EXHIBIT 10.22
CONSENT TO SUBLEASE
This Consent (the "Consent") to Sublease is entered into this
30th day of August, 2001 by and between Condiotti Enterprises, a
California Corporation ("Lessor"), Gateway Financial Corporation, a
California Corporation (Lessee/ "Sublessor"), and BioMarin
Pharmaceutical Inc., a Delaware Corporation ("Sublessee"). Lessor,
Sublessor, and Sublessee will be referred to collectively as the
"Parties" with reference to the following facts:
RECITALS
Sublessor is the Lessee under a Lease dated February 14, 1996,
and subsequent Addenda and/or Amendments, (the "Master Lease") more
particularly described in the Sublease. Sublessor is subleasing to
Sublessee a portion of the Premises described in the Master Lease
known as 79 Digital Drive, Novato California, which consists of
approximately 25,658 square feet of office/warehouse space (see
Exhibit "B" to Sublease Agreement). Sublessor and Sublessee wish to
obtain the written consent of Lessor to the Sublease.
CONSENT
1. Consent. Subject to and specifically conditioned upon the terms and
conditions set forth herein, Lessor hereby grants his consent to the
Sublease.
2. No Release. This Consent does not release the Lessee or any person or
entity claiming by, through or under Lessee, from any covenants,
agreements, liabilities, and duties under the Lease, as it may be amended
from time to time, without respect to any provision to the contrary in the
Sublease.
3. Provisions of Lease and Sublease. This Consent does not constitute approval
by Lessor of any of the terms, covenants, conditions or provisions of the
Sublease. This Consent shall not be construed to amend the Lease in any
respect. Notwithstanding any language to the contrary in the Sublease, the
Parties acknowledge and agree that Sublessee is not an intended beneficiary
of the Master Lease or Sublease. The Parties further acknowledge and agree
that Sublessee cannot enforce, as against Lessor, any terms, covenant, or
conditions, of the Master Lease or Sublease.
4. Sublessor's Continuing Liability. Sublessor shall be liable to Lessor for
any default under the Lease, whether such default is caused by Sublessor or
Sublessee or anyone claiming rights under the Sublease, by or through
Lessee or Sublessee. The foregoing shall not be deemed to restrict or
diminish any right which Lessor may have against Sublessee for violation of
the Lease.
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5. Acceptance by Sublessor and Sublessee. Sublessor and Sublessee acknowledge
and agree that Lessor has agreed to execute this Consent based upon
Sublessor's and Sublease's acknowledgment and acceptance of its terms and
conditions.
6. Reservation of Rights. This consent is limited solely to this Sublease.
Lessor reserves the right to consent or to withhold consent and all other
rights under the Lease with respect to any further or additional subleases,
assignments or transfers of the Lease, including a sublease or any
assignment of the Sublease. Notwithstanding anything herein to the
contrary, any consent and all other rights under the Master Lease shall not
be unreasonably withheld by Lessor.
7. Sublessor and Sublessee. By executing this Consent, Sublessor and Sublessee
acknowledge and agree to be bound by all the terms and condition set forth
herein.
8. Sublessee shall not have the right to exercise any of the options to renew
or extend the Master Lease.
SUBLESSOR: SUBLESSEE: BIOMARIN
GATEWAY FINANCIAL CORPORATION PHARMACEUTICAL, INC.
By: /s/ Edward J. Coyne By: /s/ R.W. Anderson
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Title: President Title: V.P. Fin. and Admin.
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Date: August 30, 2001 Date: August 31, 2001
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LESSOR:
CONDIOTTI ENTERPRISES, INC.
By: /s/ illegible
---------------------------------
Title: Vice President - CFO
---------------------------------
Date: 09/10/01
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AGREEMENT OF SUBLEASE
1. PARTIES
This Sublease, dated July 27, 2001, is entered into by Gateway Financial
Corporation, a California Corporation, Inc. ("Sublessor"), and BioMarin
Pharmaceutical Inc., a Delaware Corporation ("Sublessee"), is subject to that
certain Standard Industrial Lease Agreement dated February 14, 1996, and addenda
and amendments (collectively, the "Master Lease") thereto between Condiotti
Enterprises, Inc., a California Corporation ("Lessor"), hereinafter the "Master
Lessor" and WorkRite Ergonomic Accessories, a California corporation ("Lessee").
A copy of the Master Lease is attached hereto as Exhibit "A-1".
2. PROVISIONS CONSTITUTING SUBLEASE
Except to the extent that this Sublease clearly indicates otherwise, all terms
and conditions of the Master Lease, are incorporated into and made a part of
this Sublease as if Sublessor were the Lessor thereunder and Sublessee were the
Lessee thereunder, and as if the Sublease Premises were the Premises thereunder,
except for the following terms and conditions which are excluded from this
Sublease: In the body of the Master Lease, Articles: 1, 2, 4, 5, 34, 37, 39,
Exhibit "A", Exhibit "B", Amendment to Lease dated March 21, 1996, the Addendum
to Lease dated February 5, 1997, the Addendum to Lease dated June 4, 1997, the
Addendum to Lease dated October 7, 1997, Amendment #4 (excluding Articles 2, 3,
4, 5 and 6 only) dated March 17, 1998, and Contingency Release dated April 22,
1998. Subject to the foregoing exceptions, Sublessee hereby assumes and agrees
to perform the Lessee's obligations under the Master Lease during the term of
the Sublease to the extent that such obligations are applicable to the Premises
as defined in Section 5 herein. Without limiting the foregoing, Sublessee shall
name Sublessor, and Master Lessor as additional
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insureds under the insurance policies required to be carried by Sublessee
pursuant to the incorporation of the insurance paragraphs of the Master Lease
(Article 12). If the Master Lease terminates as a result of a default or breach
by Sublessee under this Sublease, and/or the Master Lease, Sublessee shall be
liable to the Sublessor for the damage suffered as a result of such termination.
3. PRESERVATION OF MASTER LEASE
Sublessor agrees not to terminate or modify the Master Lease without the
Sublessee's written consent, which shall not be unreasonably withheld or
delayed. Sublessee and Sublessor shall each refrain from any acts or omission
that would result in the failure or breach of any covenants, provisions or
conditions of the Master Lease on the part of the Lessee under the Master Lease.
4. MASTER LESSOR'S CONSENT REQUIRED
Sublessee acknowledges that, pursuant to the provisions of the Master Lease,
Sublessor is required to obtain Master Lessor's written consent to this
Sublease, and accordingly, the obligations of the Sublessor and Sublessee under
this Sublease are expressly subject to Sublessor obtaining such consent.
5. PREMISES
Sublessor hereby subleases to Sublessee the Premises commonly described as 79
Digital Drive, an office/warehouse building, located in Novato, California,
consisting of approximately 25,658 square feet (see Exhibit "B"). Neither
Sublessor nor Sublessee shall rely on the square footage calculation as provided
herein, and each party shall have the right to independently verify the square
footage. The taking of possession or use of the Premises by Subleases for any
purpose shall conclusively establish that Sublessee has inspected the Premises
and accepts them as being in good condition and repair, subject to Section 11
herein. Subleases acknowledges that Sublessor and Meridian
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Commercial, Inc., the broker involved in this Sublease transaction, have not
made any representations or warranties as to the suitability or fitness of the
Premises for the conduct of Sublessee's business, or for any other purpose.
6. WARRANTY BY SUBLESSOR
Sublessor warrants and represents to Sublessee that (i) the Master Lease
attached as Exhibit "A-1" is a true and complete copy of the Master Lease, that
Master Lease is in full force and effect, and that the Master Lease has not been
amended or modified except as represented herein; (ii) Sublessor has neither
given nor received a notice of any claim of default or breach of any of the
provisions of the Master Lease; and (iii) Sublessor shall continue to perform
its obligations under the Master Lease throughout the Term of this Sublease.
7. BASE RENTAL/RENTAL SCHEDULE
Unless otherwise indicated herein, Sublessee shall pay to Sublessor as rent for
the Premises in advance not later than the first (1st) day of each calendar
month of the term of the Sublease without deduction, offset, prior notice or
demand, to Gateway Financial Corporation, 767 Lincoln Avenue, Suite #4, San
Rafael, CA 94901, or at such other place as Sublessor may designate in writing,
in lawful money of the United States as follows: Sublessee shall pay the first
month's rent of $32,000.00 to Sublessor within one (1) business day following
full Sublease execution.
The monthly rent payable by Sublessee throughout the Sublease term shall be:
November 1, 2001 to October 31, 2002: $32,000.00 per month
November 1, 2002 to October 31, 2003: $32,960.00 per month
November 1, 2003 to October 31, 2004: $33,948.00 per month
November 1, 2004 to October 31, 2005: $34,967.00 per month
November 1, 2005 to July 31, 2006: $36,016.00 per month
For purposes of this Sublease "Sublessee's Share" shall mean 50% and the "Base
Year" shall
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mean and refer to 1996, per the terms of the Master Lease.
8. SECURITY DEPOSIT
The amount of the Security Deposit provided in Article 3 of the Master Lease is
revised in this Sublease to be $96,000.00. This Security Deposit shall be paid
to the Sublessor as follows: $32,000.00 within one (1) business day following
full Sublease execution and $64,000.00 not later then October 1, 2001 which
shall serve as a non-interest bearing security for Sublessee's performance under
this Sublease.
9. TERM/POSSESSION
This Sublease shall commence November 1, 2001 (the "Sublease Commencement Date")
and shall terminate on July 31, 2006, or upon the expiration or earlier
termination of the Master Lease. Promptly after delivery of possession of the
Premises to Sublessee, Sublessor shall provide Sublessee with a written
memorandum affirming the Commencement Date. As of the Sublease Commencement Date
Sublessee accepts the Premises in its "as-is" condition and repair, except as
indicated in Section 11 (Condition of Premises) and Section 12 (Tenant
Improvements) herein. In the event Sublessor cannot deliver the Premises to
Subleases on or before February 1, 2002, including the failure of Sublessor to
obtain the Master Lessor's consent to this Sublease, then Sublessee may, at
Sublessee's option, by written notice to Sublessor within ten (10) days
thereafter, cancel this Sublease, in which event neither party shall have any
further obligation to the other, and all deposit monies shall be returned to
Sublessee without offset or deduct.
10. USE
The Premises shall be used and occupied by the Sublessee as follows: Warehouse
for cGMP (current Good Manufacturing Practices, a FDA Standard) materials,
quality control test laboratories for cGMP materials, cold storage of research
materials (primarily proteins), central
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storage of research and development materials, storage of administrative
records, administrative offices and spaces for the functions outlined herein,
wet and dry laboratories for various purposes, and other office storage
functions and for no other purpose (unless Sublessee receives Sublessor's and
Master Lessor's approval per the terms and conditions of the Master Lease).
