California-San Diego-4562 Alvarado Canyon Road Lease - The Four Amigos and Red Envelope Inc.
STANDARD LEASE -- MULTI-TENANT
1. PARTIES. This Lease, dated, for reference purposes only, MARCH 28, 2000, is
made by and between THE FOUR AMIGOS, A CALIFORNIA LIMITED PARTNERSHIP (herein
called "Lessor") and RED ENVELOPE, INC. (herein called "Lessee").
2. PREMISES, PARKING AND COMMON AREAS.
2.1 PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
real property situated in the City of SAN DIEGO, County of SAN DIEGO, State of
CALIFORNIA commonly known as 4562 ALVARADO CANYON ROAD, SUITE A and M and
described as approximately 13,004 square feet of INDUSTRIAL space, herein
referred to as the "Premises", as may be outlined on an Exhibit attached hereto,
including rights to the Common Areas as hereinafter specified but not including
any rights to the roof of the Premises or to any Building in the Center. The
Premises are a portion of a building, herein referred to as the "Building." The
Premises, the Building, the Common Areas, and the land upon which the same are
located, along with all other buildings and improvements thereon, are herein
collectively referred to as the "Center."
2.2 VEHICLE PARKING. Lessee shall be entitled to FORTY (40) vehicle
parking spaces, unreserved and unassigned, on those portions of the Common Areas
designated by Lessor for parking. Lessee shall not use more parking spaces than
said number. Said parking spaces shall be used only for parking by vehicles no
larger than full size passenger automobiles or pick-up trucks, herein called
"Permitted Size Vehicles." Vehicles other than Permitted Size Vehicles are
herein referred to as "Oversized Vehicles."
2.2.1 Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
2.2.2 If Lessee permits or allows any of the prohibited activities
described in paragraph 2.2 of this Lease, then Lessor 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 and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
2.3 COMMON AREAS--DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Center that are provided and designated by the Lessor from time to time
for the general non-exclusive use of Lessor, Lessee and of other lessees of the
Center and their respective employees, suppliers, shippers, customers and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
2.4 COMMON AREAS--LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Center. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
2.5 COMMON AREAS--RULES AND REGULATIONS. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable rules and regulations with respect thereto. Lessee agrees
to abide by and conform to all such rules and regulations, and to cause its
employees, suppliers, shippers, customers, and invitees to so abide and conform.
Lessor shall not be responsible to Lessee for the non-compliance with said rules
and regulations by other lessees of the Center.
2.6 COMMON AREAS--CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas and walkways; (b) To close
temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c) To designate other land
outside the boundaries of the Center to be a part of the Common Areas; (d) To
add additional buildings and improvements to the Common Areas; (e) To use the
Common Areas while engaged in making additional improvements, repairs or
alterations to the Center, or any portion thereof; (f) To do and perform such
other acts and make such other changes in, to or with respect to the Common
Areas and Center as Lessor may, in the exercise of sound business judgment, deem
to be appropriate.
2.6.1 Lessor shall at all times provide the parking facilities
required by applicable law and in no event shall the number of parking spaces
that Lessee is entitled to under paragraph 2.2 be reduced.
3. TERM.
3.1 TERM. The term of this Lease shall be for THREE (3) MONTHS commencing
on JANUARY 1, 2004 and ending on MARCH 31, 2004 unless sooner terminated
pursuant to any provision hereof.
3.2 DELAY IN POSSESSION. Notwithstanding said commencement date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date. Lessor shall be not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Lessee hereunder
or extend the term hereof, but in such case, Lessee shall not be obligated to
pay rent or perform any other obligation of Lessee under the terms of this
Lease, except as may be otherwise provided in this Lease, until possession of
the Premises is tendered to Lessee; provided, however, that if Lessor shall not
have delivered possession of the Premises within sixty (60) days from said
commencement date, Lessee may, at Lessee's option, by notice in writing to
Lessor within ten (10) days thereafter, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall
terminate and be of no further force or effect.
3.3 EARLY POSSESSION. If Lessee occupies the Premises prior to said
commencement date, such occupancy shall be subject to all provisions of this
lease, such occupancy shall not advance the termination date, and Lessee shall
pay rent for such period at the initial monthly rates set forth below.
