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EXHIBIT 10.26
INDUSTRIAL REAL ESTATE SUBLEASE
(MULTI-TENANT FACILITY)
This Agreement constitutes a sublease of a portion of the premises at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Property"), between National
Distribution Agency, Inc., a Delaware corporation ("Landlord or Sublessor"), and
▇▇▇▇.▇▇▇, Inc., a California corporation ("Tenant" or "Sublessee"), for (the
"Lease" or the "Sublease"). This Lease is subject to that certain lease between
Landlord as Lessee and Chino Pacific Warehouse Corporation as Lessor, dated
September 25, 1997, (the "Master Lease").
Landlord warrants and represents to Tenant that the Master Lease has
not been amended or modified except as expressly set forth herein, that Landlord
is not now, and as of the commencement of the Term hereof will not be, in
default or breach of any of the provisions of the Master Lease, and the Landlord
has no knowledge of any claim by the Master Lessor that Landlord is in default
or breach of any of the provisions of the Master Lease.
Tenant shall not commit or suffer any act or omission that will violate
any of the provisions of the Master Lease. Landlord shall exercise due diligence
in attempting to cause the Master Lessor to perform its obligations under the
Master Lease for the benefit of Tenant. If the Master Lease terminates this
Sublease shall terminate and the parties shall be relieved of any further
liability or obligation under this Sublease provided however, that if the Master
Lease terminates as a result of a default or breach by Landlord or Tenant under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to the non-defaulting party for the damage suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives Landlord
any right to terminate the Master Lease in the event of the partial or total
damage, destruction, or condemnation of the Master Premises or the building or
project of which the Master Premises are a part, the exercise of such right by
Landlord shall not constitute a default or breach hereunder, provided that
Tenant receives a pro rata portion of any proceeds, or other remuneration, if
any, which Landlord receives as a result of such termination.
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and are
to be read in conjunction with the Basic Terms.
Section 1.01. DATE OF LEASE: July 1, 1999.
Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): National Distribution
Agency, Inc., a Delaware corporation, herein also known and sometimes described
as Sublessor. Address of Landlord: c/o ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
Section 1.03. TENANT (INCLUDE LEGAL ENTITY): ▇▇▇▇.▇▇▇, a California
corporation, herein also known and sometimes described as Sublessee herein.
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Address of Tenant:
Section 1.04 PROPERTY: The Property leased hereunder is part of a
multi-tenant real property leased to Landlord under the Master Lease, and
described or depicted in Exhibit "A". The premises comprise the total property
and includes the land, the buildings and all other improvements located on the
land, and the common areas described in Paragraph 4.05(a), (the "Project"). The
leased Property is located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and
includes 73,920 square feet of warehouse space, and 4,800 square feet of office
space in the Southeastern portion of the Project, as more fully reflected in
Exhibit "A", and outlined in red.
Section 1.05. LEASE TERM: Five (5) years and one and one-half (1 1/2)
months BEGINNING ON July 1, 1999, or such other date as specified in this Lease,
and ENDING ON August 14, 2004. Tenant shall pay no Base Rent for the period July
1, 1999 to August 14, 1999. During this free rent period, Tenant shall be
obligated to pay its pro rata share of taxes, insurance, maintenance and
utilities. In addition, Tenant shall have one Option to Renew, as more fully
provided in Rider No. 3, attached and incorporated herein by reference.
Section 1.06. PERMITTED USES: (See Article Five)
Warehousing and storage of ▇▇▇▇.▇▇▇, or its affiliates, products, and
for no other purpose, without the prior or concurrent written consent of
Landlord.
Section 1.07. TENANT'S GUARANTOR: Not applicable.
Section 1.08. BROKERS: (See Article Fourteen)
Landlord's Broker: Colliers International
Tenant's Broker: GVA ▇▇▇▇▇▇▇.
Section 1.09. COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article
Fourteen) Per separate agreement with Landlord.
Section 1.10. INITIAL SECURITY DEPOSIT: (See Section 3.03) [*].
LETTER-OF-CREDIT: [*]. Provided the Sublessee is not in
default of the Sublease, the Letter-of-Credit shall be reduced to [*], as of
August 14, 2000. As of August 14, 2001, the Letter-of-Credit shall no longer be
on deposit with the Landlord.
Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section
4.05) Thirty (30) unassigned parking spaces.
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* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:
(a) BASE RENT:
RATE PER SQ. FT. AMOUNT
MONTHS PER MO. PER MO.
------ ------- -------
July 1 - Aug. 14, 1999 Free rent
Aug. 15, 1999 - April 14, 2001 [*] psf/mth/nnn
April 15, 2001 - Dec. 14, 2002 Annual minimum CPI (All Consumers
S.F. Bay Area) increase of [*];
annual maximum CPI (All Consumers
S.F. Bay Area) of [*] over base
rental rate in months 1 - 20.
Dec. 15, 2002 - Aug. 14, 2004 Annual Minimum CPI (All Consumers
S.F. Bay Area) increase of [*];
annual maximum CPI (All Consumers
S.F. Bay Area) of [*] over base
rental rate in months 21 - 40.
The rents payable hereunder are more fully set forth in Lease
Rider No. 1 attached and incorporated herein by reference, and
as referred to in Lease Rider No. 2, also attached and
incorporated herein by reference.
In the event that Landlord is in default under the Master Lease and either
Landlord or Tenant receive notice of such default from the Master Lessor under
the Master Lease, Tenant shall have the right (without any obligation to do so),
to pay rent provided in this section, and all other sums due Landlord hereunder,
which Landlord is obligated to pay directly to the Master Lessor.
(a) OTHER PERIODIC PAYMENTS INCLUDED AS RENT : (i) Real Property
Taxes (See Section 4.02); (ii) Utilities (See Section 4.03);
(iii) Insurance Premiums (See Section 4.04); (iv) Tenant's
Initial Pro Rata Share of Common Area Expenses (25.67%) (See
Section 4.05); (v) Impounds for Insurance Premiums and
Property Taxes (See Section 4.08); (vi) Maintenance, Repairs
and Alterations (See Article Six).
Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE:
(See Section 9.05) seventy percent (70%) of the Profit (the "Landlord's Share").
Section 1.14. RIDERS: The following Riders are attached to and made a
part of this Lease:
Rider No. 1 - Base Rent Schedule
Rider No. 2 - Tenant Improvement Allowance
Rider No. 3 - Options to Renew
ARTICLE TWO: LEASE TERM
Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is
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* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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for the period stated in Section 1.05 above and shall begin and end on the dates
specified in Section 1.05 above, unless the beginning or end of the Lease Term
is changed under any provision of this Lease. The "Commencement Date" shall be
the date specified in Section 1.05 above for the beginning of the Lease Term,
unless advanced or delayed under any provision of this Lease.
Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to Tenant on the
Commencement Date. Landlord's non-deliver of the Property to Tenant on that date
shall not affect this Lease or the obligations of Tenant under this Lease except
that the Commencement Date shall be delayed until Landlord delivers possession
of the Property to Tenant and the Lease Term shall be extended for a period
equal to the delay in delivery of possession of the Property to Tenant, plus the
number of days necessary to end the Lease Term on the last day of a month. If
Landlord does not deliver possession of the Property to Tenant within sixty (60)
days after the Commencement Date, Tenant may elect to cancel this Lease by
giving written notice to Landlord within ten (10) days after the sixty (60) day
period ends. If Tenant gives such notice, the Lease shall be cancelled and
neither Landlord nor Tenant shall have any further obligations to the other. If
Tenant does not give such notice, Tenant's right to cancel the Lease shall
expire and the Lease Term shall commence upon the delivery of possession of the
Property to Tenant. If delivery of possession of the Property to Tenant is
delayed, Landlord and Tenant shall, upon such delivery, execute an amendment to
this Lease setting forth the actual Commencement Date and expiration date of the
Lease. Failure to execute such amendment shall not affect the actual
Commencement Date and expiration date of the Lease.
Section 2.03. EARLY OCCUPANCY. If Tenant occupies the Property prior to
the Commencement Date, Tenant's occupancy of the Property shall be subject to
all of the provisions of this Lease. Early occupancy of the Property shall not
advance the expiration date of this Lease. Tenant shall pay Base Rent and all
other charges specified in this Lease for the early occupancy period.
Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Tenant's delay in vacating the Property. If Tenant does not vacate the Property
upon the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Tenant's occupancy of the Property shall be a
"month-to-month" tenancy, subject to all of the terms of this Lease applicable
to a month-to-month tenancy, except that the Base Rent in effect shall be
increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.12(a) above for the first month of the Lease Term. On the first day of the
second month of the Lease Term and each month thereafter, Tenant shall pay
Landlord the Base Rent, in advance within five (5) business days after the
commencement of each month, without offset, deduction or prior demand. The
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Base Rent shall be payable at Landlord's address or at such other place as
Landlord may designate in writing.
Section 3.02. COST OF LIVING INCREASE. The Base Rent shall be increased
on each date (the "Rental Adjustment Date") subject to Paragraph 1.12(a) above
in accordance with the increase in the United States Department of Labor, Bureau
of Labor Statistics, Consumer Price Index for All Urban Consumer (all items for
the geographical Statistical Area in which the Property is located on the basis
of 1982-1984 = 100) (the "Index") as follows:
(a) The Base Rent (the "Comparison Base Rent") in effect
immediately before each Rental Adjustment Date shall be
increased by the percentage that the Index has increased from
the date (the "Comparison Date') on which payment of the
Comparison Base Rent began through the month in which the
applicable Rental Adjustment Date occurs. The Base Rent began
through the month in which the applicable Rental Adjustment
Date occurs. The Base Rent shall not be reduced by reason of
such computation. Landlord shall notify Tenant of each
increase by a written statement which shall include the Index
for the applicable Comparison Date, the Index for the increase
in the Base Rent provided for in this Section 3.02 shall be
subject to any minimum or maximum increase, if provided for in
Paragraph 1.12(a).
(b) Tenant shall pay the new Base Rent from the applicable Rental
Adjustment Date until the next Rental Adjustment Date.
Landlord's notice may be given after the applicable Rental
Adjustment Date of the increase, and Tenant shall pay Landlord
the accrued rental adjustment for the months elapsed between
the effective date of the increase and Landlord's notice of
such increase within ten (10) days after Landlord's notice. If
the format or components of the Index are materially changed
after the Commencement Date, Landlord shall substitute an
index which is published by the Bureau of labor Statistics or
similar agency and which is most nearly equivalent to the
Index in effect on the Commencement Date. The substitute index
shall be used to calculate the increase in the Base Rent
unless Tenant objects to such index in writing within fifteen
(15) days after receipt of Landlord's notice. If Tenant
objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with
the rules and regulations of the American Arbitration
Association at its office closest to the Property. The costs
of arbitration shall be borne equally by Landlord and Tenant.
Section 3.03. SECURITY DEPOSIT; INCREASES.
(a) Upon the execution of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount set forth in
Section 1.10 above. Landlord may apply all or part of the
Security Deposit to any unpaid rent or other charges due from
Tenant or to cure any other defaults of Tenant. If Landlord
uses any part of the Security Deposit, Tenant shall restore
the Security Deposit to its fully amount within ten (10) days
after Landlord's written request. Tenant's failure to do so
shall be a material default under this Lease. No interest
shall be paid on the
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Security Deposit. Landlord shall not be required to keep the
Security Deposit separate from its other accounts and no trust
relationship is created with respect to the Security Deposit.
