may from time to time hereafter be designated by
Lessee by like notice).
Except as otherwise provided herein, all such notices shall be
effective when received; provided, that (i) if receipt is refused,
notice shall be effective upon the first occasion that such receipt is
refused or (ii) if the notice is unable to be delivered due to a
change of address of which no notice was given, notice shall be
effective upon the date such delivery was attempted.
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Time is of the essence with respect to any and all notices and periods
for giving of notice or taking any action thereto under this Lease.
35. INSERT TO PARAGRAPH 26: "Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or earlier
termination of this Lease. Any holding over by Lessee after the
expiration of the term of this Lease shall be treated as a tenancy at
sufferance at one hundred fifty percent (150%) the monthly Base Rent
herein (prorated on a daily basis) and shall otherwise be on the terms
and conditions set forth in this Lease, as far as applicable;
provided, however, that neither the foregoing nor any other term or
provision of this Lease shall be deemed to permit Lessee to retain
possession of the Premises or hold over in the Premises after the
expiration or earlier termination of the Lease Term."
36. INSERT TO PARAGRAPH 34. "Notwithstanding any consent to a sign by
Lessor, prior to installing a sign approved by Lessor, Lessee shall
comply with all Applicable Requirements, including, without
limitation, sign bylaws and the Exhibit D Restrictions and shall
deliver to Lessor copies of the applicable permits and the approval of
such sign as given by the Plan Approving Agent under the Exhibit D
Restrictions. Any such sign shall be maintained by Lessee, at Lessee 5
sole cost and expense, in good order, condition and repair and Lessee
shall do no damage to the Premises, the Building and the Industrial
Center in connection with the installation, repair and maintenance of
such sign and shall repair any such damage done, any damage caused by
the failure to properly install, repair and maintain such sign and any
damage. caused by the removal of any such sign. Upon the occurrence of
a Breach of Lessee, Lessor, at Lessor's option and at Lessee's
expense, may remove any such sign."
37. INTENTIONALLY OMITTED
38. INTENTIONALLY OMITTED.
39. TERMINOLOGY. (a) Wherever in this Lease the Term "Landlord" is used
it shall be deemed to mean "Lessor" and wherever in this Lease the
Term "Tenant" is used it shall be deemed to mean "Lessee."
(b) Whenever in the Lease or in this Rider (i) the term "mortgagee"
is used it shall be deemed to also mean the beneficiary of a deed of
trust and (ii) the term mortgage'' is used it shall be deemed to also
mean deed of trust.''
40. INSERT TO PARAGRAPH 4.2: "(e) Notwithstanding the foregoing, no
decrease in Common Area Operating Expenses shall result in a reduction
in the amount otherwise payable by Lessee to the extent said decrease
is attributable to vacancy and no other cause.
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(f) Notwithstanding the foregoing, if Lessor shall spend any amount
included within Common Area Operating Expenses or perform any
obligation of Lessor under Paragraph 7.2 of this Lease or otherwise
because of damage to the Premises, the Building, the Property or the
Industrial Center, including, without limitation, the parking lots and
areas, the truck storage drop off and other truck areas, loading areas
and loading doors, caused by Lessee or its employees, agents,
servants, independent contractors, drivers, haulers or hauling agents,
shipping companies, delivery companies, carriers, customers or clients
or any Lessee Party, Lessee shall be responsible for one hundred
percent (100%) of the cost thereof to the extent such cost is not
actually covered by insurance maintained by Lessor, which cost
(including any deductible under any such insurance) shall be payable
as rent hereunder within fifteen (15) days after Lessor bills Lessee
therefor. If Lessee fails to pay such costs as provided above, Lessor
shall have the same remedies for such non-payment as Lessor has for
the non-payment of rent hereunder.
(g) Notwithstanding the foregoing, Common Area Operating Expenses
shall not include for the purposes of this Lease the cost of
performing Lessor's obligations under Paragraph 7.2 of this Lease for
the foundation and structural components of the Building.
(h) Notwithstanding the foregoing, Common Area Operating Expenses
shall not include for the purposes of this Lease the cost of replacing
the roof on the Building and Lessee's Share of Common Area Operating
Expenses for each calendar year during the Lease Term for performing
Lessor's other obligations under Paragraph 7.2 of this Lease for the
roof ("Lessor's Roof Maintenance Costs") during such calendar year
shall not exceed the applicable "Maximum Roof Maintenance Cost" (as
hereinafter defined) for such calendar year. The "Maximum Roof
Maintenance Cost" for the first calendar year during the Lease Term
shall be Two Thousand Dollars ($2,000.00) (the "Initial Maximum Roof
Maintenance Cost"). The "Maximum Roof Maintenance Cost" for each
subsequent calendar year during the Lease Term shall be the difference
between (i) the product of (x) the number of calendar years from the
Commencement Date through the end of such subsequent calendar year
multiplied by (y) the Initial Maximum Roof Maintenance Cost, minus
(ii) the total cumulative amount of Lessor's Roof Maintenance Costs
from the Commencement Date through the end of such subsequent calendar
year (the "Total Roof Maintenance Costs"), provided for the purpose of
calculating the Total Roof Maintenance Costs no amount expended by
Lessor for Lessor's Roof Maintenance Costs in any calendar year in
excess of Two Thousand Dollars ($2,000.00) shall be included;
provided, further, in no event shall such difference be less than
zero.
(i) Notwithstanding the foregoing, the following shall not constitute
Common Area Operating Expenses for the purposes of this Lease:
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(i) Leasing fees or commissions, advertising and promotional
expenses, legal fees, the cost of tenant improvements,
build out allowances, moving expenses, assumption of rent
under existing leases and other concessions incurred in
connection with leasing space in the Building;
(ii) All capital expenditures and depreciation, except as
otherwise explicitly provided in this Lease;
(iii) The cost of repairs or replacements incurred by reason of
fire or other casualty other than costs not in excess of
the deductible on any insurance maintained by Lessor;
(iv) Damage and repairs to the extent necessitated by the gross
negligence or willful misconduct of Lessor, Lessor's
employees, agents or contractors;
(v) The cost of any item or service to the extent to which
Lessor is actually reimbursed or compensated by insurance,
any warranty, any tenant, or third party;
(vi) Executive salaries of Lessor, salaries of service
personnel to the extent that such service personnel
perform services not solely in connection with the
management, operation, repair or maintenance of the
Building or the Common Areas;
(vii) The general overhead and administrative expenses of the
home office of Lessor not related to the Building;
(viii) Interest on indebtedness, debt amortization, ground rent,
and refinancing costs for any mortgage or ground lease of
the Building, Property and/or the Industrial Center.