11. CONDITION OF PREMISES
Sublessor, at Sublessor's sole cost and expense, shall deliver the Premises with
the following as of the Sublease Commencement date: (1) the roof shall be in
good condition and repair, and leak free; (2) all HVAC units for the Premises
shall be in good operating condition and repair, and fully serviced per
manufacturers specifications; (3) the existing restrooms shall meet current
applicable governmental requirements; including without limitation those under
the Americans with Disabilities Act; otherwise Sublessor shall be responsible
for the costs to upgrade the restrooms to meet the requirements; (4) and
Sublessor shall paint the interior of the warehouse on both the first and second
floors. Sublessor will install an elevator to access the second floor if
required by any federal, state or local government agency for Sublessee's
occupancy of the Premises, though not in the event that Sublessee's occupancy in
the Premises is considered by the applicable government agency to be a change in
use over the previous use, thus triggering the requirement for the elevator.
Sublessor will use its best efforts to have the Master Lessor paint the exterior
of the Premises within two (2) years of the Sublease Commencement Date.
12. TENANT IMPROVEMENTS
Sublessor shall provide Sublessee with an allowance in the amount of $31,188.00
(the "Tenant Improvement Allowance") for improvements to the Premises. Said
Tenant Improvement Allowance shall be paid by Sublessor to Sublessee upon
receipt of invoices for completed work
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and lien releases in a form subject to Sublessor's reasonable approval. Subject
to Article 7 (Alterations: Liens) of the Master Lease, Sublessor shall have the
right to reasonably approve Sublessee's tenant improvement plans and
specifications prior to the commencement of the construction of the tenant
improvements. Sublessee shall contract for the construction of the tenant
improvements with a bondable and licensed contractor of Sublessee's choice
subject to the Sublessor's reasonable approval. Subject to Master Lessor's
approval, Subleases shall have the right to install an emergency back-up power
generator adjacent to the Premises. Sublessee shall provide plans and
specifications for the generator to Sublessor for Sublessor's reasonable
approval. Sublessee shall be responsible for obtaining all governmental
approvals associated with the installation of the generator.
13. MASTER LEASE NOTICES
Sublessor and Sublessee each agree to promptly deliver to the other copies of
any and all notices of default, notices or other correspondence that it sends to
or receives from Master Lessor relating to the Premises or this Sublease and
further agrees, notwithstanding Section 15 of this Sublease to the contrary, to
so deliver same in the manner most appropriate to insure that each party will be
able to respond to any of such notices or other correspondence from the Master
Lessor within any time period set forth the in the Master Lease.
14. DEFAULT UNDER MASTER LEASE
In the event that Sublessor defaults under its obligations to be performed under
the Master Lease, Sublessee shall have the right to, but not obligation, to cure
any monetary default of Sublessor on behalf of Sublessor described in any notice
of default within ten (10) days after delivery of such default notice to
Sublessee. If Sublessee cures such default on behalf on Sublessor, Sublessor
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shall reimburse Sublessee for such amounts with ten (10) day after Sublessee's
notice to and demand therefor from Sublessor together with any late charge
specified in the Master Lease.
15. NOTICES
All notices or demands, which may or are required or permitted to be given by
either party to the other hereunder shall be in writing. All notices and demands
between Sublessor and Sublessee shall be hand delivered or sent by United States
mail, certified with return receipt requested, postage prepaid, addressed to the
parties at the addresses designated below, or to such other places as may be
designated from time to time by the parties pursuant to the provisions of this
section.
SUBLESSEE SUBLESSOR
BioMarin Pharmaceutical, Inc. Gateway Financial Corporation
371 Bel Marin Keys Boulevard 767 Lincoln Avenue, Suite 4
Novato, CA 94949 San Rafael, CA 94901
Attention: William Anderson, CFO Attention: Edmund Coyne, President
(415) 884-6700 fax (415)884-7889 (415) 453-0451 fax (415) 453-0465
16. BROKER PARTICIPATION
The parties acknowledge that Meridian Commercial, Inc. is the only broker
who negotiated this Sublease and agree that Sublessor shall be responsible
for the payment of all brokerage commissions to said broker, and that
Sublessee shall have no responsibility therefor. As part of the
consideration for the granting of this Sublease, Sublessor and Sublessee
represent and warrant to each other, that, to their knowledge, no other
broker, agent or finder negotiated or was instrumental in negotiating or
consummating this Sublease on behalf of Sublessor or Sublessee, and that
Sublessor and Sublessee know of no other real estate broker, agent or
finder who is or might be entitled to a commission or compensation in
connection with this Sublease. Each party
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agrees to indemnify and hold harmless the other party from and against any
damages resulting from any claims that may be asserted against the other
party by any broker, finder or other person, with whom the indemnifying
party has purportedly dealt.
17. SIGNAGE
Subject to Article 22 (Signs) of the Master Lease, and subject to
Sublessor's written approval, which shall not be unreasonably withheld,
Sublessee, at its sole cost and expense and its option, shall have the
right to install signage in accordance with the project master signage
program.
18. PARKING
Sublessee, its employees, representatives, guests and invitees shall have the
right to use the parking adjacent to the Premises on an unassigned and
unreserved basis. Sublessor has confirmed that there are currently approximately
140 parking spaces in the immediate vicinity of the Premises and the building at
81 Digital Drive.
19. MISCELLANEOUS
A. Defined Term. All capitalized terms used herein without definition
shall have the meanings given them in the Master Lease.
B. Amendment. No amendment, modification or alteration of terms hereof
shall be binding unless the same shall be in writing, dated subsequent
to tile date hereof and duly executed by the parties.
C. Attorneys' Fees. In the event any litigation, arbitration, mediation
or other proceeding ("Proceeding") is initiated by any party against
any other party to enforce, interpret or otherwise obtain judicial or
quasi-judicial relief in connection with this Sublease, the
substantially prevailing party or parties in such proceeding shall be
entitled to recover from the unsuccessful party or parties all costs,
expenses and reasonable attorney's fees relating to or arising out of
such Proceeding (whether or not the Proceeding results in judgement),
including any post-judgement or post award Proceeding, including,
without limitation, one to enforce any judgement or award resulting
from any such Proceeding. Any such judgement or award shall contain a
specific provision for the recovery of all such subsequently incurred
costs, expenses and reasonable attorneys' fees.
D. Successors and Assigns. This Sublease shall be binding upon and inure
to the benefit of parties hereto and their respective successors and
assigns in accordance with the terns of this Sublease.
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E. Time is of the Essence. Time is of the essence in the performance by
the Sublessee of its obligations hereunder.
F. Entire Agreement. The terms and provisions of all schedules and
exhibits described herein and attached hereto are hereby made a part
hereof for all purposes. This Sublease constitutes the entire
agreement of the parties with respect to the subject matter hereof,
and all prior correspondence, memoranda, agreements or understandings
(written or oral) with respect hereto are merged into and superseded
by this Sublease.
G. Severability. In any term or provision of this Sublease, or
application thereof to any person or circumstances, shall to any
extent be invalid or unenforceable, the reminder of this Sublease, or
the application of such provision to persons or circumstances other
than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each provision of this Sublease shall be valid
and shall be enforceable to the extent permitted by law.
H. Additional Documents and Acts. Without further consideration, each
party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all the terms,
provisions, and conditions of this Sublease and the transactions
contemplated hereby.
I. Counterpart. This Sublease may be executed in counterparts, each of
which (when delivered) shall be the same agreement. Only one fully
executed counterpart need be produced in order to prove this Sublease.
The parties may execute this Agreement by executing signature pages
and authorizing them to be attached to the body of this Agreement.
J. Inconsistency. In the event of any inconsistency or conflict between
the provisions of the Master Lease and the terms of this Sublease, the
terms of this Sublease shall control.
SUBLESSOR: Gateway Financial SUBLESSEE: BioMarin
Corporation Pharmaceutical Inc.
By: /s/ Edward J. Coyne By: /s/ R. W. Anderson
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Title: President Title: V.P. Fin. and Admin.
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Date: August 30, 2001 Date: August 31, 2001
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EXHIBIT A-1
STANDARD INDUSTRIAL LEASE
THIS LEASE, made this 14 day of February, 1996, between Condiotti
Enterprises, Inc., a California corporation, with offices at 2880 Cleveland
Avenue, Suite B, Santa Rosa, California 95406, as "Lessor," and WorkRite
Ergonomic Accessories, a California corporation, with offices to be located at
77 Digital Drive, as "Lessee."
For and in consideration of the rents, covenants and agreements hereinafter
agreed by Lessee to be paid, kept and performed, Lessor leases unto Lessee and
Lessee hires from Lessor the following described Premises, the "Premises"
together with appurtenances. situated in the building "Building" located at 77
Digital Drive in the City of Novato, County of Marin, State of California.
The Premises are approximately 2,235 sq. ft. first floor office, 2,500 sq.
ft. second floor office and 13,000 sq. ft. first floor warehouse (17,735 sq. ft.
total) of the Building a indicated on Exhibit "B", attached hereto.
The said Building is more particularly described in Exhibit "A" attached
hereto and made a part hereof.
Said hiring and letting is upon the following terms and conditions:
1. TERM: POSSESSION:
a. The term of this Lease shall begin with the "Commencement Date",
May 1, 1996, for the Premises, and the term shall continue until
July 31, 2001. Lessee shall be tendered occupancy of the Premises as
of the stipulated Commencement Date. In the event the improvements to
the Premises pursuant to section 39 herein are completed prior to
May 1, 1996, and a certificate of occupancy is issued, Lessee shall
have the right to take possession of the Premises without advancing
the lease Termination Date.
b. Lessor shall keep Lessee informed of any changes in the date for
occupancy.
c. If Lessor shall not have tendered possession of the Premises to Lessee
such that the occupancy date thereof would be more than sixty (60)
days after the target date set forth in Paragraph A above, Lessee may
at Lessee's option by notice in writing to Lessor cancel this Lease,
in which event the parties shall be discharged from all obligation
hereunder. In the event this Lease is cancelled by Lessee, due to
Lessor's failure to diligently pursue the work on the Premises to be
performed by it, Lessor shall be discharged from all obligations under
the Lease and shall not be liable for any other costs or damages which
Lessee may suffer except for return of all advance rental payments and
security deposits made by Lessee.
