California-Benicia-Lincoln Distribution Center Lease Agreement - Lincoln PO Benicia LP - bebe stores inc.
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LEASE AGREEMENT
Between
LINCOLN PO BENICIA LIMITED PARTNERSHIP, Landlord
and
BEBE STORES, INC., Tenant
Lincoln Distribution Center
Benicia, California
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Lease Agreement
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TABLE OF CONTENTS
Page
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1. PREMISES, TERM AND INITIAL IMPROVEMENTS.............................. 1
2. BASE RENT, SECURITY DEPOSIT AND ADDITIONAL RENT...................... 2
3. TAXES................................................................ 5
4. LANDLORD'S MAINTENANCE............................................... 6
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.......................... 7
6. ALTERATIONS.......................................................... 8
7. SIGNS................................................................ 9
8. UTILITIES............................................................ 10
9. INSURANCE............................................................ 11
10. CASUALTY DAMAGE...................................................... 12
11. LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE..... 13
12. USE.................................................................. 13
13. INSPECTION........................................................... 14
14. ASSIGNMENT AND SUBLETTING............................................ 14
15. CONDEMNATION......................................................... 17
16. SURRENDER OF PREMISES, HOLDING OVER.................................. 18
17. QUIET ENJOYMENT...................................................... 20
18. EVENTS OF DEFAULT.................................................... 20
19. REMEDIES............................................................. 20
20. LANDLORD'S DEFAULT................................................... 22
21. MORTGAGES............................................................ 22
22. ENCUMBRANCES......................................................... 23
23. MISCELLANEOUS........................................................ 23
24. NOTICES.............................................................. 26
25. HAZARDOUS WASTE...................................................... 27
26. RENEWAL OPTION....................................................... 28
27. RIGHT OF FIRST OFFER................................................. 28
Exhibit A-1 Legal Description of Property
Exhibit A-2 Site Plan
Exhibit B Tenant Work Letter
Exhibit B-1 Description of Landlord's Work
Exhibit C Tenant's Personal Property
Exhibit D Rules and Regulations
Exhibit E Renewal Option
Exhibit F Right of First Offer
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LEASE AGREEMENT
This Lease Agreement (this "LEASE") is entered into as of October 24,
2000 by and between LINCOLN PO BENICIA LIMITED PARTNERSHIP, a Delaware
limited partnership ("LANDLORD"), and BEBE STORES, INC., a California
corporation ("TENANT").
1. PREMISES, TERM, AND INITIAL IMPROVEMENTS.
(a) Subject to and upon the terms, provisions and conditions
hereinafter set forth, and each in consideration of the duties, covenants and
obligations of the other hereunder, Landlord hereby leases to Tenant, and
Tenant hereby leases and takes from Landlord, 144,000 square feet of Net
Rentable Area (hereinafter defined) (the "PREMISES") located in a building
(the "BUILDING") to be constructed upon certain land situated in the City of
Benicia, California (the "LAND"). The Building contains an aggregate of
approximately 240,000 square feet of Net Rentable Area on the Land known as
the "Lincoln Distribution Center" (the "PROJECT"). a Legal description of the
Land is attached hereto as EXHIBIT "A-1". A preliminary Site Plan depicting
the Premises is attached hereto as EXHIBIT "A-2". Landlord anticipates that
it may be necessary for Landlord to make certain modifications to the Site
Plan; accordingly, if and when such Site Plan is revised by Landlord, such
revised Site Plan shall be initialed by Landlord and Tenant an dsubstituted
in plan of the then current Site Plan attached to this Lease. The term "NET
RENTABLE AREA" refers to the square footage of the Premises, as calculated
within the boundaries defined by (i) the exterior surface of the exterior
walls and windows of the Building, and (ii) the center line of any demising
walls separating the Premises from space to be occupied by another tenant.
The Net Rentable Area in the Premises has been calculated on the basis of the
foregoing definition and is hereby stipulated to be 144,000 square feet.
(b) The term of this Lease (the "TERM") shall be twelve (12)
years, beginning ninety (90) days following the later to occur of (i)
"Building Shell Completion" (as defined in EXHIBIT "B") or (ii) January 4,
2001 (the "COMMENCEMENT DATE") and, unless extended by Tenant pursuant to the
terms and conditions contained in EXHIBIT "E" attached hereto, ending on the
last day of the calendar month in which the twelve (12) year anniversary of
the the Commencement Date shall occur; provided, however, that if the
Commencement Date shall occur on the first day of a calendar month, the
Expiration Date shall be the last day of the calendar month immediately
preceding the twelve (12) year anniversary of the Commencement Date
("EXPIRATION DATE"). Notwithstanding the foregoing, if Landlord is unable to
deliver possession of the Premises to Tenant on or before January 4, 2001 for
any reason, then, subject to the provisions of Section 1.(d) below, (1) this
Lease shall not be void or voidable by either party, and (2) Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom. Although
the Term may not commence until after the date hereof, from and after the
date hereof, this Lease shall be deemed to a contract between Landlord and
Tenant and the provisions hereof shall be effective for all purposes.
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(c) Landlord shall construct the Building Shell in a good and
workmanlike manner in substantial accordance with the plans and
specifications referenced on EXHIBIT "B-1", and, by occupying the Premises,
Tenant shall be deemed to have accepted the Premises in their then "as is"
condition, subject only to the completion of any punch-list items and any
latent defects noted by Tenant in writing to Landlord within one (1) year
following Building Shall Completion. Neither Landlord nor Landlord's agents
have made any express or implied representations or promises with respect to
the Building or the Premises or the repair or alternation thereof, except as
expressly set forth in this Lease, and no rights or easements or licenses are
acquired by Tenant by implication or otherwise, expect as expressly set forth
herein.
(d) In the event that Building Shall Completion does not occur on
or before April 1, 2001 (the "OUTSIDE BUILDING COMPLETION DEADLINE"),
Tenant, as its sole remedy, shall have the right to terminate this Lease by
giving written notice of such termination to Landlord at any time after the
Outside Building Completion Deadline and prior to the date Building Shall
Completion occurs, in which case this Lease shall be terminated effective
thirty (30) days after Landlord's receipt of Tenant's termination notice,
unless Building Shall Completion occurs within said thirty (30) day period;
provided, however, that the Outside Building Completion Deadline is delayed
due to a Tenant Delay (as defined in EXHIBIT "B" attached hereto). In the
event Tenant terminates this Lease pursuant to this Section 1.(d), neither
party shall have any obligations to the other under this Lease, except for
obligations arising before such termination. For purposes of this Lease, the
term "Tenant Delay" shall mean any delay in Building Shall Completion caused
by or attributable to any act, neglect, failure or omission of Tenant or any
of Tenant's agents, employees, contractors or subcontractors.
2. BASE RENT, SECURITY DEPOSIT AND ADDITIONAL RENT.
(a) Tenant shall pay to Landlord monthly "BASE RENT", in advance,
without demand, deduction or set off, the sums specified below:
<TABLE>
<CAPTION>
Rate Per Square
Months in Term Monthly Base Rent Foot Per Year
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<S> <C> <C>
1-36 $53,280 $4.44
37-72 $56,520 $4.71
73-108 $60,480 $5.04
109-144 $64,080 $5.34
</TABLE>
(b) The first monthly installment, plus the other monthly charges
for Tenant's Proportionate Share of Operating Expenses (as defined and set
forth in Section 2.(c) below), shall be due on the date hereof; thereafter,
monthly installments of Base Rent shall be due ont he first day of each
calendar month following the Commencement Date. If the Term begins on a day
other than the first day of a month or ends on a day other than the last day
of a month, then Base Rent and additional rent for such partial month shall be
prorated.
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(c) Intentionally Omitted
(d) Tenant shall pay, as additional rent, Tenant's Proportionate
Share (herein-after defined) of all costs incurred by Landlord in owning,
operating, maintaining, repairing and replacing the Land and Project and the
facilities and services provided for the common use of Tenant and any other
tenants of the Project (collectively, "OPERATING EXPENSES"), including the
following items: (1) Taxes (as defined below) and the cost of any tax
consultant employed to assist Landlord in determining the fair tax valuation
of the Project and Land or otherwise in contesting the Taxes; (2) the cost of
all utilities used in the Project which are not billed separately to a tenant
of the Project for above standard utility consumption; (3) insurance premiums
(including the related deductibles); (4) the cost of repairs, replacement,
management fees and expenses, landscape maintenance and replacement, security
service (if provided), sewer service (if provided), trash service (if
provided); (5) the cost of dues, assessments, and other charges applicable to
the Land payable to any property or community owner association under
restrice covenants or deed restrictions to which the Premises are subject;
and (6) alterations, additions, and improvements made by Landlord to comply
with any change in any applicable Laws (defined in Section 23.(a) below)
enacted subsequent to the time of construction of the Building. Throughout
the Term on the same day that Base Rent is due, Tenant shall pay to Landlord
an amount equal to 1/12 of Landlord's estimate of Tenant's Proportionate
Share of annual Operating Expenses. The initial monthly payments are based
upon Landlord's estimate of the Operating Expenses for the calendar year in
question, and shall be increased or decreased annually to reflect the actual
Operating Expenses determined by Landlord for that calendar year. If Tenant's
total payments in respect to Operating Expenses for any calendar year are
less than Tenant's Proportionate Share of actual Operating Expenses for the
calendar year, Tenant shall pay the difference to Landlord within ten days
after Landlord's request therefor; if such payments are more than Tenant's
Proportionate Share of actual Operating Expenses for that calendar year,
Landlord shall retain such excess and credit it against Tenant's future
annual payments. Operating Expenses shall not include the following: (A) any
costs for interest, amortization, or other payments on loans to Landlord,
except as provided in clause (H) below; (B) expenses incurred in leasing or
procuring tenants; (C) legal expenses other than those incurred for the
general benefit of the Project's tenants; (D) allowances, concessions, and
other costs of renovating or otherwise improving space for occupants of the
Project or vacant space in the Project; (E) income taxes imposed on or
measure by the income of Landlord from the operation of the Project; (F)
rents under ground leases; (G) costs incurred in selling, syndicating,
financing, mortgaging, or hypothecating any of Landlord's interests int he
Project; (H) the cost of any capital improvements (except for the
amortization over such reasonable period as Landlord shall determine, with
interest at a rate per annum equal to the "Reference Rate" defined in Section
23.(k) below, of the cost of (1) capital improvements made by Landlord or
equipment purchased by Landlord as a means to accomplish savings in
operating, repairing, managing or maintaining the Project, and (2) capital
improvements made by Landlord to comply with any change in any applicable
Laws enacted subsequent to the time of construction of the Building); (I)
depreciation of the Project; (J) management fees in excess of three percent
(3%) of total rent payable hereunder; and (K) the cost of repairs or other
work occasioned by
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fire, windstorm or other insured casualty or hazard, to the extent that
Landlord shall receive proceeds of such insurance or would have received such
proceeds had Landlord maintained the insurance coverage required under this
Lease (costs of repairing an insured casualty tot he extent of the
commercially reasonable deductible amount under the applicable insurance
policy shall constitute an Operating Expense). There shall be no duplication
of costs or reimbursements in calculating Operating Expenses.
(e) If during any calendar year the Project is less than 100%
occupied, then, for purposes of calculating Tenant's Proportionate Share the
water and sewer charges for that calendar year, the amount of such charges
shall be "grossed-up" to the amount which, in Landlord's estimation, would
have been incurred by Landlord had the Project been 100% occupied for that
entire calendar year.
(f) If any payment required of Tenant under this Lease is no6t
paid when due, such late payment will cause Landlord to incur costs not
contemplated y this Lease, the exact amount of such costs being extremely
difficult to fix. Such costs include without limitation, processing and
accounting charges, the late charges that may be imposed on Landlord by the
terms of any encumbrance and/or note secured by an encumbrance covering the
Premises. Therefore, if any payment required of Tenant under this Lease is
not paid when due, except to the extent limited by any applicable Laws, and
not in limitation or waiver of any of Landlord's other rights and remedies
under this Lease, Landlord may charge Tenant and Tenant shall pay to Landlord
a fee equal to five percent (5%) of the delinquent payment as a late charge.
The parties agree that this late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment of
rent by Tenant.
(g) All payments and reimbursements required to be made by Tenant
under this Lease shall constitute "RENT" (herein so called).
(h) The term "TENANT'S PROPORTIONATE SHARE" means the ratio from
time to time of the Net Rentable Area of the Premises to the Net Rentable
Area of the Project. Tenant's Proportionate Share has been initially
determined to be sixty percent (60%). If the Net Rentable Area of the
Premises changes, Tenant's Proportionate Share shall change accordingly.
(i) Tenant shall have the right, at Tenant's sole cost upon thirty
(30) days' written notice to Landlord, during the sixty (60) day period
following the end of each calendar year, to review in Landlord's offices
Landlord's records of Operating Expenses for subject calendar year. Such
review shall be carried out only by regular employees of Tenant or by a major
national or regional accounting firm and not by any other third party. No
person conducting such an audit shall be compensated on a "contingency" or
other incentive basis. Tenant shall keep any information gained from its
inspection of Landlord's books and records confidential and shall not disclose
any such information to any other party, except as required by applicable
Law, as defined in Section 23(a) below. If, as of the sixtieth (60th) day
after the end of the calendar year, Tenant shall not have delivered to Landlord
an objection statement (as defined below),
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then the calculation of Operating Expenses for the subject calendar year
shall be final and binding upon Landlord and Tenant, and Tenant shall have no
further right to object to such calculation of Operating Expenses. If within
such sixty (60) day period, Tenant delivers to Landlord a written statement
specifying objections to the calculation of Operating Expenses for the
subject calendar year (an "objection statement"), then Tenant and Landlord
shall meet to attempt to resolve such objection within thirty (30) days
after delivery of the objection statement. Notwithstanding that any such
dispute remains unresolved, Tenant shall be obligated to pay Landlord all
amounts payable in accordance with this Section 2 (including any disputed
amount). If such objection is not resolved within such thirty (30) day
period, then either party shall have the right to require that the dispute be
submitted to binding arbitration under the rules of the American Arbitration
Association. All costs and expenses of Tenant's initial review of Landlord's
records shall be paid by Tenant. In the event either party shall submit the
dispute over Tenant's objection statement to arbitration as provided above,
the prevailing party shall be entitled to receive from the non-prevailing
party, in addition to the arbitration costs incurred by the prevailing party,
such amount as the arbitrator may adjudge to be reasonable attorneys' fees
for the services rendered the prevailing party in such proceeding. Landlord
and Tenant agree that, notwithstanding any provision of this Lease or any
provision of the rules of the American Arbitration Association to the
contrary, Landlord shall be deemed the prevailing party in any arbitration
proceeding brought by either party under this Section 2 unless the final
determination of such arbitration proceeding is that Landlord overstated
Tenant's Proportionate Share of Operating Expenses, in the aggregate, for the
applicable calendar year by more than ten percent (10%). If such dispute
results in an agreement or determination that Tenant is entitled to a refund,
Landlord shall, at its option, either pay such refund or credit the amount
thereof to the Base Rent next becoming due from Tenant.
3. TAXES.
(a) Landlord shall pay all taxes, assessments and governmental
charges whether federal, state, county, or municipal and whether they are
imposed by taxing or management districts or authorities presently existing
or hereafter created but excluding any interest or penalties for late or
delinquent payments (collectively, "TAXES") that accrue against the Premises,
the Land and the Project. If, during the Term, there is levied, assessed or
imposed on Landlord a capital levy or other tax directly on the rent or a
franchise tax, assessment, levy or charge measured by or based, in whole or
in part, upon rent, then all such taxes, assessments, levies or charges, or
the part thereof so measured or based, shall be included within the term
"TAXES". Taxes shall not include income, franchise, transfer, inheritance or
capital stock taxes, unless, due to a change in the method of taxation, any
of such taxes is levied or assessed against Landlord in lieu of, as a
substitute (in whole or in part) for, or as an addition to, any other charge
which would otherwise constitute a part of Taxes. Further, Taxes shall not
include penalties and interest on Taxes caused by the failure of Landlord to
make timely payment (not due to any failure of Tenant to make timely payment
of Tenant's Proportionate Share of Taxes to Landlord). Tenant shall pay, as
additional rent, Tenant's Proportionate Share of Taxes as specified in
Section 2.(d) above; provided, however, if the Project is occupied by more
than one tenant and the
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cost of any improvements constructed in the Premises is disproportionately
higher than the cost of improvements constructed in the premises of other
tenants of the Project, then Landlord may require that Tenant pay the amount
of Taxes attributable to such improvements in addition to Tenant's
Proportionate Share of other Taxes.
(b) Tenant shall (1) pay when due all taxes levied or assessed
against any personal property, fixtures or alterations placed in the Premises
and (2) upon the request of Landlord, deliver to Landlord receipts from the
applicable taxing authority or other evidence acceptable to Landlord to
verify that such taxes have been paid. If any such taxes are levied or
assessed against Landlord or Landlord's property and (A) Landlord pays them
or (B) the assessed value of Landlord's property is increased thereby and
Landlord pays the increased taxes, then Tenant shall pay to Landlord such
taxes immediately upon Landlord's request therefor.
4. LANDLORD'S MAINTENANCE.
(a) This Lease is intended by Landlord and Tenant to be a net
lease; accordingly, Landlord's maintenance obligations are limited to the
replacement of the Building's roof and maintenance of the foundation and
structural members of the exterior walls and load bearing columns within the
Premises (collectively, the "BUILDING'S STRUCTURE"); however, Landlord shall
not be responsible (1) for any such work until Tenant delivers to Landlord
written notice of the need therefor, or (2) for alterations to the Building's
Structure required by any applicable Law (including, without limitation, the
Americans with Disabilities Act of 1990) because of Tenant's use of the
Premises (which alterations shall be performed by Tenant at Tenant's sole
cost and expense). The Building's Structure does not include skylights,
windows, glass or plate glass, doors, special store fronts or office entries,
all of which shall be maintained by Tenant at Tenant's sole cost and expense.
Landlord's liability for any defects, repairs, replacement or maintenance for
which Landlord is responsible hereunder shall be limited to the cost of
performing such work. Landlord shall perform all maintenance work hereunder
as expeditiously as reasonably practicable (without overtime or premium time
labor) and shall make commercially reasonable efforts to minimize any
interference with Tenant's use.
(b) Landlord shall maintain the parking areas, driveways, alleys
and grounds surrounding the Premises in a clean and sanitary condition,
including, without limitation, maintenance, repairs and replacements of (i)
any drill or spur track servicing the Premises, (ii) the exterior of the
Building (including painting), (iii) sprinkler systems and sewage lines, and
(iv) any other items normally associated with the foregoing. Tenant shall
repair or replace, as applicable, and pay for any damage caused to such
parking areas, driveways, alleys and grounds by a Tenant Party (as defined in
Section 23.(a) below) or caused by Tenant's default hereunder.
(c) The cost of performing Landlord's maintenance and repair
obligations shall be an Operating Expense (except to the limited extent any
such cost is specifically excluded from being an Operating Expense pursuant
to Section 2.(c) above).
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5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.
(a) Tenant shall maintain all parts of the Premises (except for
maintenance work for which Landlord is expressly responsible under Section 4
above) in good condition and promptly make all necessary repairs and
replacements to the Premises, and Tenant waives all rights under, and
benefits of, subsection 1 of Section 1932 and Sections 1941 and 1942 of the
California Civil Code and under any similar law or ordinance now or hereafter
in effect. Tenant shall also be responsible for the cleaning and sweeping of
the Premises and for the removal of any trash which originates from the
Premises. Tenant shall be responsible for disposal of its trash from the
Premises and will maintain adequate receptacles for such disposal, the
design, placement and capacity of such receptacles to be subject to the prior
approval of Landlord. Outdoor storage of trash or any other material and
receptacles or containers not approved by Landlord is strictly prohibited. At
its sole cost and expense, Tenant shall provide interior pest and insect
extermination at the Premises as often as is reasonably necessary to
eliminate any pests or insects, whether endemic to the Building or specific
to the Premises or Tenant's use thereof.
(b) Subject to Landlord's obligations set forth in Section 4.(c)
above, Tenant shall maintain the hot water equipment and the HVAC System in
good repair and condition and in accordance with all applicable Laws and with
such equipment manufacturers' suggested operation/maintenance service
program. Tenant shall enter into a regularly scheduled (at least monthly)
preventive maintenance/service contract for the hot water equipment and the
HVAC System, in form and substance and with a contractor reasonably
acceptable to Landlord, and deliver copies thereof to Landlord. At least
fourteen (14) days before the end of the Term, Tenant shall deliver to
Landlord a certificate from an engineer reasonably acceptable to Landlord
certifying that the hot water equipment and the HVAC System are then in good
repair and working order.
(c) If Tenant fails to perform any of Tenant's maintenance or
repair obligations, and if such failure continues for thirty (30) days after
written notice thereof is delivered to Tenant, then Landlord may perform such
obligation, in which event Tenant shall pay to Landlord the reasonable costs
incurred by Landlord in performing such obligation within thirty (30) days
after Landlord's written request therefor; provided, however, that if, by the
nature of such maintenance or repair, Tenant cannot reasonably complete the
work within the 30-day period described above, Landlord shall not perform
such maintenance or repair obligation so long as Tenant commences such
maintenance or repair with due diligence and dispatch within the 30-day
period described above, and, having so commenced, thereafter performance such
maintenance and repair with diligence and dispatch and completes the same.
(d) Tenant acknowledges that Landlord is not providing security
services of any kind to the Premises or for Tenant's property and that the
keys giving to Tenant for the Premises may not be secure. At its expense,
Tenant shall provide whatever security and/or alarm systems Tenant deems
necessary or appropriate for the protection of the Premises and of Tenant's
personal property and personnel located therein, including, if Tenant desires
to do so, installing new locks for the Premises with
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new keys. Tenant shall provide to Landlord copies of all keys and access
codes to allow Landlord entry to the Premises. In no event shall Landlord be
responsible for, and Tenant waives any and all claims arising from, the loss
or damage to any of Tenant's personal property situated in and on the
Premises, even though Landlord may have provided general area security or
guard services. Landlord may elect to, but shall have no obligation to,
provide general area security or guard services. In the event Landlord elects
to provide general area security or guard services, it may discontinue such
security or guard services with at least thirty (30) days' notice. At its
expense, Tenant is also responsible for the maintenance, repair, or
replacement of any mechanical, security, and fire protection systems which
Tenant has installed within the Premises. Tenant is expressly advised that if
Tenant should place any fixtures, inventory or equipment in or on the
Premises prior to the time the Premises are completed and delivered to the
Tenant, the risk of loss or damage to such inventory, fixtures, or equipment
will be greatly increased in view of the fact that, out of necessity,
numerous people will be permitted access to the Premises for the purpose of
completion of any work. All such risk of loss or damage shall be borne
exclusively by the Tenant and not by the Landlord, and the Tenant hereby
waives any claim for any such loss or damage against the Landlord.
6. ALTERATIONS. Tenant shall not make any alterations, additions or
improvements to the Premises (collectively, "ALTERATIONS") without the prior
written consent of Landlord; provided, however, that Landlord's consent shall
not be required for Alterations to the interior of the Premises that are
reasonably anticipated to cost less than Fifty Thousand Dollars ($50,000.00),
provided that such Alterations do not affect, or require work to be performed
on, the Building's Structure, the HVAC System or any Building systems,
including, without limitation, the electrical, life-safety, plumbing and fire
protection systems (collectively, the "BUILDING SYSTEMS") (such alterations,
additions or improvements are herein referred to as "MINOR ALTERATIONS").
Landlord shall not be required to notify Tenant of whether it consents to any
Alterations until it (a) has received plans and specifications therefor
which are sufficiently detailed to allow construction of the work depicted
thereon to be performed in a good and workmanlike manner, and (b) has had a
reasonable opportunity to review them. If the Alterations will affect the
Building's Structure, HVAC System, or other Building Systems, then the plans
and specifications therefor must be prepared by a licensed engineer
acceptable to Landlord. Landlord's approval of any plans and specifications
shall not be a representation or warranty that the plans or the work depicted
thereon will comply with applicable Laws or be adequate for any purpose, but
shall merely be Landlord's consent to performance of the work by Tenant. Upon
completion of any Alterations, Tenant shall deliver to Landlord accurate,
reproducible as-built plans therefor. Tenant may erect shelves, bins,
machinery and trade fixtures provided that such items (1) do not alter the
basic character of the Premises or the Building; (2) do not overload or
damage the same; and (3) may be removed without damage to the Premises.
Unless Landlord specifies in writing otherwise, all Alterations shall be
Landlord's property when installed in the Premises; provided, however, the
following shall remain Tenant's property: (i) furniture, movable equipment
and other personal property that is not attached to the floors, walls, or
ceiling of the Premises; and (ii) any other fixture, equipment, or other
item, regardless of the manner of attachment, that is used primarily in
Tenant's trade or
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business and that can be removed as a separate physical unit without damage
to the Building and without interference with other tenants' use and
enjoyment of their leased premises. All work performed by a Tenant Party in
the Premises (including that relating to the installation, repair,
replacement, or removal of any item) shall be performed in accordance with
all applicable Laws and with Landlord's specifications and requirements, in a
good and workmanlike, lien-free manner, and so as not to damage or alter the
Building's Structure or the Premises. In connection with any such
Alterations, Tenant shall pay to Landlord an administration fee of five
percent (5%) of all costs incurred for such work. Upon expiration of the Term
or termination of Tenant's right to possess the Premises, Landlord may
require Tenant to remove Alterations installed in the Premises by or at the
request of Tenant (excluding the Initial Improvements described on
EXHIBIT "B"), to repair any damage to the Premises caused by such removal,
and to restore the Premises to good condition and repair, ordinary wear and
tear excepted. If Landlord elects to require Tenant to remove any
Alterations, it may do so by delivering to Tenant written notice thereof at
the time Landlord consented to the Alterations or at any time thereafter.
Attached hereto as EXHIBIT "C" is a list of trade fixtures, equipment, or
other items that shall remain the property of Tenant. Subject to Landlord's
prior written approval, this list may be updated as Alterations are made to
the Premises.
7. SIGNS. Tenant shall not place, install or attach any signage,
decorations, advertising media, blinds, draperies, window treatments, bars,
or security installations to the Premises or the Building without Landlord's
prior written consent; provided, however, that Landlord agrees that Tenant
may install the signage approved by Landlord and shown on the Final Working
Drawings (as defined in EXHIBIT "B") attached hereto) (the "PRE-APPROVED
SIGNAGE"). Tenant shall repair, paint, and/or replace any portion of the
Premises or the Building damaged or altered as a result of its signage when
it is removed (including, without limitation, any discoloration of the
Building). Except for the Pre-Approved Signage, Tenant shall not (a) make any
changes to the exterior of the Premises or the Building, (b) install any
exterior lights, decorations, balloons, flags, pennants, banners or
paintings; or (c) erect or install any signs, windows or door lettering,
decals, window or storefront stickers, placards, decorations or advertising
media of any type that is visible from the exterior of the Premises without
Landlord's prior written consent. Landlord shall not be required to notify
Tenant of whether it consents to any sign until it (1) has received detailed,
to-scale drawings thereof specifying design, material composition, color
scheme, and method of installation, and (2) has had a reasonable opportunity
to review them.
8. UTILITIES.
(a) Tenant shall obtain and pay for all water, gas, electricity,
heat, telephone, sewer, sprinkler charges and other utilities and services
used at the Premises, together with any taxes, penalties, surcharges,
deposits, maintenance charges, and the like pertaining to Tenant's use of
such utilities within the Premises. Tenant or Landlord may, at Tenant's
expense, separately meter and bill Tenant directly for its use of any such
utility service, in which case, the amount separately billed to Tenant for
Building--standard utility service shall not be duplicated in Tenant's
obligation
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to pay Tenant's Proportionate Share of Operating Expenses under Section 2.(c)
above. All amounts due from Tenant under this Section 8 shall be payable
immediately upon Landlord's request therefor.
(b) If solely as a result of Landlord's gross negligence or
willful misconduct, Landlord fails to provide an Essential Service (as
hereinafter defined) which Landlord is required to provide to the Premises
pursuant to the terms of this to Section 8 (an "ABATEMENT CONDITION"), which
prevents Tenant from occupying all or a material portion of the Premises (the
"ABATEMENT SPACE"), then Tenant may elect, by notice to Landlord, to have
Base Rent and Tenant's Proportionate Share of Operating Expenses and Taxes
abate, subject to the following additional conditions having been satisfied in
each instance:
(i) With respect to the Abatement Condition in question,
Tenant shall have given notice to Landlord of the occurrence thereof, which
notice shall designate the cause or suspected cause of the Abatement
Condition, if known to Tenant, and the portion of the Premises which is not
usable by Tenant, and the Abatement Condition in question shall have
continued after Tenant has given such notice for a period of not less than
seven (7) consecutive days; and
(ii) Tenant, solely because of the occurrence of the
Abatement Condition, shall have actually vacated the Abatement Space for not
less than seven (7) consecutive days after giving its notice to Landlord of
the Abatement Condition.
If, with respect to the Abatement Condition in question, the
conditions of this Section 8.(b) are fulfilled, then Base Rent and Tenant's
Proportionate Share of Operating Expenses and Taxes shall abate, in the
proportion that the rentable square foot area of the Abatement Space actually
vacated bears to the rentable square foot area of the Premises, for a period
equal to the lesser of (A) the period during which Tenant has actually
vacated the Abatement Space, or (B) the period of time between Tenant's
having vacated the Abatement Space and the date Tenant receives notice from
Landlord that the Abatement Condition has been cured, provided that such time
periods shall not commence to run until the day after Tenant gives Landlord
notice of the Abatement Condition as required above. For purposes of this
Section 8.(b), vacation of the Abatement Space shall not require Tenant to
remove furniture, fixtures or equipment. Tenant shall be deemed to have
vacated the Abatement Space if, due to the Abatement Condition, the Abatement
Space is not occupiable by Tenant, and Tenant does not in fact conduct any
business in or use the Abatement Space. Tenant agrees that furnishing
Landlord with notice of the Abatement Condition shall be an election of
remedies, and Tenant shall be deemed to have waived any other rights against
Landlord at law or in equity, including, but not limited to, an action for
money damages in connection with the Abatement Condition in question. Nothing
contained herein shall limit Tenant's right to an abatement of rent or
termination of this Lease in the case of a Casualty as provided in Section 10
hereof. For purposes hereof, an "ESSENTIAL SERVICE" shall mean the standard
services to be provided by the heating, ventilation and air conditioning
systems, life safety systems, mechanical systems, plumbing and waste disposal
systems and electrical systems to the extent Landlord is
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required to provide such services to the Premises pursuant to the terms of
this Section 8.
(c) Except as expressly provided above, Landlord shall not be
liable for any interruption or failure of utility service to the Premises,
and Tenant hereby waives the provisions of California Civil Code Section
1932(1) or any other applicable Laws permitting the termination of this Lease
due to such failure or interruption.
9. INSURANCE. Tenant shall maintain (a) workers' compensation
insurance (with a waiver of subrogation endorsement reasonably acceptable to
Landlord) and commercial general liability insurance (with contractual
liability endorsement), including personal injury and property damage in the
amount of $2,000,000 per occurrence combined single limit for personal
injuries and death of persons and property damage occurring in or about the
Premises, plus umbrella coverage of at least $5,000,000 per occurrence, (b)
fire and extended coverage insurance covering (1) the replacement cost of all
alterations, additions, partitions and improvements installed in the Premises
by or on behalf of a Tenant Party (including the Initial Improvements
described on EXHIBIT "B"), and (2) the replacement cost of all of Tenant's
personal property in the Premises, and (c) business interruption insurance
and such other insurance as any Landlord's Mortgagee (as defined in Section
21.(a) below) may reasonably require, provided that any such other insurance
shall be reasonably consistent with the insurance requirements of prudent
landlords of comparable projects in the vicinity of the Project. Such
policies shall (A) name Landlord, Landlord's agents, and their respective
affiliates (as defined in Section 23.(a) below), as additional insureds (and
as loss payees on the fire and extended coverage insurance), (B) be issued by
an insurance company licensed to do business in the State of California with
a Best's Guide Insurance Rating of A-VII, or better, and otherwise acceptable
to Landlord, (C) provide that such insurance may not be canceled unless
thirty (30) days' prior written notice is first given to Landlord, (D) be
delivered to Landlord by Tenant before the Commencement Date and at least
30 days before each renewal thereof, and (E) provide primary coverage to
Landlord when any policy issued to Landlord is similar or duplicate in
coverage, in which case Landlord's policy shall be excess over Tenant's
policies.
Landlord shall procure and maintain throughout the Term, the cost of
which shall be included as an Operating Expense, (1) fire and extended
coverage insurance covering the Building in an amount not less than the full
replacement cost of the Building, and (2) such other insurance as Landlord or
Landlord's Mortgagee (hereinafter defined) shall require.
10. CASUALTY DAMAGE.
(a) Tenant immediately shall give written notice to Landlord of
any damage to the Premises or the Building. If the Premises or the Building
are totally destroyed by an insured peril, or so damaged by an insured peril
that, in Landlord's reasonable estimation, rebuilding or repairs cannot be
substantially completed within 180 days after the date of Landlord's actual
knowledge of such damage, then either
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Landlord or (if a Tenant Party did not cause such damage) Tenant may
terminate this Lease by delivering to the other written notice thereof within
thirty (30) days after such damage, in which case, the rent shall be abated
during the unexpired portion of this Lease, effective upon the date such
damage occurred. Time is of the essence with respect to the delivery of such
notices.
(b) Subject to Section 10.(c) below, if this Lease is not
terminated under Section 10.(a), then Landlord shall restore the Premises to
substantially its previous condition, except that Landlord shall not be
required to rebuild, repair or replace any part of the partitions, fixtures,
additions and other improvements or personal property required to be covered
by Tenant's insurance under Section 9. If the Premises are untenantable, in
whole or in part, during the period beginning on the date such damage
occurred and ending on the date of substantial completion of Landlord's
repair or restoration work (the "REPAIR PERIOD"), then the rent for such
period shall be reduced to such extent as may be fair and reasonable under
the circumstances and the Term shall be extended by the number of days in the
Repair Period.
(c) If the Premises are destroyed or damaged by any peril not
covered by the insurance maintained by Landlord or any Landlord's Mortgagee
requires that insurance proceeds be applied to the indebtedness secured by
its Mortgage (defined below) or to the Primary Lease (defined below)
obligations, Landlord may terminate this Lease by delivering written notice
of termination to Tenant within thirty (30) days after such destruction or
damage or such requirement is made known by any such Landlord's Mortgagee, as
applicable, whereupon all rights and obligations hereunder shall cease and
terminate, except for any liabilities of Tenant which accrued before this
Lease is terminated.
(d) If the Premises are destroyed or damaged by any peril not
covered by the insurance maintained by Landlord and, in Landlord's reasonable
estimation, rebuilding or repairs cannot be substantially completed within
180 days after the date of such damage, then (if a Tenant Party did not cause
such damage) Tenant may terminate this Lease by delivering to Landlord
written notice thereof within thirty (30) days after Tenant's receipt of
Landlord's estimation of the time to repair such damage, in which case, the
rent shall be abated during the unexpired portion of this Lease, effective
upon the date such damage occurred. Time is of the essence with respect to
the delivery of such notices.
(e) The provisions of this Lease, including this Section 10,
constitute an express agreement between Landlord and Tenant with respect to
any and all damage to, or destruction of, all or any part of the Premises or
the Building, and any statute or regulation of the State of California,
including, without limitation, subsection 2 of Section 1932, subsection 4 of
Section 1933, and Sections 1941 and 1942 of the California Civil Code, with
respect to any rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any other statute or
regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises or the
Building.
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11. LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE.
(a) Subject to Section 11.(b) below, Tenant shall, to the maximum
extent permitted by Law, protect, indemnify, defend, and hold harmless
Landlord, its successors, assigns, agents, employees, contractors, partners,
directors, officers and affiliates (collectively, the "INDEMNIFIED PARTIES")
from and against all fines, suits, losses, costs, liabilities, claims,
demands, actions and judgments of every kind or character (1) arising from
Tenant's failure to perform its covenants hereunder, (2) arising from, or
caused, wholly or in part, by a Tenant Party or any other person entering
upon the Premises under or with a Tenant Party's express or implied
invitation or permission, (3) arising from or out of the occupancy or use of
the Premises by a Tenant Party or arising from or out of any occurrence in
the Premises, howsoever caused, or (4) suffered by, recovered from or
asserted against any of the Indemnified Parties by the employees, agents,
contractors, or invitees of Tenant or its subtenants or assignees. However,
such indemnification of the Indemnified Parties by Tenant shall not be
applicable if such loss, damage, or injury is caused by the sole active
negligence or willful misconduct of Landlord or any of its duly authorized
agents or employees.
(b) Landlord and Tenant both waive any claim it might have against
the other for any damage to or theft, destruction, loss, or loss of use of
any property, to the extent the same is insured against under any insurance
policy maintained by it that covers the Building, the Premises, Landlord's or
Tenant's fixtures, personal property, leasehold improvements, or business, or
is required to be insured against by the waiving party under the terms
hereof, regardless of whether the negligence or fault of the other party
caused such loss. Each party shall cause its insurance carrier to endorse all
applicable policies waiving the carrier's rights of recovery under
subrogation or otherwise against the other party.
12. USE.
(a) The Premises shall be used only for receiving, storing, shipping
and selling clothing products, materials and merchandise made or distributed
by Tenant and for such other lawful purposes as may be incidental thereto;
however, no retail sales may be made from the Premises. Tenant shall not use,
or permit the use of, the Premises to receive, store or handle any product,
material or merchandise that is explosive or highly inflammable or hazardous.
Outside storage is prohibited. Tenant shall be solely responsible for
complying with all Laws applicable to the use, occupancy, and condition of
the Premises. Tenant and all Tenant Parties shall comply with all reasonable
non-arbitrary rules and regulations governing the use and occupancy of the
Premises which are now or hereafter imposed by Landlord. A copy of the rules
and regulations now in force are attached as EXHIBIT "D". Tenant shall not
cause or permit any objectionable or unpleasant odors, smoke, dust, gas,
light, noise or vibrations to emanate from the Premises; nor take or permit
any other action that would constitute a nuisance or would disturb,
unreasonably interfere with, or endanger Landlord or any other person; nor
cause or permit the Premises to be used for any purpose or in any manner that
would (1) void the insurance thereon, (2) materially increase the insurance
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risk, or (3) cause the disallowance of any sprinkler credits. Tenant shall
pay to Landlord on demand any increase in the cost of any insurance on the
Premises or the Building incurred by Landlord which is caused by Tenant's use
of the Premises.
(b) Tenant and its employees and invitees shall have the
non-exclusive right to use, in common with others, a proportionate share of
the parking spaces in the Project (based on the ratio from time to time of
the Net Rentable Area of the Premises to the Net Rentable Area of the
Project) which Landlord has designated for such use, subject to (1) such
reasonable rules and regulations as Landlord may promulgate from time to time
and (2) rights of ingress and egress of other tenants and their employees,
agents and invitees. Landlord shall not be responsible for enforcing Tenant's
parking rights against third parties.
13. INSPECTION. Landlord and Landlord's agents and representatives may
enter the Premises during business hours to: inspect the Premises; to make
such repairs as may be required or permitted under this Lease; to perform any
unperformed obligations of Tenant hereunder; and to show the Premises to
prospective purchasers, mortgagees, ground lessors, and (during the last six
(6) months of the Term) tenants. During the last six (6) months of the Term,
Landlord may erect a sign on the Premises indicating that the Premises are
available. Tenant shall notify Landlord in writing of its intention to vacate
the Premises at least sixty (60) days before Tenant will vacate the Premises;
such notice shall specify the date on which Tenant intends to vacate the
Premises (the "VACATION DATE"). At least thirty (30) days before the Vacation
Date, Tenant shall arrange to meet with Landlord for a joint inspection of the
Premises. After such inspection, Landlord shall prepare a list of items, if
any, that Tenant must perform before the Vacation Date. If Tenant fails to
arrange for such inspection, then Landlord may conduct such inspection and
Landlord's determination of the work Tenant is required to perform before the
Vacation Date shall be conclusive. If Tenant fails to perform such work
before the Vacation Date, then Landlord may perform such work at Tenant's
cost. Tenant shall pay all reasonable costs incurred by Landlord in
performing such work within ten days after Landlord's request therefor.
14. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not, without the prior written consent of Landlord,
which consent Landlord shall not unreasonably withhold, (1) advertise that
any portion of the Premises is available for lease or cause or allow any such
advertisement, (2) assign, transfer, or encumber this Lease or any estate or
interest herein, whether directly or by operation of law, (3) if Tenant is an
entity other than a corporation whose stock is publicly traded, permit the
transfer of an ownership interest in Tenant so as to result in a change in
the current control of Tenant, (4) sublet any portion of the Premises, (5)
grant any license, concession or other right of occupancy of any portion of
the Premises, or (6) permit the use of the Premises by any parties other than
Tenant (any of the events listed in Sections 14.(a)(1) through 14.(a)(6)
being a "TRANSFER" and any person or entity to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "TRANSFEREE").
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(b) If Tenant requests Landlord's consent to a Transfer, then Tenant
shall provide Landlord with a written description of all terms and conditions
of the proposed Transfer, copies of the proposed documentation, the portion
of the Premises to be Transferred (herein called the "SUBJECT SPACE") and the
following information about the proposed Transferee: name and address;
satisfactory information about its business and business history; its
proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to
determine the proposed Transferee's creditworthiness and character
(collectively, the "NOTICE OF PROPOSED TRANSFER"). Tenant shall reimburse
Landlord for its reasonable attorneys' fees and other expenses incurred in
connection with considering any request for its consent to a Transfer, up to
a maximum of One Thousand Five Hundred Dollars ($1,500.00).
(c) If Landlord consents to a proposed Transfer, then the proposed
Transferee shall deliver to Landlord a written agreement whereby it expressly
assumes the Tenant's obligations hereunder (however, any Transferee of less
than all of the space in the Premises shall be liable only for obligations
under this Lease that are properly allocable to the space subject to the
Transfer, and only to the extent of the rent it has agreed to pay Tenant
therefor). Landlord's consent to a Transfer shall not release Tenant from
performing its obligations under this Lease, but rather Tenant and its
Transferee shall be jointly and severally liable therefor. Tenant hereby
waives its rights under Section 2819 of the California Civil Code or any
similar statute or law now or hereafter in effect, and agrees that Landlord
may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or
their consent thereto, and such actions shall not relieve Tenant of its
liability under this Lease. If an Event of Default occurs while the Premises
or any part thereof are subject to a Transfer, then Landlord, in addition to
its other remedies, may collect directly from such transferee all rents
becoming due to Tenant and apply such rents against Tenant's rent
obligations. Tenant authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so.
(d) Notwithstanding the foregoing, Landlord's consent shall not be
required for the following Transfers (herein referred to as "PERMITTED
TRANSFERS" and a Transferee under any such Permitted Transfer is herein
referred to as a "PERMITTED TRANSFEREE"): (i) an assignment of this Lease to
a Transferee that purchases all or substantially all of the assets of Tenant,
or is a Transferee that is the resulting entity of a merger or consolidation
of Tenant with another entity, or (ii) an assignment or subletting of all or
a portion of the Premises to an affiliate of Tenant; provided that (1) Tenant
shall not be in default (beyond applicable notice and cure periods) in the
performance of any of its obligations under this Lease at the time of the
Transfer; (2) Tenant delivers to Landlord a Notice of Proposed Transfer with
respect to such proposed Transfer at least thirty (30) days prior to the
effective date thereof and promptly supplies Landlord with any documents or
information reasonably requested by Landlord regarding such Transfer or
Transferee, including, but not limited to, copies of the sublease or
instrument of assignment, copies of documents establishing to the reasonable
satisfaction of Landlord that the transaction in question is one described in
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clause (i) or (ii) above; and (3) any such proposed Transfer is made for a
good faith operating business purpose and not, whether in a single
transaction or in a series of transactions, be entered into as a subterfuge
to evade the obligations and restrictions relating to Transfers set forth in
this Section 14. In the event of a transfer to a Permitted Transferee, Tenant
shall not be released from performing its obligations under this Lease, but
rather Tenant and the Permitted Transferee shall be jointly and severally
liable therefor.
(e) Tenant hereby assigns, transfers and conveys one-half of all
consideration received by Tenant under any Transfer (excluding Permitted
Transfers), which are in excess of (i) the rents payable by Tenant under this
Lease, plus (ii) the unamortized cost of the Initial Improvements, and any
other Alterations to the Premises paid for by Tenant (such amortization to be
made on a straight-line basis over the initial Term), and Tenant shall hold
such amounts in trust for Landlord and pay them to Landlord within twenty
(20) days after receipt.
15. CONDEMNATION. If more than 50% of the Premises is taken for any
public or quasi-public use by right of eminent domain or private purchase in
lieu thereof (a "TAKING"), and the Taking prevents or materially interferes
with the use of the remainder of the Premises for the purpose for which they
were leased to Tenant, either party may terminate this Lease by delivering to
the other written notice thereof within thirty (30) days after the Taking, in
which case rent shall be abated during the unexpired portion of the Term,
effective as of the date of such Taking. If (a) less than 50% of the Premises
are subject to a Taking or (b) more than 50% of the Premises are subject to a
Taking, but the Taking does not prevent or materially interfere with the use
of the remainder of the Premises for the purpose for which they were leased
to Tenant, then neither party may terminate this Lease, but the rent payable
during the unexpired portion of the Term shall be reduced to such extent as
may be fair and reasonable under the circumstances. All compensation awarded
for any Taking shall be the property of Landlord and Tenant assigns any
interest it may have in any such award to Landlord. Specifically, and without
limiting the generality of the foregoing, said assignment is intended to
include: (i) the "bonus value" represented by the difference, if any, between
rent under this Lease and market rent for the unexpired Term; (ii) the value
of improvements to the Premises, whether said improvements were paid for by
Landlord or by Tenant; and (iii) the value of any and all other items and
categories of property for which payment of compensation may be made in any
such proceeding. Notwithstanding the foregoing, Tenant shall be entitled to
receive any award of compensation for (1) loss of or damage to the goodwill
of Tenant's business and lost profits (but only to the extent the same does
not constitute "bonus value"), (2) the taking of trade fixtures and equipment
owned and paid for by Tenant (meaning the trade fixtures, furniture, and
personal property placed in the Premises by Tenant and described on EXHIBIT
"C"), and (3) any moving or relocation expenses which Tenant is entitled under
the law to recover directly from the public agency which acquires the
Premises. Tenant hereby waives sections 1265.110 through 1265.160 of the
California Code of Civil Procedure.
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16. SURRENDER OF PREMISES, HOLDING OVER.
(a) No act by Landlord shall be an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be
valid unless it is in writing and signed by Landlord. At the end of the Term
or the termination of Tenant's right to possess the Premises, Tenant shall
(1) deliver to Landlord the Premises with all improvements located thereon in
good repair and condition, reasonable wear and tear (subject however to
Tenant's maintenance obligations) excepted, and with the HVAC System and hot
water equipment, any remaining light fixtures (including ballasts), and
overhead doors and related equipment in good working order, (2) deliver to
Landlord all keys to the Premises, and (3) remove all signage placed on the
Premises, the Building, or the Land by or at Tenant's request. All fixtures,
alterations, additions, and improvements (whether temporary or permanent)
shall be Landlord's property and shall remain on the Premises except as
provided in the next two sentences. Tenant may remove all trade fixtures,
furniture, and personal property placed in the Premises by Tenant and
described on EXHIBIT "C" (but Tenant shall not remove any such item which was
paid for, in whole or in part, by Landlord). Additionally, Tenant shall
remove such alterations, additions, improvements, fixtures, equipment,
wiring, furniture, and other property as Landlord may request in writing
(excluding the Initial Improvements described on EXHIBIT "B"), provided such
request is made within six (6) months after the end of the Term. All items so
requested to be moved which are not so removed shall, at the option of
Landlord, be deemed abandoned by Tenant and may be appropriated, sold, stored,
destroyed, or otherwise disposed of by Landlord without notice to Tenant and
without any obligation to account for such items and Tenant shall pay for the
costs incurred by Landlord in connection therewith. Any such disposition
shall not be considered a strict foreclosure or other exercise of Landlord's
rights in respect of the security interest granted under Section 26 below. All
work required of Tenant under this Section 16.(a) shall be coordinated with
Landlord and be done in a good and workmanlike manner, in accordance with all
applicable Laws, and so as not to damage the Building or unreasonably
interfere with other tenants' use of their premises. Tenant shall, at its
expense, repair all damage caused by any work performed by Tenant under this
Section 16.(a). Without limiting the generality of the foregoing, delivery of
the Premises in compliance with this Section 16.(a) shall require that
Tenant cause the following (which is not an exclusive list) to be true as of
the date of surrender:
(i) All interior lights are operational and burning.
(ii) All exhaust, ceiling and overhead fans are operational.
(iii) Warehouse floor is broom swept and clean of all trash and
materials.
(iv) Warehouse floor is cleaned of excessive oils, fluids and
other foreign materials.
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(v) All electrical, plumbing, and other utilities which are
terminated are disconnected, capped and/or terminated according to
applicable building codes and all other governmental requirements.
(vi) Overhead interior and exterior doors are operational and
in good condition.
(vii) Any bolts secured to floor are cut off flush and sealed
with epoxy.
(viii) All furniture, trash and debris are removed.
(ix) All pictures, posters, signage, stickers and all similar
items are removed from all walls, windows, doors and all other interior and
exterior surfaces of the Premises.
(x) Carpet areas are vacuumed.
(xi) All uncarpeted office floors are swept and any excess wax
buildup on tile and vinyl floors is removed.
(xii) All Tenant installed computer cable is removed to point of
origin.
(xiii) All doors, windows, and miscellaneous hardware are
operational if Landlord so requires.
(xiv) All heating, air conditioning and mechanical equipment is
operational and in good working condition.
(xv) Ceiling tiles, grid light lenses, air grills and
diffusers are in place with no holes or stains.
(xvi) There are no broken windows or other glass items.
(xvii) Bathroom walls, floors, and fixtures are clean.
(xviii) All plumbing fixtures are intact and operational and do not
leak.
(xix) Inside walls are reasonably clean and any holes in the
walls or roof are properly and permanently patched.
(xx) If Tenant fails to vacate the Premises at the end of the
Term, then Tenant shall be a Tenant at sufferance and Tenant shall pay, in
addition to the other rent due hereunder, a daily Base Rent equal to (i)
for the first sixty (60) days, One Hundred Fifty Percent (150%) of the
daily Base Rent payable during the last month of the Term, and (ii)
thereafter and until such time as the Premises are surrendered, Two
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Hundred Percent (200%) of the daily Base Rent payable during the last month
of the Term. Additionally, Tenant shall defend, indemnify, and hold harmless
Landlord from any damage, liability and expense (including attorneys' fees
and expenses) incurred because of such holding over. No payments of money by
Tenant to Landlord after the Term shall reinstate, continue or extend the
Term, and no extension of this Term shall be valid unless it is in writing
and signed by Landlord and Tenant.
17. QUIET ENJOYMENT. Provided Tenant has fully performed its
obligations under this Lease, Tenant shall peaceably and quietly hold and
enjoy the Premises for the Term, without hindrance from any party claiming
by, through, or under Landlord.
18. EVENTS OF DEFAULT. Each of the following events shall
constitute an "EVENT OF DEFAULT" under this Lease:
(a) Tenant fails to pay any rent when due or any payment or
reimbursement required under any other lease with Landlord when due.
(b) The filing of a petition by or against Tenant or any
guarantor of Tenant's obligations hereunder (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any debtor relief law; (3)
for the appointment of a liquidator, receiver, trustee, custodian, or similar
official for all or substantially all of Tenant's property or for Tenant's
interest in this Lease; or (4) for reorganization or modification of Tenant's
capital structure (however, if any such petition is filed against Tenant,
then the filing of such petition shall not constitute an Event of Default,
unless it is not dismissed within 60 days after the filing thereof).
(c) Tenant fails to discharge any lien placed upon the
Premises in violation of Section 22 below within thirty (30) days after any
such lien or encumbrance is filed against the Premises.
(d) Tenant fails to comply with any term, provision or
covenant of this Lease (other than those listed above in this Section 18),
and such failure continues for thirty (30) days after written notice thereof
to Tenant.
19. REMEDIES.
(a) If an Event of Default occurs, Landlord shall have the
right at any time to give a written termination notice to Tenant and, on the
date specified in such notice, Tenant's right to possession shall terminate
and this Lease shall terminate. Upon such termination, Landlord shall have
the right to recover from Tenant:
(i) The worth at the time of award of all unpaid rent
which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by
which all unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided;
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(iii) The worth at the time of award of the amount by
which all unpaid rent for the balance of the Lease Term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; and
(iv) All other amounts necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform all of Tenant's obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom. The "worth at the time
of award" of the amounts referred to in clauses (i) and (ii) above shall be
computed by allowing interest at the Interest Rate set forth in Section
23.(k). The "worth at the time of award" of the amount referred to in clause
(iii) above shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). For the purpose of determining unpaid rent under clauses (i),
(ii) and (iii) above, the rent reserved in this Lease shall be deemed to be
the total rent payable by Tenant under Sections 2 and 3 hereof. For purposes
of computing the amount of rent hereunder that would have accrued after the
time of award, the amounts of Tenant's obligations to pay increases in
Operating Expenses and Taxes shall be projected based upon the average rate
of increase, if any, in such items from the Commencement Date through the time
of award.
(b) Even though Tenant has breached this Lease, this Lease
shall continue in effect for so long as Landlord does not terminate Tenant's
right to possession, and Landlord shall have all of its rights and remedies,
including the right, pursuant to California Civil Code Section [Illegible], to
recover all rent as it becomes due under this Lease, if Tenant has the right
to sublet or assign, subject only to reasonable limitations. Acts of
maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's
right to possession unless written notice of termination is given by Landlord
to Tenant.
(c) If Tenant shall fail to perform any act required to be
performed by it hereunder or to pay any sum of money required to be paid by
it hereunder (other than Base Rent), or shall fail to cure any default and
such failure shall continue beyond any applicable notice and grace period set
forth herein, then Landlord may, at its option, and without waiving or
releasing Tenant from any of its obligations hereunder, make any such payment
or perform any such act on behalf of Tenant. All sums so paid and all costs
incurred by Landlord in taking such action shall be deemed additional rent
and shall be paid to Landlord on demand.
(d) The remedies provided for in this Lease are in addition
to all other remedies available to Landlord at law or in equity by statute or
otherwise. Tenant, to the greatest extent permitted by law, waives redemption
or relief from forfeiture under Section 1174 and 1179 of the California Code
of Civil Procedure, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of
any Default of Tenant hereunder.
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20. LANDLORD'S DEFAULT. If Landlord fails to perform any of its
obligations hereunder within thirty (30) days after written notice from
Tenant specifying such failure, Tenant's exclusive remedy shall be an action
for damages. Unless Landlord fails to so cure such default after such notice,
Tenant shall not have any remedy or cause of action by reason thereof. In
the event Landlord shall be delayed, hindered or prevented from the
performance of any act required hereunder of Landlord by reason of acts of
God, strikes, lockouts, labor disputes, weather, labor troubles, inability
to procure materials, the acts of Tenant or other causes beyond the
reasonable control of Landlord, then the performance of such act shall be
excused for the period of the delay and the period for the performance of
any such act shall be extended for a period equivalent to the period of such
delay. Liability of Landlord to Tenant for any default by Landlord shall be
limited to the actual and direct, but not consequential, special or
punitive, damages therefor and shall be recoverable only from the interest of
Landlord in the Building and the Land, and neither Landlord nor Landlord's
partners, shareholders, officers, directors, employees, agents or attorneys
shall have any personal liability therefor.
21. MORTGAGES.
(a) This Lease shall be subordinate to any deed of trust,
mortgage or other security instrument (a "MORTGAGE"), and any ground lease,
master lease, or primary lease (a "PRIMARY LEASE") that now or hereafter
covers any portion of the Premises (the mortgagee under any Mortgage or the
lessor under any Primary Lease is referred to herein as "LANDLORD'S
MORTGAGEE"), and to increases, renewals, modifications, consolidations,
replacements and extensions thereof. However, any Landlord's Mortgagee may
elect to subordinate its Mortgage or Primary Lease (as the case may be) to
this Lease by delivering written notice thereof to Tenant. The provisions of
this Section 21 shall be self-operative, and no further instrument shall be
required to effect such subordination; however, Tenant shall from time to time
within twenty (20) days after request therefor, execute any instruments that
may be required by any Landlord's Mortgagee to evidence the subordination of
this Lease to any such Mortgage or Primary Lease. If Tenant fails to execute
the same within such 20-day period, Landlord may execute the same as
attorney-in-fact for Tenant. Tenant also agrees to modify this Lease as
reasonably requested by Landlord's Mortgagee which does not cause increased
expense to Tenant, a decrease in Tenant's rights under this Lease, or
otherwise materially adversely affect Tenant's interest under this Lease.
(b) With respect to any Mortgage or Primary Lease to which this
Lease is now or shall hereafter become subordinate, Landlord shall use
commercially reasonable efforts to obtain from the Landlord's Mortgagee, for
the benefit of Tenant, a non-disturbance agreement, in the usual form of such
Landlord's Mortgagee, providing generally that as long as Tenant is not in
default under this Lease, this Lease will not be terminated if such
Landlord's Mortgagee acquires title to the Project by reason of foreclosure
proceedings, acceptance of a deed in lieu of foreclosure, or termination of
the leasehold interest of Landlord, provided that Tenant attorns to such
Landlord's Mortgagee in accordance with its requirements. Except for making
such commercially reasonable efforts, Landlord will be under no duty or
obligation hereunder with respect
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to any Mortgage or Primary Lease, nor will the failure or refusal of any
Landlord's Mortgagee(s) to grant a non-disturbance agreement render Landlord
liable to Tenant, or affect this Lease, in any manner. Tenant will bear all
costs and expenses (including attorneys' fees) of the Landlord Mortgagee(s)
in connection with Landlord's reasonable efforts to obtain a non-disturbance
agreement.
(c) Tenant shall attorn to any party succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements confirming such attornment
as such party may reasonably request. Tenant shall not seek to enforce any
remedy it may have for any default on the part of Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail to any Landlord's Mortgagee whose address
has been given to Tenant, and affording such Landlord's Mortgagee a
reasonable opportunity to perform Landlord's obligations thereunder.
(d) Notwithstanding any such attornment or subordination of a
Mortgage or Primary Lease to this Lease, the Landlord's Mortgagee shall not
be liable for any acts of any previous landlord, shall not be obligated to
install the Initial Improvements, and shall not be bound by any amendment to
which it did not consent in writing nor any payment of rent made more than
one month in advance.
22. ENCUMBRANCES. Tenant has no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner to bind Landlord's property or the interest of
Landlord or Tenant in the Premises or the Building or to charge the rent for
any claim in favor of any person dealing with Tenant, including those who may
furnish materials or perform labor for any construction or repairs. Tenant
shall pay or cause to be paid all sums due for any labor performed or
materials furnished in connection with any work performed on the Premises by
or at the request of Tenant. Tenant shall give Landlord immediate written
notice of the placing of any lien or encumbrance against the Premises.
23. MISCELLANEOUS.
(a) Words of any gender used in this Lease shall include any
other gender, and words in the singular shall include the plural, unless the
context otherwise requires. The captions inserted in this Lease are for
convenience only and in no way affect the interpretation of this Lease. The
following terms shall have the following meanings: "Laws" shall mean all
federal, state and local laws, rules, and regulations; all court orders,
governmental directives, and governmental orders; and all restrictive
covenants affecting Tenant or the Premises, and "LAW" shall mean any of the
foregoing; "AFFILIATE" shall mean any person or entity which, directly or
indirectly, controls, is controlled by, or is under common control with the
party in question; and "TENANT PARTY" shall include Tenant, any assignees
claiming by, through, or under Tenant, any subtenants claiming by, through,
or under Tenant, and any of their respective agents,
contractors, employees, and invitees.
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(b) Landlord may transfer and assign, in whole or in part, its
rights and obligations in the Building and property that are the subject of
this Lease, in which case Landlord shall have no further liability hereunder
provided that Landlord's assignee assumes all of Landlord's obligations under
this Lease. Each party shall furnish to the other, promptly upon demand, a
corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization of such party to
enter into this Lease.
(c) Tenant shall, from time to time, within 20 days after request
of Landlord, deliver to Landlord, or Landlord's designee, a certificate of
occupancy for the Premises, financial statements for itself and any guarantor
of its obligations hereunder, evidence reasonably satisfactory to Landlord
that Tenant has performed its obligations under this Lease, and an estoppel
certificate stating that this Lease is in full effect, the date to which rent
has been paid, the unexpired Term and such other factual matters pertaining
to this Lease as may be requested by Landlord. Tenant's obligation to furnish
the above-described items in a timely fashion is a material inducement for
Landlord's execution of this Lease. Tenant's failure to deliver said
statement in the time required shall be conclusive upon Tenant that: (i) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) there are no uncured defaults in Landlord's
performance and Tenant has no right of offset, counterclaim or deduction
against rent under this Lease and (iii) no more than one month's Base Rent
has been paid in advance.
(d) This Lease constitutes the entire agreement of the Landlord
and Tenant with respect to the subject matter of this Lease, and contains all
of the covenants and agreements of Landlord and Tenant with respect thereto.
Landlord and Tenant each acknowledge that no representations, inducements,
promises or agreements, oral or written, have been made by Landlord or
Tenant, or anyone acting on behalf of Landlord or Tenant, which are not
contained herein, and any prior agreements, promises, negotiations, or
representations not expressly set forth in this Lease are of no effect. This
Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.
(e) All obligations of Tenant hereunder not fully performed by
the end of the Term shall survive, including, without limitation, all payment
obligations with respect to Taxes and insurance and all obligations
concerning the condition and repair of the Premises. Tenant shall, prior to
vacating the Premises, pay to Landlord the prorated amount, as estimated by
Landlord, of Tenant's obligation hereunder for Operating Expenses for the
year in which the Term ends. All such amounts shall be used and held by
Landlord for payment of such obligations of Tenant hereunder, with Tenant
being liable for any additional costs therefor upon demand by Landlord or
with any excess to be returned to Tenant after all such obligations have been
determined and satisfied as the case may be.
(f) The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against
the drafting parties shall be employed in the interpretation of this Lease.
This Lease shall be construed and
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interpreted in accordance with the laws of the State of California. If any
provision of this Lease is illegal, invalid or unenforceable, then the
remainder of this Lease shall not be affected thereby, and in lieu of each
such provision, there shall be added, as a part of this Lease, a provision as
similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable. Time is of
the essence of each provision of this Lease.
(g) All references in this Lease to "THE DATE HEREOF" or similar
references shall be deemed to refer to the last date, in point of time, on
which all parties hereto have executed this Lease.
(h) Landlord and Tenant each warrant to the other that it has not
dealt with any broker or agent in connection with this Lease except for
Colliers International. Tenant and Landlord shall each indemnify the other
against all costs, attorneys' fees, and other liabilities for commissions or
other compensation claimed by any broker or agent claiming the same by,
through, or under the indemnifying party. Landlord shall pay Colliers
International a real estate commission as per separate agreement.
(i) If and when included within the term "TENANT", as used in
this instrument, there is more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of a notice
specifying an individual at a specific address within the continental United
States for the receipt of notices and payments to Tenant. All parties
included within the terms "LANDLORD" and "TENANT", respectively, shall be
bound by notices given in accordance with the provisions of Section 24 to the
same effect as if each had received such notice.
(j) The terms and conditions of this Lease are confidential and
Tenant shall not disclose the terms of this Lease to any third party except
as may be required by law or to enforce its rights hereunder.
(k) Tenant shall pay interest on all past-due rent from the date
due until paid at an annual rate of interest (the "INTEREST RATE") equal to
the greater of (i) eighteen percent (18%) per year, or (ii) a rate equal to
the sum of five (5) percentage points over the publicly announced reference
rate (the "REFERENCE RATE") charged on such due date by the San Francisco
Main Office of Bank of America NT & SA (or any successor bank thereto) (or if
there is no such publicly announced rate, the rate quoted by such bank in
pricing ninety (90) day commercial loans to substantial commercial
borrowers); provided, however, Tenant's total liability for interest payments
under this Lease shall not exceed the limits, if any, imposed on such
payments by the usury laws of the State of California.
(l) This Lease may be executed in any number of counterparts,
each of which shall be an original, but such counterparts together shall
constitute one and the same instrument.
(m) In case any suit or other proceeding shall be brought for an
unlawful detainer of the Premises or for the recovery of any rent due under
the
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provisions of this Lease or because of the failure of performance or
observance of any other term or covenant herein contained on the part of
Landlord or Tenant, the unsuccessful party in such suit or proceeding shall
pay to the prevailing party therein reasonable attorneys' fees and costs
which shall include fees and costs of any appeal, all as fixed by the court.
Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Lease and to survive and not be merged into
any such judgment.
(n) Each party hereto shall not seek a jury trial, hereby waives
trial by jury, and hereby further waives any objection to venue in the County
of Solano and agrees and consents to personal jurisdiction of the courts of
the State of California, in any action or proceeding or counterclaim brought by
any party hereto against the other on any matter whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or
damage, or the enforcement of any remedy under any statute, emergency or
otherwise, whether any of the foregoing is based on this Lease or on tort
law. No party will seek to consolidate any such action in which a jury has
been waived with any other action in which a jury trial cannot or has not
been waived. It is the intention of the parties that these provisions shall
be subject to no exceptions. By execution of this Lease the parties agree
that this provision may be filed by any party hereto with the clerk or judge
before whom any action is instituted, which filing shall constitute the
written consent to a waiver of jury trial pursuant to and in accordance with
Section 631 of the California Code of Civil Procedure. No party has in any
way agreed with or represented to any other party that the provisions of this
Section 23.(n) will not be fully enforced in all instances. The provisions
of this Section 23.(n) shall survive the expiration or earlier termination of
this Lease.
24. NOTICES. Each provision of this instrument or of any applicable
Laws and other requirements with reference to the sending, mailing or
delivering of notice or the making of any payment hereunder shall be deemed
to be complied with when and if the following steps are taken:
(a) All rent shall be payable to Landlord at the address for
Landlord set forth below or at such other address as Landlord may specify
from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay rent shall not be deemed satisfied until such rent
has been actually received by Landlord.
(b) All payments required to be made by Landlord to Tenant
hereunder shall be payable to Tenant at the address set forth below, or at
such other address within the continental United States as Tenant may specify
from time to time by written notice delivered in accordance herewith.
(c) Any notice or document required or permitted to be delivered
hereunder or under the laws of the State of California, including, but not
limited to, notice under the provisions of Section 1161 of the California
Code of Civil Procedure
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and Section 1946 of the California Civil Code (each, a "Notice"), shall be
made in writing and shall be deemed to be delivered upon the earlier to occur
of (1) tender of delivery (in the case of a hand delivered notice), (2)
deposit in the United States Mail, postage prepaid, certified mail, return
receipt requested, or (3) receipt by facsimile transmission, in each case,
addressed to the parties hereto at the respective addresses set out next to
their signatures below, or at such other address as they have theretofore
specified by written notice delivered in accordance herewith; or, in the case
of notice given to Tenant subsequent to Tenant's vacating, deserting,
abandoning or surrendering the Premises, if delivered to the Premises or any
place where Tenant or any agent or employee of Tenant may be found. Tenant
hereby appoints as its agent to receive the service of process in any action,
or any notice required by law to be given prior to the commencement of any
action, for recovery of possession of the Premises or any part thereof, and to
receive service of all dispossessory or distraint proceedings and notices
thereunder, the person in charge of or occupying the Premises at the time,
and, if no person shall be in charge of or occupying the same, then such
service may be made by attaching the same on the main entrance of the
Premises. Tenant hereby agrees that service of notice in accordance with the
terms of this Lease shall be in lieu of the methods of service specified in
Section 1161 of the California Code of Civil Procedure. The provisions of
subdivision (a) of Section 1013 of the California Code of Civil Procedure,
extending the time within which a right may be exercised or an act may be
done, shall not apply to a notice given pursuant to this Lease. Landlord may
act through its property manager for the Project, through its legal counsel
or through any other person who may from time to time be designated by
Landlord in writing.
25. HAZARDOUS WASTE. The term "Hazardous Substances", as used in this
Lease, shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the removal of which is required or the use of which is
restricted, prohibited or penalized by any "ENVIRONMENTAL LAW", which term
shall mean any Law relating to health, pollution, or protection of the
environment. Tenant hereby agrees that (a) no activity will be conducted on
the Premises that will produce any Hazardous Substances; (b) the Premises
will not be used in any manner for the storage of any Hazardous Substances,
except for de minimis quantities of general office supplies customarily used
by office tenants in the ordinary course of Tenant's business their business,
such as copier toner, liquid paper, glue, ink and cleaning solvents (the
"PERMITTED MATERIALS"), provided such Permitted Materials are properly stored
in a manner and location satisfying all Environmental Laws; (c) no portion of
the Premises will be used as a landfill or a dump; (d) Tenant will not
install any underground tanks of any type; (e) Tenant will not cause any
surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute a public or private
nuisance; and (f) Tenant will not permit any Hazardous Substances to be
brought onto the Premises, except for the Permitted Materials, and if so
brought or found located thereon, the same shall be immediately removed by
Tenant, with proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. If at any time
during or after the Term, the Premises are found to be so contaminated or
subject to such conditions as a result of Tenant's use of the Premises or
breach of this Lease, Tenant shall defend, indemnify and hold Landlord
harmless from all claims, demands, actions, liabilities, costs, expenses,
damages and
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obligations of any nature arising from or as a result of the use of the
Premises by Tenant. Landlord may enter the Premises and conduct environmental
inspections and tests therein as it may require from time to time, provided
that Landlord shall use reasonable efforts to minimize the interference with
Tenant's business. Such inspections and tests shall be conducted at
Landlord's expense, unless they reveal the presence of Hazardous Substances
(other than Permitted Materials) or that Tenant has not complied with the
requirements set forth in this Section 25, in which case Tenant shall
reimburse Landlord for the reasonable cost thereof within ten days after
Landlord's request therefor. Nothing in this Section shall require Tenant to
indemnify Landlord for any matters arising out of or caused by the actions or
omissions of Landlord, its employees, agents, contractors, licensees, or
invitees.
26. RENEWAL OPTION. Tenant shall be granted one (1) option to renew
this Lease for an additional term of ten (10) years on the terms and
conditions set forth in EXHIBIT "E".
27. RIGHT OF FIRST OFFER. Tenant shall be granted a conditional right
to make a first offer to lease additional space in the Project on the terms
and conditions set forth in EXHIBIT "F".
TENANT ACKNOWLEDGES THAT (1) NO REPRESENTATIONS AS TO THE REPAIR OF
THE PREMISES, NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE PREMISES HAVE
BEEN MADE BY LANDLORD (EXCEPT AS MAY BE SET FORTH IN EXHIBIT "B" ATTACHED TO
THIS LEASE), AND (2) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED,
IMPLIED OR STATUTORY, THAT EXTEND BEYOND THE DESCRIPTION OF THE PREMISES.
SIGNATURES ON FOLLOWING PAGE
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TENANT: LANDLORD:
BEBE STORES, INC., LINCOLN PO BENICIA LIMITED
a California corporation PARTNERSHIP,
a Delaware limited partnership
BY: Lincoln-Benicia LLC,
a Delaware limited liability
company, its general partner
By: /s/ Manny Mashouf BY: Lincoln MM Benicia, Inc.
----------------------------- a Texas corporation,
Name: Manny Mashouf its managing member
Title: President & CEO
By: /s/ Lilliemae Stephens BY: /s/ John Herr
----------------------------- --------------------------------
Name: Lilliemae Stephens Name: John Herr
Title: Vice President and Title: Vice President
General Counsel
Address: Address:
380 Valley Drive Lincoln Property Company
Brisbane, CA 94005 500 North Akard Street
3300 Lincoln Plaza
Dallas, TX 75201-3394
Attention: Manny Mashouf Attention: Gregory Courtwright
Telephone: (415) 715-3900 Telephone: (214) 740-3300
Fax: (415) 715-3939 Fax: (214) 740-3460
Dated: Dated: 10-27-00
---------------------------- -------------------------------
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EXHIBIT "A-1"
LEGAL DESCRIPTION
REAL PROPERTY in the City of Benicia, County of Solano, State of California,
described as follows:
PARCEL ONE:
Beginning at the most southerly corner of Lot 5 as shown on the Subdivision
Map for "Fleetside Industrial Park", recorded July 24, 1985 in Book
[ILLEGIBLE] of Maps, at Pages 57-60, Solano County Records, said point being
a point on a curve concave to the southeast having a radius of 2,032 feet and
whose radial bears North 53 DEG. 48' 41" West; thence North 56 DEG. 33' 10"
West 698.33 feet; thence North 33 DEG. 26' 50" East 82.16 feet to the
beginning of a non-tangent curve concave to the southeast having a radius of
11,359.17 feet and whose radial bears North 56 DEG. 39' 25" West; thence
northerly along the curve 123.91 feet through a central angle of 0 DEG. 37'
30" to a point on a compound curve concave to the southeast having a radius
of 5,629.63 feet and whose radial bears North 55 DEG. 55' 35" West; thence
northerly along the curve 629.34 feet ([ILLEGIBLE] record) through a central
angle of 6 DEG. 24' 19"; thence South 52 DEG. 07' 58" East 710.95 feet to a
point on a non-tangent curve concave to the northwest having a radius of
968.00 feet and whose radial bears North 58 DEG. 41' 58" West; thence
southerly along the curve 110.94 feet through a central angle of 6 DEG. 34'
00"; thence South 37 DEG. 52' 02" West 610.43 feet to the beginning of a
tangent curve concave to the southeast having a radius of 2,032 feet; thence
southerly along the curve 59.5 feet through a central angle of 1 DEG. 40' 43"
to the point of beginning.
PARCEL TWO:
A non-exclusive storm drain easement for construction, maintenance of storm
drainage facilities, works, structures and lines, including reasonable right
of access thereto, as granted in the Easement Deed recorded April 9, 1995,
Series No. 96-22958, Solano County Records, and being described as follows:
Being a portion of "New Lot 7" as shown on the Lot Line Adjustment Map
recorded Jun 15, 1994, Series No. 1994-58782, Solano County Records,
beginning at the most southerly corner of said "New Lot 7"; thence along the
general southwest property the North 52 DEG. 07' 58" West 10.03 feet; thence
North 30 DEG. 42' 31" East 8.75 feet; thence South 59 DEG. 17' 29" East 10.00
feet to a point on a curve concave to the northwest having a radius of 968.00
feet and whose radial bears North 59 DEG. 17' 29" West; thence southwest
along the curve 10.00 feet through a central angle of 0 DEG. 35' 31" to the
point of beginning.
A.P.Nos.: 080-301-200 and 210
****
A-1
<PAGE>
EXHIBIT "A-2"
SITE PLAN OF PREMISES
[DIAGRAM]
A-2
<PAGE>
EXHIBIT "B"
TENANT WORK LETTER
This Tenant Work Letter is attached to and forms a part of the Lease
dated as of October 24, 2000 (the "Lease"), by and among LINCOLN PO BENICIA
LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord"), and BEBE
STORES, INC., a California corporation ("Tenant") pertaining to certain
premises located in the Lincoln Distribution Center, Benicia, California.
Except where clearly inconsistent or inapplicable, the provisions of the
Lease are incorporated into this Tenant Work Letter, and capitalized terms
used without being defined in this Tenant Work Letter shall have the
meanings given them in the Lease.
The purpose of this Tenant Work Letter is to set forth the respective
responsibilities of Landlord and Tenant with respect to the design and
construction of the Building and all alterations, additions and improvements
which Tenant may deem necessary or appropriate to prepare the Premises for
occupancy by Tenant under the Lease.
Landlord and Tenant agree as follows:
1. DEFINITIONS. Wherever used in the Lease or this Tenant Work Letter,
the following terms are defined as follows:
1.1 "BUILDING SHELL" means the portion of the Premises being
constructed by Landlord as part of Landlord's Work, including the building
structure, exterior walls, exterior glass, floor slab, roof, parking lot,
landscaping and the base for any street monument sign. The Building Shell
does not include any elevators, stairs, HVAC, roof screens or thermal
insulation. Tenant shall be responsible for installing the HVAC system for
the Building.
1.2 "INITIAL IMPROVEMENTS" means the alterations, additions and
improvements which Tenant may deem necessary or appropriate to prepare the
Premises for occupancy by Tenant under the Lease (excluding the Personal
Property shown on Exhibit "C" to the Lease).
1.3 "LANDLORD'S WORK" means the work specifically described in
Exhibit B-1 attached hereto. Landlord's Work shall also include bringing
telecommunications, electrical and plumbing service to the Building (i.e.,
stubbed but not distributed) and for installing the main fire sprinkler
trunks (i.e., installed but not distributed or "dropped").
1.4 "OUTSIDE OPENING DATE" means the date six (6) months following
Building Shell Completion; provided, however, that the Outside Opening Date
shall be extended one day for each day that completion of the Initial
Improvements is delayed by strikes, lockouts, labor disputes, acts of God,
inability to obtain services, labor, or materials or reasonable substitutes
therefor, governmental actions, civil commotion, fire or other casualty, and
other causes beyond Tenant's reasonable control.
B-1
<PAGE>
1.5 "BUILDING SHELL COMPLETION" means the date when a notice of
completion (or equivalent) is issued for the Building Shell by the City of
Benicia. Tenant agrees and acknowledges that Building Shell Completion may
occur notwithstanding the fact that certain tasks to be performed by Landlord
have yet to be completed. For instance, Tenant agrees that Building Shell
Completion may occur notwithstanding the fact that Landlord has not completed
certain "punch list" items, the parking lot and landscape installation and/or
street improvements, so long as such uncompleted items do not materially
affect Tenant's ability to commence without interruption the construction of
the Initial Improvements.
1.6 "TENANT DELAY" means any delay in Building Shell Completion
caused by or attributable to (a) any failure by Tenant to perform its
obligations under this Tenant Work Letter by or within the time specified for
such performance, or (b) any act, neglect, failure or omission of Tenant or
any of Tenant's agents, employees, contractors or subcontractors which
interferes with Landlord's ability to perform the Landlord's Work.
1.7 "TENANT IMPROVEMENT WORK" means the work of constructing the
Initial Improvements.
2. DELIVERY OF PREMISES.
2.1 LANDLORD'S WORK. Landlord shall, at its sole cost of expense,
perform Landlord's Work.
2.2 TENANT'S EARLY ENTRY. On reasonable prior notice, Landlord will
permit Tenant and Tenant's Agents (as defined below) to enter the Premises
from time to time prior to Building Shell Completion as may be reasonably
necessary or appropriate. Tenant shall indemnify, protect, defend and hold
Landlord and the other Indemnitees harmless from and against any and all
claims, losses, liability, damages, costs or expenses (including, without
limitation, attorneys' fees and costs) suffered or incurred by the
Indemnified Parties arising from such entry.
3. DESIGN AND APPROVAL OF THE INITIAL IMPROVEMENTS.
3.1 SELECTION OF TENANT'S ARCHITECT; CONSTRUCTION DRAWINGS.
(a) Tenant shall retain an architect/space planner ("Tenant's
Architect") to prepare the Construction Drawings. Tenant's Architect shall be
subject to the written approval of Landlord, which approval will not be
unreasonably withheld, conditioned or delayed; provided, however, Landlord
approves Berger/Detmer as Tenant's Architect. Tenant shall retain engineering
consultants approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, to prepare all plans and engineering
working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, life-safety and sprinkler work in the Premises in connection
with the Initial Improvements. The plans and drawings to be prepared by
Tenant's Architect and the engineers hereunder shall be known, collectively,
as the "Construction Drawings".
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(b) All Construction Drawings shall be subject to Landlord's
approval, which approval shall not be unreasonably withheld, conditioned or
delayed. Landlord's sole interest in reviewing and approving the Construction
Drawings is to protect the Building and Landlord's interests, and no such
review or approval by Landlord shall be deemed to create any liability of any
kind on the part of Landlord, or constitute a representation on the part of
Landlord or any person consulted by Landlord in connection with such review
and approval that the Construction Drawings are correct or accurate, or are
in compliance with any applicable Laws. Prior to execution of the Lease,
Landlord has supplied Tenant with a set of drawings of the Building which
Tenant may use in connection with the preparation of the Construction
Drawings, but Tenant agrees that Landlord shall have no liability for the
completeness or accuracy thereof, and Tenant's Architect shall be responsible
for performing all necessary field measurements and confirming the
completeness and accuracy of such drawings.
3.2 SPACE PLANS. Prior to drafting any Construction Drawings, Tenant
shall furnish Landlord with Tenant's final space plans for the Premises
("Space Plans"). The Space Plans shall show locations of all proposed
improvements, including partitions, cabinetry, equipment and fixtures, shall
identify materials and finishes by location, and shall specify the location
of any proposed structural floor penetrations, any special HVAC requirements,
the location and description of any special plumbing requirements, and any
special electrical requirements. In addition, the Space Plans shall show
telephone and telecommunications facilities, and computer and electronic data
facilities. Landlord shall approve or disapprove the Space Plans by written
notice given to Tenant within five (5) business days after receipt of the
Space Plans. Landlord shall not unreasonably withhold or condition its
approval of the Space Plans. If Landlord disapproves the Space Plans,
Landlord shall return the Space Plans to Tenant with a statement of
Landlord's reasons for disapproval, or specifying any required corrections
and/or revisions. Landlord shall approve or disapprove of any revisions to
the Space Plans by written notice given to Tenant within five (5) business
days after receipt of such revisions. This procedure shall be repeated until
Landlord approves the Space Plans.
3.3 FINAL WORKING DRAWINGS. Following Landlord's approval of the
Space Plans, Tenant shall cause Tenant's Architect and the Engineers to
prepare and submit for Landlord's approval complete and detailed construction
plans and specifications, including a fully coordinated set of architectural,
structural, mechanical, fire protection, electrical and plumbing working
drawings for the Tenant Improvement Work, in a form which is sufficiently
complete to permit subcontractors to bid on the work, obtain all required
Permits (as hereinafter defined) and commence construction (the "Final
Working Drawings"). Tenant shall furnish Landlord with four (4) copies signed
by Tenant of such Final Working Drawings. Landlord shall approve or
disapprove of the Final Working Drawings by giving written notice to Tenant
within five (5) business days after receipt thereof. Landlord shall not
unreasonably withhold, condition or delay its approval of the Final Working
Drawings, provided that, without limiting the generality of the foregoing,
Landlord shall be entitled to withhold its consent to the Final Working
Drawings if in Landlord's good faith judgment, the Final Working Drawings are
inconsistent with, or do not conform to, the Space Plans. If Landlord
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disapproves the Final Working Drawings, Landlord shall return the Final
Working Drawings to Tenant with a statement of Landlord's reasons for
disapproval and/or specifying any required corrections or revisions. Landlord
shall approve or disapprove of any such revisions to the Final Working
Drawings within five (5) business days after receipt of such revisions. This
procedure shall be repeated until Landlord approves the Final Working
Drawings (as so approved, the "Approved Working Drawings").
4. CONSTRUCTION OF INITIAL IMPROVEMENTS.
4.1 CONTRACTS WITH TENANT'S CONTRACTOR AND SUBCONTRACTORS.
(a) Tenant shall retain a licensed general contractor as the
contractor for the construction of the Initial Improvements ("Tenant's
Contractor"). Tenant's Contractor must be experienced in the performance of
work comparable to the work of the Initial Improvements in buildings
comparable to the Building, and shall be subject to Landlord's prior
approval, which approval shall not be unreasonably withheld, conditioned or
delayed. All subcontractors, laborers, materialmen and suppliers used by
Tenant (such subcontractors, laborers, materialmen and suppliers, together
with Tenant's Contractor, are collectively referred to herein as "Tenant's
Agents") must be approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed.
(b) Tenant shall furnish Landlord with true and correct copies
of all construction contracts between or among Tenant, Tenant's Contractor
and all subcontractors relating to the Tenant Improvement Work, provided
that Landlord's review of such contracts shall not relieve Tenant from its
obligations under this Tenant Work Letter nor shall such review be deemed to
constitute Landlord's representation that such contracts comply with the
requirements of this Tenant Work Letter. All such contracts shall expressly
provide that (i) the work to be performed thereunder shall be subject to the
terms and conditions of this Tenant Work Letter, and (ii) the Tenant
Improvement Work (or in the case of a subcontractor, the portion thereof
performed by such subcontractor) shall be warranted in writing to Tenant and
Landlord to be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion of the
Tenant Improvement Work. Tenant agrees to give to Landlord any assignment or
other assurances which may be necessary to permit Landlord to directly
enforce such warranties (such warranties shall include, without additional
charge, the repair of any portion of the Building or Common Areas which may
be damaged as a result of the removal or replacement of the defective Initial
Improvements). Tenant shall cause Tenant's Agents to engage only labor that
is harmonious and compatible with other labor working in the Building. In the
event of any labor disturbance caused by persons employed by Tenant or
Tenant's Contractor, Tenant shall immediately take all actions necessary to
eliminate such disturbance. If at any time any of Tenant's Agents interferes
with any other occupant of the Building, or hinders or delays any other work
of improvement in the Building, or performs any work which may or does impair
the quality, integrity or performance of any portion of the Building,
including any building systems, Tenant shall cause such subcontractor,
laborer, materialman or supplier to leave the Building and remove all tools,
equipment
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and materials immediately upon written notice delivered to Tenant, and,
without limiting Tenant's indemnity obligations set forth in Section 11 of
the Lease, Tenant shall reimburse Landlord for all costs, expenses, losses or
damages incurred or suffered by Landlord resulting from the acts or omissions
of Tenant's Agents in or about the Building.
4.2 PERMITS. Tenant shall obtain all building permits and other
permits, authorizations and approvals which may be required in connection
with, or to satisfy all applicable Laws applicable to, the construction of
the Initial Improvements in accordance with the Approved Working Drawings
(the "Permits"). Tenant agrees that neither Landlord nor Landlord's
consultants shall be responsible for obtaining any Permits or the certificate
of occupancy for the Premises, and that obtaining the same shall be Tenant's
responsibility; provided, however, that Landlord will cooperate with Tenant
in executing permit applications and performing other ministerial acts
reasonably necessary to enable Tenant to obtain any such Permit or
certificate of occupancy. Any amendments or revisions to the Approved Working
Drawings that may be necessary to obtain any such Permits or certificate of
occupancy, or which may be required by city officials or inspectors to comply
with code rulings or interpretations, shall be prepared by Tenant's
Architect, at Tenant's expense, and submitted to Landlord for Landlord's
review and approval as a Change Order under Section 6 below. If Landlord
disapproves of such amendments or revisions, Landlord shall return the same
to Tenant with a statement of Landlord's reasons for disapproval, or
specifying any required corrections. This procedure shall be repeated until
Landlord approves the amendments or revisions and all Permits have been
obtained for the Approved Working Drawings, as so amended.
4.3 COMMENCEMENT OF WORK. At least ten (10) days prior to the
commencement of construction of the Initial Improvements, or the delivery of
any construction materials for the Tenant Improvement Work to the Building,
whichever is earlier, Tenant shall submit to Landlord a notice specifying the
date Tenant will commence construction of the Initial Improvements, the
estimated date of completion of the Initial Improvements and the construction
schedule provided by Tenant's Contractor. In addition, prior to the
commencement of construction of the Initial Improvements, or the delivery of
any construction materials for the Tenant Improvement Work to the Building,
whichever is earlier, Tenant shall submit to Landlord the following: (a) all
Permits required to commence construction of the Initial Improvements; (b) a
certificate from Tenant stating that the costs which have theretofore been
incurred in connection with the design and construction of the Initial
Improvements, which costs of construction form a basis for the amount of the
construction contract; and (c) original certificates of insurance policies
obtained pursuant to this Tenant Work Letter, together with any endorsements
referred to in Section 4.6 below, confirming to Landlord's reasonable
satisfaction compliance with the insurance requirements of this Tenant Work
Letter.
4.4 PERFORMANCE OF WORK.
(a) Following Building Shell Completion, Tenant shall be
permitted to enter the Premises for the sole purpose of constructing the
Initial
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Improvements, provided that Tenant's occupancy of the Premises prior to the
Commencement Date shall be subject to all of the terms, covenants and
conditions of the Lease (including, without limitation, Tenant's obligations
under Section 11 (regarding Tenant's indemnity obligations). Notwithstanding
any provision of the Lease to the contrary, Tenant shall pay for all utility
and other costs incurred by Landlord to the extent they relate to Tenant's
work prior to the Commencement Date. Further, if Tenant occupies any part of
the Premises prior to the Commencement Date for purposes of doing business (as
opposed to constructing the Initial Improvements), then Tenant shall pay all
Base Rent and Tenant's Proportionate Share of Operating Expenses and Real
Property Taxes at the rate for the first Lease Year prorated for any partial
month.
(b) Without limiting the provisions of Section 4.4(a) above,
all work performed by Tenant's Contractor shall strictly conform to the
Approved Working Drawings, shall comply with all applicable Laws (including
building codes) and all applicable standards of the American Insurance
Association and the National Electrical Code and all building material
manufacturer's specifications, shall comply with all reasonable non-arbitrary
rules and regulations from time to time adopted by Landlord to govern
construction in or about the Building, and shall be performed in a good and
professional manner and so as not to interfere with the performance of any
other work within the Building, or with Landlord's maintenance or operation
of the Building. At all times during construction of the Initial
Improvements, Landlord and Landlord's employees and agents shall have the
right to enter the Premises to perform Landlord's Work, inspect the Tenant
Improvement Work, and to require the correction of any faulty work or any
material deviation from the Approved Working Drawings by written notice to
Tenant. Tenant shall deliver notice to Landlord at least two (2) business
days prior to Tenant's closing-up of any Tenant Improvement Work affecting
the life safety, telecommunications, heating, ventilation and air
conditioning, plumbing, electrical or other building systems in the Premises,
in order to give Landlord or Landlord's agents an opportunity to inspect and
approve the same. No inspection or approval by Landlord of any such work
shall constitute an endorsement thereof or any representation as to the
adequacy thereof for any purpose or the conformance thereof with any
applicable Laws, and Tenant shall be fully responsible and liable therefor.
Tenant shall reimburse Landlord for the cost of any repairs, corrections or
restoration which must be made, in Landlord's good faith judgment, to the
Premises or any other portion of the Building, if caused by Tenant's
Contractor or any other of Tenant's Agents.
4.5 OUTSIDE OPENING DATE. Tenant agrees to complete the Tenant
Improvement Work and open for business in the Premises on or before the
Outside Opening Date.
4.6 INSURANCE. At all times during the construction of the Initial
Improvements, in addition to the insurance required to be maintained by
Tenant under the Lease, Tenant shall require all of Tenant's Agents to
maintain (i) Commercial General Liability Insurance with limits of not less
than $2,000,000 combined single limit for bodily injury and property damage,
including personal injury and death, and Products and Completed Operations
Coverage; (ii) Comprehensive automobile liability insurance with a policy
limit of not less than $1,000,000 each accident for bodily injury and
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property damage, providing coverage at least as broad as the Insurance
Services Office (ISO) Business Auto Coverage form covering Automobile
Liability, code 1 "any auto", and insuring against all loss in connection
with the ownership, maintenance and operation of automotive equipment that
is owned, hired or non-owned; (iii) Worker's Compensation with statutory
limits and Employer's Liability Insurance with limits of not less than
$100,000 per accident, $500,000 aggregate disease coverage and $100,000
disease coverage per employee. In addition, Tenant shall carry "Builder's
Risk" insurance on a replacement cost, agreed value basis, in an amount equal
to at least the initial sum of the construction contract(s) for the
construction of the Initial Improvements, and shall include loss or damage to
the work of Tenant's Contractor and any subcontractors (the amount of this
insurance to be adjusted as needed to reflect any subsequent material
changes), it being understood and agreed that the Initial Improvements shall
be insured by Tenant pursuant to Section 9 of the Lease immediately upon
completion thereof. Tenant's liability insurance shall be written on an
"occurrence" basis and shall name Landlord and Landlord's Mortgagee(s) as
additional insureds (by endorsement reasonably acceptable to Landlord). The
"Builder's Risk" insurance shall name Landlord and such other parties as
Landlord may reasonably specify as the loss payee(s), as their interest may
appear, with respect to all proceeds received therefrom. All of the insurance
required to be carried by Tenant hereunder shall provide that it is primary
insurance, and not excess over or contributory with any other valid,
existing, and applicable insurance in force for or on behalf of Landlord,
shall provide that Landlord shall receive thirty (30) days' written notice
from the insurer prior to any cancellation or material reduction of coverage,
and shall be placed with companies which are rated A:VII or better by Best's
Insurance Guide and licensed to business in the State of California. All
deductibles and self-insured retentions under Tenant's policies are subject
to Landlord's reasonable approval, and all insurance, except Workers'
Compensation, maintained by Tenant's Agents shall preclude subrogation claims
by the insurer against anyone insured thereunder. Tenant's compliance with
the provisions of this Section shall in no way limit Tenant's liability under
any of the other provisions of the Lease.
4.7 LIENS. Tenant shall keep the Premises and the Building free
from any liens arising out of work performed, materials furnished or
obligations incurred by Tenant; provided, however, Tenant shall have the
right, at its sole cost and expense, to contest in good faith any such
mechanics' or other liens so long as Tenant has posted a release bond in an
amount equal to one hundred fifty percent (150%) of the amount of the lien
and otherwise in accordance with applicable Laws. Should Tenant fail to
remove any such lien (or record a bond as provided above) within five (5)
business days after notice to do so from Landlord, Landlord may, in addition
to any other remedies, record a bond pursuant to California Civil Code
Section 3143 and all costs and obligations incurred by Landlord in so doing
shall immediately become due and payable by Tenant to Landlord as additional
rent under the Lease. Landlord shall have the right to post and keep posted
on the Premises any notices that may be required or permitted by applicable
Laws, or which Landlord may deem to be proper, for the protection of Landlord
and the Building from such liens. Promptly following completion of
construction, Tenant shall provide Landlord a copy of a final unconditional
lien release from Tenant's Contractor and each of Tenant's Agents who
performed work or supplied
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materials for the Initial Improvements. Upon completion of construction,
Tenant shall promptly record a Notice of Completion in accordance with
California Civil Code Section 3093 and provide a copy thereof to Landlord.
5. RESPONSIBILITY FOR DESIGN AND CONSTRUCTION COSTS. Landlord's
Work shall be performed by Landlord at Landlord's sole cost and expense and
the Tenant Improvement Work shall be performed by Tenant at Tenant's sole
cost and expense. Except as otherwise provided in the Lease, Tenant shall not
be obligated to pay for any chargebacks, reimbursables, fees, bonds, security
deposits or barricades in connection with Landlord's Work or the Initial
Improvements.
6. CHANGE ORDERS. Landlord will not unreasonably withhold its
approval of (a) any request by Tenant, or by Tenant's Contractor with
Tenant's approval, to amend or change the Approved Working Drawings, or (b)
any change or amendment to the Approved Working Drawings that may be
necessary to obtain any Permits, or which may be required by city officials
or inspectors to comply with code rulings or interpretations (any of the
foregoing, a "Change Order"). No material changes or modifications to the
Approved Working Drawings shall be made unless by written Change Order signed
by Landlord and Tenant. Tenant shall pay all costs attributable to Change
Orders, including reasonable costs incurred by Landlord in reviewing proposed
Change Orders. Landlord agrees to respond to any request for approval of a
Change Order within three (3) business days following Landlord's receipt of
such request.
7. OWNERSHIP OF INITIAL IMPROVEMENTS. The Initial Improvements
shall be deemed, effective upon installation, to be a part of the Premises
and the Building and shall be deemed to be the property of Landlord (subject
to Tenant's right to use the same during the Term of the Lease), and shall be
surrendered at the expiration or earlier termination of the Term, unless
Landlord shall have conditioned its approval of the Final Working Drawings or
any Change Order on Tenant's agreement to remove any items thereof, in which
event, prior to the expiration or termination of the Term, the specified
items shall be removed at Tenant's expense, any damage caused by such removal
shall be repaired, and the Premises shall be restored to their condition
existing prior to the installation of the items in question, normal wear and
tear excepted. The removal, repair and restoration described above shall, at
Landlord's sole election, be performed either by Tenant or by Landlord; and
if such work shall be performed by Landlord, Tenant shall pay to
Landlord, within twenty (20) days following Landlord's demand, the reasonable
cost and expense of such work.
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EXHIBIT B-1
DESCRIPTION OF LANDLORD'S WORK
Landlord's Work is shown on those certain plans prepared by Tulloch
Construction dated January 16, 1998, and identified as Job No. 2147.
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EXHIBIT "C"
TENANT'S PERSONAL PROPERTY
All furniture, movable equipment and other personal property that is not
attached to the floors, walls or ceiling of the Premises; and any other
fixture, equipment, or other item, regardless of the manner of attachement,
that is used primarily in Tenant's trade or business and that can be removed
as a separate physical unit without material damage to the Building and
without unreasonable interference with other tenants' use and enjoyment of
their leased premises, including without limitation, the following:
1. the personal property and fixtures of Tenant's Customers, Contractors
or Employees; and
2. lighting fixtures.
[TO BE COMPLETED BY TENANT AFTER EXECUTION OF LEASE, WITH FINAL EXHIBIT C
TO BE SLIP SHEETED INTO ORIGINAL EXECUTED LEASE]
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EXHIBIT "D"
RULES AND REGULATIONS
1. Landlord shall have the right to prescribe the weight, position
and manner of installation of heavy equipment which, if considered necessary
by Landlord, shall be installed in a manner which shall insure satisfactory
weight distribution. The time, routing and manner of moving such heavy
equipment shall be subject to prior approval by Landlord.
2. Tenant, or the employees, agents, visitors or licensees of Tenant,
shall not at any time place, leave or discard any rubbish, paper, articles or
objects of any kind whatsoever outside the doors of the Premises or the
Property. No animals or birds shall be brought or kept in or about the
Premises or the Property.
3. Canvassing, soliciting or peddling in or about the Premises or the
Property is prohibited and Tenant shall cooperate to prevent same.
4. Landlord shall have the right to exclude any person from the Property
other than during customary business hours, and any person in the Property
will be subject to identification by employees and agents of Landlord. All
persons in or entering the Property shall be required to comply with the
security policies of the Property. If Tenant desires any additional security
service for the Premises or the Property, Tenant shall have the right (with
the prior written consent of Landlord) to obtain such additional service at
Tenant's sole cost and expense. Tenant shall keep doors to unattended areas
locked and shall otherwise exercise reasonable precautions to protect its
property from theft, loss or damage. Landlord shall not be responsible for
the theft, loss or damage of any property or for any error with regard to the
exclusion from or admission to the Premises or the Property of any person. In
case of invasion, mob, riot or public excitement, Landlord reserves the right
to prevent access to the Premises or the Property during the continuance of
same by closing the doors or taking other measures for the safety of the
tenants and protection of the Premises or the Property and property or
persons therewith.
5. Tenant shall not cause or permit any odors to permeate in or emanate
from the Premises or the Property, or permit or suffer the Premises or the
Property to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Premises or the Property by reason of
light, radiation, magnetism, noise, odors, and/or vibrations, or interfere in
any way with other tenants or those having business in the Premises or the
Property.
6. All keys shall be returned to Landlord upon the termination of this
Lease and Tenant shall give to Landlord the explanations of the combinations
of all safes, vaults and combination locks remaining with the Premises.
Landlord may at all times keep a pass key to the Premises. All entrance doors
to the Premises shall be left closed at all times and left locked when the
Premises are not in use.
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7. Tenant shall give immediate notice to Landlord in case of any known
emergency at the Premises or the Property.
8. Tenant shall not advertise for temporary laborers giving the Premises
or the Property as an address, nor pay such laborers at a location in the
Premises or the Property.
9. No portion of the Premises or any part of the Property shall at any
time be used or occupied as sleeping or lodging quarters.
10. The toilet rooms, urinals, wash bowls and other apparatus in the
Premises shall not be used for any purpose other than that for which they
were constructed and no foreign substance of any kind whatsoever shall be
thrown therein and the expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the Tenant who or whose
employees or invitees shall have caused it.
11. Landlord reserves the right to exclude or expel from the Property any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the Rules and Regulations of the Premises or the Property.
12. Landlord reserves the right to rescind any of these rules and
regulations and to make such other and further rules and regulations as in
its reasonable judgment shall, from time to time, be required for the safety,
protection, care and cleanliness of the Property, the operation thereof, the
preservation of good order therein and the protection and comfort of the
tenants and their agents, employees, and invitees, which rules and regulations
shall be binding upon it in like manner as if originally herein prescribed.
13. Tenant shall park trailers and other oversized vehicles only in areas
designated by Landlord for the parking of trailers or oversized vehicles.
14. Tenant shall not utilize the Premises for outside storage except with
the written consent of Landlord.
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EXHIBIT "E"
RENEWAL OPTION
If, at the end of the primary term of this Lease, Tenant is not in
default of any of the terms, conditions, or covenants of the Lease after
notice and the expiration of applicable cure periods, Tenant, but not any
assignee or subtenant of Tenant, is hereby granted one (1) option to renew
this Lease for an additional term of ten (10) years upon the same terms and
conditions contained in this Lease with the following exceptions:
1. Renewal option term will contain no further renewal options unless
granted by Landlord in writing; and
2. Base rent for the renewal term shall be based on ninety-five
percent (95%) of the then prevailing rental rates for properties of
equivalent quality, size, utility and location, with the length of the Lease
term and credit standing of Tenant to be taken into account; provided,
however, that no event will the base rent for any year of the renewal term be
less than the base rent payable by Tenant for the twelve (12) month period
immediately preceding the commencement of the renewal term (without regard to
any periods of rent abatement on account of casualty, etc.). If Tenant
desires to renew this Lease, Tenant will notify Landlord in writing of its
intention to renew no later than six (6) months prior to the expiration date
of the Lease, the time of such exercise being of the essence; Landlord shall,
within the next fifteen (15) days, after receipt of such notice, deliver to
Tenant the proposed rent and terms with respect to the renewal term. Tenant
shall have (15) days to accept or reject such proposed rent and terms. In
the event Tenant rejects such proposed rent and terms and Landlord and Tenant
are thereafter unable to agree upon the rent and terms to be applicable
during the renewal term within the thirty (30) days after such rejection by
Tenant after reasonably and in good faith attempting to reach such an
agreement, Tenant's renewal option shall terminate and thereafter be of no
force or effect.
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EXHIBIT "F"
RIGHT OF FIRST OFFER
Subject to the conditions set forth in this Exhibit "F", Tenant shall
have a right of first offer to lease the remainder of the Building in which
the Premises is located (the "FIRST OFFER SPACE"), in the event the First
Offer Space becomes available for lease to third parties during the Term
(excluding the Renewal Term) following the initial leasing thereof after the
Commencement Date. Prior to leasing the First Offer Space to a third party,
Landlord will give notice to Tenant (an "Offering Notice") specifying
Landlord's good faith estimate of (i) the Base Rent which Landlord
proposes to charge for the First Offer Space, which Base Rent shall equal
Landlord's good faith estimate of the prevailing market rate for the First
Offer Space for a term equal to the remainder of the Term (taking into
account the Renewal Term), (ii) the approximate date upon which the First
Offer Space is anticipated to be available for delivery, and (iii) any other
material conditions or provisions relating to the leasing of the First Offer
Space which vary from the provisions of this Lease. If Tenant wishes to lease
the First Offer Space on the terms specified by Landlord in the Offering
Notice, Tenant shall so notify Landlord within ten (10) business days after
receipt thereof, which notice shall be unconditional and irrevocable. Tenant
may exercise its right of first offer only with respect to all of the First
Offer Space identified in the Offering Notice, and only if Tenant intends to
occupy such First Offer Space in connection with its own reasonably
foreseeable needs.
If Tenant timely exercises its right to lease the First Offer Space,
then except as specified in this Exhibit "F" or in the Offering Notice
(which shall govern to the extent of any conflict with this Lease), the First
Offer Space shall become a portion of the Premises on all of the terms and
conditions of this Lease for the remainder of the Term (including any Renewal
Term), provided that (i) Base Rent for the First Offer Space shall be
determined as specified above, (ii) Tenant's Proportionate Share of Operating
Expenses and Taxes shall be adjusted to reflect the addition of the First
Offer Space, and (iii) the First Offer Space shall be delivered in its then
existing "as is" condition, without obligation on the part of Landlord to
make any repairs or construct any improvements to the First Offer Space in
connection with Tenant's contemplated use, or to demolish existing
improvements therein, and Tenant shall be responsible for the construction and
installation, in accordance with the provisions of Section 6 of the Lease, of
any tenant improvements it desires to install within the First Offer Space, at
Tenant's sole cost and expense. Tenant shall commence paying Base Rent and all
additional rent with respect to the First Offer Space on the date of delivery
of the First Offer Space to Tenant in the condition required hereunder.
Landlord shall promptly prepare and Landlord and Tenant shall promptly
execute an amendment to this Lease reflecting the addition of the First Offer
Space. Tenant's right of first offer under this Exhibit "F" shall be a
one-time right as to the First Offer Space. If Tenant fails to timely notify
Landlord that it wishes to lease the First Offer Space, or if Tenant fails to
execute and deliver said lease amendment to Landlord within ten (10) business
days following receipt thereof by Tenant, Landlord may thereafter lease the
First Offer Space to any person on any terms and conditions it may deem
appropriate, including terms and conditions more favorable than the terms and
conditions set forth in the Offering Notice,
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and Tenant shall have no further rights with respect to the First Offer Space,
either at such time or at any future time.
If Tenant timely exercises its right to lease the First Offer Space, and
Landlord fails to deliver possession of all or any portion of the First Offer
Space to Tenant on or before the scheduled date for delivery of possession for
any reason, this Lease shall not be void or voidable and Landlord shall not
be deemed in default or otherwise liable to Tenant for any claims, damages,
or liabilities in connection therewith or by reason thereof, but Tenant shall
have no obligation to pay Base Rent or Tenant's Proportionate Share of Operating
Expenses or Taxes with respect to the First Offer Space until possession of
the First Offer Space has been delivered to Tenant. Notwithstanding anything
to the contrary set forth herein, if Tenant is in default under this Lease
beyond applicable notice and cure periods at the time an Offering Notice
would otherwise be required to be sent under this Exhibit, or any other time
following Tenant's exercise of its right to lease the First Offer Space and
prior to the date upon which possession of the First Offer Space is to be
delivered to Tenant, Landlord shall have, in addition to any other remedies,
the right to terminate Tenant's rights under this Exhibit "F", and in
such event Landlord shall not be required to deliver the Offering Notice or to
deliver possession of the First Offer Space to Tenant. If not earlier
terminated, the rights of Tenant pursuant to this Exhibit "F" shall
automatically terminate upon the Expiration Date. Nothing contained in this
Exhibit "F" shall be deemed to impose any obligation on Landlord to refrain
from negotiating with existing or future tenants of the First Offer Space, to
withhold the First Offer Space from the market, or to take any other action
or omit to take any other action in order to make the First Offer Space
available to Tenant.
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