(ix) Legal, auditing, consulting and professional fees and
other costs, (other than those legal, auditing, consulting
and professional fees and other costs incurred in
connection with the normal and routine maintenance and
operation of the Building, Property and/or the Industrial
Center) paid or incurred in connection with financings,
refinancings or sales of Lessor's interest in the
Building, Property and/or the Industrial Center;
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(x) Legal expenses in enforcing the terms of any lease or
defending Lessor's title to the Building, the Property
and/or the Industrial Center;
(xi) Charitable or political contributions;
(xii) The cost of testing, redemption or removal of Hazardous
Substances in or on the Building, the Property or the
Industrial Center;
(xiii) Penalties and interest for late payment of any
obligations of Landlord, including, without limitation,
taxes, insurance, and other past due amounts;
(xiv) Property management fees in excess of reasonable fees
given the location of the Building, the type of occupancy
and the services rendered; and
(xv) Any advertising, promotional or marketing expenses for the
Building.
(j) Notwithstanding the foregoing, Lessee's Share of Common Area
Operating Expenses for the deductible amount under any policy of
earthquake insurance shall not exceed Seventy-Five Thousand Dollars
($75,000.00) for any individual earthquake casualty, and if Lessee's
Share of such deductible exceeds one (1) month of monthly Base Rent
payable under this Lease at the time of such earthquake casualty,
Lessee shall pay the portion of Lessee's Share of such deductible
equal to such monthly Base Rent when billed by Lessor therefor in
accordance with Paragraph 4.2 of the Lease, and the amount of such
deductible in excess of such monthly Base Rent (but not including any
amount in excess of Seventy-Five Thousand Dollars ($75,000.00)), plus
interest from the date of the expenditure of such deductible at the
Specified Rate, shall be paid by Lessee, as rent, in equal monthly
installments over the remainder of the Lease Term in the same manner
and at the same time applicable to the payment of Common Area
Operating Expenses."
41. RIGHT OF FIRST OFFER. As of the date of this Lease, the approximately
60,000 square feet of space in the Building not included in the
Premises and shown on Exhibit A attached hereto as the First Offer
Space (the "First Offer Space") is leased to Viking Office Products,
Inc. ("Viking") pursuant to a lease dated January 5, 1996 (the "Viking
Lease"). The Viking Lease and any amendments thereto and the terms
thereof including, but not limited to, the original term thereof
options to extend the term thereof and any expansion options, is
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hereinafter sometimes referred to as the "Existing Lease" and Viking
is hereinafter sometimes called the "Existing Tenant" Subject to the
Existing Lease and the rights of the Existing Tenant thereunder, which
rights are prior to the rights of Lessee under this Paragraph and
provided that at the time the First Offer Space becomes available for
reletting, (i) there shall not be existing any Lessee Default or
Breach (defined in Paragraph 13. 1), (ii) this Lease is still in full
force and effect and (iii) Lessee has not assigned this Lease nor
sublet more than fifty thousand (50,000) square feet of the Premises
in the aggregate (except for an assignment or subletting permitted
under Paragraph 27.2 of this Rider), Lessor agrees not to enter into a
lease or leases to relet the First Offer Space without first giving
Lessee notice ("Lessor's Availability Notice") of the availability of
the First Offer Space and an opportunity to lease the First Offer
Space for a coterminous period of time with the Premises upon the same
terms and conditions applicable to the Premises (including the
Extension Option), except that the monthly Base Rent applicable to the
First Offer Space shall be the fair market monthly base rent for the
First Offer Space as of the commencement of Lessee's leasing thereof
as specified by Lessor in Lessor's Availability Notice (the "First
Offer Space Market Rent"). The term "First Offer Space Market Rent"
shall mean the monthly amount per square foot that a willing, non-
equity, tenant would pay and a willing landlord would accept at arm's
length from a comparable tenant for space in a comparable building or
buildings, with comparable tenant improvements, in a comparable
location, giving appropriate consideration to monthly rental rates per
square foot, the presence or absence of rent escalation clauses such
as operating expense and tax pass-throughs, length of lease term, size
and location of premises being leased, if any, and other generally
applicable terms and conditions of tenancy for a similar building or
buildings; provided, that the value of any improvements to be made to
the First Offer Space by Lessee at Lessee's expense shall not be
considered for the purpose of valuing the Market Rent of the Premises.
In no event shall the First Offer Space Market Rent be less than the
monthly Base Rent payable for the Premises during the same time
period. If Lessee wishes to exercise Lessee's right of first offer,
Lessee shall do so, if at all, by giving Lessor notice of Lessee's
desire to lease the First Offer Space within seven (7) days after
receipt of Lessor's Availability Notice. If Lessee shall give such
notice, the same shall constitute an agreement to enter into an
amendment to this Lease to incorporate the First Offer Space into the
space demised under this Lease upon the terms and conditions set forth
in this Paragraph within thirty (30) days after the receipt by Lessee
of the proposed amendment from Lessor. If Lessee shall not so exercise
such right within such seven (7) day period or fail to execute such
Lease amendment within such thirty (30) day period, time being of the
essence, Lessee shall have no further right of offer with respect to
the entire First Offer Space and Lessor shall be free to enter into a
lease of the First Offer Space or any portion thereof with another
prospective tenant upon terms and conditions as Lessor shall
determine. Lessee's right of first offer shall only apply to the
entire First Offer Space and not only to a
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portion thereof and if Lessee exercises Lessee's right of first offer,
Lessee's right to extend the Lease Term as provided in Rider Paragraph
3 shall apply only to the Premises and the First Offer Space
collectively, and not to either of such spaces independently.
If Lessee shall exercise such right of first offer and if thereafter,
the then occupant of the First Offer Space wrongfully fails to deliver
possession of such space at the time when its tenancy is scheduled to
expire, commencement of the term of Lessee 5 occupancy and lease of
the First Offer Space shall, in the event of such holding over by such
occupant, be deferred until possession of the First Offer Space is
delivered to Lessee. The failure of the then occupant of the First
Offer Space to so vacate shall not give Lessee any right to terminate
this Lease or to deduct from, offset against or withhold monthly Base
Rent, rent or any other amount payable under the Lease (or any
portions thereof).
42. INSERT TO PARAGRAPH 2.6: "Lessee shall not be charged separately for
the use of Lessee's Parking Areas; provided that the foregoing shall
not limit Lessee's responsibility for costs relating to Lessee's
Parking Areas pursuant to Paragraph 4.2 and the Rider Paragraph
referenced therein."
43. INSERT TO PARAGRAPH 2.9: "Lessor shall not enforce any such rules and
regulations in a discriminatory manner."