2. RENT:
a. Starting with the Commencement Date, Lessee shall pay to Lessor Rent
for the Premises in the amount of Thirteen Thousand One Hundred
Thirty-Eight and 50/100 Dollars ($13,138.50) each month, the fixed
minimal rental hereunder. The Fixed Minimal Monthly Rent shall be paid
in advance on the first (1st) day of each month during the term
hereof. Lessor acknowledges receipt of Thirteen Thousand One Hundred
Thirty-Eight and 50/100 Dollars ($13,138.50) on the execution of this
Lease, which shall be applied to the first month rent due hereunder.
b. If the commencement date or the termination date does not fall on the
first or last day of the month, or if Lessee with Lessor's consent
occupies the Premises prior to the Commencement Date or terminates on
a date other than the last day of a month, Lessee shall pay rent for
such partial month prorated on the basis of a thirty (30) day month.
c. The fixed minimal rental hereunder shall be increased during the term
hereof as hereinafter provided, but in no event shall any adjustment
to rent result in a reduction below the initial fixed minimal rent or
any subsequently determined rent, whichever is higher. Rent shall be
payable in lawful money of the United States to Lessor at the address
hereinabove set forth or to such other persons or at such other places
as Lessor may designate in writing.
d. In consideration of Lessee executing this lease agreement, Lessee
shall have the right to occupy the premises on a rent free basis for
the second, third and fourth months of the lease term.
3. SECURITY DEPOSIT:
Lessee shall deposit with Lessor upon execution hereof the sum or Thirteen
Thousand One Hundred Thirty-Eight and 50/100 Dollars ($13,138.50) as
security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder or
otherwise defaults with respect to any provision of this Lease, Lessor 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 Lessor may become obligated by reason of Lessee's default, or to
compensate Lessor for any loss or damage which Lessor may suffer thereby.
If Lessor so uses or applies all or any portion of said deposit, Lessee
shall within ten (10) days after written demand therefor deposit cash with
Lessor in an amount sufficient to restore said deposit to the full amount
hereinabove stated and Lessee's failure to do so shall be a material breach
of this Lease. Lessor shall not be required to keep said deposit separate
from its general accounts. If Lessee performs all of Lessee's obligations
hereunder, said deposit, or so much thereof as has not therefore been
applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or at
Lessor:_Lessee:_
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Lessor's option, to the last assignee, if any, of Lessee's interest
hereunder) at the expiration of the initial five (5) year term of this
Lease in the event Lessee has not exercised its option to extend the term
of this Lease, and after Lessee has vacated the Premises. In the event
Lessee has not exercised its option to extend the term of this Lease, such
security deposit shall be applied as a credit towards the security deposit
owed by Lessee under the extended term of this Lease. No trust relationship
is created herein between Lessor and Lessee with respect to said Security
Deposit.
4. USE:
The Premises the hereby leased to Lessee upon the express condition that
Lessee shall use said Premises for administrative offices, manufacturing
and assembly of office furniture, sales, warehousing and related uses.
Lessee agrees that the said Lessee's business shall be established and
conducted through the term hereof in a first class manner; that Lessee will
not use the demised Premises for, or carry on or permit upon said Premises
any offensive, noisy or dangerous trade, business, manufacture or
occupation or any nuisance, or anything against public policy, nor permit
any auction sale to be held or conducted on or about said Premises; that
Lessee shall not commit, or suffer to be committed, any waste upon the
Premises; that Lessee will not do or suffer anything to be done upon said
Premises which will cause structural injury to said Premises or the
building of which same form a part; that said Premises will not be
overloaded and that no machinery, apparatus or other appliance shall be
used or operated in or upon the Premises which will in any manner injure,
vibrate or shake said Premises or the building of which it is a part; that
no use will be made of the Premises which will in any way impair the
efficient operation of the sprinkler system (if any) within the building
containing the Premises; that Lessee will not vacate or abandon said
Premises during the term hereof unless pursuant to an assignment of this
Lease or subletting of the Premises; Lessee further agrees not to use or
permit the use of the Premises or any part thereof, for any immoral or
other purpose prohibited by law or which will increase the existing rate of
insurance (or if a newly constructed building, lien the initial rate of
insurance) upon the building in which the Premises may be located, or cause
a cancellation of any insurance policy covering said building or any part
thereof. If any act on the part of Lessee or use of the Premises by Lessee
shall cause, directly or indirectly, any increase of Lessor's insurance
expense, said additional expense shall be paid by Lessee to Lessor upon
demand. No such payment by Lessee shall limit Lessor in the exercise of any
other rights or remedies, or constitute a waiver of Lessor's right to
require Lessee to discontinue such act or use. No use shall be made or
permitted to be made of the Premises or any part thereof, and no act done
therein, which may disturb the quiet enjoyment of any other tenant in the
building of which the Premises are a part. Lessee, at Lessee's sole cost
and expense, agrees to do all things necessary to maintain the Premises, in
a clean, neat and sanitary manner; and repair and maintain the interior of
the Premises forming a part of the building in compliance and conformity
with all laws and ordinances, municipal, state, federal and/or any other
governmental board or authority, present or future, in anywise relating to
the condition, use or occupancy of the Premises throughout the entire term
of this lease and to the perfect exoneration from liability of Lessor, or
if due to Lessee's specific use of the Premises any governmental authority
requires alterations, Lessee shall make such alternations at its sole cost
and expense, excluding structural changes not related to or affected
Lessee's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Lessee in any action or proceeding against
Lessee, whether Lessor be a party thereto or not, that Lessee has violated
any such law, ordinance, requirement or order in the use of the Premises,
shall be conclusive of that fact as between Lessor and Lessee.
5. CONDITION OF PREMISES:
Lessor shall deliver the Premises to Lessee clean and free of debris
(broomswept floors, windows washed, HVAC grills cleaned, etc.) on the
Commencement Date and warrants to Lessee that the interior plumbing,
interior electrical, and interior sewage systems, the heating and air
conditioning installation. the lighting (including replacement or burnt out
light fixtures) and loading doors, if any, in the Premises shall be in good
operating condition on the Commencement date. In the event a non-compliance
with said warranty exists as of the Commencement Date, Lessor shall
promptly, after receipt of written notice from Lessee setting forth the
nature and extent of such non-compliance, rectify the same at Lessor's sole
cost and expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within three (3) months after the
Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense.
6. REPAIRS:
a. Repairs by Lessee:
Lessee agrees at its own cost and expense to maintain, repair and keep
the interior of the Premises forming a part of the building, and all
appurtenances (including interior wiring, interior plumbing, interior
sewage system, heating and air cooling installation, all glazing in or
bordering the Premises and any store front), in good condition and
repair during the term of this Lease, excepting capital replacement or
improvement of building systems that have outlived their useful life
in which event Lessor will be responsible. Lessor is responsible for
foundations, and structural portions of the Premises and damage to
such Premises by fire, earthquake, civil insurrection, and acts of God
or the elements. In the event Lessee should fail to make the repairs
required of Lessee forthwith upon notice by Lessor, Lessor, in
addition to all other remedies available hereunder or by law, and
without waiving any said alternative remedies, may make same and
Lessee agrees to repay Lessor the cost thereof as part of the rental
(payable as such) on the next day on which rent becomes due, and
failure to pay same shall carry with it the same consequences as
failure to pay any installment of rental. Lessee agrees during the
full term of this Lease, at its own cost and expense, to make all
repairs and replacements of whatever kind or nature, either to the
interior or exterior of said Premises, rendered necessary by reason of
any act or omission of Lessee or its agents, servants or employees.
Upon lease termination, Lessee shall surrender unto Lessor the
Premises in the same condition as received, ordinary wear and tear and
damage by fire, earthquake, civil insurrection, acts or God or the
elements alone excepted. Notwithstanding the foregoing, Lessor shall
repair damages to the Premises caused by acts or omissions of Lessor
or it's authorized representatives or agents or the Lessor's failure
to perform its obligations under Paragraph b, herein below.
Lessor:_Lessee:_
3
b. Repairs by Lessor:
Lessor agrees, after written notice of the necessity therefor, and
should the same not be caused by the gross negligence or willful
misconduct of Lessee, to initiate necessary repairs to the sprinkler
system, foundations and other structural portions of the Premises
forming a part of the building; the common areas, if any; and the
roof, exterior walls, bearing walls, window frames, gutters and
downspouts, subflooring parking area, landscaping and all wiring,
plumbing and sewage system exterior to the Premises, within thirty
(30) days of notification thereof, except in the event of any
emergency Lessor will make repairs as soon as reasonably possible.
c. If Lessor fails to perform its obligation as to any and all repairs
and maintenance of the Premises within thirty (30) days notification
of the necessity of the same, Lessee may perform Lessor's obligations
and have the right to be reimbursed for the sum it actually expands in
the permanence of Lessors obligations.
7. ALTERNATIONS: LIENS:
Lessee agrees not to make any structural alterations of, changes in or
additions to the Premises. Lessee agrees not to make any non-structural
alterations of, changes in or additions to the Premises of a cost in excess
of Five Thousand Dollars ($5,000) without the prior written consent of
Lessor. Lessee agrees that should Lessor give written consent, all
alterations, additions and improvements, including fixtures, made in, to or
on the Premises, except unattached movable business fixtures, shall be the
property of Lessor at termination of Lease and shall remain upon and be
surrendered with the Premises. If Lessor shall require to have the Premises
or any part or parts thereof restored to their condition when the Premises
were delivered to Lessee then Lessor shall notify Lessee thereof together
with Lessor's written consent to any alterations or changes to the
Premises, and if Lessor shall so desire, Lessee shall so restore the
Premises or such part or parts thereof by the end of the term of this
Lease, entirely at Lessee's own cost and expense.
Lessee agrees that if any such alterations, changes or additions are to be
made, same shall not be commenced until two (2) days after receipt of
written consent of Lessor required by this paragraph, in order that Lessor
may post appropriate notice to avoid liability on account thereof. Lessee
agrees to indemnify and save harmless Lessor from all liens, claims or
demands arising out of any work performed, materials furnished, or
obligations incurred by or for Lessee upon the Premises during said term,
and agrees not to suffer any such lien or other lien to be created.
8. UTILITIES:
Lessee shall pay far all gas, heat, light, power, telephone, refuse
service, and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately
metered to Lessee, Lessee shall pay a pro-rata proportion to be determined
by Lessor of all charges jointly metered with other Premises.