Section 3.04. TERMINATION; ADVANCE PAYMENT. Upon termination of this
Lease under Article Seven (Damage or Destruction), Article Eight (Condemnation)
or any other termination not resulting from Tenant's default, and after Tenant
has vacated the Property in the manner required by this Lease, Landlord shall
refund or credit to Tenant (or Tenant's successor) the unused portion of the
Security Deposit, any advance rent or other advance payments made by Tenant to
Landlord, and any amounts paid for real property taxes and other reserves which
apply to any time periods after termination of the Lease.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly installment
of Base Rent. The term "rent" shall mean Base Rent and Additional Rent.
Section 4.02. PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all real property taxes
on the Property (including any fees, taxes or assessments
against, or as a result of, any tenant improvements installed
on the Property by or for the benefit of Tenant) during the
Lease Term. Subject to Paragraph 4.02(c) and Section 4.08
below, such payment shall be made at lease ten (10) days prior
to the delinquency date of the taxes. Within such ten (10) day
period, Tenant shall furnish Landlord with satisfactory
evidence that the real property taxes have been paid. Landlord
shall reimburse Tenant for any real property taxes paid by
Tenant covering any period prior to or after the Lease Term.
If Tenant fails to pay the real property taxes when due,
Landlord may pay the taxes and Tenant shall reimburse Landlord
for the amount of such tax payments as Additional rent.
(b) DEFINITION OF "REAL PROPERTY TAX". "Real property tax" means:
(i) any fee, license fee, license tax, business license fee,
commercial rental tax, levy, charge, assessment, penalty or
tax imposed by any taxing authority against the Property; (ii)
any tax on the Landlord's right to receive, or the receipt of,
rent or income from the Property or against Landlord's
business of leasing the Property; (iii) any tax or charge for
fire protection, streets, sidewalks, road maintenance, refuse
or other services provided to the Property by any governmental
agency; (iv) any tax imposed upon this transaction or based
upon a re-assessment of the Property due to a change of
ownership, as defined by applicable law, or other transfer of
all or part of Landlord's interest in the Property; and (v)
any charge or fee replacing any tax previously included within
the definition of real property tax. "Real property tax" does
not, however, include Landlord's federal or state income,
franchise, transfer, inheritance or estate taxes.
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(c) JOINT ASSESSMENT. If the Property is not separately assessed,
Landlord shall reasonably determine Tenant's share of the real
property tax payable by Tenant under Paragraph 4.02(a) from
the assessor's worksheets or other reasonably available
information. Tenant shall pay such share to Landlord within
fifteen (15) days after receipt of Landlord's written
statement. Tenant's share of such real property tax shall be
25.67% of the total amount assessed on the Project, based on
the total square footage occupied at the time of the execution
of this Sublease, divided by the total square footage of the
premises (78,720 square feet / 306,650 square feet = 25.67%).
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other
personal property belonging to Tenant. Tenant shall
try to have personal property taxed separately from
the Property.
(ii) If any of Tenant's personal property is taxed with
the Property, Tenant shall pay Landlord the taxes for
the personal property within fifteen (15) days after
Tenant receives a written statement from Landlord for
such personal property taxes.
Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with
other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services and Tenant shall
pay its share to Landlord within fifteen (15) days after receipt of Landlord's
written statement. Tenant's share of such non-jointly metered costs shall be
25.67% of the total charged to the Project, based on the square footage occupied
by Tenant at the time of the execution of this Sublease.
Section 4.04. INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance
(sometimes known as broad form comprehensive general liability
insurance) insuring Tenant against liability for bodily
injury, property damage (including loss of use of property)
and personal injury arising out of the operation, use or
occupancy of the Property. Tenant shall name Landlord as an
additional insured under such policy. The initial amount of
such insurance shall be One Million Dollars ($1,000,000) per
occurrence and shall be subject to periodic increase based
upon inflation, increased liability awards, recommendation of
Landlord's professional insurance advisers and other relevant
factors. The liability insurance obtained by Tenant under this
Paragraph 4.04(a) shall be (i) primary and non-contributing;
(ii) contain cross-liability endorsements; and (iii) insure
Landlord against Tenant's performance under Section 5.05, if
the matters giving rise to the indemnity under Section 5.05
result from the negligence
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of Tenant. The amount and coverage of such insurance shall not
limit Tenant's liability nor relieve Tenant of any other
obligation under this Lease. Landlord may also obtain
comprehensive public liability insurance in an amount and with
coverage determined by Landlord insuring Landlord against
liability arising out of ownership, operation, use or
occupancy of the Property. The policy obtained by Landlord
shall not be contributory and shall not provide primary
insurance.
(b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of
or damage to the Property in the full amount of its
replacement value. Such policy shall contain an Inflation
Guard Endorsement and shall provide protection against all
perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended
perils (all risk), sprinkler leakage and any other perils
which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance if required
by any lender holding a security interest in the Property.
Landlord shall not obtain insurance for Tenant's fixtures or
equipment or building improvements installed by Tenant on the
Property. During the Lease Term, Landlord shall also maintain
a rental income insurance policy, with loss payable to
Landlord, in an amount equal to one year's Base Rent, plus
estimated real property taxes and insurance premiums. Tenant
shall be liable for the payment of any deductible amount under
Landlord's or Tenant's insurance policies maintained pursuant
to this Section 4.04, in an amount not to exceed Five Thousand
Dollars ($5,000). Tenant shall not do or permit anything to be
done which invalidates any such insurance policies.
(c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay
all premiums for the insurance policies described in
Paragraphs 4.04(a) and (b) (whether obtained by Landlord or
Tenant) within fifteen (15) days after Tenant's receipt of a
copy of the premium statement or other evidence of the amount
due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects
to obtain as provided in Paragraph 4.04(a). For insurance
policies maintained by Landlord which cover improvements on
the entire Project, Tenant shall pay Tenant's pro rata share
of the premiums, in accordance with the formula in Paragraph
4.05(e) for determining Tenant's share of Common Area costs.
If insurance policies maintained by Landlord cover
improvements on real property other than the Project, Landlord
shall deliver to Tenant a statement of the premium applicable
to the Property showing in reasonable detail how Tenant's
share of the premium was computed. If the Lease Term expires
before the expiration of an insurance policy maintained by
Landlord, Tenant shall be liable for Tenant's pro rata share
of the insurance premiums. Before the Commencement Date,
Tenant shall deliver to Landlord a copy of any policy of
insurance which Tenant is required to maintain under this
Section 4.04. At least thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to
Landlord a renewal of such policy. As an alternative to
providing a policy of insurance, Tenant shall have the right
to provide Landlord a certificate of insurance, executed by an
authorized officer of the insurance company, showing
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that the insurance which Tenant is required to maintain under
this Section 4.04 is in full force and effect and containing
such other information which Landlord reasonably requires.
(d) GENERAL PROVISIONS.
(i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which
requires the insurance carrier to give Landlord not
less than thirty (30) days' written notice prior to
any cancellation or decrease of such coverage.
(ii) If Tenant fails to deliver any policy, certificate or
renewal to Landlord required under this Lease within
the prescribed time period of if any such policy is
cancelled or modified during the Lease Term without
Landlord's consent, landlord may obtain such
insurance, in which case Tenant shall reimburse
Landlord for the cost of such insurance within twenty
(20) days after receipt of a statement that indicates
the cost of such insurance.
(iii) Tenant shall maintain all insurance required under
this Lease with companies holding a "General
Policyholders Rating of at least B+, V, or such other
rating as may be required by a Lender having a lien
on the Premises, as set forth in the most current
issue of "Best's Insurance Guide." Landlord and
Tenant acknowledge the insurance markets are rapidly
changing and that insurance in the form and amounts
described in this Section 4.04 may not be available
in the future. Tenant acknowledges that the insurance
described in this Section 4.04 is for the primary
benefit of Landlord. If at any time during the Lease
Term, Tenant is unable to maintain the insurance
required under the Lease, Tenant shall nevertheless
maintain insurance coverage which is customary and
commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may
change from time to time. Landlord makes no
representation as to the adequacy of such insurance
to protect Landlord's or Tenant's interests.
Therefore, Tenant shall obtain any such additional
property or liability insurance which Tenant deems
necessary to protect Landlord and Tenant.
(iv) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby
waive any and all rights of recovery against the
other, or against the officers, employees, agents or
representatives of the other, for loss of or damage
to its property or the property of others under its
control, if such loss or damage is covered by any
insurance policy in force (whether or not described
in this Lease) at the time of such loss or damage.
Upon obtaining the required policies of insurance,
Landlord and Tenant shall give notice to the
insurance carriers of this mutual waiver of
subrogation.
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Section 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS.
(a) COMMON AREAS. As used in this Lease, "Common Areas" shall mean
all areas within the Project which are available for the
common use of tenants of the Project and which are not leased
or held for the exclusive use of Tenant or other tenants,
including, but not limited to, parking areas, driveways,
sidewalks, loading areas, access roads, corridors, landscaping
and planted areas. Landlord, from time to time, may change the
size, location, nature and use of any of the Common Areas into
leaseable areas, construct additional parking facilities
(including parking structures) in the Common Areas, and
increase or decrease Common Area land and/or facilities.
Tenant acknowledges that such activity may result in
inconvenience to Tenant. Such activities and changes are
permitted if they do not materially affect Tenant's use of the
Property.
(b) USE OF COMMON AREAS. Tenant shall have the nonexclusive right
(in common with other tenants and all others to whom Landlord
has granted or may grant such rights) to use the Common Areas
for the purposes intended, subject to such reasonable rules
and regulations as Landlord may establish from time to time.
Tenant shall abide by such rules and regulations and shall use
its best effort to cause others who use the Common Areas with
Tenant's express or implied permission to abide by Landlord's
rules and regulations. At any time, Landlord may close any
Common Areas to perform any acts in the Common Area as, in
Landlord's judgment, are desirable to improve the Project.
Tenant shall not interfere with the rights of Landlord, other
tenants or any other person entitled to use the Common Areas.
(c) SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be
entitled to use the number of vehicle parking spaces in the
Project allocated to Tenant in Section 1.11 of the Lease
without paying any additional rent. Tenant's parking shall not
be reserved and shall be limited to vehicles no larger than
the standard size automobiles or pickup utility vehicles.
Tenant shall not cause large trucks or other large vehicles to
be parked within the Project or on the adjacent public
streets. Temporary parking of large delivery vehicles in the
Project may be permitted by the rules and regulations
established by the Landlord. Vehicles shall be parked only in
striped parking spaces and not in driveways, loading areas or
other locations not specifically designated for parking.
Handicapped spaces shall only be used by those legally
permitted to use them. If Tenant parks more vehicles in the
parking area than the number set forth in Section 1.11 of this
Lease, such conduct shall be a material breach of this Lease.
In addition to Landlord's other remedies under the Lease,
Tenant shall pay a daily charge determined by Landlord for
each additional vehicle.
