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EXHIBIT 10.58
LEASE
(Multi Tenant)
between
GRAND AVENUE VENTURE, LLC,
a California limited liability company
and
JP FERRERO PARKWAY, INC.,
a California corporation
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TABLE OF CONTENTS
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1. Parties 1
2. Premises, Parking and Common Areas 1
2.1 Premises 1
2.2 Vehicle Parking 1
2.3 Common Areas -- Definition 2
2.4 Common Areas -- Tenant's Rights 2
2.5 Common Areas -- Rules and Regulations 2
2.6 Common Areas -- Changes 3
3. Term 4
3.1 Term 4
3.2 Delay in Possession 4
3.3 Early Possession 4
4. Rent 5
4.1 Base Rent 5
4.2 Operating Expenses 5
4.3 Certain Capital Items 9
4.4 Capital Items Incurred by Tenant for Compliance Work 10
4.5 Effect of Exercise of Option to Extend on Payment of Certain
Amounts Under Sections 4.3 and 4.4 10
5. Security Deposit 10
6. Use 12
6.1 Use 12
6.2 Compliance with Law 12
6.3 Conditions of Premises 13
7. Maintenance, Repairs, Alterations and Common Area Services 14
7.1 Landlord's Obligations 14
7.2 Tenant's Obligations 14
7.3 Alterations and Additions 15
7.4 Utility Additions 20
7.5 Condition of Premises Upon Termination; Additional
Use Provisions 20
8. Insurance; Indemnity 21
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9. Damage or Destruction 25
9.1 Definitions 25
9.2 Premises Partial Damage; Premises Building Partial Damage 26
9.3 Premises Total Destruction; Premises Building Total Destruction;
Industrial Center Buildings Total Destruction 27
9.4 Damage Near End of Term 27
9.5 Abatement of Rent; Tenant's Remedies 28
9.6 Termination -- Advance Payments 28
9.7 Waiver 28
10. Real Property Taxes 28
10.1 Payment of Taxes 28
10.2 Additional Improvements 29
10.3 Definition of "Real Property Tax" 29
10.4 Joint Assessment 29
10.5 Personal Property Taxes 29
10.6 Additional Provisions Regarding Real Property Taxes. 30
11. Utilities 30
12. Assignment and Subletting 30
12.1 Landlord's Consent Required 30
12.2 Tenant Affiliate 32
12.3 Tenants Other Than Individuals 32
12.4 Terms and Conditions of Assignment 33
12.5 Terms and Conditions Applicable to Subletting 33
12.6 Attorney's Fees 35
12.7 Permitted Truck Yard Occupants 35
13. Default Remedies 36
13.1 Default 36
13.2 Remedies 37
13.3 Default by Landlord 39
13.4 Late Charges 39
14. Condemnation 40
15. Broker's Commissions 40
16. Estoppel Certificate 41
17. Landlord's Liability 42
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18. Severability 42
19. Interest on Past-due Obligations 42
20. Time of Essence 42
21. Additional Rent 42
22. Incorporation of Prior Agreements; Amendments 42
23. Notices 43
24. Waivers 44
25. No Recording 44
26. Holding Over 44
27. Cumulative Remedies 44
28. Covenants and Conditions 44
29. Binding Effect; Choice of Law 45
30. Subordination 45
31. Attorney's Fees 46
32. Landlord's Access 46
33. Auctions 46
34. Signs 47
35. Merger 47
36. Consents 47
37. Guarantor 47
38. Quiet Possession 47
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39. Options 48
39.1 Definition 48
39.2 Options Personal 48
39.3 Multiple Options 48
39.4 Effect of Default on Options 48
39.5 First Option 49
39.6 Second Option 50
39.7 Fair Market Rent 51
40. Security Measures 53
41. Easements 53
42. Performance Under Protest 54
43. Authority 54
44. Cashier's Checks 54
45. Amendments to Lease 54
46. Storage Tanks 54
47. Hazardous Materials 55
47.1 Tenant's Covenants Regarding Hazardous Materials 55
47.2 Indemnification of Landlord 57
48. Landlord's Default 58
49. Recovery of Concessions Upon Early Termination 58
50. Easements and Restrictions of Record 58
51. Offer 58
52. Waiver of Trial by Jury 58
53. ERISA 59
54. Guaranty 59
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LEASE
1. Parties. This Lease (the "Lease"), dated, for reference purposes
only, November 21, 2000, is made by and between GRAND AVENUE VENTURE, LLC, a
California limited liability company ("Landlord") and JP FERRERO PARKWAY, INC.,
a California corporation ("Tenant").
2. Premises, Parking and Common Areas.
2.1 Premises. Landlord hereby leases to Tenant and Tenant leases
from Landlord for the term, at the rental, and upon all of the conditions set
forth herein, that certain real property situated in the County of Los Angeles,
State of California, commonly known as 21558 Ferrero Parkway, City of Industry,
California and described as all of the space in the 318,497 square foot building
(the "Building") located on the property shown on Exhibit "A" hereto, said
318,497 square feet herein referred to as the "Premises," and cross-hatched on
Exhibit "A" attached hereto, including rights to the Common Areas as hereinafter
specified but not including any rights to the roof of the Premises or to any
Building in the Industrial Center. The Premises, the Building, the Common Areas,
the land upon which the same are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the "Industrial
Center." Landlord shall construct certain tenant improvements (the "Tenant
Improvements") in the Premises pursuant to Exhibit "C" attached hereto.
2.2 Vehicle Parking. Tenant shall be entitled to exclusive use of
all of the vehicle parking spaces, on those portions of the Common Areas shown
as Tenant's Parking on Exhibit "B" hereto ("Tenant's Parking Area"). Tenant
shall not use parking spaces outside of Tenant's Parking Area. Said parking
spaces shall be used only for parking by vehicles no larger than full size
passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles are herein referred to as
"Oversized Vehicles."
2.2.1 Tenant shall not permit or allow any vehicles that belong
to or are controlled by Tenant or Tenant's employees, suppliers, shippers,
customers, or invitees to be loaded, unloaded, or parked in any area other than
Tenant's Parking area and the Exclusive Truck Yard Area (as defined below).
2.2.2 If Tenant permits or allows any of the prohibited
activities described in paragraph 2.2 of this Lease, then Landlord shall have
the right, without notice, in addition to such other rights and remedies that it
may have, to remove or tow
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away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.
2.2.3 The Exclusive Truck Yard Area shall be for the exclusive
use of Tenant. Tenant may park Oversized Vehicles in the Exclusive Truck Yard
Area.
2.3 Common Areas -- Definition. The term "Common Areas" is defined
as all areas and facilities outside the Premises and within the exterior
boundary line of the Industrial Center that are provided and designated by the
Landlord from time to time for the general non-exclusive use of Landlord, Tenant
and of other Tenants of the Industrial Center and their respective employees,
suppliers, shippers, customers and invitees, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways and landscaped areas.
2.4 Common Areas -- Tenant's Rights. Landlord hereby grants to
Tenant, for the benefit of Tenant and its employees, suppliers, shippers,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Landlord under the terms hereof or under the terms of any rules and
regulations or restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Landlord or Landlord's designated agent, which consent may be revoked
at any time. In the event that any unauthorized storage shall occur then
Landlord shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove the property and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord.
2.5 Common Areas -- Rules and Regulations. Landlord or such other
person(s) as Landlord may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
establish, modify, amend and enforce reasonable rules and regulations with
respect thereto. Tenant agrees to abide by and conform to all such rules and
regulations, and to cause its employees, suppliers, shippers, customers, and
invitees to so abide and conform. Landlord shall not be responsible to Tenant
for the non-compliance with said rules and regulations by other tenants of the
Industrial Center.
2.6 Common Areas -- Changes. Landlord shall have the right, in
Landlord's sole discretion, from time to time:
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(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas
and walkways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any
portion thereof;
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Industrial Center as
Landlord may, in the exercise of sound business judgment, deem to be
appropriate.
2.6.1 Landlord shall at all times provide the parking facilities
required by applicable law and in no event shall the number of parking spaces
that Tenant is entitled to under paragraph 2.2 be reduced.
2.7 Truck Yard. The truck yard area shall be enclosed with fencing as
shown on Exhibit "B" (the "Exclusive Truck Yard Area"). In the event the
Exclusive Truck Yard Area is so separately fenced, then thereafter through the
term of this Lease Tenant shall maintain, repair and replace all improvements
(including without limitation the fencing) in the Exclusive Truck Yard Area at
its sole cost and expense in accordance with the standards of maintenance
provided for herein.
3. Term.
3.1 Term. The term of this Lease shall be for sixty-one (61) months
commencing on the Commencement Date (as defined below) and ending on the
Expiration Date (as defined below) unless sooner terminated pursuant to any
provision hereof. The term "Commencement Date" means the later of (a) January 1,
2001, or (b) the date that is 15 days after the date upon which Substantial
Completion (as
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defined below) of the Tenant Improvements (as defined in Exhibit C hereto)
occurs. The initial term of this Lease shall expire at 5:00 p.m. on the day (the
"Expiration Date") preceding the date that is 61 months after the Commencement
Date. Landlord and Tenant shall promptly execute an amendment to the Lease
confirming the commencement and expiration dates of the initial term as soon as
the Commencement Date is determined, but failure to execute that Amendment shall
not affect the Commencement Date. If the Commencement Date falls on a day that
is other than the first day of a calendar month, the number of months for
purposes of rent adjustments under this Lease shall be measured from the first
day of the calendar month in which the Commencement Date falls. As used in this
Lease, the term "Substantial Completion" means the substantial completion of the
Tenant Improvements, as determined by Landlord's architect, subject to
completion of punch list items.
3.2 Delay in Possession. Notwithstanding the Commencement Date, if
for any reason Landlord cannot deliver possession of the Premises to Tenant on
or before April 1, 2001 (the "Outside Commencement Date") Landlord shall not be
subject to any liability therefor, nor shall such failure affect the validity of
this Lease or the obligations of Tenant hereunder or extend the term hereof, but
in such case, Tenant may at Tenant's option, by notice in writing to Landlord
within ten (10) days thereafter, cancel this Lease, in which event the parties
shall be discharged from all obligations hereunder; provided, further, that if
such written notice of Tenant is not received by Landlord within said ten (10)
day period, Tenant's right to cancel this Lease hereunder shall terminate and be
of no further force or effect. The Outside Commencement Date shall be delayed
for one day for each day of delay in Substantial Completion due to Tenant Delays
(as defined in Exhibit C) or by strikes, shortages of materials, bad weather,
acts of God or any other event beyond Landlord's reasonable control.
3.3 Early Possession. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not advance the termination date. Tenant shall be
permitted to enter the Premises on the first business day after full execution
and delivery of this Lease by Landlord and Tenant without the obligation for
payment of Base Rent for the purpose of installing fixtures, telecommunications
equipment, equipment, furniture and trade fixtures and to occupy the Premises
for its business purposes; provided that (a) Tenant will not interfere with
Landlord's construction of the Tenant Improvements, (b) Tenant first provides
Landlord with all insurance required by the terms of this Lease, (c) Tenant pays
Landlord the second month's Base Rent as provided in paragraph 4.1, (d) all
construction by Tenant shall be performed in accordance with the terms of this
Lease, including without limitation paragraph 7.3., and (e) Tenant has obtained
the necessary governmental approvals required for such early occupancy. Without
limiting any other provision of this Lease, Landlord shall not be responsible
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for damages or loss to any work performed by Tenant or to Tenant's personal
property or the personal property of Tenant's contractor's, employees or agents
which occurs during such period of early access.
4. Rent.
4.1 Base Rent. Tenant shall pay to Landlord, as base rent (the "Base
Rent") for the Premises, without any offset or deduction, except as may be
otherwise expressly provided in this Lease, on the first day of each month of
the term hereof, monthly payments in advance in accordance with the following
schedule:
Period Monthly Base Rent
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Months 1-30 $114,658.92
Months 31 - Expiration of initial $121,028.86
Term
Tenant shall pay Landlord upon the execution hereof $114,658.92 as Base Rent for
the second month of the term. Rent for any period during the term hereof which
is for less than one month shall be a pro rata portion of the Base Rent. Rent
shall be payable in lawful money of the United States to Landlord at the address
stated herein or to such other persons or at such other places as Landlord may
designate in writing.
4.1.1 Free Rent. As an inducement to Tenant's entering into this
Lease, Landlord agrees that Base Rent for the first month of the term shall be
abated. Landlord and Tenant agree that for tax reporting purposes, none of the
Base Rent due in periods in which the Base Rent is not being abated shall be
allocated to any other period.
4.2 Operating Expenses. Tenant shall pay to Landlord during the term
hereof, in addition to the Base Rent, Tenant's Share, as hereinafter defined, of
all Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:
(a) "Tenant's Share" is defined, for purposes of this Lease, as
follows:
(i) 53.7121% with respect to Operating Expenses applicable to
the Industrial Center;
(ii) 100% with respect to Operating Expenses applicable
solely to the Building in which the Premises are located.
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The percentages set forth above have been determined by dividing the approximate
rentable square footage of the Premises by the total approximate square footage
of rentable space contained in the Industrial Center, and the Building, as
applicable. It is understood and agreed that the square footage figure set forth
in paragraph 2.1 is an approximation which Landlord and Tenant agree is
reasonable and shall not be subject to revision except in connection with an
actual change in the size of the Premises or a change in the space available for
lease in the Building, the tax parcel or the Industrial Center.
(b) "Operating Expenses" is defined, for purposes of this Lease,
as all costs incurred by Landlord relating to the ownership and
operation of the Industrial Center, including but not limited to the
following:
(i) The operation, repair and maintenance, in neat, clean,
good order and condition, of the following:
(aa) The Common Areas, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, and fences
and gates, elevators and roof.