9. ENTRY AND INSPECTION:
Lessee agrees that Lessor and his agents may enter upon the Premises at
reasonable times and upon reasonable notice to inspect the same, to submit
them to a prospective purchaser, lender, or lessee, or to make any changes
or alterations or repairs which Lessor shall consider necessary for the
protection, improvement or preservation thereof, or of the building in
which the Premises are situated, or to make changes in the plumbing,
wiring, meters or other equipment, fixtures or appurtenances of the
building, or to post any notice provided for by law, or otherwise to
protect any and all rights of Lessor; and Lessor shall have the right to
erect and maintain all necessary or proper scaffolding or other structures
for the making of such changes, alterations or repairs (provided the
entrance to the Premises shall not be blocked thereby and that such work
shall be completed with diligence and dispatch) and there shall be no
liability against Lessor for damages thereby sustained by Lessee, nor shall
Lessee be entitled to any abatement of rental by reason of the exercise by
Lessor of any such rights herein reserved. Nothing herein contained shall
be construed to obligate Lessor to make any changes, alterations or
repairs. Lessee, further agrees that at any time after six (6) months prior
to the termination of this Lease, Lessor may place thereon any usual or
ordinary "To Let" or "To Lease" signs.
10. ASSIGNMENT AND SUBLETTING:
a. Lessor's Consent Required: Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise
transfer or encumber all or any part of Lessee's interest in this
Lease or in the Premises without Lessor's prior written consent, which
Lessor shall not unreasonably withhold. Lessor shall respond to
Lessee'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 breach of
this Lease.
b. Lease Affiliate: Notwithstanding the provisions of paragraph "A"
hereof, Lessee may assign this Lease or sublet the Premises or any
portion thereof, without Lessors consent, to any corporation which
controls, is controlled by or is under common control with Lessee, or
to any corporation resulting from the merger or consolidation with
Lessee, or to any person or entity which acquires all the assets of
Lessee as a going concern of the business first is being conducted on
the Premises, provided in the case of an assignment that said assignee
assumes, in full, are obligations of Lessee under this Lease.
c. No Release of Lessee: Regardless of Lessor's consent, no subletting or
assignment shall release Lessee of Lessee's obligation or alter the
primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder, unless Lessor
specifically consents to Release of Liability. The acceptance of rent
by Lessor from any other person shall not be deemed to be a waiver by
Lessor of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Lessee or any
successor of Lessee to the performance of any of the terms hereof,
Lessor may proceed directly against Lessee without the necessity of
exhausting remedies against said assignee. Any subsequent assignment,
sublease, amendment or modification of this lease with assignees or
successors of lease, made without Lessee's written consent shall
relieve Lessee from liability under this lease.
Lessor:_Lessee:_
4
d. Attorney's Fees: In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or
subletting, or if Lessee shall request the consent of Lessor for any
act Leasee proposes to do, so long that Lessee is not in default under
any of the terms and conditions of the lease agreement, then Lessee
shall pay Lessor's reasonable attorney's fees incurred in connection
therewith, not to exceed $500.00 for each proposed assignment or
sublet.
11. HOLD HARMLESS:
This Lease is made upon the express condition that Lessee agrees to keep,
save and hold Lessor free from all liability, penalties, losses, damages,
costs, expenses, causes of action, claims and/or judgments arising by
reason of any injury or damage to any person or persons, including without
limitation, Lessee, its servants, agents and employees, or property of any
kind whatsoever and to whomsoever belonging, including without limitation,
Lessee's, its servants', agents', and employees', from any cause or causes
whatsoever, including leakage, while in, upon or in any way connected with
said demised Premises, of its appurtenances during the term of this Lease
or any occupancy hereunder, Lessee hereby covenanting and agreeing to
indemnify, protect and save Lessor harmless from all liability, loss costs
and obligations on account of or arising out of any such injuries or
losses, however incurring.
Lessee, as a material part of the consideration to be rendered to Lessor,
hereby waives all claims against Lessor for damages to goods, wares and
merchandise in, upon of about the Premises and for injuries to Lessee, his
agents or third persons in or about the Premises from any cause arising at
any time including, without limiting the generality of the foregoing,
damages arising from acts or omissions of other tenants of the building of
which the Premises are a part.
Notwithstanding the foregoing, in no event shall the Lessee be liable for
damages or injury occasioned by the gross negligence or intentional acts or
omissions of the Lessor or of Lessor's designated agents, servants or
employees in which case the Lessor shall hold the Lessee harmless from all
damages arising out of the same.
A parties obligation under this paragraph shall be limited to the sum that
exceeds the amount of insurance proceeds, if any received by the party
being indemnified.
12. INSURANCE:
a. Liability Insurance: Lessee shall, at Lessee's expense, obtain and
keep in force during the term of this Lease a policy of Combined
Single Limit, Bodily Injury and Property Damage insurance insuring
Lessor and Lessee against any liability arising out of the ownership,
use, occupancy, or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be a combined single limit
policy in an amount not less than $2,000,000 per occurrence. The
policy shall insure the risks assumed by Lessee of the indemnity
provision of Paragraph 9 and 11. The limits of said insurance shall
not, however, limit the liability of Lessee hereunder.
b. Property Insurance: Lessee shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or
damage to its fixtures, equipment, tenant improvements, inventory and
other contents stored in the Premises in the amount of the full
replacement value thereof, as the same may exist from time to time.
c. Insurance Policies. Insurance required hereunder shall be in companies
holding a "General Policyholders Rating" of at least B plus, or such
other rating as may be required by a lender having a lien on the
Premises, as set forth in the most current issue of "Best's Insurance
Guide". The insuring party shall deliver to the other party copies of
policies of such insurance or certificates evidencing the existence
and amounts of such insurance with loss payable clauses as required by
this paragraph 12. No such policy shall be cancelable or subject to
reduction of coverage or other modification except after thirty (30)
days' prior written notice to Lessor. If Lessee is the insuring party,
Lessee shall, at least thirty (30) days prior to the expiration of
such policies, furnish Lessor with renewals or "binders" thereof, or
Lessor may order such insurance and charge the cost thereof to Lessee,
which amount shall be payable by Lessee upon demand.
d. Waiver of Subrogation: Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against
the other and against the officers, employees, agents and
representatives of the other for loss or damage arising out of or
incident to the perils insured against under paragraph 12, which
perils occur in, an or about the Premises, whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors
and/or invites. Lessee and Lessor shall, upon obtaining the policies
of insurance required hereunder, give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
e. Fire and Extended Coverage Insurance: At all times from and after the
date of commencement of this Lease, Lessor shall keep the building
which constitutes a part of the Premises insured for the mutual
benefit of Lessor and Lessee against (i) loss or damage by fire and
such other risks as may be included in a standard form of extended
coverage insurance from time to time available, in amounts sufficient
to prevent Lessor or Lessee from becoming a co-insurer within the
terms of the applicable policies and, in any event. In an amount not
less than one hundred percent (100%) of the then full replacement
value of the building, together with an addendum thereto providing for
six (6) month's rental income coverage payable to Lessor, (ii) loss or
damage from leakage of sprinkler systems now or hereafter installed in
the building in such amount as Lessor shall reasonably establish, and
(iii) loss or damage resulting from explosion of steam boiler, air
conditioning equipment, pressure vessels or similar apparatus, now of
hereafter installed in the building by Lessor, in such amount as
Lessor shall reasonably establish.
Lessor_:Lessee:_
5
f. Notice by Lessee: Lessee agrees to give prompt notice to Lessor with
respect to all events occurring upon the Premises which may be the
subject of claims on insurance policies, whether policies are being
maintained by Lessor or by Lessee.
13. PERSONAL PROPERTY TAXES:
a. Lessee shall pay prior to delinquency all taxes assessed against and
levied upon trade fixtures, furnishing, equipment and all other
personal property of Lessee contained in the Premises or elsewhere as
it may affect the Premises. When possible, Lessee shall cause said
trade fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor.
b. If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable
to Lessee within ten (10) days after receipt of a written statement
selling forth the taxes applicable to Lessee's property.
14. DEFAULTS: REMEDIES:
a. Defaults: The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by
Lessee:
i. The vacating or abandonment of the Premises by Lessee or assignee
or sublessee as applicable.
ii. The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due,
where such failure shall continue for a period of ten (10) days
after written notice thereof from Lessor to Lessee. In the event
that Lessor serves Lessee 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.
iii The failure by Lessee to observe or perform any conditions or
provisions of this Lease to be observed or performed by Lessees,
other than described in paragraph (ii) above, where such failure
shall continue for a period of thirty (30) days after written
notice thereof from Lessor to Lessee; provided, however, that if
the nature of Lessee's default is such that more than thirty (30)
days are reasonably required for its cure, that Lessee shall not
be deemed to be in default if Lessee commenced such cure within
said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
iv. (a) The making by Lessee of any general arrangement or assignment
for the benefit of creditors; (b) Lessee becomes a "debtor" as
defined in 11 U.S.C. 101 or any successor statute thereto
(unless, in the case of a petition filed against Lessee, the same
is dismissed within sixty [60] days); (c) the appointment of a
trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Leassee's interest
in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (d) the attachment, execution or other
judicial seizure of substantially all of Lessee' assets located
at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days. Provided,
however, in the event that any provision of this paragraph A (iv)
is contrary to any applicable law, such provision shall be of no
force or effect.
v. The discovery by Lessor that any financial statement given to
Lessor by Lessee, any assignee of Lessee, any subtenant of
Lessee, any successor in interest of Lessee or any guarantor of
Lessee's obligation hereunder, and any or them, was materially
false.
Remedies: In the event of any such material default or breach by
Lessee, Lessor may at any time thereafter, by written notice or demand
and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default or breach:
i. Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor.
In such event Lessor shall be entitled to recover from Lessee all
damages incurred by Lessor by reason of Lessee's default
including, but not limited to, the cost of recovering possession
of the Premises, expenses of re-letting including necessary
renovation and alteration of the Premises, reasonable attorney's
fees, and any real estate commission actually paid; and the worth
at the time of award by the court having jurisdiction thereof of
the amount by which the unpaid rent for the balance of the term
after the time of such award exceeds the amount of such rental
loss for the same period that Lessee proves could be reasonably
avoided.
ii. Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have
abandoned the Premises. In such event, Lessor shall be entitled
to enforce all of Lessor's rights and remedies under this Lease,
including the right to recover the rent as it becomes due
hereunder.
iii. Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decision of the state wherein use
Premises are located. Unpaid installments of rent and other
unpaid monetary obligations of Lessee under the terms of this
Lease shall bear interest from the date due at the maximum rate
then allowable by law.
Lessor:_Lessee:_
6
c. Default by Lessor: Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time,
but in no event later than thirty (30) days after written notice by
Lessee to Lessor and to the holder of any first mortgage of deed of
trust covering the Premises whose name and address shall have
therefore been furnished to Lessee in writing, specifying wherein
Lessor has failed to perform such obligation; provided, however, that
if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
In the event Lessor shall neglect or fail to perform or observe any of
the covenants, provision or conditions contained in this Lease on its
part to be performed or observed within thirty (30) days after written
notice of default, or if more than thirty (30) days shall be required
because of the nature of the default, if Lessor shall fail to proceed
diligently to cure such default after written notice, then in that
event, Lessor shall be responsible to Lessee for any and all damages
sustained by Lessee as a result of Lessor's breach.
d. Late Charges: Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are
not limited to processing and accounting charges, and late charges
which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of rent or
any other sum due from Lessee shall not be received by Lessor or
Lessor's designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay
to Lessor a late charge equal to five percent (5%) of such overdue
amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason
of late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's default with respect
to such overdue amount, nor prevent Lessor 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 rent, then rent shall automatically become
due and payable quarterly in advance, rather than monthly,
notwithstanding paragraph #2 or any other provision or this Lease to
the contrary.
