Exhibit 10.21
WAREHOUSE LEASE
between
R & R LAND, LLC
as "Lessor"
and
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC
as "Lessee"
TABLE OF CONTENTS
PAGE
RECITALS.......................................................................1
1. PREMISES....................................................................1
2. TERM; POSSESSION............................................................1
3. RENT AND SECURITY DEPOSIT...................................................2
4. APPURTENANT RIGHTS IN COMMON AREA...........................................2
4.1 Additional Rights Granted to Lessee.....................................2
4.2 Parking And Access......................................................2
4.3 Restrictions on Development.............................................3
5. IMPROVEMENTS AND ALTERATIONS................................................3
6.1 Alterations.............................................................3
6. ABANDONMENT.................................................................3
7. REPAIRS.....................................................................3
8. LIENS.......................................................................4
9. SUBORDINATION; NON-DISTURBANCE AND ATTORNMENT...............................5
10. COMPLIANCE WITH GOVERNMENTAL REGULATIONS...................................5
11. INDEMNIFICATION; EXCULPATION AND INSURANCE.................................5
11.1 Lessee's Indemnification...............................................5
11.2 Lessor's Indemnification...............................................6
11.3 Exculpation............................................................6
11.4 General................................................................6
11.5 Fire and Casualty Insurance............................................7
11.6 Insurable Interest in Trade Fixtures and Improvements..................7
11.7 Waiver of Subrogation Rights...........................................7
11.8 Survival...............................................................8
12. UTILITIES..................................................................8
13. ENTRY BY LESSOR............................................................8
14. DESTRUCTION OF PREMISES....................................................8
14.1 Lessor's Duty to Repair................................................8
14.2 Lessor's Right to Terminate............................................9
14.3 Lessee's Right to Terminate............................................9
14.4 Waiver of Statutory Provisions.........................................9
15. EMINENT DOMAIN............................................................10
15.1 Premises/Ingress and Egress...........................................10
15.2 Restoration of Premises...............................................10
16. ASSIGNMENT AND SUBLETTING.................................................11
17. INSOLVENCY OR BANKRUPTCY..................................................11
18. DEFAULTS AND REMEDIES.....................................................11
18.1 Events of Default.....................................................11
18.2 Remedies..............................................................12
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19. SURRENDER OF LEASE........................................................13
20. ATTORNEY'S FEES...........................................................13
21. NOTICE....................................................................13
22. WAIVER....................................................................14
23. HOLDING OVER..............................................................14
24. SUCCESSORS AND ASSIGNS....................................................14
25. TIME......................................................................14
26. LATE CHARGE...............................................................14
37. LESSOR'S RIGHT OF FIRST REFUSAL TO PURCHASE...............................14
28. QUIET ENJOYMENT...........................................................15
29. COVENANT OF TITLE.........................................................15
30. HAZARDOUS MATERIAL........................................................15
30.1 Lessor's Representations, Warranties and Covenant.....................15
30.2 Lessor's Indemnification Obligation...................................15
30.3 Lessee's Covenant and Indemnification Obligation......................16
30.4 Definition............................................................17
31. MEMORANDUM OF LEASE.......................................................17
32. BROKER'S REPRESENTATION...................................................17
33. FORCE MAJEURE.............................................................18
34. CONDITION OF PREMISES AT TERMINATION......................................18
35. CONSENTS AND APPROVALS....................................................18
36. AUTHORITY.................................................................18
36.1 Lessor's Representations..............................................18
36.2 Lessee's Representations..............................................18
37. ENTIRE AGREEMENT..........................................................19
38. LESSOR'S LIABILITY........................................................19
39. ESTOPPEL CERTIFICATES.....................................................19
40. MISCELLANEOUS.............................................................19
EXHIBIT A: Legal Description of the Land
EXHIBIT B: Plot Plan
EXHIBIT C: Non-Disturbance Agreement
EXHIBIT D: Existing Mortgages
EXHIBIT E: Memorandum of Lease
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WAREHOUSE LEASE
THIS WAREHOUSE LEASE ("Lease") is made and entered into this 1st day of
July, 1999, by and between R & R LAND, LLC, a California limited liability
company ("Lessor"), and ▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, a California limited
liability company ("Lessee").
RECITALS:
A. Lessor is the owner of certain "Land" (defined below), upon which is
constructed the "Warehouse" (defined below).
▇. ▇▇▇▇▇▇ desires to lease to Lessee and Lessee desires to lease from
Lessor the entire rentable area of the Warehouse.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, which the parties hereby acknowledge, Lessor and Lessee
hereby agree as follows:
1. PREMISES. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, upon the terms and subject to the conditions of this Lease, the
entire rentable area (the "Premises"), consisting of approximately 2,580
rentable square feet of space, in that warehouse, and all appurtenances thereto,
located in St. Helena, County of Napa, State of California, known for U.S.
Postal purposes as ▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the
"Warehouse"), which Warehouse is located on the certain real property located in
Napa County commonly known as Assessors Parcel No. ▇▇▇-▇▇▇-▇▇ and more fully
described in EXHIBIT A attached hereto (the "Land"). The location of the
Warehouse on the Land, the "Common Areas," entrances, exits, driveways, parking
areas and service drives are depicted on the drawing attached hereto as EXHIBIT
B.
2. TERM; POSSESSION. The term of this Lease ("Term") shall commence on
July 1, 1999 (the "Commencement Date"), and unless sooner terminated, shall
expire three (3) years after the Commencement Date (the "Expiration Date"). As
used in this Lease, "Month" shall mean a calendar month, except that if the Term
begins on a day other than the first day of a calendar month, the first "month"
shall be the period from (and including) the Commencement Date through (and
including) the last day of the calendar month in which the Commencement Date
falls, and if the Term ends on a day other than the last day of a calendar
month, the last "month" shall be the period from (and including) the first day
of the calendar month in which the Term ends through (and including) the day on
which the Term ends. The term "Lease Year" shall mean each twelve (12) month
period from and after the Commencement Date and each anniversary thereof. If the
Commencement Date occurs on a date other than the first day of a month, the
first Lease Year shall include the partial month and the next twelve (12) full
calendar months.
Notwithstanding the foregoing, Lessor may terminate this Lease for any
reason, in its sole discretion, on any day in the month of January of the year
2000 or 2001 by giving notice to Lessee sixty (60) days prior to such
termination, whether or not Lessee is in default under any provision of
this Lease. (For example, and not by way of limitation, Lessor may terminate the
Lease on January 15, 2000 by giving notice on November 15, 1999).
3. RENT AND SECURITY DEPOSIT. After the Commencement Date and during
the Term, Lessee agrees to pay to Lessor as monthly rent for the Premises the
following amounts:
LEASE YEARS: MONTHLY RENT
1-3 $2,000
Rent shall be payable in advance on the first day of each and every
calendar month during the Term, except that Rent for any partial month at the
beginning of the Term shall be paid on the Commencement Date. Rent for any
partial month at the beginning or end of the Term shall be prorated based on the
actual number of days in the month. Rent is payable in lawful money of the
United States of America, which Lessee agrees to pay to Lessor, without
deduction or offset, except as expressly provided herein, at such place as may
be designated from time to time by Lessor. Lessee shall not be required to pay
to Lessor any portion of the real property taxes levied upon the Land. The term
"Additional Rent" shall mean all payments required to be made by Lessee under
this Lease for insurance. There shall be no security deposit.
4. APPURTENANT RIGHTS IN COMMON AREA.
4.1 ADDITIONAL RIGHTS GRANTED TO LESSEE. The following rights are
granted to Lessee as appurtenances to the Premises:
(a) Lessee and Lessee's employees and customers shall have the
non-exclusive easement and right to use, in common with Lessor and all other
occupants of the "Property" (defined below) and all persons having business with
Lessor and such other occupants, without charge, the parking areas in the
Property owned by Lessor in which the Premises are located and all other areas
and facilities of the Property designed or intended for common use, including
without limitation "Common Areas" as defined below. The term "Common Areas"
means all areas and facilities outside the Premises and within the exterior
boundaries of the Property, but not including the Adjacent Building, that are
provided and designated by Lessor for the general use and convenience of Lessee
and of other tenants of the Property and their respective authorized
representatives and invitees. Common Areas shall include, at a minimum, all
pedestrian walkways, landscaped areas, sidewalks, service drives, parking areas,
entrances, exits, driveways and roads, substantially as depicted on EXHIBIT B.
(b) Lessor shall maintain the parking areas, landscaping and
other Common Areas of the Property; provided, however, Lessee shall be solely
responsible for any landscaping that Lessee installs on the Premises or in the
Common Area.