4. RENT.
4.1 BASE RENT. Lessee shall pay to Lessor, as Base Rent for the
Premises, without any offset or deduction, except as may be otherwise expressly
provided in this Lease, on the 1st day of each month of the term hereof, monthly
payments in advance of $11,855.00 plus operating expenses of $2600.80 for a
total of $14,255.80. Lessee shall pay Lessor on January 1, 2004 hereof
$14,255.80 as Base Rest including operating expenses for JANUARY, 2004. Rent for
any period during the term hereof which is for less than one month shall be a
pro rata portion of the Base Rent. Rent shall be payable in lawful money of the
United States to Lessor at the address stated herein or to such other persons or
at such other places as Lessor may designate in writing.
4.2 OPERATING EXPENSES. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share, as hereinafter defined, of
all Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as
approximately 20.89 percent based on the total square footage of the project.
(b) "Operating Expenses" is defined, for purposes of this Lease,
as all costs incurred by Lessor, if any, for:
(i) The operations, repair and maintenance, in neat,
clean, good order and condition, of the following:
(aa) The Common Areas, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
Common Area lighting facilities, fences and gates, and roofs and walls;
(bb) Trash disposal services;
(cc) Tenant directories;
(dd) Fire detection systems including sprinkler system
maintenance and repair;
(ee) Security services;
(ff) Any other service to be provided by Lessor that
is elsewhere in this Lease stated to be an "Operating Expense."
(ii) Any deductible portion of an insured loss concerning
any of the items or matters described in this paragraph 4.2;
(iii) The cost of the premiums for the liability and
property insurance policies to be maintained by Lessor under paragraph 8 hereof;
(iv) The amount of the real property tax to be paid by
Lessor under paragraph 10.1 hereof;
(v) The cost of water, gas and electricity to service the
Common Areas;
(vi) Annual account audit plus 10% supervision fee, based
on total annual expenses.
(vii) All other costs of any kind paid or incurred by
Landlord in connection with the operation, the cost of capital improvements
designed to protect the health and safety of the tenants, maintenance, and
management of the Building and the Project including, by way of examples and not
as a limitation upon the generality of the foregoing, costs of repairs and
replacements to improvements within the Project as appropriate to maintain the
Project in first class condition including cost of funding such reasonable
reserves as Landlord deems consistent with good business practice and may
establish to provide for future repairs and replacements, association dues or
any other fees due pursuant to any documents governing the real property on
which the Building is located, costs of utilities furnished to the Common Areas,
sewer fees, windows, heating, ventilation, air conditioning, maintenance of
landscape and grounds, maintenance of drives and parking areas, security
services and devices, building supplies, maintenance and replacement to
equipment utilized for operation and maintenance of the Project, insurance
premiums, portions of loss by reason of insurance policy terms, service
contracts, costs of services of independent contractors retained to do work of
nature before referenced, and costs of compensation (including employment taxes
and fringe benefits) of all persons who perform regular and recurring duties
connected with the day-to-day operation and maintenance of the Project, its
equipment, the adjacent walks, landscaped areas, drives, and parking areas,
including without limitation, janitors, floor waxers, window-washers, watchmen,
gardeners, sweepers, and handyman and reasonable costs of management services.
(c) The inclusion of the improvements, facilities and services
set forth in paragraph 4.2(b)(i) of the definition of Operating Expenses shall
not be deemed to impose an obligation upon Lessor to either have said
improvements or facilities or to provide those services unless the Center
already has the same, Lessor already provides the services, or Lessor has agreed
elsewhere in this Lease to provide the same of some of them.
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(d) Lessee's Share of Operating Expenses shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses
is presented to Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each twelve-month period of the Lease term, on the same day
as the Base Rent is due hereunder. In the event that Lessee pays Lessor's
estimate of Lessee's Share of Operating Expenses as aforesaid, Lessor shall
deliver to Lessee within sixty (60) days after the expiration of each calendar
year a reasonably detailed statement showing Lessee's Share of the actual
Operating Expenses incurred during the preceding year. If Lessee's payments
under this paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit the amount of
such overpayment against Lessee's Share of Operating Expenses next falling due.