15. ABANDONMENT:
If Lessee should abandon, vacate or surrender the Premises or be
dispossessed by process of law, in addition to all other remedies of
Lessor, Lessor, at its option, may deem that any personal property
belonging to Lessee left on the Premises is abandoned and/or Lessor may at
once enter upon the Premises and remove therefrom any and all equipment,
fixtures and merchandise therein and may sell said fixtures, equipment and
merchandise at public or private sale at such price and upon such terms as
Lessor may determine, without notice to or demand upon Lessee. Out of the
proceeds of such sale, Lessor may reimburse itself for the expense of such
taking, removal and sale and for any indebtedness of Lessee to Lessor and
the surplus, if any, shall be accounted for to Lessee.
16. DESTRUCTION: RENEWAL:
a. In the event of damage or destruction of the Premises or the building
and other improvements in which the Premises are located during the
term hereof, which Lessor is obligated to repair to substantially the
same condition as the Premises or the building or other improvements
in which the Premises are located were prior to the damage or
destruction by the terms of this Lease, Lessor shall forthwith repair
the same, provided such repairs can be made within sixty (60) days of
the date of such damage or destruction under the laws and regulations
of State, Federal, County of Municipal authorities, but such
destruction shall in no way annul or void this Lease, except that
Lessee shall be entitled to a proportionate reduction in minimal
monthly rent to be based upon the extent to which the making of such
repairs shall interfere with the business carried on by Lessee in the
Premises. If such repairs cannot be made in sixty (60) days, Lessor
may, at its option, make same within a reasonable time, in which event
this Lease shall continue in full force and effect, and the monthly
rental shall be proportionately abated as aforesaid in this paragraph
provided. In the event that Lessor does not so elect to make such
repairs which cannot be made within sixty (60) days, this Lease may be
terminated at the option of either party. If repairs to the Premises
or the building and other improvements in which the Premises are
located cannot be made within ninety (90) days of the date of such
damage or destruction, so long as Lessee, its agent or representatives
are not the cause of such damage or destruction. Lessee shall have the
right to terminate this lease. Lessor shall give written notice to
Lessee within thirty (30) days of the occurrence of said damage or
destruction requiring repair in the event such repairs cannot be made
within said sixty (60) days or if repairs can and will be made within
ninety (90) days of such damage and destruction.
b. In respect to any damage or destruction which Lessor is obligated to
repair or may elect to repair under the terms of this paragraph, the
provisions of Section 1932, Subdivision 2. and of Section 1933,
Subdivision 4 of the Civil Code of the State of California are waived
by Lessee. In the event that the building in which the Premises may be
situated be damaged or destroyed to the extent of 33-1/3% or more of
the replacement cost thereof, Lessor may elect to terminate this
Lease, whether the Premises be injured or not.
c. Should the parties hereto be unable to agree in writing as to the time
required for repair of any such damage or destruction to the Premises
or the building and other improvements in which the Premises are
located or as to the percentage of damage to the building of which the
same are a part, within five (5) days after the happening of said
occurrence, or to the extent, if any, of reduction of rental during
the period of repair within fifteen (15)
Lessor:_Lessee:_
7
days after the happening of said occurrence, each shall within five
(5) days following written notice from either party to such effect,
provided such party is not in default or this Lease at such time,
select an arbitrator and notify in writing the other of the name and
address of the arbitrator so selected. Within five (5) days thereafter
the two so selected shall appoint a third arbitrator and notify in
writing within said last mentioned time the Lesser and Lessee of the
name and address of said appointee, or of their inability to agree
upon said appointee, if such should be the fact. In the latter event,
the selection of the third arbitrator shall be committed to the
Presiding Judge of the Superior Court of the State of California, of
the County in which the Premises are located, and such appointment
shall be invoked by written request addressed to said Judge signed by
Lessor or by Lessee, or their respective counsel, within five (5) days
after receipt by the Lessor and Lessee of said notice of inability
from said two arbitrators and Lessor and Lessee. When the three
arbitrators have been selected in either of the ways above set forth,
they shall forthwith convene and determine the issue or issues
submitted unto them, and the written determination under the
signatures of a majority of said arbitrators shall be final, binding
and conclusive upon the parties hereto. Should either party refuse or
fall to select an arbitrator within the time as above provided and
notify the other party thereof, the arbitrator selected by such other
party shall be the sole arbitrator and his decision shall have the
same effect as if rendered by a majority of three arbitrators. Save as
modified hereby, the provisions of Title IX of Part III of the Code or
Civil Procedure of the State of California dealing with the subject or
arbitration shall apply. The costs or any arbitration shall be borne
equally by the parties except in the instance of refusal of a party to
abide thereby, in which event, and should the award be confirmed by
judicial order in conformity with the said provisions of said Title,
all costs, including those incurred in the court proceeding, shall be
assessed against and borne by the disaffirming party.
d. Notwithstanding anything herein to the contrary, if, at any time
during the term hereof, any governmental agency having jurisdiction
over the Premises or the building of which the Premises are a part
shall require the making of any repairs, improvements or alterations
to said building or Premises, and Lessor determines to demolish said
building or Premises rather than to make said repairs, improvements or
alterations, or allow same to be made, Lessor, upon at least ninety
(90) days written notice to Lessee shall have the right to terminate
this Lease. Upon the date specified in such notice, this Lease shall
terminate and Lessor shall have no further liability to Lessee except
that: (i) Lessor shall refund to Lessee any unearned rentals and shall
return any security deposit, and (ii) in the event Lessor had
therefore given written consent to any leasehold improvements upon the
Premises made by Lessee and had agrees, in writing, as to the cost
thereof to Lessee. Lessor shall pay to Lessee upon such termination
that percentage or such cost to Lessee as the number of full calendar
months remaining in the original term of this Lease bears to the total
number of calendar months in said original term.
17. COSTS OF SUIT:
Lessee agrees that if Lessor is involuntarily made a party defendant to any
litigation concerning this Lease or the Premises by reason of any act or
omission of Lessee and not because of any act or emission of Lessor, then
Lessee shall hold harmless the Lessor from all liability by reason thereof,
including reasonable attorneys' fees incurred by Lessor in such litigation
and all taxable court costs. If legal action shall be brought by either of
the parties hereto for the unlawful detainer of the Premises, for the
recovery or any rent due under the provisions of this Lease, or because of
the breach of any term, covenant, or provision hereof, the party prevailing
in said action (Lessor or Lessee as the case may be) shall be entitled to
recover from the parry not prevailing costs of suit and a reasonable
attorney's fee which shall be fixed by the Judge of the Court.
18. HOLDING OVER:
Should Lessee hold over the term hereby created with or without the consent
or Lessor, Lessee shall became a tenant from month to month at 125% of the
minimal monthly rental paid in the final month of the lease term, and
otherwise upon the covenants and conditions in this Lease contained, and
shall continue to be such tenant until thirty (30) days after either party
hereto serves upon the other written notice of intention to terminate such
monthly tenancy. Should such termination occur on any day other than the
last day of any rental month, any unearned prepaid rental shall,
immediately following surrender of the Premises by Lessee, be refunded unto
him.
19. SALE OF PREMISES:
In the event of a sale or conveyance by Lessor of the Premises, the same
shall operate to release Lessor from any future liability upon any of the
covenants or conditions, express or implied, herein contained in favor of
Lessee, and in such event Lessee agrees to look solely to the
responsibility of the successor in interest of Lessor. If any security be
given by Lessee to secure faithful performance of Lessee's covenants in
this Lease or any rent shall have been prepaid, Lessor shall transfer the
same, as such, to the purchaser of the reversion and thereupon Lessor shall
be discharged from any further liability in reference thereto.
20. CONDEMNATION:
If any part of the Premises or the building in which the Premises are
located (even though no part of the Premiums be taken) be condemned for a
public or quasi-public use by right of eminent domain, with or without
litigation, or transferred by agreement in connection with such public or
quasi-public use, this Lease, as to the part so taken, shall terminate as
of the date title shall vest in the condemnor, and the rent payable
hereunder shall be adjusted so that Lessee shall be required to pay for the
remainder of the term only such portion of such rent as the value of the
part remaining after condemnation bears to the value of the entire Premises
at the date of condemnation; but in either such event Lessor shall have the
option to terminate this Lease as of the date when title to the part so
condemned vests in the condemnor.
Lessor:_Lessee_
8
Lessee shall have the right to this lease if: (1) any part of the Premises
is taken if such taking renders the remaining portion of such Premises
substantially unsuitable for Lessee's continued use therein, and (2) if the
building in which the Premises are located, whether or not any part of the
Premises are taken, or if the parking areas adjacent to the building or
other improvements in which the Premises are located, are taken in which
taking renders the Premises substantially unsuitable for Lessee's continued
use.
If either Lessor or Lessee elects to terminate this lease under this
section 20, such Lesser or Lessee must exercise said right to terminate by
giving written thirty (30) day notice to the other of such exercise and the
date of termination within ten (10) days after the nature and extent of the
taking have been finally determined.
All compensation for loss of use of premises, not loss of business or other
incidental compensation awarded upon such condemnation or taking shall
belong and be paid to Lessor and Lessee shall have no claim thereto, and
Lessee hereby irrevocably assigns and transfers to Lessor any right to
compensation or damages for loss of use of the Premises to which Lessee of
Lessor may become entitled during the term hereof by reason of the
condemnation of all or part of the Premises.
Lessor and Lessee waives the provisions of the Code of Civil Procedure
section 1265.130 allowing either party to petition the superior court to
terminate this Lease in the event of a partial taking of the Premises.
21. SUBORDINATION:
a. Within thirty (30) days after the date of execution of this Lease, but
in no event later than the lease commencement date, Lessor shall
deliver to Lessee a commercially reasonable non-disturbance agreement
in form and substance reasonably acceptable to Lessee executed by any
ground lessor or lender holding a lien in the Premises.