(bb) Tenant directories and exterior signs;
(cc) Fire detection systems including sprinkler system
maintenance and repair.
(dd) Any other service to be provided by Landlord that is
elsewhere in this Lease stated to be an "Operating Expense."
(ii) Trash disposal, property management and security
services and the cost of any environmental inspections;
(iii) Any deductible portion of an insured loss concerning
the Building or the Common Areas;
(iv) The cost of the premiums for the liability and property
insurance policies maintained by Landlord under paragraph 8 hereof;
provided that if Landlord elects to self-insure or includes the
Premises under blanket insurance policies covering multiple
properties,
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then the cost included in Operating Expenses shall include the
portion of the reasonable cost of such self-insurance or blanket
insurance that is allocated to the Premises;
(v) The amount of the real property tax to be paid by
Landlord under paragraph 10.1 hereof;
(vi) The cost of water, gas, electricity and telephone to
service the Common Areas;
(vii) the cost of Landlord's performing the maintenance
obligations described in paragraph 7.1, including replacements;
(viii) the cost of operating, repairing, replacing and
maintaining (including without limitation exterior painting) the
Building, the roof, and any other utilities or equipment, wherever
situated, that are for the common use of the tenants of the
Building or Industrial Center;
(ix) Reserves set aside for maintenance and repairs of the
Common Area, Building and Industrial Center;
(x) the cost of a Commercial General Liability policy of
insurance, insuring Landlord, but not Tenant, against liability
arising out of the ownership, use, occupancy or maintenance of the
Industrial Center, in amounts determined by Landlord, if Landlord
determines to obtain such insurance; and
(xi) any charges or fees applicable to the Industrial Center
imposed or assessed by any master association or pursuant to any
covenants, conditions and restrictions and/or Reciprocal Easement
Agreement affecting the Industrial Center and other property in the
project of which the Industrial Center is a part.
(c) The inclusion of the improvements, facilities and services
set forth in paragraph 4.2(b) of the definition of Operating Expenses
shall not be deemed to impose an obligation upon Landlord to either have
said improvements or facilities or to provide those services unless the
Industrial Center already has the same, Landlord already provides the
services, or Landlord has agreed elsewhere in this Lease to provide the
same or some of them.
(d) Tenant's Share of Operating Expenses shall be payable by
Tenant within thirty (30) days after a reasonably detailed statement of
actual
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expenses is presented to Tenant by Landlord. Real property tax shall be
billed semiannually upon receipt of tax bills and property insurance
premiums shall be billed annually. At Landlord's option, however, an
amount may be estimated by Landlord from time to time of Tenant's Share
of annual Operating Expenses (other than real property taxes and
insurance) and the same shall be payable monthly or quarterly, as
Landlord shall designate, during each twelve-month period of the Lease
term, on the same day as the Base Rent is due hereunder. In the event
that Tenant pays Landlord's estimate of Tenant's Share of Operating
Expenses as aforesaid, Landlord shall deliver to Tenant within sixty
(60) days after the expiration of each calendar year, or as soon
thereafter as practicable, a reasonably detailed statement showing
Tenant's Share of the actual Operating Expenses incurred during the
preceding year. If Tenant's payments under this paragraph 4.2(d) during
said preceding year exceed Tenant's Share as indicated on said
statement, Tenant shall be entitled to credit the amount of such
overpayment against Tenant's Share of Operating Expenses next falling
due. If Tenant's payments under this paragraph during said preceding
year were less than Tenant's Share as indicated on said statement,
Tenant shall pay to Landlord the amount of the deficiency within thirty
(30) days after delivery by Landlord to Tenant of said statement.
(e) Landlord and Tenant shall promptly adjust between them by
appropriate cash payment any balance determined to exist with respect to
Tenant's Share of Operating Expenses after the end of the calendar year
in which this Lease terminates, prorating for any partial year involved.
(f) Notwithstanding anything to the contrary in this paragraph
4.2, (i) the property management fee payable by Tenant shall be
calculated solely based on the gross rentals under this Lease, (ii)
Tenant's Share with respect to such property management fee shall be
deemed to be 100% to reflect that only the portion of the property
management fee attributable to the gross rentals under this Lease are
payable by Tenant, and (iii) Tenant shall not be obligated to pay any
property management fee attributable to the gross rentals under any
other lease in the Industrial Center.
(g) Special Limitation on Operating Expenses. Anything to the
contrary herein notwithstanding, Landlord, at Landlord's cost and not as
a part of Operating Expenses, shall be responsible for the maintenance
of the roof structure (excluding the roof membrane) and structural
elements of exterior walls and foundations of the Building (the
"Landlord Structural Elements"), except for repairs arising from damage
caused by Tenant or any employee, agent, contractor, subtenant, or
invitee of Tenant.
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(h) Exclusions from Operating Expenses. Operating Expenses shall
exclude improvements made for the exclusive or restricted use of any
other tenant in the Industrial Center and any costs incurred in
connection with disputes with other tenants of the Industrial Center.
4.3 Certain Capital Items. As used herein, the term "Capital Item"
means an item, the cost of which under generally accepted accounting principles,
consistently applied, must be capitalized and not expensed. As used herein, the
term "Amortized Capital Cost" means a repair, maintenance, replacement,
alteration or improvement which (a) is a Capital Item, and (b) either (i) costs
$5,000.00 or more with respect to a single Capital Item or (ii) has a cost that
when added to other Capital Items which are not Amortized Capital Costs would
cause the amount of costs for Capital Items that are not Amortized Capital Costs
and that are paid by Tenant as Operating Expenses to exceed $25,000.00 in any
calendar year. As used herein, the term "Useful Life" means the useful life of
the particular Capital Item determined under generally accepted industry
standards. As to each Operating Cost otherwise payable by Tenant pursuant to
this Lease that is an Amortized Capital Cost, the Amortized Capital Cost shall
be included in Operating Expenses in a monthly amount (the "Monthly Recovery
Amount") which equals the monthly amount that would fully amortize a loan having
a principal balance equal to the Amortized Capital Cost and an interest rate
equal to the Amortization Interest Rate (as defined below) in equal monthly
payments over the number of months in the Useful Life of the applicable Capital
Item. Commencing on the first day of the calendar month after the calendar month
in which the applicable Capital Item is completed and on the first day of each
month thereafter until the earlier of (A) the expiration of the term of the
Lease, or (B) the expiration of the number of months in the item's Useful Life
used to calculate the Monthly Recovery Amount, Tenant shall pay Landlord as part
of Operating Expenses an amount equal to the Monthly Recovery Amount as to each
Amortized Capital Cost. As used herein, the term "Amortization Interest Rate"
means an interest rate equal to the LIBOR Rate plus 425 basis points, where the
"LIBOR Rate" means, for each month, the one (1) month LIBOR (London Interbank
Offered Rate) Rate published in The Wall Street Journal (the "Reported Rate") on
the first Publication Date (as defined below) of the applicable month. If The
Wall Street Journal (i) publishes more than one (1) Reported Rate on any
Publication Date, the average of such rates shall apply or (ii) publishes a
retraction or correction of any Reported Rate, the corrected rate reported in
such retraction or correction shall apply. If the Reported Rate is no longer
published at least monthly, the LIBOR Rate shall be deemed to be such other
London Interbank Offered Rate published in The Wall Street Journal as most
reasonably approximates the Reported Rate. As used herein, the term "Publication
Date" means any date on which the LIBOR Rate is published in The Wall Street
Journal.
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4.4 Capital Items Incurred by Tenant for Compliance Work. With
respect to any Capital Item which is the obligation of Tenant pursuant to
paragraph 6.2(b) of the Lease (other than Capital Items that are related to or
part of the Tenant Improvements or any alterations by Tenant) and which is not
required due to Tenant's particular use of the Premises, Tenant's breach of the
Lease or any alterations or other improvements to the Premises by Tenant (each,
a "Tenant Capital Cost"), Tenant may give notice to Landlord of the amount of
the Tenant Capital Cost and Tenant's opinion as to the Useful Life of the
Capital Item and that Tenant requires that Landlord reimburse Tenant for the
entire cost of the Tenant Capital Cost and agrees to repay Landlord on a monthly
basis in the same manner as if the Tenant Capital Cost were an Amortized Capital
Cost under paragraph 4.3. If Tenant makes the election under this paragraph 4.4,
Landlord shall reimburse Tenant for the entire cost of such Capital Item within
thirty (30) days after Tenant's notice. As a condition to Landlord's obligation
to make the payments to Tenant described in paragraphs 4.3 and 4.4, Tenant shall
provide Landlord with reasonable evidence that the costs of such Capital Item
was paid and unconditional mechanic's lien releases in the form required under
California law from the contractor and subcontractors who installed the Capital
Item.
4.5 Effect of Exercise of Option to Extend on Payment of Certain
Amounts Under Sections 4.3 and 4.4. In the event that Tenant exercises an
option pursuant to paragraph 39, then with respect to Amortized Capital Costs
under paragraph 4.3 and Tenant Capital Costs under paragraph 4.4, as to which it
has not made a Monthly Recovery Amount payment for the number of months in the
Useful Life of the applicable Capital Item, Tenant shall pay during the
applicable Lease Option a Monthly Recovery Amount until it has made monthly
payments for the number of months in the Useful Life of the applicable Capital
Item, taking into account all prior Monthly Recovery Amount payments.
5. Security Deposit. Subject to paragraph 5.1 Tenant shall deposit with
Landlord upon execution hereof $114,658.92 as security for Tenant's faithful
performance of Tenant's obligations hereunder. If Tenant fails to pay rent or
other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, Landlord may use, apply or retain all or any portion of said
deposit for the payment of any rent or other charge in default or for the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of said deposit, Tenant shall within ten (10) days after written demand therefor
deposit cash with Landlord in an amount sufficient to restore said deposit to
the full amount then required of Tenant and Tenant's failure to do so shall be a
material breach of this Lease. If the monthly rent shall, from time to time,
increase during the term of this Lease, Tenant shall, at the time of such
increase, deposit with Landlord additional money as a security deposit so that
the total amount
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of the security deposit held by Landlord shall at all times bear the same
proportion to the then current Base Rent as the initial security deposit bears
to the initial Base Rent set forth in paragraph 4. Landlord shall not be
required to keep said security deposit separate from its general accounts. If
Tenant performs all of Tenant's obligations hereunder, said deposit, or so much
thereof as has not theretofore been applied by Landlord, shall be returned,
without payment of interest or other increment for its use, to Tenant (or, at
Landlord's option, to the last assignee, if any, of Tenant's interest hereunder)
at the expiration of the term hereof, and after Tenant has vacated the Premises.
No trust relationship is created herein between Landlord and Tenant with respect
to said Security Deposit.
5.1 Conditional Waiver of Security Deposit. Subject to the terms of
this Paragraph, Landlord waives the requirement of a Security Deposit. During
the term of this Lease, Tenant shall deliver to Landlord annual financial
statements of Guarantor (as defined below) and Tenant, including a balance
sheet, income statement and statement of changes in financial position for the
prior 12-month period. Each such annual report shall (a) include a schedule of
all material contingent liabilities and all other notes and schedules relating
thereto, (b) be in a form reasonably satisfactory to Landlord, (c) be prepared
in accordance with generally accepted accounting principles consistently
applied, and (d) be audited by independent certified public accountants
satisfactory to Landlord. Landlord agrees that so long as Guarantor is then
making 10-K filings with the Securities and Exchange Commission, the form of
financial statement filed by Guarantor on Form 10-K with the Securities and
Exchange Commission shall be an acceptable form of financial statements of
Guarantor and that the auditors regularly employed by Guarantor to audit those
financial statements will be acceptable to Landlord for purposes of this
Paragraph 5.1. In the event that, upon review of that annual statement, Landlord
determines in its sole and absolute discretion that Guarantor's and Tenant's
aggregate tangible net worth is less than $100,000,000.00, Landlord may give
Tenant written notice that this waiver is rescinded and that a Security Deposit
will be required for the balance of the term of the Lease and Tenant shall
deposit with Landlord within 15 days after that written notice an amount equal
to one month's Base Rent payable at that time and that deposit will be held as a
Security Deposit pursuant to, and thereafter be subject to all of the
requirements of, the terms of Paragraph 5 of this Lease. This waiver is for the
benefit of, and is personal to, the original Tenant named in this Lease.
6. Use.
6.1 Use. The Premises shall be used and occupied only for packing,
assembly, warehousing and distribution of consumer and household products and
office uses and for no other purpose. Tenant shall be solely responsible for (a)
determining if and to the extent Tenant's use is permitted by applicable laws
and
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regulations and (b) obtaining and maintaining all permits and licenses required
by applicable laws and regulations for such use.
6.2 Compliance with Law.
(a) Landlord warrants to Tenant to Landlord's actual knowledge
that the Premises, in the state existing on the date that the Lease term
commences, but without regard to alterations by Tenant or to the use for
which Tenant will occupy the Premises, does not violate any covenants or
restrictions of record, or any applicable building code, regulation or
ordinance in effect on such Lease term commencement date. In the event
it is determined that this warranty has been violated, then it shall be
the obligation of the Landlord, after written notice from Tenant, to
promptly, at Landlord's sole cost and expense, rectify any such
violation. In the event Tenant does not give to Landlord written notice
of the violation of this warranty within six months from the date that
the Lease term commences, the correction of same shall be the obligation
of Tenant at Tenant's sole cost.