(d) MAINTENANCE OF COMMON AREAS. Landlord shall maintain Common
Areas in good order, condition and repair and shall operate
the Project, in Landlord's sole discretion, as a first-class
industrial/commercial real property development. Tenant shall
pay Tenant's pro rata share (as determined below) of all costs
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incurred by Landlord for the operation and maintenance of the
Common Areas. Common Area costs include, but are not limited
to, costs and expenses for the following: gardening and
landscaping; utilities, water and sewage charges; maintenance
of signs (other than tenants' signs); premiums for liability,
property damage, fire and other types of casualty insurance on
the Common Areas and worker's compensation insurance; all
property taxes and assessments levied on or attributable to
the Common Area and all Common Area improvements; all personal
property taxes levied on or attributable to personal property
used in connection with the Common Areas; straight-line
depreciation on personal property owned by Landlord which is
consumed in the operation or maintenance of the Common Areas;
rental or lease payments paid by Landlord for rented or leased
personal property used in the operation or maintenance of the
Common Areas; fees for required licenses and permits;
repairing, resurfacing, repaving, maintaining, painting,
lighting, cleaning, refuse removal, security, underground
piping, fire sprinkler repair, and similar items; reserves for
roof replacement and exterior painting and other appropriate
reserves; and a reasonable allowance to Landlord for
Landlord's supervision of the Common Areas (not to exceed ten
percent (10%) of the common area costs, property tax and
insurance pass-through for the Project for the calendar year).
Landlord may cause any or all of such services to be provided
by third parties and the cost of such services shall be
included in Common Area costs. Common Area costs shall not
include depreciation of real property which forms part of the
Common Areas.
(e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual
pro rata share of all Common Area costs (prorated for any
fractional month) upon notice from Landlord that such costs
are due and payable, and in any event prior to delinquency.
Tenant's pro rata share shall be calculated by dividing the
square footage area of the Property, as set forth in Section
1.04 of the Lease, by the aggregate square foot area of the
Project which is leased or held for lease by tenants, as of
the date on which the computation is made. Tenant's initial
pro rata share is set out in Paragraph 4.03. Any changes in
the Common Area costs and/or the aggregate area of the
Project, leased or held for lease during the Lease Term shall
be effective on the first day of the month after such change
occurs. Landlord may, at Landlord's election, estimate in
advance and charge to Tenant as Common Area costs, all
maintenance and repair costs for which Tenant is liable under
Section 6.04 of the Lease, and all other Common Area costs
payable by Tenant hereunder. At Landlord's election, such
statements of estimated Common Area costs shall be delivered
monthly, quarterly or at any other periodic intervals to be
designated by Landlord. Landlord may adjust such estimates at
any time based upon Landlord's experience and reasonable
anticipation of costs. Such adjustments shall be effective as
of the next rent payment date after notice to Tenant. Within
sixty (60) days after the end of each calendar year of the
Lease Term, Landlord shall deliver to Tenant a statement
prepared in accordance with generally accepted accounting
principles setting forth, in reasonable detail, the Common
Area costs paid or incurred by Landlord during the preceding
calendar year and Tenant's pro rata share. Upon receipt of
such statement, there shall be an
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adjustment between Landlord and Tenant, with payment to or
credit given by Landlord (as the case may be) so that Landlord
shall receive the entire amount of Tenant's share of such
costs and expenses for such period.
Section 4.06. LATE CHARGES. Tenant's failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any rent payment within five
(5) days after it becomes due, Tenant shall pay Landlord a late charge equal to
five percent (5%) of the overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.
Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law.
Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES.
If requested by any ground lessor or lender to whom landlord has granted or may
hereafter grant a security interest in the Property, or if Tenant is more than
ten (10) days late in the payment of rent more than once in any consecutive
twelve (12) month period, Tenant shall pay Landlord a sum equal to one-twelfth
(1/12) of the annual real property taxes and insurance premiums payable by
Tenant under this Lease, together with each payment of Base Rent. Landlord shall
hold such payments in a non-interest bearing impound account. If unknown,
Landlord shall reasonably estimate the amount of real property taxes and
insurance premiums when due. Tenant shall pay any deficiency of funds in the
impound account to Landlord upon written request. If Tenant defaults under this
Lease, Landlord may apply any funds in the impound account to any obligation
then due under this lease.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of tenants of the Project, or which constitutes a nuisance or waste.
Tenant shall obtain and pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statues, ordinances,
rules, regulations,
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orders and requirements regulating the use by Tenant of the Property, including
the Occupational Safety and Health Act.
Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant, its agents, employees, contractors, sublessees or
invitees without the prior written consent of Landlord. Landlord shall be
entitled to take into account such other factors or facts as Landlord may
reasonably determine to be relevant in determining whether to grant or withhold
consent to Tenant's proposed activity with respect to Hazardous Material. In no
event, however, shall Landlord be required to consent to the installation or use
of any storage tanks on the Property.
Section 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs on
the Property without Landlord's prior written consent. Tenant shall not conduct
or permit any auctions or sheriff's sales at the Property.
Section 5.05. INDEMNITY. Tenant shall indemnify Landlord against and
hold Landlord harmless from any and all costs, claims or liability arising from:
(a) Tenant's use of the Property;
(b) The conduct of Tenant's business or anything else done or
permitted by Tenant to be done in or about the property,
including any contamination of the Property or any other
property resulting from the presence or use of Hazardous
Material caused or permitted by Tenant;
(c) Any breach or default in the performance of Tenant's
obligations under this Lease;
(d) Any misrepresentation or breach of warranty by Tenant under
this Lease; or
(e) Other acts or omissions of Tenant.
Tenant shall defend Landlord against any such cost, claim or liability at
Tenant's expense with counsel reasonably acceptable to Landlord, or at
Landlord's election, Tenant shall reimburse Landlord for any reasonable legal
fees or costs incurred by Landlord in connection with any such claim. As a
material part of the consideration to Landlord, Tenant assumes all risk of
damage to property or injury to persons in or about the Property arising from
any cause, and Tenant hereby waives all claims in respect thereof against
Landlord, except for any claim arising out of
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Landlord's gross negligence or willful misconduct. As used in this Section, the
term "Tenant" shall include Tenant's employees, agents, contractors, and
invitees, if applicable.
Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall give
Tenant prior notice of such entry, except in the case of an emergency. Landlord
may place customary "For Sale" or "For Lease" signs on the Property.
Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Property for
the full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS.
Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and order. Except as provided
herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation as to the condition of the Property or the suitability
of the Property for Tenant's intended use. Tenant represents and warrants that
Tenant has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto. If Landlord or Landlord's Broker has provided a Property
Information Sheet or other Disclosure Statement regarding the Property, a copy
is attached as an exhibit to the Lease.
Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not
be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers or any other person in or about the
Property, whether such damage or injury is caused by or results from:
(a) Fire, steam, electricity, water, gas or rain;
(b) The breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause;
(c) Conditions arising in or about the Property or upon other
portions of the Project, or from other sources or places; or
(d) Any act or omission of any other tenant of the Project.
Landlord shall not be liable for any such damage or injury
even though the cause of or the means of repairing such damage
or injury are not accessible to Tenant.
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The provisions of this Section 6.02 shall not, however, exempt Landlord from
liability for Landlord's gross negligence or willful misconduct.
Section 6.03. LANDLORD'S OBLIGATION.
(a) Except as provided in Article Seven (Damage or Destruction)
and Article Eight (Condemnation), Landlord shall keep the
following in good order, condition and repair: the
foundations, exterior walls and roof of the Property
(including painting the exterior surface of the exterior walls
of the property not more often than once every five (5) years,
if necessary) and all components of electrical, mechanical,
plumbing, heating and air conditioning systems and facilities
located in the Property which are concealed or used in common
by tenants of the Project. However, Landlord shall not be
obligated to maintain or repair window, doors, plate glass or
the interior surfaces of exterior walls. Landlord shall make
repairs under this Section 6.03 within a reasonable time after
receipt of written notice from Tenant of the need for such
repairs.
(b) Tenant shall pay or reimburse Landlord for all costs Landlord
incurs under Paragraph 6.03(a) above as Common Area costs as
provided for in Section 4.05 of the Lease. Tenant waives the
benefit of any statute in effect now or in the future which
might give Tenant the right to make repairs at Landlord's
expense or to terminate this Lease due to Landlord's failure
to keep the Property in good order, condition and repair.
Section 6.04. TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven (Damage or
Destruction) and Article Eight (Condemnation), Tenant shall
keep all portions of the Property (including nonstructural,
interior, systems and equipment installed by Tenant) in good
order, condition and repair (including interior repainting and
refinishing, as needed). If any portion of the Property or any
system or equipment in the Property which Tenant is obligated
to repair cannot be fully repaired or restored, Tenant shall
promptly replace such portion of the Property or system or
equipment in the Property, regardless of whether the benefit
of such replacement extends beyond the Lease Term; but if the
benefit or useful life of such replacement extends beyond the
Lease Term (as such term may be extended by exercise of any
options), the useful life of such replacement shall be
prorated over the remaining portion of the Lease Term (as
extended), and Tenant shall be liable only for that portion of
the cost which is applicable to the Lease Term (as extended).
Tenant shall maintain a preventive maintenance contract
providing for the regular inspection and maintenance of the
heating and air conditioning system by a licensed heating and
air conditioning contractor, unless Landlord maintains such
equipment under Section 6.03 above. If any part of the
Property or the Project is damaged by any act or omission of
Tenant, Tenant shall pay Landlord the cost of repairing or
replacing such damaged property, whether or not Landlord would
otherwise be obligated to pay the cost of maintaining or
repairing such property. It is the
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intention of Landlord and Tenant that at all times Tenant
shall maintain the portions of the Property which Tenant is
obligated to maintain in an attractive, first-class and full
operative condition.
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to
maintain, repair or replace the Property as required by this
Section 6.04, Landlord may, upon ten (10) days' prior notice
to Tenant (except that no notice shall be required in the case
of an emergency), enter the Property and perform such
maintenance or repair (including replacement, as needed) on
behalf of Tenant. In such case, Tenant shall reimburse
Landlord for all costs incurred in performing such maintenance
or repair immediately upon demand.
Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written
consent, except for non-structural alterations which do not
exceed Ten Thousand Dollars ($10,000) in cost cumulatively
over the Lease Term and which are not visible from the outside
of the building of which the Property is part. Landlord may
require Tenant to provide demolition and/or lien and
completion bonds in form and amount satisfactory to Landlord.
Tenant shall promptly remove any alterations, additions, or
improvements constructed in violation of this Paragraph
6.05(a) upon Landlord's written request. All alterations,
additions, and improvements shall be done in a good and
workmanlike manner, in conformity with all applicable laws and
regulations, and by a contractor approved by Landlord. Upon
completion of any such work, Tenant shall provide Landlord
with "as built" plans, copies of all construction contracts,
and proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least
twenty (20) days' prior written notice of the commencement of
any work on the Property, regardless of whether Landlord's
consent to such work is required. Landlord may elect to record
and post notices of non-responsibility on the Property.
Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under Article Seven (Damage or Destruction). In addition, Landlord may
require Tenant to remove any alterations, additions or improvements (whether or
not made with Landlord's consent) prior to the expiration of the Lease and to
restore the Property to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord's property and shall be surrendered to Landlord
upon the expiration or earlier termination fo the Lease, except Tenant may
remove any of Tenant's machinery or equipment which can be
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removed without material damage to the Property. Tenant shall repair, at
Tenant's expense, any damage to the Property caused by the removal of any such
equipment. In no event, however, shall Tenant remove any of the following
materials or equipment (which shall be deemed Landlord's property) without
Landlord's prior written consent: any power wiring or power panels; lighting or
lighting fixtures; wall coverings; drapes, blinds or other window coverings;
carpets or other floor coverings; heaters, air conditioners or any other heating
or air conditioning equipment; fencing or security gates; or other similar
building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is
only partially damaged (i.e., less than fifty percent (50%) of
the Property is untenantable as a result of such damage or
less than fifty percent (50%) of Tenant's operations are
materially impaired) and if the proceeds received by Landlord
from the insurance policies described in Paragraph 4.04(b) are
sufficient to pay for the necessary repairs, this Lease shall
remain in effect and Landlord shall repair the damage as soon
as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures,
equipment, or improvements.
(b) If the insurance proceeds received by Landlord are not
sufficient to pay the entire cost of repair, of if the cause
of damage is not covered by the insurance policies which
Landlord maintains under Paragraph 4.04(b), Landlord may elect
either to (i) repair the damage as soon as reasonably
possibly, in which case this Lease shall remain in full force
and effect, or (ii) terminate this Lease as of the date the
damage occurred. Landlord shall notify Tenant within thirty
(30) days after receipt of notice of the occurrence of the
damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage,
Tenant shall pay Landlord Tenant's pro rata share of the
"deductible amount" (if any) under Landlord's insurance
policies and, if the damage was due to an act or omission of
Tenant, or Tenant's employees, agents, contractors or
invitees, the difference between the actual cost of repair and
any insurance proceeds received by Landlord. If Landlord
elects to terminate this Lease, Tenant may elect to continue
this Lease in full force and effect, in which case Tenant
shall repair any damage to the Property and any building in
which Property is located. Tenant shall pay the cost of such
repairs, except that upon satisfactory completion of such
repairs, Landlord shall deliver to Tenant any insurance
proceeds received by Landlord for the damage repaired by
Tenant. Tenant shall give Landlord written notice of such
election within ten (10) days after receiving Landlord's
termination notice.
(c) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more
than thirty (30) days to repair, either
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Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any
insurance proceeds. The party electing to terminate this Lease
shall give written notification to the other party of such
election within thirty (30) days after Tenant's notice to
Landlord of the occurrence of the damage.
Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding the preceding
sentence, if the Property can be rebuilt within six (6) months after the date of
destruction, Landlord may elect to rebuild the Property at Landlord's own
expense, in which case this Lease shall remain in full force and effect.
Landlord shall notify Tenant of such election within thirty (30) days after
Tenant's notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord.
Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, any rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Tenant's use of the Property is impaired. However, the reduction
shall not exceed the sum of one year's payment of Base rent, insurance premiums
and real property taxes. Except for such possible reduction in Base rent,
insurance premiums and real property taxes, Tenant shall not be entitled to any
other compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.
Section 7.04. WAIVER. Tenant waives the protection of any statute, code
or judicial decision which grants a tenant the right to terminate a lease in the
event of the substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction of the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which the
Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice ten (10) days
after the condemning authority takes title or possession). If neither Landlord
nor Tenant terminates this Lease, this Lease shall remain in effect as to the
portion of the Property not taken, except that the Base Rent and Additional
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Rent shall be reduced in proportion to the reduction in the floor area of the
Property. Any Condemnation award or payment shall be distributed in the
following order:
(a) First, to any ground lessor, mortgagee or beneficiary under a
deed of trust encumbering the Property, the amount of its
interest in the Property;
(b) Second, to Tenant, only the amount of any award specifically
designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and
(c) Third to Landlord, the remainder of such award, whether as
compensation for reduction in the value of the leasehold, the
taking of the fee, or otherwise.
If this Lease is not terminated, Landlord shall repair any damage for which
Tenant has been reimbursed by the condemning authority. If the severance damages
received by Landlord are not sufficient to pay for such repair, Landlord shall
have the right to either terminate this Lease or make such repair at Landlord's
expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property
or of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without Landlord's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this Lease.
If Tenant is a partnership, any cumulative transfer of more than twenty percent
(20%) of the partnership interests shall require Landlord's consent. If Tenant
is a corporation, any change in the ownership of a controlling interest of the
voting stock of the corporation shall require Landlord's consent, unless the
change is due to a public offering of Tenant's capital stock.
Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or
sublease the Property, without Landlord's consent, to any corporation which
controls, is controlled by or is under common control with Tenant, or to any
corporation resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all of
Tenant's obligations under this Lease.
Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release Tenant
or change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If Tenant's transferee
defaults under this Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee. Landlord may consent to subsequent
assignments or modifications of this Lease by Tenant's transferee, without
notifying Tenant or obtaining its consent. Such action shall not relieve
Tenant's liability under this Lease.
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Section 9.04. OFFER TO TERMINATE. If Tenant desires to assign the Lease
or sublease the Property, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects in
writing to accept the offer to terminate within twenty (20) days after notice of
the offer, the Lease shall terminate as of the date specified and all terms and
provisions of the Lease governing termination shall apply. If Landlord does not
so elect, the Lease shall continue in effect until otherwise terminated and the
provisions of Section 9.05 with respect to any proposed transfer shall continue
to apply.
Section 9.05. LANDLORD'S CONSENT.
(a) Tenant's request for consent to any transfer described in
Section 9.02 shall set forth in writing the details of the
proposed transfer, including the name, business and financial
condition of the prospective transferee, financial details of
the proposed transfer (e.g., the term of and the rent and
security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant.
Landlord shall have the right to withhold consent, if
reasonable, or to grant consent, based on the following
factors: (i) the business of the proposed assignee or
subtenant and the proposed use of the Property; (ii) the net
worth and financial reputation of the proposed assignee or
subtenant; (iii) Tenant's compliance with all of its
obligations under the Lease; and (iv) such other factors as
Landlord may reasonably deem relevant. If Landlord objects to
a proposed assignment solely because of the net worth and/or
financial reputation of the proposed assignee, Tenant may
nonetheless sublease (but not assign), all or a portion of the
Property to the proposed transferee, but only on the terms of
the proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under
the Lease the Landlord's Share (stated in Section
1.13) of the Profit (defined below) on such
transaction as and when received by Tenant, unless
Landlord gives written notice to Tenant and the
assignee or subtenant that Landlord's Share shall be
paid by the assignee or subtenant to Landlord
directly. The "Profit" means (A) all amounts paid to
Tenant for such assignment or sublease, including
"key" money, monthly rent in excess of the monthly
rent payable under the Lease, and all fees and other
consideration paid for the assignment or sublease,
including fees under any collateral agreements, less
(B) costs and expenses directly incurred by Tenant in
connection with the execution and performance of such
assignment or sublease for real estate broker's
commissions, reasonable attorney's fees and costs of
renovation or construction of tenant improvements
required under such assignment or sublease. Tenant is
entitled to recover such costs and expenses before
Tenant is obligated to pay Landlord's Share to
Landlord. The Profit in the case of a sublease of
less than all the Property is the rent allocable to
the subleased space as a percentage on a square
footage basis.
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(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment
or sublease of the Property within thirty (30) days
after the transaction documentation is signed, and
landlord may inspect Tenant's books and records to
verify the accuracy of such statement. On written
request, Tenant shall promptly furnish to Landlord
copies of all transaction documentation, all of which
shall be certified by Tenant to be complete, true and
correct. Landlord's receipt of Landlord's Share shall
not be a consent to any further assignment or
subletting. The breach of Tenant's obligation under
this Paragraph 9.05(b) shall be a material default of
the Lease.
Section 9.06. NO MERGER. No merger shall result from Tenant's sublease
of the Property under this Article Nine, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. COVENANTS AND CONDITIONS. Tenant's performance of each
of Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.
Section 10.02. DEFAULTS. Tenant shall be in material default under this
Lease:
(a) If Tenant abandons the Property or if Tenant's vacation of the
Property results in the cancellation of any insurance
described in Section 4.04;
(b) If Tenant fails to pay rent or any other charge within three
(3) business days from the date when due, and after written
notice from Landlord.
(c) If Tenant fails to perform any of Tenant's non-monetary
obligations under this Lease for a period of thirty (30) days
after written notice from Landlord; provided that if more than
thirty (30) days are required to complete such performance,
Tenant shall not be in default if Tenant commences such
performance within the thirty (30) day period and thereafter
diligently pursues its completion. However, Landlord shall not
be required to give such notice if Tenant's failure to perform
constitutes a non-curable breach of this Lease. The notice
required by this Paragraph is intended to satisfy any and all
notice requirements imposed by law on Landlord and is not in
addition to any such requirement.
(d) (i) If Tenant makes a general assignment or general
arrangement for the benefit of creditors; (ii) if a petition
for adjudication of bankruptcy or for reorganization or
rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or
receiver is appointed to take possession of substantially all
of Tenant's assets located at the Property or of Tenant's
interest
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in this Lease and possession is not restored to Tenant within
thirty (30) days; or (iv) if substantially all of Tenant's
assets located at the Property or of Tenant's interest in this
Lease is subjected to attachment, execution or other judicial
seizure which is not discharged within thirty (30) days. If a
court of competent jurisdiction determines that any of the
acts described in this subparagraph (d) is not a default under
this Lease, and a trustee is appointed to take possession (or
if Tenant remains a debtor in possession) and such trustee or
Tenant transfers Tenant's interest hereunder, then Landlord
shall receive, as Additional Rent, the excess, if any, of the
rent (or any consideration) paid in connection with such
assignment or sublease over the rent payable by Tenant under
this Lease.
(e) If any guarantor of this Lease revokes or otherwise
terminates, or purports to revoke or otherwise terminate, any
guaranty of all or any portion of Tenant's obligations under
this Lease. Unless otherwise expressly provided, no guaranty
of the Lease is revocable.
Section 10.03. REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Tenant's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Property
to Landlord. In such event, Landlord shall be entitled to
recover from Tenant all damages incurred by Landlord by reason
of Tenant's default, including (i) the worth at the time of
the award of the unpaid Base Rent, Additional Rent and other
charges which Landlord had earned at the time of the
termination; (ii) the worth at the time of the award of the
amount by which the unpaid Base rent, Additional Rent and
other charges which Landlord would have earned after
termination until the time of the award exceeds the amount of
such rental loss that Tenant proves Landlord could have
reasonably avoided; (iii) the worth at the time of the award
of the amount by which the unpaid Base Rent, Additional Rent
and other charges which Tenant would have paid for the balance
of the Lease term after the time of award exceeds the amount
of such rental loss that Tenant proves Landlord could have
reasonably avoided; and (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under the Lease
or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, any costs or
expenses Landlord incurs in maintaining or preserving the
Property after such default, the cost of recovering possession
of the Property, expenses of reletting, including necessary
renovation or alteration of th Property, Landlord's reasonable
attorneys' fees incurred in connection therewith, and any real
estate commission paid or payable. As used in subparts (i) and
(ii) above, the "worth at the time of the award" is computed
by allowing interest on unpaid amounts at the rate of fifteen
percent (15%) per annum, or such lesser amount as may then be
the maximum lawful rate. As used in subpart (iii) the "worth
at the time of the award" is computed by discounting such
amount at the discount rate of
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the Federal Reserve Bank of San Francisco at the time of the
award, plus one percent (1%). If Tenant has abandoned the
Property, Landlord shall have the option of (i) retaking
possession of the Property and recovering from Tenant the
amount specified in this Paragraph 10.03(a), or (ii)
proceeding under Paragraph 10.03(b);
(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant has
abandoned the Property. In such event, Landlord shall be
entitled to enforce all of Landlord's rights and remedies
under this Lease, including the right to recover the rent as
it becomes due;
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the
Property is located.