4.2 ACCESS. Lessor shall use reasonable efforts to maintain the
ingress and egress that exists on the day that this Lease is executed, as shown
on EXHIBIT B, from public streets to the front and rear entrances of the
Premises for the purpose of receiving and delivering fixtures, merchandise and
other property.
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4.3 DEVELOPMENT AND REPAIR OF COMMON AREAS. Lessor hereby reserves
the right to, at any time and from time to time, without liability to Lessee,
and without constituting an eviction, constructive or otherwise, or entitling
Lessee to any abatement of rent or to terminate this Lease or otherwise
releasing Lessee from any of Lessee's obligations under this Lease:
(a) To make alterations, additions, repairs, improvements to or
in, all or any part of the Common Areas;
(b) To install and maintain any and all signs on the exterior
and interior of the Building;
(c) To reduce, increase, enclose or otherwise change at any time
and from time to time the size, number, location and nature of the Common Areas
(including the parking facilities) and other tenancies and premises in the
Property and to create additional rentable areas through the use or enclosure of
common areas, except as otherwise provided herein;
(d) If any governmental authority promulgate or revises any Law
or imposes mandatory or voluntary controls or guidelines on Lessor or the
Property relating to the use or conservation of energy or utilities or the
reduction of automobile or other emissions or reduction or management of traffic
or parking on the Property (collectively "Controls"), to comply with such
Controls, whether mandatory or voluntary, or make any alterations to the Common
Areas or Property related thereto.
5. ALTERATIONS. Lessee shall only have the right to install
furnishings, counters, interior partitions and equipment that are not a
permanent part of the structure, whether the same shall be affixed or nailed to
the Premises or not, or by Lessee, which shall at all times be regarded as
"Trade Fixtures" and shall be separately assessed for real property tax
purposes. Such Trade Fixtures may be removed by the Lessee at any time prior to
the termination of this Lease or any renewals or extensions thereof at Lessee's
own expense. If Lessee removes any of such Trade Fixtures as herein designated,
Lessee shall do so in a way as not to injure the Warehouse.
6. ABANDONMENT. Lessee shall not vacate or abandon the Premises at any
time during the Term, except during a major renovation, and if Lessee shall
abandon, vacate or surrender such Premises, or be disposed by process of law, or
otherwise, any personal property belonging to Lessee and left on the Premises
shall be deemed to be abandoned if the same is not claimed thirty (30) days
after written notice, at the option of the Lessor, except such property as may
be mortgaged to Lessor.
7. MAINTENANCE AND REPAIRS. By taking possession of the Premises Lessee
agrees that the Premises are then in a good and tenantable condition. During the
Term, Lessee shall, at its sole cost and expense, keep, repair and maintain the
Premises, including all windows (interior and exterior), plate glass and
glazing, plumbing and electrical systems located within the Premises, interior
walls (excepting the structural portion of the walls forming the perimeter of
the Premises), floors (except as covered by contractor's warranty, if any) and
all interior
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improvements within the Premises and any septic system that Lessee installs for
its own use, in a first class condition, and Lessee shall keep the Premises in a
clean, safe and orderly condition.
Lessor shall provide, without reimbursement from Lessee, (i) electrical
and plumbing to the exterior wall of the Premises in a manner meeting all
Applicable Laws (including, all current codes) for the existing usage and
electrical and plumbing demands; (ii) all maintenance, replacement and repair to
the foundation, roof, parapets, flashing, gutters, downspouts, floor slab, outer
walls and structural portions of the Building which shall be necessary to
maintain the Premises in a safe, dry and tenantable condition and in good order
and repair and the parking lot (repaving and restriping only), curbs, and
sidewalks; (iii) all maintenance, replacement and repair of underground utility
installations and underground electrical conduit and wire; including, but not
limited to, repairs, maintenance and replacements which are occasioned by
settlement of the Premises, or a portion thereof, or caused by soil conditions
which are not due to change in use of the Premises by Lessee; and (iv) any
repair, maintenance or restoration required as a result of the act or neglect of
Lessor or its agents, employees, contractors, members or partners (collectively,
"Representatives") or resulting from the failure of Lessor to perform in a
timely manner its obligations under this Lease.
Notwithstanding the foregoing, Lessee shall pay the cost of repairs for
any damage occasioned by Lessee's use of the Premises or Property or any act or
omission of Lessee or Lessee's representatives or visitors, to the extent (if
any) not covered by Lessor's insurance. Lessee shall be also responsible for
maintaining those portions of the roof and structure of the Building to the
extent of any replacements or improvements made by Lessee. Lessee shall also be
responsible for installing and maintaining any improvements to the electrical
and plumbing (including septic systems) facilities to the Premises to the extent
that such improvements are necessary due to Lessee's needs in the Premises.
Lessor shall be responsible for abating any asbestos found on the Premises in a
manner that complies with federal, state and local law and further represents
and warrants, to the best of Lessor's knowledge, that (i) all asbestos
previously removed from the Building by Lessor was done in compliance with all
Applicable Laws and (ii) no asbestos remains in the Building.
Lessee hereby waives all rights under and benefits of Subsection (1) of
Civil Code Section 1932 and Sections 1941 and 1942 of the California Civil Code
and under any similar law, statute or ordinance now or hereafter in effect.
8. LIENS. Lessee shall keep the Premises free from any liens arising
out of work performed, materials furnished, or obligations incurred by Lessee.
If Lessee elects to make improvements or additions to the Premises at its own
expense, at least ten (10) days prior to the commencement of any construction
involving expenditures for labor and materials in excess of $5,000.00, Lessee
shall notify Lessor, in writing, of its intention to commence such construction
and the scheduled date for the commencement of such construction. Lessor shall
have the right to enter the Premises to post and keep posted any and all notices
of non-responsibility, or other matters provided or permitted by law for the
Lessor's protection, in connection with any such construction work.
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9. SUBORDINATION; NON-DISTURBANCE AND ATTORNMENT.
9.1. Upon written request by Lessor, this Lease shall be subordinate
to the lien of any first mortgage or deed of trust in any amount whatsoever now
or hereafter placed on or against the land or improvements or either thereof, of
which the Premises are a part, or on or against the Lessor's interest or estate
therein (collectively, "Encumbrance"), without the necessity of the execution
and delivery of any further instruments to effectuate such subordination;
provided, however, that such subordination shall only be effective and be on the
express condition that the holder of the Encumbrance executes and delivers to
Lessee a Non-Disturbance Agreement and Agreement to Honor Rights, in
substantially the form attached hereto as EXHIBIT D ("Non-Disturbance
Agreement"), stating that this Lease shall survive the termination of the
Encumbrance by lapse of time, foreclosure or otherwise so long as Lessee is not
in default under this Lease and that the holder of the Encumbrance will honor
the rights of first refusal granted to Lessee pursuant to this Lease. If any
mortgagee, trustee, or ground lessor shall elect to have this lease prior to the
lien of its mortgage, deed of trust, or ground lease, and gives the Lessee
written notice thereof, this Lease shall be deemed prior to such mortgage, deed
of trust, or ground lease, whether it is dated prior or subsequent to the date
of the mortgage, deed of trust or ground lease, or the recording thereof.
9.2 Within five (5) days from request, the Lessee agrees to execute
and deliver without charge such further instruments evidencing the subordination
of this Lease to such ground or underlying leases and to the lien of any such
mortgages or deeds of trust as the Lessor may reasonably request; provided that
a Non-Disturbance Agreement is executed contemporaneously therewith.
9.3 In the event of foreclosure or the exercise of the power of sale
under any mortgage or deed of trust covering the Premises, the Lessee agrees to
attorn to the purchaser upon any such foreclosure or sale and recognize such
purchaser as the Lessor under this Lease, subject to such purchaser assuming the
remaining obligations of Lessor under the Lease.
10. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Lessee shall observe and
comply with all requirements, rules, orders and regulations of the federal,
state and municipal governments or other duly constituted public authority
affecting the Premises ("Applicable Laws"), including the making of
nonstructural alterations, insofar as they are due to Lessee's occupancy;
provided, however, that in the event such Applicable Laws shall either (a)
require the removal of asbestos or other Hazardous Material not placed on the
Premises by Lessee, (b) require structural changes, including but not limited
to, the erection of fire escapes or exits, or (c) require nonstructural changes
required of retail and/or commercial properties generally irrespective of the
nature of the current tenancy, unless such changes were triggered by a
remodeling or renovation of the Premises by Lessee (in which case Lessee shall
be solely responsible for the changes), then the same shall be complied with by
Lessor at its sole expense.