44. INSERT TO PARAGRAPH 4.2(a): "(x) Depreciation for capital
expenditures made by Lessor (a) to reduce Common Area Operating
Expenses if Lessor has a reasonable basis for believing the capital
expenditure will reduce Common Area Operating Expenses, (b) to comply
with Applicable Requirements which come into effect after the date of
this Lease or (c) to perform Lessor's obligations under Paragraph 7.2
of this Lease or which are otherwise included in the definition of
"Common Area Operating Expenses" (plus, in the case of (a), (b) and
(c), an interest factor, reasonably determined by Lessor, as being the
interest rate then charged for long term mortgages by institutional
lenders on like properties within the general locality in which the
Building is located (the "Specified Interest Rate")), and in the case
of (a), (b) and (c) depreciation shall be determined by dividing the
original cost of such capital expenditure by the number of years of
useful life of the capital item acquired, which useful life shall be
determined reasonably by Lessor in accordance with generally accepted
accounting principles and practices in effect at the time of
acquisition of the capital item. Notwithstanding the foregoing,
Lessee's Share of Common Area Operating Expenses for each calendar
year during the Lease Term for depreciation for (a), (b) and (c) above
("Permitted Depreciation") combined during such calendar year shall
not exceed the applicable "Maximum Depreciation Amount" (as
hereinafter defined) for such calendar year. The "Maximum Depreciation
Amount" for the
-25-
first calendar year during the Lease Term shall be Eight Thousand
Dollars ($8,000.00) (the "Initial Maximum Depreciation Amount"). The
"Maximum Depreciation Amount" for each subsequent calendar year during
the Lease Term shall be the difference between (i) the product of (x)
the number of calendar years from the Commencement Date through the
end of such subsequent calendar year multiplied by (y) the Initial
Depreciation Amount, minus (ii) the total cumulative amount of
Permitted Depreciation from the Commencement Date through the end of
such subsequent calendar year (the "Total Depreciation Amount"),
provided for the purpose of calculating the Total Depreciation Amount
no amount expended by Lessor for Permitted Depreciation in any
calendar year in excess of Eight Thousand Dollars ($8,000.00) shall be
included; provided, further, in no event shall such difference be less
than zero."
45. INSERT TO PARAGRAPH 6.3: "Notwithstanding the foregoing, Lessee shall
have no obligation to make any alterations or improvements to the
Premises which are required by Applicable Requirements unless such
requirement is caused by "Lessee Improvements" or "Lessee's Specific
Use of the Premises" (as such terms are defined in Rider Paragraph 7),
provided that Lessee may be required to pay for all or a portion of
the cost of such additions or alterations as explicitly provided in
Paragraphs 4.2, 7.1 and 7.3 of this Lease and the Rider Paragraphs
referenced therein and Rider Paragraph 7 of this Lease. Lessor shall
not enter into any new restrictions of record that will materially
increase Lessee's obligations or decrease Lessee's rights hereunder
without either (i) Lessor assuming such obligations in the case of
increased obligations or (ii) obtaining the prior written consent of
Lessee which shall not be unreasonably withheld, delayed or
conditioned.
46. INSERT TO PARAGRAPH 7.1(a): "Notwithstanding the foregoing, Lessee's
obligations to repair under this Rider Paragraph 7.1(a) shall not
apply to (i) damage or repairs to the extent any insurance policy
carried by Lessor in connection with the Building actually pays Lessor
for the cost of the restoration or repair, provided that Lessee shall
reimburse Lessor, as rent, within fifteen (15) business days of being
billed therefor for any deductible amount under any such insurance and
any other costs of the restoration or repair for work subject to
Lessee's obligations under Rider Paragraph 7.1 not actually paid for
by such insurance, provided, further, that if the restoration or
repair paid for by such insurance includes areas outside of the
Premises, Lessee shall only be so responsible for Lessee's Share of
such deductible, (ii) damage to the extent caused by the gross
negligence or intentional misconduct of Lessor or Lessor's employees,
agents or contractors, (iii) conditions to the extent actually covered
by any warranties of Landlord's contractors, (iv) damage or repairs
caused by fire or other casualty, which shall be subject to the
provisions of Paragraph 9 of this Lease and (v) the replacement of the
heating, ventilating and air conditioning units servicing the Premises
(the "Premises HVAC Units"), unless such replacement is a
-26-
"Lessee Caused Replacement" (as defined below), provided that Lessee
shall be responsible for maintaining the Premises HVAC Units at
Lessee's sole cost and expense. Except for "Lessee's Caused
Replacements" (as defined below), any replacements to the base
building systems of the Premises (other than the Premises HVAC Units)
which become necessary during the Term of the Lease shall be performed
by Lessor and the cost thereof shall be amortized over the useful life
of such replacement, as reasonably determined by Landlord in
accordance with generally accepted accounting principles. Lessee shall
reimburse Lessor, as rent, at the same time and in the same manner as
applicable to the payment of Common Area Operating Expenses, for the
portion of such amortization coming due during the Term of this Lease
only plus interest at the Specified Interest Rate on the cost of such
replacement from the date of expenditure by Lessor. Notwithstanding
the foregoing, Lessee shall be required to make replacements required
pursuant to Paragraph 7.1 of the Lease at Lessee's sole cost and
expense if such replacements are required by (i) Lessee's Specific Use
of the Premises, (ii) Lessee Improvements, (iii) a Lessee Default or
Breach or (iv) the gross negligence or willful misconduct of Lessee or
any Lessee Party (collectively "Lessee Caused Replacements").
47. INSERT TO PARAGRAPH 7.4(c): "and damage to the extent caused by fire
or other casualty or the default by Lessor under the terms of this
Lease,
48. INSERT TO PARAGRAPH 8.1(a): "The Base Premium" shall be the annual
premium applicable to calendar year 1997 (being the period from
January 1, 1997 through December 31, 1997)."
49. INSERT TO PARAGRAPH 8.4: "All insurance required or permitted to be
maintained by Lessee and Lessor hereunder may be in the form of
blanket policies, so called, insuring the Premises as well as other
locations."
50. INSERT TO PARAGRAPH 10.2: "The definition of "Real Property Taxes"
shall not include (i) any amount which is imposed as a result of a
sale of the Building, the Property or the Industrial Center (other
than a transfer to a real estate investment trust (a "REIT")) during
the first year of the Lease Term provided that the definition of "Real
Property Taxes" shall include any such amounts resulting from a sale
after the first year of the Original Lease Term, (ii) any amount which
is imposed as a result of the first transfer of the Building, the
Property or the Industrial Center into a REIT, provided that the
definition of "Real Property Taxes" shall include any amounts
resulting from transfers to a REIT after the first transfer, (iii)
income, estate, gift, inheritance, franchise or transfer taxes;
provided, however, that if any time during the Lease Term the present
system of ad valorem taxation of real property shall be changed so
that in lieu of or in addition to, the whole or any part of the ad
valorem tax on real property, there
-27-
shall be assessed on Lessor a capital levy or other tax on the gross
rents received with respect to the Industrial Center, or a Federal,
State, County, Municipal, or other local income, franchise, excise of
similar tax, assessment, levy or charge (distinct form any now in
effect in the jurisdiction in which the Industrial Center is located)
measured by or based in whole or in part, upon any such gross rents,
then any and all of such taxes, assessments, levies or charges, to the
extent so measured or based, shall be deemed to be included with in
the term "Real Property Taxes" but only to the extent that the same
would be payable if the Industrial Center were the only property of
Lessor, (iv) any increases attributable to an expansion of the
Building unless such improvements are constructed for Lessee's sole
benefit, in which event Lessee shall be responsible for one hundred
percent (100%) of such increases and (v) interest or penalties for
Lessor's failure to pay taxes when due, except to the extent such
failure is due to Lessee's failure to pay such taxes to Lessor when
provided for pursuant to this Lease. If any assessments affecting the
Premises are payable in installments and Lessor should prepay such
assessments in advance of the date such installments would become due,
Lessee shall be solely responsible for the portion of such assessment
that would have normally come due as an installment, unless consented
to by Lessee in writing."