If Lessee's payments under this paragraph during said preceding year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor
the amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
$6162.80 and Deposit an additional $8,083.00 on January 1, 2004 with Lessor as
security for Lessee's faithful performance of Lessee's obligations hereunder. If
Lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent or other charge in
default or for the payment of any other sum to which Lessor may become obligated
by reason of Lessee's default, or to compensate Lessor for any loss or damage
which Lessor may suffer thereby. If Lessor so uses or applies all or any portion
of said deposit, Lessee shall within ten (10) days after written demand therefor
deposit cash with Lessor in an amount sufficient to restore said deposit to the
full amount then required of Lessee. If the monthly rent shall, from time to
time, increase during the term of this Lease, Lessee shall, at the time of such
increase, deposit with Lessor additional money as a security deposit so that the
total amount of the security deposit held by Lessor shall at all times bear the
same proportion to the then current Base Rent as the initial security deposit
bears to the Initial Base Rent set forth in paragraph 4. Lessor shall not be
required to keep said security deposit separate from its general accounts. If
Lessee performs all of Lessee's obligations hereunder, said deposit, or so much
thereof as has not theretofore been applied by Lessor, shall be returned,
without payment of interest or other increment for its use, to Lessee (or, at
Lessor's option, to the last assignee, if any, of Lessee's interest hereunder)
at the expiration of the term hereof, and after Lessee has vacated the Premises.
No trust relationship is created herein between Lessor and Lessee with respect
to said Security Deposit.
6. USE.
6.1 USE. The Premises shall be used and occupied only for ADMINISTRATIVE
OFFICE AND CALL CENTER OF E-COMMERCE BUSINESS or any other use which is
reasonably comparable and for no other purpose.
6.2 COMPLIANCE WITH LAW.
(a) Lessor warrants to Lessee that the Premises, in the state
existing on the date that the Lease term commences, but without regard to the
use for which Lessee will occupy the Premises, does not violate any covenants
or restrictions of record, or any applicable building code, regulation or
ordinance in effect on such Lease term commencement date. In the event it is
determined that this warranty has been violated, then it shall be the
obligation of the Lessor, after written notice from Lessee, to promptly, at
Lessor's sole cost and expense, rectify any such violation. In the event Lessee
does not give to Lessor written notice of the violation of this warranty within
six months from the date that the Lease term commences, the correction of same
shall be the obligation of the Lessee at Lessee's sole cost. The warranty
contained in this paragraph 6.2(a) shall be of no force or effect if, prior to
the date of this Lease, Lessee was an owner or occupant of the Premises and, in
such event, Lessee shall correct any such violation at Lessee's sole cost.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the Premises and the occupation and use by Lessee of the Premises
and of the Common Areas. Lessee shall not use nor permit the use of the
Premises or the Common Areas in any manner that will tend to create waste or a
nuisance or shall tend to disturb other occupants of the Center.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee clean and free of
debris on the Lease commencement date (unless Lessee is already in possession)
and Lessor warrants to Lessee that the plumbing, lighting, and loading doors in
the Premises shall be in good operating condition on the Lease commencement
date. In the event that it is determined that this warranty has been violated,
then it shall be the obligation of Lessor, after receipt of written notice from
Lessee setting forth with specificity the nature of the violation, to promptly,
at Lessor's sole cost, rectify such violation. Lessee's failure to give such
written notice to Lessor within thirty (30) days after the Lease commencement
date shall cause the conclusive presumption that Lessor has complied with all
of Lessor's obligations hereunder. The warranty contained in this paragraph
6.3(a) shall be of no force or effect if prior to the date of this Lease,
Lessee was an owner or occupant of the Premises.