11. INDEMNIFICATION; EXCULPATION AND INSURANCE.
11.1 LESSEE'S INDEMNIFICATION. During the Term, Lessee shall
indemnify, defend (with counsel reasonably acceptable to Lessor), and save
Lessor and its Representatives,
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harmless against all loss, liability, penalties, claims or demands of whatsoever
nature, including reasonable attorneys' fees and costs, arising from any
occurrence in the Premises (including construction of Lessee's tenant
improvements or Alterations), except to the extent resulting, in whole or in
part, directly or indirectly from the default or negligence of Lessor and its
Representative. Lessee will carry liability insurance with a deductible amount
and company reasonably satisfactory to the Lessor in the sum of $2,000,000.00 in
favor of Lessee and Lessor agrees to deliver a duplicate policy to the Lessor
naming Lessor as an additional insured. Lessee shall also carry such worker's
compensation insurance as is required by law.
11.2 LESSOR'S INDEMNIFICATION. During the Term, Lessor shall
indemnify, defend (with counsel reasonably acceptable to Lessee), and save
Lessee, its Representatives and sublessees, harmless against all loss,
liability, penalties, claims or demands of whatsoever nature, including
reasonable attorneys' fees and costs, arising from any occurrence in any area of
the Property other than the Premises, except those which shall result, in whole
or in part, directly or indirectly from the default or negligence of Lessee, its
Representatives, assignees or sublessees. Lessor will carry liability insurance
with a deductible amount and company reasonably satisfactory to the Lessee in
the sum of $2,000,000.00 and Lessor agrees to deliver a duplicate policy to the
Lessee naming Lessee as an additional insured.
11.3 EXCULPATION. Lessor shall not be liable for injury or damage
to the person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether the such injury or damage results from conditions arising upon the
Premises, or from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is accessible or
not, except that Lessor shall remain liable for any damages arising from any act
or neglect of Lessor, or its Representatives or Lessor's breach of this Lease.
11.4 GENERAL. All insurance policies required under this Lease
shall:
(a) be issued by insurance companies authorized to do business
in the State of California, with a financial rating of at least an A VII as
rated in the most recent edition of Best's Key Rating Guide;
(b) be issued as a primary policy;
(c) contain an endorsement requiring thirty (30) days' written
notice from the insurance company to both parties before cancellation or change
in the coverage, scope, or amount of any policy; and
(d) the parties shall increase the amount of liability
insurance carried pursuant to Subsections 12.1 and 12.2 from time to time to the
extent necessary to maintain commercially reasonable amounts of insurance and in
any event no less than that carried by similar first-class properties.
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11.5 FIRE AND CASUALTY INSURANCE. Lessor shall maintain in effect
during the Term a policy or policies of insurance on the Warehouse with
responsible insurers, on an "all risk" or "special form" basis, insuring the
Warehouse, but not the Alterations or tenant improvements, in an amount equal to
100% of the replacement cost thereof, excluding land, foundations, footings and
underground installations. Lessee shall pay fifty percent (50%) of such
insurance.
Lessee shall at all times maintain in effect with respect to its Trade
Fixtures, Alterations, tenant improvements and personal property, commercial
property insurance providing coverage, on an "all risk" or "special form" basis,
in an amount equal to the full replacement cost of the covered property. Lessee
may carry such insurance under a blanket policy, provided that such policy
provides coverage equivalent to a separate policy.
11.6 INSURABLE INTEREST IN TRADE FIXTURES AND IMPROVEMENTS. Lessor
hereby expressly acknowledges that Lessee shall have the sole insurable interest
in the Trade Fixtures, leasehold improvements and Alterations installed in the
Premises by Lessee, or at Lessee's direction, or at Lessee's expense, and that,
in the event of any damage to or destruction of the Premises, Lessee shall be
entitled to retain all insurance proceeds collected by Lessee with respect to
such Trade Fixtures, leasehold improvements and Alterations.
11.7 WAIVER OF SUBROGATION RIGHTS. The parties release each other
and their respective authorized representatives, from any claims for damage to
any person or to the Premises and the Warehouse and other improvements in which
the Premises are located and to the fixtures, personal property, Lessee's
improvements and alterations of either Lessor or Lessee in or on the Premises
and the Warehouse and other improvements in which the Premises are located that
are caused by or result from any risk insured against under any insurance
policies required under this Lease or actually carried by the parties and in
force at the time of any such damage; provided, however, this waiver shall only
extend to the limits of the insurance actually carried by the parties.
Each party shall cause each insurance policy contained by it to
provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy. Neither party shall be liable to the other for any damage caused by fire
or any of the risks insured against under any insurance policy required by this
Lease. If any insurance policy cannot be obtained which contains a waiver of
subrogation or is obtainable only by the payment of an additional premium charge
above that charge by insurance companies issuing policies without waiver of
subrogation, the party undertaking to obtain the insurance shall notify the
other party of this fact. The other party shall have a period of ten (10) days
after receiving notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry the insurance
with a waiver of subrogation, or to agree to pay the additional premium of such
if such a policy is obtainable at additional cost. If the party in whose favor a
waiver of subrogation is desired refuses to pay the additional premium charge,
the other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.
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11.8 SURVIVAL. The indemnifications set forth in this Section shall
survive the expiration, cancellation or termination of this Lease.
12. UTILITIES. Lessor covenants and agrees that, as of the Commencement
Date, the Premises shall be serviced with gas, electric, telephone, water,
septic and other utilities. Lessor agrees, at its sole cost and expense, to
cause the necessary mains, conduits and other facilities to be provided to make
water, sewer, gas, telephone and electricity available to the Premises from and
after the Commencement Date, including the payment of impact or tap fees and
meter installation charges. After installation, Lessee shall pay all charges for
consumption of utility services furnished to the Premises during the Term.
Lessor agrees to use reasonable efforts to maintain, and if possible, increase,
the amount of water provided to the Premises.
In the event of an interruption in or failure or inability to provide
any services or utilities to the Premises or Building for any reason (a "Service
Failure"), such Service Failure shall not, regardless of its duration, impose
upon Lessor any liability whatsoever, constitute an eviction of Lessee,
constructive or otherwise, entitle Lessee to an abatement of Rent or to
terminate this Lease or otherwise release Lessee from any of Lessee's
obligations under this Lease. Lessee hereby waives any benefits of any
applicable existing or future Law, including the provisions of California Civil
Code Section 1932(1), permitting the termination of this Lease due to such
interruption, failure or inability.
13. ENTRY BY LESSOR. Lessee shall permit Lessor and its Representatives
to enter into and upon the Premises at all reasonable times upon reasonable
notice (except in the case of an emergency) for the purpose of inspecting the
Premises to determine if the Premises are in good condition and whether Lessee
is complying with its obligations under the Lease, or for the purposes of
maintaining the Building, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required, for the purpose of
showing the Premises for sale or in connection with any financing, or for the
purpose of posting notices of non-responsibility for alterations, additions, or
repairs, without any rebate of rent and without any liability to Lessee for any
loss of occupation or quiet enjoyment of the Premises thereby occasioned; and
shall permit Lessor, at any time within six (6) months prior to the expiration
of this Lease, to place upon the Premises any usual or ordinary "to let" or "to
lease" signs, provided that such signs are tasteful and in keeping with the
first-class nature of Lessee's business. Lessor shall use reasonable efforts to
conduct its activities under this Section in a manner that will minimize
inconvenience to Lessee.
14. DESTRUCTION OF PREMISES.
14.1 LESSOR'S DUTY TO REPAIR. If all or a substantial portion of
the Premises are rendered untenantable or inaccessible by damage to all or any
part of the Premises or Common Area from fire or other casualty then, unless
either party is entitled to and elects to terminate this Lease pursuant to
Sections 14.2 or 14.3, Lessor shall, at its expense, use reasonable efforts to
repair and restore the Premises to substantially its former condition as
permitted by then applicable Laws; provided, however, that in no event shall
Lessor have any obligation for repair or restoration beyond the extent of
insurance proceeds received by Lessor for such repair or
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restoration not required to be paid to any mortgagee. Lessor shall have no
obligation to repair or replace any of Lessee's personal property, Trade
Fixtures or Alterations.
If Lessor is required or elects to repair damage to the Premises, this
Lease shall continue in effect but the Rent and Additional Rent from the date of
the casualty through the date of substantial completion of the repair shall be
abated with regard to any portion of the Premises that Lessee is prevented from
using by reason of such damage or its repair. The amount and period of rental
abatement shall be mutually determined by the parties in the exercise of their
good faith reasonable judgment. In no event shall Lessor be liable to Lessee by
reason of any injury to or interference with Lessee's business or property
arising from fire or other casualty or by reason of any repairs to any part of
the Property necessitated by such casualty.