Section 10.04. REPAYMENT OF "FREE" RENT. (INTENTIONALLY DELETED).
Section 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence of
any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of an unlawful detainer
action against Tenant. On such termination Landlord's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing, commencement, pursuing and/or defaulting
of any action in any bankruptcy court or other court with respect to the Lease;
the obtaining of relief from any stay in bankruptcy restraining any action to
evict Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Property. All such damages suffered (apart from Base rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceeding.
Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust, mortgage encumbering
the Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Tenant shall cooperate with Landlord and any lender which is
acquiring a security interest in the Property or the Lease. Tenant shall execute
such further documents and assurances as such lender may require, provided that
Tenant's obligations under this Lese shall not be increased in any material way
(the performance of ministerial acts shall not be deemed material), and Tenant
shall not be deprived of its rights under this Lease Tenant's right to quiet
possession of the Property during the Lease Term shall not be disturbed if
Tenant pays the rent and performs all of Tenant's obligations under this Lease
and is not otherwise in default. If any ground lessor, beneficiary or mortgagee
elects to have this Lease prior to the lien on its ground lease, deed of trust
or mortgage and gives written notice
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thereof to Tenant, this Lease shall be deemed prior to such ground lease, deed
of trust or mortgage whether this Lease is dated prior or subsequent to the date
of said ground lease, deed of trust or mortgage or the date of recording
thereof.
Section 11.02. ATTORNMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, or purchaser
at a foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Property and recognize such transferee or successor
as Landlord under this Lease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant any right to terminate this
Lease or surrender possession of the Property upon the transfer of Landlord's
interest.
Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten (10)
business days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
Section 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement
certifying: (i) that none of the terms or provisions of this
Lease have been changed (or if they have been changed, stating
how they have been changed; (ii) that this Lease has not been
cancelled or terminated; (iii) the last date of payment of the
Base Rent and other charges and the time period covered by
such payment; (iv) that Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other representations or information with
respect to Tenant or the Lease as Landlord may reasonably
request or which any prospective purchaser or encumbrancer of
the Property may require. Tenant shall deliver such statement
to Landlord within ten (10) business days after Landlord's
request. Landlord may give any such statement by Tenant to any
prospective purchaser or encumbrancer of the Property. Such
purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within
such ten (10) business day period, Landlord and any
prospective purchaser or encumbrancer, may conclusively
presume and rely upon the following facts: (i) that the terms
and provisions of this Lease have not been changed except as
otherwise represented by Landlord; (ii) that this Lease has
not been cancelled or terminated except as otherwise
represented by Landlord; (iii) that not more than one month's
Base Rent or other charges have been paid in advance; and (iv)
that Landlord is not in default under the Lease. In such
event, Tenant shall be estopped from denying the truth of such
facts.
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Section 11.05. TENANT'S FINANCIAL CONDITION. Within ten (10) business
days after written request from Landlord, Tenant shall deliver to Landlord such
financial statements as Landlord reasonably requires to verify the net worth of
Tenant or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant
shall deliver to any lender designated by Landlord any financial statements
required by such lender to facilitate the financing or refinancing of the
Property. Tenant represents and warrants to Landlord that each such financial
statement is a true and accurate statement as of the date of such statement. All
financial statements shall be confidential and shall be used only for the
purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any costs
or expenses that the Nondefaulting Party incurs in connection with any breach or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the provisions
of this Lease is commenced, the court in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys' fees and
costs. The losing party in such action shall pay such attorneys' fees and costs.
Tenant shall also indemnify Landlord against and hold Landlord harmless from all
costs, expenses, demands and liability Landlord may incur if Landlord becomes or
is made a party to any claims or action:
(a) Instituted by Tenant against any third party, or by any third
party against Tenant, or by or against any person holding any
interest under or using the Property by license of or
agreement with Tenant;
(b) For any foreclosure of any lien for labor or material
furnished to or for Tenant or such other person;
(c) Otherwise arising out of or resulting from any act or
transaction of tenant or such other person; or
(d) Necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding of Tenant, or other proceeding of Tenant
under Title 11 of the United States Code, as amended.
Tenant shall defend Landlord against any such claim or action at Tenant's
expense with counsel reasonably acceptable to Landlord or, at Landlord's
election, Tenant shall reimburse Landlord for any legal fees or costs Landlord
incurs in any such claim or action.
Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with Tenant's request for
Landlord's consent under Article Nine (Assignment and Subletting), or in
connection with any other act which Tenant proposes to do and which requires
Landlord's consent.
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ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a
condition to the continuance of this Lease, that there will be no discrimination
against, or segregation of, any person or group of persons on the basis of race,
color, sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or
Project or the leasehold estate under a ground lease of the
Property or Project at the time in question. Each Landlord is
obligated to perform the obligations of Landlord under this
Lease only during the time such Landlord owns such interest or
title. Any Landlord who transfers its title or interest is
relieved of all liability with respect to the obligations of
Landlord under this Lease to be performed on or after the date
of transfer. However, each Landlord shall deliver to its
transferee all funds that Tenant previously paid if such funds
have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to
perform any of its obligations under this Lese to Landlord and
to any ground lessor, mortgagee or beneficiary under any deed
of trust encumbering the Property whose name and address have
been furnished to Tenant in writing. Landlord shall not be in
default under this Lease unless Landlord (or such ground
lessor, mortgagee or beneficiary) fails to cure such
non-performance within thirty (30) days after receipt of
Tenant's notice. However, if such non-performance reasonably
requires more than thirty (30) days to cure, Landlord shall
not be in default if such cure is commenced within such thirty
(30) day period and thereafter diligently pursued to
completion.
(c) Notwithstanding any term or provision herein to the contrary,
the liability of Landlord for the performance of its duties
and obligations under this Lease is limited to Landlord's
interest in the Property and the Project, and neither the
Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.
Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
Section 13.04. INTERPRETATION. The captions of the Articles of Sections
of this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of
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this Lease. Whenever required by the context of this Lease, the singular shall
include the plural and the plural shall include the singular. The masculine,
feminine and neuter genders shall each include the other. In any provision
related to the conduct, acts or omissions of Tenant, the term "Tenant" shall
include Tenant's agents, employees, contractors, invitees, successors or others
using the Property with Tenant's expressed or implied permission.
Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
Section 13.06. NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
Tenant's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to the
other party.
Section 13.07. WAIVERS. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provision of this Lease or
its acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
Section 13.08. NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or Tenant
may require that a "Short Form" memorandum of this Lease executed by both
parties be recorded. The party requiring such recording shall pay all transfer
taxes and recording fees.
Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any
party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.
Section 13.10 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is
a corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general partner of the partnership, that he or it has full authority
to sign for the partnership and that this Lease binds the partnership and all
general partners of the partnership. Tenant shall give written notice to
Landlord of any
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general partner's withdrawal or addition. Within thirty (30) days after this
Lease is signed, Tenant shall deliver to Landlord a copy of Tenant's recorded
statement of partnership or certificate of limited partners.
Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.
Section 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterpart
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
Section 13.14. SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.
ARTICLE FOURTEEN: BROKERS
Section 14.01. BROKER'S FEE. When this Lease is signed by and delivered
to both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and Landlord's Broker. Landlord shall pay
Landlord's Broker a commission if Tenant exercises any option to extend the
Lease Term or to buy the Property, or any similar option or right which Landlord
may grant to Tenant, or if Landlord's Broker is the procuring cause of any other
lease or sale entered into between Landlord and Tenant covering the Property.
Such commission shall be the amount set forth in Landlord's Broker's commission
schedule in effect as of the execution of this Lease. If a Tenant's Broker is
named in Section 1.08 above, Landlord's Broker shall pay an appropriate portion
of its commission to Tenant's Broker if so provided in any agreement between
Landlord's Broker and Tenant's Broker. Nothing contained in this Lease shall
impose any obligation on Landlord to pay a commission or fee to any party other
than Landlord's Broker.
Section 14.02. PROTECTION OF BROKERS. If Landlord sells the Property,
or assigns Landlord's interest in this Lease, the buyer or assignee shall, by
accepting such conveyance of the Property or assignment of the Lease, be
conclusively deemed to have agreed to make all payments to Landlord's Broker
thereafter required of Landlord under this Article Fourteen. Landlord's Broker
shall have the right to bring a legal action to enforce or declare rights under
this provision. The prevailing party in such action shall be entitled to
reasonable attorneys' fees to be paid by the losing party. Such attorneys' fees
shall be fixed by the court in such action.
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This Paragraph is included in this Lease for the benefit of Landlord's Broker.
Section 14.03. BROKER'S DISCLOSURE OF AGENCY. Landlord's Broker hereby
discloses to Landlord and Tenant and Landlord and Tenant hereby consent to
Landlord's Broker acting in this transaction as the agent of (check one):
[ ] Landlord exclusively, or
[ ] both Landlord and Tenant.
Section 14.04. NO OTHER BROKERS. Tenant represents and warrants to
Landlord that the brokers named in Section 1.08 above are the only agents,
brokers, finders or other parties with whom Tenant has dealt who are or may be
entitled to any commission or fee with respect to this Lease or the Property.
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Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Riders which
are attached to or incorporated by reference to this Lease.
"LANDLORD"
Signed on July 23, 1999. NATIONAL DISTRIBUTION AGENCY, INC.,
a Delaware corporation
at Santa Monica, CA By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: CORPORATE SECRETARY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its GENERAL MANAGER
"TENANT"
Signed on July 26, 1999. ▇▇▇▇.▇▇▇, INC., a California corporation
at San Francisco, CA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: CHIEF EXECUTIVE OFFICER
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Its: President
------------------------------------
SECRETARY
IN ANY SUCH REAL ESTATE ACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH A
PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST, OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
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FIRST AMENDMENT TO
INDUSTRIAL REAL ESTATE SUBLEASE
(MULTI-TENANT FACILITY)
This First Amendment is made for the purpose of amending that certain
Agreement dated July 1, 1999, constituting a sublease of a portion of the
premises at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Property"), between
National Distribution Agency, Inc., a Delaware corporation ("Landlord or
Sublessor"), and ▇▇▇▇.▇▇▇, Inc., a California corporation ("Tenant" or
"Sublessee"), for (the "Lease" or the "Sublease"). Said Sublease dated July 1,
1999, is herein referred to as the "Primary Sublease". This First Amendment to
Lease is subject to that certain lease between Landlord as Lessee and Chino
Pacific Warehouse Corporation as Lessor, dated September 25, 1997, (the "Master
Lease").