(b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises in their condition existing as of the Lease commencement
date or the date that Lessee takes possession of the Premises, whichever is
earlier, subject to all applicable zoning, municipal, county and state laws,
ordinances and regulations governing and regulating the use of the Premises,
and any covenants or restrictions of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto. Lessee acknowledges that neither Lessor nor Lessor's agent has made any
representation or warranty as to the present or future suitability of the
Premises for the conduct of Lessee's business.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of paragraphs 4.2
(Operating Expenses), 6 (Use), 7.2 (Lessee's Obligations) and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of Lessee, Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, and roof of the Premises, as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of
the Common Areas and all parts thereof, as well as providing the services for
which there is an Operating Expense pursuant to paragraph 4.2. Lessor shall
not, however, be obligated to paint the exterior or interior surface of
exterior walls, nor shall Lessor be required to maintain, repair or replace
windows, doors or plate glass of the Premises. Lessor shall have no obligation
to make repairs under this paragraph 7.1 until reasonable time after receipt of
written notice from Lessee of the need for such repairs. Lessee expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford Lessee the right to make repairs at Lessor's expense or to
terminate this Lease because of Lessor's failure to keep the Premises in good
order, condition and repair. Lessor shall not be liable for damages or loss of
any kind or nature by reason of Lessor's failure to furnish any Common Area
Services when such failure is caused by accident, breakage, repairs, strikes,
lockout, or other labor disturbances or disputes of any character, or by any
other cause beyond the reasonable control of Lessor.
7.2 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of paragraphs 6 (Use), 7.1 (Lessor's
Obligations), and 9 (Damage or Destruction), Lessee, at Lessee's expense, shall
keep in good order, condition and repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or the means of repairing
the same are reasonably or readily accessible to Lessee) including, without
limiting the generality of the foregoing, all plumbing, including the
replacement of the heating, ventilating and air conditioning systems (Lessor
shall procure and maintain, at Lessee's sole expense, a ventilating and air
conditioning system maintenance contract with a licensed subcontractor. The
maintenance agreement does not cover repairs, just routine maintenance. Said
contract shall be obtained through Lessor at the cost to the Lessee of $15.00
per month which is to be paid concurrently each month with Base Rent and any
other monies due as per this lease), electrical and lighting facilities and
equipment within the Premises, fixtures, interior walls and interior surfaces
of exterior walls, ceilings, windows, doors, plate glass, and skylights located
within the Premises. Lessor reserves the right to procure and maintain the
ventilating and air conditioning system maintenance contract and if Lessor so
elects, Lessee shall reimburse Lessor, upon demand, for the costs thereof.
(b) If Lessee fails to perform Lessee's obligations under this
paragraph 7.2 or under any other paragraph of this Lease, Lessor may enter upon
the Premises after ten (10) days' prior written notice to Lessee (except in the
case of emergency, in which no notice shall be required), perform such
obligations on Lessee's behalf and put the Premises in good order, condition and
repair, and the cost thereof together with interest thereon at the maximum rate
then allowable by law shall be due and payable as additional rent to Lessor
together with Lessee's next Base Rent installment.
(c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same
condition as received, ordinary wear and tear excepted, clean and free of
debris. Any damage or deterioration of the Premises shall not be deemed
ordinary wear and tear if the same could have been prevented by good
maintenance practices. Lessee shall repair any damage to the Premises
occasioned by the installation or removal of Lessee's trade fixtures,
alterations, furnishings and equipment. Notwithstanding anything to the
contrary otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing on the Premises in good
operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written consent make
any alterations, improvements, additions, or Utility installations in, on or
about the Premises, or the Center, except for nonstructural alterations to the
Premises not exceeding $2,500 in cumulative costs, during the term of this
Lease. In any event, whether or not in excess of $2,500 in cumulative cost,
Lessee shall make no change or alteration to the exterior of the Premises nor
the exterior of the Building nor the Center without Lessor's prior written
consent. As used in this paragraph 7.3 the term "Utility Installation" shall
mean carpeting, window coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing, and fencing. Lessor may require that Lessee remove any or all of said
alterations, improvements, additions or Utility Installations at the expiration
of the term, and restore the Premises and the Center to their prior condition.