14.2 LESSOR'S RIGHT TO TERMINATE. Lessor may elect to terminate
this Lease, effective as of the date of the casualty, under the following
circumstances:
(a) Where, in the reasonable judgment of Lessor, the damage
cannot be substantially repaired and restored under Applicable Law within one
(1) year from the date of the casualty;
(b) Where the Premises are damaged or destroyed to the extent
that the cost to repair and restore the Premises exceeds the amount of available
insurance proceeds (or that would have been available if Lessor had carried the
insurance required under the Lease);
(c) Where the Premises are damaged or destroyed to the extent
that, in the reasonable judgment of the Lessor, the cost to repair and restore
the Premises would exceed twenty-five percent (25%) of the full replacement cost
of the Building, whether or not the Premises are at all damaged or destroyed; or
(d) If the fire or casualty occurs in the last year of the
Term, unless Lessee has extended, or agrees in advance to extend, the Term
pursuant to its Extension Options.
If any of the circumstances described in subparagraphs (a),
(b), (c) or (d) of this subsection occur or arise, Lessor must notify Lessee in
writing of that fact within one hundred and twenty (120) days after the date of
the casualty and in such notice Lessor must also advise Lessee whether Lessor
has elected to terminate this Lease as of the date of the casualty.
14.3 LESSEE'S RIGHT TO TERMINATE. If all or a substantial part of
the Premises are rendered untenantable or inaccessible by damage to all or any
part of the Premises from fire or other casualty, and Lessor does not elect to
terminate as provided above, then Lessee may elect to terminate this Lease if
Lessor's estimate f the time required to complete Lessor's repair obligations
under this Lease is greater than one (1) year, in which event Lessee may elect
to terminate this Lease by giving Lessor notice of such election to terminate
within thirty (30) days after Lessor's notice to Lessee pursuant to Section 16.2
(Lessor's Right to Terminate).
14.4 WAIVER OF STATUTORY PROVISIONS. Lessor and Lessee each hereby
waive the provisions of California Civil Code Sections 1932(2), 1933(4) and any
other applicable existing
9
or future law, ordinance or regulation with respect to damage or destruction of
leased premises or with respect to the termination of a lease agreement in the
event of such damage or destruction under any circumstances other than as
provided in Sections 16.2 and 16.3 above.
15. CONDEMNATION.
15.1 CONDEMNATION DEFINED AND ITS EFFECT ON THE LEASE. Condemnation
shall mean (i) a permanent taking (or a temporary taking extending beyond the
end of the Term) pursuant to the exercise of power of condemnation or eminent
domain by any public or quasi public authority, private corporation or
individual having such power ("Condemnor"), whether by legal proceedings or
otherwise, or (ii) a voluntary sale or transfer by Lessor to any such authority,
whether under threat of condemnation or while legal proceedings for condemnation
are pending.
If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the date of that Condemnation. If a portion but not all of
the Premises is taken by Condemnation, this Lease shall remain in effect;
provided, however, that if the portion of the Premises remaining after the
Condemnation is not reasonably suitable for Lessee's continued use, then upon
notice to Lessor within thirty (30) days after Lessor notifies Lessee of the
Condemnation, Lessee may terminate this Lease effective as of the date of the
Condemnation. If twenty-five percent (25%) of the Property or of the land on
which the Building is situated or of the designated parking areas or of the
floor area in the Building is taken by Condemnation, or if as a result of
condemnation the Building is no longer reasonably suited for use as a retail
building, whether or not any portion of the Premises is taken, Lessor may elect
to terminate this Lease, effective as of the date of Condemnation, by notice to
Lessee within thirty (30) days after the date of Condemnation. If all or a
portion of the Premises is temporarily taken by a Condemnor for a period not
extending beyond the Term, this Lease shall remain in full force and effect.
15.2 RESTORATION OF PREMISES. If this Lease is not terminated as
provided in Section 17.1, Lessor shall, at it expense, diligently proceed to
repair and restore the Premises to substantially its former condition (to the
extent permitted by then applicable Laws) and/or repair and restore the Building
to an architecturally complete retail building; provided, however, that Lessor's
obligations to so repair and restore shall be limited to the amount of any award
received by Lessor for the Condemnation and not required to be paid to any
mortgagee. In no event shall Lessor have any obligation to repair or replace any
improvements in the Premises beyond the amount of any reward received by Lessor
for such repair or to repair or replace any of Lessee's personal property, Trade
Fixtures or Alterations. If any portion of the Premises is taken in a
Condemnation or is rendered untenantable by repairs necessitated by the
Condemnation, and this Lease is not terminated, the Rent and Additional Rent
shall be proportionately reduced as of the date of the Condemnation based upon
the percentage of rentable square feet in the Premises so taken or rendered
permanently untenantable. In addition, if this Lease remains in full force and
effect following a Condemnation and Lessor proceeds to repair and restore the
Premises, the Rent and Additional Rent payable under the Lease shall be abated
during the period of such repair or restoration to the extent such repairs
prevent Lessee's use of the Premises.
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Lessor and Lessee each hereby waive the provisions of California
Code of Civil Procedure Section 1265.130 and any other applicable existing or
future Law allowing either party to petition for a termination of this Lease
upon a partial taking of the Premises and/or the Property.
16. ASSIGNMENT AND SUBLETTING. Lessee shall not assign this Lease, or
any interest therein, and shall not sublet the Premises or any part thereof, or
any right or privilege appurtenant thereto, or suffer any other person (the
Representatives of Lessee excepted), including any corporation or other person
or entity resulting from a merger or consolidation with Lessee, or to any person
or entity which acquires substantially all the assets of Lessee as a going
concern to occupy or use the Premises, or any portion thereof, without the prior
written consent of Lessor, which shall not be unreasonably withheld; provided,
however, Lessor's consent shall not be required with respect an assignment or
sublet to any corporation or other person or entity which controls, is
controlled by, or is under common control with Lessee (collectively, an
"Affiliate"). A consent to one assignment, subletting, occupation or use by any
other person, shall not be deemed to be a consent to any subsequent assignment,
subletting, occupation or use by another persons. Any such assignment or
subletting without such consent shall be void. This lease shall not, nor shall
any interest therein, be assignable, as to the interest of Lessee, by operation
of law, without the written consent of Lessor. Lessor and Lessee acknowledge and
agree that this Section shall not be interpreted to require that Lessee notify
Lessor or obtain Lessor's consent to any joint venture or concession arrangement
involving a portion of the Premises so long as Lessee continues to operate and
maintain its business at the Premises.
17. INSOLVENCY OR BANKRUPTCY. Lessee shall be in default under this
Lease if (a) a petition of bankruptcy or reorganization is filed by Lessee or
against Lessee and is not dismissed within ninety (90) days after such filing
and Lessee becomes bankrupt, (b) Lessee makes a general assignment for the
benefit of creditors, (c) in any proceeding based upon the insolvency of Lessee,
a receiver or trustee of all of the property of Lessee is appointed and is not
discharged within ninety (90) days after such appointment, or (d) a writ of
attachment or execution is levied against all or substantially all of Lessee's
assets and is not discharged within thirty (30) days after Lessee receives
notice thereof; provided, however, neither bankruptcy, insolvency,
reorganization, an assignment for the benefit of creditors nor the appointment
of a receiver or trustee shall affect this Lease or permit its termination so
long as the covenants on the part of Lessee to be performed shall be performed
by Lessee, or someone claiming under it.
18. DEFAULTS AND REMEDIES.
18.1 Events of Default. The occurrence of any of the following
shall constitute an "Event of Default" by Lessee:
(a) Lessee fails to make any payment of rent when due, or any
amount required to replenish the security deposit as provided in Section 3
above, if payment in full is not received by Lessee within three (3) days after
written notice that it is due.
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(b) Lessee abandons the Premises.
(c) Lessee fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Lessee within the
applicable time period specified in Section 39 below.
(d) Lessee violates the restrictions on Transfer set forth in
Section 16 - ASSIGNMENT AND SUBLETTING.
(e) Lessee ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any state or federal bankruptcy or other statute, law or
regulation affecting creditors' rights; all or substantially all of Lessee's
assets are subject to judicial seizure or attachment and are not released within
30 days, or Lessee consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for Lessee or for all or any substantial part of Lessee's
assets.
(f) Lessee fails, within ninety (90) days after the commencement of
any proceedings against Lessee seeking relief under any state or federal
bankruptcy or other statute, law or regulation affecting creditors' rights, to
have such proceedings dismissed, or Lessee fails, within ninety (90) days after
an appointment, without Lessee's consent or acquiescence, of any trustee,
receiver or liquidator for Lessee or for all or any substantial part of Lessee's
assets, to have such appointment vacated.