In connection with the execution of this First Amendment to Sublease,
the following provisions and representations of the Primary Sublease are
incorporated herein:
Landlord warrants and represents to Tenant that the Master Lease has
not been amended or modified except as expressly set forth herein, that Landlord
is not now, and as of the commencement of the Term hereof will not be, in
default or breach of any of the provisions of the Master Lease, and the Landlord
has no knowledge of any claim by the Master Lessor that Landlord is in default
or breach of any of the provisions of the Master Lease.
Tenant shall not commit or suffer any act or omission that will violate
any of the provisions of the Master Lease. Landlord shall exercise due diligence
in attempting to cause the Master Lessor to perform its obligations under the
Master Lease for the benefit of Tenant. If the Master Lease terminates this
Sublease shall terminate and the parties shall be relieved of any further
liability or obligation under this Sublease provided however, that if the Master
Lease terminates as a result of a default or breach by Landlord or Tenant under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to the non-defaulting party for the damage suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives Landlord
any right to terminate the Master Lease in the event of the partial or total
damage, destruction, or condemnation of the Master Premises or the building or
project of which the Master Premises are a part, the exercise of such right by
Landlord shall not constitute a default or breach hereunder, provided that
Tenant receives a pro rata portion of any proceeds, or other remuneration, if
any, which Landlord receives as a result of such termination.
The provisions of this First Amendment to Sublease are made to reflect
the desire of Tenant to increase its Primary leased space of approximately
73,920 square feet of warehouse space and 4,800 square feet of office space
under the Primary Sublease, in two separate phases described as First Expansion
Space of approximately 32,256 square feet of warehouse space, and Second
Expansion Space of approximately 32,256 square feet of office space, as more
specifically reflected in amended Exhibit "A" attached.
The provisions and terms of the Primary Sublease are amended,
supplemented and/or
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modified as hereafter set forth. If not amended, supplemented or modified, the
terms are identified as "no change". To the extent not amended, superseded, or
modified herein, the terms of the Primary Sublease shall constitute a part of
this amendment and are hereby incorporated by reference.
ARTICLE ONE: BASIC TERMS - ADDED AND MODIFIED AS FOLLOWS:
Section 1.01. DATE OF LEASE.
THE FOLLOWING PROVISIONS SPECIFIED BELOW ARE ADDED:
FIRST EXPANSION SPACE: October 15, 1999.
SECOND EXPANSION SPACE: November 15, 1999
Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): NO CHANGE.
Section 1.03. TENANT (INCLUDED LEGAL ENTITY): NO CHANGE.
Section 1.04. PROPERTY.
THE FOLLOWING PROVISIONS ARE ADDED:
The First Expansion space includes approximately 32,256 square feet of
warehouse space; the Second Expansion Space includes approximately 32,256 square
feet of warehouse space, both of which areas are more fully reflected in Exhibit
"A", as amended and outlined in red.
Section 1.05. LEASE TERM:
THE FOLLOWING PROVISIONS ARE ADDED:
The Lease Term for the First Expansion Space shall become effective
beginning October 15, 1999, and ending on August 14, 2004, a period of Fifty-six
and one-half (56.5) months. Tenant shall pay no Base Rent for the period October
15, 1999 to November 30, 1999. During the period of free rent, Tenant shall be
obligated to pay its pro rata share of taxes, insurance, maintenance and
utilities, effective commencing November 1, 1999, and as provided in Section
1.12(b) herein.
The Lease Term for the Second Expansion Space shall become effective
beginning November 15, 1999, and ending on August 14, 2004, a period of
Fifty-five and one-half (55.5) months. Tenant shall pay no base rent for the
period November 15, 1999 to December 31, 1999. During the period of free rent,
Tenant shall be obligated to pay its pro rata share of taxes, insurance,
maintenance and utilities, effective commencing November 1, 1999, and as
provided in Section 1.12(b) herein.
In the event Lessor fails to deliver the First Expansion Space on or before
October 15, 1999,
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Lessor shall compensate Lessee for the delay in possession as
follows:
- Beginning October 15, 1999, one (1) day free rent for each day
possession is delayed.
In the event Lessor fails to deliver the Second Expansion Space on or before
November 15, 1999, Lessor shall compensate Lessee for the delay in possession as
follows:
- Beginning November 15, 1999, one (1) day free rent for each
day possession is delayed.
Notwithstanding the above, should Lessor deliver either Expansion space at any
time prior to the original commencement date of the Term of the particular
Expansion Space, Lessee agrees to begin the Lease term for the particular
Expansion Space, upon receipt of the space.
The Option to Renew referenced herein, shall include both Expansion
Spaces.
Section 1.06. PERMITTED USES: (See Article Five) NO CHANGE.
Section 1.07. TENANT'S GUARANTOR: NO CHANGE.
Section 1.08. BROKERS: (See Article Fourteen) NO CHANGE.
Section 1.09. NO CHANGE. COMMISSION PAYABLE TO LANDLORD'S BROKER:
Section 1.10. INITIAL SECURITY DEPOSIT: These provisions are MODIFIED
AND/OR ADDED TO as set forth below:
The existing initial security deposit of [*] shall be increased by [*],
by November 15, 1999, for a total Security Deposit of [*].
The Letter-of-Credit for [*] shall be increased by [*] by November 15,
1999, for a total Letter-of-Credit of [*]. Provided the Tenant is not in
default of the Sublease, the Letter-of-Credit in the sum of [*], shall be
reduced to [*] as of August 14, 2000. As of August 14, 2001, no
Letter-of-Credit shall be required to be on deposit.
Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT. THE FOLLOWING
PROVISIONS ARE ADDED:
Upon occupancy of the Second Expansion Space, Tenant shall be entitled
to an additional
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* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
34
35 unassigned parking spaces.
Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT: MODIFIED AS SET
FORTH BELOW.
(a) BASE RENT: MODIFIED AS FOLLOWS:
(i) EXISTING SPACE:
BASE RENTAL
RATE PER SQ. FT. AMOUNT
MONTHS PER MO. PER MO.
------ ------- -------
July 1 - Aug. 14, 1999 Free rent
Aug. 15, 1999 - April 14, 2001 [*] psf/mth/nnn [*]
April 15, 2001 - Dec. 14, 2002 Annual minimum CPI (All
Consumers S.F. Bay Area)
increase of [*]; annual
maximum CPI (All Consumers
S.F. Bay Area) of [*] over
base rental rate in months
1 - 20.
Dec. 15, 2002 - Aug. 14, 2004 Annual Minimum CPI (All
Consumers S.F. Bay Area)
increase of [*]; annual
maximum CPI (All Consumers
S.F. Bay Area) of [*] over
base rental rate in months
21 - 40.
(ii) FIRST EXPANSION SPACE:
BASE RENTAL
RATE PER SQ. FT. AMOUNT
MONTHS PER MO. PER MO.
------ ------- -------
Oct. 15, 1999 - Nov. 30, 1999 Free rent.
Dec. 1, 1999 - April 14, 2001 [*] psf/mth/nnn [*]
April 15, 2001 - Dec. 14, 2002 Increase concurrently per
subsection (i) above
Dec. 15, 2002 - Aug. 14, 2004 Increase concurrently per
subsection (i) above
(iii) SECOND EXPANSION SPACE:
BASE RENTAL
RATE PER SQ. FT. AMOUNT
MONTHS PER MO. PER MO.
Nov. 15, 1999 - Dec. 31, 1999 Free rent.
Jan. 1, 2000 - April 14, 2001 [*] psf/mtn/nnn [*]
April 15, 2001 - Dec. 14, 2002 Increase concurrently per
subsection (i) above
Dec. 15, 2002 - Aug. 14, 2004 Increase concurrently per
subsection (i) above
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* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
35
The Base Rents payable hereunder are more fully set forth in REVISED Lease Rider
No. 1 attached and incorporated herein by reference, and as referred to in
REVISED Lease Rider No. 3, also attached and incorporated herein by reference.
In the event that Landlord is in default under the Master Lease and either
Landlord or Tenant receive notice of such default from the Master Lessor under
the Master Lease, Tenant shall have the right (without any obligation to do so),
to pay rent provided in this section, and all other sums due Landlord hereunder,
which Landlord is obligated to pay directly to the Master Lessor.
(b) OTHER PERIODIC PAYMENTS INCLUDED AS RENT - REVISED TO READ IN
FULL AS FOLLOWS: (i) Real Property Taxes (See Section 4.02);
(ii) Utilities (See Section 4.03); (iii) Insurance Premiums
(See Section 4.04); (iv) Tenant's Initial Pro Rata Share of
Common Area Expenses presently at 25.67% shall be increased to
(46.7%) effective November 1, 1999. (See Section 4.05); (v)
Impounds for Insurance Premiums and Property Taxes (See
Section 4.08); (vi) Maintenance, Repairs and Alterations (See
Article Six).
Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE: NO
CHANGE.
Section 1.14. RIDERS: The following Riders ARE REVISED as indicated and
are attached and made a part of this Lease:
Rider No. 1 - Base Rent Schedule - REVISED TO READ IN FULL AS ATTACHED.
Rider No. 2 - Tenant Improvement Allowance - NO CHANGE. All Tenant
Improvements to Expansion Spaces are to be made at Tenant's sole cost and
expense and in accordance with Section 6.05 (a) and (b) of the Primary Lease.
Rider No. 3 - Options to Renew and to Expand Space - REVISED TO READ IN
FULL AS ATTACHED.
ARTICLE TWO: LEASE TERM
Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. REVISED AS FOLLOWS:
Landlord leases the Property to Tenant and Tenant leases the Property from
Landlord for the Lease Term, as amended. The Lease term is for the period stated
in Section 1.05, as amended, and shall begin and end on the dates specified in
Section 1.05, as amended, unless the beginning or end of the Lease Term is
changed under any provision of this Lease. The "Commencement Date" shall be the
dates specified in Section 1.05, as amended, for the beginning of the Lease
Term, unless advanced or delayed under any provision of this Lease. The Lease
Term for all space shall end on August 14, 2004, unless extended by exercise of
any option provided, or under any applicable provision of the Lease.
Section 2.02. DELAY IN COMMENCEMENT. NO CHANGE.
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Section 2.03. EARLY OCCUPANCY. NO CHANGE.
Section 2.04. HOLDING OVER. NO CHANGE.
ARTICLE THREE: BASE RENT - MODIFIED AS SET FORTH BELOW.
Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this First
Amendment to Lease, Tenant shall continue to pay Landlord the Base Rent for the
existing space in the amount stated in Paragraph 1.12(a)(i) above, on the first
day of the each month of the Lease Term. On December 1, 1999, Tenant shall pay,
in addition to such rent, the Base Rent for the First Expansion Space for the
first month and each month thereafter as provided in Section 1.12(a)(ii). On
January 1, 2000, Tenant shall pay additional Base Rent for the Second Expansion
Space for first month and each month thereafter, as provided in Section
1.12(a)(iii). Tenant shall pay Landlord the Base Rent, in advance within five
(5) business days after the commencement of each month, without offset,
deduction or prior demand. The Base Rent shall be payable at Landlord's address
or at such other place as Landlord may designate in writing. If the Term of
either the First Expansion Space or the Second Expansion Space commences other
than on the first day of a month, then the Base Rent provided for such partial
month shall be prorated based upon a thirty (30) day month and the prorated
installment shall be paid on the first day of the calendar month next succeeding
the Term Commencement Date together with the other amounts payable on that day.