Lessor may require Lessee to provide Lessor, at Lessee's sole cost and expense,
a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such improvements, to insure Lessor against any liability for
mechanic's and materialmen's liens and to insure completion of the work. Should
Lessee make any alterations, improvements, additions or Utility installations
without the prior approval of Lessor, Lessor may, at any time during the term
of this Lease, require that Lessee remove any or all of the same.
(b) Any alterations, improvements, additions or Utility installations
in or about the Premises or the Center that Lessee shall desire to make and
which requires the consent of the Lessor shall be presented to Lessor in written
form, with proposed detailed plans. If Lessor shall give its consent, the
consent
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shall be deemed conditioned upon Lessee acquiring permit to do so from
appropriate governmental agency, the furnishing of a copy thereof to Lessor
prior to the commencement of the work and the compliance by Lessee of all
conditions of said permit in a prompt and expeditions manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, or the Center, or any interest therein.
Lessee shall give Lessor not less than ten (10) days' notice prior to the
commencement of any work in the Premises, and Lessor shall have the right to
post notices of non-responsibility in or on the Premises or the Building as
provided by law. If Lessee shall, in good faith, contest the validity of any
such lien, claim or demand, then Lessee shall, at its sole expense defend itself
and Lessor against the same and shall pay and satisfy any such adverse judgment
that may be rendered thereon before the enforcement thereof against the Lessor
or the Premises or the Center, upon the condition that if Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount
equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises and the Center free from the
effect of such lien or claim. In addition, Lessor may require Lessee to pay
Lessor's attorneys fees and costs in participating in such action if Lessor
shall decide it is to Lessor's best interest to do so.
(d) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made on the Premises, shall be the property of
Lessor and shall remain upon and be surrendered with the Premises at the
expiration of the Lease term, unless Lessor requires their removal pursuant to
paragraph 7.3(a). Notwithstanding the provisions of this paragraph 7.3(d),
Lessee's machinery and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises,
and other than Utility installations, shall remain the property of Lessee and
may be removed by Lessee subject to the provisions of paragraph 7.2.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of Lessor or Lessee, or any other lessee of the Center, including,
but not by way of limitation, such utilities as plumbing, electrical systems,
security systems, communication systems, and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Lessee's use of the Premises.
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE - LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease a policy of Combined
Single Limit Bodily Injury and Property Damage Insurance insuring Lessee and
Lessor against any liability arising out of the use, occupancy or maintenance of
the Premises and the Center. Such insurance shall be in an amount not less than
$1,000,000.00 per occurrence. The policy shall insure performance by Lessee of
the indemnity provisions of this paragraph 8. The limits of said insurance shall
not, however, limit the liability of Lessee hereunder. The liability coverage
will also include coverage for fire legal liability, with limits of at least
$50,000 and are subject to increase at the discretion of the Lessor.
8.2 LIABILITY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Property Damage Insurance, insuring Lessor, but not Lessee, against any
liability arising out of the ownership use, occupancy or maintenance of the
Center in an amount not less than $1,000,000.00 per occurrence.
8.3 PROPERTY INSURANCE. (a) Lessor shall obtain and keep in force during
the term of this Lease a policy or policies of Insurance covering loss or damage
to the Center improvements, but not Lessee's personal property, fixtures,
equipment or tenant Improvements, in an amount not to exceed the full
replacement value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, flood (in the event same is
required by a lender having a lien on the Premises) special extended peril ("all
risk", as such term is used in the insurance industry), plate glass insurance
and such other insurance as Lessor deems advisable. In addition, Lessor shall
obtain and keep in force, during the term of this Lease, a policy of rental
value insurance covering a period of one year, with loss payable to Lessor,
which insurance shall also cover all Operating Expenses for said period. In the
event that the Premises shall suffer an insured loss as defined in paragraph
9.1(g) hereof, the deductible amounts under the casualty insurance policies
relating to the Premises shall be paid by Lessee.
(b) Lessee shall obtain and keep in force during the term of this
Lease a policy of Insurance covering the Lessee's personal property, fixtures,
equipment, and tenant improvements, for full replacement cost, for the "all
risk" perils.