(g) Lessee fails to perform or comply with any provision of this
Lease other than those described in (a) through (f) above, and does not fully
cure such failure within fifteen (15) days after notice to Lessee or, if such
failure cannot be cured within such fifteen (15)-day period, Lessee fails within
such fifteen (15)-day period to commence, and thereafter diligently proceed
with, all actions necessary to cure such failure as soon as reasonably possible
but in all events within ninety (90) days of such notice; provided, however,
that if Lessee in Lessee's reasonable judgment determines that such failure
cannot or will not be cured by Lessee within such ninety (90) days, then such
failure shall constitute an Event of Default immediately upon such notice to
Lessee.
18.2 Remedies. If Lessee is in default under any provision of this
Lease, Lessor shall have the following remedies, which shall not be exclusive
but shall be cumulative and shall be in addition to any other remedies now or
hereafter allowed by law:
(a) Lessor may terminate Lessee's right to possession of the
Premises at any time by written notice to Lessee. Lessee expressly acknowledges
that in the absence of such written notice from Lessor, no other act of Lessor,
including re-entry into the Premises, efforts to relet the Premises, reletting
the Premises for Lessee's account, storage of Lessee's personal property and
Trade Fixtures, acceptance of keys to the Premises from Lessee or exercise of
any other rights and remedies under this Section, shall constitute an acceptance
of Lessee's surrender of the premises or constitute a termination of this Lease
or of Lessee's right to possession of the Premises. Upon such termination in
writing of Lessee's right to possession of the Premises, as
12
herein provided, this Lease shall terminate and Lessor shall be entitled to
recover damages from Lessee as provided in California Civil Code Section 1951.2
and any other applicable existing or future Law providing for recovery of
damages for such breach, including the worth at the time of award of the amount
by which rent which would be payable by Lessee hereunder for the remainder of
the Term after the date of the award of damages, including Additional Rent as
reasonably estimated by Lessor, exceeds the amount of such rental loss as Lessee
proves could have been reasonably avoided, discounted at the discount rate
published by the Federal reserve Bank of San Francisco for member banks at the
time of the award plus one percent (1%).
(b) Lessor shall have the remedy described in California Civil
Code Section 1951.4 (Lessor may continue this Lease in effect after Lessee's
breach and abandonment and recover rent as it becomes due, if Lessee has the
right to sublet or assign, subject only to reasonable limitations).
(c) Lessor may cure the default at Lessee's expense. If Lessor
pays any sum or incurs any expense in curing the default, Lessee shall reimburse
Lessor upon demand for the amount of such payment or expense with interest at
the rate of fifteen percent (15%) per annum from the date the sum is paid or the
expense is incurred until Lessor is reimbursed by Lessee.
(d) Lessor may remove all Lessee's property from the Premises,
and such property may be stored by Lessor in a public warehouse or elsewhere at
the sole cost and for the account of Lessee. If Lessor does not elect to store
any or all or Lessee's property left in the Premises, Lessee may consider such
property in any manner deemed appropriate by Lessor. Any proceeds realized by
Lessor on the disposal of any such property shall be applied first to offset all
expenses of storage and sale, then credited against Lessee's outstanding
obligations to Lessor under this Lease, and any balance remaining after
satisfaction of all obligations of Lessee under this Lease shall be delivered to
Lessee.
19. SURRENDER OF LEASE. The voluntary or other surrender of this Lease
by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Lessor, terminate all or any existing sublease or subtenancies,
or may, at the option of Lessor, operate as an assignment to him of any or all
such subleases or subtenancies.
20. ATTORNEY'S FEES. In the event of any litigation or arbitration
regarding any rights and obligations under this Lease, the prevailing party
shall be entitled to recover reasonable attorneys' fees and court costs in
addition to any other relief which may be granted. The "prevailing party" shall
be determined by the court or arbitrator before whom the action was brought
based upon an assessment of which party's major arguments or positions taken in
the suit or proceeding could fairly be said to have prevailed over the other
party's major arguments or positions on major disputed issues in the court's or
arbitrator's opinion.
21. NOTICE. Any notice, demand, request, consent or approval that
either party desires or is required to give to the other party under this Lease
shall be in writing and shall be served personally, delivered by messenger or
courier service, or sent by U.S. certified mail, return receipt requested,
postage prepaid, addressed to the other party at the party's address for notices
provided in
13
writing to the other party from time to time. The initial address for notices
shall be the addresses set forth in the signature block to this Lease. Notices
will be effective upon receipt (or refusal of delivery or receipt). Either party
may change its address for notices hereunder by a notice to the other party
complying with this Section. If Lessee sublets the Premises, notices from Lessor
shall be effective on the subtenant when given to Lessee pursuant to this
Section.
22. WAIVER. No provisions of this Lease shall be deemed waived by
either party unless such waiver is in a writing signed by the waiving party. The
waiver of any breach of any provision of this Lease shall not be deemed a waiver
of such provision or of any subsequent breach of the same or any other provision
of this Lease. No delay or omission in the exercise of any right or remedy upon
any default shall impair such right or remedy or be construed as a waiver.
Either party's consent to or approval of any act requiring consent or approval
shall not be deemed to waive or render unnecessary such consent to or approval
of any subsequent act.
23. HOLDING OVER. Any holding over after the expiration of the said
term, with the consent of Lessor, shall be construed to be a tenancy from month
to month, at 150% of the current rent and on the terms and conditions herein
specified, so far as applicable.
24. SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained shall, subject to the provisions as to assignment, apply to and bind
the heirs, successors, executors, administrators and assigns of all of the
parties hereto; and all of the parties hereto shall be jointly and severally
liable hereunder.
25. TIME. Time is of the essence of this Lease.
26. LATE CHARGE. If any payment of Rent is not received by Lessor
within five (5) days after it is due, Lessee shall pay to Lessor on demand as a
late charge an additional amount equal to five percent (5%) of the overdue
payment,. Lessee acknowledges that late payment of Rent will cause Lessor to
incur costs which are difficult to ascertain, and the parties agree that the
foregoing amount is a reasonable estimate of Lessor's expenses resulting from
late payments and are not intended as a penalty. A late charge shall not be
imposed more than once on any particular installment not paid when due, but
imposition of a late charge on any payment not made when due does not eliminate
or supersede late charges imposed on other payments not made when due or
preclude imposition of a late charge on other installments or payments not made
when due or waive any other default by Lessee.
27. LESSOR'S RIGHT OF FIRST REFUSAL TO PURCHASE. Lessee hereby grants
to Lessor a continuing Right of First Refusal to purchase Lessee's leasehold
interest in this Lease ("Leasehold Interest"), which shall continue during the
Term or and Extension Period, as the case may be. Lessee shall not, at any time
prior to the expiration of the Term of this Lease, or any extension thereof,
sell the Leasehold Interest, except to an Affiliate of Lessee, without first
giving written notice thereof to Lessor, which notice shall clearly state that
Lessor has five (5) business days to respond and which notice is hereinafter
referred to as "Notice of Sale." Provided that Lessor is not in default under
this Lease which remains uncured after the expiration of the applicable cure
period at the time it receives the Notice of Sale, for a period of five (5)
business days after receipt by Lessor of the Notice of Sale, Lessor shall have
the right to give
14
written notice to Lessee of Lessor's exercise of Lessor's right to purchase the
Leasehold Interest, on the same terms, price and conditions as set forth in the
Notice of Sale. In the event that Lessor does not exercise the purchase right
herein granted within such five (5) day period, there shall be a conclusive
presumption that Lessor has elected not to exercise Lessor's right hereunder,
and Lessee may sell the Leasehold Interest, on the same terms set forth in the
Notice of Sale; provided, however, that if (a) Lessee proposes to sell the
Leasehold Interest, at a purchase price that is less than ninety-five percent
(95%) of the purchase price proposed to Lessor, or upon other terms which are
substantially more favorable to the prospective purchaser, Lessee shall first
re-offer such space to Lessor at such lower purchase price and/or more favorable
terms or (b) Lessee proposes to sell the Leasehold Interest, more than six (6)
months after Lessor's receipt of the Notice of Sale, Lessee shall first re-offer
such space to Lessor, all in accordance with the provisions of this Section. The
right under this Section is a continuing right and must be reoffered to Lessor
each time this provision is triggered, whether or not Lessor has exercised its
rights hereunder with respect to previous offers.
28. QUIET ENJOYMENT. Lessor covenants, represents and warrants that it
has full right and power to execute and perform this Lease and to grant the
estate demised herein and that Lessee, on payment of the rent and performance of
the covenants and agreements hereof, shall peaceably and quietly have, hold and
enjoy the Premises and all rights, easements, appurtenances and privileges
belonging or in any way pertaining thereto during the Lease Term without
molestation or hindrance of any person whomsoever.