(b) Except as provided in paragraph 6.2(a) Tenant shall, at
Tenant's expense, promptly comply with all applicable statutes,
ordinances, rules, regulations, orders, covenants and restrictions of
record, and requirements of any fire insurance underwriters or rating
bureaus, now in effect or which may hereafter come into effect, whether
or not they reflect a change in policy from that now existing, during
the term or any part of the term hereof, relating in any manner to the
Premises and the occupation and use by Tenant of the Premises and of the
Common Areas. Tenant shall not use nor permit the use of the Premises or
the Common Areas in any manner that will tend to create waste or a
nuisance or shall tend to disturb other occupants of the Industrial
Center. Tenant shall also be responsible for the cost of compliance with
all laws and requirements that impose any obligation, order or duty on
Landlord or Tenant in respect of the Common Area, the Industrial Center,
or the Building, arising from or related to: (i) Tenant's particular use
of the Premises; (ii) the manner of conduct of Tenant's business or
operation of its installations, equipment or other property (for other
than general warehouse and distribution uses); (iii) any cause or
condition created by or at the instance of Tenant; or (iv) breach of any
of Tenant's obligations hereunder; and Tenant shall pay all costs,
expenses, fines, penalties and damages imposed upon Landlord by reason
of or arising out of Tenant's failure to fully and promptly comply with
and observe the provision of this Paragraph 6.2. Where Tenant's
compliance as required by this Paragraph 6.2 necessitates action by
Tenant for which this Lease requires Landlord's consent, Tenant shall
obtain such consent before taking such actions.
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6.3 Conditions of Premises.
(a) Landlord shall deliver the Premises to Tenant vacant, clean
and free of debris on the Commencement Date (unless Tenant is already in
possession) and Landlord warrants to Tenant that the plumbing,
mechanical and electrical (from the property line to the central
distribution point in the Building) systems in the Premises other than
those portions constructed by Tenant and the air-conditioning and
ventilating system constructed by Landlord as part of the Tenant
Improvements shall be in good operating condition on the Commencement
Date. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Landlord, after receipt of
written notice from Tenant setting forth with specificity the nature of
the violation, to promptly, at Landlord's sole cost, rectify such
violation. Tenant's failure to give such written notice to Landlord
within twelve (12) months after the Lease Commencement Date shall cause
the conclusive presumption that Landlord has complied with all of
Landlord's obligations hereunder.
(b) Except as otherwise provided in this Lease, Tenant hereby
accepts the Premises in their condition existing as of the Lease
commencement date or the date that Tenant takes possession of the
Premises, whichever is earlier, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing
and regulating the use of the Premises, and any covenants, easements or
restrictions of record and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the present or future suitability of
the Premises for the conduct of Tenant's business.
7. Maintenance, Repairs, Alterations and Common Area Services.
7.1 Landlord's Obligations. Subject to the provisions of paragraph
4.2 (Operating Expenses), 6 (Use), 7.2 (Tenant's Obligations) 7.5, (Condition of
Premises Upon Termination) and 9 (Damage or Destruction) and except for damage
caused by any negligent or intentional act or omission of Tenant, Tenant's
employees, suppliers, shippers, customers, or invitees, in which event Tenant
shall repair the damage, Landlord, at Landlord's expense, subject to
reimbursement pursuant to paragraph 4.2 (for other than the costs related to the
Landlord Structural Elements for which Landlord is responsible under paragraph
4.2(g)), shall keep in good condition and repair the foundations, exterior
walls, structural condition of interior bearing walls, and roof of the Premises,
as well as the parking lots, walkways, driveways, landscaping, fences, signs and
utility installations of the Common Areas and all parts thereof, including
without limitation, repairs of electrical, mechanical and
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plumbing (water and sewer) lines serving the Industrial Center and the Building,
up to their central distribution point within the Building. Landlord shall not,
however, be obligated to paint the exterior or interior surface of exterior
walls, nor shall Landlord be required to maintain, repair or replace windows,
doors or plate glass of the Premises, or to maintain or repair anything required
to be maintained by Tenant under paragraph 7.2. Landlord shall have no
obligation to make repairs under this paragraph 7.1 until a reasonable time
after receipt of written notice from Tenant of the need for such repairs. Tenant
expressly waives the benefits of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair. Landlord shall not be liable for damages or
loss of any kind or nature by reason of Landlord's failure to furnish any Common
Area services when such failure is caused by accident, breakage, repairs,
strikes, lockout, or other labor disturbances or disputes of any character or by
any other cause beyond the reasonable control of Landlord.
7.2 Tenant's Obligations.
(a) Subject to the provisions of paragraphs 6 (Use), 7.1
(Landlord's Obligations), and 9 (Damage or Destruction), Tenant, at
Tenant's expense, shall keep in good order, condition and repair the
Premises and every part thereof (whether or not the damaged portion of
the Premises or the means of repairing the same are reasonably or
readily accessible to Tenant) including, without limiting the generality
of the foregoing, any plumbing, heating, ventilating and air
conditioning systems (Tenant shall procure and maintain, at Tenant's
expense, a ventilating and air conditioning system maintenance
contract), electrical and lighting facilities and equipment within the
Premises, or that serves only the Premises wherever situated, fixtures,
interior walls and interior surfaces of exterior walls, ceilings,
windows, doors, plate glass, and skylights located within the Premises.
Landlord reserves the right to procure and maintain the ventilating and
air conditioning system maintenance contract and if Landlord so elects,
Tenant shall reimburse Landlord, upon demand for the cost thereof.
(b) If Tenant fails to perform Tenant's obligations under this
paragraph 7.2 or under any other paragraph of this Lease, Landlord may
enter upon the Premises after ten (10) days' prior written notice to
Tenant (except in the case of emergency, in which no notice shall be
required) perform such obligations on Tenant's behalf and put the
Premises in good order, condition and repair, and the cost thereof
together with interest thereon at the maximum rate then allowable by law
shall be due and payable as additional rent to Landlord together with
Tenant's next Base Rent installment.
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(c) On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear excepted, clean and free
of debris. Any damage or deterioration of the Premises shall not be
deemed ordinary wear and tear if the same could have been prevented by
good maintenance practices. Tenant shall repair any damage to the
Premises occasioned by the installation or removal of Tenant's trade
fixtures, alterations, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in this Lease, Tenant shall
leave the air lines, power panels, electrical distribution systems,
lighting fixtures, space heaters, air conditioning, plumbing and fencing
on the Premises in good operating condition.
7.3 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written consent
make any alterations, improvements, additions, or Utility Installations
in, on or about the Premises, or the Industrial Center, except for
nonstructural alterations to the Premises not exceeding $25,000.00 in
cumulative costs, during the term of this Lease. In any event, whether
or not in excess of $25,000.00 in cumulative cost, Tenant shall make no
change or alteration to the exterior of the Premises nor the exterior of
the Building nor the Industrial Center without Landlord's prior written
consent. As used in this paragraph 7.3 the term "Utility Installation"
shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing, and fencing. Landlord may require that Tenant
remove any or all of said alterations, improvements, additions or
Utility Installations at the expiration or earlier termination of the
term, and restore the Premises and the Industrial Center to their prior
condition. Landlord may require Tenant to provide Landlord, at Tenant's
sole cost and expense, a lien and completion bond in an amount equal to
one and one-half times the estimated cost of such improvements, to
insure Landlord against any liability for mechanic's and materialmen's
liens and to insure completion of the work. Should Tenant make any
alterations, improvements, additions or Utility Installations without
the prior approval of Landlord, Landlord may, at any time during the
term of the Lease, require that Tenant remove any or all of the same.
(b) Any alterations, improvements, additions, or Utility
Installations made by Tenant during the term of this Lease shall be done
in a good and workmanlike manner and of good and sufficient materials,
and Tenant shall, within thirty (30) days after completion of such
alteration, improvements, addition or Utility Installation, provide
Landlord with as-built plans and
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specifications for same. Notwithstanding anything contained in this
Lease to the contrary, Paragraphs 7.3(d)(i)(bb) and (cc) shall apply to
non-structural alterations, improvements, additions or Utility
Installations not exceeding $25,000.00 in cost.
(c) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Industrial Center that
Tenant shall desire to make and which requires the consent of the
Landlord shall be presented to Landlord in written form, with proposed
detailed plans. If Landlord shall give its consent, the consent shall be
deemed conditioned upon Tenant acquiring a permit to do so from
appropriate governmental agencies, the furnishing of a copy thereof to
Landlord prior to the commencement of the work and the compliance by
Tenant of all conditions of said permit in a prompt and expeditious
manner.
(d) For any additions, alterations, improvements, or Utility
Installations requiring Landlord's prior written consent:
(i) Tenant shall:
(aa) Request Landlord's approval in writing at least
fifteen (15) days prior to proposed construction.
(bb) Employ a California licensed architect, contractor
and structural engineer in connection with the proposed
construction.
(cc) Be fully responsible for the acts of Tenant's
consultants, employees, contractors, subcontractors, invitees and
agents, and cause them to fully comply with any applicable terms
of this Lease and documents referred to by this Lease and all
applicable laws, rules and regulations.
(dd) Enter into written agreements with an architect and
general contractor on standard American Institute of Architects
(AIA) form or reasonable equivalent for the contract itself as
well as payment schedules, change orders, etc. Copies of executed
agreements will be forwarded to Landlord within five (5) days of
execution.
(ee) Cause to be obtained an applicable building permit
for any and all construction and modifications, and
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construct the additions and alterations and perform the
construction work in accordance with all applicable laws,
including without limitation the Americans With Disabilities Act.
(ii) Tenant's Architect Shall:
(aa) Be licensed by the State of California.
(bb) Design and specify within the parameters of the
building work letter (if any) and approved building
specifications (if any) or have received specific written
exceptions from Landlord.
(cc) Secure Landlord's written approval before submitting
plans to the general contractor for bidding or to governmental
agencies for approval.
(dd) Secure Landlord's written approval of any changes or
alternates to the plans recommended by the general contractor or
required by governmental agencies.
(ee) Submit a copy of the final application for permit
and issued permit to Landlord.
(ff) Incorporate the building standard details (if any)
supplied by Landlord onto the drawings.
(gg) Submit final plans for Landlord's written approval
prior to construction.
(hh) Be available for final inspection with Landlord at
job completion.
(ii) Secure Landlord's written approval of details of any
changes in specifications or finishes during construction.
(jj) Provide samples and specifications as required by
Landlord.
(kk) Sign off on the as-built drawings as the Architect's
certification that the improvements have, in fact, been built as
per the Architect's design.
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(iii) Tenant's General Contractor and/or Subcontractors
Shall:
(aa) Be licensed by the State of California.
(bb) Have substantial experience providing similar
quality and quantity of improvements. Work history shall be
provided to Landlord prior to being awarded contract.
(cc) Have a bonding capacity equal to or exceeding the
valuation of the job. Landlord may, at its sole option, require
the job to be bonded.
(dd) Maintain in full force and effect, throughout the
duration of its performance under the contract with the Tenant, a
Worker's Compensation insurance policy and a Commercial General
Liability insurance policy issued by an insurer satisfactory to
Landlord with liability coverage of not less than $1,000,000.00
for personal injury and $500,000.00 to cover property damage. The
Commercial General Liability insurance policy shall include
assumption of contractual liability. Certificates of insurance
containing a thirty (30) day cancellation clause shall be
furnished to Landlord prior to commencement of performance under
the construction contract naming Landlord and its managing agent
as additional insureds.
(ee) Provide a construction schedule to Landlord prior to
commencement of work and weekly written progress reports.
(ff) Warrant the General Contractor's work and that of
the General Contractor's subcontractors, for a minimum of one (1)
year.
(gg) Provide Landlord with as-built drawings of all
improvements.
(iv) All approvals by Landlord, as herein provided for, shall
not be unreasonably withheld or delayed. All requests to be
submitted to Landlord shall be submitted through Landlord's
managing agent.
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(e) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for
use in the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises, or the Industrial
Center, or any interest therein. Tenant shall give Landlord not less
than thirty (30) days' notice prior to the commencement of any work in
the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises or the Building as provided by
law. If Tenant shall, in good faith, contest the validity of any such
lien, claim or demand, then Tenant shall, at its sole expense defend
itself and Landlord against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement
thereof against the Landlord or the Premises or the Industrial Center,
upon the condition that if Landlord shall require, Tenant shall furnish
to Landlord a surety bond satisfactory to Landlord in an amount equal to
such contested lien claim or demand indemnifying Landlord against
liability for the same and holding the Premises and the Industrial
Center free from the effect of such lien or claim. In addition, Landlord
may require Tenant to pay Landlord's attorneys fees and costs in
participating in such action if Landlord shall decide it is to
Landlord's best interest to do so.
(f) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute
trade fixtures of Tenant), which may be made on the Premises, shall be
the property of Landlord and shall remain upon and be surrendered with
the Premises at the expiration or earlier termination of the Lease term,
unless Landlord requires their removal pursuant to paragraph 7.3(a).
Notwithstanding the provisions of this paragraph 7.3(f), Tenant's
machinery and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the
Premises, and other than Utility Installations, shall remain the
property of Tenant and may be removed by Tenant subject to the
provisions of paragraph 7.2.
7.4 Utility Additions. Landlord reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of Landlord or Tenant, or any other tenant of the Industrial Center,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Tenant's use of the Premises.
7.5 Condition of Premises Upon Termination; Additional Use
Provisions.