51. INSERT TO PARAGRAPH 1.1: "Notwithstanding the foregoing, Lessor and
Lessee agree that during the time period starting with the
Commencement Date of the Lease and ending on the last day of the
seventh (7th) months following the month in which the Commencement
Date occurs (the "Initial Period"), Lessee shall have the right to
occupy an approximately 50,000 square foot portion of the Premises,
and Lessee shall not have the right to occupy the remaining portion of
the Premises (the "Remaining Portion") during such Initial Period,
except that Lessee shall have the right to sublet the Remaining
Portion of the Premises during the Initial Period, subject to the
terms of this Lease. Nothing herein shall be deemed to excuse Lessee
from Lessee's other obligations under this Lease with respect to the
Remaining Portion during the Initial Period, including but not limited
to the obligations described herein to repair and maintain the
Remaining Portion; nor shall Lessee's obligation to pay monthly Base
Rent or Share of Common Area Operating Expenses be reduced as a result
of Lessee' non-occupancy of the Remaining Portion."
52. INSERT TO PARAGRAPH 2.4: "except as otherwise expressly provided in
this Lease."
53. INSERT TO PARAGRAPH 2.3: "performed in accordance with the provisions
of Paragraphs 7.1 and 7.2 of this Lease."
54. INSERT TO PARAGRAPH 2.3: "without giving consideration to "Lessee's
Specific Uses of the Premises" (as defined in Rider Paragraph 7)."
-28-
55. INSERT TO PARAGRAPH 6.2(b): "Lessee or any Lessee Party, to spill or
release any Hazardous Substance in, on, under or about the Premises,
the Building, the Property or the Industrial Center"
56. INSERT TO PARAGRAPH 7.1(c): "beyond any applicable notice and cure
period (except in an emergency, in which case no notice and cure
period shall be applicable),"
57. INSERT TO PARAGRAPH 10.2(b): "for calendar year 1997 (being the period
from January 1, 1997 through December 31, 1997)."
58. INSERT TO PARAGRAPH 13.1(a): "for more than ninety (90) consecutive
days."
59. INSERT TO PARAGRAPH 13.1(b): "within five (5) business days after
notice that such sum is past due"
60. INSERT TO PARAGRAPH 13.1(c): "if Lessor has a reasonable basis to
believe that Lessee is not in compliance with Applicable Requirements"
61. INSERT TO PARAGRAPH 32: "Upon reasonable advance notice (except in the
case of any emergency),"
62. INSERT TO PARAGRAPH 7.3:
"(d) Notwithstanding the terms of Paragraph 7.3 of this Lease, Lessee
shall have the right, without obtaining the prior consent of Lessor,
to make Alterations within the Premises where:
(a) the same are within the interior of the Building and do not
have any effect or appearance on the exterior of the Building, it
being specifically understood and agreed that no changes in any
exterior glass, doors or windows shall be permitted under this
Paragraph 7.3(d);
(b) the same do not affect any structural element of the
Building, any Utility Installation in the Building or the fire
protection system of the Building;
(c) the same shall not in any individual case exceed $25,000.00
in cost, and in the aggregate together with any prior work under
this Paragraph 7.3(d) shall not exceed $100,000.00 in cost; and
-29-
(d) Lessee shall comply with all other provisions of this Lease
applicable to Alterations and Utility Installations other than
the requirement for obtaining Lessor's prior consent and if such
work increases the cost of insurance or taxes or of services,
Lessee shall pay for any such increase in cost;
provided, however, that Lessee shall, within fifteen (15) days after
making of any such Alteration, deliver to Lessor as built plans and
specifications, describing such work in reasonable detail."
63. INSERT TO PARAGRAPH 7.2: "On or prior to the date which is one (1)
year subsequent to the Commencement Date (the "Roof Replacement
Substantial Completion Date"), Lessor shall remove the existing roof
membrane and substantially complete the replacement of the roof
membrane and roof flashing of the Building substantially in accordance
with the specifications attached hereto as Exhibit G with a with a no
dollar limit warranty. The Roof Replacement Substantial Completion
Date shall be automatically extended for no more than sixty (60) days
in the aggregate for such periods of time as Lessor is delayed in the
performance of such work by "Lessor's Force Majeure" (as defined in
Rider Paragraph 7). For the purpose of this Rider Paragraph 63, such
work shall be substantially completed if it is "Substantially
Complete" except for "punch list items" (as such terms are defined in
Rider Paragraph 7)."
-30-
EXHIBIT A
FLOOR PLAN OF THE PREMISES
(INCLUDING THE SECOND FLOOR OFFICES)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇, ▇▇
[DIAGRAM APPEARS TO LEFT]
EXHIBIT B
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
LEGAL DESCRIPTION
That certain parcel of land in the City of Hayward, County of Alameda, State of
California shown as Parcel 1 on Parcel Map 1530, filed November 5, 1974 in Book
84 of Maps, Page 66 with the Alameda County Records.
Excepting therefrom, all that portion conveyed in that certain "Final Order Of
Condemnation" in favor of the City of Hayward, a ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇-▇ ▇▇▇▇▇-▇ Superior Court of Alameda County, by instrument recorded May 29,
1987, Series No. 87-151484 with the Alameda County Records.
EXHIBIT C
LESSEE'S PARKING AREAS
SITE PLAN (APPEARS ABOVE)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
HAYWARD INDUSTRIAL CENTER
CABOT, CABOT & FORBES RECORDED AT REQUEST OF
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Title Insurance & Trust Co.
SUITE 1190 At 9 A.M.
SAN FRANCISCO, CALIFORNIA
DECLARATION OF COVENANTS
AND RESTRICTIONS
WHEREAS, CABOT, CABOT & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PROPERTIES, INC., a Delaware
corporation (hereinafter called "Cabot") is the owner of a portion of and has a
contract to purchase the balance of all that certain real property located in
the City of Hayward, County of Alameda, State of California, more particularly
described in Exhibit A, attached hereto and incorporated herein by reference
thereto; and
WHEREAS, it is the desire and intention of Cabot to develop all of
said property as an industrial center, beginning with development of that
portion thereof more particularly described in Exhibit B, attached hereto and
incorporated herein by reference thereto (hereinafter called "Initial Restricted
Area"); and
WHEREAS, it is the desire and intention of Cabot to impose upon the
Initial Restricted Area and such other portions of the property described in
Exhibit A made subject hereto from time to time, mutually beneficial
restrictions under a general plan of improvement for the benefit of all of said
property, the improvements theron and the future owners thereof;
NOW, THEREFORE, Cabot hereby declares that the Initial Restricted Area
(and such other portions of the property described in Exhibit A as may be, from
time to time, designated by Cabot pursuant to the provision herein-after set
forth ) is held and shall be held, conveyed, hypothecated, encumbered, leased,
rented, used, occupied and improved, subject to the following limitations,
restrictions and covenants, all of which are declared and agreed to be in
furtherance of a plan for the subdivision, improvement and sale of the
Restricted Area (as hereinafter defined) and are established and agreed upon for
the purpose of enhancing and perfecting the value, desirability and
attractiveness of the real property and shall be binding on all parties having
or acquiring any right, title or interest in the property made subject hereto or
any part thereof, and shall be for the benefit of each owner of any portion of
said real property, or any interest therein, and shall inure to the benefit of
and be binding upon each successor in interest of the owners thereof.