29. COVENANT OF TITLE. Lessor further covenants, represents and
warrants that it is seized of an indefeasible estate in fee simple and has good
and marketable title to the Land described in EXHIBIT A, free and clear of any
liens, encumbrances, restrictions and violations (or claims or notices hereof),
except the lien of the mortgage or mortgages specifically identified on the
attached EXHIBIT E and public utility easements and covenants and restrictions
of record not impairing Lessee's Intended Use of the Premises, and taxes not yet
due and payable.
30. HAZARDOUS MATERIAL.
30.1 LESSOR'S REPRESENTATIONS, WARRANTIES AND COVENANT. Lessor
represents that to the best of its knowledge, except as set forth in either of
the Underground Storage Tank Report and the DTSC Environmental Reports for the
Property or as otherwise previously disclosed to Lessee, there are no "Hazardous
Materials" (as defined below) on the Premises as of the Commencement Date.
Lessor's representations to Lessee under this Section shall survive the
cancellation or termination of this Lease.
30.2 LESSOR'S INDEMNIFICATION OBLIGATION. Notwithstanding any
investigation or disclosures made by Lessor or Lessee, Lessor hereby agrees to
indemnify, defend, and hold harmless Lessee, its Representatives, assignees and
Sublessees, and Lessee's guarantor, if any, from and against any penalty, loss,
liability, claim or expenses including, without limitation, engineering and
attorneys fees, arising out of a breach of the representations and warranties in
Section 32.1 above, except to the extent such condition was directly caused by
the breach of
15
Lessee's covenant below. Lessor's representations and indemnity to Lessee under
this Section shall survive the cancellation or termination of this Lease.
30.3 LESSEE'S COVENANT AND INDEMNIFICATION OBLIGATION.
(a) LESSEE'S COVENANTS. No Hazardous Materials shall be
Handled by Lessee at or about the Premises or Property without Lessor's prior
written consent, which consent may be granted, denied, or conditioned upon
compliance with Lessor's requirements, all in Lessor's absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of warehouse activities, such as
copier fluids and cleaning supplies ("Permitted Hazardous Materials"), may be
used and stored at the Premises without Lessor's prior written consent, provided
that Lessee's activities at or about the Premises and Property and the Handling
by Lessee of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Lessee shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Lessee at the Premises or the Property. Lessee shall keep
Lessor fully and promptly informed of all Handling by Lessee of Hazardous
Materials other than Permitted Hazardous Materials. Lessee shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Lessee's Representatives and Visitors, and all of Lessee's obligations under
this Section (including its indemnification obligations under paragraph (e)
below) shall survive the expiration or termination of this Lease.
(b) COMPLIANCE. Lessee shall at Lessee's expense promptly take
all actions required by any governmental agency or entity in connection with or
as a result of the Handling by Lessee of Hazardous Materials at or about the
Premises or Property, including inspection and testing, performing all cleanup,
removal and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and all Handling by
Lessee of all Hazardous Materials shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet enjoyment
of the Property or Lessor's use, operation, leasing and sale of the Property.
Lessee shall deliver to Lessor prior to delivery to any governmental agency, or
promptly after receipt from any such agency, copies of all permits, manifests,
closure or remedial action plans, notices, and all other documents relating to
the Handling by Lessee of Hazardous Materials at or about the Premises or
Property. If any lien attaches to the Premises or the Property in connection
with or as a result of the Handling by Lessee of Hazardous Materials, and Lessee
does not cause the same to be released, by payment, bonding or otherwise, within
ten (10) days after the attachment thereof, Lessor shall have the right but not
the obligation to cause the same to be released and any sums expended by Lessor
(plus Lessor's administrative costs) in connection therewith shall be payable by
Lessee on demand.
(c) LESSOR'S RIGHTS. Lessor shall have the right, but not the
obligation, to enter the Premises at any reasonable time (i) to confirm Lessee's
compliance with the provisions of this Section, and (ii) to perform Lessee's
obligations under this Section if Lessee has failed to do so after reasonable
notice to Lessee. Lessor shall also have the right to engage qualified Hazardous
16
Materials consultants to inspect the Premises and review the Handling by Lessee
of Hazardous Materials, including review of all permits, reports, plans, and
other documents regarding same. Lessee shall pay to Lessor on demand the costs
of Lessor's consultants' fees and all costs incurred by Lessor in performing
Lessee's obligations under this Section. Lessor shall use reasonable efforts to
minimize any interference with Lessee's business caused by Lessor's entry into
the Premises, but Lessor shall not be responsible for any interference caused
thereby.
30.4 DEFINITION.
(a) "Hazardous Materials" shall mean any substance: (A) that
now or in the future is regulated or governed by, requires investigation or
remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute, code, ordinance,
regulation, rule or order, and any amendment thereto, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
ss.9601 ET SEQ., and the Resource Conservation and Recovery Act, 42 U.S.C.
ss.6901 ET SEQ., or (B) that is toxic, explosive, corrosive, flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.
(b) "Environmental Requirements" shall mean all present and
future Laws, orders, permits, licenses, approvals, authorizations and other
requirements of any kind applicable to Hazardous Materials.
(c) "Handled by Lessee" and "Handling by Lessee" shall mean
and refer to any installation, handling, generation, storage, use, disposal,
discharge, release, abatement, removal, transportation, or any other activity of
any type by Lessee or its agents, employees, contractors, licensees, assignees,
sublessees, transferees or representatives (collectively, "Representatives") or
its guests, customers, invitees, or visitors (collectively, "Visitors"), at or
about the Premises in connection with or involving Hazardous Materials.
(d) "Environmental Losses" shall mean all costs and expenses
of any kind, damages, including foreseeable and unforeseeable consequential
damages, fines and penalties incurred in connection with any violation of and
compliance with Environmental Requirements and all losses of any kind
attributable to the diminution of value, loss of use or adverse effects on
marketability or use of any portion of the Premises or Property.
31. MEMORANDUM OF LEASE.
The parties hereto have simultaneously with the execution and delivery
of this Lease, executed and delivered a Memorandum of Lease substantially in the
form attached as EXHIBIT E to this Lease, which Lessor shall, at its sole
expense, cause to be recorded within five (5) days following delivery of this
Lease and returned to Lessee by Lessor within five (5) days thereafter.
32. BROKER'S REPRESENTATION. Each party represents that it dealt with
no broker or brokers in connection with the negotiation, execution and delivery
of this Lease.
17
Lessor and Lessee shall, and do hereby, indemnify, defend, and save the other
harmless from and against any losses, damages, penalties, claims or demands of
whatsoever nature arising from a breach of its foregoing representation
including, without limitation, reasonable attorneys' fees and expenses. The
representations and indemnifications set forth in this Section shall survive the
cancellation or termination of this Lease.
33. FORCE MAJEURE. Lessor and Lessee shall be excused for the period of
any delay in performance of any obligations hereunder (except payment of Rent)
by reason of the wrongful or negligent acts or omissions of the other party, or
their Representatives, or by reason of labor disputes, civil disturbance, war,
war-like operations, invasions, rebellion, hostilities, military or usurped
power, sabotage, governmental regulations or controls, fires or other casualty,
or acts of God (referred to collectively herein as "Force Majeure).
34. CONDITION OF PREMISES AT TERMINATION. At the expiration or earlier
termination of the Term, Lessee shall surrender the Premises, together with all
improvements installed by Lessee then a part thereof, in good order and
condition, except for the following: (a) ordinary wear and tear, (b) repairs
required to be made by Lessor, and (c) loss or damage by fire, the elements or
other casualty. All furniture and Trade Fixtures installed in the Premises at
the expense of Lessee, or other occupant, shall remain the property of Lessee,
or such other occupant; provided, however, Lessee shall have the option, during
the Term, to relinquish its property rights in such Trade Fixtures (including,
but not limited to, air conditioning machinery and lighting fixtures, if owned
by Lessee), which option shall be exercised by written notice of such
relinquishment to Lessor and, from and after the exercise of said option, the
property specified in said notice shall be the property of Lessor.
35. CONSENTS AND APPROVALS. Unless another consent standard is
specifically provided under the terms of this Lease, whenever consent,
satisfaction or approval of either party is required under this Lease, such
consent, satisfaction or approval shall not be unreasonably withheld,
conditioned or delayed. If and to the extent that any written request for
consent, satisfaction or approval is not reasonably disapproved in writing
(including a statement of the reasons for disapproval with reasonable
particularity) within fifteen (15) days or such other time specifically set
forth in the particular provision of the Lease, the consent, satisfaction or
approval shall be deemed to have been given.
36. AUTHORITY.
36.1 LESSOR'S REPRESENTATIONS. Each of the persons executing this
Lease on behalf of Lessor warrants and represents that Lessor is a duly
organized and validly existing limited liability company, that Lessor has full
right and authority to enter into this Lease and that the persons signing on
behalf of Lessor are authorized to do so and have the power to bind Lessor to
this Lease. Lessor shall provide Lessee upon request with evidence reasonably
satisfactory to Lessee confirming the foregoing representations.