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7.5.1 Tenant shall maintain the Premises as provided in Paragraph
7.2 and in accordance with the requirements of any covenants or restrictions as
may from time to time be applicable to the Premises. Tenant, in keeping the
Premises in good order, condition and repair, shall exercise and perform good
maintenance practices and any damage or deterioration shall not be deemed
"ordinary wear and tear" if the same could have been prevented by good
maintenance practice. Tenant's obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair. Notwithstanding anything contained in the Lease to the contrary, Tenant
shall make all repairs whatsoever on the Premises necessitated by the
negligence, misconduct or fault of Tenant, or its agents, licensees, contractors
or invitees.
7.5.2 If the term of this Lease, as the same may be extended or
renewed, exceeds five (5) years, Landlord shall have the right to require Tenant
to repaint the interior of the improvements every four (4) to six (6) years, but
not more often that once every five (5) years, as reasonably necessary.
7.5.3 Notwithstanding anything to the contrary in paragraph 7.2
of this Lease, upon termination of this Lease, Tenant shall leave all plumbing,
heating (including space heaters), air conditioning, electrical and mechanical
systems, on the Premises and in good condition and operating order, reasonable
wear and tear and damage by the elements excepted, and Tenant shall upon demand
pay to Landlord that portion of the cost to restore such items to good condition
and operating order as may be reasonably allocable to Tenant's tenancy.
7.5.4 Notwithstanding anything to the contrary contained in this
Lease, the Premises shall not be used for the warehousing or distribution of
hazardous or explosive products, substances or materials, or of products,
substances or materials that are detrimental to the Premises, the Industrial
Center or other tenants thereof.
8. Insurance; Indemnity.
8.1 Tenant hereby agrees to indemnify, defend and hold harmless
Landlord, its successors, assigns, subsidiaries, directors, officers, agents and
employees from and against any and all damage, loss, liability or expense
including, but not limited to, reasonable attorney's fees and legal costs
suffered by same directly or by reason of any claim, suit or judgment brought by
or in favor of any person or persons for damage, loss or expense due to, but not
limited to, bodily injury, including death resulting anytime therefrom, and
property damage sustained by such person or persons which arises out of, is
occasioned by or in any way attributable to the use or
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occupancy of the Premises by the Tenant, the acts or omission of the Tenant, its
agents, employees or any other contractors or invitees brought onto said
Premises by the Tenant, or any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease,
except to the extent caused by the gross negligence or wilful misconduct of
Landlord, its employees, and agents. If any action or proceeding is brought
against Landlord by reason of any such claim, Tenant, upon notice from Landlord,
shall defend same at Tenant's expense by counsel satisfactory to Landlord. Such
loss or damage shall include, but not be limited to, any injury or damage to
Landlord's personnel (including death resulting anytime therefrom) on the
Premises. Landlord shall not be liable for any damages arising from any act or
neglect of any other tenant, if any, of the building or industrial park in which
the Premises are located. Tenant agrees that the obligations assumed herein
shall survive the termination of this Lease.
8.2 Tenant hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at Tenant's own expense, for the protection
of Tenant, Landlord and Landlord's property manager, as their interest may
appear, policies of insurance issued by a responsible carrier or carriers which
afford the following coverages:
(a) Workers' Compensation with statutory limits.
(b) Employers' Liability insurance with the following minimum
limits:
Bodily injury by disease per person $1,000,000
Bodily injury by accident policy limit $1,000,000
Bodily injury by disease policy limit $1,000,000
(c) Property insurance on a special causes of loss insurance form
covering any and all personal property of Tenant including but not
limited to improvements, betterments, furniture, fixtures, Utility
Installations, and equipment in an amount not less than their full
replacement cost, with a deductible not to exceed $10,000. This policy
should contain a waiver of subrogation.
(d) Commercial General Liability Insurance including Broad Form
Property Damage and Contractual Liability with the following minimum
limits:
General Aggregate $2,000,000
Products/Completed Operations Aggregate $2,000,000
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Each Occurrence $1,000,000
Personal & Advertising Injury $1,000,000
Medical Payments $5,000 per person
(e) Umbrella/Excess Liability on a following form basis with the
following minimum limits:
General Aggregate $10,000,000
Each Occurrence $10,000,000
The limits of said insurance in this Paragraph 8.2 shall not, however,
limit the liability of Tenant hereunder.
8.3 If Landlord is providing property insurance on the Premises, then
Landlord shall, at all times during the term of this Lease, maintain the
following insurance:
(a) a policy or policies of all-risk property insurance, issued
by and binding upon some solvent insurance company, insuring for the
full replacement cost of the building on the Premises. Landlord shall
not be obligated to insure, and shall not assume any liability or risk
of loss for, any of Tenant's furniture, equipment, machinery, goods,
supplies, utility installations, improvements, or alterations upon the
Premises. This policy shall contain an agreed amount endorsement and be
written with no coinsurance. Landlord may, but shall not be obligated
to, obtain earthquake and flood insurance.
(b) Rent insurance on an all-risk basis in an amount equal to all
that is called for under Paragraph 4 of this Lease (Base Rent and any
additional rents payable under this Lease including tax and insurance
costs) for a period of at least twelve (12) months commencing with the
date of loss.
(c) Boiler and machinery insurance in an amount satisfactory to
Landlord on a comprehensive coverage form.
8.4 The Tenant shall deliver to Landlord prior to taking possession
of the Premises, and thereafter at least thirty (30) days prior to expiration of
such policy, certificates of insurance evidencing the above coverage with limits
not less than those specified above. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of at least A-VIII as set
forth in the most current issue of "Best's Insurance Guide". Such Certificates
with the exception of Worker's Compensation, shall name Landlord, its
subsidiaries, directors, agents and employees,
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and its property manager as additional insureds and shall expressly provide that
the interest of same herein shall not be affected by a breach by Tenant of any
insurance policy provision for which such Certificates evidence coverage.
Further, all Certificates shall expressly provide that no less than thirty (30)
days prior written notice shall be given to Landlord in the event of material
alteration to or cancellation of the coverage evidenced by such Certificates.
8.5 Landlord may secure and maintain, at Tenant's expense, increased
amounts of insurance and other insurance coverage in such limits, as Landlord
may require in its sole judgment to afford Landlord adequate protection.
8.6 Landlord makes no representation that the limits of liability
specified to be carried by Tenant under the term of this Lease are adequate to
protect Tenant against Tenant's undertaking under this Paragraph 8 and in the
event Tenant believes that any such insurance coverage called for under this
Lease is insufficient, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate.
8.7 Anything in this Lease to the contrary notwithstanding, Landlord
and Tenant hereby waive and release each other of and from any and all rights of
recovery, claims, action or cause of action, against each other, their agents,
officers and employees, for any loss or damage that may occur to the Premises,
improvements to the building of which the Premises are a part, personal property
(building contents) within the building on the Premises, any furniture,
equipment, machinery, goods or supplies not covered by this Lease which Tenant
may bring or obtain upon the Premises or any additional improvements which
Tenant may construct on the Premises, by reason of fire, the elements or any
other cause which could be insured against under the terms of all risk property
insurance policies, regardless of cause or origin, including negligence of
Landlord or Tenant and their agents, officers and employees. Because this
Paragraph will preclude the assignment of any claim mentioned in it by way of
subrogation (or otherwise) to an insurance company (or any other person) each
party to this Lease agrees immediately to give to each insurance company,
written notice of the terms of the mutual waivers contained in this Paragraph,
and to have the insurance policies properly endorsed if necessary to prevent the
invalidation of the insurance coverages by reason of the mutual waivers
contained in this Paragraph. Tenant also waives and releases Landlord, its
agents, officers and employees of and from any and all rights of recovery,
claim, action or cause of action for any loss or damage insured against under
any other policies of insurance carried by Tenant.
8.8 Payment of Premium Increase.
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(a) After the term of this Lease has commenced, Tenant shall not
be responsible for paying Tenant's Share of any increase in the property
insurance premium for the Industrial Center specified by Landlord's
insurance carrier as being caused by the use, acts or omissions of any
other Tenant of the Industrial Center, or by the nature of such other
Tenant's occupancy which create an extraordinary or unusual risk.
(b) Tenant, however, shall pay the entirety of any increase in
the property insurance premium for the Industrial Center over what it
was immediately prior to the commencement of the term of this Lease if
the increase is specified by Landlord's insurance carrier as being
caused by the nature of Tenant's occupancy or any act or omission of
Tenant.
8.9 Exemption of Landlord from Liability. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers, or any other person
in or about the Premises or the Industrial Center, nor shall Landlord be liable
for injury to the person of Tenant, Tenant's employees, agents or contractors,
whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning, or lighting fixtures, or from any other cause, whether said damage
or injury results from conditions arising upon the Premises or upon other
portions of the Industrial Center, or from other sources or places and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant, Landlord shall not be liable for
any damages arising from any act or neglect of any other Tenant, occupant or
user of the Industrial Center, nor from the failure of Landlord to enforce the
provisions of any other lease of the Industrial Center. Notwithstanding
Landlord's negligence or breach of this Lease, Landlord shall under no
circumstances be liable for injury to Tenant's business or for any loss of
income or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is less than
fifty percent of the then replacement cost of the Premises.
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(b) "Premises Total Destruction" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is fifty
percent or more of the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is less than fifty percent of the then
replacement cost of the Building.
(d) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is fifty percent or more of the then
replacement cost of the Building.
(e) "Industrial Center Buildings" shall mean all of the buildings
on the Industrial Center site.
(f) "Industrial Center Buildings Total Destruction" shall mean if
the Industrial Center Buildings are damaged or destroyed to the extent
that the cost of repair is fifty percent or more of the then replacement
cost of the Industrial Center Buildings.
(g) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall
not make the loss an uninsured loss.
(h) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the
condition that existed immediately prior to the damage occurring
excluding all improvements made by tenants.
9.2 Premises Partial Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which
is an Insured Loss and which falls into the classification of either
Premises Partial Damage or Premises Building Partial Damage, then
Landlord shall, at Landlord's expense, repair such damage to the
Premises, but not Tenant's fixtures, equipment, tenant improvements or
Utility Installations, as soon as reasonably possible and this Lease
shall continue in full force and effect.
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(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage
which is not an Insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage, unless
caused by a negligent or willful act of Tenant or its agents,
contractors or invitees (in which event Tenant shall make the repairs at
Tenant's expense), which damage prevents Tenant from using the Premises,
Landlord may at Landlord's option either (i) repair such damage as soon
as reasonably possible at Landlord's expense, in which event this Lease
shall continue in full force and effect, or (ii) give written notice to
Tenant within thirty (30) days after the date of the occurrence of such
damage of Landlord's intention to cancel and terminate this Lease as of
the date of the occurrence of such damage. In the event Landlord elects
to give such notice of Landlord's intention to cancel or terminate this
Lease, Tenant shall have the right within ten (10) days after the
receipt of such notice to give written notice to Landlord of Tenant's
intention to repair such damage at Tenant's expense, without
reimbursement from Landlord, in which event this Lease shall continue in
full force and effect, and Tenant shall proceed to make such repairs as
soon as reasonably possible. If Tenant does not give such notice within
such 10-day period this Lease shall be canceled and terminated as of the
date of the occurrence of such damage.
9.3 Premises Total Destruction; Premises Building Total Destruction;
Industrial Center Buildings Total Destruction.
(a) Subject to the provisions of paragraphs 9.4 and 9.5, if at
any time during the term of this Lease there is damage, whether or not
it is an Insured Loss, and which falls into the classifications of
either (i) Premises Total Destruction, or (ii) Premises Building Total
Destruction, or (iii) Industrial Center Buildings Total Destruction,
then Landlord may at Landlord's option either (i) repair such damage or
destruction, but not Tenant's fixtures, equipment, tenant improvements
or Utility Installations as soon as reasonably possible at Landlord's
expense, and this Lease shall continue in full force and effect, or (ii)
give written notice to Tenant within thirty (30) days after the date of
occurrence of such damage of Landlord's intention to cancel and
terminate this Lease, in which case this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last
six months of the term of this Lease there is substantial damage,
whether or not an Insured Loss, which falls within the classification of
Premises Partial
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Damage, Landlord may at Landlord's option cancel and terminate this
Lease as of the date of occurrence of such damage by giving written
notice to Tenant of Landlord's election to do so within 30 days after
the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Tenant
has an option to extend or renew this Lease, and the time within which
said option may be exercised has not yet expired, Tenant shall exercise
such option, if it is to be exercised at all, no later than twenty (20)
days after the occurrence of an Insured Loss falling within the
classification of Premises Partial Damage during the last six months of
the term of this Lease. If Tenant duly exercises such option during said
twenty (20) day period, Landlord shall, at Landlord's expense, repair
such damage, but not Tenant's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect provided Tenant first deposits with
Landlord any shortfall in necessary funds. If Tenant fails to exercise
such option during said twenty (20) day period, then Landlord may at
Landlord's option terminate and cancel this Lease as of the expiration
of said twenty (20) day period by giving written notice to Tenant of
Landlord's election to do so within ten (10) days after the expiration
of said twenty (20) day period, notwithstanding any term or provision in
the grant of option to the contrary.
9.5 Abatement of Rent; Tenant's Remedies.
(a) In the event Landlord repairs or restores the Premises
pursuant to the provisions of this paragraph 9, the rent payable
hereunder for the period during which such damage, repair or restoration
continues shall be abated in proportion to the degree to which Tenant's
use of the Premises is impaired. Except for abatement of rent, if any,
Tenant shall have no claim against Landlord for any damage suffered by
reason of any such damage, destruction, repair or restoration.