A. Definitions.
1. "Approving Agent" means, in the following order of precedence:
(a) Cabot, so long as it owns of record any land in the Restricted Area,
or thereafter
(b) Any corporation, association or trust controlled by Cabot or with
which Cabot has been merged or consolidated or by which Cabot has
been acquired, all as certified of record by Cabot (herein-after
called Cabot's Successor) so long as it owns of record any land in
the Restricted Area and provided it has been granted of record by
Cabot the exclusive right to approve plans and grant variances as
hereinafter set forth, or hereafter
(c) Any association (whether or not incorporated ) organized by a
majority of the owners of record of land in the Restricted Area for
the purpose, amont others, of approving plans and granting variances
as hereinafter provided, in which membership is available to all
such owners without charge, provided Cabot or Cabot's Successor has
granted to it of record the exclusive right to approve plans and
grant variances as hereinafter set forth which Cabot agrees will be
done by it or Cabot's Successor before Cabot or Cabot's Successor
ceases to own of record any land in the Restricted Area, if written
request therefor is received prior to that time.
2. "Restricted Area" means the Initial Restricted Area and also such other
portions of the property described in Exhibit A as may from time to time
be designated as subject to the provisions hereof by Cabot or Cabot's
Successor by duly recorded designation referring to this instrument,
whether or not such additional areas are owned by Cabot in fee at the
date hereof.
3. "Site" means an area of land in the same ownership either shown as one
lot on a recorded plan or, if not so shown, described as the Site for one
or more buildings by the owner in a recorded instrument, whether or not
in either case acquired at one time or previously so shown as more than
one lot, or shown or described for the purpose of lease but not of
conveyance as more than one lot, if an easement or easements over any
portion or portions of a Site established by recorded plan or recorded
instrument then exists or exist or is or are reserved by Cabot for any
purpose whatsoever, the area of such portion or portions shall be
included in computing the area of that Site. If subsequent to the
establishment of a Site by recorded plan or recorded instrument, any
portion or portions thereof are for railroad, street,
2.
highway, utility or public purpose taken by right to eminent domain, or
deed in lieu thereof, or dedicated or conveyed pursuant to reservation by
Cabot, the area of such portion or portions shall continue to be included
thereafter in computing the area of that Site.
B. Restrictions.
1. No building shall be constructed upon any site within forty (40) feet of
any street in existence at the time of such construction or within
fifteen (15) feet of any other Site, nor have exterior walls constructed
other than of tilt-up concrete or equal material; nor shall any building
be constructed upon any Site with a roof having a difference in elevation
of more than two (2) feet unless approved in the manner hereinafter
provided.
2. Within the required set-back area from streets there shall be maintained
on each Site only paved walks, paved driveways, lawns and landscaping,
and the surface of so much of the remainder of each Site as is not
covered by buildings, by lawns or by landscaping shall be treated so as
to be dust free. At least two-thirds of the surface of the required set-
back area from streets shall be maintained in lawns or other landscaping.
3. There shall be maintained on each Site facilities for parking, loading
and unloading sufficient to serve the business conducted thereon without
using adjacent streets therefor; and no use shall be made of any Site
which will attract parking in excess of the parking spaces then available
thereon.
4. Each Site shall be used only for manufacturing, processing, storage,
wholesale, office, laboratory, professional, research and development
activities; and there shall not be permitted any junk or salvage yard or
any other use which will be offensive to the neighborhood by reason of
odor, fumes, dust, smoke, noise or pollution or will be hazardous by
reason of danger of fire or explosion. Retail uses shall be limited to
sales of goods and services reasonably required for the convenience of
occupants within the Restricted Area such as restaurants, drug stores,
▇▇▇▇▇▇ and beauty shops, show repair shops, cleaners, post offices, banks
and automobile service stations, and no such retail uses shall be
undertaken unless and until the
3.
same shall have been approved in the manner hereinafter provided.
5. The exterior of all structures and all walks, driveways, lawns and
landscaping on each Site shall be maintained in good order, repair and
condition; and all exterior painted surfaces shall be maintained in
first-class condition and shall be repainted at least once in every four
(4) years.
6. No open storage shall be permitted on any Site unless protected by
screening to a height of not more than eight (8) feet approved in the
manner hereinafter provided.
7. The ratio of building to land area in a Site shall be determined on the
basis of a Site plan to be approved in advance of construction in the
manner hereinafter provided. Such Site plan shall incorporate and show
compliance with all restrictions contained herein with respect to front,
side and rear setbacks and off street parking and shall show adequate
truck loading and maneuvering areas, which shall not be less than the
minimum areas prescribed by ordinances of the City of Hayward. No
buildings, exterior signs or structures shall be erected, or exterior
structural alterations or additions made on any Site except pursuant to
plan and specifications approved in the manner hereinafter provided as to
landscaping and architectural conformity to a garden type industrial
center. Such approvals shall not be withheld unreasonably. The
requirement of approvals set forth in this paragraph are in addition to
and not in substitution for any and all other restrictions herein
contained.
C. Approvals, Variances and Waivers.
1. So long as there in an Approving Agent it shall have the exclusive right
to grant approvals required by the Restrictions and to waive or vary the
Restrictions in particular respects whenever in its opinion such waiver
or variance will not be detrimental to a garden type industrial center.
2. After there ceases to be an Approving Agent the owners of record of the
land in the Restricted Area abutting upon each Site shall have the
exclusive right to grant approvals required by the Restrictions and the
owners of record of two-thirds (2/3) in area of land in the Restricted
Area within five hundred (500) feet of each Site (said area to be defined
by a line parallel to the boundaries of each Site and located five
hundred (500) feet therefrom) shall have the
4.
exclusive right to waive or vary the Restrictions in particular respects
whenever in their opinion such waiver or variance will not be detrimental
to a garden type industrial center.
3. Any person having an interest in any Site may relay upon any instrument
of record signed by the Approving Agent or after there ceases to be an
Approving Agent by the appropriate owners referred to above purporting to
grant an approval or to waive or vary the Restrictions in particular
respects.
4. Any construction, other than exterior signs, driveways, parking areas,
grading landscaping, fences and screens, completed for more than three
(3) months shall be deemed approved, unless prior to the expiration of
such period a suit for enforcement has been commenced and notice thereof
duly recorded. No owner of any Site shall be responsible except for
violations occurring while owner.
D. Enforcement
1. All of the provisions herein contained shall run with the land and shall
be enforceable in equity.
2. So long as there is an Approving Agent it shall have the exclusive right
to enforce the provisions hereof, without liability for failure so to do,
except that each owner of record of land in the Restricted Area shall
have the right to enforce the provisions hereof then applicable to any
Site if the Approving Agent shall fail so to do within thirty (30) days
after written request from any such owner.