36.2 LESSEE'S REPRESENTATIONS. Each of the persons executing this
Lease on behalf of Lessee warrants and represents that Lessee is a duly
organized and validly existing limited
18
liability company, that Lessee has full right and authority to enter into this
Lease and that the persons signing on behalf of Lessee are authorized to do so
and have the power to bind Lessee to this Lease. Lessee shall provide Lessor
upon request with evidence reasonably satisfactory to Lessor confirming the
foregoing representations.
37. ENTIRE AGREEMENT. This Lease, including the Exhibits and any
Addenda attached hereto, and the documents referred to herein, if any,
constitute the entire agreement between Lessor and Lessee with respect to the
leasing of space by Lessee at the Property, and supersede all prior or
contemporaneous agreements, understandings, proposals and other representations
by or between Lessor and Lessee, whether written or oral.
38. LESSOR'S LIABILITY. The liability of Lessor for its obligations
under this Lease is limited solely to the assets of Lessor, including without
limitation Lessor's interest in the Property, and no personal liability shall at
any time be asserted or enforceable against Lessor's partners on account of any
of Lessor's obligations or actions under this Lease.
39. ESTOPPEL CERTIFICATES. Either Lessor or Lessee may request that the
other party execute and deliver, within ten (10) days after written request
therefor, in a form provided by or satisfactory to the requesting party, a
certificate stating that this Lease is in full force and effect, describing any
amendments or modifications hereto, acknowledging that this Lease is subordinate
or prior, as the case may be, to any Encumbrance and stating any other
information that the requesting party may reasonably request, including the
Term, the monthly Rent, the date to which Rent has been paid, any claims or
offsets, the amount of any prepaid rent, and whether either party hereto is in
default under the terms of the Lease. Lessee irrevocably constitutes, appoints
and authorizes Lessor as Lessee's special attorney-in-fact for such purpose to
complete, execute and deliver such certificate if Lessee fails timely to execute
and deliver such certificate as provided above. Lessor irrevocably constitutes,
appoints and authorizes Lessee as Lessor's special attorney-in-fact for such
purpose to complete, execute and deliver such certificate if Lessor fails timely
to execute and deliver such certificate as provided above. Any person or entity
purchasing, acquiring an interest in or extending financing with respect to the
Property shall be entitled to rely upon any such certificate.
40. MISCELLANEOUS. This Lease may not be amended or modified except by
a writing signed by Lessor and Lessee. The determination that any provisions
hereof may be void, invalid, illegal or unenforceable shall not impair any other
provisions hereof and all such other provisions of this Lease shall remain in
full force and effect. The unenforceability, invalidity or illegality of any
provision of this Lease under particular circumstances shall not render
unenforceable, invalid or illegal other provisions of this Lease, or the same
provisions under other circumstances. This Lease shall be construed and
interpreted in accordance with the laws of the State of California. The
provisions of this Lease shall be construed in accordance with the fair meaning
of the language used and shall not be strictly construed against either party.
The captions contained in this Lease are for purposes of convenience only and
are not to be used to interpret or construe this Lease. When required by the
context of this Lease, the singular includes the plural. Wherever the term
"including" is used in this Lease, it shall be interpreted as meaning
"including, but not limited to" the matter or matters thereafter enumerated.
19
[Signatures on Following Page]
20
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day
and year first above written.
LESSOR:
R & R LAND, LLC, a California limited
liability company,
By: /s/ ▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇ ▇▇▇▇▇, Manager
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LESSEE:
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, a
California limited liability company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, CEO
ADDRESS FOR NOTICES:
▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
21
EXHIBIT A
ATTACHED TO AND FORMING A PART OF
WAREHOUSE LEASE
DATED AS OF MARCH 18, 1999
BETWEEN
R & R LAND, LLC, AS LESSOR,
AND
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, AS LESSEE ("LEASE")
LEGAL DESCRIPTION OF THE LAND
(TO BE ATTACHED)
EXHIBIT B
ATTACHED TO AND FORMING A PART OF
WAREHOUSE LEASE
DATED AS OF MARCH 18, 1999
BETWEEN
R & R LAND, LLC, AS LESSOR,
AND
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, AS LESSEE ("LEASE")
PLOT PLAN
(PARTIES TO DRAFT AND ATTACH)
Needs to show:
1. Land and layout of Structures, identifying the "Premises" and the "Adjacent
Building"
2. Parking
3. Driveways, entrances, sidewalks and exits
4. Existing signage
EXHIBIT C
ATTACHED TO AND FORMING A PART OF
WAREHOUSE LEASE
DATED AS OF MARCH 18, 1999
BETWEEN
R & R LAND, LLC, AS LESSOR,
AND
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, AS LESSEE ("LEASE")
NON-DISTURBANCE AGREEMENT
NON-DISTURBANCE AGREEMENT AND
AGREEMENT TO HONOR RIGHTS
This NON-DISTURBANCE AGREEMENT AND AGREEMENT TO HONOR RIGHTS
("Agreement") is executed as of the _____ day of _________, 199_, among ▇▇▇▇ and
▇▇▇▇▇▇ Markets, LLC, a California limited liability company ("Lessee"), R & R
land, LLC, a California limited liability company ("Lessor"), and
________________, a ________________ ("Beneficiary").
RECITALS:
A. Beneficiary has loaned to Lessor (and its affiliates) $__________
(the "Loan"), which Loan is evidenced by a $__________ Promissory Note and
secured by a Deed of Trust, [Security Agreement and Fixture Filing With
Assignment of Rents] executed by Lessor in favor of Beneficiary, dated
_______________, and recorded on ________________ under Series Number
____________ of the Official Records of the Recorder's Office of Napa County,
California (the "Deed of Trust"). [The Loan is also secured by an Assignment of
Lessor's Interest in Leases, executed by Lessor in favor of Beneficiary, dated
_________________, and recorded on ________________ under Series Number
____________ of the Official Records of the Recorder's Office of Napa County,
California (the "Assignment").] The Deed of Trust [and the Assignment] encumber
certain real property (the "Security Property") located in the County of Napa,
State of California and more particularly described on EXHIBIT A to the Deed of
Trust. [IT HAS BEEN ASSUMED THAT THE SECURITY PROPERTY INCLUDES ALL OF THE
"PROPERTY" SUBJECT TO THE OPTION TO PURCHASE. IF NOT, THE DEFINITIONS WILL NEED
TO BE CHANGED.]
▇. ▇▇▇▇▇▇ and Lessee have executed a Warehouse Lease, dated March 18,
1999 (the "Lease"), pursuant to which Lessor is leasing a portion of the
Security Property (the "Premises") to Lessee. A legal description of the
Premises is attached and made a part of this Agreement as EXHIBIT A.
C. Lessee has requested that Beneficiary agree not to disturb Lessee's
possessory rights in the Premises in the event that, through or in lieu of the
exercise by Beneficiary of any of
its remedies pursuant to the Deed of Trust, [the Assignment] or any other
documents granting or perfecting a security interest to secure the Loan
(collectively, the "Security Documents"), Beneficiary or any other person or
entity that succeeds to the interests of Lessor in the Security Property or
the Premises (collectively, including Beneficiary and the successors and
assigns of each of them, the "Successor"), provided that Lessee is not in
default under the Lease and that Lessee attorns to the Successor.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties agree as follows:
1. LEASE. Beneficiary hereby consents to the Lease. In the event that,
through or in lieu of the exercise by Beneficiary of any of its remedies
pursuant to the Security Documents, Beneficiary or any other Successor succeeds
to the interests of Lessor under the Lease or acquires title to the Security
Property or the Premises, the parties agree that: (a) the Lease and the rights
of Lessee thereunder, shall remain in full force and effect and shall not be
terminated or disturbed, except in accordance with the terms of the Lease and
this Agreement; (b) so long as Lessee shall not be in default in the performance
or observance of any term, covenant or condition of the Lease, beyond any
applicable grace or cure period therein, no action or proceeding shall be
commenced by Successor to remove or evict Lessee from the Premises or to
terminate the Lease; (c) except as provided in Paragraph 2 (Prior Acts) below,
Successor shall assume and perform all of the duties and responsibilities of
Lessor under the Lease; (d) Lessee shall attorn to Successor and perform, and be
bound under, all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, including any renewal options which are
exercised in accordance with the terms of the Lease; and (e) if, notwithstanding
any other provisions of this Agreement, the acquisition by Successor of the
interests of Lessor in the Security Property or the Premises results, in whole
or part, in the termination of the Lease, there shall be deemed to have been
created a direct lease between Successor and Lessee on the same terms and
conditions as the Lease, for the remainder of the term of the Lease, with
renewal options, if any. The provisions of this Paragraph 1 shall be effective
and self-operative immediately upon Successor succeeding to the interests of
Lessor, without the execution of any further instrument.