(b) If Landlord shall be obligated to repair or restore the
Premises under the provisions of this paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such obligation
shall accrue, Tenant may at Tenant's option cancel and terminate this
Lease by giving Landlord written notice of Tenant's election to do so at
any time prior to the commencement of such repair or restoration. In
such event this Lease shall terminate as of the date of such notice. In
the event that Landlord shall be obligated to repair or restore the
Premises pursuant to Paragraph 9 of this Lease and shall not commence
such repair or restoration within ninety (90) days after such obligation
shall accrue, the right of Tenant to terminate this Lease
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pursuant to this Paragraph 9.5(b) shall be the sole right and remedy of
Tenant against Landlord, and Landlord shall have no other liability to
Tenant, for damages, specific performance or otherwise, in connection
with any such failure.
9.6 Termination -- Advance Payments. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's security deposit as has
not theretofore been applied by Landlord.
9.7 Waiver. Landlord and Tenant waive the provisions of any statute
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Taxes. Landlord shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Industrial Center subject to
reimbursement by Tenant of Tenant's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 Additional Improvements. Tenant shall not be responsible for
paying Tenant's Share of any increase in real property tax specified in the tax
assessor's records and work sheets as being caused by additional improvements
placed upon the Industrial Center by other Tenants or by Landlord for the
exclusive enjoyment of such other Tenants. Tenant shall, however, pay to
Landlord at the time that Operating Expenses are payable under paragraph 4.2(c)
the entirety of any increase in real property tax if assessed solely by reason
of additional improvements placed upon the Premises by Tenant or at Tenant's
request.
10.3 Definition of "Real Property Tax". As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Industrial Center or any portion
thereof by any authority having the direct or indirect power to tax, including
any city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as
against any legal or equitable interest of Landlord in the Industrial Center or
in any portion thereof, as against Landlord's right to rent or other income
therefrom, and as against Landlord's business of leasing the Industrial Center.
The term "real property tax" shall also include any tax, fee, levy, assessment
or charge (i) in
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substitution of, partially or totally, any tax, fee, levy, assessment or charge
hereinabove included within the definition of "real property tax," or (ii) the
nature of which was hereinbefore included within the definition of "real
property tax" or (iii) which is imposed for a service or right not charged prior
to June 1, 1978, or, if previously charged, has been increased since June 1,
1978 or (iv) which is imposed as a result of a transfer, either partial or
total, of Landlord's interest in the Industrial Center or which is added to a
tax or charge hereinbefore included within the definition of real property tax
by reason of such transfer, or (v) which is imposed by reason of this
transaction, any modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the Industrial Center is not
separately assessed, Tenant's Share of the real property tax liability shall be
an equitable proportion of the real property taxes for all of the land and
improvements included within the tax parcel assessed, such proportion to be
determined by Landlord from the respective valuations assigned in the assessor's
work sheets or such other information as may be reasonably available, Landlord's
reasonable determination thereof, in good faith, shall be conclusive.
10.5 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed
and billed separately from the real property of Landlord.
(b) If any of Tenant's said personal property shall be assessed
with Landlord's real property, Tenant shall pay to Landlord the amounts
attributable to Tenant within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Tenant's property.
10.6 Additional Provisions Regarding Real Property Taxes. Landlord
shall have the sole right to contest or appeal any real property taxes or
assessments applicable to all or any portion of the Industrial Center and to
seek a reduction in the assessed valuation of all or any portion of the
Industrial Center (collectively, "Tax Contests"). Any refund of real property
taxes resulting from any such Tax Contest shall be applied first to reimburse
Landlord for its costs and expenses in connection with the Tax Contest
(including, without limitation attorneys' fees and the costs of consultants) and
then, out of and to the extent of the balance of such refund, Landlord shall
reimburse to Tenant the portion of such reduction attributable to the Premises
and the term of this Lease, as and to the extent previously paid by Tenant as
part of
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Tenant's Share of Operating Expenses. Fees payable to tax consultants and
attorneys for consultation and contesting real property taxes shall be an
Operating Expense. Landlord's obligation to refund tax reductions attributable
to the real property taxes and assessments paid by Tenant shall survive
termination of this Lease. Landlord agrees to provide a reasonably detailed
statement of the calculation of the net refund due Tenant which shall indicate
the expenses of obtaining the refund and the calculation of the portion of the
tax refund payable to Tenant.
11. Utilities. Tenant shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to the
Premises, Tenant shall pay at Landlord's option, either Tenant's Share or a
reasonable proportion to be determined by Landlord of all charges jointly
metered with other premises in the Building.
12. Assignment and Subletting.
12.1 Landlord's Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in the Lease or in the Premises,
without Landlord's prior written consent, which Landlord shall not unreasonably
withhold. Landlord shall respond to Tenant's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a noncurable
breach of this Lease without the need for notice to Tenant under paragraph 13.1.
If at any time or from time to time during the term of this Lease, Tenant
desires to assign or sublet all or any part of Tenant's interest in this Lease
or in the Premises, Tenant shall give prior written notice to Landlord setting
forth the terms of the proposed assignment or subletting and the space so
proposed to be assigned or sublet. Such assignment or sublease shall be subject
to, without limitation, all the conditions in this Paragraph 12 and the
following conditions:
(a) The assignment or sublease shall be on the terms set forth in
the notice given to Landlord. Any subsequent changes or modifications
will require Landlord's prior written consent.
(b) Tenant acknowledges that Landlord's agreement to lease these
Premises to Tenant at the rent and terms stated herein is made in
material reliance upon Landlord's evaluation of this particular Tenant's
background, experience and ability, as well as the nature of the use of
the Premises by this Tenant as set forth in Paragraph 6. In the event
that Tenant shall request Landlord's written consent to assign or
sublease the Premises as required in this
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Paragraph 12.1, then each such request for consent shall be accompanied
by the following:
(i) Financial statements of the proposed assignee or
subtenant;
(ii) A statement of the specific uses for which the Premises
will be utilized by the proposed assignee or subtenant; and
(iii) Preliminary plans prepared by an architect or civil
engineer for all alterations to the Premises that are contemplated
to be made by Tenant, the proposed assignee or subtenant.
(c) No assignment or sublease shall be valid and no assignee or
subtenant shall take possession of the Premises assigned or subleased
until an executed counterpart of such assignment or sublease has been
delivered to Landlord.
(d) No subtenant or assignee shall have a right further to sublet
or assign.
(e) In the case of an assignment, 50% of any sums or other
economic consideration received by Tenant as a result of such assignment
shall be paid to Landlord after first deducting the unamortized cost of
leasehold improvements paid for by Tenant in connection with such
assignment and the cost of any real estate commissions incurred by
Tenant in connection with such assignment.
(f) In the case of a subletting (other than to a Permitted Truck
Yard Occupant), 50% of any sums or economic consideration received by
Tenant as a result of such subletting shall be paid to Landlord after
first deducting (i) the rent due hereunder prorated to reflect only rent
allocable to the sublet portion of the Premises, (ii) the cost of tenant
improvements made to the sublet portion of the Premises at Tenant's cost
in connection with such sublease, which shall be amortized over the term
of the applicable sublease and (iii) the cost of any real estate
commissions incurred by Tenant in connection with such subletting,
amortized over the term of the sublease.
12.2 Tenant Affiliate. Notwithstanding the provisions of paragraph
12.1 hereof, Tenant may assign or sublet the Premises, or any portion thereof,
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
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merger or consolidation with Tenant, or to any person or entity which acquires
all the assets of Tenant as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Tenant Affiliate,"
provided that (a) before such assignment shall be effective said assignee shall
assume, in full, the obligations of Tenant under this Lease, (b) such Tenant
Affiliate has a tangible net worth at least equal to Tenant's tangible net worth
on the date of the assignment or sublease, and (c) the use of the Premises does
not change. Any such assignment shall not, in any way, affect or limit the
liability of Tenant under the terms of this Lease, even if after such assignment
or subletting the terms of this Lease are materially changed or altered without
the consent of Tenant, the consent of whom shall not be necessary.
12.3 Tenants Other Than Individuals.
(a) If Tenant is a partnership, a transfer of any interest of a
general partner, a withdrawal of any general partner from the
partnership, or the dissolution of the partnership, shall be deemed to
be an assignment of this Lease.
(b) If Tenant is a corporation, unless Tenant is a public
corporation whose stock is regularly traded on a national stock
exchange, or is regularly traded in the over-the-counter market and
quoted on NASDAQ, any sale or other transfer of a percentage of capital
stock of Tenant which results in a change of controlling persons, or the
sale or other transfer of substantially all of the assets of Tenant,
shall be deemed to be an assignment of this Lease.
12.4 Terms and Conditions of Assignment. Regardless of Landlord's
consent, no assignment shall release Tenant of Tenant's obligations hereunder or
alter the primary liability of Tenant to pay the Base Rent and Tenant's Share of
Operating Expenses, and to perform all other obligations to be performed by
Tenant hereunder. Landlord may accept rent from any person other than Tenant
pending approval or disapproval of such assignment. Neither a delay in the
approval or disapproval of such assignment nor the acceptance of rent shall
constitute a waiver or estoppel of Landlord's right to exercise its remedies for
the breach of any of the terms or conditions of this paragraph 12 of this Lease.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
of Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee, Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease.
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12.5 Terms and Conditions Applicable to Subletting. Regardless of
Landlord's consent, the following terms and conditions shall apply to any
subletting by Tenant of all or any part of the Premises and shall be included in
subleases:
(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease
heretofore or hereafter made by Tenant, and Landlord may collect such
rent and income and apply same toward Tenant's obligations under this
Lease; provided, however, that until a default shall occur in the
performance of Tenant's obligations under this Lease, Tenant may,
subject to paragraphs 12.1(e) and 12.1(f) receive, collect and enjoy the
rents accruing under such sublease. Landlord shall not, by reason of
this or any other assignment of such sublease to Landlord nor by reason
of the collection of the rents from a subtenant, be deemed liable to the
subtenant for any failure of Tenant to perform and comply with any of
Tenant's obligations to such subtenant under such sublease. Tenant
hereby irrevocably authorizes and directs any such subtenant, upon
receipt of a written notice from Landlord stating that a default exists
in the performance of Tenant's obligations under this Lease, to pay to
Landlord the rents due and to become due under the sublease, Tenant
agrees that such subtenant shall have the right to rely upon any such
statement and request from Landlord, and that such subtenant shall pay
such rents to Landlord without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice from or claim
from Tenant to the contrary. Tenant shall have no right or claim against
such subtenant or Landlord for any such rents so paid by said subtenant
to Landlord.
(b) No sublease entered into by Tenant shall be effective unless
and until it has been approved in writing by Landlord. In entering into
any sublease, Tenant shall use only such form of sublease as is
satisfactory to Landlord, and once approved by Landlord, such sublease
shall not be changed or modified without Landlord's prior written
consent. Any subtenant shall, by reason of entering into a sublease
under this Lease, be deemed, for the benefit of Landlord, to have
assumed and agreed to conform and comply with each and every obligation
herein to be performed by Tenant other than such obligations as are
contrary to or inconsistent with provisions contained in a sublease to
which Landlord has expressly consented in writing.
(c) If Tenant's obligations under this Lease have been guaranteed
by third parties, then a sublease, and Landlord's consent thereto, shall
not be effective unless said guarantors give their written consent to
such sublease and the terms thereof.
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(d) The consent by Landlord to any subletting shall not release
Tenant from its obligations or alter the primary liability of Tenant to
pay the rent and perform and comply with all of the obligations of
Tenant to be performed under this Lease.
(e) The consent by Landlord to any subletting shall not
constitute a consent to any subsequent subletting by Tenant or to any
assignment or subletting by the subtenant. However, Landlord may consent
to subsequent sublettings and assignments of the sublease or any
amendments or modifications thereto without notifying Tenant or anyone
else liable on the Lease or sublease and without obtaining their consent
and such action shall not relieve such persons from liability.
(f) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or any one else
responsible for the performance of this Lease, including the subtenant,
without first exhausting Landlord's remedies against any other person or
entity responsible therefor to Landlord, or any security held by
Landlord or Tenant.
(g) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in
which event Landlord shall undertake the obligations of Tenant under
such sublease from the time of the exercise of said option to the
termination of such sublease; provided, however, Landlord shall not be
liable for any prepaid rents or security deposit paid by such subtenant
to Tenant or for any other prior defaults of Tenant under such sublease.
(h) Each and every consent required of Tenant under a sublease
shall also require the consent of Landlord.
(i) No subtenant shall further assign or sublet all or any part
of the Premises without Landlord's prior written consent.
(j) Landlord's written consent to any subletting of the Premises
by Tenant shall not constitute an acknowledgment that no default then
exists under this Lease of the obligations to be performed by Tenant nor
shall such consent be deemed a waiver of any then existing default,
except as may be otherwise stated by Landlord at the time.
(k) With respect to any subletting to which Landlord has
consented, Landlord agrees to deliver a copy of any notice of default by
Tenant
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to the subtenant. Such subtenant shall have the right to cure a default
of Tenant within ten (10) days after service of said notice of default
upon such subtenant, and the subtenant shall have a right of
reimbursement and offset from and against Tenant for any such defaults
cured by the subtenant.
12.6 Attorney's Fees. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or subletting or
if Tenant shall request the consent of Landlord for any act Tenant proposes to
do then Tenant shall pay Landlord's reasonable attorney's and/or consultants'
fees incurred in connection therewith, such attorney's fees not to exceed
$350.00 for each such request. Notwithstanding anything to the contrary in this
Paragraph 12.6, the parties agree that a payment of $750.00 is a reasonable fee
for Landlord's review of Tenant's request to assign or sublet.