3. After there ceases to be an Approving Agent each owner of record of land
in the Restricted Area shall have the right to enforce the Restrictions
then applicable to any Site without liability for failure to do so.
IN WITNESS WHEREOF, CABOT, CABOT & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PROPERTIES, INC., has
caused its corporate seal to be hereto affixed and this instrument to be
executed in its name and behalf by P.M. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ its General
Manager and Assistant Secretary, hereunto duly authorized this 18th day of
November, 1968.
CABOT, CABOT & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PROPERTIES, INC.
By ____________________
Its General Manager
By ____________________
Its Assistant Secretary
5.
STATE OF CALIFORNIA )
) SS.
City and County of San Francisco )
On this 18th day of November, 1968, before me, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a
Notary Public in and for said County and State, residing therein, duly
commissioned and sworn, personally appeared P. M. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
known to me to be the General Manager and Assistant Secretary, respectively, of
CABOT, CABOT & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PROPERTIES, INC., the corporation described in and
that executed the within instrument, and also known to me to be the persons who
executed it on behalf of the corporation therein named, and they acknowledged to
me that such corporation executed the same pursuant to its By-Laws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the City and County of San Francisco, the day and year in this
certificate first above written.
________________________
Notary Public
in and for the City and County of
San Francisco, State of California
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(SEAL)
PROPERTY DESCRIPTION
Parcels 1, 2, 3 and 4 as shown on that certain Amended Record of Survey No.
339, recorded April 4, 1968 in Book 7 of Records of Survey at Pages 13
through 15, Alameda County Records.
EXHIBIT A
EXHIBIT "B"
REAL PROPERTY IN THE CITY OF HAYWARD, COUNTY OF ALAMEDA, STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS;
LOTS 1 TO 5, INCLUSIVE, AS SAID LOTS ARE SHOWN ON THE MAP OF "TRACT 3017,
C.C.& ▇. ▇▇▇▇▇▇▇ INDUSTRIAL CENTER, CITY OF HAYWARD, ALAMEDA COUNTY,
CALIFORNIA:, FILED DECEMBER 25, 1968, IN BOOK 59 OF MAPS, PAGES 53 TO 55,
INCLUSIVE, IN THE OFFICE OF THE COUNTY OF RECORDER OF ALAMEDA COUNTY.
EXHIBIT E
DECLARATION AFFIXING THE COMMENCEMENT DATE OF LEASE
THIS AGREEMENT made this ____ day of ___________________, l99__, by and
between _____________________________, (hereinafter "Lessor") and
____________________________ (hereinafter "Lessee").
WITNESSETH THAT
1. This Agreement is made pursuant to Paragraph 1 of the Rider to that
certain Lease dated ____________________ 199__, between Lessor, as lessor, and
Lessee, as lessee.
2. It is hereby stipulated and agreed that the Term of the Lease commenced
on __________________ 19__, (being the "Commencement Date" under the Lease), and
shall end and expire on ________________ 19__, unless sooner terminated or
extended, as provided for in the Lease.
WITNESS the execution hereof, by persons hereunto duly authorized, the date
first above written.
LESSOR:
________________________
________________________
LESSEE:
________________________
By__________________________
Name________________________
Office________________________
HEREUNTO DULY AUTHORIZED
(CORPORATE SEAL)
EXHIBIT F
---------
MAC ASSOCIATES
ARCHITECTURE, INTERIORS, TENANT PLANNING
APRIL 23, 1997
REVISED PRICING NOTES (3)
▇▇▇▇ ▇. ▇▇▇▇▇▇
MAC PROJECT NO: 7022.00
DEMOLITION NOTES
Dl REMOVE EXISTING FLOORING PREP FOR NEW.
D2 EXISTING VCT FLOORING TO REMAIN.
D3 REMOVE ALL UNUSED ELECTRICAL WIRE AND TELE DATA CABLE.
D4 REMOVE EXISTING GYP. BOARD CEILING.
D5 REMOVE EXISTING KITCHEN/RESTROOM. CAP ALL PLUMBING. PRICE AS TENANT
ALTERNATE (1).
D6 REMOVE EXISTING WINDOW.
D7 REMOVE EXISTING PARTITION.
D8 REMOVE AND SAVE SLOP SINK. CAP ALL PLUMBING. SEE CONSTRUCTION NOTES FOR
RELOCATION.
D9 REMOVE EXISTING DOOR AND FRAME. SEE CONSTRUCTION NOTES FOR RELOCATION.
D10 REMQVE EXISTING SHELVING. PRICE AS TENANT ALTERNATE (3).
Dl1 REMOVE EXISTING DOOR AND FRAME. SEE CONSTRUCTION NOTES FOR RELOCATION.
PRICE AS TENANT ALTERNATE (7).
D12 REMOVE EXISTING DOOR, PARTITION AND WINDOW. PRICE AS TENANT ALTERNATE (2).
D13 REMOVE EXISTING FLOORING, PREP FOR NEW. PRICE AS TENANT ALTERNATE (8)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ * ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
* TEL: 415/989.4040 * FAX: 415/989.4056
MAC ASSOCIATES
ARCHITECTURE, INTERIORS, TENANT PLANNING
APRIL 23, 1997
REVISED PRICING NOTES (3)
▇▇▇▇ ▇. ▇▇▇▇▇▇
MAC PROJECT NO: 7022.00
CONSTRUCTION NOTES
C1 NEW VINYL WALL COVERING OVER EXISTING WALL COVERING. ▇▇▇▇-▇▇▇▇▇▇ OR EQUAL.
PRICE As ALTERNATE (4a): FLOAT AND PAINT, (4b): REMOVE (E) WALL COVERING
AND PAINT.
C2 NEW VCT FLOORING, ▇▇▇▇▇▇▇▇▇ STANDARD EXELON OR EQUAL.
C3 NEW LEVEL LOOP GLUE DOWN CARPET, ▇▇▇▇ COMMERCIAL "SEA ISLAND 11" OR EQUAL.
C4 NEW SHEET VINYL FLOORING.
C5 FILL EXISTING WINDOW/DOOR OPENING.
C6 NEW CEILING HEIGHT PARTITION.
C7 NEW KITCHEN WITH SINGLE COMPARTMENT SINK, 10 LINEAR FEET OF CABINETS,
PLASTIC LAMINATE COUNTER TOP. CONNECT TO EXISTING WATER HEATER.
C8 RELOCATED SLOP SINK. PRICE AS TENANT ALTERNATE (5).
C9 RELOCATED ENTRY DOOR, FRAME, LOCKSET,
C10 NEW CEILING GRID AND TILE, EXTEND PREDOMINANT CEILING GRID IF POSSIBLE.
C11 NEW GYP BOARD CEILING. ONE EXHAUST FAN PER RESTROOM.
C12 RELOCATE EXISTING DOOR AND FRAME. FILL EXISTING DOOR OPENING. PRICE AS
TENANT ALTERNATE (6).
C13 NEW LEVEL LOOP GLUE DOWN CARPET, ▇▇▇▇ COMMERCIAL "SEA ISLAND 11" OR EQUAL.