With respect to security devices entered into by the Lessor after the
execution of this Lease, Lessee's subordination of this Lease shall be
subject to receiving assurance (a "non-disturbance agreement") from
the lender that Lessee's possession and this Lease, including any
options to extend the term hereof, will not be disturbed so long as
Lessee is not in breach of any of the terms and conditions of this
Lease and attorns to the owner of record the Premises hereof.
b. This Lease, at Lessor'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 real property of which the Premises
are a part and to any and all advances made on the security thereof
and to all renewals, modifications, consolidations, replacements and
extensions thereof. If any mortgagee, trustee or ground lessor shall
elect to have this Lease prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to
Lessee, this Lease shall be deemed prior to such mortgage deed of
trust, or ground lease, whether this Lease is dated prior to or
subsequent to the date of said mortgage, deed of trust or ground lease
or the date of recording thereof.
c. Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease prior to the lien
of any mortgage, deed of trust or ground lease, as the case may be.
Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee
hereunder, or, at Lessor's option, Lessor shall execute such documents
on behalf of Lessee and Lessee's attorney-in-fact. Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's
attorney-in-fact and in Lessee's name, place and stead, to execute
such documents in accordance with this Paragraph 21C.
22. SIGNS:
Lessee agrees not to inscribe, paint or affix any signs, advertisements,
placards or awnings on the exterior or roof of the Premises or upon the
entrance doors, windows, or the sidewalk on or adjacent to the Premises
without the written consent of Lessor first obtained. Any signs so placed
on the Premises shall be so placed upon the understanding and agreement
that Lessee will remove same at the termination of the tenancy herein
created and repair any damage or injury to the Premises caused thereby, and
if not so removed by Lessee, then Lessor may have same so removed at
Lessee's expense. Lessee shall not be allowed to use the name of the
building, or words to such effect in connection with any business carried
on in the Premises (except as the address of the Lessee) without the
written consent of Lessor. Lessor reserves the right to change the name and
title of the building at any time during the term of said Lease. Lessee
hereby expressly agrees to such change at the option of Lessor and waives
any and all damage occasioned thereby.
23. SURRENDER OF LEASE
No act or conduct of Lessor, whether consisting of the acceptance of the
keys to the Premises, or otherwise, shall be deemed to be or constitute an
acceptance of the surrender of the Premises by Lessee prior to the
expiration of the term hereof, and such acceptance by Lessor of surrender
by Lessee shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender by Lessor. The voluntary or other
surrender of this Lease by Lessee, or a mutual cancellation thereof, shall
not work a merger, and shall, at the option of the Lessor, terminate all or
any existing subleases of subtenancies, or concessions, or may at the
option of Lessor operate as an assignment to him of any or all such
subleases or subtenancies or concessions.
Lessor:_Lessee:_
9
24. NOTICES:
It is agreed between the parties hereto that any notice required hereunder
or by law to be served upon either of the parties shall be in writing and
shall be delivered personally upon the other or sent by registered or
certified mail, postage prepaid, addressed m the above address or to slide
other address as may be from drain to time furnished in writing by Lessor
to Lessee or by Lessee to Lessor, each of the parties hereto waiving
personal or any other service than as in this paragraph provided for.
Notice by registered or certified mail shall be deemed to be communicated
the second business day from the time of mailing.
25. CUMULATIVE REMEDIES; NON WAIVER:
The receipt by Lessor of any rent or payment wide or without knowledge of
the breach of any covenant hereof shall not be deemed a waiver of any such
breach and no waiver by Lessor of any sum due hereunder or any provision
hereof shall be deemed to leave been made unless expressed in writing and
signed by Lessor. No delay or omission in the exercise of any right or
remedy deeming to Lessor upon any breech by Lessee under this Lease shall
impair such right or remedy or be construed as a waiver of any such breach
theretofore or hereafter occurring. The waiver by Lessor of any breach of
any term, covenant or condition herein contained shall not be deemed to be
a waiver of any subsequent breach of the same or any other term, covenant
or condition herein contained. All rights, powers, options or remedies
afforded to Lessor either hereunder or by law shall be cumulative and not
alternative and the exercise of one right, power, option or remedy shall
not bar other rights, powers, options or remedies allowed hereto or by law.
26. ADDITIONAL RENT:
Any monetary obligations of Lessee to Lessor under the terms of this Lease
shall be deemed to be rent.
27. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS:
This Lease contains all agreements of the parties with respect to any
matter mentioned herein. No prior 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, Lessee hereby acknowledges that
neither the Lessor nor any employees or agents of any of said person has
made any oral or written warranties or representations to Lessee relative
to the condition or use by Lessee of the Premises and Lessee acknowledges
that Lessee 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.
28. MULTIPLE TENANT BUILDING:
In the event that the Premises are a part or a larger building or group of
buildings, then Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time
for the management, safety, care, and cleanliness of the building and
grounds, the parking of the vehicles and the preservation or good order
therein as well as for the convenience of other occupants and tenants of
the building. The violations of any such rules and regulations shall be
deemed a material breach of this Lease by Lessee.
29. SECURITY MEASURES:
Lessee hereby acknowledges that the rental payable to Lessor hereunder does
not included the cost of guard service or other security measures, and that
Lessor shall have no obligation whatsoever to provide same. Lessee assumes
all responsibility for the protection of Lessee, its agents and invites the
Premises and any property on the Premises from acts of third parties.
30. EASEMENTS:
Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of parcel maps and restrictions, so long as
such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee shall
sign any of the aforementioned documents upon request of Lessor and failure
to do so shall constitute a material breach of this Lease.
31. 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.
Lessor:_Lessee:_
10
32. AUTHORITY:
If Lessee 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 Lessee is a corporation, trust, or
partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
33. CONFLICT:
Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
34. OPTION TO EXTEND:
If the Lessee has fully and faithfully kept and performed all of the terms,
covenants and conditions of this Lease on the part of the Lessee to be kept
and performed, including the full and prompt payments of all rental herein
reserved, then Lessee shall have the right, at its option, to renew and
extend this Lease for one (1) additional term of five (5) years, to begin
at the expiration of the primary term hereof, upon and subject to all the
terms and conditions set forth in this lease provided Lessee gives written
notice to Lessor of intent to exercise said option at least six (6) months
prior to the date of expiration of the term of this Lease. In the event
that the Lessee exercises the option hereinabove described, the fixed
minimal monthly rental to be charged shall be adjusted in accordance with
section 37 herein.
35. MISCELLANEOUS:
a. It is agreed by and between the parties hereto that all agreements
herein contained upon the part of Lessee, whether technically
covenants or conditions, shall be deemed conditions for the purpose
hereof, conferring upon lessor, in the event of breach of any of said
agreements, the right to terminate this Lease.
b. Lessee agrees, at any time and from time to time within ten (10) days
of written request from Lessor, to execute, acknowledge and deliver to
Lessor a statement in writing certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified, and stating the
modifications), and the dates to which the rent and other charges have
been paid in advance, if any, it being intended that any such
statement delivered pursuant to this paragraph may be relied upon by
any prospective purchaser, mortgagee or assignee of any mortgages of
the Premises.
c. Lessee and Lessee's Guarantor, if any, agree to deliver to Lessor,
within thirty (30) days from written request therefore (but not more
frequently than once each calendar year), a balance sheet prepared and
certified by a Public Accountant or Certified Public Accountant
showing the true and accurate net worth of Lessee and said Guarantor,
if any, as of the close of Lessee's and the Guarantor's last
accounting period.
d. In case there is more than one Lessee, the obligation of Lessee
executing this Lease shall be joint and several. The words "Lessor"
and "Lessee" as used herein shall include the plural as well as the
singular. The covenants and agreements contained herein shall be
binding upon and be enforceable by the parties hereto and their
respective heirs, executors, administrators, successors and assigns,
subject to the restrictions herein imposed on assignment by Lessee.
e. Time is of the essence of this Lease and of each and every covenant,
condition and provision herein contained.
f. The paragraph headings of this Lease are inserted only as a matter of
convenience and for reference, and in no way define, limit or describe
the scope or intent of this agreement or any provision thereof or in
any way affect this agreement.
g. Consent: Wherever in this Lease the consent of one party is required
to an act of the other party, such content shall not be unreasonably
withheld.
h. Guarantor: In the event that there is a Guarantor of this Lease, said
Guarantor shall have the same obligations as Lessee under this Lease.
i. If any term of or provision of the lease shall, to any extent, be
determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of the Lease shall not be affected
thereby, and each term and provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law; it is the
intention of the Lessor and Lessee hereto that if any provision of
this Lease is capable of two constructions, one of which would render
the provision void and the other of which would render the provision
valid, then the provision shall have the meaning that renders it
valid.
j. This lease shall be governed by the laws of the State of California.
k. The masculine, feminine, of neuter gender and the singular or plural
number shall each include the other whenever the context indicates.
Lessor:_Lessee:_
11
l. This lease is subject to Lessee satisfying itself that it will be able
to obtain such permits and licenses as required by governmental
agencies for Lessee's use and occupancy of the Premises pursuant to
section 4 within fourteen (14) day, of lease execution.
m. Lessee's leasing of an additional 5,200 square feet of warehouse space
pursuant to Exhibit "B" is subject to Lessee's subleasing or
termination or that certain lease agreement on warehouse space, Lessee
is currently leasing at 5715 Redwood Drive, Rohnert Park, California
within thirty (30) days of lease execution.
36. BROKERS:
Meridian Commercial, Inc., represents the Lessor and the Lessee, and Lessor
and Lessee consent hereto.
37. COST OF LIVING ADJUSTMENT:
Pursuant to section 2 herein, on each of every anniversary following
commencement of this Lease, the fixed minimal rental provided for by this
Lease shall be adjusted for the ensuing twelve (12) months by the
proportion that the Producer Price Index (base year 1967 = 100) for the
United States of the U.S. Department of Labor, Bureau of Labor Statistics,
then most recently published, bears to the Producer Price Index for the
month of May 1996. The annual adjustment shall be no more than five (5%)
percent greater than the rent for the previous year. In no event shall any
adjustment to the fixed minimal rental result in its reduction below the
base minimal rent herein provided. Lessor shall make all such adjustments
and shall notify Lessee of any changes to the fixed minimum rental provided
herein. Lessor shall also provide Lessee with the backup data pertinent to
such changes.
In case the U.S. Department of Labor shall discontinue the computation and
publication of said Producer Price Index or the publication thereof should
be delayed so as to prevent its use hereunder at the times required, there
shall be substituted therefor by Lessor such other other index or method of
ascertaining changes in the price levels as, in the opinion of the Lessor,
most closely resembles the Producer Price Index and method of arriving at
the index figure by said Bureau.