If such Term terminates on other than the last day of a calendar month, then the
Rent provided for such partial month shall be prorated based upon a thirty (30)
day month and the prorated installment shall be paid on the first day of the
calendar month in which the date of termination occurs.
Section 3.02. COST OF LIVING INCREASE. The Base Rent for all space
shall be increased on each date (the "Rental Adjustment Date") as provided in
Paragraph 1.12(a) above in accordance with the increase in the United States
Department of Labor, Bureau of Labor Statistics, Consumer Price Index for All
Urban Consumer (all items for the geographical Statistical Area in which the
Property is located on the basis of 1982-1984 = 100) (the "Index") as follows:
(a) The Base Rent (the "Comparison Base Rent") in effect
immediately before each Rental Adjustment Date shall be
increased by the percentage that the Index has increased from
the date (the "Comparison Date') on which payment of the
Comparison Base Rent began through the month in which the
applicable Rental Adjustment Date occurs. The Base Rent shall
not be reduced by reason of such computation. Landlord shall
notify Tenant of each increase by a written statement which
shall include the Index for the applicable Comparison Date,
the Index for the increase in the Base Rent provided for in
this Section 3.02 shall be subject to any minimum or maximum
increase, if provided for in Paragraph 1.12(a).
(b) Tenant shall pay the new Base Rent from the applicable Rental
Adjustment Date
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37
until the next Rental Adjustment Date. Landlord's notice may
be given after the applicable Rental Adjustment Date of the
increase, and Tenant shall pay Landlord the accrued rental
adjustment for the months elapsed between the effective date
of the increase and Landlord's notice of such increase within
ten (10) days after Landlord's notice. If the format or
components of the Index are materially changed after the
Commencement Date, Landlord shall substitute an index which is
published by the Bureau of labor Statistics or similar agency
and which is most nearly equivalent to the Index in effect on
the Commencement Date. The substitute index shall be used to
calculate the increase in the Base Rent unless Tenant objects
to such index in writing within fifteen (15) days after
receipt of Landlord's notice. If Tenant objects, Landlord and
Tenant shall submit the selection of the substitute index for
binding arbitration in accordance with the rules and
regulations of the American Arbitration Association at its
office closest to the Property. The costs of arbitration shall
be borne equally by Landlord and Tenant.
Section 3.03. SECURITY DEPOSIT; INCREASES. NO CHANGE.
Section 3.04. TERMINATION; ADVANCE PAYMENT. NO CHANGE.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT - NO CHANGE, EXCEPT FOR REVISIONS
IN SUBPARAGRAPH 4.02(c) AND 4.03.
Section 4.01. ADDITIONAL RENT. NO CHANGE.
Section 4.02. PROPERTY TAXES. NO CHANGE, EXCEPT FOR SUBSECTIONS (c)
JOINT ASSESSMENT.
(a) REAL PROPERTY TAXES. NO CHANGE.
(b) DEFINITION OF "REAL PROPERTY TAX". NO CHANGE.
(c) JOINT ASSESSMENT. REVISED AS SHOWN: If the Property is not
separately assessed, Landlord shall reasonably determine
Tenant's share of the real property tax payable by Tenant
under Paragraph 4.02(a) from the assessor's worksheets or
other reasonably available information. Tenant shall pay such
share to Landlord within fifteen (15) days after receipt of
Landlord's written statement. Until November 1, 1999, Tenant's
share of such real property tax shall be 25.67% of the total
amount assessed on the Project, based on the total square
footage occupied at the time of the execution of this
Sublease, divided by the total square footage of the premises
(78,720 square feet / 306,650 square feet = 25.67%). Effective
November 1, 1999, the Tenant's share shall be 46.7% based upon
the total square footage, including Expansion Spaces, covered
by the Lease, as amended, divided by the total square footage
of the premises. (143,232 / 306,650 = 46.7%).
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38
(d) PERSONAL PROPERTY TAXES. NO CHANGE.
Section 4.03. UTILITIES - REVISED AS FOLLOWS: Tenant shall pay,
directly to the appropriate supplier, the cost of all natural gas, heat, light,
power, sewer service, telephone, water, refuse disposal and other utilities and
services supplied to the Property. However, if any services or utilities are
jointly metered with other property, Landlord shall make a reasonable
determination of Tenant's proportionate share of the cost of such utilities and
services and Tenant shall pay its share to Landlord within fifteen (15) days
after receipt of Landlord's written statement. Tenant's share of such
non-jointly metered costs shall be 25.67% of the total charged to the Project,
based on the square footage occupied by Tenant at the time prior to and at the
execution of this Sublease, and 46.7% as of November 1, 1999.
Section 4.04. INSURANCE POLICIES. NO CHANGE.
(a) LIABILITY INSURANCE. NO CHANGE.
(b) PROPERTY AND RENTAL INCOME INSURANCE. NO CHANGE.
(c) PAYMENT OF PREMIUMS. NO CHANGE.
(d) GENERAL PROVISIONS. NO CHANGE.
Section 4.05. COMMON AREAS; USE, MAINTENANCE AND COSTS. REVISED PER
SUBSECTION (e) AS FOLLOWS:
(a) COMMON AREAS. NO CHANGE.
(b) USE OF COMMON AREAS. NO CHANGE.
(c) SPECIFIC PROVISION RE: VEHICLE PARKING. NO CHANGE.
(d) MAINTENANCE OF COMMON AREAS. NO CHANGE.
(e) TENANT'S SHARE AND PAYMENT. REVISED TO READ IN FULL AS
FOLLOWS: Tenant shall pay Tenant's annual pro rata share of
all Common Area costs (prorated for any fractional month) upon
notice from Landlord that such costs are due and payable, and
in any event prior to delinquency. Tenant's pro rata share
shall be calculated by dividing the square footage area of the
Property, as set forth in Section 1.04 of the Lease, by the
aggregate square foot area of the Project which is leased or
held for lease by tenants, as of the date on which the
computation is made. Tenant's initial and subsequent pro rata
share is set out in Section 1.12(b), AS AMENDED. Any changes
in the Common Area costs and/or the aggregate area of the
Project, leased or held for lease during the Lease Term shall
be effective on the first day of the month after such change
occurs. Landlord may, at Landlord's election,
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39
estimate in advance and charge to Tenant as Common Area costs,
all maintenance and repair costs for which Tenant is liable
under Section 6.04 of the Lease, and all other Common Area
costs payable by Tenant hereunder. At Landlord's election,
such statements of estimated Common Area costs shall be
delivered monthly, quarterly or at any other periodic
intervals to be designated by Landlord. Landlord may adjust
such estimates at any time based upon Landlord's experience
and reasonable anticipation of costs. Such adjustments shall
be effective as of the next rent payment date after notice to
Tenant. Within sixty (60) days after the end of each calendar
year of the Lease Term, Landlord shall deliver to Tenant a
statement prepared in accordance with generally accepted
accounting principles setting forth, in reasonable detail, the
Common Area costs paid or incurred by Landlord during the
preceding calendar year and Tenant's pro rata share. Upon
receipt of such statement, there shall be an adjustment
between Landlord and Tenant, with payment to or credit given
by Landlord (as the case may be) so that Landlord shall
receive the entire amount of Tenant's share of such costs and
expenses for such period.
Section 4.06. LATE CHARGES. NO CHANGE.
Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. NO CHANGE.
Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES.
NO CHANGE.
ARTICLE FIVE: USE OF PROPERTY - NO CHANGE.
Section 5.01. PERMITTED USES. NO CHANGE.
Section 5.02. MANNER OF USE. NO CHANGE.
Section 5.03. HAZARDOUS MATERIALS. NO CHANGE.
Section 5.04. SIGNS AND AUCTIONS. NO CHANGE.
Section 5.05. INDEMNITY. NO CHANGE.
Section 5.06. LANDLORD'S ACCESS. NO CHANGE.
Section 5.07. QUIET POSSESSION. NO CHANGE.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS. NO
CHANGE.
Section 6.01. EXISTING CONDITIONS. NO CHANGE.
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Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. NO CHANGE.
Section 6.03. LANDLORD'S OBLIGATION. NO CHANGE.
Section 6.04. TENANT'S OBLIGATIONS. NO CHANGE.
Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS. NO CHANGE.
Section 6.06. CONDITION UPON TERMINATION. NO CHANGE.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION - NO CHANGE.
ARTICLE EIGHT: CONDEMNATION - NO CHANGE.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING - NO CHANGE.
ARTICLE TEN: DEFAULTS; REMEDIES - NO CHANGE.
ARTICLE ELEVEN: PROTECTION OF LENDERS - NO CHANGE.
ARTICLE TWELVE: LEGAL COSTS - NO CHANGE.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS - THE PROVISIONS OF SECTIONS 13.15
AND 13.16 ARE ADDED:
Section 13.01. NON-DISCRIMINATION. NO CHANGE.
Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES. NO CHANGE.
Section 13.03. SEVERABILITY. NO CHANGE.
Section 13.04. INTERPRETATION. NO CHANGE.
Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. NO
CHANGE.
Section 13.06. NOTICES. NO CHANGE.
Section 13.07. WAIVERS. NO CHANGE.
Section 13.08. NO RECORDATION. NO CHANGE.
Section 13.09. BINDING EFFECT; CHOICE OF LAW. NO CHANGE.
Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. NO CHANGE.
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Section 13.11. JOINT AND SEVERAL LIABILITY. NO CHANGE.
Section 13.12. FORCE MAJEURE. NO CHANGE.
Section 13.13. EXECUTION OF LEASE. NO CHANGE.
Section 13.14. SURVIVAL. NO CHANGE.
Section 13.15. TENANT'S RESTROOM FACILITY.
JOINT RESTROOM USE. The parties agree that during the term of this
Sublease, they shall be jointly entitled to use the restroom facility marked as
"JOINT RESTROOM" on Exhibit "A", and Landlord agrees to provide for Tenant's
access as indicated in solid Green lines on Exhibit "A" at Tenant's sole cost
for alterations for access, security and other requirements to permit joint use
but retaining security for the respective operation of Landlord and Tenant.
TENANT'S SEPARATE RESTROOM. Alternatively, the parties agree that
during the term of this Sublease, Tenant at its election, may be exclusively
entitled to construct and use the restroom facility marked as "RESTROOM" on
Exhibit "A", as indicated in Green. Tenant shall install such facility at its
sole cost and expense at the approximate location indicated in dotted Green
lines on Exhibit "A", and according to plans and specifications approved by
Landlord.
Section 13.16. TENANT'S CONTRIBUTION TO LANDLORD'S RELOCATION EXPENSE.