12.7 Permitted Truck Yard Occupants. Landlord hereby consents to
Tenant from time to time subleasing portions of the Exclusive Truck Yard Area to
Permitted Truck Yard Occupants (as defined below). As used herein, "Permitted
Truck Yard Occupant" means a trucking contractor who subleases a portion of the
Permitted Truck Yard Area solely in connection with providing distribution and
trucking services to Tenant in the Premises.
13. Default Remedies.
13.1 Default. The occurrence of any one or more of the following
events shall constitute a material default of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of five (5) days after
written notice thereof from Landlord to Tenant. In the event that
Landlord serves Tenant with a Notice to Pay Rent or Quit pursuant to
applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit
shall also constitute the notice required by this subparagraph.
(c) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Tenant, other
than described in paragraph (b) above, where such failure shall continue
for a period of thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant's
noncompliance is such that more than thirty (30)
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days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commenced such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to
completion. To the extent permitted by law, such thirty (30) day notice
shall constitute the sole and exclusive notice required to be given to
Tenant under applicable Unlawful Detainer statutes.
(d) (i) The making by Tenant of any general arrangement or
general assignment for the benefit of creditors; (ii) Tenant becomes a
"debtor" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or
(iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged
within thirty (30) days. In the event that any provision of this
paragraph 13.1(d) is contrary to any applicable law, such provision
shall be of no force or effect.
(e) The discovery by Landlord that any financial statement given
to Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant,
any successor in interest of Tenant or any guarantor of Tenant's
obligations hereunder, was materially false.
(f) If the performance of Tenant's obligations under this Lease
is guaranteed: (i) the dissolution of a guarantor, (ii) the termination
of a guarantor's liability with respect to this Lease other than in
accordance with the terms of such guaranty, (iii) a guarantor's becoming
insolvent or the subject of a bankruptcy filing, (iv) a guarantor's
refusal to honor the guaranty, or (v) a guarantor's breach of its
guaranty obligation on an anticipatory breach basis, and Tenant's
failure, within sixty (60) days following written notice by or on behalf
of Landlord to Tenant of any such event, to provide Landlord with
written alternative assurance or security, which, when coupled with the
then existing resources of Tenant, equals or exceeds the combined
financial resources of Tenant and the guarantors that existed at the
time of execution of this Lease.
13.2 Remedies. If Tenant fails to perform any affirmative duty or
obligation of Tenant under this Lease, within thirty (30) days after written
notice to Tenant (or in case of an emergency, without notice), Landlord may at
its option (but without obligation to do so), perform such duty or obligation on
Tenant's behalf
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including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Landlord shall be due and payable by
Tenant to Landlord upon invoice therefor. In the event of a breach of this Lease
by Tenant, as defined in Paragraph 13.1, with or without further notice or
demand, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such breach, Landlord may:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall
terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event Landlord shall be entitled to
recover from Tenant: (i) the worth at the time of the award of the
unpaid rent which had been earned at the time of termination; (ii) the
worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds
the amount of such rental loss that the Tenant proves could have been
reasonably avoided; (iii) the worth at the time of award of the amount
by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Tenant proves
could be reasonably avoided; and (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by the
Tenant's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result therefrom,
including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorneys' fees, and that portion
of the leasing commission paid by Landlord applicable to the unexpired
term of this Lease. The worth at the time of award of the amount
referred to in provisions (i) and (ii) of the prior sentence shall be
calculated based on an interest rate equal to the highest rate permitted
by applicable law. The worth at the time of award of the amount referred
to in provision (iii) of the prior sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent. Efforts by
Landlord to mitigate damages caused by Tenant's breach of this Lease
shall not waive Landlord's right to recover damages under this
Paragraph. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Landlord shall have the right
to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Landlord may reserve therein the right to
recover all or any part thereof in a separate suit for such rent and/or
damages. If a notice and grace period required under subparagraphs
13.1(b), (c) or (d) was not previously given, a notice to pay rent or
quit, or to perform or quit, as the case may be, given to Tenant under
any statute authorizing the forfeiture of leases for unlawful detainer
shall also
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constitute the applicable notice for grace period purposes required by
subparagraphs 13.1(b), (c) or (d). In such case, the applicable grace
period under subparagraphs 13.1(b), (c) or (d) and under the unlawful
detainer statute shall run concurrently after the one such statutory
notice, and the failure of Tenant to cure the default within the greater
of the two such grace periods shall constitute both an unlawful detainer
and breach of this Lease entitling Landlord to the remedies provided for
in this Lease and/or by said statute.
(b) Continue the Lease and Tenant's right to possession in
effect (in California under California Civil Code Section 1951.4) after
Tenant's breach and abandonment and recover the rent as it becomes due,
provided Tenant has the right to sublet or assign, subject only to
reasonable limitations. See Paragraphs 12 and 36 for the limitations on
assignment and subletting which limitations Tenant and Landlord agree
are reasonable. Acts of maintenance or preservation, efforts to relet
the Premises, or the appointment of a receiver to protect the Landlord's
interest under the Lease, shall not constitute a termination of the
Tenant's right to possession.
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of
California. Unpaid installments of rent and other unpaid monetary
obligations of Tenant under the terms of this Lease shall bear interest
from the date due at the maximum rate allowed by law.
(d) The expiration or termination of this Lease and/or the
termination of Tenant's right to possession shall not relieve Tenant
from liability under any indemnity provisions of this Lease as to
matters occurring or accruing during the term hereof or by reason of
Tenant's occupancy of the Premises.
13.3 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
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13.4 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Base Rent, Tenant's Share of Operating Expenses or other
sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges, and
late charges which may be imposed on Landlord by the terms of any mortgage or
trust deed covering the Premises. Accordingly, if any installment of Base Rent,
Operating Expenses or any other sum due from Tenant shall not be received by
Landlord or Landlord's designee within ten (10) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall pay to
Landlord a late charge equal to 6% of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder. In the event
that a late charge is payable hereunder, whether or not collected, for three (3)
consecutive installments of any of the aforesaid monetary obligations of Tenant,
then Base Rent shall automatically become due and payable quarterly in advance,
rather than monthly, notwithstanding paragraph 4.1 or any other provision of
this Lease to the contrary.
14. Condemnation. If the Premises or any portion thereof or the
Industrial Center are taken under the power of eminent domain, or sold under the
threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of the
date the condemning authority takes title or possession, whichever first occurs.
If more than ten percent of the floor area of the Premises, or more than
twenty-five percent of that portion of the Common Area designated as parking for
the Industrial Center is taken by condemnation, Tenant may, at Tenant's option,
to be exercised in writing only within ten (10) days after Landlord shall have
given Tenant written notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Tenant does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the rent shall be reduced in the proportion
that the floor area of the Premises taken bears to the total floor area of the
Premises. No reduction of rent shall occur if the only area taken is that which
does not have the Premises located thereon. Any award for the taking of all or
any part of the Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Landlord,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Tenant shall be entitled to any award for loss of or damage to
Tenant's
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trade fixtures and removable personal property. In the event that this Lease is
not terminated by reason of such condemnation, Landlord shall to the extent of
severance damages received by Landlord in connection with such condemnation,
repair any damage to the Premises caused by such condemnation except to the
extent that Tenant has been reimbursed therefor by the condemning authority.
Tenant shall pay any amount in excess of such severance damages required to
complete such repair.
15. Broker's Commissions.
Tenant and Landlord each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder (other than those
persons, if any, whose names are set forth at the end of this paragraph 15) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Tenant and Landlord do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation, commission or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the indemnifying party. Named brokers:
Landlord's Broker: CB Richard Ellis, Inc.
Tenant's Broker: CB Richard Ellis, Inc.
The commission payable to Landlord's Broker and Tenant's Broker with respect to
this Lease shall be pursuant to the terms of the separate commission agreements
in effect between Landlord and Landlord's Broker and Tenant's Broker. Nothing in
this Lease shall impose any obligation on Landlord to pay a commission or fee to
any party other than Landlord's Broker and Tenant's Broker.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon
not less than ten (10) days' prior written notice from the other party,
("requesting party") execute, acknowledge and deliver to the requesting
party a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the date to which the rent
and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to the responding party's knowledge, any uncured
defaults on the part of the requesting party, or specifying such
defaults if any are claimed.
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Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises or of the business of the
requesting party.
(b) At the requesting party's option, the failure to deliver
such statement within such time shall be conclusive upon the party
failing to respond that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting
party, (ii) there are no uncured defaults in the requesting party's
performance, and (iii) if Landlord is the requesting party, not more
than one month's rent has been paid in advance.
(c) If Landlord desires to finance, refinance, or sell the
Industrial Center, or any part thereof, Tenant hereby agrees to deliver
to any lender or purchaser designated by Landlord such financial
statements of Tenant as may be reasonably required by such lender or
purchaser. Such statements shall include the past three (3) years'
financial statements of Tenant. All such financial statements shall be
received by Landlord and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth. So long as the
initially-named Tenant under this Lease is a subsidiary of the Guarantor
and remains the Tenant under this Lease, the Guaranty is in full force
and effect and the Guarantor is then making 10-K filings with the
Securities and Exchange Commission, Guarantor's most recent 10-K
containing its consolidated financial statements for Guarantor and its
subsidiaries shall be deemed to satisfy the requirements of this section
for delivery of financial statements.
17. Landlord's Liability. The term "Landlord" as used herein shall mean
only the owner or owners, at the time in question, of the fee title or a
Tenant's interest in a ground lease of the Industrial Center, in the event of
any transfer of such title or interest. Landlord herein named (and in case of
any subsequent transfers then the grantor) shall be relieved from and after the
date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed, provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer, in which Tenant has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns, only during their respective periods of ownership.
18. Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. Interest on Past-due Obligations. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
the maximum rate then allowable by law from the date due. Payment of such
interest shall not excuse or
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cure any default by Tenant under this Lease; provided, however, that interest
shall not be payable on late charges incurred by Tenant nor on any amounts upon
which late charges are paid by Tenant.
20. Time of Essence. Time is of the essence with respect to the
obligations to be performed under this Lease.
21. Additional Rent. All monetary obligations of Tenant to Landlord
under the terms of this Lease, including but not limited to Tenant's Share of
Operating Expenses and insurance and tax expenses payable shall be deemed to be
rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains
all agreements of the parties with respect to any matter mentioned herein. No
prior or contemporaneous agreement or understanding pertaining to any such
matter shall be effective. This Lease may be modified in writing only, signed by
the parties in interest at the time of the modification. Except as otherwise
stated in this Lease, Tenant hereby acknowledges that neither the real estate
broker listed in paragraph 15 hereof nor any cooperating broker on this
transaction nor the Landlord or any employee or agents of any of said persons
has made any oral or written warranties or representations to Tenant relative to
the condition or use by Tenant of the Premises or the Industrial Center and
Tenant acknowledges that Tenant assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and regulations in effect
during the term of this Lease except as otherwise specifically stated in this
Lease.
23. Notices. Any notice required or permitted to be given hereunder
shall be in writing and shall be delivered by Federal Express or comparable
overnight courier, providing written evidence of delivery, or delivered by U.S.
registered or certified mail, return receipt requested, postage prepaid and if
given personally or by mail, shall be deemed sufficiently given if addressed to
Tenant or to Landlord at the addresses noted below. Either party may by notice
to the other specify a different address for notice purposes except that upon
Tenant's taking possession of the Premises, the Premises shall constitute
Tenant's address for notice purposes. A copy of all notices required or
permitted to be given to Landlord hereunder shall be concurrently transmitted to
such party or parties at such addresses as Landlord may from time to time
hereafter designate by notice to Tenant.
Landlord:
c/o The Prudential Insurance Company of America
8 Campus Drive, 4th Floor
Parsippany, New Jersey 07054
Attn: Victor Del Pizzo
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With a copy by the same method to:
c/o The Prudential Insurance Company of America
8 Campus Drive, 4th Floor
Parsippany, New Jersey 07054
Attn: Joan Hayden
With a copy by the same method to:
Experien Property Solutions
3000 E. Birch Street, Suite 109
Brea, California 92821
Attn: Mark Harryman
Tenant:
JP FERRERO PARKWAY, INC.,
a California corporation
22761 Pacific Coast Highway Suite 226
Malibu, CA 90265
Attn: Stephen Berman, President
With a copy to:
Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP
750 Lexington Avenue
New York, NY 10022-1200
Attn: Geoffrey A. Bass
or such other address as either party may from time to time designate as its
notice address by notifying the other party thereof. Notice so sent shall be
deemed given (a) when personally delivered, or (b) on the first business day
following deposit with Federal Express or a comparable overnight courier service
providing written evidence of delivery, or (c) five business days following
deposit in the United States mail, if notice is sent by registered or certified
mail, return receipt requested, postage prepaid.
24. Waivers. No waiver by Landlord of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Tenant of the same or any other provision. Landlord's consent to, or approval
of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by
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Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
25. No Recording. Tenant shall not record this Lease.
26. Holding Over. If Tenant, with Landlord's consent, remains in
possession of the Premises or any part thereof after the expiration of the term
hereof, such occupancy shall be a tenancy from month to month upon all of the
provisions of this Lease pertaining to the obligations of Tenant, except that
the monthly rent shall be 150% of the rent payable in the last month of the
lease term but all Options, if any, granted under the terms of this Lease shall
be deemed terminated and be of no further effect during said month to month
tenancy.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. Each provision of this Lease performable
by Tenant shall be deemed both a covenant and condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provisions of
paragraph 17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
where the Industrial Center is located and any litigation concerning this Lease
between the parties hereto shall be initiated in the county in which the
Industrial Center is located.
30. Subordination.
(a) This Lease, and any Option granted hereby, at Landlord's
option, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed
upon the Industrial Center and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Notwithstanding such subordination,
Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay
the rent and observe and perform all of the provisions of this Lease,
unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground Landlord shall elect to have this Lease and
any Options granted hereby prior to the lien of its mortgage, deed of
trust or ground
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lease, and shall give written notice thereof to Tenant, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust, or
ground lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease
or the date of recording thereof.
(b) Tenant agrees to execute any documents required to
effectuate an attornment, a subordination or to make this Lease or any
Option granted herein prior to the lien of any mortgage, deed of trust
or ground lease, as the case may be, Tenant's failure to execute such
documents within ten (10) days after written demand shall constitute a
material default by Tenant hereunder without further notice to Tenant
or, at Landlord's option, Landlord shall execute such documents on
behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact
and in Tenant's name, place and stead, to execute such documents in
accordance with this paragraph 30(b).
(c) Landlord shall use commercially reasonable efforts to
provide appropriate subordination, non-disturbance and attornment
agreements from any present or future mortgage holders and holders of
other superior interests, if any. Landlord shall provide Tenant with a
non-disturbance agreement from any ground lessor or mortgagee existing
on the date of this Lease prior to or within ten (10) days after
execution of this Lease by Landlord and Tenant. Landlord represents that
there are no ground lessors or mortgagees existing on the date of this
Lease.
31. Attorney's Fees.
31.1 If either party brings an action or proceeding to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
proceeding, action, or appeal thereon, shall be entitled to its reasonable
attorney's fees and such fees as may be awarded in the same suit or recovered in
a separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, "prevailing party" shall include, without limitation, a
party who obtains legal counsel or brings an action against the other by reason
of the other's breach or default, or who defends such action, and substantially
obtains or defeats the relief sought, whether by compromise, settlement,
judgment, or abandonment of the claim or defense by the other party.
31.2 The attorney's fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred in good faith.
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31.3 Landlord shall be entitled to attorney's fees, costs and
expenses incurred in the preparation and service of notices of default and
consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such default. Landlord and Tenant
agree that $350.00 is a reasonable sum per occurrence for legal services and
costs per preparation and service of a notice of default and that Landlord may
include $350.00 as additional rent due in each such notice of default as an
amount that must be paid to cure said default.
32. Landlord's Access. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times for the purpose of inspecting
same, showing the same to prospective purchasers, lenders, or tenants, and
making such alterations, repairs, improvements or additions to the Premises or
to the building of which they are part as Landlord may deem necessary or
desirable. Landlord may at any time place on or about the Premises or the
Building not more than two (2) ordinary "For Sale" signs and Landlord may at any
time during the last 120 days of the term hereof place on or about the Premises
any ordinary "For Lease" signs. All activities of Landlord pursuant to this
paragraph shall be without abatement of rent, nor shall Landlord have any
liability to Tenant for the same.
33. Auctions. Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises or the Common
Areas without first having obtained Landlord's prior written consent.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be
obligated to exercise any standard of reasonableness in determining whether to
grant such consent.
34. Signs. Tenant shall not place any sign upon the Premises or the
Industrial Center without Landlord's prior written consent. Under no
circumstances shall Tenant place a sign on any roof of the Industrial Center.
Tenant shall have the right, at its sole cost and expense, to install a sign on
the exterior of the Building identifying its name and logo. The graphics,
materials, color, design, lettering, size, location and specifications of
Tenant's signage shall be subject to the prior written approval of Landlord,
which approval shall not be unreasonably withheld or delayed, and the approval
of the City of Industry. The sign shall be installed and maintained, at Tenant's
sole cost and expense, pursuant to an installation and maintenance program
approved and supervised by Landlord. At the expiration or earlier termination of
this Lease, Landlord shall, at Tenant's sole cost and expense, cause the sign to
be removed and the exterior of the Building affected by the sign to be restored
to the condition existing prior to the installation of the sign. Landlord may
disapprove any signage that contains a name which relates to an entity or
individual which is of a character or reputation, or is associated with a
political orientation or faction, which is materially inconsistent with the
quality of the Industrial Center, or which would otherwise reasonably offend the
landlord of a comparable building or that would conflict with
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any covenants in leases of space in the Industrial Center. This signage right is
personal to the initially named Tenant under this Lease.
35. Merger. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation thereof, or a termination by Landlord, shall not work a
merger, and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
36. Consents. Except for paragraphs 33, 34 (except as otherwise provided
therein), 46 and 47 hereof, wherever in this Lease the consent of one party is
required to an act of the other party, such consent shall not be unreasonably
withheld or delayed.
37. Guarantor. In the event that there is a guarantor of this Lease,
said guarantor shall have the same obligations as Tenant under this Lease.
38. Quiet Possession. Upon Tenant paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease and all easements, covenants, conditions and
restrictions of record. The individuals executing this Lease on behalf of
Landlord represent and warrant to Tenant that they are fully authorized and
legally capable of executing this Lease on behalf of Landlord and that such
execution is binding upon all parties holding an ownership interest in the
Industrial Center.
39. Options.
39.1 Definition. As used in this paragraph, the word "Option" has
the following meaning: (1) the right or option to extend the term of this Lease
or to renew this Lease or to extend or renew any lease that Tenant has on other
property of Landlord; (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Industrial Center or other property of
Landlord or the right of first offer to lease other space within the Industrial
Center or other property of Landlord; (3) the right or option to purchase the
Premises or the Industrial Center, or the right of first refusal to purchase the
Premises or the Industrial Center, or the right of first offer to purchase the
Premises or the Industrial Center, or the right or option to purchase other
property of Landlord, or the right of first refusal to purchase other property
of Landlord or the right of first offer to purchaser other property of Landlord.
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39.2 Options Personal. Each Option granted to Tenant in this Lease
is personal to Tenant and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Tenant, provided,
however, the Option may be exercised by or assigned to any Tenant Affiliate as
defined in Paragraph 12.2 of this Lease. The Options herein granted to Tenant
are not assignable separate and apart from this Lease.
39.3 Multiple Options. In the event that Tenant has any multiple
options to extend or renew this Lease a later option cannot be exercised unless
the prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Tenant shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary,
(i) during the time commencing from the date Landlord gives to Tenant a
notice of default pursuant to Paragraphs 13.1(b) or 13.1(c) and
continuing until the default alleged in said notice of default is cured,
or (ii) during the period of time commencing on the day after a monetary
obligation to Landlord is due from Tenant and unpaid (without any
necessity for notice thereof to Tenant) continuing until the obligation
is paid, or (iii) at any time after an event of default described in
Paragraphs 13.1(a), 13.1(d), 13.1(e) or 13.1(f) (without any necessity
of Landlord to give notice of such default to Tenant), or (iv) in the
event that Landlord has given to Tenant three or more notices of default
under Paragraph 13.1(b), where a late charge has become payable under
Paragraph 13.4 for each of such defaults, or Paragraph 13.1(c), whether
or not the defaults are cured, during the 12 month period prior to the
time that Tenant intends to exercise the subject Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Tenant's inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Tenant under the provisions of an Option
shall terminate and be of no further force or effect, notwithstanding
Tenant's due and timely exercise of the Option, if, after such exercise
and during the term of this Lease, (i) Tenant fails to cure defaults
specified in Paragraph 13.1(b) prior to the expiration of the notice and
cure period provided for therein, or (ii) Tenant fails to commence to
cure a default specified in Paragraph 13.1(a) or 13.1(c) within 30 days
after the date that Landlord gives notice to Tenant of such default
and/or Tenant fails thereafter to diligently prosecute said cure to
completion, or (iii) Tenant commits a default described in Paragraphs
13.1(d),
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13.1(e) or 13.1(f) (without any necessity of Landlord to give notice of
such default to Tenant).
39.5 First Option. Landlord hereby grants to Tenant the option to
extend the term of this Lease for a five (5) year period commencing on the date
the prior term expires (the "First Option Period") upon each and all of the
following terms and conditions:
(a) Tenant gives to Landlord, and Landlord actually receives, on
a date which is prior to the date that the First Option Period would
commence (if exercised) by at least six (6) and not more than nine (9)
months, a written notice of exercise of the option to extend this Lease
for said additional term, time being of the essence. If said
notification of the exercise of said option is not so given and
received, this option shall automatically expire;
(b) The provisions of Paragraph 39, including the provision
relating to default of Tenant set forth in Paragraph 39.4, of this Lease
are conditions of this option;
(c) All of the terms and conditions of this Lease except where
specifically modified by this option shall apply, except that Tenant
shall have no further option to extend the term of this Lease other than
for the Second Option Period;
(d) Any prior Tenant that has not been expressly released from
liability under this Lease, and any guarantor of the Tenant's
performance hereunder, expressly reaffirms in writing the extension of
their liability for the term of the option; and
(e) The monthly Base Rent for each month of the First Option
Period shall be the Fair Market Rent (as defined below) of the Premises
as of the commencement of the First Option Period, but in no event less
than the monthly Base Rent scheduled to be paid during the month prior
to the commencement of the First Option Period.
39.6 Second Option. Landlord hereby grants to Tenant the option to
extend the term of this Lease for a five (5) year period commencing on the date
the First Option Period expires (the "Second Option Period") upon each and all
of the following terms and conditions:
(a) Tenant gives to Landlord, and Landlord actually receives, on
a date which is prior to the date that the Second Option Period would
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commence (if exercised) by at least six (6) and not more than nine (9)
months, a written notice of exercise of the option to extend this Lease
for said additional term, time being of the essence. If said
notification of the exercise of said option is not so given and
received, this option shall automatically expire;
(b) The provisions of Paragraph 39, including the provision
relating to default of Tenant set forth in Paragraph 39.4 of this Lease
are conditions of this option;
(c) All of the terms and conditions of this Lease except where
specifically modified by this option shall apply, except that Tenant
shall have no further option to extend the term of this Lease;
(d) Any prior Tenant that has not been expressly released from
liability under this Lease, and any guarantor of the Tenant's
performance hereunder, expressly reaffirms in writing the extension of
their liability for the term of the option; and
(e) The monthly Base Rent for each month of the Second Option
Period shall be the Fair Market Rent of the Premises as of the
commencement of the Second Option Period, but in no event less than the
monthly Base Rent scheduled to be paid during the month prior to the
commencement of the Second Option Period.
39.7 Fair Market Rent.
(a) The term "Fair Market Rent" as used in this Lease is defined
to mean the rent, including all escalations, at which tenants are
leasing non-sublease, non-encumbered, non-equity space comparable in
size and quality to the Premises for uses comparable to the uses
permitted under this Lease for the Option Period as to which Fair Market
Rent is being determined in the San Gabriel Valley, giving appropriate
consideration to the annual rental rates per square foot and the
standard of measurement by which the square footage is measured. In
determining Fair Market Rent it shall be assumed that:
(i) The Premises are in excellent condition and repair and
there shall be no deduction for depreciation, obsolescence or
deferred maintenance (but less reasonable wear and tear as long as
well maintained by Tenant).
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(ii) The Premises would be leased for the period of the
option being exercised by a tenant with the credit standing of
Tenant, as the same exists at that time.
(iii) The Premises would be leased on the same terms of this
Lease insofar as the obligations for repair, maintenance,
insurance and real estate taxes existed as of the expiration of
the original term of this Lease.
(iv) No deduction shall be given nor consideration given to
allowances for real estate brokerage commissions or free rent.
(v) The Premises will be used packing, assembly,
warehousing, distribution and office uses.
(b) Determination By Landlord. Landlord shall initially
determine the Fair Market Rent in each instance, and shall give Tenant
notice (the "Market Rent Notice") of such determination and the basis on
which such determination was made on or before the 60th day prior to the
date on which such determination is to take effect, or as soon
thereafter as is reasonably practicable.
(c) Disputes re Fair Market Rent. In the event that Tenant
notifies Landlord in writing, on or before the 20th business day
following any Market Rent Notice, that Tenant disagrees with the
applicable determination, Landlord and Tenant shall negotiate in good
faith to resolve such dispute within 10 business days thereafter (The
30th business day after any Market Rent Notice is referred to herein as
the "Outside Agreement Date.") If not resolved by the Outside Agreement
Date each party shall submit to the other its determination of Fair
Market Rent and the dispute shall be submitted to arbitration in
accordance with the following paragraph titled "Arbitration Procedures."
Until any such dispute is resolved, any applicable payments due under
this Lease shall correspond to Landlord's determination and, if Tenant's
determination becomes the final determination, Landlord shall refund any
overpayments to Tenant, within 5 business days following the final
resolution of the dispute.
(d) Arbitration Procedures.
(i) Landlord and Tenant shall each appoint one arbitrator
who shall by profession be a real estate broker who shall have
been active over the 5-year period ending on the date of such
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appointment in the leasing of properties similar to the Premises
in the surrounding area of Los Angeles County. The determination
of the arbitrators shall be limited solely to the issue of whether
Landlord's or Tenant's submitted Fair Market Rent for the Premises
is the closest to the actual Fair Market Rent for the Premises as
determined by the arbitrators, taking into account the
requirements of this subparagraph regarding the same. Each such
arbitrator shall be appointed within 15 days after the Outside
Agreement Date. Landlord and Tenant may not consult with either
such arbitrator prior to resolution.
(ii) The two arbitrators so appointed shall within 15 days
of the date of the appointment of the last appointed arbitrator,
meet and attempt to reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted Fair Market Rent, and
shall notify Landlord and Tenant of their decision, if any.
(iii) If the two arbitrators are unable to reach a decision,
the two arbitrators shall, within 30 days of the date of the
appointment of the last appointed arbitrator, agree upon and
appoint a 3rd arbitrator who shall be a broker who shall be
qualified under the same criteria set forth hereinabove for
qualification of the initial 2 arbitrators.
(iv) The 3 arbitrators shall, within 30 days of the
appointment of the 3rd arbitrator, reach a decision as to whether
the parties shall use Landlord's or Tenant's submitted Fair Market
Rent, and shall notify Landlord and Tenant thereof.
(v) The decision of the majority of the 3 arbitrators shall
be binding upon Landlord and Tenant.
(vi) If either Landlord or Tenant fails to appoint an
arbitrator within 15 days after the Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify
Landlord and Tenant thereof, and such arbitrator's decision shall
be binding upon Landlord and Tenant.
(vii) If the 2 arbitrators fail to agree upon and to appoint
a 3rd arbitrator, then the appointment of the 3rd arbitrator shall
be dismissed, and the matter to be decided shall be forthwith
submitted to arbitration under the provisions of the American
Arbitration Association, but subject to the instructions set forth
in this Lease.
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(viii) The cost of arbitration shall be paid by Landlord and
Tenant equally.
40. Security Measures. Tenant hereby acknowledges that Landlord shall
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Industrial Center. Tenant
assumes all responsibility for the protection of Tenant, its agents and invitees
and the property of Tenant and of Tenant's agents and invitees from acts of
third parties. Nothing herein contained shall prevent Landlord at Landlord's
sole option, from providing security protection for the Industrial Center or any
part thereof, in which event the cost thereof shall be included within the
definition of Operating Expenses, as set forth in paragraph 4.2(b).
41. Easements. Landlord reserves to itself the right, from time to time,
to grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so long
as such easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the use of the Premises or the Exclusive Truck Yard
Area by Tenant. Tenant shall sign any of the aforementioned documents upon
request of Landlord and failure to do so shall constitute a material default of
this Lease by Tenant without the need for further notice to Tenant.
42. Performance Under Protest. If at any time a dispute shall arise as
to any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the right
on the part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said party
to pay such sum or any part thereof, said party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
43. Authority. If Tenant is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity. If Tenant is a corporation, trust or
partnership, Tenant shall, within thirty (30) days after execution of this
Lease, deliver to Landlord evidence of such authority satisfactory to Landlord.
44. Cashier's Checks.
44.1 In the event that any check given to Landlord by Tenant shall
not be honored by the bank upon which it is drawn on two or more occasions, then
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Landlord, at its option may require all future payments to be made by Tenant
under this Lease to be made by Cashier's Checks.
44.2 Any payment made by Tenant pursuant to a written notice to pay
or be deemed in default under this Lease shall be made by Cashier's Check.
45. Amendments to Lease.
45.1 At such times as a rental adjustment is made to this Lease by
virtue of any provision of this Lease, the parties shall execute a written
amendment to this Lease to reflect said change.
45.2 Tenant agrees to make any non-monetary modifications to this
Lease that may be required by an institutional mortgagee of Landlord.
46. Storage Tanks.
46.1 Notwithstanding anything to the contrary in Paragraph 7.3
hereof, Tenant shall not install storage tanks of any size or shape in the
Premises, above or below ground, without the consent of the Landlord which can
be withheld in Landlord's sole discretion. If Landlord elects to grant its
consent, Landlord shall have the right to condition its consent upon Tenant
agreeing to give to Landlord such assurances that Landlord, in its sole
discretion, deems necessary to protect itself against potential problems
concerning the installation, use, removal and contamination of the Premises as a
result of the installation and/or use of such tank, including but not limited to
the installation of a concrete encasement for said tank. Tenant shall comply at
its expense with all applicable permit and/or registration requirements and
repair any damage caused by the installation, maintenance or removal of such
tank. Upon termination of the Lease, Tenant shall, at its sole cost and expense,
remove any tank from the Premises, remove and replace any contaminated soil or
materials (and compact or treat the same as then required by law) and repair any
damage or change to the Premises caused by said installation and/or removal.
Nothing contained herein shall be construed to diminish or reduce Tenant's
obligations under Paragraph 47.
46.2 Landlord shall have the right to employ experts and/or
consultants, at Tenant's expense, to advise Landlord with respect to the
installation, operation, monitoring, maintenance and removal and restoration of
any such tank.
46.3 Landlord has no current actual knowledge that any underground
storage tanks exist on the Premises as of the date of this Lease. For purposes
of this Paragraph 46.3, the current actual knowledge of Landlord means the
current actual knowledge of Mark Harryman, without duty of investigation or
inquiry. For purposes
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of Paragraphs 46 and 47 of this Lease, the term "Premises" shall include without
limitation the Exclusive Truck Yard Area.
47. Hazardous Materials.
47.1 Tenant's Covenants Regarding Hazardous Materials.
(a) Landlord's Prior Consent. Notwithstanding anything
contained in this Lease to the contrary, Tenant has not caused or
permitted, and shall not cause or permit any "Hazardous Materials" (as
defined in subparagraph (b) below) to be brought upon, kept, stored,
discharged, released or used in, under or about the Premises by Tenant,
its agents, employees, contractors, subcontractors, licensees or
invitees, unless (1) such Hazardous Materials are reasonably necessary
to Tenant's business and will be handled, used, kept, stored and
disposed of in a manner which complies with all "Hazardous Materials
Laws" (as defined in subparagraph (b) below); (2) Tenant will comply
with such other rules or requirements as Landlord may from time to time
impose, including without limitation that (i) such materials are in
small quantities, properly labeled and contained, (ii) such materials
are handled and disposed of in accordance with the highest accepted
industry standards for safety, storage, use and disposal, (iii) such
materials are for use in the ordinary course of business (i.e., as with
office or cleaning supplies), (3) notice of and a copy of the current
material safety data sheet is provided to Landlord for each such
Hazardous Material, and (4) Landlord shall have granted its prior
written consent to the use of such Hazardous Materials.
(b) Compliance with Hazardous Materials Laws. As used herein,
the term "Hazardous Materials" means any (1) oil, petroleum, petroleum
products, flammable substances, explosives, radioactive materials,
hazardous wastes or substances, toxic wastes or substances or any other
wastes, materials or pollutants which (i) pose a hazard to the Premises
or to persons on or about the Premises or (ii) cause the Premises to be
in violation of any Hazardous Materials Laws (as hereinafter defined);
(2) asbestos in any form, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls, or radon gas; (3)
chemical, material or substance defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," or "toxic
substances" or words of similar import under any applicable local, state
or federal law or under the regulations adopted or publications
promulgated pursuant thereto, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq.; the Resources
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Conservation Recovery Act, 42 U.S.C. Section 6901, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section
1801, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251, et seq.; Sections 25115, 25117, 25122.7, 25140,
25249.8, 25281, 25316 and 25501 of the California Health and Safety
Code; and Title 22 of the California Code of Regulations, Division 4.5,
Chapter 11; (4) other chemical, material or substance, exposure to which
is prohibited, limited or regulated by any governmental authority or may
or could pose a hazard to the health and safety of the occupants of the
Premises or the owners and/or occupants of property adjacent to or
surrounding the Premises, or any other Person coming upon the Premises
or adjacent property; and (5) other chemical, materials or substance
which may or could pose a hazard to the environment. As used here the
term "Hazardous Materials Laws" means any federal, state or local laws,
ordinances, regulations or policies relating to the environment, health
and safety, and Hazardous Materials (including, without limitation, the
use, handling, transportation, production, disposal, discharge or
storage thereof) or to industrial hygiene or the environmental
conditions on, under or about the Premises, including, without
limitation, soil, groundwater and indoor and ambient air conditions.
Tenant shall at all times and in all respects comply with all Hazardous
Materials Laws.
(c) Hazardous Materials Removal. Upon expiration or earlier
termination of this Lease, Tenant shall, at Tenant's sole cost and
expense, cause all Hazardous Materials brought on the Premises to be
removed from the Premises in compliance with all applicable Hazardous
Materials Laws. If Tenant or its employees, agents, or contractors
violates the provisions of the foregoing two paragraphs, or if Tenant's
acts, negligence, or business operations contaminate, or expand the
scope of contamination of, the Premises from such Hazardous Materials,
then Tenant shall promptly, at Tenant's expense, take all investigatory
and/or remedial action (collectively, the "Remediation") that is
necessary in order to clean up, remove and dispose of such Hazardous
Materials causing the violation on the Premises or the underlying
groundwater or the properties adjacent to the Premises to the extent
such contamination was caused by Tenant, in compliance with all
applicable Hazardous Materials Laws. Tenant shall further repair any
damage to the Premises caused by the Hazardous Materials contamination.
Tenant shall provide prior written notice to Landlord of such
Remediation, and Tenant shall commence such Remediation no later than
thirty (30) days after such notice to Landlord and diligently and
continuously complete such Remediation. Such written notice shall also
include Tenant's method, time and procedure for such Remediation and
Landlord shall have the right to require reasonable changes in such
method, time or procedure of the Remediation. Tenant shall not take any
Remediation in response to the presence of any Hazardous Materials in or
about the Premises
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or enter into any settlement agreement, consent decree or other
compromise in respect to any claims relating to any Hazardous Materials
in any way connected with the Premises, without first notifying Landlord
of Tenant's intention to do so and affording Landlord ample opportunity
to appear, intervene or otherwise appropriately assert and protect
Landlord's interests with respect thereto.
(d) Notices. Tenant shall immediately notify Landlord in
writing of: (i) any enforcement, cleanup, removal or other governmental
or regulatory action threatened, instituted, or completed pursuant to
any Hazardous Materials Laws with respect to the Premises; (ii) any
claim, demand, or complaint made or threatened by any person against
Tenant or the Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials; and
(iii) any reports made to any governmental authority arising out of any
Hazardous Materials on or removed from the Premises. Landlord shall have
the right (but not the obligation) to join and participate, as a party,
in any legal proceedings or actions affecting the Premises initiated in
connection with any Hazardous Materials Laws.
47.2 Indemnification of Landlord. Tenant shall indemnify, protect,
defend and forever hold Landlord harmless from any and all damages, losses,
expenses, liabilities, obligations and costs arising out of any failure of
Tenant to observe any of the covenants contained in paragraphs 46 and 47.
48. Landlord's Default.
Any damages or judgments arising out of Landlord's default of its
obligations under this Lease shall be satisfied only out of Landlord's interest
and estate in the Premises, and Landlord shall have no personal liability beyond
such interest and estate with respect to such damages or judgments.
49. Recovery of Concessions Upon Early Termination. In the event that
Tenant's right of possession of the Premises is terminated prior to the end of
the initial term by reason of default or abandonment of the Premises, then
immediately upon such termination, an amount shall be due and payable by Tenant
to Landlord equal to the unamortized portion as of that date (which amortization
shall exclude any Option Terms and shall be based on an interest rate of twelve
percent (12%) per annum) of the sum of (i) the cost of the Tenant Improvements,
(ii) the value of the free Base Rent (i.e., the Base Rent stated in this Lease
to be abated as an inducement to Tenant's entering into this Lease) enjoyed as
of that date by Tenant, and (iii) the amount of all commissions paid by Landlord
in order to procure this Lease.
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50. Easements and Restrictions of Record
50.1 Tenant accepts the Premises and Industrial Center subject to
the easements and covenants or restrictions of record.
50.2 Landlord and Tenant agree to cooperate and use their best
efforts to participate in traffic management programs generally applicable to
businesses located in the area which includes the Industrial Center and,
initially, shall encourage and support van and car pooling by Tenant's employees
to the fullest extent permitted by the requirements of Tenant's business.
Neither this Paragraph nor any other provision in this Lease, however, is
intended to or shall create any rights or benefits in any other person, firm,
company, governmental entity or the public.
51. Offer. Preparation of this Lease by Landlord or Landlord's agent and
submission of same to Tenant shall not be deemed an offer to lease. This Lease
shall become binding upon Landlord and Tenant only when fully executed by
Landlord and Tenant.
52. Waiver of Trial by Jury. LANDLORD AND TENANT HEREBY WAIVE TRIAL BY
JURY AND CONSENT TO TRIAL WITHOUT A JURY IN THE EVENT OF ANY ACTION, PROCEEDING
OR COUNTERCLAIM BROUGHT BY EITHER LANDLORD OR TENANT AGAINST THE OTHER IN
CONNECTION WITH THIS LEASE.
53. ERISA. Tenant hereby represents and warrants to Landlord that (i)
Tenant is not a "party in interest" (within the meaning of Section 3(14) of the
Employee Retirement Income Security Act of 1974, as amended) or a "disqualified
person" (within the meaning of Section 4975 of the Internal Revenue Code of
1986, as amended) with respect to any retirement or pension plan of The
Prudential Insurance Company of America, and (ii) no portion of or interest in
the Lease will be treated as a "plan asset" within the meaning of Regulation 29
CFR Section 2510.3-101 issued by the Department of Labor.
54. Guaranty. The obligations of Tenant under this Lease shall be
guarantied by JAKKS PACIFIC, INC., a Delaware corporation ("Guarantor"),
pursuant to a Guaranty in a form prepared by Landlord which shall be executed
and delivered to Landlord concurrently with Tenant's execution and delivery of
this Lease.
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
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THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES.
"LANDLORD" "TENANT"
- ---------- --------
GRAND AVENUE VENTURE, LLC, a California JP FERRERO PARKWAY, INC., a
limited liability company California corporation
By: /s/ FRANK MAXSON By: /s/ STEPHEN G. BERMAN
------------------------------- -------------------------------
Frank Maxson Stephen G. Berman
Principal President/C.O.O
By: By: /s/ JOEL M. BENNETT
------------------------------- -------------------------------
[Printed Name and Title] Joel M. Bennett
Executive Vice President/C.F.O
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