38. INCREASES IN OPERATING EXPENSES:
a. Lessee shall pay to Lessor during the term hereof, in addition to the
fixed minimal monthly rent pursuant to sections 2 and 37 of this
Lease, Lessee's Share, as hereinafter defined, of the Increases in the
Operating Expenses over the Base Year as hereinafter defined.
i. "Lessee's Share" is defined, for the purpose of this Lease, is
80.85%.
ii. Base Year: The calendar year the which this Lease term commence.
iii. Comparison Year: Each calendar year of the term after the Base
Year, including the option to extend.
iv. "Operating Expenses" is defined, for purposes of this Lease, as
all costs incurred by Lessor, if any, for:
(1) The operation, repair and maintenance, in neat, clean, good
order arid condition of the following:
(a) The Common Areas, including, but not limited to,
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, common entrances, common
stairwells, common restrooms and common access ways.
(b) Lessor's direct cost in providing landscaping service
(c) Five (5) percent of the total cost of the Operating
Expenses as a fee for its general and administrative
expenses
(d) Trash disposal services
(e) Fire detection systems, including sprinkler maintenance
and repair;
(f) Security services
(g) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an Operating
Expense.
(h) Notwithstanding the foregoing Operating Expenses shall
not include capital replacements or improvements of or
to the items set out in this subparagraph (1).
(2) The cost of premiums for the liability and property
insurance policies to be maintained by Lessor;
(3) The amount of the real property tax to be paid by Lessor,
excluding only any penalties for late payment;
(4) The cost of water, gas and electricity to service the Common
Areas.
v. If the Operating Expenses paid or incurred by the Lessor for the
Comparison Year are in excess of the Operating Expenses paid or
incurred for the Base Year, then the Lessee shall pay 80.85% of
the increase. This percentage is that portion of the total
rentable area of the Building occupied by the Lessee hereunder.
Lessor:_Lessee:_
12
vi. The inclusion of the improvements, facilities and services set
forth herein the definition of the Operating Expense shall not be
deemed to impose an obligation upon Lessor to either have said
improvements or facilities or to provide those services unless
the Building already has the same, Lessor already provides the
services or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
vii. Lessee's Pro-rata Share of the increases in Operating Expenses
shall be payable by Lessee within ten (10) days after a
reasonable detailed statement of actual expenses is presented to
Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of
increases in Opening Expenses and the same shall be payable
monthly or quarterly, as Lessor shall designate, anytime after
the first year of the Lease term aforesaid. Lessor shall deliver
to Lessee within sixty (60) days after the expiration of each
calendar year a reasonably detailed statement showing Lessee's
Pro-rata Share of the increases and actual Operating Expenses
incurred during the preceding year. If Lessee's payments under
this paragraph during said preceding year exceed Lessee's Share
as indicated on said statement, Lessee shall be entitled to
credit the amount of such overpayment against Lessee's Share of
Operating Expense increases next falling due. If Lessee's
payments under this paragraph during said preceding year were
less than Lessee's Share as indicated an said statement, Lessee
shall pay to Lessor the amount of the deficiency within ten (10)
days after delivery by Lessor to Lessee of said statement.
39. TENANT IMPROVEMENTS:
As a material put of this Lease, Lessor has agreed to make tenant
improvements to the premises, up to Sixty Thousand Dollars ($60,000),
herein after the "Allowance," per the approved specifications and plans to
be attached as Exhibit "C". Lessor's cost of building the improvements per
Exhibit "C" to be attached unless modified by Lessee, shall not exceed
$60.000.00 including architectural fees, building permits, and new locks on
exterior doors.
Additionally, in consideration of Lessee leasing an additional 5,200 square
feet of warehouse space, as defined in Exhibit "B" attached hereto, and
subject to section 35.1 herein, Lessor agrees to provide Lessee an
additional allowance of Twenty-Six Thousand Dollars ($26,000.00), herein
after the "Additional Allowance", for improvements to the warehouse space
pursuant to Exhibit "C" to be attached.
IN WITNESS WHEREOF, the parties hereto lave subscribed their names, and if
corporations, executed this Lease by officers thereunto duly authorized by
resolution of said corporations, in duplicate the day and year first hereinabove
written.
LESSOR: Condiotti Enterprises, Inc., LESSEE: Work Rite Ergonomic Accessories,
A California Corporation Inc., A California Corporation
By: /s/ Solomon S. Condiotti By: /s/ Raymond L. Henrickson
----------------------------- ---------------------------------
Its: Property Mgr. Its: President
----------------------------- ---------------------------------
Date: 2/15/96 Date: 2-14-96
----------------------------- ---------------------------------
Lessor:_Lessee:_
PROPERTY: 77 Digital Drive, Novato, CA,
-------------------------------------
HAZARDOUS MATERIALS WARNING: Current and future federal, state, and local laws
and regulations may require the clean-up of such toxic, hazardous, or
undesirable materials at the expense of those persons who in the past, present,
or future have had any interest in the Property Including, but not limited to,
current, past, present, and future owners and users of the Property. Lessor and
Lessee are advised to consult with independent legal counsel of their choice or
other experts, to determine their potential liability.
AMERICANS WITH DISABILITIES ACT: On July 26, 1991, the federal legislation known
as the Americans with Disabilities Act (ADA) was signed Into law. The purpose of
the ADA is to integrate persons with disabilities into the economic and social
mainstream of American life. Title III of the ADA applies to landlords and
tenants of "places of public accommodation" and "commercial facilities," and
requires that places of public accommodation undertake "readily achievable"
removal of communication and access barriers to the disabled. This requirement
of Title III of the ADA is effective January 26, 1992. Lessor and Lessee should
seek expert advice regarding the implications of the Act as it affects this
agreement.
LIABILITY RELEASE: Meridian Commercial, Inc., and its salespeople in this
transaction, have no expertise regarding hazardous materials or the Americans
with Disabilities Act. Lessor and Lessee agree that they shall indemnify and
hold Meridian Commercial, Inc., and its salespeople, harmless from any claim,
liability, or expense regarding hazardous materials or the ADA.
BROKER REPRESENTATION: Meridian Commercial, Inc., is the real estate broker for
the Lessor and the Lessee.
LESSOR: CONDIOTTI ENTERPRISES LESSEE: WORK-RITE
By: /s/ Solomon S. Condioitti By: /s/ Raymond L. Henricksen
---------------------------- ----------------------------
Date: 2/15/96 Title: President
---------------------------- ----------------------------
Date: 2-14-96
----------------------------
EXHIBIT "A-1"
AMENDMENT TO LEASE
BY & BETWEEN
CONDIOTTI ENTERPRISES, INC., LESSOR
AND
WORKRITE ERGONOMIC ACCESSORIES, LESSEE
DATED: MARCH 21, 1996
1. TENANT IMPROVEMENTS Lessor, at Lessor's sole cost and expense, shall
complete the improvements pursuant to the approved plans and specifications
prepared by Greg LeDoux and Associates dated February,1996 and the revision
dated March 5, 1996.
2. ADDITIONAL RENT In consideration of the Lessor completing the "Tenant
Improvements" pursuant to Section 1 herein, Lessee shall pay additional
rent for the lease term in the amount of $515.25 per month ($.029 per
square foot x 17,735 square feet). Pursuant to Section 2 of the lease
agreement, the monthly rent shall be $13,653.50.
3. 5,200 SQUARE FOOT WAREHOUSE Lessee hereby agrees to lease upon the lease
commencement date, the 5,200 square foot warehouse space, which is included
in the 17,735 square feet, as defined in Exhibit "B" of the lease
agreement, and Lessor shall complete the improvements to the 5,200 square
foot per the approved plans and specifications.
4. SUBORDINATION Pursuant to Section 21 of the lease agreement Lessee hereby
waives its requirement of Lessor to provide Lessee a non-disturbance
agreement.
All other terms and conditions of the lease agreement by and between the
parties shall remain in full force and affect.
LESSOR: Condiotti Enterprises, Inc.
By: /s/ Solomon S. Condiotti
-----------------------------------------
Its: Property Mgr.
-----------------------------------------
Date: 4/1/96
-----------------------------------------
LESSEE: Work-Rite Ergonomic Accessories
By: /s/ Raymond L. Henricksen
-----------------------------------------
Its: President
-----------------------------------------
Date: 3-28-96
-----------------------------------------
2
EXHIBIT "A-1"
ADDENDUM
This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).
The parties do hereby desire to amend the Lease as follows:
1. There shall be added to the Lessee's space 1000 square feet of the upstairs
premises of 77 Digital Drive, effective 2/15/97 and continuing through the
end of the Lease term.
2. Rent for such additional space to be $700.00 per month, due on the first of
each month in advance. Rent for the period 2/15-28/97 to be $350.00.
3. All other terms and conditions of the Lease and Addenda not in conflict
with the agreements set forth above shall remain in full force and effect.
/s/ Solomon S. Condiotti /s/ Raymond L. Henricksen
- ----------------------------------- ------------------------------------
Solomon S. Condiotti Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises
Raymond L. Henricksen, President
------------------------------------
By
2/5/97 2-3-97
- ----------------------------------- ------------------------------------
Date Date
3
EXHIBIT "A-1"
ADDENDUM
This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).
The parties do hereby desire to amend the Lease as follows:
1. There shall be added to the Lessees space 5250 square feet located at 75
Digital Drive, effective 6/01/97 and continuing through the end of the Lease
term.
2. Base rent for such additional space to be $2,925.00 per month, due on the
first of each month in advance till May 1, 1998. Then subject to CPI as provided
for in Paragraph 37 of the Lease.
3. All other terms and conditions of the Lease and Addenda not in conflict with
the agreements set forth above shall remain in full force and effect.
/s/ Solomon S. Condiotti /s/ Raymon L. Henricksen
- ------------------------------------ -------------------------------------
Solomon S. Condiotti Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises
-------------------------------------
By
6/4/97 5-28-97
- ------------------------------------ -------------------------------------
Date Date
4
EXHIBIT "A-1"
ADDENDUM
This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).
The parties do hereby desire to amend the Lease as follows:
1. The remainder of the space located at 77 Digital Drive shall be added to the
Lease effective 10/01/97 and continuing through the end of the Lease term.
2. Rent shall be increased by $1,100.00. The new monthly rent will be
$15,881.11 effective 10/01/97.
3. All other terms and conditions of the Lease and Addenda not in conflict with
the agreements set forth above shall remain in full force and effect.
/s/ Solomon S. Condiotti /s/ Raymond L. Henricksen
- --------------------------------- ----------------------------------------
Solomon S. Condiotti Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises
----------------------------------------
By
10/7/97 10-3-97
- ---------------------------------- ----------------------------------------
Date Date
5
EXHIBIT "A-1"
AMENDMENT #4 TO THAT CERTAIN LEASE AGREEMENT
DATED FEBRUARY 14, 1996
BY AND BETWEEN
CONDIOTTI ENTERPRISES, INC., LESSOR
AND
WORKRITE ERGONOMIC ACCESSORIES, LESSEE
DATED: MARCH 17, 1996
The following terms and conditions of that certain lease agreement by and
between the parties hereto shall be amended as followings;
1. PREMISES: Lessee agrees to lease, and add to its existing lease, 79 Digital
Drive, Novato, Ca. (entire building) including the following terms and
conditions herein this Amendment to Lease.
2. COMMENCEMENT TERM: The term of the lease for 79 Digital Drive shall
commence March 1, 1999 end shall terminate concurrently with the lease
termination date of July 31, 2001 for Lessee's existing space at 75 and 77
Digital Drive, Novato, Ca.
3. RENT: The monthly rent for the first year of the lease term at 79 Digital
Drive shall be $18,492.90. Upon Lessee's determination that 79 Digital
Drive is compatible with Lessee's intended use and occupancy pursuant to
section 5 herein Lessee shall deposit with Lessor $5,000 which shall be
credited towards the First months rent (March 1999), and shall be due and
payable to Lessor upon Lessee's written release of section 5 herein this
Amendment. The next installment of rent due end payable to Lessor shall be
June 1999 in the amount of $18,492.90 and shall remain the same until May
1, 2000 then the rent shall adjust per section 37 of the lease agreement.
Lessee shall have the right to occupy the Premises on a rent free basis for
the months of April 1999 and May 1999. The rent shall adjust each year
thereafter pursuant to section 37 of the lease agreement.
4. TENANT IMPROVEMENTS: Lessor shall provide Lessee with $75,000 as a tenant
improvement allowance for lessee improvements to 79 Digital Drive. Lessee
reserves the right to contract for and supervise all such tenant
improvements. In addition to the tenant improvement allowance, Lessor shall
install, at its sole cost and expense, two (2) additional restrooms (single
stall) on the first floor of 79 Digital Drive behind the existing first
floor restrooms.
5. SUBJECT TO: Upon execution of this Lease Amendment by Lessor and Lessee,
Lessee shall have thirty (30) days to conduct a feasibility study of 79
Digital Drive for Lessee's intended use and occupancy. In the event Lessee
determines that 79 Digital Drive is not compatible with Lessee's intended
use and occupancy Lessee shall notify Lessor in writing of such
incompatibility and this Amendment to Lease shall be of no further force
and effect. In the event Lessee determines in said thirty (30) day period
that 79 Digital Drive is compatible with Lessee's intended use and
occupancy, Lessor shall deposit with Lessor by the end of said thirty(30)
day period the sum of $5,000 which shall be credited toward the first
month's rent of $18,492.90 and the balance of the final month's rent shall
be due and payable to Lessor on or before January 1, 1999. Upon Lessee's
release of this condition herein section 5 this Amendment to Lease shall be
in full force and effect.
6. RELEASE OF SPACE: Upon execution of this agreement Lessee shall have during
the term of the lease period at its sole discretion the right to terminate
its lease for all of those premises Lessee is leasing from Lessor at 75
Digital Drive upon giving Lessor sixty (60) days prior written notice of
the same. Thereafter Lessee shall have no further obligation with 75
Digital Drive.
All other terms and conditions of that certain lease dated February 14, 1996
shall remain in full force and effect.
6
LESSOR: CONDIOTTI ENTERPRISES, INC. LESSEE: WORK-RITE ACCESSORIES, INC.
By: /s/ Solomon S. Condiotti By: /s/ Raymond L. Henricksen
------------------------------- --------------------------------
Its: Property Manager Its: President
------------------------------- ------------------------------
Date: 3/23/98 Date: 3-17-98
------------------------------- ------------------------------
7
EXHIBIT "A-1"
CONTINGENCY RELEASE
DATED APRIL 22, 1998
Work-Rite Accessories, Inc, hereby releases its contingencies pursuant to
"Section 5. Subject to" in the Amendment #4 To That Certain Lease Agreement
Dated February 14, 1996 by and Between Condiotti Enterprises, Inc., Lessor and
Work-Rite Accessories, Inc., Lessee, Dated March 17, 1998, upon the following
terms and conditions which shall include the following amendment to section 4
"Tenant Improvements";
Lessor shall not be required to install two additional restrooms on the first
floor at 79 Digital Dr.
Lessor shall, at its sole cost and expense, convert the existing two single
stall restrooms at 77 Digital Dr. on the first floor into one larger restroom
with two stalls and one sink, and one new restroom with two stalls, one urinal
and one sink.
All other terms and conditions of the Lease Agreement and Amendments shall
remain the same.
LESSOR: Condiotti Enterprises
By: /s/ Solomon S. Condiotti
---------------------------------------
Title: Property Manager
---------------------------------------
Date: 4/22/98
---------------------------------------
LESSEE: Work-Rite Ergonomic Accessories, Inc.
By: /s/ Raymond L. Henricksen
---------------------------------------
Title: President
---------------------------------------
Date: 4-22-98
---------------------------------------
@
8
EXHIBIT "A-2"
ASSIGNMENT AND ASSUMPTION
OF
AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT ("Assignment") is entered
into on April 30, 2001, by and among WORKRITE ERGONOMIC ACCESSORIES, INC., a
Delaware corporation, as assignor ("Assignor" or "Tenant"), and GATEWAY
FINANCIAL CORPORATION, a California corporation, as assignee ("Assignee") and
Condiotti Enterprises, Inc., a California corporation, as landlord ("Landlord").
RECITALS
A. Landlord, and Assignor, as tenant, executed that certain Lease dated February
14, 1996, an addendum dated February 14, 1996, an amendment dated March 21,
1996, a second amendment dated February 3, 1997, a third amendment dated May 28,
1997, an amendment dated October 3, 1997, and a "fourth" [sic] amendment dated
March 17, 1998, (collectively, the "Lease"), a copy of which is attached as
Exhibit A and incorporated herein by reference, pursuant to which Landlord
leased to Tenant and Tenant leased from Landlord the Premises. The term
"Premises" includes 5250 square feet in 75 Digital Drive, Novato, California;
20,446 square feet in 77 Digital Drive and 25,658 square feet in 79 Digital
Drive.
B. The current rental rates for various portions of the Premises are as follows:
9
- ---------------- ------------------- --------------------- ----------------
Building Type Square footage Rent sq. ft.
per month*
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
75 Digital Warehouse Office 5,250 N/A Deleted EAC
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
77 Digital Warehouse Office 13,000 Deleted EAC
7,446
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
79 Digital Warehouse Office 15,262 Deleted EAC
10,396
- ---------------- ------------------- --------------------- ----------------
*All rental rates are subject to escalation as provided in the Lease; the next
increase takes effect May 1.
C. Assignor desires to assign the Lease to Assignee, and Assignee desires to
accept the assignment of the Lease from Assignor and assume all obligations
under the Lease.
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are acknowledged, Assignor and Assignee agree as follows:
1. Extension of Term: Landlord and Tenant agree that the term of the Lease has
been extended to July 31, 2006, and Paragraph 34 of the Lease has been fully
executed.
2. Assignment: As of August 1, 2001 ("Effective Date") Assignor assigns and
transfers to Assignee all right, title and interest in and to the Lease, and
Assignee accepts from Assignor all right, title and interest in and to the
Lease, subject to the terms and conditions set forth herein.
3. Assumption of Lease Obligations: As of the Effective Date, Assignee
assumes and agrees to perform and fulfill all past, present and future terms,
covenants, conditions and obligations required to be performed and fulfilled
by Assignor,
10
as Tenant, under the Lease, including, without limitation, making all payments
due to or payable on behalf of Assignor under the Lease.
4. Assignor's and Landlord's Covenants:
(a) Assignor and Landlord each acknowledges and covenants that the copy of the
Lease attached as Exhibit A is a true and accurate copy of the Lease as
currently in effect and that there exists no other agreement affecting
Assignor's tenancy under the Lease.
(b) Assignor and Landlord each covenants that the Lease is in full force and
effect and that no defaults exist under the Lease, nor any acts or events which,
with the passage of time or the giving of notice or both, could become defaults.
(c) Landlord represents and warrants that it is the sole owner in fee simple of
the properties on which the Premises are located.
5. Security Deposit: As of the Effective Date, Assignor assigns all right in any
security deposits held by Landlord to Assignee.
6. Discharge of Assignor: Assignor shall be discharged from any liability under
the Lease for any duty or obligation arising after the Effective Date.
7. Limitation on Further Assignment or Subletting: In addition to compliance
with all terms and conditions governing assignment or subletting under the
Lease, Assignee shall not assign or sublet the Premises or any portion thereof
to an
11
assignee or sublessee for any rental amounts which are less than the amounts
then being charged under the Lease. Furthermore, in no event shall Landlord be
required to consent to recognition of an assignee or sublessee or to grant any
further extension of the term of the Lease, other than as provided in the Lease.
8. Guaranty: Landlord's consent to this Assignment is conditioned on and made
subject to the delivery of a signed guaranty from Edmund J. Coyne in the form
attached to this Assignment as Exhibit B and incorporated by this reference.
9. Litigation costs: If any litigation between Assignor and Assignee arises out
of this Assignment or concerning the meaning of interpretation of this
Assignment, the losing party shall pay the prevailing party's costs and expenses
of this litigation, including, without limitation, reasonable attorney fees.
10. Indemnification: Assignor indemnifies Assignee from and against any loss,
cost, or expense, including attorney fees and court costs, relating to the
default of Assignor to fulfill Assignor's obligations under the Lease, and
accruing with respect to the period on or prior to the Effective Date. Assignee
indemnifies Assignor from and against any loss, cost, or expense, including
attorney fees and court costs, relating to the default of Assignee to fulfill
obligations under the Lease, and accruing with respect to the period subsequent
to the Effective Date.
11. Successors and Assigns: This Assignment shall be binding on and inure to the
benefit of the parties to it, their
12
heirs, executors, administrators, successors in interest, and, assigns.
12. Governing Law: This Assignment shall be governed by and construed in
accordance with California law.
The parties have executed this Assignment as of the date first mentioned above.
"ASSIGNOR" "ASSIGNEE"
WORKSITE ERGONOMIC ACCESSORIES, GATEWAY FINANCIAL CORPORATION,
INC., a Delaware corporation a California corporation
By /s/ illegible By /s/ Ed Coyne
---------------------------- --------------------------------------
Its President Its President
---------------------------- -------------------------------------
THE TERMS AND CONDITIONS OF THIS ASSIGNMENT ARE AGREED AND CONSENTED TO:
"LANDLORD"
Condiotti Enterprises, Inc.,
a California corporation
By /s/illegible
---------------------------
Its VP-CFO
---------------------------