2. PRIOR ACTS.
Notwithstanding any other provisions of this Agreement, Successor shall
not be:
a. liable for any act or omission of Lessor, or its successors
preceding Successor, under the Lease; or
b. subject to any offsets, counterclaims or defenses which Lessee
might have against Lessor, or its successors preceding Successor, under the
Lease; or
c. bound by any prepaid rent in excess of one month's rent or by any
security deposit, cleaning deposit or other prepaid charge paid by Lessee to
Lessor, or its successors preceding Successor, unless such amount is actually
transferred to Successor; or
d. bound by any agreement or modification of the Lease made without
the written consent of Successor.
4. SUBJECT TO LEASE. Each Successor shall acquire its interest in the
Premises subject to the Lease and the terms of this Agreement, except as
expressly provided herein.
5. ACKNOWLEDGMENT AND AGREEMENT BY LESSEE. Lessee acknowledges and
agrees as follows:
a. The Lease shall be subject and subordinate to the lien of the
Deed of Trust and to all of the terms thereof, to all advances made thereunder
and to any renewals, extensions, modifications or replacements thereof.
b. Beneficiary has no obligation to oversee the use of the Loan
proceeds by Lessor and Lessee acknowledges that such proceeds, in fact, may be
used by Lessor for purposes other than improvement of the Security Property.
c. In the event of any act or omission by Lessor that would give
Lessee the right to terminate the Lease, to ▇▇▇▇▇ the rent payable thereunder or
to claim a partial or total eviction, Lessee's exercise of any such right shall
not be effective until (i) Lessee has given written notice of such act or
omission to Beneficiary, and (ii) Beneficiary has failed to cure such act or
omission within thirty (30) days following Lessee's notice to Beneficiary.
d. If Beneficiary notifies Lessee in writing that Lessor is in
default under the Deed of Trust and demands that Lessee pay rent, consideration
and other sums due under the Lease to Beneficiary, Lessee shall pay such amounts
directly to Beneficiary or as otherwise required in such notice.
e. This Agreement satisfies any condition or requirement in the
Lease relating to the granting of a non-disturbance agreement.
f. Successor shall be relieved of any obligation of Lessor under
the Lease accruing after an assignment by Successor of its interest in the
Premises.
6. ACKNOWLEDGMENT AND AGREEMENT BY LESSOR. Lessor, as Lessor under the
Lease, and trustor under the Deed of Trust, acknowledges and agrees as follows:
a. This Agreement does not constitute a waiver by Beneficiary of
any of its rights under any of the Security Documents or release Lessor from its
obligations under any of the Security Documents.
b. In the event of a default under the Deed of Trust, Lessee may
pay all rent, consideration and all other sums due under the Lease to
Beneficiary as provided in this Agreement.
7. NOTICES. All communications, notices and demands of any kind which
either party may be required or desire to give or serve upon the other party
shall be made in writing (unless expressly provided otherwise) and will be
effective (a) immediately upon delivery in person or by facsimile, provided
delivery is made during regular business hours or receipt is acknowledged by a
person reasonably believed by the delivering party to be employed by the
recipient, or (b) 24 hours after deposit with a commercial courier or delivery
service for overnight delivery, provided delivery is made during regular
business hours or receipt is acknowledged by a person reasonably believed by the
delivering party to be employed by the recipient, or (c) three (3) days after
deposit with the United States Postal Service, certified mail, return receipt
requested, postage prepaid. All notices must be properly addressed and delivered
to the parties at the addresses set forth below, or at such other addresses as
any party may subsequently designate by written notice given in the manner
provided in this Section.
To Lessee: ------------------------------
------------------------------
------------------------------
------------------------------
Telephone No.:(____) _________
Fax No.: (____) _________
With copies to:
------------------------------
------------------------------
------------------------------
------------------------------
Telephone No.:(____) _________
Fax No.: (____) _________
To Lessor: ------------------------------
------------------------------
------------------------------
------------------------------
Telephone No.:(____) _________
Fax No.: (____) _________
With copies to:
------------------------------
------------------------------
------------------------------
------------------------------
Telephone No.:(____) _________
Fax No.: (____) _________
To ------------------------------
Beneficiary: ------------------------------
------------------------------
------------------------------
Telephone no.: (___) ________
Fax no.: (___) _________
8. MISCELLANEOUS.
a. This Agreement supersedes any inconsistent provision of the
Lease.
b. This Agreement shall inure to the benefit of and bind the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
c. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
d. In the event that any controversy, claim or action is filed or
instituted under this Agreement to enforce its terms and provisions, the
prevailing party shall be entitled to receive from the other party or parties,
in addition to all costs, damages, and expenses, reasonable attorneys' fees and
costs, incurred by the prevailing party, whether or not such controversy or
claim is litigated or prosecuted to judgment. The "prevailing party" shall be
determined by the court or arbitrator before whom the action was brought based
upon an assessment of which party's major arguments or positions taken in the
suit or proceeding could fairly be said to have prevailed over the other party's
major arguments or positions on major disputed issues in the court's or
arbitrator's decision. Any attorneys' fees and other costs and expenses incurred
by any party in enforcing a judgment or decision in its favor under this
Agreement shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged in any such judgment, which shall be deemed an "actual
pecuniary loss" within the meaning of Bankruptcy Code Section 365(b) (1) (B).
e. All Recitals and Exhibits referred to in this Agreement are
incorporated herein by reference and shall be deemed part of this Agreement.
f. This Agreement shall not be canceled, modified or amended orally
or in any manner other than by an agreement in writing signed by the parties
hereto or their respective successors or assigns.
g. This Agreement may be executed in one or more counterparts, all
of which, together, shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BENEFICIARY: ______________________________,
a ______________________
By: ________________________
Name: ________________________
Title: ________________________
LESSEE: ▇▇▇▇ & ▇▇▇▇▇▇ Markets, LLC,
a California limited liability company
By: ________________________
Name: ________________________
Title: ________________________
LESSOR: R & R Land, LLC,
a California limited liability company
By: ________________________
Name: ________________________
Title: ________________________
EXHIBIT A
DESCRIPTION OF PREMISES
EXHIBIT D
ATTACHED TO AND FORMING A PART OF
WAREHOUSE LEASE
DATED AS OF MARCH 18, 1999
BETWEEN
R & R LAND, LLC, AS LESSOR,
AND
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, AS LESSEE ("LEASE")
EXISTING MORTGAGES
NONE.
EXHIBIT E
ATTACHED TO AND FORMING A PART OF
WAREHOUSE LEASE
DATED AS OF MARCH 18, 1999
BETWEEN
R & R LAND, LLC, AS LESSOR,
AND
▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC, AS LESSEE ("LEASE")
MEMORANDUM OF LEASE
Recording Requested By
When Recorded Mail To
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------ -------------------------------
MEMORANDUM OF LEASE
THE LEASE TERM IS LESS THAN THIRTY-FIVE (35) YEARS AND NO
TRANSFER TAX IS DUE.
THIS MEMORANDUM OF LEASE is made and entered into as of this _____ day
of ____________, 1999, by and between R & R Land, LLC, a California limited
liability company ("Lessor"), and ▇▇▇▇ & ▇▇▇▇▇▇ Markets, LLC, a California
limited liability company ("Lessee").
In consideration of and upon all of the terms, conditions, and
covenants set forth in that certain unrecorded Warehouse Lease of even date
herewith between Lessor and Lessee (hereinafter, the "Lease"), Lessor hereby
leases to Lessee, and Lessee hereby leases from Lessor, the "Premises" (as
described in the Lease), which Premises are located on the real property
described in EXHIBIT A attached hereto and made a part hereof. The Lease and all
its terms and provisions, are by this reference incorporated herein and made a
part hereof.
The Lease includes a right of first refusal to purchase the "Leasehold
Interest (as defined in Paragraph 27 of the Lease).
This Memorandum of Lease is executed for the sole purpose of giving
notice of the existence and contents of the Lease to all interested parties, and
shall in no way modify or affect the terms of such Lease or the obligations of
the parties thereunder.
IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease
as of the date first above written.
LESSOR: LESSEE:
R & R LAND, LLC ▇▇▇▇ & ▇▇▇▇▇▇ MARKETS, LLC
a California limited liability company a California limited liability company
By: By:
--------------------------- ------------------------
Print Name: Print Name:
------------------ -----------------
Its: Its:
------------------------- ------------------------
EXHIBIT A
Legal Description of the Premises
All that real property situated in the State of California, County of Napa, and
described as follows:
