California-San Diego-15822 Bernardo Center Drive Lease - Pacifica Holding Co. and Garden Fresh Restaurant Corp.
OFFICE LEASE
PACIFICA HOLDING COMPANY,
a California corporation
LANDLORD,
AND
GARDEN FRESH RESTAURANT CORP.,
a Delaware corporation
TENANT
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Table of Contents
ARTICLE 1- TERM .......................................................... 3
ARTICLE 2- RENT .......................................................... 3
ARTICLE 3- RENT ADJUSTMENT ............................................... 3
ARTICLE 4- [INTENTIONALLY OMITTED] ....................................... 5
ARTICLE 5- UTILITIES, SERVICES PARKING AND COMMON AREAS .................. 5
ARTICLE 6- USE OF PREMISES ............................................... 6
ARTICLE 7- ACCEPTANCE OF PREMISES ........................................ 9
ARTICLE 8- ALTERATIONS AND EQUIPMENT ..................................... 9
ARTICLE 9- LIENS ......................................................... 9
ARTICLE 10- TAX ON TENANT'S PROPERTY ...................................... 9
ARTICLE 11- MAINTENANCE AND REPAIR ........................................ 10
ARTICLE 12- ENTRY AND INSPECTION .......................................... 10
ARTICLE 13- HOLD HARMLESS; LIMITATION OF LIABILITY; INSURANCE ............. 10
ARTICLE 14- WAIVER OF SUBROGATION ......................................... 12
ARTICLE 15- ASSIGNMENT AND SUBLETTING ..................................... 12
ARTICLE 16- SALE BY LANDLORD; NONRECOURSE LIABILITY ....................... 14
ARTICLE 17- DAMAGE OR DESTRUCTION ......................................... 14
ARTICLE 18- EMINENT DOMAIN ................................................ 15
ARTICLE 19- [INTENTIONALLY OMITTED] ....................................... 15
ARTICLE 20- DEFAULTS AND REMEDIES ......................................... 15
ARTICLE 21- SURRENDER OF PREMISES, REMOVAL OF PROPERTY .................... 17
ARTICLE 22- WAIVER OF DAMAGES FOR RE-ENTRY ................................ 18
ARTICLE 23- COSTS OF SUIT ................................................. 18
ARTICLE 24- WAIVER ........................................................ 18
ARTICLE 25- HOLDING OVER .................................................. 18
ARTICLE 26- SUBORDINATION AND FINANCING ................................... 18
ARTICLE 27- RULES AND REGULATIONS ......................................... 19
ARTICLE 28- DEFINED TERMS ................................................. 19
ARTICLE 29- HEIRS AND ASSIGNS ............................................. 19
ARTICLE 30- TIME OF ESSENCE ............................................... 19
ARTICLE 31- SEVERABILITY .................................................. 19
ARTICLE 32- ENTIRE AGREEMENT .............................................. 19
ARTICLE 33- NO OPTION ..................................................... 19
ARTICLE 34- AUTHORITY ..................................................... 19
ARTICLE 35- WORK LETTER ................................................... 19
ARTICLE 36- RIGHT OF LANDLORD TO PERFORM .................................. 20
ARTICLE 37- Light and air ................................................. 20
ARTICLE 38- NOTICES ....................................................... 20
ARTICLE 39- QUIET ENJOYMENT ............................................... 20
ARTICLE 40- ESTOPPEL CERTIFICATES ......................................... 20
ARTICLE 41- NONDISCRIMINATION ............................................. 20
ARTICLE 42- RECORDATION ................................................... 20
ARTICLE 43- BROKERS ....................................................... 20
ARTICLE 44- APPLICABLE LAW ................................................ 21
ARTICLE 45- INTENTIONALLY OMITTED ......................................... 21
ARTICLE 46- INTENTIONALLY OMITTED ......................................... 21
ARTICLE 47- MATTERS OF RECORD ............................................. 21
ARTICLE 48- FINANCIAL STATEMENTS .......................................... 21
ARTICLE 49- WAIVER OF TRIAL BY JURY ....................................... 21
ARTICLE 50- NAME; Signs ................................................... 21
ARTICLE 51- VENUE ......................................................... 21
ARTICLE 52- MERGER ........................................................ 21
ARTICLE 53- COUNTERPARTS .................................................. 21
ARTICLE 54- OTHER PROVISIONS .............................................. 22
EXHIBIT A -- Location of the Premises in the Building
EXHIBIT B -- Building Known as 15822 Bernardo Center Drive
EXHIBIT C -- Lease Commencement and Commencement Date Memorandum
EXHIBIT D -- Requirements for Alterations After Lease Commencement
EXHIBIT E -- Rules and Regulations of the Building
EXHIBIT F -- Work Letter
EXHIBIT G -- Tenant Estoppel Certificate
EXHIBIT H -- Adjustments to Basic Rent
EXHIBIT I -- Consent of Landlord
RIDER NO. 1 Options to Extend Term
RIDER NO. 2 Deferred Rent Agreement
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STANDARD FORM OFFICE LEASE
THIS STANDARD FORM OFFICE LEASE ("Lease") is made as of the 15th day of
August, 2001, by and between PACIFICA HOLDING COMPANY, a California corporation,
hereinafter called "Landlord" and GARDEN FRESH RESTAURANT CORP., a Delaware
corporation, hereinafter called "Tenant".
LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
subject to all of the terms and conditions hereinafter set forth, those certain
premises, hereinafter called the "Premises," shown in the drawings(s) attached
hereto as Exhibit "A" and located on the floor(s), in the suite, and which
includes that certain outside patio area ("Patio Area") (the location of which
is shown in the approximate location set forth in Exhibit "A") of that certain
office building (the "Building") as set forth in Item 1 of the Basic Lease
Provisions. The Building is located on that certain land which is improved with
landscaping, common areas, parking facilities and other Improvements as
generally shown on Exhibit "B" attached hereto (the "Property").
BASIC LEASE PROVISIONS
Each reference in the Lease to any of the Basic Lease Provisions
shall mean the respective information set forth below, and such information
shall be deemed incorporated as a part of the terms provided under the
particular Lease Section pertaining to such information. In the event of any
conflict between any Basic Lease Provisions and The Lease, the former shall
control.
1. Building Address: 15822 Bernardo Center Drive, San Diego,
California
Suite: A.
2. Rentable Area of the Premises: 30,300 Square feet (exclusive of
the Patio Area)
3. Rentable Area of the Building: 60,600 Square feet
4. Tenant's Proportionate Share: 50%
5. Basic Rent:
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Annual Rent per Monthly Rent per
Months Total Annual Rent Total Monthly Rent Square Foot Square Foot
----------------------------------------------------------------------------------
1-12 $ 509,040.00 $42,420.00 $16.80 $1.40
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Months 13 through 120 are subject to adjustment per Exhibit "H".
6. Intentionally Deleted
7. Term: Ten (10) years and Zero (0) months from the actual
Commencement Date, as may be extended as set forth in Lease Rider No. 1 attached
hereto.
8. Scheduled Commencement Date: January 1, 2002
9. Security Deposit: None
10. Brokers: Landlord agents: Jay Alexander and John Hale of
Colliers International; Tenant Agents: Bill Walker of Walker Commercial Realty
11. Use of Premises: General office and test kitchen, all in
accordance with Laws (as hereafter defined) and private restrictions and
pursuant to approvals to be obtained by Tenant from all relevant City, County
and other required governmental agencies and authorities.
12. Parking: One hundred fifteen (115) unreserved spaces
13. Guarantor: None
14. Addresses and Signatures of Landlord and Tenant:
ADDRESS OF TENANT: ADDRESS OF LANDLORD:
Garden Fresh Restaurant Corp. Pacific Holding Company
17180 Bernardo Center Dr. c/o Pacifica Property Management, Inc
San Diego, CA 92128 23422 Mill Creek Drive, Suite 110
Attn: Kathleen Salerno Laguna Hills, CA 92653
Landlord and Tenant hereby execute this Lease, consisting of the foregoing
provisions and Articles 1 through 54 which follow, together with all Exhibits,
Schedules and Riders attached hereto, as of the date first above written.
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"TENANT" "LANDLORD"
GARDEN FRESH RESTAURANT CORP., PACIFICA HOLDING COMPANY
a Delaware corporation a California corporation
By: Pacifica Property Management, Inc.,
a California corporation
Its: Authorized Agent
By: /s/ [Illegible] By: /s/ [Illegible]
------------------------------ ---------------------------------
Its: CEO - President Its: President
By: /s/ [Illegible] By: ________________________________
------------------------------
Its: CEO - Secretary Its: ________________________________
------------------------------
9-7-01 9-14-2001
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ADDITIONAL LEASE PROVISIONS
ARTICLE 1 - TERM
1.1 Unless sooner terminated as provided herein, the Term of this
Lease shall be for that period of years and months set forth in Item 7 of the
Basic Lease Provisions, as the same may be extended in accordance with any
option or options to extend the Term granted herein. The Term shall commence
(the "Commencement Date") upon the earlier of (i) the date upon which the City
of San Diego (the "City") has approved the Tenant Improvements (as hereinafter
defined) in accordance with its building code, as evidenced by its written
approval thereof in accordance with the building permits issued for the Tenant
Improvements, provided that in such event Tenant shall deliver to Landlord a
certificate of occupancy (temporary or otherwise) from the City for The Premises
within five (5) business days of such date, (ii) the date Tenant's architect has
certified in writing that the Tenant Improvements are substantially completed in
accordance with the Working Plans (as defined hereinafter), provided that in
such event Tenant shall deliver to Landlord a certificate of occupancy
(temporary or otherwise) from the City for the Premises within five (5) business
days of such date, (iii) the date Tenant commences occupancy of the Premises, or
(iv) January 1,2002. When the actual Commencement Date has occurred, Landlord
and Tenant shall execute a Commencement Date Memorandum in the form shown in
Exhibit "C". Landlord and Tenant anticipate that the Term will commence on the
"Scheduled Commencement Date" set forth in item 7 of the Basic Lease Provisions,
but the Scheduled Commencement Date shall in no event affect the actual
Commencement Date, which shall be determined as set forth in this Section 1.1.
Landlord's failure to deliver the Premises to Tenant by the Scheduled
Commencement Date shall not be considered a default of this Lease, but, except
for delay due to the fault of Tenant, the Commencement Date shall be deferred
until the Premises are so delivered. Notwithstanding the above, in the event (i)
a delay caused by force majeure (such that normally available standard building
materials become reasonably unavailable) or a delay caused by Landlord, either
of which directly results in Tenant being unable to complete the construction of
the Tenant Improvements by January 1,2002, or (ii) Tenant is unable to obtain a
Certificate of Occupancy for the Premises (or a temporary certificate of
occupancy for a period of time adequate to establish elevator service) solely as
a direct result of a lack of current elevator service, then the Commencement
Date shall be deferred on a day for day basis for such period of delay caused by
force majeure, Landlord or until the required elevator service is established.
1.2 Tenant and its authorized agents, contractors, subcontractors
and employees shall be granted a license by Landlord to enter upon the Premises,
at Tenants sole risk and expense, during ordinary business hours prior to the
Commencement Date, for the sole purpose of performing its required work as
provided in the Work Letter (as defined hereinafter) and installing Tenants
trade fixtures and equipment in the Premises; provided, however, that (i) the
provisions of this Lease, other than with respect to the payment of Rent, shall
apply during such early entry, including, but not limited to, the provisions of
Article 13 relating to Tenant's indemnification of Landlord, (ii) prior to any
such entry, Tenant shall pay for and provide evidence of the insurance to be
provided by Tenant pursuant to the provisions of Article 13, (iii) Tenant shall
pay all utility, service and maintenance charges for the Premises attributable
to Tenant's early entry and use of the Premises as reasonably determined by
Landlord, (iv) Tenant shall not unreasonably interfere, delay or hinder
Landlord, its agents, contractors or subcontractors in their performance of the
work required by Landlord in accordance with the Work Letter, and (v) Tenant
shall not use the Premises for the storage of inventory or otherwise commence
the operation of business during the period of such early entry. Upon Tenant's
breach of any of the foregoing conditions, Landlord may, in addition to
exercising any of its other rights and remedies set forth herein, revoke such
license upon notice to Tenant. Early entry by Tenant in accordance with this
Section 1.2 shall not constitute occupancy of the Premises for purposes of
establishing the Commencement Date.
ARTICLE 2 - RENT
Commencing on the Commencement Date, Tenant shall pay a Basic Rent
("Basic Rent") for the Premises in the amount shown in Item 5 of the Basic Lease
Provisions for the specified lease year, in monthly installments payable on the
first day of each month in advance. The first monthly installment of Basic Rent
and the Security Deposit shall be paid concurrently with the execution of this
Lease. If the Commencement Date occurs on a day other than the first day of a
month, then the Basic Rent for the fraction of the month starting with the
Commencement Date shall be prorated on the basis of the actual number of days in
said month with the balance of any prepaid Basic Rent applied to the next
month's Basic Rent. If the Term hereof ends on a day other than the last day of
a month, then the Basic Rent for the month during which said expiration occurs
shall be prorated on the basis of the actual number of days in said month. As
used in reference to Item 7 of the Basic Lease Provisions, "year" shall mean
each succeeding period of twelve full calendar months during the Term,
commencing with the first day of the first full calendar month of the Term
hereof, except that the first such period shall include in addition any partial
month at the commencement of the Lease Term. In addition to said Basic Rent,
Tenant agrees to pay Additional Rent ("Additional Rent") as and when hereinafter
provided in this Lease. Said Basic Rent and Additional Rent, together with all
other sums payable by Tenant under this Lease are hereinafter sometimes referred
to collectively as the "Rent." The Rent shall be payable to Landlord, without
notice, demand, abatement, deduction or offset in lawful money of the United
States of America at the address for Landlord as shown in Item 14 of the Basic
Lease Provisions, or to such other person or at such other place as Landlord may
from time to time designate in writing.
Tenant shall not disclose and shall instruct its employees and
representatives not to disclose the Rent and other terms of this Lease except to
the extent disclosure is reasonably necessary in the conduct of Tenant's
business or is otherwise required by court order or applicable law.
ARTICLE 3 - RENT ADJUSTMENT
3.1 Tenant shall pay as Additional Rent, in addition to the Basic
Rent specified in Article 2 above, in equal monthly installments payable on the
first day of each month in advance, one twelfth (1/12th) of the amount computed
by multiplying Tenant's Proportionate Share (as hereinafter defined), by the
Total Operating Expenses (as hereinafter defined) for the Building for any
calendar year during the Term of this Lease.
3.2 Landlord shall provide Tenant with a written estimate of the
Total Operating Expenses for each calendar year or partial calendar year, as the
case may be, during the Term of this Lease prior to the start of each such year,
except that said estimate for the 2002 calendar year shall be provided no later
than December 1, 2001. If Landlord has not furnished its written estimate by the
time set forth above, Tenant shall pay monthly installments of its Proportionate
Share of the Total Operating Expenses at the rate established for the prior
calendar year, if any; provided that when the new estimate is delivered to
Tenant, Tenant shall at the next monthly payment date pay Landlord any accrued
deficiency based on the new estimate, or Landlord shall
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credit any accrued overpayment based on such estimate toward Tenant's next
installment payment hereunder. Within a reasonable period of time after the end
of each calendar year (in no event less than ninety (90) days after the end of
each calendar year unless sooner completed by Landlord) Landlord shall furnish
Tenant a statement showing in reasonable detail the actual Total Operating
Expenses incurred for the period in question. If Tenant's estimated payments are
less than its Proportionate Share of the actual Total Operating Expenses as
shown by the applicable statement, Tenant shall pay the difference to Landlord
within thirty (30) days thereafter. If Tenant shall have overpaid Landlord,
Landlord shall credit such overpayment toward Tenant's next installment payment
of Additional Rent hereunder. When the final determination is made of the actual
Total Operating Expenses for the calendar year in which this Lease terminates,
Tenant shall, even if this Lease has terminated, pay to Landlord within ten (10)
days after notice the excess of its Proportionate Share of such actual Total
Operating Expenses over the estimate of its Proportionate Share of the Total
Operating Expenses paid. Conversely, any overpayment shall be rebated by
Landlord to Tenant. If Landlord shall determine at any time that the estimate of
Total Operating Expenses for the current calendar year is or will become
inadequate to meet all such Total Operating Expenses for any reason, Landlord
shall immediately determine the approximate amount of such inadequacy and issue
a supplemental estimate as to such Total Operating Expenses and Tenant shall pay
its Proportionate Share of any increase as reflected by such supplemental
estimate. Landlord shall keep or cause to be kept separate and complete books of
accounting covering all Total Operating Expenses and shall preserve for at least
twelve (12) months after the close of each calendar year all material documents
evidencing said Total Operating Expenses for that calendar year. Tenant, at its
sole cost and expense, through any certified public accountant designated by it
or the controller of Tenant, shall have the right, during reasonable business
hours and not more frequency than once during any calendar year, to examine
and/or audit the books and documents mentioned above evidencing such costs and
expenses for the previous calendar year. Tenant shall make all payments of
Additional Rent without delay and regardless of any pending dispute over the
amount of Additional Rent that is due in accordance with the statement furnished
by Landlord. Any delay or failure by Landlord in delivering any estimate or
statement pursuant to this Section 3.2 shall not constitute a waiver of its
right to require Tenant to pay all Total Operating Expenses pursuant hereto or
otherwise impair Tenants obligations under this Section 3.2. or otherwise.
3.3 "Tenant's Proportionate Share" is defined as that percentage
computed by dividing the Rentable Area of the Premises, as hereinafter defined,
during the calendar year in question by the total Rentable Area of the Building,
as hereinafter defined.
3.4 "Rentable Area of the Premises" and "Rentable Area of the
Building " are defined as those areas obtained by measuring the Premises (not
including the Patio Area) and the Building in accordance with the method of
measuring rentable office space specified by the Building Operators Management
Association ANSI Z65.1-1996 (the "BOMA Standard") as a guideline, including (i)
for single tenancy floors, all the area including, but not limited to, elevator
lobbies (if any), corridors, restrooms, mechanical rooms, electrical rooms,
telephone closets, mailrooms, fire control rooms, and any other areas used on
the floor within a Building, or (ii) for multiple tenancy floors, a pro rata
portion of all of the area including, but not limited to, elevator lobbies (if
any), corridors, restrooms, mechanical rooms, electrical rooms, telephone
closets, mailrooms, fire control rooms and any other areas used on the floor and
within a Building. Landlord and Tenant agree that although the Patio Area is a
part of the Premises, the square footage of the Patio Area shall not be used in
the calculations of Rentable Area of the Premises, Rentable Area of the Building
or Tenant's Proportionate Share.
3.5 The initial Rentable Area of the Premises, Rentable Area of the
Building, and Tenant's Proportionate Share are deemed to be as stated in Items
2, 3, and 4 of the Basic Lease Provisions, respectively. From time to time, as
Landlord deems necessary, Landlord's architect shall determine and certify in
writing the actual Rentable Area of the Premises and the actual Rentable Area of
the Building. Such determination shall be conclusive, and Items 2, 3, and 4 of
the Basic Lease Provisions shall be adjusted accordingly.
3.6 "Total Operating Expenses" are defined as the Utility Operating
Expenses, the Tax Operating Expenses and the General Operating Expenses.
(a) Utility Operating Expenses shall include the following:
Cost of water, sewer, electricity, gas, telephone and other services
used in operation of the Building;
(b) Tax Operating Expenses shall include the following: All
taxes and assessments and governmental charges whether federal,
state, county or municipal, and whether they be taxing districts or
authorities presently taxing the Premises or by others, subsequently
created or otherwise, and any other taxes and assessments
attributable to the Building or its operation, including any tax or
other levy, however denominated, on or measured by the rent
collected by Landlord with respect to the Building, or on Landlord's
business of leasing the Building, but excluding federal and state
taxes on income;
(c) General Operating Expenses are all other expenses
necessary to operate and maintain the Buildings in the Building in a
manner deemed reasonable and appropriate and for the best interest
of the tenants in the Building, including, but not limited to, the
following:
(i) Wages, salaries and fringe benefits of all employees
engaged in the operation and maintenance of the Building,
employers Social Security taxes, unemployment taxes or
insurance, and any other taxes which may be levied on such
wages and salaries, the cost of disability and hospitalization
insurance and pension or retirement benefits for such
employees, provided however if such employees provide services
for other buildings, only the portion of such employees' time
spent on services related to the Building shall be charged;
(ii) All supplies and material used in operation,
maintenance and repair of the Building;
(iii) Cost of janitorial service (for the Common Areas)
and personnel, trash removal, parking lot sweeping, window
washing, pest control, guard service and landscape
maintenance;
(iv) Cost of replacement of Building equipment and all
maintenance and service agreements on Building equipment,
including alarm, security, answering service, energy
management, mechanical, electrical, window cleaning, common
area elevator equipment (if any), the roof and skylights of
the Building, and relighting of light standards, soffit and
interior and exterior building lights;
(v) Reasonable reserves as established by Landlord to
cover cost of repainting buildings, resealing, resurfacing and
restriping parking and vehicular circulation and access areas,
replacement or repair of capital improvements, including
without limitation HVAC systems and roofs, to the extent of
the
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amortized amount thereof over the useful life of such capital
improvements calculated at a market cost of funds, and general
repairs and maintenance, and depreciation of machinery and
equipment used in connection with the maintenance of the
Building for which a reasonable reserve has not been
established;
(vi) Cost of any capital improvements (other than tenant
improvements for specific tenants) made by or on behalf of
Landlord to the Building or Common Areas to the extent of the
amortized amount thereof over the useful life of such capital
improvements calculated at a market cost of funds, all as
determined by Landlord, for each such year of useful life
during the Term and depreciation of machinery and equipment
used in connection with the maintenance and operation of the
Common Areas for which a reasonable reserve has not been
established as herein provided;
(vii) All taxes and assessments and governmental charges
whether federal, state, county or municipal, and whether they
be taxing districts or authorities presently taxing the leased
premises or by others, subsequently created or otherwise, and
any other taxes and assessments attributable to the Building
or its operation, including any tax or other levy, however
denominated, on or measured by the rent collected by Landlord
with respect to the Building, or on Landlord's business of
leasing the Building, but excluding federal and state taxes on
income;
(viii) Cost of casualty and liability insurance
applicable to the Building and Landlord's personal property
used in connection therewith together with any deductible of
an insured loss covering the Building or the Common Areas;
(ix) Cost of all accounting and other professional fees
incurred in connection with the operation of the Building;
(x) A management fee, not to exceed four percent (4%) of
Basic Rent;
(xi) Assessment and or/costs assessed or charged to the
Building under any covenants, conditions or restrictions of
record or any other declaration which may from time to time
encumber the Building;
(xii) Rent for any office space occupied by the
Building's management personnel (including, any rent paid or
imputed in connection with any space occupied by such
management personnel); provided, however, such rent shall not
exceed market rates for similar office space in the area;
(xiv) costs incurred in connection with compliance with
laws (other than building codes in effect at the time of
construction of the Buildings) or changes in laws applicable
to the Building; and
(xv) any costs incurred under Section 11.2 of this
Lease.
Notwithstanding the foregoing, General Operating Expenses shall not
include expenses for which Landlord is reimbursed (either by an insurer,
condemner, tenant or otherwise); expenses incurred in leasing or procuring
tenants (including, without limitation, lease commissions, advertising expenses,
legal expenses, and expenses of renovating space for tenants); legal expenses
arising out of disputes with tenants or the enforcement of the provisions of any
lease of space in the Building, interest or amortization payments on any
mortgage or mortgages, or rent under any ground or underlying lease or leases,
wages, salaries or other compensation paid to any executive employees above the
grade of building manager; wages, salaries or other compensation paid for clerks
or attendants in concessions or newsstands operated by Landlord; the cost of any
work or service performed for or facilities furnished to a tenant at the
tenant's cost; the cost of correcting defects (latent or otherwise) in the
construction of the Building or in the Building equipment, except that
conditions resulting from ordinary wear and tear shall not be deemed defects;
the cost of installing, operating and maintaining a specialty improvement
including, without limitation, an observatory or broadcasting tower, cafeteria
or dining facility, or athletic, luncheon or recreational club; any cost or
expense representing an amount paid to a corporation affiliated with Landlord
which is in excess of the amounts which would be paid in the absence of such
relationship. Payment of Additional Rent pursuant to Section 3.1 above shall not
be deemed a reimbursement to Landlord for purposes of this Section 3.6.
3.7 Total Operating Expenses for any calendar year during which
actual occupancy of the Building is less than ninety-five percent (95%) of the
Rentable Area of the Building shall be appropriately adjusted to reflect ninety
five percent (95%) occupancy of the existing Rentable Area of the Building
during such period.
3.8 Any operating expense increase for any calendar year during the
Term of this Lease shall be apportioned so that Tenant shall be charged under
this Article 3 for only that portion of the increase for such year as falls
within the Term. This provision shall survive the expiration or earlier
termination of the Term of this Lease.
3.9 If any special assessment is included as part of the real estate
taxes and such assessment may be paid in installments, Tenant shall be charged
under this Article 3 for only the installment falling within the Term whether or
not Landlord pays such assessment in installments.
3.10 Landlord and Tenant, each from time to time upon request of the
other, shall sign a written memorandum confirming the amount of the Additional
Rent as adjusted from time to time hereunder. The rights and obligations of
Landlord and Tenant with respect to payments to be made hereunder or allocable
to periods prior to the expiration or sooner termination of this Lease shall
survive such expiration or termination.
ARTICLE 4 - [INTENTIONALLY OMITTED].
ARTICLE 5 - UTILITIES, SERVICES; PARKING AND COMMON AREAS
5.1 Subject to provisions set forth below, Landlord shall at all
times furnish the Premises with electrical utility service and water for
lavatory and drinking purposes. Tenant's natural gas utility service shall be
separately metered. Tenant shall pay for all maintenance costs associated with
any such gas separate meter and repair thereof, including without limitation the
cost of any new utility equipment. Landlord may impose a reasonable charge for
any utilities or services (where not separately metered or sub-metered) required
to be provided by Landlord (i) by reason of any substantial recurrent use of the
Common Areas or the Premises at any time other than the hours of 8:00 a.m. to
6:00 p.m. Monday through Friday and 9 a.m. to 1 p.m. Saturday excluding legal
holidays or (ii) in the event Landlord makes a reasonable determination that
Tenant's use of nonsub-metered or separately metered utilities due to test
kitchen use, restaurant use or other use of the Premises are not in
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balance with Tenant's Proportionate Share of the Building's Utility Operating
Expenses. Tenant shall pay such amount set forth in clauses (i) and (ii) above
to Landlord, as an item of Additional Rent. Landlord may elect to provide for
janitor service for the Common Areas which shall be deemed a General Operating
Expense; provided however in the event Tenant's use of the Common Areas exceeds
the average services required by other tenants in the Building occupying
premises of a type and size similar to the Premises Tenant shall separately pay
for such excess services. Tenant, at its sole cost and expense, shall provide
for daily janitor service for the Premises. Tenant shall pay for replacement of
all bulbs and light standards in the premises. Landlord shall not be liable for
any failure to furnish any of such services or utilities when such failure is
caused by accidents, breakage, repairs, stoppage, or other interruptions,
strikes, lockouts, other labor troubles, governmental actions, shortages,
inability to obtain electricity, waste or fuel, or other conditions beyond
Landlord's reasonable control, and Tenant shall not be entitled to any damages,
nor shall any such failure relieve Tenant of the obligation to pay the full Rent
reserved herein or constitute or be construed as a constructive or other
eviction of Tenant, unless caused by Landlord's gross negligence. Furthermore,
Landlord shall be entitled to cooperate voluntarily in a reasonable manner with
the efforts of national, state or local governmental agencies or utilities
suppliers in reducing energy or other resource consumption.
5.2 Tenant shall not, without the prior written consent of Landlord,
which consent may be withheld in Landlord's sole and reasonable discretion, use
any apparatus or device in the Premises, using current in excess of 110 volts,
except as specified in the Work Letter or the Working Plans (as defined in
Exhibit "F" attached hereto), which will in any way increase the amount of
electricity or water usually furnished or supplied for use of the Premises as
general office space; nor connect any apparatus, machine or device with water
pipes or electric current (except through existing electrical outlets in the
Premises), for the purpose of using electric current or water, except as
provided in the Work Letter. Any conduit, wiring, cabling, or other lines
installed under the Work Letter or as an alteration by Tenant under this Lease
shall be the sole responsibility of Tenant, shall be maintained and repaired at
Tenant's sole cost and expense, and shall otherwise be subject to any wiring and
cabling management plan in effect by Landlord from time to time or, if Landlord
does not have such a plan, then by a plan prepared by Tenant and approved by
Landlord.
5.3 Tenant shall have the right to the nonexclusive use of the
number of parking spaces located in the parking facilities of the Building
specified in Item 12 of the Basic Lease Provisions for the parking of motor
vehicles used by Tenant, its officers and employees only. Landlord reserves the
right, at any time upon written notice to Tenant, to change the location of
Tenant's parking spaces within the parking facility originally designated for
such use, if any, as determined by Landlord in its sole and reasonable
discretion. The use of such spaces shall be subject to the rules and regulations
adopted by Landlord from time to time for the use of such facilities. Tenant
agrees that Tenant, its officers and employees shall not be entitled to park in
any reserved or specially assigned areas designated by Landlord from time to
time in the Building's parking facilities. Tenant shall not permit or allow any
vehicles that belong to or are controlled by Tenant or Tenant's officers,
employees, suppliers, shippers, customers or invitees to be loaded, unloaded,
washed waxed, detailed, serviced, or parked in areas other than those designated
by Landlord for such activities. If Tenant permits or allows any of the
prohibited activities described in this Section 5.3, then Landlord shall have
the right, without notice, in addition to such other rights and remedies that it
may have, to remove or tow away the vehicle involved with the cost of such
removal or tow to be paid by the owner of such vehicle.
5.4 Subject to the terms and conditions of this Lease, Tenant shall
have the nonexclusive right, in common with others, to the use of such
entrances, lobbies, restrooms, elevators (if any), ramps, drives, stairs, and
similar accessways and serviceways and other common areas and facilities in and
adjacent to the Building as are designated from time to time by Landlord for the
general nonexclusive use of Landlord, Tenant and the other tenants of the
Building and their respective employees, agents, representatives, licensees and
invitees ("Common Areas"). The use of such Common Areas shall be subject to the
rules and regulations contained herein and the provisions of any covenants,
conditions and restrictions affecting the Building. Landlord reserves the right
to make such changes, alterations, additions, deletions, improvements, repairs
or replacements in or to the Building, (including the Premises in the event such
change is mandated by a governmental agency) and the Common Areas as Landlord
may deem necessary or desirable, including, without limitation, constructing new
buildings and making changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading areas, landscaped
areas and walkways; provided, however, that there shall be no (i) unreasonable
permanent obstruction of access to or use of the Premises or (ii) material
change to the layout of the Premises or the Tenant Improvements. Notwithstanding
any provision of this Lease to the contrary, the Common Areas shall not in any
event be deemed to be a portion of or included within the Premises leased to
Tenant, and the Premises shall not be deemed to be a portion of the Common
Areas. Landlord reserves the right (i) to change the configuration, size and
dimensions of the Building (including the Premises in the event such change is
mandated by a governmental agency) and its Common Areas, (ii) to add or sever
from its ownership any portion of the Building (including the Premises in the
event such change is mandated by a governmental agency) at any time, and (iii)
to exclude from the rights of use granted to Tenant any rights of passage over
or use of any portion of the Building. The rights of Tenant hereunder in and to
the Common Areas shall at all times be nonexclusive with the rights of Landlord
and other tenants of Landlord who use the same in common with Tenant, and it
shall be the duty of Tenant to keep all of the Common Areas free and clear of
any obstructions created or permitted by Tenant or resulting from Tenant's
operations, and to use the Common Areas only for normal activities, parking and
ingress and egress by Tenant and its employees, agents, representatives,
licensees and invitees to and from the Premises, or the Building. If, in the
opinion of Landlord, unauthorized persons are using the Common Areas by reason
of the presence of Tenant in the Premises, Tenant, upon demand of Landlord,
shall correct such situation by appropriate action or proceedings against all
such unauthorized persons. Nothing herein shall affect the rights of Landlord at
any time to remove any such unauthorized persons from said areas or to prevent
the use of any of said areas by unauthorized persons.
ARTICLE 6 - USE OF PREMISES
6.1 Tenant shall use and occupy the Premises only as specified in
Item 11 of the Basic Lease Provisions and shall not use or occupy the Premises
for any other purpose without the prior written consent of Landlord, which
consent may be withheld at the sole reasonable discretion of Landlord.
Notwithstanding the above, Tenant agrees, by way of example and without
limitation, that it shall not be unreasonable for Landlord to withhold its
consent to a proposed change of use if such use is incompatible with other the
general office uses of other tenants in the Building or that the proposed change
of use would breach a covenant, condition or restriction in some other lease,
financing agreement or other agreement relating to the Building, the Premises or
this Lease. If any governmental license or permit, other than a certificate of
occupancy, shall be required for the proper and lawful conduct of Tenant's
business in the Premises or any part thereof, Tenant, at its expense, shall duly
procure and thereafter maintain such license or permit and submit the same to
Landlord for inspection. Tenant shall at all times comply with the terms and
conditions of each such license or permit. Tenant shall not use or occupy the
Premises in violation of any law, statute, ordinance or any governmental rule,
regulation or order (collectively "Law"), shall at its sole cost and expense,
promptly comply
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with all Laws now in force or which may hereafter be in force and with all
private restrictions and the requirements of any board of fire underwriters or
similar body and shall, upon written notice from Landlord, promptly discontinue
any use of the Premises which is declared to be a violation of Law by any
governmental authority having jurisdiction. Tenant shall not at any time use or
occupy the Premises in violation of the certificates of occupancy issued for the
Building or the Premises, and in the event that the Premises are used or
occupied in violation of such certificate or certificates of occupancy, any Law
or any recorded covenants, conditions and restrictions affecting the Building,
Tenant shall, upon ten (10) days' notice from Landlord or any governmental
agency, immediately discontinue such use of the Premises (and otherwise
immediately remedy such violation). The failure by Tenant to discontinue such
use shall be considered a default under this Lease, and Landlord shall have the
right to exercise any and all rights and remedies provided herein or by Law.
Tenant, at its sole cost and expense, shall comply with any direction of any
governmental authority having jurisdiction which shall impose any duty upon
Tenant or Landlord with respect to the Premises or the use or occupation
thereof, by reason of the nature of Tenant's use or occupancy of the Premises.
Notwithstanding the above, in the event Tenant desires to use a portion of the
Premises as a public or private restaurant, Landlord's consent to such use shall
not be unreasonably withheld; provided however (i) such restaurant shall not
exceed two thousand square feet (2000 sq. ft.), (ii) Landlord may reasonably
restrict the hours of operation, and (iii) Tenant shall pay (in addition to
Rent) for all costs associated with such restaurant including, without
limitation, pest control, refuse, providing additional parking and compliance
with ADA requirements, mitigation measures to reduce noise and odors, insurance
requirements, increased wear and tear on Building systems, and charges resulting
from increased utility use where not separately metered or sub-metered. Tenant
acknowledges that (a) such a restaurant would be also subject to, among other
things, approvals from parties other than Landlord, including without
limitation, applicable governmental agencies, lenders encumbering the Building,
and Landlord's insurance carriers (collectively, "Third Party Approvers"), and
such approval may not be granted by such parties, (b) Landlord has not made any
representations regarding the suitability of the Premises for such use, and (c)
any such approved restaurant use shall be personal to Tenant and irrespective of
Article 15 Tenant shall not sublease or assign its rights under this Lease with
respect to any restaurant portion of the Premises. The build-out of a portion of
the Premises for restaurant use shall be subject to Article 8, including without
limitation, removal of improvement and equipment obligations.
6.2 Tenant shall not do or permit to be done anything which. will
invalidate or increase the cost of any fire and extended coverage insurance
policy covering the Building or property located therein. In addition to all
other remedies of Landlord, Landlord may require Tenant to reimburse Landlord
promptly upon demand for any additional premium charged for such policy by
reason of Tenant's failure to comply with the provisions of this Section 6.2.
6.3 Tenant shall not in any way interfere with the rights or quiet
enjoyment of other tenants or occupants of the Premises or the Building. Tenant
shall not use or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, nor shall Tenant cause, maintain, or permit
any nuisance in, on or about the Premises or the Building. Tenant shall not
place a load upon any portion of the Premises exceeding the structural floor
load (per square foot of area) which such area was designated (and is permitted
by Law) to carry or otherwise use any Building system in excess of its capacity
or in any other manner which may damage such system or the Building. Business
machines and mechanical equipment shall be placed and maintained by Tenant, at
Tenant's sole cost and expense, in locations and in settings sufficient in
Landlord's reasonable judgment to absorb and prevent vibration, noise and
annoyance. Tenant shall not commit or suffer to be committed any waste in, on,
upon or about the Premises or the Building.
6.4 Landlord and Tenant acknowledge that the Americans With
Disabilities Act of 1990 (42 U.S.C. ss.12101 et seq.) and regulations and
guidelines promulgated thereunder, as all of the same may be amended and
supplemented from time to time (collectively referred to herein as the "ADA')
establish requirements for business operations, accessibility and barrier
removal, and that such requirements may or may not apply to the Premises and the
Building depending on, among other things: (1) whether Tenant's business is
deemed a "public accommodation" or "commercial facility", (2) whether such
requirements are "readily achievable", and (3) whether a given alteration
affects a "primary function area" or triggers "path of travel" requirements. The
parties hereby agree that notwithstanding anything contained in this Lease to
the contrary: (a) Landlord shall be responsible for ADA Title III compliance in
the common areas of the Building except as provided below, (b) Tenant shall be
responsible for ADA Title III compliance in the Premises, including any
leasehold improvements or other work to be performed in the Premises under or in
connection with this Lease, (c) Landlord may perform, or require that Tenant
perform and Tenant shall be responsible for the cost of, ADA Title III "path of
travel" requirements triggered by alterations in the Premises, and (d) Landlord
may perform, or require Tenant to perform, and Tenant shall be responsible for
the cost of, ADA Title III compliance in the common areas of the Building
necessitated by the Building being deemed to be a "public accommodation" instead
of a "commercial facility" as a result of Tenant's use of the Premises. Tenant
shall be solely responsible for requirements under Title I of the ADA relating
to Tenant's employees.
6.5 As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government, including, without limitation, (i) any material or substance which
is defined or listed as a "hazardous waste," "extremely hazardous waste,"
"restricted hazardous waste," "hazardous substance" or "hazardous material"
under any federal, state or local law, statute, ordinance or any governmental
rule, regulation or order governing or in any way relating to the release, use,
generation, handling, leakage, dumping, discharge or disposal of any of the
above (collectively, "Hazardous Material Laws") (ii) petroleum or any petroleum
derivative, (iii) any flammable explosive or radioactive material, (iv) any
polychlorinated biphenyl, and (v) asbestos or any asbestos containing material
or derivative. Tenant hereby agrees that (i) Tenant and each of its affiliates,
assignees, subtenants, and their respective agents, servants, employees,
representatives and contractors shall not bring onto the Premises or the
Building any Hazardous Material (other than customary amounts of Hazardous
Materials used for office supplies and cleaning materials brought into the
Premises by Tenant in the normal course of its tenancy and in full compliance
with all Hazardous Material Laws) and shall comply with all Hazardous Materials
Laws in effect, or that may come into effect, applicable to the Tenant or
Tenant's use and occupancy of the Building, (ii) Tenant shall immediately notify
Landlord, in writing, of any existing, pending or threatened (a) investigation,
inquiry, claim or action by any governmental authority in connection with any
Hazardous Materials Laws relating to the Building of which Tenant receives
notice; (b) third party claims relating to the Building of which Tenant receives
notice; (c) regulatory actions relating to the Building of which Tenant receives
notice; and/or (d) contamination of the Building; (iii) Tenant shall immediately
notify Landlord in the event Tenant becomes aware of or suspects that there has
been any release of any Hazardous Materials in, on or about the Premises or the
Building, or that any person has stored or otherwise brought onto the Building,
or any portion thereof, any Hazardous Material (other than customary amounts of
office supplies and cleaning materials); (iv) Tenant shall, at Tenant's expense,
investigate, monitor, remediate, and/or clean up any Hazardous Material or other
environmental condition on, about, or under the Building required as a result of
Tenant's or any Tenant Parties' use or occupancy of the Building; and (v) Tenant
shall keep the Building free of any lien imposed pursuant to any
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Hazardous Materials Laws. Tenant agrees to indemnify, defend (with counsel
selected by Landlord), protect and hold Landlord and its partners, members,
officers, trustees, affiliates, directors, constituent partners, shareholders,
employees, contractors, agents and representatives (collectively, "Affiliates")
and Landlord's mortgagees, harmless from and against any and all claims,
actions, administrative proceedings (including informal proceedings), judgments,
damages, punitive damages, penalties, fines, costs, liabilities, interest or
losses, including reasonable attorneys' fees and expenses, consultant fees, and
expert fees, together with all other costs and expenses of any kind or nature
that arise during or after the Term of this Lease directly or indirectly from or
in connection with the violation of any Hazardous Materials Laws or the
presence, handling, storage, release or discharge of any Hazardous Material in
or into the air, soil, surface water or groundwater at, on, about, under or
within the Premises or the Building, or any portion thereof, generated,
released, discharged or otherwise brought onto, under, or about the Premises or
Building by Tenant or any affiliate thereof. Each of the covenants and
agreements of Tenant set forth in this Section 6.5 shall survive the expiration
or earlier termination of this Lease. Provided that Tenant, its officers,
affiliates, directors, shareholders, employees, contractors, invitees, agents or
representatives have not caused the release of Hazardous Materials which
contaminates the Premises, Tenant shall not be obligated to remediate, remove,
or encapsulate any of such Hazardous Materials.
6.6 In the event Hazardous Material or a condition involving or
resulting from same, has come to be located in, on under or about the Premises
and materially impairs Tenant's use of the Premises, unless Tenant is legally
responsible therefor (in which case Tenant shall make the investigation and
remediation thereof required by applicable Law and this Lease shall continue in
full force and effect, but subject to Landlord's rights under Article 20),
Landlord may at Landlord's option either (i) investigate and remediate such
Hazardous Material, in compliance with Law, as soon as reasonably possible at
Landlord's expense, in which event this Lease shall continue in full force and
effect, or (ii) if the estimated cost to investigate and remediate such
condition exceeds Ten Thousand Dollars ($10,000.00), give written notice to
Tenant within thirty (30) days after receipt by Landlord of knowledge of the
occurrence of such Hazardous Material of Landlord's desire to terminate this
Lease as of the date sixty (60) days following the giving of such notice. In the
event Landlord elects to give such notice of Landlord's intention to terminate
this Lease, Tenant shall have the right (at Tenant's sole option) within ten
(10) days after the receipt of such notice to give written notice to Landlord of
Tenant's commitment to pay for the investigation and remediation of such
Hazardous Material solely at Tenant's expense and without reimbursement from
Landlord except to the extent of Ten Thousand Dollars ($10,000.00). Tenant shall
provide Landlord with the funds required of Tenant or satisfactory assurance
thereof within thirty (30) days following Tenant's commitment. In such event
this Lease shall continue in full force and effect, and Landlord shall proceed
to make such investigation and remediation as soon as reasonably possible and
the required funds are available. If Tenant does not give such notice and
provide the required funds or assurance thereof within the times specified
above, this Lease shall terminate as of the date specified in Landlord's notice
of termination. If an occurrence of Hazardous Materials (for which Tenant is not
legally responsible) materially impairs use of the Premises by Tenant, Rent
shall be abated in proportion to the degree to which Tenant's use of the
Premises is impaired. Other than as stated in this Section 6.6, Landlord shall
have no further obligations to Tenant with respect to remediation or removal of
Hazardous Materials from the Building.
6.7 Tenant may desire to install outside of the Building a backup
electrical generator ("Generator") to serve as an emergency power source for its
operations in the Premises. Landlord agrees to not unreasonably withhold its
consent to the installation of the Generator, subject to the requirements of
this Lease. Tenant acknowledges that (i) installation of the Generator shall be
subject to the terms of this Lease, including without limitation Landlord's
reasonable aesthetic, noise reduction, air quality, safety and spill/leak
mitigation or prevention requirements, and Exhibit "F" if the Generator is
described in the Working Plans, or Article 8 if the Generator is to be installed
at a later date, and (ii) the installation and use of the Generator will need
approvals from Third Party Approvers (as defined in section 6.1 above), and such
approval may not be granted by such Third Party Approvers. In the event such
Generator is approved, (i) Tenant shall, at Landlord's request and at its sole
cost and expense and no later than thirty (30) days prior to the expiration of
the Term of this Lease, remove the Generator from the Premises and restore the
Property to a clean, neat, attractive, healthy, safe and sanitary condition, and
(ii) Tenant shall promptly upon the expiration or sooner termination of this
Lease, represent to Landlord in writing that (a) Tenant has made a diligent
effort to determine whether any Hazardous Materials are on, under or about the
Premises as a result of any acts or omissions of Tenant or Tenant's affiliates,
agents, or employees, and (b) no such Hazardous Materials exist on, under or
about the Premises other than as specifically identified to Landlord by Tenant
in writing. If Tenant discloses the existence of Hazardous Materials on, under
or about the Premises which are the responsibility of Tenant, or if Landlord at
any time discovers that Tenant or Tenant's Agents caused or permitted the
release of a Hazardous Material on, under, from or about the Premises, Tenant
shall, at Landlord's request, promptly (but no later than thirty (30) days after
Tenant has notice of the existence of any such Hazardous Materials) prepare and
submit to Landlord a comprehensive plan, subject to Landlord's approval,
specifying the actions to be taken by Tenant to remediate such Hazardous
Materials in accordance with Law and any Third Party Approvers' requirements.
Upon Landlord's approval of such clean up plan, Tenant shall, at Tenant's sole
cost and expense, without limitation on any rights and remedies of Landlord
under this Lease or at law or in equity, promptly implement such plan and
diligently proceed to clean up such Hazardous Materials in accordance with all
applicable Laws and as required by such plan and this Lease. Tenant understands
that Landlord may utilize an environmental consultant to assist in determining
conditions of approval and monitoring in connection with the use or installation
of the Generator or the presence, storage, generation or use of Hazardous
Materials on or about the Premises by Tenant, and Tenant agrees that any actual
third-party costs reasonably incurred by Landlord in connection with any such
environmental consultant's services shall be reimbursed by Tenant to Landlord as
Additional Rent within 30 days after demand.
6.8 Landlord shall have the right at Landlord's sole cost and
expense, but not the obligation, to inspect, investigate, sample and/or monitor
the Premises, including any air, soil, water, groundwater or other sampling, and
any other testing, digging, drilling or analyses, at any time to determine
whether Tenant is complying with the terms of this Article 6, and in connection
therewith, Tenant shall provide Landlord with full access to all relevant
facilities, records and personnel. In the event Landlord's inspections,
investigations, sampling and/or monitoring of the Premises and/or the Property
reveals that Tenant is not in compliance with the terms of this Article 6,
Tenant shall reimburse Landlord for the reasonable and actual costs of such
inspections, investigations, sampling and/or monitoring within thirty (30) days
after demand. If Tenant is not in compliance with any of the provisions of this
Article 6, or in the event of a release of any Hazardous Material on, under,
from or about the Premises, Landlord shall have the right, but not the
obligation, without limitation on any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises and to discharge
Tenant's obligations under this Article 6 at Tenant's expense, including without
limitation the taking of emergency or long-term remedial action. Landlord shall
endeavor to minimize interference with Tenant's business but shall not be liable
for any such interference. Notwithstanding the foregoing, unless any of the
Third Party Approvers (as defined in Section 6.1 above) require Landlord to
discharge Tenant's obligations under this Article 6, or in the event of an
emergency, Landlord shall first provide written notice to Tenant of Landlord's
intent to discharge Tenant's obligations under this Article 6 and Tenant shall
thereafter have ten (10) days after such written notice to comply with the
provisions of this Article 6. In
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addition, Landlord, at Tenant's sole cost and expense, shall have the right, but
not the obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims or causes of action arising out of the
storage, generation, use or disposal by Tenant or Tenant's affiliates, agents or
employees of Hazardous Materials on, under, from or about the Premises. All sums
reasonably disbursed, deposited or incurred by Landlord in connection herewith,
including, but not limited to, all costs, expenses and actual attorney's fees,
shall be due and payable by Tenant to Landlord, as an item of Additional Rent,
on demand by Landlord, together with interest thereon at the maximum legal rate
from the date of such demand until paid by Tenant. Notwithstanding anything to
the contrary contained in this Lease, Tenant shall not, without Landlord's prior
written consent, take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises, or enter into any
settlement agreement, consent decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided, however,
Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises (i) poses an
immediate threat to the health, safety or welfare of any individual or (ii) is
of such a nature that an immediate remedial response is necessary and it is not
possible to obtain Landlord's consent before taking such action.
ARTICLE 7 - ACCEPTANCE OF PREMISES
Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty regarding the Premises, the Building or
with respect to the suitability or fitness thereof for the conduct of Tenant's
business or for any other purpose. Tenant takes the Premises in its AS-IS
condition subject to Landlord's work as set forth in the Work Letter, and
Landlord shall have no obligation to alter, remove, improve, repair, decorate,
or paint the Premises except as may otherwise be specifically set forth herein.
The taking of possession or use of the Premises by Tenant for any purpose other
than Tenant's construction of tenant improvements or the installation of
tenant's fixtures and equipment shall conclusively establish that the Premises
and the Building were at such time in satisfactory condition (except for latent
defects) and in conformity with the provisions of this Lease in all respects,
except as to any items as to which Tenant and Landlord shall reasonably agree
are unsatisfactory, which agreement shall be evidenced in writing and set forth
in reasonable detail no later than ten (10) days after Tenant takes such
possession or commences such use of the Premises, or the Term of this Lease
otherwise commences as provided in Article 1 above. Nothing contained in this
Article 7 shall affect the commencement of the Term of this Lease or the
obligation of Tenant to pay Rent hereunder as provided in Article 2 above.
Landlord shall promptly correct any actual defects of which it is notified as
provided above.
ARTICLE 8 - ALTERATIONS AND EQUIPMENT
8.1 Tenant shall make no alterations, additions or improvements to
the Premises in excess of Five Thousand Dollars ($5,000.00) without the prior
written consent of Landlord, and Landlord may impose as a condition to such
consent such requirements as Landlord in its sole discretion may deem necessary
or desirable, including, but not limited to, requirements as to the manner in
which, and the time or times at which, such work shall be done, and the right to
approve the contractor selected by Tenant to perform such work; provided however
in no event shall Tenant make structural alterations to the Premises. Without
limiting the foregoing, Landlord may require at a minimum, compliance with the
requirements set forth in Exhibit "D". Notwithstanding the above, Tenant may
make non-structural alterations, additions or improvements to the Patio Area
upon the prior written consent of Landlord, which consent may not be
unreasonably withheld. All alterations shall be made by Tenant, at Tenant's sole
cost and expense, and shall be diligently prosecuted to completion and in
conformance with all Laws. The cost of any modifications of Building
improvements outside or inside of the Premises required by any governmental
agency as a condition or the result of Tenant's alterations shall be borne by
Tenant. All such alterations, additions or improvements shall become the
property of Landlord and shall be surrendered with the Premises, as a part
thereof, at the end of the Term hereof, except that Landlord may, by written
notice to Tenant given at least thirty (30) days prior to the end of Term,
require Tenant to remove all partitions, counters, railings and any other
improvements or equipment installed by Tenant, and to repair any damage to the
Premises from such removal, all at Tenant's sole expense.
8.2 All articles of personal property and all business and trade
fixtures, machinery and equipment, cabinet work, furniture and movable
partitions owned by Tenant or installed by Tenant at its expense in the Premises
shall be and remain the property of Tenant and may be removed by Tenant at any
time during the lease Term when Tenant is not in default hereunder, provided
that Tenant promptly repairs at Tenant's expense any damage to the Premises or
the Building caused by such removal. On the expiration of the Term of this
Lease, or on any earlier termination of this Lease, Tenant shall remove all such
personal property and other items in accordance with the provisions of Article
21 below.
8.3 Landlord within ten (10) business days after request from Tenant
shall execute and deliver a document in substantially the form of Exhibit "I"
"Landlord's Waiver" as required by any supplier or lender in connection with the
financing of or installation in the Premises of Tenant's personal property or
trade fixtures.
ARTICLE 9 - LIENS
Except to the extent of the Limited Refurbishment as defined and
described in Exhibit "F" which is to be performed by or on behalf of Landlord,
Tenant, at its expense, and with diligence and dispatch, shall procure the
cancellation or discharge of all notices of violation arising from or otherwise
connected with any alterations, additions, or modifications, or any other work,
labor, services, equipment, or materials done for or supplied to Tenant, or any
other person claiming through or under Tenant. Tenant shall notify Landlord of,
and shall defend, indemnify and save harmless Landlord and any holder under a
Security Document (defined below) from and against any and all construction and
other liens and encumbrances filed in connection with any such alterations,
modifications, additions, or any other work, labor, services or materials done
for or supplied to Tenant, or any person claiming through or under Tenant,
including, without limitation, security interests in any materials, fixtures,
equipment, or articles so installed in and constituting part of the Premises and
against all costs, expenses and liabilities incurred in connection with any such
lien or encumbrance or any action or proceeding brought thereon. Tenant, at its
expense, shall procure the satisfaction or discharge of record of all such liens
and encumbrances within thirty (30) days after the filing thereof. Nothing
herein contained shall prevent Tenant from contesting, in good faith and at its
own expense, any notice of violation, or lien provided Tenant posts for the
protection of Landlord security acceptable to Landlord.
ARTICLE 10 - TAX ON TENANT'S PROPERTY
10.1 Tenant shall be liable for and shall pay not later than ten
(10) days before delinquency, all taxes levied against any personal property or
trade fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenants personal property or trade fixtures are levied against Landlord or
Landlord's property and if Landlord, after written notice to
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Tenant, pays the same, which Landlord shall have the right to do regardless of
the validity of such levy, but only under proper protest if requested by Tenant,
or if the assessed value of Landlord's property is increased by the inclusion
therein of a value placed upon such personal property or trade fixtures of
Tenant and if Landlord, after written notice to Tenant, pays the taxes based
upon such increased assessment, which Landlord shall have the right to do
regardless of the validity thereof, but only under proper protest if requested
by Tenant, Tenant shall upon demand, as the case may be, repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from
such increase in assessment; provided that, in any such event Tenant shall have
the right, in the name of Landlord and with Landlord's full cooperation, but at
no cost to Landlord, to bring suit in any court of competent jurisdiction to
recover the amount of any such taxes so paid under protest, any amount so
recovered to belong to Tenant.
10.2 If the tenant improvements in the Premises, whether installed
or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's building standard construction in other space in the
Building are assessed, then the real property taxes and assessments levied
against Landlord or Landlord's property by reason of such excess assessed
valuation shall not be deemed to be taxes levied against Landlord or Landlord's
property by reason of such excess assessed valuation, but rather shall be deemed
to be taxes levied against personal property of Tenant and shall be governed by
the provisions of Section 10.1 above.
ARTICLE 11 - MAINTENANCE AND REPAIR
11.1 Subject to the provisions of Section 11.2 below, Tenant shall,
at its sole cost and expense, maintain the Premises, including without
limitation the Patio Area, in a safe, clean and neat condition (including
without limitation, repair and maintenance of any grease traps installed
pursuant to the Work Letter) and shall take good care of the Premises and
fixtures therein and, subject to the provisions of Article 17 below, shall
reimburse Landlord for all repairs thereto or to the Building or the Common
Areas which are made necessary as a result of any use (exclusive of ordinary
wear and tear), misuse or neglect by Tenant or any of its officers, agents,
employees, contractors, licensees, visitors, guests or invitees.
11.2 Subject to Landlord's timely receipt of Tenant's payment of
Rent, the provisions Sections 3.6, 5.1 and 11.1 above and Article 17 hereof,
Landlord shall repair and maintain the Building structure and public areas, the
plumbing, air conditioning and electrical systems serving the Premises, and the
roof and skylights of the Building. Landlord shall not be liable for any failure
to make any repairs or to perform any maintenance unless such failure shall
persist for an unreasonable time after written notice of the need for such
repairs or maintenance is given to Landlord by Tenant. Except as provided in
Article 17 hereof, there shall be no abatement of Rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion therein (unless caused by Landlord's gross negligence, but in no event
shall Landlord be liable for consequential or punitive damages), provided,
however, that in making such repairs, alterations or improvements, Landlord
shall interfere as little as reasonably practicable with the conduct of Tenant's
business in the Premises. Tenant hereby waives its right to make repairs at
Landlord's expense under the provisions of Sections 1941 and 1942 of the Civil
Code of California. Notwithstanding anything contained in this Section 11.2 to
the contrary, Landlord shall have no obligation to maintain or repair any
alterations, additions, improvements, fixtures or equipment installed in the
Premises by Tenant. The cost of any maintenance and repairs on the part of
Landlord provided for in this Section 11.2 shall be considered part of General
Operating Expenses and paid by Tenant in the manner set forth in Article 3,
except that repairs which Landlord deems arise out of any act or omission by or
on behalf of Tenant shall be made at the immediate expense of Tenant.
Notwithstanding anything to the contrary contained herein, in the event Landlord
fails to perform any maintenance or repair obligations as set forth herein which
materially affect Tenant's permitted use of the Premises and such failure
continues for fifteen (15) days after written notice by Tenant specifying the
nature of such needed maintenance or repairs, or immediately in the case of an
emergency, or sixty (60) days in the event such maintenance or repair reasonably
requires more then fifteen (15) days provided the Landlord commences work within
fifteen (15) days, then Tenant, at its option without obligation to do so, may
perform such maintenance or repair obligations and Landlord shall pay to Tenant
the actual and reasonable expenses incurred for such maintenance or repairs
within sixty (60) days after receipt of an invoice from Tenant.
ARTICLE 12 - ENTRY AND INSPECTION
Upon prior written notice (including without limitation notice by
facsimile transmission). Tenant will permit Landlord and its agents (which may
be accompanied by Tenant's personnel at Tenant's discretion) at all reasonable
times during normal business hours and at any time in case of emergency (without
notice or escort requirements), in such manner as to cause as little disturbance
to Tenant as reasonably practicable, to enter into and upon the Premises for the
purpose of inspecting the same or for the purpose of protecting the interest
therein of Landlord, and to take all required materials and equipment into the
Premises, and perform all required work therein, including the erection of
scaffolding, props, or other mechanical devices, for the purpose of making
alterations, repairs or additions to the Premises or to any other portion of the
Building in which the Premises are situated as may be provided for by this Lease
or as may be mutually agreed upon by the parties or as Landlord may be required
to make by law or for maintaining any service provided by Landlord to Tenant
hereunder without any rebate of Rent to Tenant for any loss of occupancy or
quiet enjoyment of the Premises, or damage, injury or inconvenience thereby
occasioned (unless caused by Landlord's gross negligence, but in no event shall
Landlord be liable for consequential or punitive damages). Tenant shall also
permit Landlord and its agents (which may be accompanied by Tenant's personnel
at Tenant's discretion), upon prior notice and, to enter or pass through the
Premises or any part thereof, at reasonable times during normal business hours
to show the Premises to holders of encumbrances on the interest of Landlord
under the Lease, or prospective purchasers, or mortgagees of the Building, and
during the period of six (6) months prior to the expiration date of this Lease,
Landlord may exhibit the Premises to prospective tenants. Landlord shall also
have the right to enter on or pass through the Premises, or any part thereof, at
such times as such entry shall be required by circumstances of emergency
affecting the Premises or any other portion of the Building in which the
Premises are located. If during the last month of the Term hereof Tenant shall
have removed substantially all of Tenant's property and personnel from the
Premises, Landlord may enter the Premises and repair, alter and redecorate the
same, without abatement of Rent and without liability to Tenant, and such acts
shall have no effect on this Lease.
ARTICLE 13 - HOLD HARMLESS; LIMITATION OF LIABILITY; INSURANCE
13.1 Tenant shall indemnify, defend (with legal counsel selected by
Landlord), protect and hold Landlord and its Affiliates (as defined in Article
6.4) harmless from and against any and all claims, suits, judgments, losses,
costs, obligations, damages, expenses, interest and liabilities, including,
without limitation, reasonable attorneys' fees, for any injury or damage to any
person or property whatsoever arising out of or in connection with this Lease,
the Premises or Tenant's activities in the Building, including, without
limitation, by reason of the active or passive negligence of Landlord or its
Affiliates when such Injury
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or damage has been caused in whole or in part by the act, negligence, fault or
omission of Tenant, its agents, servants, contractors, employees,
representatives, licensees or invitees. Without limiting the foregoing, Tenant
shall reimburse Landlord for all expenses, damages and fines incurred or
suffered by Landlord by reason of any breach, violation or non-performance by
Tenant, its agents, servants or employees, of any covenant or provision of this
Lease, or by reason of damage to persons or property caused by moving property
of or for Tenant in or out of the Building, or by the installation or removal of
furniture or other property, or by reason of carelessness, negligence or
improper conduct of Tenant or its agents, employees or servants in the use or
occupancy of the Premises. The provisions of this Section 13.1 shall survive the
expiration or earlier termination of this Lease.
13.2 Landlord shall not be liable to Tenant, and Tenant hereby
waives all claims against Landlord and its Affiliates for any injury or damage
to any person or property occurring or incurred in connection with or in any way
relating to the Premises or the Building from any cause, including, without
limitation, by reason of the active or passive negligence of Landlord or its
Affiliates. Without limiting the foregoing, neither Landlord nor any of its
Affiliates shall be liable for and there shall be no abatement of Rent for (i)
any damage to Tenant's property stored with or entrusted to Landlord or its
Affiliates, (ii) loss of or damage to any property by theft or any other
wrongful or illegal act, or (iii) any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from the pipes,
appliances, appurtenances or plumbing works therein or from the roof, street or
sub-surface or from any other place or resulting from dampness or any other
cause whatsoever or from the acts or omissions of other tenants, occupants or
other visitors to the Building, or from any other cause whatsoever, (iv) any
diminution or shutting off of light, air or view by any structure which may be
erected on lands adjacent to the Building, or (v) any latent or other defect in
the Premises or the Building. In addition and without limitation to the other
provisions of this Section 13.2, Tenant agrees that in no case shall Landlord
ever be responsible or liable on any theory for any injury to Tenant's business,
loss of profits, loss of income or any other form of consequential damage.
Tenant shall give prompt notice to Landlord in the event of (A) the occurrence
of a fire or accident in the Premises or in the Building, or (B) the discovery
of any defect therein or in the fixtures or equipment thereof.
13.3 Tenant hereby agrees to maintain in full force and effect at
all times during the Term of this Lease, at its sole cost and expense, for the
protection of Tenant and Landlord, as their interests may appear, policies of
insurance issued by a responsible carrier or carriers, qualified to do business
in the State of California, with a financial class rating of not less than X
and a policy holder rating of not less than A in the most recent Best's Key
Rating Guide and otherwise acceptable to Landlord, which afford the following
coverages:
(a) Comprehensive general liability insurance (or commercial
general liability insurance) or such successor comparable form of
coverage, including blanket contractual liability, broad form
property damage, independent contractor's coverage, personal injury,
completed operations, products liability, cross liability and
severability of interest clauses, and fire damage, written on an
"occurrence" basis with coverage of not less than Five Million
Dollars ($5,000,000.00) combined single limit per occurrence for
both bodily injury (including death) and property damage;
(b) All Risk Insurance, including, without limitation,
insurance covering loss or damage resulting or arising from
sprinkler leakage, in an amount sufficient to cover the full cost of
replacement of all improvements to the Premises and all of Tenant's
fixtures and other personal property. The proceeds of such insurance
shall be devoted exclusively to the replacement of the same unless
this Lease shall cease and terminate pursuant to the provisions of
Article 17; and
(c) Loss of income insurance in such amounts as will cover
Tenant for direct or indirect loss of earnings resulting from all
risks or perils customarily insured against by commercially prudent
tenants, as reasonably determined by Landlord.
(d) Tenant may, with the prior written consent of Landlord,
elect to have reasonable deductibles (not to exceed Ten Thousand
Dollars ($10,000.00)) under the policies required hereunder.
(e) Tenant shall deliver to Landlord at least thirty (30) days
prior to the time such Insurance is first required to be carried by
Tenant, and thereafter at least thirty (30) days prior to expiration
of each such policy, certificates of insurance evidencing the
coverage required hereunder with limits not less than those
specified above. Such policies of insurance shall be written as
primary policies, not contributing with, and not in excess of
coverage which Landlord may carry. Such certificates shall name
Landlord, Pacifica Property Management, Inc., a California
corporation, Pacifica Real Estate Group, a California corporation,
Pacifica Real Estate Group, LLC, a California limited liability
company and lenders as required by contract as additional insureds
and this insurance shall (i) be primary and non-contributory with
any other coverage's carried by Landlord and (ii) shall expressly
provide that the interest of the same therein shall not be affected
by any breach by Tenant of any policy provision for which such
certificates evidence coverage. Further, all certificates shall
expressly provide that not less than thirty (30) days' prior written
notice shall be given Landlord in the event of material alteration
to or cancellation of the coverages evidenced by such certificates.
The limits of insurance required to be carried by Tenant hereunder
shall not limit Tenant's liability hereunder.
(f) Notwithstanding any provision of this Section 13.3 to the
contrary, Tenant shall not keep, use, sell or offer for sale in or
upon the Premises any article which may be prohibited by any
insurance policy periodically in force covering the Premises or the
Building. If any of Landlord's insurance policies shall be canceled
or cancellation shall be threatened or the coverage thereunder
reduced or threatened to be reduced in any way because of the use of
the Premises, or any part thereof, by Tenant or any assignee,
subtenant, licensee or invitee of Tenant and, if Tenant fails to
remedy the condition giving rise to such cancellation, threatened
cancellation, reduction of coverage, or threatened reduction of
coverage, within forty-eight (48) hours after notice thereof,
Landlord may, at its option, either terminate this Lease or enter
upon the Premises and attempt to remedy such condition, and Tenant
shall promptly pay the cost thereof to Landlord as Additional Rent.
Landlord shall not be liable for any damage or injury caused to any
property of Tenant or of others located on the Premises resulting
from such entry. If Landlord is unable, or elects not to remedy such
condition, then Landlord shall have all of the remedies provided for
in this Lease in the event of a default by Tenant.
(g) Tenant shall not do or permit to be done any act or things
upon or about the Premises or the Building, which will (i) result in
the assertion of any defense by the insurer to any claim under, (ii)
invalidate, or (iii) be in conflict with, the insurance policies of
Landlord or Tenant covering the Building, the Premises or fixtures
and property therein, or which would increase the rate of fire
insurance applicable to the Building to an amount higher than it
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otherwise would be; and Tenant shall neither do nor permit to be
done any act or thing upon or about the Premises or the Building
which shall or might subject Landlord to any liability or
responsibility for injury to any person or persons or to property.
(h) If, as a result of any act or omission by or on the part
of Tenant or violation of this Lease, whether or not Landlord has
consented to the same, the rate of "All Risk" or other type of
insurance maintained by Landlord on the Building and fixtures and
property therein, shall be increased to an amount higher than it
otherwise would be, Tenant shall reimburse Landlord for all
increases of Landlord's fire insurance premiums so caused, such
reimbursement to be additional Rent payable within five (5) days
after demand therefor by Landlord. If, due to abandonment of, or
failure to occupy the Premises by Tenant, any such insurance shall
be canceled by the insurance carrier, then Tenant hereby indemnifies
Landlord against liability which would have been covered by such
insurance.
(i) Landlord may from time to time, but not more frequently
than once every three (3) years, require that the amount of
commercial public liability insurance to be maintained by Tenant
under this Section 13.3 be increased so that the amount thereof
adequately protects the Landlord's interest based on amounts of
coverage required of comparable tenants in comparable buildings.
(j) In the event Tenant installs the Generator or uses,
generates or stores Hazardous Materials on, under or about the
Premises pursuant to Article 6, Landlord shall have the continuing
right to require Tenant, at Tenants sole cost and expense, to
purchase environmental insurance, issued by a responsible carrier,
qualified to do business in the State of California, with a
financial class rating of not less than VII and a policy holder
rating of not less than A in the most recent Best's Key Rating
Guide, with coverage of no less than Five Million Dollars
(S5,000,000.00), insuring (i) any Hazardous Materials and tanks
described in Section 6.7 shall be removed from the Premises, (ii)
the Premises shall be restored to a clean, neat, attractive,
healthy, safe and sanitary condition, and (iii) any liability of
Tenant, Landlord and Landlord's agents arising from such Hazardous
Materials or tanks.
13.4 Landlord shall, at all times during the Term, keep the Building
insured against loss or damage by fire and the perils covered by a combined
single limit bodily injury and broad form property damage insurance policy,
extended coverage, or an "all risk" insurance, with inflation guard, vandalism
and malicious mischief endorsements, and any other endorsements selected by the
Landlord (excluding at Landlord's discretion, the perils of flood or
earthquake); provided however Tenant shall be an additional insured under said
policy. Landlord, at its sole and absolute discretion, may purchase (a) an
earthquake policy of insurance and flood or zoning ordinance coverage, in any
amount sufficient to prevent either the Landlord or the Tenant from becoming a
co-insured under the provisions of the policies, (b) a policy of rental value or
rent continuation insurance for a period of one (1) year, and (c) any other
insurance that may be required from time to time by the holders of any
mortgages, deed of trust or grounds leases on the Building. In addition, the
Landlord may purchase any other insurance which it, in its reasonable
discretion, deems necessary or appropriate. All such insurance shall be payable
to the Landlord and the holder of any encumbrances on the Building as their
interests may appear. All of the costs and expenses and deductible amounts of
such insurance shall be a General Operating Expense. Upon written request by
Tenant, Landlord shall provide to Tenant evidence of such insurance. Tenant
owned alterations and improvements shall be insured by Tenant as provided in
Section 13.3.
ARTICLE 14 - WAIVER OF SUBROGATION
In the event that Landlord's insurance policies with respect to the
Premises or the Building permit a waiver of subrogation, Landlord hereby waives
any and all rights of recovery against Tenant for or arising out of damage to,
or destruction of the Premises or the Building, from causes then included under
standard fire and all risk insurance policies or endorsements; provided,
however, that such waiver of subrogation shall be limited exclusively to
insurance proceeds actually received by Landlord for such damage or destruction.
In the event that Tenant's insurance policies with respect to the Premises
permit a waiver of subrogation, Tenant waives any and all rights of recovery
against Landlord for or arising out of damage to, or destruction of, any
property of Tenant, from causes then included under standard fire and all risk
insurance policies or endorsements. Tenant represents that its present insurance
policies now in force permit such waiver. If at any time during the Term of this
Lease (i) either party shall give not less than five (5) days' prior written
notice to the other party certifying that any insurance carrier which has issued
any such policy shall refuse to consent to the aforesaid waiver of subrogation,
or (ii) such insurance carrier shall consent to such waiver only upon the
payment of an additional premium (and such additional premium is not paid by the
other party hereto), or (iii) such insurance carrier shall revoke a consent
previously given or shall cancel or threaten to cancel any policy previously
issued and then in force and effect, because of such waiver of subrogation,
then, in any of such events, the waiver of subrogation contained herein shall
thereupon be of no further force or effect as to the loss, damage or destruction
covered by such policy. If however, at any time thereafter, a consent to such
waiver of subrogation shall be obtained without an additional premium from any
existing or substitute insurance carrier, the waiver hereinabove provided for
shall again become effective.
ARTICLE 15 - ASSIGNMENT AND SUBLETTING
15.1 Tenant shall not directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, assign, sublet, mortgage,
hypothecate or otherwise encumber all or any portion of its interest in this
Lease or in the Premises or grant any license in or suffer any person other than
Tenant the right to use or occupy the Premises, or any part thereof, without
obtaining the prior written consent of Landlord, which consent shall, subject to
Section 15.5 below, not be unreasonably withheld. Any such attempted assignment,
subletting, license, mortgage, hypothecation, other encumbrance or other use or
occupancy without the consent of Landlord shall be null and void and of no
effect. For purposes of application of this Article 15, any mortgage,
hypothecation or encumbrance of all or any portion of Tenant's interest in this
Lease or in the Premises and any grant of a license or sufferance of any person
other than Tenant to use or occupy the Premises, or any part thereof, shall be
deemed to be an "assignment" of this Lease. In addition, as used in this Article
15, the term "Tenant" shall also mean any entity that has guaranteed Tenant's
obligations under this Lease, and the restrictions applicable to Tenant
contained herein shall also be applicable to such guarantor.
15.2 No permitted assignment or subletting shall relieve Tenant of
its obligation to pay the Rent and to perform all of the other obligations to be
performed by Tenant hereunder. The acceptance of Rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision of this
Lease or to be a consent to any subletting or assignment. Consent by Landlord to
one (1) subletting or assignment shall not be deemed to constitute a consent to
any other or subsequent attempted subletting or assignment.
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15.3 If Tenant desires at any time to assign this Lease or to sublet
the Premises, or any portion thereof, it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord (i) the name of the
proposed assignee or subtenant; (ii) the nature of the proposed assignee's or
subtenant's business to be carried on in the Premises; (iii) the terms and
provisions of the proposed assignment or sublease, which shall be expressly
subject to the provisions of this Lease; (iv) in the case of a sublease, the
portion of the Premises proposed to be sublet; and (v) such financial and other
information as Landlord may reasonably request concerning the proposed assignee
or subtenant.
15.4 At any time within thirty (30) days after Landlord's receipt of
the information specified in Section 15.3 above, Landlord may, by written notice
to Tenant, elect to (i) consent to the subletting or assignment under the terms
and to the subtenant or assignee proposed or (ii) withhold its consent. If
Landlord consents to such assignment or sublease, Tenant may, within ninety (90)
days thereafter, enter into a valid assignment or sublease of the Premises, or
portion thereof, upon the terms and conditions set forth in the information
furnished by Tenant to Landlord pursuant to Section 15.3 above, subject,
however, to Landlord's receipt of a fully executed counterpart of such
assignment or sublease. Failure of Landlord to elect an option set forth in
clauses (i) or (ii) above within such thirty (30) day period shall be deemed
refusal of Landlord to consent to the proposed subletting or assignment.
Landlord acknowledges that its refusal to consent to a proposed subletting or
assignment shall not provide Landlord with an additional right to recapture the
portion of the Premises so proposed to be subleased or assigned
15.5 Tenant acknowledges that it shall be reasonable for Landlord to
withhold its consent to a proposed assignment or sublease if (i) the use to be
made of the Premises by the proposed assignee or subtenant is (A) not generally
consistent with the character and nature of other tenants in the Building or
would result in a heavier burden (in comparison to that resulting from Tenant's
use of such portion of the Premises) on the Building, the systems, the
structures or the Common Areas thereof, (B) in conflict with any "exclusive" or
similar use or signage rights of another Building tenant, or (C) prohibited by
any provision of this Lease, including, without limitation, the rules and
regulations then in effect; (ii) the character, moral stability, reputation or
financial responsibility of the proposed assignee or subtenant are not
reasonably satisfactory to Landlord; (iii) in the case of a proposed mortgage,
hypothecation or other encumbrance of Tenant's leasehold estate, (A) the
proposed assignee or subtenant requests relief from any provision of this
Article 15 or this Lease, including, without limitation, those provisions
requiring assumption of this Lease by each assignee or subtenant and continuous
occupancy of the Premises, (B) the proposed mortgage, hypothecation or
encumbrance is of less than the entire leasehold estate, or (C) the proposed
assignee or subtenant cannot reasonably demonstrate to Landlord that such
mortgage, hypothecation or encumbrance will not impair or adversely affect any
of Landlord's rights hereunder; (iv) in the case of a sublease, (A) the portion
of the Premises proposed to be sublet is not a single, self-contained unit of
space with access to restrooms and exits in conformance with applicable Law or
otherwise cannot be the subject of a valid certificate of occupancy, or (B) the
proposed transaction is a sublease of a subleasehold interest; (v) the proposed
assignee or subtenant is an existing tenant or subtenant in the Building; (vi)
the proposed assignee or subtenant is a party with whom (A) Landlord is
currently negotiating with in connection with a lease of space in the Building,
or (B) Landlord has negotiated with in connection with a lease of space in the
Building, during the six month period prior to the date of Tenant's notification
of the proposed assignment or sublease, or (vii) a default has occurred and is
continuing at the time of Tenant's request for Landlord's consent or as of the
effective date of such assignment of subletting.
15.6 Except for the satisfaction of the conditions provided in
Section 15.5 above, Landlord's consent shall not be required for the assignment
of this Lease or any sublease of all or part of the Premises to any Affiliate,
Subsidiary or Successor of Tenant (as those terms are hereinafter defined),
provided, however, that such Affiliate, Subsidiary or Successor, as the case may
be, shall have provided evidence satisfactory to Landlord that such Affiliate,
Subsidiary or Successor is financially capable of fulfilling Tenant's
obligations pursuant to the Lease. Any assignment or sublease to an Affiliate,
Subsidiary or Successor in violation of the requirements set forth above shall,
at Landlord's option, be deemed null and void.
For purposes of this Section 15.6 an "Affiliate," a "Subsidiary" and
a "Successor" of Tenant are defined as follows:
(a) An "Affiliate" is any corporation or other legal entity
which directly or indirectly controls or is controlled by or is
under common control with Tenant. For this purpose, "control" shall
mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such
corporation or other legal entity, whether through the ownership of
voting securities or by contract or otherwise.
(b) A "Subsidiary" shall mean any corporation or other legal
entity not less than fifty percent (50%) of whose outstanding stock
or beneficial interest shall, at the time, be owned directly or
indirectly by Tenant.
(c) A "Successor" of Tenant shall mean:
(i) A corporation or other legal entity in which or with
which Tenant is merged or consolidated, in accordance with
applicable statutory provisions for merger or consolidation,
if any, provided that by operation of law or by effective
provisions contained in the instruments of merger or
consolidation, the liabilities of the entities participating
in such merger or consolidation are assumed by the corporation
or other legal entity surviving such merger or created by such
consolidation; or
(ii) A corporation or other legal entity acquiring the
rights of Tenant hereunder and a substantial portion of the
property and assets of Tenant.
15.7 The sale, transfer or conveyance of publicly traded shares of
Tenant's stock shall not constitute an assignment within the meaning and
provisions of this Article 15, so long as no change in the controlling interests
of Tenant occurs as a result thereof.
15.8 Each assignee, subtenant, licensee, mortgagee or other
transferee, other than Landlord, shall assume in a writing satisfactory to
Landlord, all obligations of Tenant under this Lease and shall be jointly and
severally liable for the performance of all of the provisions hereof.
Notwithstanding the foregoing and without prejudice to Landlord's right to
require a written assumption from each assignee, any person or entity to whom
this Lease is assigned, including, without limitation, assignees pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. ss. 101 et seq. (the "Bankruptcy
Code"), shall
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automatically be deemed to have assumed all obligations of Tenant arising under
this Lease. Regardless of Landlord's consent, no assignment or subletting shall:
(i) release Tenant of any obligations hereunder, or (ii) alter the primary
liability of Tenant for the payment of Rent or for the performance of any other
obligations to be performed by Tenant, Tenant agrees to reimburse Landlord for
Landlord's reasonable costs and attorneys' fees incurred in connection with the
routine processing, investigation and documentation of any requested assignment
or sublease subject to this Article 15 not to exceed One Thousand Five Hundred
Dollars ($1,500.00). Landlord may accept Rent or performance of Tenant's
obligations from any person other than Tenant pending approval or disapproval of
any assignment.
If Landlord shall give its consent to any assignment of this Lease
or to any sublease of all or any portion of the Premises, Tenant shall pay to
Landlord as additional Rent hereunder:
(a) In the case of an assignment, an amount equal to fifty
percent (50%), during the initial Term of the Lease, and one hundred
percent (100%), during an extension of the initial Term of the
Lease, of all sums and other consideration paid to the assignor
Tenant by the assignee for, or by reason of such assignment, but
deducting from such sums and consideration, all brokerage
commissions actually paid to independent brokers in connection with
such transaction and any tenant improvement allowance granted to the
assignee to the extent actually devoted exclusively to the
installation of leasehold improvements in the Premises (such
commissions and allowance being referred to herein as "Transaction
Inducements"); and
(b) In the case of a sublease, fifty percent (50%), during the
initial Term of the Lease, and one hundred percent (100%), during an
extension of the initial Term of the Lease, of all sums, rents,
additional charges, key money and other consideration payable under
the sublease by the subtenant to Tenant in excess of Rent accruing
during the term of the sublease with respect to the subleased
portion of the Premises (at the rate per square foot of Rentable
Area payable by Tenant). Tenant shall be entitled to deduct all
Transaction Inducements related to such sublease, provided the same
are amortized over the entire term of the sublease. The obligation
to make the payments described in this Section 15.8 shall be a joint
and several obligation of the Tenant and the assignee or subtenant,
as the case may be. The amounts payable under Section 15.8(a) shall
be paid to Landlord on the effective date of the assignment, as a
condition of the effectiveness of Landlord's consent. The amounts
payable under Section 15.8(b) shall be paid to Landlord as and when
payable by the subtenant to Tenant. Within fifteen (16) days after
written request therefor by Landlord, Tenant shall furnish evidence
to Landlord of the amount of consideration received or expected to
be received from such assignment or sublease.
15.9 An assignment or subletting without the consent of Landlord
shall, at Landlord's option, determined in its sole and absolute discretion, be
a default curable after notice pursuant to Section 20.1(c), or a noncurable
default without the necessity of any notice and grace period. If Landlord elects
to treat such unapproved assignment or subletting as a noncurable default,
Landlord may terminate the Lease.
15.10 Tenant's remedy for any breach of this Article 15 by Landlord
shall be limited to compensatory damages or injunctive relief.
15.11 Landlord's consent to any assignment or subletting shall not
transfer to the assignee or subtenant any option or right of first refusal
granted to the original Tenant by this Lease unless the transfer of such option
or right of first refusal is specifically consented to by Landlord in writing.
ARTICLE 16 - SALE BY LANDLORD; NONRECOURSE LIABILITY
16.1 In the event of a sale or conveyance by Landlord of the
Building, Landlord shall be released from any and all liability under this Lease
for events occurring after such sale or conveyance. If the security deposit has
been made by Tenant prior to such sale or conveyance, Landlord shall transfer
the security deposit to the purchaser, and upon delivery to Tenant of notice
thereof pursuant to the provisions of Section 1950.7 of the California Civil
Code, Landlord shall be discharged from any further liability in reference
thereto. Subject to Article 26 below, until the expiration or termination of
this Lease, a purchaser of the Building shall be subject to the terms of this
Lease from and after such sale or conveyance and Tenant shall attorn to and
become the Tenant of the successor-in-interest to Landlord
16.2 Landlord and its Affiliates (as defined in Article 6.4) shall
in no event or at any time be personally liable for the payment or performance
of any obligation required or permitted of the Landlord under this Lease or
under any document executed in connection herewith. In the event of any actual
or alleged failure, breach or default by Landlord under this Lease or any such
document, the sole recourse of Tenant shall be against the interest of Landlord
in the Building. No attachment, execution, writ or other process shall be sought
or obtained, and no judicial proceeding shall be initiated by or on behalf of
Tenant, against Landlord or its Affiliates personally or Landlord's assets
(other than Landlord's interest in the Building) as a result of any such
failure, breach or default.
16.3 Landlord shall not be in default of any obligation of Landlord
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice of such failure from Tenant,
provided, however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for its performance, Landlord shall not be in
default if Landlord commences to cure such default within the thirty (30) day
period and thereafter diligently prosecutes the same to completion. Tenant's
sole remedy for breach of this Lease by Landlord shall be an action for damages,
injunction or specific performance; Tenant shall have no right to terminate this
Lease on account of any breach or default by Landlord. Notwithstanding any
provision of this Lease, all liability of Landlord under this Lease or otherwise
with respect to any acts or omissions of Landlord or events which occur during
the Term of this Lease and which in any way relate to Tenant's tenancy hereunder
or occupancy of the Premises shall terminate one (1) year following the
expiration or sooner termination of this Lease other than as to those claims, if
any, asserted in reasonable detail in a writing delivered by Tenant to Landlord
prior to the expiration of such one (1) year period.
ARTICLE 17 - DAMAGE OR DESTRUCTION
17.1 If the Premises are damaged by any casualty, and Tenant is not
in default under this Lease, the damage shall be repaired by and at the expense
of Landlord, provided such repair can, in Landlord's opinion, be made within one
hundred eighty (180) days after Tenant's written notice to Landlord of the
occurrence of such damage, without the payment of overtime or other premiums. If
Landlord determines that said repairs can be made within one hundred eighty
(180) days from Landlord's receipt of Tenant's notice, and, except as set forth
hereinbelow, until such repairs are completed, the Rent shall be
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abated in proportion to the part of the Premises which is unusable by Tenant in
the conduct of its business. There shall be no abatement of Rent by reason of
any portion of the Premises being unusable for a period equal to three (3) days
or less.
17.2 If such repairs cannot, in Landlord's opinion, be made within
such one hundred eighty (180) day period, Landlord may, at its option, make them
within a reasonable time and in such event this Lease shall continue in effect
and the Rent shall be abated in the manner and to the extent provided above.
Landlord's election to make such repairs must be evidenced by written notice to
Tenant within thirty (30) days after notice to Landlord of the occurrence of the
damage, advising Tenant whether or not Landlord will make such repairs and the
estimated time for completing the same. If Landlord does not so elect to make
such repairs which cannot be made within such one hundred eighty (180) day
period, then either party may by written notice to the other cancel this Lease
as of the date of the occurrence of such damage.
17.3 In case of any damage or destruction mentioned in this Article
17 which Landlord is required or undertakes to repair as provided herein, Tenant
may terminate this Lease by notice to Landlord any time prior to completion of
the required repairs if Landlord has not restored and rebuilt the Premises
(exclusive of any property of Tenant or improvements installed by Tenant located
therein) to substantially the same condition as existed immediately prior to
such damage or destruction within one hundred eighty (180) days after notice to
Landlord of the occurrence of such damage or destruction, or such longer period
as Landlord has estimated pursuant to Section 17.2, plus such additional period
thereafter (not exceeding six months) as shall equal the aggregate period
Landlord may have been delayed in doing so by acts of God, adjustment of
insurance, labor trouble, governmental controls, unavailability of materials, or
any other cause beyond Landlord's reasonable control.
17.4 No damages, compensation or claim shall be payable by Landlord
for inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Premises or other portion of the Building.
Landlord shall use reasonable efforts to effect such repair or restoration
promptly and to avoid unreasonable interference with Tenant's use and occupancy.
17.5 Landlord shall not be required to carry insurance of any kind
on Tenant's property and, except by reason of the breach by Landlord of any of
its obligations hereunder (subject to the provisions of Article 14 above), shall
not be obligated to repair any damage thereto or to replace the same.
17.6 If the entire Building is destroyed by casualty, or any part of
the Building other than the Premises is damaged by casualty to the extent that
repairs cannot, in Landlord's opinion, be completed within one (1) year after
the date of such damage, Landlord, at its option, may cancel this Lease as of
the date of the occurrence of such destruction or damage.
17.7 Notwithstanding anything to the contrary contained in this
Article 17, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when (i) the damage resulting from any
casualty covered under this Article 17 occurs during the last twelve (12) months
of the Term of this Lease or any extension hereof; (ii) the damage or
destruction of the Premises is caused by Tenant, or Tenant's employees, agents,
contractors, servants, customers or invitees, (iii) Landlord reasonably
determines that the cost of repair is not covered by Landlord's fire and
extended coverage insurance or any other applicable insurance coverage of
Landlord maintained, plus such additional amounts Tenant elects, at its option,
to contribute, excluding however Tenants Proportionate Share of any insurance
deductible (for which Tenant shall be responsible); or (iv) a default by Tenant
has occurred and is continuing at the time of such damage.
17.8 Tenant hereby waives the provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4.
ARTICLE 18 - EMINENT DOMAIN
18.1 If more than twenty-five percent (25%) of the Building shall be
taken or appropriated under the power of eminent domain or conveyed in lieu
thereof Landlord shall have the right to terminate this Lease. If the whole of
the Premises, or so much thereof as to render the balance unusable by Tenant,
shall be taken under power of eminent domain or conveyed in lieu thereof, this
Lease shall automatically terminate as of the date of such condemnation, or as
of the date possession is taken by the condemning authority, whichever is
earlier. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof, provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for the taking of personal
property and fixtures belonging to Tenant or for the interruption of or damage
to Tenant's business or for Tenant's unamortized cost of leasehold improvements.
Tenant expressly waives the provisions of California Civil Procedure Code
Section 1266.150, as amended from time to time.
18.2 In the event of a partial taking which does not result in a
termination of this Lease, Rent shall be abated in proportion to the part of the
Premises so made unusable by Tenant.
18.3 No temporary taking of the Premises or of Tenant's rights
therein or under this Lease shall terminate this Lease or give Tenant any right
to any abatement of Rent hereunder, any award made to Tenant by reason of any
such temporary taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein.
ARTICLE 19 - [INTENTIONALLY OMITTED]
ARTICLE 20 - DEFAULTS AND REMEDIES
20.1 At the option of Landlord, a breach or default under this Lease
by Tenant shall exist if any of the following events shall occur (each is
sometimes herein called a "default" or an "Event of Default"":
(a) My failure by Tenant to pay monthly installments of Basic
and Additional Rent or to make any other payment required to be made
by Tenant hereunder within five (5) business days after receiving
written notice, at the time and in the amount as herein provided;
(b) The abandonment or vacation of the Premises by Tenant
accompanied by a failure to pay Rent;
(c) Any failure by Tenant to observe and perform any other
provision of this Lease to be observed or performed by Tenant, where
such failure continues for fifteen (15) days (except where a
different period of time is specified in this Lease, in which case
the different period of time shall apply) after written notice by
Landlord to Tenant; provided, however, that if such cure reasonably
requires more than fifteen (15) days, tenant shall not be in default
if Tenant commences the cure within the fifteen (15) day period and
thereafter diligently prosecute the cure to completion
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within sixty (60) days and further provided that any such notice
shall be in lieu of, and not in addition to, any notice required
under Section 1161, et seq. of the California Code of Civil
Procedure; or,
(d) The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition
to have Tenant adjudged a bankrupt or of a petition or
reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is
dismissed within sixty (60) days); the appointment of a trustee or
receiver to take possession of substantially all of Tenants assets
located at the Premises or of Tenant's interest in this Lease, where
possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially all
of Tenant's assets located at the Premises or of Tenant's interest
in this Lease, where such seizure is not discharged within thirty
(30) days;
(e) Any failure by Tenant to execute and deliver any statement
described in Articles 26 or 40 requested by Landlord, where such
failure continues for ten (10) days after delivery of written notice
of such failure by Landlord to Tenant; provided, however, that any
such notice shall be in lieu of, and not in addition to, any notice
required under Sections 1161 et seq., of the California Code of
Civil Procedure;
(f) The making or furnishing by Tenant of any warranty,
representation or statement to Landlord in connection with this
Lease, or any other agreement to which Tenant and Landlord are
parties, which is false or misleading in any material respect when
made or furnished;
(g) the attempted repudiation or revocation of any such
guaranty or the participation by any such guarantor in any other
event described in this Section 20.1(d) or (f) (as if this
subsection 20.1(g) referred to such guarantor in place of Tenant; or
(h) any purported assignment or sublease of the Premises
contrary to the provisions of Article 15.
20.2 Landlord shall have the following remedies if Tenant commits a
default or breach of the Lease, or an Event of Default occurs, which remedies
are cumulative, not exclusive, and in addition to any remedies now or later
allowed bylaw:
(i) Continue this Lease in full force and effect, and the
Lease will continue in effect as long as Landlord does not terminate
Tenant's right to possession and Landlord shall have the right to
collect Rent when due. During the period Tenant is in default,
Landlord can enter the Premises and relet them, or any part of them,
to third parties for Tenant's account. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in reletting
the Premises, including without limitation brokers' commissions,
legal fees, expenses of remodeling the Premises required by the
reletting, and like costs. Reletting can be for a period shorter or
longer than the remaining Term of this Lease. Tenant shall pay to
Landlord the Rent due under this Lease on the dates the Rent is due,
less the Rent Landlord receives from any reletting. No act by
Landlord allowed by this Subsection 20.2(a) shall terminate this
Lease unless Landlord notifies Tenant that Landlord elects to
terminate this Lease in writing. After Tenant's default and for as
long as Landlord does not terminate Tenant's right to possession of
the Premises, if Tenant obtains Landlord's written consent Tenant
shall have the right to assign or sublet its interest in this Lease,
but Tenant shall not thereby be released from liability.
(ii) Terminate Tenant's right to possession of the Premises at
any time. No act by Landlord other than giving written notice to
Tenant shall terminate this Lease. Acts of maintenance, efforts to
relet the Premises, or the appointment of a receiver on Landlord's
initiative to protect Landlord's interest under this Lease shall not
constitute a termination of Tenant's right to possession. On
termination, Landlord has the right to recover from Tenant;
(i) The worth, at the time of the award, of the unpaid
Rent that had been earned at the time of termination of this
Lease;
(ii) The worth, at the time of the award, of the amount
by which the unpaid Rent that would have been earned after the
time of termination of this Lease until the time of the award
exceeds the amount of the loss of Rent that Tenant proves
could have been reasonably avoided;
(iii) The worth, at the time of the award, of the amount
by which the unpaid Rent for the balance of the Term after the
time of the award exceeds the amount of the loss of Rent that
Tenant proves could have been reasonably avoided; and
(iv) Any other amount, and courts costs, including
without limitation attorneys' fees, necessary to compensate
Landlord for all detriment proximately caused by Tenant's
default.
"The worth, at the time of the award," as used in Subsection
(b)(i) and (b)(ii) hereof, is to be computed by allowing interest at the maximum
rate allowed by law. "The worth, at the time of the award," as referred to in
Subsection (b)(iii), is to be computed by discounting the amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of the award plus
one percent (1%).
20.3 In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises subject to the terms and
conditions of Landlord Waiver attached hereto as Exhibit "I"; such property may
be removed and stored in a public warehouse or elsewhere at the cost of and for
the account of Tenant.
20.4 In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided above
or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, and Landlord does not elect to terminate
this Lease as provided in this Article 20, then Landlord may, from time to time,
without terminating this Lease, either recover all Rent as it becomes due or
relet the Premises or any part thereof for such term or terms and at such Rent
and upon such other terms and conditions as Landlord in its sole discretion may
deem advisable with the right to make alterations and repairs to the Premises;
provided that if Landlord elects to recover such Rent as it becomes due without
terminating this Lease pursuant to this Section 20.4, Landlord will not
unreasonably withhold its consent to a subletting or assignment by Tenant.
20.5 In the event that Landlord shall elect to so relet, then Rent
received by Landlord from such reletting shall be applied; first, to the payment
of any indebtedness other than Rent due hereunder from Tenant to Landlord;
second, to the payment of any cost of such reletting; third, to the payment of
the cost of any alterations and repairs to the Premises; fourth, to the payment
of Rent due and unpaid hereunder, and the residue, if any, shall be held by
Landlord and applied to payment of future Rent as the same may become due and
payable hereunder. Should that portion of such Rent received from such
reletting, during any month to which it is applied by the payment of Rent
hereunder, be less than the Rent payable during that month by
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Tenant hereunder, then Tenant shall pay such deficiency to Landlord immediately
upon demand therefore by Landlord. Such deficiency shall be calculated and paid
monthly. Tenant shall also pay to Landlord as soon as ascertained, any costs and
expenses incurred by Landlord in such reletting or in making such alterations
and repairs not covered by the Rent received from such reletting.
20.6 No re-entry or taking possession of the Premises by Landlord
pursuant to this Article 20 shall be construed as an election to terminate this
Lease unless a written notice of such intention be given to Tenant or unless the
termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.
20.7 In the event of the material and undisputed default of Tenant
hereunder, Landlord shall have the right, at Landlord's option, to suspend or
discontinue the services specified in Article 5, above, or any thereof, during
the continuance of any such default and any such suspension or discontinuance
shall not be deemed or construed to be an eviction or ejection of Tenant.
20.8 Tenant hereby acknowledges that in addition to lost interest,
the late payment by Tenant to Landlord of installments of Basic or Additional
Rent or other sums due hereunder will cause Landlord to incur other costs not
contemplated in this Lease, the exact amount of which is extremely difficult and
impractical to ascertain. Such other costs include, but are not limited to,
processing, administrative and accounting costs. Accordingly, if any installment
of Basic or Additional Rent or any other sum due from Tenant shall not be
received by Landlord within ten (10) days after such amount shall be due, Tenant
shall also pay to Landlord a service charge in an amount equal to the greater of
One Hundred Dollars ($100.00) or eight percent (8%) of the amount overdue. The
parties hereby agree that (i) such late charge represents a fair and reasonable
estimate of the costs Landlord will incur in processing each delinquent payment
by Tenant, (ii) such late charge shall be paid to Landlord as liquidated damages
for each delinquent payment pursuant to California Civil Code Section 1671, and
(iii) the payment of late charges is to compensate Landlord for the additional
administrative expenses incurred by Landlord in handling and processing
delinquent payments. In addition, any sum accruing to Landlord under the terms
and provisions of this Lease which shall not be paid when due shall bear
interest at the highest lawful rate from the date the same becomes due and
payable by the terms and provisions of this Lease until paid. If such late
charges are not paid concurrently with the delinquent payment, Landlord shall
have the right, without notice, to deduct the amount of the unpaid late charge
from Tenant's security deposit.
20.9 The performance by Landlord of any agreement, concession or
grant for "free rent," rent abatement, a "credit fund' to be applied against
rent otherwise payable hereunder or any grant or payment by Landlord to or for
the benefit of Tenant of any cash or other bonus, allowance or other payment or
inducement or any assumption of obligations by Landlord to or for the benefit of
Tenant given or granted to or for the benefit of Tenant as consideration for
execution and delivery of this Lease by Tenant (all such agreements,
concessions, grants, payments and assumptions are collectively referred to
herein as "Tenant Inducements") shall be continuously conditional upon Tenant's
full and complete performance of its obligations under this Lease, as this Lease
may be amended or extended. Effective immediately upon the occurrence of a
Tenant default (A) any provision of this Lease providing for performance of a
Tenant Inducement shall be automatically deemed terminated and of no further
force or effect and (B) any Tenant Inducement previously granted, issued, paid
or given to or for the benefit of Tenant shall be immediately due and payable by
Tenant to Landlord as Rent hereunder. Deferred Rent (as such term is defined in
Lease Rider No. 2 attached hereto) shall not be considered a Tenant Inducement
but rather shall be subject to the terms and conditions set forth in Lease Rider
No. 2.
ARTICLE 21 - SURRENDER OF PREMISES; REMOVAL OF PROPERTY
21.1 The voluntary or other surrender of this Lease by Tenant to
Landlord, or a mutual termination thereof, shall not work a merger, and shall,
at the option of Landlord, operate as an assignment to it of any or all
subleases or subtenancies affecting the Premises.
21.2 Upon the expiration of the Term of this Lease, or upon any
earlier termination of this Lease, Tenant shall quit and surrender possession of
the Premises to Landlord in as good order and condition as the same are now or
hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning and other articles of personal property
owned by Tenant or installed or placed by Tenant at its expense in the Premises
(exclusive of any items described in Section 21.4 below) and all similar
articles of any other persons claiming under Tenant, unless Landlord exercises
its option to have any subleases or subtenancies assigned to it, and Tenant
shall repair all damages to the Premises resulting from such removal.
21.3 Whenever Landlord shall re-enter the Premises as provided in
Article 20 hereof, or as otherwise provided in this Lease, any property of
Tenant not removed by Tenant upon the expiration of the Term of this Lease (or
within forty-eight (48) hours after a termination by reason of Tenant's
default), as provided in this Lease and subject to the terms and conditions of
Landlord's Waiver attached hereto as Exhibit "I", shall be considered abandoned
and Landlord may remove any or all of such items and dispose of the same in any
manner or store the same in a public warehouse or elsewhere for the account and
at the expense and risk of Tenant, and if Tenant shall fail to pay the cost of
storing any such property after it has been stored for a period of ninety (90)
days or more, Landlord may sell any or all of such property at public or private
sale, in such manner and at such times and places as Landlord, in its sole
discretion, may deem proper, without notice to or demand upon Tenant, for the
payment of all or any part of such charges or the removal of any such property,
and shall apply the proceeds of such sale; first, to the cost and expenses of
such sale, including reasonable attorneys' fees actually incurred; second, to
the payment of the cost of, or charges for, storing any such property; third, to
the payment of any other sums of money which may then or thereafter be due to
Landlord from Tenant under any of the terms hereof; and fourth, the balance, if
any, to Tenant.
21.4 All fixtures, equipment alterations, additions, improvements or
appurtenances attached to or built into the Premises prior to or during the Term
of this Lease (but not including Tenant's personal property subject to Section
21.2 above), whether by Landlord at its expense or at the expense of Tenant or
both, shall be and remain part of the Premises and shall not be removed by
Tenant at the end of the Term unless otherwise expressly provided for in this
Lease or unless such removal is required by Landlord pursuant to the provisions
of Article 8, above. Such fixtures, equipment, alterations, additions,
improvements or appurtenances shall include, but not be limited to: all floor
coverings, drapes, paneling, molding, doors, vaults, plumbing systems,
electrical systems, lighting systems, silencing equipment, communication
systems, fixtures and outlets for the systems mentioned above and for telephone,
radio, telegraph and television purposes, and any special flooring or ceiling
installations. All Tenant Improvements (as such term is defined in the Work
Letter) constructed by Tenant shall (i) be and remain part of the Premises, (ii)
not be deemed Tenants personal property, and (iii) not be removed by Tenant at
the end of the Term
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unless Landlord by written notice to Tenant, given at least thirty (30) days
prior to the end of Term, requires Tenant to remove all or a portion of the
Tenant Improvements installed by Tenant. If Landlord elects to require the
removal or all or a portion of the Tenant Improvements installed by Tenant,
Tenant shall remove such identified Tenant Improvements and repair any damage to
the Premises from such removal, all at Tenant's sole expense.
ARTICLE 22 - WAIVER OF DAMAGES FOR RE-ENTRY
Tenant hereby waives all claims for damages that may be caused by
Landlord's re-entering and taking possession of the Premises or removing and
storing the property of Tenant as herein provided, and Tenant shall hold
Landlord harmless thereby, and no such re-entry shall be considered or construed
to be a forcible entry. Notwithstanding the foregoing, Landlord shall be bound
by the terms and conditions contained within the Landlord's Waiver attached
hereto as Exhibit "I".
ARTICLE 23 - COSTS OF SUIT
23.1 If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of or under this Lease,
including any suit by Landlord for the recovery of Rent or possession of the
Premises, the prevailing party shall be entitled to a reasonable sum for
attorneys' fees in such suit and such attorneys' fees shall be deemed to have
accrued on the commencement of such action and shall be paid whether or not such
action is prosecuted to judgment.
23.2 Should Landlord, without fault on Landlord's part, be made
party to any litigation instituted by Tenant, or by any third party against
Tenant, or by or against any person holding under or using the Premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant, or by any such other person or otherwise arising out
of or resulting from any act or transaction of Tenant or of any such other
person, Tenant covenants to save and hold Landlord harmless from any judgment
rendered against Landlord or the Premises or any part thereof, and all costs and
expenses, including reasonable attorney's fees, incurred by Landlord in or in
connection with such litigation. Should Tenant, without fault on Tenant's part,
be made party to any litigation instituted by Landlord, or by any third party
against Landlord, or for the foreclosure of any lien for labor or material
furnished to or for Landlord, or by any such other person or otherwise arising
out of or resulting from any act or transaction of Landlord or of any such other
person, Landlord covenants to save and hold Tenant harmless from any judgment
rendered against Tenant, and all costs and expenses, including reasonable
attorney's fees, incurred by Tenant in or in connection with such litigation.
ARTICLE 24 - WAIVER
The waiver by Landlord or Tenant of any breach of any term, covenant
or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition as to any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent.
ARTICLE 25 - HOLDING OVER
If Tenant holds over after the Term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or any extension for any further
term, and in such case Rent shall be payable at the rate of one hundred fifty
percent (150%) of the Rent due for the last month of the Term of this Lease and
at the time specified in Articles 2 and 3 hereof, and such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. Nothing contained in this Article 25 shall be construed as consent by
Landlord to any holding over by Tenant and Landlord expressly reserves the right
to require Tenant to surrender possession of the Premises to Landlord as
provided in Article 21 above forthwith upon the expiration of the Term of this
Lease or other termination of this Lease. Neither any provision hereof nor
acceptance by Landlord of Rent after such expiration or earlier termination
shall be deemed a consent to a holdover hereunder or result in a renewal of this
Lease or an extension of the Term. Notwithstanding any provision to the contrary
contained herein, (i) Landlord expressly reserves the right to require Tenant to
surrender possession of the Premises upon the expiration of the Term of this
Lease or upon the earlier termination hereof, the right to reenter the Premises,
and the right to assert any remedy at law or in equity to evict Tenant and/or
collect damages in connection with any such holding over, and (ii) Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
claims, demands, actions, losses, damages, obligations, costs and expenses,
including, without limitation, attorneys' fees incurred or suffered by Landlord
by reason of Tenant's failure to surrender the Premises on the expiration or
earlier termination of this Lease in accordance with the provisions of this
Lease.
ARTICLE 26 - SUBORDINATION AND FINANCING
26.1 Tenant agrees that this Lease and the rights of Tenant
hereunder shall be subject and subordinate to any and all deeds of trust,
security interests, mortgages, master leases, ground leases or other security
documents and any and all modifications, renewals, extensions, consolidations
and replacements thereof (collectively, "Security Documents") which now or
hereafter constitute a lien upon or affect the Building or the Premises. Such
subordination shall be effective without the necessity of the execution by
Tenant of any additional document for the purpose of evidencing or effecting
such subordination, in addition, Landlord shall have the right to subordinate or
cause to be subordinated any such Security Documents to this Lease, and in such
case, in the event of the termination or transfer of Landlord's estate or
interest in the Building by reason of any termination or foreclosure of any such
Security Documents, Tenant shall, notwithstanding such subordination, attorn to
and become the Tenant of the successor in interest to Landlord at the option of
such successor in interest. Furthermore, Tenant shall within five (5) business
days of demand therefor execute any instruments or other documents which may be
required by Landlord or the holder of any Security Document and specifically
shall execute, acknowledge and deliver within five (5) business days of demand
therefor a subordination of lease or subordination of deed of trust, in the form
required by the holder of the Security Document requesting the document; the
failure to do so by Tenant within such time period shall be a material default
hereunder. Notwithstanding any provision of this Lease to the contrary, the
subordination of this Lease and the rights of Tenant to any Security Documents
which are executed or entered into after the date of this Lease (and Tenant's
duty hereunder to execute any documents evidencing such subordination) shall be
subject to the holder of such Security Document agreeing pursuant to such
holders standard form for such purpose or otherwise pursuant to any other form
in common use by institutional lenders that Tenants possession and this Lease
shall not be disturbed by such holder so long as no default hereunder shall
occur, and Tenant shall attorn to the record owner of the Building.
26.2 If any proceeding is brought for default under any ground or
master lease to which this Lease is subject or in the event of foreclosure or
the exercise of the power of sale under any mortgage, deed of trust or other
Security Document made
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by Landlord covering the Premises, at the election of such ground lessor, master
lessor or purchaser at foreclosure, Tenant shall attorn to and recognize the
same as Landlord under this Lease, provided such successor expressly agrees in
writing to be bound to all future obligations by the terms of this Lease, and if
so requested, Tenant shall enter into a new lease with that successor on the
same terms and conditions as are contained in this Lease (for the unexpired Term
of this Lease then remaining); provided, however, in no case shall such ground
lessor, master lessor or purchaser (i) be liable or responsible for any acts or
omissions of any predecessor owner or with respect to events prior to its
ownership, (ii) be subject to any offsets or defenses Tenant may have against
any predecessor or (iii) be bound by prepayment of more than one (1) month's
rent.
26.3 It is understood that Landlord may be required to obtain
financing in connection with the purchase, construction and/or operation of the
Building and the lender or lenders providing such financing may require
technical modifications or amendments to this Lease, including without
limitation scrivener errors. In the event Tenant does not agree to such
amendments or modifications of this Lease, as may be required by such lender or
lenders as a condition to providing such financing, then in either of these
events, Landlord may cancel this Lease on thirty (30) days' written notice to
Tenant without liability for such cancellation. Notwithstanding the foregoing,
Tenant shall in no event be required to execute any amendment or modification to
this Lease which increases Tenant's Rent or materially increases Tenant's other
obligations hereunder or has a materially restrictive or substantial adverse
effect on Tenant's tenancy. Tenant agrees to furnish such financial statements,
balance sheets and operating statements as may be required and which Landlord is
authorized to use or furnish to any lender or lenders. Any financial statements
submitted by Tenant prior to or after the execution of this Lease are warranted
by Tenant to be true and correct.
26.4 Landlord shall use commercially reasonable efforts to obtain
and deliver to Tenant not later than January 1, 2002, a form of subordination,
non-disturbance and attornment agreement from the holders of any existing
Security Document.
ARTICLE 27 - RULES AND REGULATIONS
The Rules and Regulations attached hereto as Exhibit "E" by this
reference are hereby incorporated herein and made a part hereof Tenant agrees to
abide by and comply with said Rules and Regulations and any reasonable and
non-discriminatory amendments, modifications or additions thereto as may
hereafter be adopted and published by written notice to tenants by Landlord for
the safety, care, security, good order, or cleanliness of the Premises or the
Building, Landlord shall not be liable to Tenant for any violation of such Rules
and Regulations by any other tenant.
ARTICLE 28 - DEFINED TERMS
The words "Landlord" and "Tenant" as used herein, shall include the
plural as well as the singular. Words used in neuter gender include the
masculine and feminine and words in the masculine or feminine gender include the
neuter. If there be more than one Tenant, the obligations hereunder imposed upon
Tenant shall be joint and several. The headings or titles to the articles of
this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part thereof.
ARTICLE 29 - HEIRS AND ASSIGNS
Subject to the provisions of Article 15 hereof relating to
assignment and subletting, this Lease is intended to and does bind the heirs,
executors, administrators, personal representatives, successors and assigns of
any and all of the parties hereto.
ARTICLE 30 - TIME OF ESSENCE
Time is of the essence with respect to the performance of every
provision of this Lease in which time or performance is a factor.
ARTICLE 31 - SEVERABILITY
If any term or provision of this Lease, the deletion of which would
not adversely affect the receipt of any material benefit by either party
hereunder, shall be held invalid or unenforceable to any extent, the remainder
of this Lease shall not be affected thereby and each remaining term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
ARTICLE 32 - ENTIRE AGREEMENT
This instrument along with any exhibits and attachments or other
documents affixed hereto or referred to herein constitutes the entire and
exclusive agreement between Landlord and Tenant relative to the Premises herein
described, and this agreement and said exhibits and attachments and other
documents may be altered, amended or revoked only by an instrument in writing
signed by both Landlord and Tenant. Landlord and Tenant hereby agree that all
prior or contemporaneous oral agreements, understandings, or practices relative
to the leasing of the Premises are merged in or revoked by this agreement.
ARTICLE 33 - NO OPTION
The submission of this Lease for examination does not constitute a
reservation of or option for the Premises and this Lease shall become effective
only upon execution and delivery thereof by Land lord and Tenant.
ARTICLE 34 - AUTHORITY
If Tenant is a corporation, each individual executing this Lease on
behalf of Tenant hereby covenants and warrants that Tenant is a duly authorized
and existing corporation, that Tenant has and is qualified to do business in
California, that the corporation has full right and authority to enter into this
Lease, and that each person signing on behalf of the corporation is authorized
to do so. If Tenant is a partnership, limited liability company or trust, each
individual executing this Lease on behalf of Tenant hereby covenants and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of Tenant in accordance with the terms of such entity's partnership, operating
or trust agreement. Tenant shall provide Landlord on demand with such evidence
of such authority as Landlord shall reasonably request, including, without
limitation, resolutions or certificates. Landlord represents and warrants that
it is the fee simple owner of the Building and has full right, power and
authority to make, execute and deliver this Lease.
ARTICLE 35 - WORK LETTER
The obligations of Landlord and Tenant, if any, with respect to the
Tenant Improvements, are set forth in the "Work Letter" attached as Exhibit "F".
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ARTICLE 36 - RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Rent, required to be paid by it hereunder or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue beyond any applicable grace period set forth in Article 20,
Landlord may, but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs,
together with interest thereon at the maximum rate allowed by law from the date
of such payment by Landlord, shall be payable to Landlord on demand and Tenant
covenants to pay any such sums, and Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
nonpayment thereof by Tenant as in the case of default by Tenant in the payment
of the Rent.
ARTICLE 37 - LIGHT AND AIR
Any diminution or shutting off of light, air or view by any
structure which may be erected on lands adjacent to or near the Premises shall
in no way affect this Lease or impose any liability on Landlord.
ARTICLE 38 - NOTICES
All notices which Landlord or Tenant may be required, or may desire,
to serve on the other may be served, as an alternative to personal service, by
mailing the same by (i) overnight mail by a nationally recognized courier
service, or (ii) United States mail, certified with return receipt requested and
postage prepaid, addressed as set forth in Item 14 of the Basic Lease
Provisions, or, from and after the Commencement Date, to the Tenant at the
Premises whether or not Tenant has departed from, abandoned or vacated the
Premises, or addressed to such other address or addresses as either Landlord or
Tenant may from time to time designate to the other in writing. Notice shall be
deemed to have been given or served on the date such notice was given or served
as indicated by the courier service or the United State Postal Service on the
return receipt or on the date such delivery is refused.
ARTICLE 39 - QUIET ENJOYMENT
Landlord covenants and agrees that Tenant, upon paying the Basic
Rent, Additional Rent and all other charges herein provided for and observing
and keeping the covenants, agreements and conditions of this Lease on its part
to be kept, shall lawfully and quietly hold, occupy and enjoy the Premises
during the Term of this Lease without hindrance or molestation of anyone
lawfully claiming by, through or under Landlord, subject, however, to the
matters herein set forth.
ARTICLE 40 - ESTOPPEL CERTIFICATES
Tenant agrees at any time and from time to time upon not less than
five (5) business days' prior notice by Landlord to execute, acknowledge and
deliver to Landlord a statement in writing certifying to such matters as
Landlord shall request, including without limitation the following: A) that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications), B) the Commencement Date and expiration dale of the Lease,
C) the amounts and the dates to which the Basic Rent, Additional Rent and other
charges have been paid in advance, if any, D) whether or not to the best
knowledge of the signer of such certificate, Landlord is in default in
performance of any covenant, agreement or condition contained in this Lease;
and, if so, specifying each such default of which the signer may have knowledge;
E) that this Lease is in full force and effect in accordance with its terms, F)
that Tenant has received no prior notice of sale or transfer of the Lease or the
rents thereunder, G) the existence or non-existence of any options or other
rights of Tenant to purchase all or any part of the Building, H) the existence
or non-existence of any options or other rights of Tenant to terminate the Lease
prior to its natural expiration date, extend the Term of the Lease, or lease
additional space in the Project, I) the absence of agreements regarding free
rental, partial rental or other economic inducements, J) to the absence of
bankruptcy filings or other bankruptcy matters in connection with Tenant, K)
payment by Tenant of required insurance, L) Tenant's compliance with provisions
of this Lease related to Hazardous Materials, M) Landlord's right to assign this
Lease and rent hereunder without Tenant's consent, and N) any other information
concerning this Lease as Landlord may reasonably request. Any such statement
delivered pursuant to this section may be relied upon by a prospective purchaser
of the fee of the Building or any mortgagee thereof or any assignee of any
mortgage upon the fee of the Building. The form of the statement attached hereto
as Exhibit "G" is hereby approved by Tenant for use pursuant to this Article 40;
however, at Landlord's option, Landlord shall have the right to use other forms
for such purpose. Tenant's failure to execute and deliver such statement within
such time shall, at the option of Landlord, constitute a material default under
this Lease and, in any event, shall be conclusive upon Tenant that this Lease is
in full force and effect without modification except as may be represented by
Landlord in any such certificate prepared by Landlord and delivered to Tenant
for execution. Any statement delivered pursuant to this Article 40 may be relied
upon by any prospective purchaser of the fee of the Building or any mortgagee,
ground lessor or other like encumbrancer thereof or any assignee of any such
encumbrance upon the Building.
ARTICLE 41 - NONDISCRIMINATION
Tenant herein covenants by and for himself, his heirs, executors,
administrators, personal representatives, successors and assigns, and all
persons claiming under or through him, and this Lease is made and accepted upon
and subject to the following conditions: That there shall be no discrimination
against or segregation of any person or group of persons, on account of race,
color, creed, sex, national origin, or ancestry, in the leasing, sub-leasing,
transferring, use, occupancy, tenure or enjoyment of the Premises herein leased
nor shall Tenant, or any person claiming under or through Tenant, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
Tenants, subtenants or vendees of the Premises.
ARTICLE 42 - RECORDATION
Tenant shall not record this Lease nor a short form memorandum
hereof without the prior written consent of Landlord.
ARTICLE 43 - BROKERS
The parties recognize as the broker(s) who procured this Lease the
firm(s) specified in Item 10 of the Basic Lease provisions, and agree that
Landlord shall be solely responsible for the payment of brokerage commissions to
said broker(s) and that Tenant shall have no responsibility therefore unless
written provision to the contrary has been made a part of this Lease. If Tenant
has dealt with any other person or real estate broker with respect to leasing or
renting space in the Building, Tenant shall be solely responsible for the
payment of any fee due said person or firm and Tenant shall hold Landlord free
and harmless against any liability with respect thereto.
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ARTICLE 44. APPLICABLE LAW
This Lease, and the rights and obligations of the parties hereto,
shall be construed and enforced in accordance with the laws of the State of
California.
ARTICLE 45 - INTENTIONALLY OMITTED
ARTICLE 46 - INTENTIONALLY OMITTED
ARTICLE 47 - MATTERS OF RECORD
Except as otherwise provided herein, this Lease and Tenant's rights
hereunder are subject and subordinate to all matters affecting Landlord's title
to the Building recorded in the official records of San Diego County,
California, prior to and subsequent to the date hereof, including, without
limitation, all covenants, conditions and restrictions and the provisions of all
loan documents relating to each loan secured by a mortgage or deed of trust
encumbering the Building. Tenant agrees for itself and all persons in possession
or holding under it that it will comply with and not violate any such covenants,
conditions and restrictions, loan documents, or other matters of record.
Landlord reserves the right, from time to time, to grant such easements, rights
and dedications as Landlord deems necessary or desirable, and to cause the
recordation of parcel maps and covenants, conditions and restrictions affecting
the Premises or the Building, as long as such easements, rights, dedications,
maps, and covenants, conditions and restrictions do not materially interfere
with the use of the Premises by Tenant. At Landlord's request, Tenant shall join
in the execution of any of the aforementioned
ARTICLE 48 - FINANCIAL STATEMENTS
Upon Landlord's written request, Tenant shall promptly furnish
Landlord, from time to time, with the next current audited financial statements
prepared in accordance with generally-accepted accounting principles, certified
by Tenant and an independent auditor to be true and correct, reflecting Tenant's
then-current financial condition.
ARTICLE 49 - WAIVER OF TRIAL BY JURY
Landlord and Tenant, to the extent they may legally do so, hereby
expressly waive any right to trial by jury of any claim, demand, action, cause
of action, or proceeding arising under or with respect to this Lease, or in any
way connected with, or related to, or incidental to, the dealings of the parties
hereto with respect to this Lease or the transactions related hereto or thereto,
in each case whether now existing or hereafter arising, and irrespective of
whether sounding in contract, tort, or otherwise. To the extent they may legally
do so, Landlord and Tenant hereby agree that any such claim, demand, action,
cause of action, or proceeding shall be decided by a court trial without a jury
and that any party hereto may file an original counterpart or a copy of this
Article with any court as written evidence of the consent of the other party or
parties hereto to waiver of its or their right to trial by jury.
ARTICLE 50 - NAME; SIGNS
Landlord expressly reserves the right at any time to change the
name, number, designation or logotype of the Building or the exterior or
interior signage thereon and therein without the consent of Tenant without in
any manner being liable to Tenant therefor.
Tenant shall be entitled to (i) its Proportionate Share of
identification signs permitted for the Building (rounded down to the next whole
number of signs) on the top of the exterior walls of the Building, (ii) one (1)
identification sign adjacent to Tenant's main suite entrance, and (iii) one (1)
identification sign on the existing signage monument located near the
intersection of Maturin and Bernardo Center Drive ("the Monument"); provided
however Landlord shall first approve (which approval shall not be unreasonably
withheld) such specific location on the Premises for Tenant's identification
signs. Tenant shall have no right to maintain identification signs in any other
location in, on or about the Premises and shall not display or erect any other
signs, displays or other advertising materials that are visible from the
exterior of the Building. The size, design, color and other physical aspects of
permitted signs shall be subject to Landlord's written approval prior to
installation, which approval may be withheld in Landlord's reasonable
discretion, and any applicable private restrictions, municipal or other
governmental permits and approvals; provided however Landlord shall not
disapprove Tenant's use of up to Tenant's Proportionate Share of the sign space
on the Monument for Tenant's identification sign. The cost of all signs and
graphics, including without limitation the design, approval process,
installation, maintenance and removal thereof, shall be at Tenant's sole cost
and expense. If Tenant fails to maintain its sign, or if Tenant fails to remove
same upon termination of this Lease and repair any damage caused by such removal
(including, but not limited to, repainting the affected area, if required by
Landlord), Landlord may do so at Tenant's expense. All sums reasonably
disbursed, deposited or incurred by Landlord in connection with such removal,
including, but not limited to, all costs, expenses and actual attorneys' fees,
shall be due and payable by Tenant to Landlord on demand by Landlord.
ARTICLE 51 - VENUE
Venue shall be proper in the Superior Court or federal district
court for San Diego County, California, in the event of any litigation between
the parties with respect to this Lease, and Tenant hereby waive any claim of
proper venue in any other jurisdiction and any objection to venue as described
herein. Tenant unconditionally submits to the jurisdiction of the Superior Court
or federal district court for San Diego County,
ARTICLE 52 - MERGER
All understandings and agreements heretofore had between the parties
are merged in this Lease, which alone fully and completely expresses the
agreement of the parties and which is entered into after full investigation,
neither party relying upon any statement or representation not embodied in this
Lease.
ARTICLE 53 - COUNTERPARTS
This Lease may be executed in one or more counterparts by separate
signature, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, binding on all parties hereto,
even though all parties are not signatories to the original or to the same
counterpart. Any counterpart of this Lease that has attached to it separate
signature pages, which together contain the signatures of all parties, shall for
all purposes be deemed a fully-executed
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instrument, and in making proof of this Lease, it shall not be necessary to
produce or account for more than one such counterpart.
ARTICLE 54 - OTHER PROVISIONS
Please see the Riders attached hereto and made a part thereof,
22
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EXHIBIT "A"
LOCATION OF THE PREMISES IN THE BUILDING
[GRAPHIC]
MEZZANINE
[GRAPHIC]
GROUND FLOOR
EXHIBIT "A"
<PAGE>
EXHIBIT "B"
BUILDING KNOWN AS "15822 BERNARDO CENTER DRIVE"
[GRAPHIC]
EXHIBIT "B"
<PAGE>
EXHIBIT "C"
LEASE COMMENCEMENT AND
COMMENCEMENT DATE MEMORANDUM
Date: _________________________
Re: Lease dated August 15, 2001 between PACIFICA HOLDING COMPANY, a California
corporation, as Landlord, and Garden Fresh Restaurant Corp., a California
corporation as Tenant, concerning Premises located at 15822 Bernardo Center
Drive, Suite A, San Diego, California.
In accordance with the subject Lease, the undersigned hereby agrees that:
1. The Tenant Improvements to the Premises have been substantially
completed in accordance with the subject Lease.
2. The undersigned has accepted possession and entered into occupancy
of the Premises.
3. The Commencement Date of the Lease is ______________________.
4. The expiration of the Term of the Lease is _________________.
5. The obligation to pay Basic Rent commences on _________________.
"TENANT" GARDEN FRESH RESTAURANT CORP., a Delaware corporation
By: _________________________________________________
Its: ________________________________________
By: _________________________________________________
Its: ________________________________________
"LANDLORD" PACIFICA HOLDING COMPANY, a California corporation
By: Pacifica Property Management, Inc., a California
corporation
Its: Authorized Agent
By: _____________________________________________
Its: ______________________________________
EXHIBIT "C"
LEASE COMMENCEMENT AND
COMMENCEMENT DATE MEMORANDUM
<PAGE>
EXHIBIT "D"
REQUIREMENTS FOR ALTERATIONS AFTER LEASE COMMENCEMENT
1. Tenant shall have prepared, at its sole cost and expense, architectural,
mechanical and engineering plans and specifications for any requested
alterations in form and content (i) sufficient to secure all required
governmental approvals and permits, (ii) sufficient to permit a contractor
to perform the work covered thereby, and (iii) satisfactory to Landlord.
The plans shall be prepared by a licensed qualified architect and must be
reviewed and approved by Landlord in writing prior to commencement of any
work.
2. All work shall be performed by a contractor acceptable to Landlord in its
reasonable discretion, or at Landlord's option, Landlord's contractor.
3. Prior to commencement of any work, Tenant shall obtain and deliver to
Landlord payment and performance bonds in form and content, and issued by
a surety company, acceptable to Landlord and copies of all necessary
government permits.
4. Tenant shall indemnify Landlord from and against all liability, cost and
expense arising from the proposed alteration.
5. Tenant shall obtain, at its sole cost and expense, workers' compensation,
liability, property damage and such other insurance coverage as Landlord
may require, insuring Landlord and Tenant in such amounts and issued by
such insurers as Landlord may reasonably require. Tenant shall provide
evidence of such insurance prior to commencement of any work.
6. Prior to Landlord's review of Tenant's plans for alterations, Tenant shall
agree to pay the reasonable cost of Landlord's third-party consultants in
connection with the review, documentation and construction of the proposed
alterations, including, without limitation, architect's fees, engineer's
fees and attorneys' fees; provided however that such costs shall be
limited to a maximum of One Thousand Five Hundred Dollars ($1,500.00) for
proposed alterations costing less than Fifty Thousand Dollars ($50,000.00)
to construct.
7. Tenant shall obtain, at its sole cost, and comply with all necessary
governmental permits and shall comply with all Laws and any alterations
shall be constructed in a workmanlike manner with good and sufficient
materials. Upon completion, Tenant shall furnish Landlord with as-built
plans and specifications.
8. Landlord and Tenant shall have entered into an agreement satisfactory to
Landlord covering the rules and regulations governing construction of the
proposed alterations, including, without limitation, standards of
construction, hours of construction, payment of contractors' fees and
other amounts incurred by Tenant, and such other items as Landlord may
reasonably require.
9. Landlord shall have no duty to Tenant with respect to the safety,
adequacy, construction, efficiency or compliance with laws, with regard to
the design of the alterations, the plans or specifications therefore, or
any other matter related to the alterations, nor shall the approval by
Landlord of any such alterations be deemed to be a representation as to
the safety, adequacy, construction, efficiency or compliance of said
alterations.
EXHIBIT "D"
REQUIREMENTS FOR ALTERATIONS AFTER LEASE COMMENCEMENT
<PAGE>
EXHIBIT "E"
RULES AND REGULATIONS OF THE BUILDING
Tenant agrees to conform to the following rules and regulations and all
other rules and regulations which Landlord may, from time to time, establish for
tenants of the Building. Landlord shall not be responsible to Tenant for the
violation or non-performance by any other tenant or occupant of the Building
with regard to such rules and regulations. The provisions of this Exhibit "E"
shall be applied to all tenants in a non-discriminatory manner.
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building or the Premises without the prior written consent of
Landlord, which consent shall be exercised in Landlord's sole discretion and in
accordance with all applicable codes and ordinances. Landlord shall have the
right to remove at the expense of Tenant any signs, placards, pictures,
advertisements, names or notices which have not received Landlord's written
approval. All approved signs or lettering on doors shall be printed, affixed or
inscribed at the expense of Tenant by the person or company designated by
Landlord. - Tenant shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises. Tenant shall not cause to be covered, or otherwise
sunscreened, any window.
2. Tenant shall be permitted to have its name displayed in the Building
directory. Landlord reserves the right to exclude any other names therefrom.
3. Landlord shall have the right to prohibit any advertising by any tenant
which, in Landlord's opinion, tends to impair the reputation of the Building or
its desirability as an office building. Upon written notice from Landlord, any
tenant shall refrain from or discontinue such advertising.
4. Any sidewalks, walkways, arcades, halls, passages, exits, entrances,
elevators (if any) and stairways shall not be obstructed by Tenant or used by
Tenant for any other purpose other than for ingress to and egress from the
Premises. The sidewalks, walkways, arcades, halls, passages, exits, entrances,
elevators (if any) and stairways are not for the use of the general public and
Landlord shall in all cases retain the right to control and prevent access
thereto by all persons whose presence, in the judgment of Landlord, shall be
prejudicial to the safety, reputation and interests of the Building and its
tenants; provided, however, that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant normally deals in the ordinary
course of Tenant's business, unless such persons are engaged in illegal
activities. Tenant, its employees and invitees shall not go upon the roof of the
Building, unless (i) such access is needed for installation of Tenant's roof top
equipment (as provided in the Work Letter) or maintenance of same, and (ii) with
prior written approval from Landlord.
5. No tenant shall throw anything out of doors or down the passageways.
6. Tenant shall not alter any lock or install any new or additional locks
or any bolts on any door of the Premises without the prior written consent of
Landlord.
7. The washroom partitions, mirrors, toilets, urinals, wash bowls,
plumbing fixtures and such other features 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. The expenses of any breakage, stoppage
or damage resulting from the violation of this rule by Tenant, its employees or
invitees shall be borne by Tenant.
8. Except as set forth in the Work Letter or in Article 5 of this Lease,
Tenant shall not mark, drive nails, screw, drill, core into or make any other
modification to the floor, partitions, woodwork or plaster or in any way deface
the Premises or any part thereof. Tenant must obtain the prior written
authorization from Landlord or Landlord's architect to drive nails, screw,
drill, core or make any other modification to the floor. Tenant shall not add
to, remove or modify any existing interior walls or partitions, except as set
forth in the Work Letter or in Article 8 of this Lease.
9. Tenant shall not overload the floor or any structural component of the
Premises or the Building with any electronic or other equipment of any type,
furniture or freight. In the event Tenant shall require electronic or other
equipment, furniture or freight which would overload the floor or other
structural components of the Premises or the Building, Tenant shall notify
Landlord, in writing, providing Landlord information on the specific nature of
such equipment, furniture or freight, including, but not limited to, dimensions,
weight and specifications thereof. If Landlord approves, in writing, the
placement of same in the Premises, Landlord shall make any necessary adjustments
to the Premises and/or the Building required to accommodate such equipment,
furniture or freight, all at the cost of Tenant. In addition, Landlord shall
have the right to prescribe how such equipment, furniture and freight shall be
permitted to be situated within the Premises, including requiring the same to
stand on wooden strips of such thickness as is necessary to properly distribute
the weight. All such approved equipment, furniture and freight shall be moved
into and out of the Building during such hours and in such a manner as Landlord
shall designate. Landlord shall also have the right to prescribe the weight,
size and position of all safes which Tenant shall bring into the Building.
Landlord will not be liable for the loss of or damage to any equipment,
furniture or freight from any cause and any damage to the Building and/or the
Premises caused by moving or maintaining equipment, furniture or freight shall
be repaired at the expense of Tenant. Tenant shall not use any hand trucks in
the Premises or the Building except those equipped with rubber tires and side
guards.
10. Tenant shall not use or keep, or permit to be used or kept upon the
Premises or the Building any noxious gas, kerosene, gasoline, inflammable or
combustible fluids or materials or any similar substance. No tenant shall do or
permit anything to be done in its Premises, or bring or keep anything therein,
which shall in any way increase the rate of fire insurance on the Building or on
the property kept therein, or obstruct or interfere with the rights of other
tenants, or in any way injure or annoy them, or conflict with the regulations of
the fire department or the fire laws, or with any insurance policy upon the
Building or any part thereof, or with any rules and ordinances established by
the local health authority or other governmental authority.
11. The Premises shall not be used for manufacturing or storing
merchandise except when such storage is incidental to the use of the. Premises
as permitted in the Lease. Tenant shall not occupy or permit any portion of the
Premises to be occupied as an office for a public stenographer or typist, or for
the manufacture or sale of liquor, narcotics, or tobacco, or as a medical
office, barber shop, or manicure shop. Tenant shall not advertise for laborers
giving the address of the Building or the Premises. The Premises shall not be
used for lodging or sleeping or for any, illegal purposes.
12. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord. Tenant shall not, without the prior written
consent of Landlord, use any apparatus or device in the Premises which will in
any way increase the amount of electricity usually furnished or supplied to the
Premises for its permitted use as set forth in Item 11 of the Basic Lease
Provisions. Tenant shall not connect any device to any electrical current except
through existing electrical outlets located within the Premises.
EXHIBIT "E"
RULES AND REGULATIONS OF THE BUILDING
Page 1 of 2
<PAGE>
13. Landlord will direct electricians in the manner and to the locations
in which telephone and telegraph wires are to be introduced. No boring or
cutting for or laying of wires will be allowed without the written consent of
Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the prior written approval of
Landlord.
14. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering except with the prior written consent of Landlord and as Landlord shall
direct. No hanging planters, television sets or other objects shall be attached
to or suspended from ceilings without the prior written consent of Landlord. No
curtains, blinds (other than that provided by Landlord), shades or screens shall
be attached to or hung in, or used in connection with, any window or door,
without the prior written consent of Landlord. The expense of repairing any
damage resulting from a violation of this rule or the removal of any item or
floor covering shall be borne by Tenant.
15. Furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevator (if any) at times
and in a way that will not materially inconvenience other tenants of the
Building.
16. Landlord shall have the right to restrict access to the Building
during any invasion, riot, public disturbance or excitement, and at any other
time Landlord deems it advisable for the safety and protection of the Building,
its occupants and/or the property thereof. Landlord shall not be held liable
for, and Tenant indemnifies Landlord against, damages which may arise by the
failure of Landlord to grant access to the Building during such events listed in
the preceding sentence.
17. It shall be Tenant's responsibility before leaving the Building to
ensure that (a) all doors to the Premises are closed and securely locked, (b)
all water faucets and other water apparatus are entirely shut off, and (c) all
electricity is shutoff, so as to prevent waste or damage. Tenant shall be solely
liable for any damage or injury which may be occasioned by the failure of Tenant
and/or its employees to observe such precautions.
18. Landlord reserves the right to exclude or expel from the Building 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 Building.
19. The needs of Tenant will be attended to only upon written application
to the Building Management Office. Employees of Landlord shall not perform any
work or do anything outside of their regular duties unless under special
instructions from Landlord, and no employee will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
20. No vending or gaming machine or machines shall be installed,
maintained or operated upon the Premises without the written consent of
Landlord, except for such machines located in non-public areas which are for
the exclusive use of Tenant's employees.
21. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building of
which the Premises are a part.
22. Tenant agrees that it shall comply with all fire and security
regulations that may be issued from time to time by Landlord, and Tenant also
shall provide Landlord with the name of a designated responsible employee to
represent Tenant in all matters pertaining to such fire and security
regulations.
23. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent same.
24. All keys and security system access cards to the Building, Premises,
offices, rooms and toilet rooms shall be obtained from the Building Management
Office and Tenant shall not duplicate or obtain keys or access cards from any
other source. Tenant, upon termination of the tenancy, shall deliver to Landlord
any access cards and keys to the Building, Premises, offices, rooms and toilet
rooms which shall have been furnished Tenant. In the event Tenant fails, or is
unable, to return all such keys and/or cards, then Tenant shall reimburse
Landlord the cost of replacing such keys and/or cards and, if deemed necessary
by Landlord, replacing locks. Landlord, in its sole discretion, may require from
Tenant a reasonable sum as a deposit for any such keys and cards.
25. Tenant shall not use or permit the Premises to used in a manner which
may be deemed objectionable or offensive to Landlord or any occupant of the
Building. Tenant shall not create or permit to be created upon the Premises any
noise or vibrations which disturb other occupants of the Building. Other than in
the test kitchen portion of the Premises, no cooking shall be done or permitted
by any Tenant in its Premises except that the preparation of coffee, tea, hot
soup and similar items for the Tenant, its employees and invitees shall be
permitted. No Tenant shall cause or permit any unusual or objectionable odors to
escape from its Premises. Tenant shall not permit any pets or animals to be
brought upon or kept in or about the Premises or the Building, provided however
an aquarium may be permitted subject to Landlord's approval, which shall not be
unreasonably withheld.
26. No tenant shall obstruct, alter or in any way impair the efficient
operation of Landlord's heating, ventilation and air conditioning system.
27. All parking areas, pedestrian walkways, plazas and other public areas
forming a part of the Building shall be under the sole and absolute control of
Landlord with the exclusive right to regulate and control these areas. Tenant
agrees to conform to the rules and regulations that may be established by
Landlord for these areas from time to time.
28. Landlord reserves the right, upon written notice to Tenant, to
rescind, alter, include or waive any rule or regulation at any time prescribed
for the Building when, in Landlord's reasonable judgment, it is necessary,
desirable or proper for the best interest of the Building and its tenants.
EXHIBIT "E"
RULES AND REGULATIONS OF THE BUILDING
Page 2 of 2
<PAGE>
EXHIBIT "F"
WORK LETTER
THIS WORK LETTER supplements the Lease between Landlord and Tenant to
which this Work Letter is attached as Exhibit "F."
Unless otherwise defined herein, capitalized terms used in this Work
Letter shall have the same meanings as set forth in the Lease. The provisions of
this Exhibit shall supersede any inconsistent or conflicting provisions of the
Lease.
I. TENANT IMPROVEMENTS
(a) Plans and Specifications. Tenant shall promptly cause the construction
of tenant improvements, including without limitation, (i) any required upgrades
to the fire main or domestic water main to the Building resulting from Tenant's
special non-building standard proposed use or restaurant use, (ii) installation
of a separate gas meter to the Premises, (iii) any required modification to the
electrical service distribution within the Premises, (iv) installation of grease
trap(s), if required, (v) all ADA upgrades or modifications to the Premises
resulting from Tenant's anticipated use of the Premises, (vi) upgrade the HVAC
systems serving the Premises to no less than 76 tons, together with all
necessary equipment curbs, condensation lines, plenum drops, structure
reinforcement, roof repair, and gas and electrical service to the utility roof
panel; provided however Landlord shall credit the Allowance for the first
Eighty-Four Thousand Dollars ($84,000.00) of Tenant's actual expenses incurred
in the installation of said HVAC, (vii) installation of electrical service from
the HVAC roof panel to the Premises, (viii) upgrade the roof insulation to at
least meet Title 24 requirements; provided however Landlord shall credit the
Allowance for the first Eighteen Thousand Dollars ($18,000.00) of Tenant's
actual expenses incurred in the installation of said roof insulation, (ix)
repairs to the floor of the Premises, including without limitation filling
existing trenches, and (x) construction of a demising wall separating the
Premises from the adjacent space in the Building; provided however Landlord
shall credit the Allowance for first Eleven Thousand Three Hundred Dollars
($11,300.00) Tenant's actual expenses incurred to construct said demising wall
(collectively, the "Tenant Improvements"), all in accordance with the provisions
set forth below. All such credits to the Allowance as provided in this Paragraph
shall be subject to the same conditions precedent to a Payment Request as set
forth in Section I(e) below.
Tenant has previously delivered to Landlord preliminary plans
("Preliminary Plans"), to be utilized in the preparation of final working
drawings and specifications for the Tenant Improvements. Promptly (but in no
event less than ten (10) business days) after execution of this Lease, Landlord
shall return the same to Tenant marked and accompanied by comments and
Landlord's required revisions. Within five (5) days thereafter, Tenant shall
submit two (2) sets of revised Preliminary Plans, revised to reflect and conform
to Landlord's comments and requirements, to Landlord for its final review and
approval. Within five (5) days following Landlord's approval of the Preliminary
Plans, Tenant shall cause its architect to prepare and submit two (2) copies of
working drawings and specifications ("Working Plans") to Landlord for its review
and approval. Landlord shall advise Tenant promptly after Landlord's receipt of
the Working Plans of any required revisions. Within five (5) days thereafter,
Tenant shall submit two (2) copies of the revised Working Plans to Landlord for
its final review and approval.
Concurrently with the above review and approval process, Tenant
shall submit all plans and specifications to the City and other applicable
governmental agencies to obtain governmental approvals and issuance of necessary
permits and licenses to construct the Tenant Improvements as shown on the
Working Plans. If any governmental entity requires, as a condition to approval
of the Tenant Improvements, that improvements be made which are not shown in the
Preliminary Plans (including without limitation improvements outside of the
Premises), and if Landlord consents to such other improvements, then Tenant
shall cause the same to be made in such manner, utilizing such materials, and
with such contractors (including, if required by Landlord, Landlord's
contractors) as Landlord may require, and the same shall be deemed to be part of
the Tenant Improvements.
(b) Construction of Tenant Improvements. Tenant shall cause the
construction of the Tenant Improvements to be carried out in compliance with the
Working Plans, all applicable zoning laws and regulations, applicable covenants,
conditions and restrictions, and otherwise in compliance with the provisions of
the Lease. Prior to the commencement of construction, Tenant shall obtain course
of construction and builder's "all risk" insurance in such amounts and form as
Landlord requires, liability insurance in the form and amounts required under
the Lease, and such performance bonds in form and amounts as Landlord requires.
Tenant shall cause the construction of the Tenant Improvements to be
carried out with such materials, equipment, contractors and subcontractors as
Tenant shall select, all of which shall be approved by Landlord. Landlord hereby
approves of SIMAC CONSTRUCTION COMPANY as Tenant's general contractor for its
construction of the Tenant Improvements, subject however to such general
contractor complying with all applicable requirements of this Work Letter.
Within ten (10) days after the approval of the final Working Plans in accordance
with subparagraph (a) above or as soon as is reasonably possible thereafter,
Tenant shall submit to Landlord for its review and approval (i) copies of all
proposed construction contracts between Tenant and all contractors and between
such contractors and all subcontractors for the Tenant Improvements, together
with such background information on such contractors and subcontractors as
Landlord may require; (ii) a listing of the make, model, type, grade and all
other characteristics requested by Landlord, of all materials, equipment and
fixtures which Tenant proposes to install in or use in connection with the
Tenant Improvements; and (iii) a budget setting forth in itemized fashion the
costs of all materials, equipment, fixtures, contractors, subcontractors,
laborers, permits, fees, licenses, architectural services, and all other costs
and expenses Tenant proposes to incur in connection with the construction of the
Tenant Improvements, specifically also including development review
reimbursements to be paid to Landlord for Landlord's actual third party costs
incurred in connection with its review, oversight and related functions under
this Work Letter in the maximum amount of Five Thousand Dollars ($5,000.00)
(hereafter collectively the "Tenant Improvements Costs"). All such matters shall
be subject to the approval of Landlord prior to the commencement of construction
of the Tenant Improvements, in Landlord's reasonable discretion,
EXHIBIT "F"
WORK LETTER
Page l of 3
<PAGE>
Tenant shall have the responsibility to obtain all necessary construction
and building permits and licenses necessary for the construction of the Tenant
Improvements. Tenant shall cause construction of the Tenant Improvements in a
good and workmanlike manner in strict accordance with the approved Working
Plans. All Tenant Improvements Costs shall be paid for by and shall be the sole
responsibility of the Tenant (other than to the extent reimbursed by the
Allowance as set forth below), including without limitation all costs of
utilities, services and insurance on the Premises arising out of the
construction of the Tenant Improvements. All construction of the Tenant
Improvements shall be performed and completed lien free, and Tenant hereby
indemnifies and agrees to defend and hold Landlord and the Premises free and
harmless from any and all claims, losses, damages, actions and causes of action
as may be incurred as a result of work performed or materials furnished in
connection with construction of the Tenant Improvements. Landlord shall have
such rights to post notices of non-responsibility prior to the commencement of
construction of the Tenant Improvements.
(c) Change Orders. Tenant may from time to time request and obtain change
orders during the course of construction of the Tenant Improvements, provided
that:
(i) each such request shall be reasonable and in writing signed by
or on behalf of Tenant;
(ii) each such request shall not result in any major structural
change in the Building or Tenant Improvements;
(iii) Landlord shall have the sole and absolute right to approve or
disapprove any requested change order, in Landlord's discretion;
(iv) all costs arising out of any approved change order, if any,
shall be borne by Tenant.
(d) Allowance. Landlord agrees to provide Tenant a tenant improvement
allowance in the amount of Thirty Dollars per square foot ($30.00/sq. ft.) of
Rentable Area of the Premises as provided in Item 2 of the Basic Lease
Provisions (the "Allowance") for the construction of the Tenant Improvements.
The Allowance shall be applied by Tenant against the Tenant Improvements Costs
incurred in the construction of the Tenant Improvements which have been approved
by the Landlord in Tenant's proposed budget pursuant to subparagraph (b) above,
and the provisions for disbursement set forth below. In no event shall any
portion of the Allowance be used for any purpose other than the approved costs
in the budget for the Tenant Improvements Costs. Any and all costs in excess of
the Allowance required to complete the construction of the Tenant Improvements
in accordance with subparagraph (b) above shall be the sole and exclusive
obligation and responsibility of Tenant.
(e) Rights of Landlord. Throughout the course of construction of the
Tenant Improvements, Landlord shall have the unconditional right to review and
inspect such construction by and through its agents and employees, including
without limitation Landlord's Architect. If at any time Landlord disapproves of
the materials or workmanship of the Tenant Improvements by Tenant, Landlord
shall promptly give Tenant written notice thereof, specifying the deficiencies
or defects therein. Upon receipt of any such notice, Tenant shall immediately
commence correction of the defect or deficiency in a manner and to a condition
acceptable to Landlord. Should Tenant fail to commence or complete any such
correction as herein provided, or should Landlord deliver to Tenant three (3) or
more such notices during the course of construction of the Tenant Improvements,
Landlord shall have the immediate right to order the discontinuance of any
further construction of the Tenant Improvements by or on behalf of Tenant, and
Landlord may, but shall not be obligated to, complete the construction of such
Tenant Improvements in accordance with the Working Plans. Should Landlord elect
to complete the Tenant Improvements as herein provided, Landlord shall be
entitled to any and all funds remaining in the Allowance to pay for the costs of
completing said construction, and any additional costs incurred in connection
therewith shall be the obligation of and shall be paid by Tenant within ten (10)
days after written demand by Landlord. In addition, Landlord shall be entitled
to a construction fee for the costs of administering and completing the Tenant
Improvements in an amount equal to five percent (5%) of all costs incurred by
Landlord in completing the Tenant Improvements, which fee shall not be part of
the Allowance or the development review fee incorporated into the Tenant
Improvement Costs.
After completion of the Tenant Improvements, Tenant shall provide
landlord, for its review and approval, (i) an unqualified Certificate of
Occupancy for the Premises, (ii) As-Built plans for the Tenant Improvements,
(iii) a copy of the building permit, and (iv) AIA Form No. G702 and No. G703
invoices (or comparable invoices acceptable to Landlord) for work performed and
materials furnished to the Premises in connection with the construction of the
Tenant Improvements ("Payment Request"). The Payment Request shall be
accompanied by a certification signed by the Tenant's general contractor and the
Tenant's architect showing that the work reflected in such Payment Request was
performed in accordance with the approved Working Plans and the terms of all
approved construction contracts; and the total costs to construct the Tenant
Improvements, including change orders, and the amount expended for such items to
date and the estimated costs to complete the Tenant Improvements. In addition,
the Payment Request shall be accompanied by applicable final lien release
waivers from all contractors, subcontractors and materialmen to be paid through
the Payment Request, all in form and content acceptable to Landlord. Provided
the period in which liens may be filed against the Premises by any contractor,
subcontractor or materialmen furnishing goods or services thereto in connection
with the Tenant Improvements ("Lien Release Period") has expired, within ten
(10) business days after the Landlord's approval of the Payment Request and the
expiration of the Lien Release Period, Landlord shall cause to be disbursed to
Tenant's general contractor an amount equal to one hundred percent (100%) of
such approved Payment Request, up to the limit of the Allowance.
II. LANDLORD'S IMPROVEMENT OBLIGATIONS
(a) Limited Refurbishment. To the extent not already completed,
concurrently with Tenant's construction of the Tenant Improvements and provided
that an Event of Default has not occurred, Landlord shall, at its sole cost and
expense, (i) replace all broken spandrel glass around the Building, including
replacing various fan and vented panel with spandrel glass to the extent such
fans and vents are not part of the HVAC system, (ii) split the main natural gas
service such that the Premises may be separately metered for natural gas by
Tenant, (iii) repair or replace, if needed, the existing Building skylights,
(iv) if required by the City of San Diego, install or upgrade a reduced pressure
detection assembly (RPDA) in accordance the City of San Diego specifications,
(v) deliver the sewer system to the Premises in good working order, and (vi)
removal and demolition of the existing Make-Up Air equipment and roof repairs
required as a result of such removal (collectively, the "Limited
Refurbishment"). The
EXHIBIT "F"
WORK LETTER
Page 2 of 3
<PAGE>
construction of the Limited Refurbishment shall be completed by the Landlord
utilizing Landlord's then-standard grade, quality, make, style, design and color
materials and construction methods for the Premises. Landlord shall endeavor to
complete the Limited Refurbishment by Scheduled Commencement Date; provided
however Landlord's failure shall not be considered a default of this Lease, but,
except for delay due to the fault of Tenant, the Term of the Lease shall be
increased by the period of delay.
(b) Elevator. If and only in the event Tenant is unable to obtain a
Certificate of Occupancy for the Premises solely as a direct result of a lack of
current elevator service, then Landlord shall use commercially reasonable
efforts to install elevator service in the Building sufficient for the issuance
of a Certificate of Occupancy for the Premises.
EXHIBIT "F"
WORK LETTER
Page 3 of 3
<PAGE>
EXHIBIT "G"
TENANT ESTOPPEL CERTIFICATE
__________, 200_
To:
________________
________________
________________
________________
Re: Lease Dated: ________________________________
Landlord: PACIFICA HOLDING COMPANY, a California corporation ("Landlord")
Tenant: ______________________________________
____________________________("Tenant")
Premises: Approximately ____ square feet located at
____________________________("Premises")
Ladies and Gentlemen:
The undersigned hereby certifies to ___________________, a
______________, or its assigns ("Buyer" or "Lender" as appropriate) as of the
date hereof as follows:
1. The undersigned is the "Tenant" under the above-referenced lease
("Lease") covering the above-referenced Premises ("Premises"). Except as
otherwise defined herein, capitalized terms have the same meaning as given to
them in the Lease.
2. The Lease, attached hereto as Exhibit "A", constitutes the entire
agreement between Landlord and Tenant and the Lease is in full force and effect
in accordance with its terms and is a binding obligation of the undersigned.
3. The term of the Lease commenced on _____, 2001, and will expire on
____, 20__. There are no options or other rights to extend the term of the Lease
beyond such expiration date other than ________________________________________.
(if none, state so). There are no options or other rights to terminate the Lease
prior to such expiration date other than _______________________ (if none, state
so). There are no options or other rights to lease additional space other than
___________________ (If none so state). Tenant has accepted complete possession
of the Premises and is the actual occupant in possession and has not sublet,
assigned or hypothecated or otherwise transferred all or any portion of Tenant's
leasehold interest except as follows (if none, so state):
______________________________________________
______________________________________________
______________________________________________
All improvements to be constructed on the Premises by Landlord have been
completed to the satisfaction of Tenant and accepted by Tenant and any tenant
construction allowances have been paid in full. All duties of an inducement
nature required of the Landlord in the Lease have been fulfilled. All of the
Landlord's obligations which have accrued prior to the date hereof have been
performed.
4. There exists no breach or default, nor, to Tenant's knowledge, state of
facts nor condition which, with notice, the passage of time, or both would
result in a breach or default on the part of either Tenant or Landlord except as
follows (if non, so state):
______________________________________________
______________________________________________
______________________________________________
To Tenant's knowledge, no claim, controversy, dispute, quarrel or
disagreement exists between Tenant and Landlord, except as follows (if none, so
state):
______________________________________________
______________________________________________
______________________________________________
5. Tenant is currently obligated to pay Basic Rent in monthly installments
of $_________ per month and monthly installments of Basic Rent annual rental
have been paid through _____, 20__. In addition, Tenant is currently obligated
to pay a proportionate share of common area maintenance charges, utility charge,
and real estate taxes referred to as Additional Rent equal to $____ per month,
based upon a ___% share of such charges. Reconcilement for the Tenant's
proportionate share of common area maintenance charges and real estate taxes
have been made through ______, 20__, and Tenant or Landlord, as appropriate, has
been fully and finally reimbursed for any deviations between the estimated
payments and the actual expense through such date. No other rent has been paid
in advance and Tenant has no claim against Landlord for any security, rental,
cleaning or other deposits, except for a security deposit in the amount of
$_______ which was paid pursuant to the Lease.
EXHIBIT "G"
TENANT ESTOPPEL CERTIFICATE
Page 1 of 2
<PAGE>
6. The undersigned has received no notice prior sale, transfer,
assignment, hypothecation or pledge of the Lease or of the rents secured
therein.
7. Tenant has no option or preferential right to purchase all or any part
of the Premises (or the real property of which the Premises are a part) nor any
right or interest with respect to the Premises or the real property of which the
Premises are a part other than as set forth in the Lease. Tenant has no right to
expand the Premises except (if none, so state):
______________________________________________
______________________________________________
______________________________________________
8. Tenant has made no agreement with Landlord or any agent, representative
or employee of Landlord concerning free rent, partial rent, rebate of rental
payments or any other type of rental or other economic inducement or concession
except as expressly set forth in the Lease.
9. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the bankruptcy laws of the
United States, or any state thereof, or any other action brought under said
bankruptcy laws with respect to Tenant.
10. All insurance required of Tenant by the Lease has been provided by
Tenant and all premiums paid.
11. The undersigned (i) is not presently engaged in nor does it presently
permit, (ii) has not at any time in the past engaged in nor permitted, and (iii)
has no knowledge that any third person or entity engaged in or permitted any
operations or activities upon, or any use or occupancy of the Premises, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacturing, treatment, storage, use, transportation, spillage, leakage,
dumping, discharge or disposal (whether legal or illegal, accidental or
intentional) of any radioactive, toxic or hazardous substances, materials or
wastes, or any wastes regulated under any local, state or federal law, except as
follows (if none, so state):
______________________________________________
______________________________________________
______________________________________________
12. Tenant acknowledges that Landlord has the right to assign the Lease
and the rent thereunder and to sell, assign, transfer, mortgage or otherwise
encumber the Building without the consent of Tenant.
Tenant makes this statement for the benefit and protection of ____________
with the understanding that ___________________________ intends to rely on this
statement in connection with the _______________________ of the Building.
IN WITNESS WHEREOF, this certificate has been executed and delivered by
the authorized officers or representatives of the undersigned as of
________________________, 200__.
_____________________________________ ____________________________________
_____________________________________ ____________________________________
By:_________________________________ By:_________________________________
Its:________________________________ Its:________________________________
EXHIBIT "G"
TENANT ESTOPPEL CERTIFICATE
Page 2 of 2
<PAGE>
EXHIBIT H
ADJUSTMENTS TO BASIC RENT
(Cost of Living Adjustment)
This Exhibit is attached to and made a part of that certain Standard Form
Office Lease dated August 15, 2001, by and between PACIFIC HOLDING COMPANY, a
California corporation, as "Landlord", and GARDEN FRESH RESTAURANT CORP., a
Delaware corporation, as "Tenant", for the Premises known as 15822 Bemardo
Center Drive, Suite A, San Diego, California.
The capitalized terms used and not otherwise defined in this Exhibit
shall have the same definitions as set forth in the Lease. The provisions of
this Exhibit shall supersede any inconsistent or conflicting provisions of the
Lease.
The Basic Rent set forth in the Lease shall be increased, as of the
commencement of the thirteenth (13th) month of the Term and upon each annual
anniversary thereafter (the "Rental Adjustment Date(s)") in accordance with the
following:
The Basic Rent shall be increased on each Rental Adjustment Date by
double the percentage increase, if any, in the Consumer Price Index, Urban Wage
Earners and Clerical Workers (Los Angeles-Anaheim-Riverside region; "All Items";
Reference Base Year 1982-1984=100), as published by the United States Department
of Labor, Bureau of Labor Statistics or its successor (the "Index"), as follows:
The Index for the second month preceding each Rental Adjustment Date shall be
compared with the Index for the second month preceding the last Rental
Adjustment Date (or, for the first Rental Adjustment Date, the second month
preceding the Commencement Date), and the Basic Rent then in effect shall be
increased by double the amount of the percentage increase, if any, between them;
provided, however, in no event shall the Basic Rent be increased by a percentage
of more than three percent (3%) per year, compounded. In no event shall the
Basic Rent be reduced by reason of such computation. If the Index ceases to be
published, is published less frequently or is altered in any material respect,
then Landlord shall adopt, at its sole discretion, a substitute index or
substitute procedure which reasonably reflects and monitors changes in consumer
prices. Landlord shall use diligent efforts to calculate and give Tenant notice
of any such increase in the Basic Rent on or near each Rental Adjustment Date,
and Tenant shall commence to pay the increased Basic Rent effective on the
applicable Rental Adjustment Date. In the event Landlord is unable to deliver to
Tenant the notice of the increased Basic Rent at least five (5) days prior to
any Rental Adjustment Date, Tenant shall commence to pay the increased Basic
Rent on the first day of the month following the receipt of such notice, which
notice must be sent at least five (5) days prior to the first day of such month
(the "Payment Date"). Tenant shall also pay, together with the first payment of
the increased Basic Rent, an amount determined by multiplying the amount of the
increase in Basic Rent times the number of months that have elapsed between such
Rental Adjustment Date and such Payment Date.
EXHIBIT H
ADJUSTMENTS TO BASIC RENT
<PAGE>
EXHIBIT I
CONSENT OF LANDLORD
WHEREAS, PACIFICA HOLDING COMPANY, a California corporation,
hereinafter called "Landlord" and GARDEN FRESH RESTAURANT CORP., a Delaware
corporation, hereinafter called "Tenant" have entered into that certain Standard
Form Office Lease dated August 15, 2001, for the Premises known as 15822
Bemardo Center Drive, Suite A, San Diego, California.
WHEREAS, _________________________ ("Lender"), has been asked by
Tenant to provide financing for Tenant, which financing is to be secured, inter
alia, by Tenant's accounts receivable, inventory, equipment, instruments and
general intangibles (collectively, the "Collateral"); and
WHEREAS, the Lender is willing to make such borrowing only if
Landlord has executed this Consent;
NOW, THEREFORE, Landlord hereby consents as follows:
1. Landlord disclaims any interest superior to Lender in the
Collateral, provided however, that if at the expiration or earlier termination
of the term of the Lease, Tenant and/or Lender fails to remove the Collateral
from the Premises, Landlord, upon notice to Lender, may exercise any and all
rights it may have under the Lease and at law with respect to the Collateral.
2. Landlord hereby consents to the location of the Collateral on the
Premises and hereby authorizes and empowers the Lender, its employees, agents,
representatives, successors and assigns to enter upon the Premises and remove
the Collateral, subject however, to the express conditions precedent that (i)
Lender shall notify Landlord in writing at least five (5) days prior to any such
entry, (ii) in no event shall Lender effect a forced entry upon the Premises and
Lender shall not disturb or otherwise violate the rights of Landlord, Tenant, or
any neighboring Tenant of Tenant, (iii) Lender shall repair to a condition
reasonably approved by Landlord any damage to the Premises caused by its removal
of the Collateral, (iv) from the date Landlord provides Lender notice of
Tenant's default under the Lease ("Default Notice Date") and continuing on a per
diem basis for so long as any of the Collateral remains on the Premises, then
prior to any such entry, Lender shall pay to Landlord all Rent due for said
period prior to any such entry, and (v) Lender shall indemnify, defend, protect
and hold Landlord and the Premises free and harmless from any actions, claims,
damages, demand, injuries liabilities, losses and expenses (including, without
limitation attorneys' fees) arising out of the exercise of any of Lender's
rights hereunder.
3. Without limiting the foregoing, if Lender does not remove the
Collateral within thirty (30) days from the Default Notice Date, then each and
all of the rights of Lender under this Consent shall become null and void and of
no further force and effect thereafter. Said thirty (30) day period may only be
extended in writing by Landlord in its sole and absolute discretion.
4. Tenant acknowledges that Landlord may admit Lender into the
Premises pursuant hereto following request by Lender and irrespective of any
protest or objection by Tenant, and Tenant hereby irrevocably consents to such
entry. Tenant further waives and releases any right to hold Landlord or any of
its officers, employees or agents liable for any cost, damage, expense or loss
resulting from such entry by Lender. Tenant agrees that any such entry shall not
constitute a constructive eviction under the Lease.
5. Any notice or demand by which a provision of this Consent is
required or provided to be given shall be deemed to have been sufficiently given
or served by sending all papers by certified or registered mail, postage and
registration fees prepaid to the parties hereto as follows:
Landlord: Pacific Holding Company
c/o Pacifica Property Management, Inc
23422 Mill Creek Drive, Suite 110
Laguna Hills, CA 92653
Lender: ____________________________
____________________________
____________________________
6. Notwithstanding the foregoing, it is understood that this Consent
by the Landlord shall be limited to the extent of Tenant's indebtedness due to
the Lender, plus reasonable expenses incurred by Lender, and this Consent shall
not create any rights with respect to any third party.
7. This Agreement shall bind and benefit Landlord, Lender, Tenant
and their respective heirs, administrators, legal representatives, successors
and assigns.
8. This Consent shall be governed by and construed in accordance
with the laws of the State of California, and the parties hereto agree that
venue for the purposes of any action brought pursuant to or arising out of this
Consent shall be proper in the state courts located in Orange County,
California.
EXHIBIT I
CONSENT OF LANDLORD
Page 1 of 2
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Consent this
____ day of ____________, 20__
LANDLORD: PACIFIC HOLDING COMPANY, a California corporation
By: Pacifica Property Management, Inc., a California corporation
Its: Authorized Agent
By: _____________________________
Its: ________________________
TENANT: GARDEN FRESH RESTAURANT CORP., a Delaware corporation
By: ____________________________________
Its: _______________________________
By: ____________________________________
Its: _______________________________
LENDER: _________________________________________
By: ____________________________________
Its: _______________________________
By: ____________________________________
Its: _______________________________
EXHIBIT I
CONSENT OF LANDLORD
Page 2 of 2
<PAGE>
LEASE RIDER NO. 1
OPTION TO EXTEND TERM
(Fair Market Value Adjustment)
THIS LEASE RIDER is attached to and made a part of that certain Standard
Form Office Lease dated August 15, 2001, by and between PACIFIC HOLDING COMPANY,
a California corporation, as "Landlord", and GARDEN FRESH RESTAURANT CORP., a
Delaware corporation, as "Tenant", for the Premises known as 15822 Bernardo
Center Drive, Suite A, San Diego, California.
The capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Lease Rider
shall supersede any inconsistent or conflicting provisions of the Lease.
A. Option to Extend Term.
1. Grant of Option. Provided no Event of Default has occurred,
Tenant shall have one (1) option (referred to hereinafter as the "Option") to
extend the Term of the Lease for an additional consecutive term of five (5)
years and zero (0) months ("Extension"), on the same terms and conditions as set
forth in the Lease, except the Basic Rent shall be the amount determined as set
forth below. The Option shall be exercised only by written notice delivered to
Landlord at least two hundred seventy (270) days, but no sooner than three
hundred sixty-five (365) days before the expiration of the initial Term of the
Lease. If Tenant fails to deliver to Landlord written notice of the exercise of
the Option within the time period prescribed above, the Option shall lapse, and
there shall be no further right to extend the Term of the Lease. The Option
shall be exercisable by Tenant on the express conditions that (i) at the time of
the exercise of the Option, and thereafter at all times prior to the
commencement of such Extension, an Event of Default shall not have occurred and
be continuing under the Lease, and (ii) Tenant has not been ten (10) or more
days late in the payment of Rent more than a total of three (3) times during the
Term of the Lease. If Tenant properly exercises the Option, "Term", as used
herein and in the Lease, shall be deemed to include the Extension, unless
specified otherwise herein or in the Lease.
2. Personal Option. The Option is personal to Tenant. If Tenant
subleases or assigns or otherwise transfers any interest under the Lease prior
to the exercise of the Option, the Option shall lapse. If Tenant subleases or
assigns or otherwise transfers any interest of Tenant under the Lease after the
exercise of the Option but prior to the commencement of the Extension, the
Option shall lapse and the Term of the Lease shall expire as if the Option were
not exercised.
B. Calculation of Basic Rent.
The Basic Rent during the Extension shall be changed, as of the
commencement of the Extension (the "Rental Adjustment Date") to the "Fair Market
Value" of the Premises, determined in the following manner: Not later than one
hundred (100) days prior to any applicable Rental Adjustment Date, Landlord and
Tenant shall meet in an effort to negotiate, in good faith, the Fair Market
Value of the Premises as of such Rental Adjustment Date for each year of the
Term. If Landlord and Tenant have not agreed upon the Fair Market Value of the
Premises at least ninety (90) days prior to the applicable Rental Adjustment
Date, the Fair Market Value shall be determined by the following appraisal
method:
(i) If Landlord and Tenant are not able to agree upon the Fair
Market Value of the Premises within the time period described above, then
Landlord and Tenant shall attempt to agree in good faith upon a single
appraiser not later than seventy-five (75) days prior to the applicable
Rental Adjustment Date. If Landlord and Tenant are unable to agree upon a
single appraiser within such time period, then Landlord and Tenant shall
each appoint one appraiser not later than sixty-five (65) days prior to
the applicable Rental Adjustment Date, and Landlord and Tenant shall each
give written notice to the other of such appointment at the time of such
appointment. Within ten (10) days thereafter, the two appointed appraisers
shall appoint a third appraiser. If either Landlord or Tenant fails to
appoint its appraiser and to give written notice thereof to the other
party within the prescribed time period, the single appraiser appointed
shall determine the Fair Market Value of the Premises. If both parties
fail to appoint appraisers within the prescribed time periods, then the
first appraiser thereafter selected by a party (such selection to be by
written notice thereof to such appraiser and the other party) shall
determine the Fair Market Value of the Premises. Each party shall bear the
cost of its own appraiser and the parties shall share equally the cost of
the single or third appraiser if applicable. All appraisers shall have at
least ten (10) years' experience in the appraisal of commercial/industrial
real property in the area in which the Premises are located and shall be
members of professional organizations such as MAI or its equivalent.
(ii) For the purposes of such appraisal, the term "Fair Market
Value" shall mean the price that a ready and willing tenant would pay, as
of the Rental Adjustment Date, as monthly rent for each year of the Term,
to a ready and willing landlord of property comparable to the Premises
(including without limitation, length of the lease term, comparable size,
quality, location, rent, rent abatement, tenant improvements, broker fees
and any other inducements offered to a new or renewing tenant in
comparable class office building) if such property were exposed for lease
on the open market for a reasonable period of time and taking into account
all of the purposes for which such property may be used. If a single
appraiser is chosen, then such appraiser shall determine the Fair Market
Value of the Premises. Otherwise, the Fair Market Value of the Premises
shall be the arithmetic average of the two (2) of the three (3) appraisals
which are closest in amount, and the third appraisal shall be disregarded.
Landlord and Tenant shall instruct the appraiser(s) to complete their
determination of the Fair Market Value not later than thirty (30) days
prior to the applicable Rental Adjustment Date. If the Fair Market Value
is not determined prior to the Rental Adjustment Date, then Tenant shall
continue to pay to Landlord the Basic Rent applicable to the Premises
immediately prior to the Rental Adjustment Dale until the Fair Market
Value is determined. When the Fair Market Value of the Premises is
determined, Landlord shall deliver notice thereof to Tenant, and Tenant
shall pay to Landlord, within ten (10) days after receipt of such notice,
the difference between the Basic Rent actually paid by Tenant to Landlord
for the period after the Rental Adjustment Date and
LEASE RIDER NO. 1
OPTION TO EXTEND TERM
Page 1 of 2
<PAGE>
the new Basic Rent determined hereunder effective as of the Rental
Adjustment Date. In no event shall the Basic Rent be reduced below the
Basic Rent applicable to the Premises immediately prior to the Rental
Adjustment Date.
LEASE RIDER NO. 1
OPTION TO EXTEND TERM
Page 2 of 2
<PAGE>
LEASE RIDER NO. 2
DEFERRED RENT AGREEMENT
THIS LEASE RIDER is attached to and made a part of that
certain Standard Form Office Lease dated August 15, 2001, by and between PACIFIC
HOLDING COMPANY, a California corporation, as "Landlord", and GARDEN FRESH
RESTAURANT CORP., a Delaware corporation, as "Tenant", for the Premises known as
15822 Bernardo Center Drive, Suite A, San Diego, California.
The capitalized terms used and not otherwise defined herein
shall have the same definitions as set forth in the Lease. The provisions of
this Lease Rider shall supersede any inconsistent or conflicting provisions of
the Lease.
Tenant currently leases certain space in the amount of 11,280
sq. ft. located at 17180 Bernardo Center Drive, San Diego, California 92128
("Existing Premises") which is subject to that certain Lease Agreement dated as
of November 1, 1991 by and between Tenant and Mitsui Estate Sales U.S.A. Co.
Ltd, as successor-in-interest to Park Terrance Partners, as landlord ("Existing
Lease"). Provided an Event of Default has not occurred, Landlord agrees to
credit Rent due by the amount Tenant pays for Existing Rent (as defined
hereafter) incurred from and after the Commencement Date for the Existing
Premises until the Expiration Date (as defined hereafter) or earlier termination
of the Existing Lease, all as more particularly set forth herein:
Representations and Warranties. In consideration of Landlord
entering into this Lease and as an inducement to Landlord to lease the Premises
to Tenant, Tenant makes the following representations and warranties, each of
which is material and is being relied upon by Landlord (the continued truth and
accuracy of which shall constitute a condition precedent to Landlord's
obligations hereunder):
(a) The current entire monthly rental amount for the Existing
Premises, including without limitation any additional rent, common area
maintenance charges, capital improvements reserves, taxes and insurance,
is no greater than Twenty-Six Thousand Seven Hundred Eight Dollars
($26,889.85) (the "Existing Rent");
(b) The only future change to the Existing Rent is a consumer price
index increase on the basic monthly rent which is effective August 1, 2001
and is capped at a maximum of four and one-half percent (4.5%), at which
time the Existing Rent shall be deemed to include such increase;
(c) The Existing Lease expires on July 31, 2002 (the "Expiration
Date");
(d) Tenant is not entitled to and has no claim or agreement
concerning free rent, partial rent, rebate of rental payments, credit or
offset or reduction in rent, or any other type of rental or lease
concessions related to the Existing Lease;
(e) That the Existing Lease is presently in full force and effect
and that (i) monthly basic rent has been paid through September 30, 2001,
and (ii) all additional rent charges and expenses, if any, have been paid
through September 30, 2001;
(f) Tenant is not in default under the Existing Lease and the
Existing Lease permits Tenant to assign the Existing Lease and/or sublease
the Existing Premises; and
(g) Tenant has presented to Landlord the entire Existing Lease and
all related documents including without limitation all exhibits,
amendments, riders and addenda.
Deferment of Rent. Provided an Event of Default has not occurred,
from and after the Commencement Date, Landlord shall, subject to the provisions
set forth herein, credit towards monthly Rent the actual basic and additional
rental amounts paid by Tenant for the Existing Premises under the Existing Lease
(as evidenced by cancelled checks presented to Landlord) incurred from and after
the Commencement Date up to a maximum monthly amount of the Existing Rent until
the earlier of the Expiration Date or the termination of the Existing Lease
(such credited monthly Rent being hereinafter collectively referred to as
"Deferred Rent"). Notwithstanding said Deferred Rent, all of the terms and
conditions of the Lease shall remain in full force and effect during the Term.
Mitigation of Existing Rent. Tenant shall in good faith cooperate
with Landlord in subleasing the Existing Premises or assigning the Existing
Lease to a third party, including without limitation, executing such instruments
and documents and diligently undertaking such actions as may be required in
order to consummate an assignment or sublease, upon terms and conditions in
Landlord's reasonable discretion. Tenant acknowledges and agrees that Landlord
shall not (i) assume the Existing Lease or any of Tenant obligations thereunder,
or (ii) be liable for leasing commissions, subtenant improvements, or any other
expenses related to or arising from the assignment of the Existing Lease or the
subleasing of the Existing Premises. All rental amounts collected by Tenant
under a sublease of the Existing Premises or assignment of the Existing Lease
shall be paid to Landlord and Landlord shall thereafter credit such amounts
against any current or outstanding amounts of Deferred Rent.
Amortization of Deterred Rent. Upon the earlier of the expiration of
the Existing Lease or the termination of the Existing Lease, the outstanding
Deferred Rent (as such amount may have been reduced by rent paid to Landlord
pursuant to a sublease of the Existing Premises or an assignment of the Existing
Lease) shall be amortized over the remaining initial Term of the Lease at a rate
of ten percent (10%) per annum, compounded ("Amortization Rate"), with all such
amortized amounts paid by Tenant to Landlord as Additional Rent at the time and
in the manner required for Tenant to pay Basic Rent as set forth in this Lease.
Upon the occurrence of any Event of Default under this Lease, Landlord shall
have the right to accelerate the remaining
LEASE RIDER NO. 2
DEFERRED RENT AGREEMENT
Page 1 of 2
<PAGE>
principal balance of the Deferred Rent amortized hereunder and to require that
the entire amount thereof be immediately paid in full by Tenant. Should Tenant
fail to pay such remaining principal amount within five (5) business days after
any such election by Landlord, such principal amount shall thereafter bear
interest at the greater of the Amortization Rate or the maximum rate allowed
under California law until paid.
LEASE RIDER NO. 2
DEFERRED RENT AGREEMENT
Page 2 of 2