PRICE As TENANT ALTERNATE (9).
C14 NEW CEILING GRID AND TILE, EXTEND PREDOMINANT CEILING GRID IF POSSIBLE.
PRICE As TENANT ALTERNATE (10).
C15 FILL EXISTING DOOR OPENING. PRICE As TENANT ALTERNATE (11).
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ * ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
* TEL: 415/989.4040 * FAX: 415/989.4056
MAC ASSOCIATES
ARCHITECTURE, INTERIORS, TENANT PLANNING
APRIL 23, 1997
REVISED PRICING NOTES (3)
▇▇▇▇ ▇. ▇▇▇▇▇▇
MAC PROJECT NO: 7022.00
MECHANICAL/ELECTRICAL NOTES
Ml PROVIDE AND INSTALL FIVE (5) NEW 2X4 FLUORESCENT FIXTURES FOUR (4) AT
RESTROOM AND ONE (1) AT HALLWAY.
M2 REUSE EXISTING WATER HEATER FOR RESTROOMS AND KITCHEN.
M3 PROVIDE RESTROOM FIXTURES AS SHOWN.
M4 RELOCATE EXISTING 2X4 FLUORESCENT FIXTURES.
M5 PROVIDE WALL MOUNTED STROBELIGHITS (8), AND ASSOCIATED SMOKE DETECTORS, AND
THREE FIRE PULL STATIONS (ONE AT EACH EXIT).
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ * ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
* TEL: 415/989.4040 * FAX: 415/989.4056
MAC ASSOCIATES
ARCHITECTURE, INTERIORS, TENANT PLANNING
APRIL 23, 1997
REVISED PRICING NOTES (3)
▇▇▇▇ ▇. ▇▇▇▇▇▇
MAC PROJECT NO: 7022.00
RESTROOM NOTES
. FIXTURES AS SHOWN TO BE AMERICAN STANDARD OR EQUAL.
. FLOORING AND BASE TO BE SHEET VINYL.
. WALL FINISH TO BE VINYL WALLCOVERING.
. LAVATORY COUNTERS TO BE PLASTIC LAMINATE.
. PROVIDE CODE REQUIRED SIGNAGE.
. PROVIDE AND INSTALL ACCESSORIES, BOBRICK OR EQUAL, INCLUDING TOILET
PARTITIONS, MIRRORS, GRAB BARS, PAPER TOWEL DISPENSOR, FEMININE NAPKIN
DISPENSOR, COMBO TOILET PAPER/SEAT COVER/FND UNITS.
FINISHES NOTES
. ALL WALLS TO RECEIVE PAINT.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ * ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
* TEL: 415/989.4040 * FAX: 415/989.4056
Title: 1ST FLOOR DEMO PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Proj. Name: RESTORATION HARDWARE
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Drawn by: BCM
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Scale: 1/8" = 1'-0"
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Date: 4/23/97
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Sheet: 1A.0
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Title: 1ST FLOOR PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Drawn by: BCM
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Scale: 1/8" = 1'-0"
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Date: 4/23/97
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Sheet: 1A.1
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Title: 1ST FLOOR PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Proj. No.: 7022.00
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Drawn by: BCM
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Scale: 1/8" = 1'-0"
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Date: 4/23/97
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Sheet: 1A.2
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Title: 2ND FLOOR DEMO PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Drawn by: BCM
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Scale: 1/8" = 1'-0"
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Date: 4/22/97
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Sheet: 2A.0
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Title: 2ND FLOOR PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Proj. Name: RESTORATION HARDWARE
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Scale: 1/8" = 1'-0"
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Date: 4/22/97
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Sheet: 2A.1
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Title: HANDICAP PARKING PLAN
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MAC Associates
ARCHITECTURE, INTERIORS, TENANT PLANNING
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Proj. No.: 7022.00
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Date: 4/22/97
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Sheet: HCP.1
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"RESERVED FOR HANDICPAPED" SIGN
EXHIBIT F - CONTINUED
1. Install approximately 400 linear feet of chain link fence, 8 ft high, with
vinyl slats to divide property line shown on attached plan.
2. Remove existing 8 ft fence and rolling gate, and reinstall chain link fence
and gate with new posts, approximately 40 ft north from the existing location.
FENCE INSTALLATION DIAGRAM
EXHIBIT F-1
TENANT RESPONSIBILITY
SCOPE OF WORK
1. Remove existing cabinetry located in original kitchen (D5).
2. Remove existing shelving (D10).
3. Remove existing door and relocate door (D11) and fill existing door opening
(C12).
4. Remove existing flooring (D13) and replace with new carpet (C13).
5. Remove existing door, partition, and window (D12) and fill window and door
opening (C15). Also provide for new ceiling grid and tiles or extend
existing ceiling grid (C14).
6. Remove existing slop sink (D8) and relocate to original kitchen. (C8).
EXHIBIT G
SPECIFICATIONS
PART 1.00 - GENERAL
1.01 DESCRIPTION
A. Scope of work:
Furnish all labor, materials, equipment and services necessary to
install a new built-up roof and flashings as indicated and
specified herein.
B. Work included in this section:
1. Installation of new roofing.
2. Inspection by the contractor's field supervisory personnel.
C. Work not included in this section:
1. Sheet metal work
2. Electrical
3. Plumbing
4. Carpentry
5. Asbestos (Unless predetermined with building owner and
proper parameters have been followed with regards to
membrane testing for friability).
1.02 QUALITY ASSURANCE AND GUARANTEE
A. Roofing Contractor shall be authorized by the manufacturer. All
work shall be done with their specifications and conditions.
B. A unit guarantee shall be provided by the contractor for
materials and installation.
1.03 MATERIALS HANDLING
A. Delivery of materials:
1
All roofing materials shall be delivered to the site in the
original unbroken manufacturer's wrappings, materials and
containers with the original label thereon intact. If any bulk or
unlabeled materials are to be used, a properly attested
certificate from the manufacturer stating that such materials
shall comply with the specification requirements shall be
furnished to the contractor prior to installation.
B. Storage of materials at job site:
1. Roofing materials shall be raised above the supporting
surfaces, such as on pallets. Roll goods, insulation and any
other materials which may have moisture contact shall be
kept dry. Wet materials shall not be permitted to be used on
the job and shall be removed promptly.
2. Materials containing solvents shall be stored in a dry, cool
area with proper fire and safety precautions.
3. Roll goods shall be stored on end.
4. If stored on other than the ground, all material shall be
distributed so that their resultant weight does not exceed
the design of live load of the deck.
1.04 PROTECTION AND CLEANING
A. Protection:
1. Any work or materials damaged during the handling of
bitumans and roofing materials shall be resotred to their
original (undamaged condition or replaced by the roofing
applicator.
2. Protective covering shall be installed at all paving and
exposed building walls adjacent to hoist and kettles prior
tot he start of work.
3. Protection shall remain in place for the duration of the
roofing work.
1.05 GUARANTEE
2
A. The contractor shall provide a written guarantee that all roofing
materials and installation will be maintained in a waterproof
condition for a period of three (3) years from the date of final
approval of the roofing at no charge to the building owner.