Tenant agrees, in further consideration, for this Sublease, to pay Landlord the
sum of $43,947 to defray, to that extent, Landlords cost of relocating its
existing customers and facility in the Expansion Spaces. Said payment shall be
made by Tenant concurrently with execution by Tenant of this Sublease. Tenant
further agrees to disassemble, remove, transport, and reinstall, Landlord's
existing racking in the Expansion Spaces to Landlord's facilities at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at Tenant's sole cost and expense.
Tenant shall accomplish such relocation of racking on occupation of the First
Expansion Space and in coordination with Landlord's on-site management.
ARTICLE FOURTEEN: BROKERS - NO CHANGE.
Landlord and Tenant have signed this Amendment to Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all Riders
which are attached to or incorporated by reference to this Lease.
"LANDLORD"
Signed on October 20, 1999. NATIONAL DISTRIBUTION AGENCY, INC.,
a Delaware corporation
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at Santa Monica, CA By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: CORPORATE SECRETARY
By:
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its GENERAL MANAGER
"TENANT"
Signed on October 22, 1999. ▇▇▇▇.▇▇▇, INC., a California corporation
at San Francisco, CA
-----------------------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: CHIEF EXECUTIVE OFFICER
By:
--------------------------------------
Its:
-------------------------------------
SECRETARY
IN ANY SUCH REAL ESTATE ACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH
A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST, OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
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BASE RENT SCHEDULE
REVISED
LEASE RIDER
RIDER NO. 1
This Rider is attached to and made a part of that certain Lease (the
"Lease") dated July 1, 1999, between National Distribution Agency, Inc. a
Delaware corporation, as Landlord, and ▇▇▇▇.▇▇▇, Inc., a California corporation,
as Tenant, covering the premises constituting a portion of the Project located
at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, (the "Property"). The terms used
herein shall have the same definitions as set forth in the Lease. The provisions
of this Rider shall supersede any inconsistent or conflicting provisions of the
Lease, with the exception of additional free rent for delay in delivery of
possession or early delivery, as provided in Section 1.05 hereof.
SECTION 1.12 RENT AND OTHER CHARGES PAYABLE BY TENANT
This Rider sets forth the Base Rental payable under the Lease for the
first and subsequent years as to the Existing Space (i), and each of the two
Expansion Spaces (ii) and (iii).
(i) INITIAL TERM OF BASE SUBLEASE - JULY 1, 1999 TO AUGUST 14, 2004
Rental Period Monthly Base Rent*
------------- -----------------
July 1, 1999 through August 14, 1999 - 1-1/2 mo. Free
August 15, 1999 through April 14, 2001 - 20 mo. $27,552.00
April 15, 2001 through December 14, 2002 - 20 mo. $28,930.00
December 15, 2002 through August, 14, 2004 - 20 mo. $30,376.00
(ii) FIRST EXPANSION SPACE - OCTOBER 15, 1999 - AUGUST 14, 2004
Rental Period Monthly Base Rent*
------------- ------------------
October 15, 1999 - November 30, 1999 - 1-1/2 mo. Free
December 1, 1999 - April 14, 2001 $11,290.00
April 15, 2001 - December 14, 2002 - Increase per formula for Subsection
(i).
December 15, 2002 - August, 14, 2004 - Increase per formula for
Subsection (i).
44
(iii) SECOND EXPANSION SPACE - NOVEMBER 15, 1999 - AUGUST 14, 2004
Rental Period Monthly Base Rent*
------------- ------------------
November 15, 1999 - December 31, 1999 Free
January 1, 2000 - April 14, 2001 $11,290.00
April 15, 2001 - December 14, 2002 - Increase per formula for Subsection
(i).
December 15, 2002 - August, 14, 2004 - Increase per formula for
Subsection (i).
OPTION TERM OF AMENDED SUBLEASE - AUGUST 15, 2004 TO AUGUST 14, 2009
August 15, 2004 through April 14, 2006 - 20 mo. $58,033.00
April 15, 2006 through December 14, 2007 - 20 mo. $60,935.00
December 15, 2007 through August 14, 2008 - 20 mo. $63,982.00
*Minimum rental which would be due based on assumed CPI increase of
three percent (3%) per annum.
Notwithstanding the foregoing, the increased rental for the periods
indicated are subject to the effective CPI increase for such periods as set
forth in Section 1.12(a) of the Amended Sublease.
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TENANT IMPROVEMENT ALLOWANCE
LEASE RIDER
RIDER NO.2
This Rider is attached to and made a part of that certain lease (the
"Lease") dated July 1,1999, between National Distribution Agency, Inc., a
Delaware corporation, as Landlord and ▇▇▇▇.▇▇▇, Inc., a California corporation,
as Tenant, covering the premises constituting a portion of the property located
at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, (the "Property"). The terms used
herein shall have the same definitions as set forth in the Lease. The provisions
of this Rider shall supersede any inconsistency or conflicting provisions of the
Lease.
The Tenant Improvement Allowance paid for by Landlord shall not exceed
Seventy-eight Thousand Seven Hundred Twenty Dollars ($78,720.00). Any excess
costs over the amount of $78,720.00 shall be paid by, and at the sole cost, of
Tenant. The type and character of Tenant Improvements, whether paid for by
Landlord or those at Tenant's option, shall be subject to approval of plans and
specifications by the Building Department of the City of Union City, as accepted
by Sublessor and submitted to said Building Department.
The parties agree and understand that the exact scope of work has not
yet been finally determined but that the tentative scope of work is set forth in
the "Work Letter" and layout, Appendix 1, attached thereto and made a part
hereof by this reference.
It is further understood that said Scope of Work is subject to mutually
agreed modifications consistent with Tenant's use of the premises; provided
that, all work is subject to all necessary permits from all governmental
agencies having jurisdiction over the work. Further, any costs of the work as
finally specified, including architectural plans, permits and related
construction costs, shall be paid first by Landlord to the extent of the sum of
$78,720, and that all costs of such work in excess thereof shall be paid through
Landlord by Tenant upon five (5) business days written notice. Landlord's
payment shall be paid to the respective construction creditor within ten (10)
business days from submission of invoice to Landlord, accompanied by appropriate
labor and material lien releases.
46
WORK LETTER
APPENDIX 1 TO LEASE RIDER NO. 2
Attached to and made a part of that certain Lease (the "Lease") dated
July 1, 1999, between National Distribution Agency, Inc., a Delaware
corporation, as Landlord, and ▇▇▇▇.▇▇▇, Inc., a California corporation, as
Tenant, covering the premises constituting a portion of the property located at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, (the "Property"). The Terms used
herein shall have the same definitions as set forth in the Lease. The provisions
of this Work Letter shall supersede any inconsistency or conflicting provisions
of the Lease.
Other than funding the Tenant Improvement Allowance (as defined in Lease
Rider No.2), as provided herein, Landlord shall not have any obligation
whatsoever with respect to the finishing of the Premises for Tenant's use and
occupancy. The Tenant Improvements have been specified by the Tenant as follows:
1. Install approximately 3,000 square feet of office space with code
compliant restrooms.
2. Reconfigure lighting system (as required by code).
3. Install draft curtains (if required by Tenant and by code).
4. Install smoke vents (as required by code).
5. Cut new opening through the concrete demising wall and install a roll-up
door.
47
OPTIONS TO RENEW AND TO EXPAND SPACE
LEASE RIDER
RIDER NO. 3
This Rider is attached to and made a part of that certain Lease (the
"Lease") dated July 1, 1999, between National Distribution Agency, Inc., a
Delaware corporation, as Landlord or Sublessor, and ▇▇▇▇.▇▇▇, Inc., a California
corporation, as Tenant or Sublessee, amended by First Amendment thereto,
covering the premises constituting a portion of the Project located at ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Property"). The terms used herein
shall have the same definitions as set forth in the Lease, as amended. The
provisions of this Rider shall supersede any inconsistent or conflicting
provisions of the Lease, as amended.
A. OPTION TO RENEW TERM.
Provided Sublessee shall not be in material default of any terms of
conditions of this Sublease, as amended, at the time of exercise of the
particular Option to Extend as provided herein, Sublessee shall have the right
and option to extend the existing Term covering 143,232 square feet and ending
August 14, 2004, for one (1) five year period, such five year period is herein
referred to as the "Extended Term." The Extended Term shall commence on the day
next following the Term Expiration Date for the preceding term unless sooner
terminated as herein provided and shall terminate on the fifth anniversary of
such Extended Term Commencement Date. Sublessee may exercise its right and
option to extend the existing Term only by giving Sublessor written notice of
intention to do so at least one hundred and twenty (120) days prior to the end
of the existing Term. The Sublease as extended shall be upon and subject to the
terms and conditions set forth in the Primary Lease, as amended, except for
exclusion of any free rent and, further, that the Rent (defined in Article
Three), shall be adjusted as specified in Section C hereof. Sublessor agrees and
covenants that:
(a) Except for defaults committed by Sublessee, it will not commit or
allow to be committed (and if committed, it will timely cure within the periods
set forth in the Master Lease), any event which would constitute an event of
default under the Master Lease, including complying with an order or judgment of
any court having jurisdiction, pursuant to a declaratory relief, or similar
action whereby the obligation of a matter of performance under the Master Lease,
involving, but not limited to, compliance with any subsequently enacted
ordinances or laws concerning seismic retrofitting and/or repair to the Leased
Premises, or any portion thereof, is disputed between Master Lessor and
Sublessor, and such a court order or judgement determines that the performance
in dispute is the obligation of Sublessor under the Master Lease.
(b) That it will timely exercise its rights to extend the term of the
Master Lease so that at all times the remaining term of the Master Lease is at
least as long as the remaining term of the Sublease, as the same may be extended
by Sublessee from time to time.
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B. PERSONAL OPTIONS.
The Options are personal to the Tenant named in Section 1.03 of the
Lease or any Tenant's Affiliated described in Section 9.02 of the Lease. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest under the Lease to an entity other than a Tenant Affiliate prior to
the exercise of the Option (whether with or without Landlord's consent), such
Option shall lapse. If Tenant subleases any portion of the Property or assigns
or otherwise transfers any interest of Tenant under the Lease to an entity other
than a Tenant Affiliate after the exercise of the Option, such Option shall
lapse and the lease terms shall expire as if such Option was not exercised. If
Tenant subleases any portion of the Property, or assigns or otherwise transfers
any interest of the Tenant under the Lease in accordance with Article 9 of the
Lease, after the exercise of the Option and after commencement of the Extension
related to such Option, then the term of the Lease shall expire upon the
expiration of the Extension during which sublease or transfer occurred.
C. CALCULATION OF RENT ON EXTENSION.
The Base Rent during the Extended Term shall be determined by the
following method:
1. COST OF LIVING ADJUSTMENT.
Rental Adjustment Dates: The following dates of the Extended
Terms.
The Rent during the Extended Term shall be increased on the
following date(s) (the "Rental Adjustment Date(s)"), August 15, 2004, April 15,
2006, and December 15, 2007, by reference to the index described in Paragraph
1.12(a) of the Sublease, as follows:
The Base Rent in effect for the month immediately prior to the
applicable Rental Adjustment Date (the "Comparison Base Rent"), shall be
increased by the percentage that the index has increased from the month in which
the payment of the comparison base rent commenced through the month in which the
applicable Rental Adjustment Date occurs. In no event shall the base rent be
reduced by reason of such computation.
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