PART 2.00 PRODUCTS
2.01 MATERIALS
A. All materials shall be manufactured by Manville Corporation or
equal.
B. Asphalt: ASTM D-312-78, Type III, Bituman when labeled with a
Softening Point (SP), Minimum Flash Point (FP), Minimum Finished
Blowing Temperature (FBT), and Equiviscous Temperature Range
(EVT) shall not be heated above the FP, held at the FBT longer
than 4 hours and must be applied within 25 degrees of the EVT.
If the asphalt is not so labeled or the foregoing information is
not otherwise available, the asphalt shall be heated in
accordance with information contained in the current
Manufacturer's manual.
C. GlasBase. Asphalt coated fiberglass mat, Approximate weight per
100 square feet, 28 lbs.
D. GlasPly. Asphalt coated fiberglass mat. Approximate weight per
100 square feet, 12 lbs. ASTM D-2176 Type IV.
E. GlasKap. Mineral surfaced cap sheet. Asphalt coated fiberglass
mat with ceramic granule surfacing. Approximate weight per 100
square feet, 72 lbs. Federal Specification # ??-R-630D Class III.
2.02 SUMMARY OF MATERIALS PER 100 SQUARE FEET
A. Built-up roofing system shall be Specification #3GNC:
GlasBase Felt 28 lbs.
Asphalt 25 lbs.
3
GlasPly Felt 12 lbs.
Asphalt 25 lbs.
GlasKap 72 lbs.
Total Average Weight 162 lbs.
B. Roofing and flashings shall be installed in strict accordance
with Manufacturer's recommendations and as specified herein.
PART 3.00 EXECUTION
3.01 GENERAL INSTALLATION REQUIREMENTS
A. All surfaces shall be adequately anchored, even, and free of any
foreign material, moisture, or unevenness.
B. Immediately notify owner of any defects. Built-up roofing shall
not be installed until defects have been corrected. (We
anticipate no significant defects on this project.)
C. Verify that any curbs or nailers are in place and properly
installed.
3.02 DEMOLITION AND REMOVAL OF EXISTING MEMBRANE
A. Remove and dispose of the roofing and flashings down to the deck.
If complete removal is not possible because of solid attachment,
the materials shall be removed down to the original membrane.
B. Minor deck repairs shall be made at no charge to the owner. If
major deck repairs are necessary, the owner shall be informed of
the additional cost and the work shall be performed for a cost
mutually acceptable to the owner and the contractor.
3.03 INSTALLATION OF MATERIALS
A. Asphalt:
1. All kettles and tankers shall have both
4
thermostatic controls and an accurate visible thermometer.
2. Heat and apply at correct EVT between 400 and 500 degrees
Fahrenheit.
3. Solidly map heated asphalt between and under layers of felt
and insulation so that at not point does felt touch felt.
B. Deck Preparation:
Existing roof membrane shall be torn off to the deck as outlined
in section 3.02 above.
C. Base Sheet: ▇▇▇▇▇▇▇▇ #26 GlasBase (or equal)
Nail and/or mechanically fasten as necessary to the prepared
deck. Side laps to be 2", and laps 4". Broom ▇▇▇▇▇ to insure
total adhesion where necessary.
D. Ply ▇▇▇▇▇: ▇▇▇▇▇▇▇▇ #12 GlasPly (or equal)
Starting at low edge apply one 18" wide, then a full 36" wide
GlasPly overlapping the preceding felt by 2". All following ▇▇▇▇▇
are to be applied full width with the same 2" overlap. Install
each felt so that it shall be uniformly set, without voids.
E. Cap Sheet: ▇▇▇▇▇▇▇▇ #72 GlasKap (or equal)
Before starting application of the cap sheet, cut it into 13' to
18' lengths and allow it to flatten. This is especially important
in cold weather to assure good contact with the asphalt.
Starting at the low edge (on slopes up to 2") or at the side
opposite of the prevailing wind (on slopes over 2"), apply one
layer of cap sheet, lapping each layer over the selvage edge of
the preceding one. Lap the end 6" over the preceding felt. Mop
the full width under each layer with asphalt at the rate of 25
lbs. Per 100 sq. feet, making sure that all edges are well sealed
with the cap sheet uniformly set without voids into the hot
asphalt.
F. Angle reinforcement: Items 1 through 5 below shall be done with
multi-layer ▇▇▇▇▇, set in hot asphalt with one layer SBS modified
reinforcement sheet set in hot asphalt.
1. Curbs and walls with metal counterflashing, apply one layer
of Reinforced Base Flashing in the angle formed by the roof
and vertical surface. Base flashing shall be set in a solid
bed of asphalt and nailed at 4" centers adjacent to the top
edge.
2. Voids are not acceptable. Rub materials into all angles.
3. Coat any concrete surfaces with primer and allow to dry.
4. At low curbs, wrap flashing over top of curb. Extend down
over cant area onto roof surface at least 4".
5. At air conditioning housing curbs, which are to receive
roofing on top of housing, run flashing from at least 4" on
roof surface up cant area and over curb. Extend ▇▇▇▇▇ over
curb at least 4" and stagger ▇▇▇▇▇, top felt overlapping
bottom felt by at least 4".
G. Sheet Metal:
All sheet metal which shall have contact and be bonded to any
roofing material shall be primed and allowed to dry before
applying roofing materials.
H. Vent Pipe Flashing:
Metal roof jacks and other metal flashing with metal deck flanges
shall be removed, as necessary, prior to the installation of new
roofing. Contractor shall provide and install new jacks to
replace those damaged or otherwise deemed unserviceable. The new
jacks (lead only), either new or existing shall be installed as
follows: Install on top of completed membrane. The deck flange
shall be set in a solid bed of industrial roof cement (nailed if
over a nailable deck) and shall be covered with two collars of
roofing felt. ▇▇▇▇▇ to extend 4" and 6" beyond the outside
dimension of the deck flange and extend to the inside of the base
of the protrusion. ▇▇▇▇▇ to be set in a solid be of industrial
roof cent or hot asphalt.
I. Can Strip:
Provide new cant strip in angles of roof deck and
6
curbs where present cant strip is unserviceable, or non-existent.
Fit flush at ends and to wall surface. Secure to deck with
adhesive or hot asphalt.
J. Nosing:
New 24 gauge galvanized metal nosing shall be installed as
necessary to the roof edge. Side laps to be set in industrial
roof cement.
K. Pitch Pans:
New sheet metal pitch pans shall be installed around all poles,
brackets, pipe supports, and other items which rest upon or are
attached to the roof deck. Pitch pans shall have dimensions at
least 2" larger than the dimensions of the pole, brackets, pipe
supports, etc. They shall have flanges not less than 3" wide
which shall be set on top of all roofing plies in a full bed of
industrial roof cement. The flange shall then be flashed with two
strips of felt set in hot asphalt. The top strip shall be wider
than that below by at least 3" on all sides. Pitch pans shall be
filled about 1/3 full with roof cement, and the balance with
asphalt. After the asphalt has cooled and settled, refill pitch
pans with roof cement and slope tops to the outside edge.
7