8.4 PAYMENT OF PREMIUM INCREASE.
(a) After the term of this Lease has commenced, Lessee shall not be
responsible for paying Lessee's Share of any increase in the property insurance
premium for the Center specified by Lessor's insurance carrier as being caused
by the use, acts or omissions of any other lessee of the Center, or by the
nature of such other lessee's occupancy which create an extraordinary or unusual
risk.
(b) Lessee, however, shall pay the entirety of any increase in the
property insurance premium for the Center over what it was immediately prior to
the commencement of the term of this Lease if the increase is specified by
Lessor's Insurance carrier as being caused by the nature of Lessee's occupancy
or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of at least B plus, or such
other rating as may be required by a lender having a lien on the Premises, as
set forth in the most current issue of "Best's Insurance Guide." Lessee shall
not do or permit to be done anything which shall invalidate the insurance
policies carried by Lessor. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days after the
commencement date of this Lease. No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals or "binders"
thereof.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other
for loss or damage arising out of or incident to the perils insurance against
which perils occur in, on or about the Premises, whether due to the negligence
of Lessor or Lessee or their agents, employees, contractors and/or invitees.
Lessee and Lessor shall, upon obtaining the policies of insurance required, give
notice to the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
8.7 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and
against any and all claims arising from Lessee's use of the Center, or from the
conduct of Lessee's business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or elsewhere and shall
further indemnify and hold harmless Lessor from and against any and all claims
arising from any breach or default in the performance of any obligation on
Lessee's part to be performed under the terms of this Lease, or arising from any
act or a omission of Lessee, or any of Lessee's agents, contractors, or
employees, and from and against all costs, attorney's fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon; and in case any action or proceeding be brought
against Lessor by reason of any such claim. Lessee upon notice from Lessor shall
defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessee, as a material
part to the consideration to Lessor, hereby assumes all risk of damage to
property of Lessee or injury to persons, in, upon or about the Center arising
from any cause and Lessee hereby waives all claims in respect thereof against
Lessor.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that Lessor
shall not be liable for injury to Lessee's business or any loss of income
therefrom or for damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the Premises or the Center, nor shall Lessor be liable for injury to the person
of Lessee, Lessee's employees, agents or contractors, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Center, or from other
sources or places and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible to Lessee. Lessor shall not
be liable for any damages arising from any act or neglect of any other lessee,
occupant or user of the Center, nor from the failure of Lessor to enforce the
provisions of any other lease of the Center.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITION.
(a) "Premises Partial Damage" shall mean if the Premises are damaged
or destroyed to the extent that the cost of repairs is less than fifty percent
of the then replacement cost of the Premises.
(b) "Premises Total Destruction" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is fifty percent or
more of the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent of the then replacement cost of the
Building.
(d) "Premises Building Total Destruction" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent or more of the then replacement cost
of the Building.
(e) "Center Buildings" shall mean all of the buildings on the Center
site.
(f) "Center Buildings Total Destruction" shall mean if the Center
Buildings are damaged or destroyed to the extent that the cost of repair is
fifty percent or more of the then replacement cost of the Center Buildings.
(g) "Insured Loss" shall mean damage or destruction which was covered
by an event required to be covered by the insurance described in paragraph 8.
The fact that an insured Loss has a deductible amount shall not make the loss an
uninsured loss.
(h) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring excluding all improvements
made by lessees.
9.2 PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraph 9.4 and 9.5.
If at any time during the term of this Lease there is damage which is an Insured
Loss and which falls into the classification of either Premises Partial Damage
or Premises Building Partial Damage, than Lessor shall, at the Lessor's expense,
repair such damage to the Premises, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect.
Initials /s/ TMB
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(b) Uninsured Loss: Subject to the provisions of paragraph 9.4
and 9.5, if at any time during the term of this Lease there is damage which
is not an insured Loss and which falls within the classification of
Premises Partial Damage or Premises Building Partial Damage, unless caused
by a negligent or willful act of Lessee (in which event Lessee shall make
the repairs at Lessee's expense), which damage prevents Lessee from using
the Premises, Lessor may at Lessor's option either (i) repair such damage
as soon as reasonably possible at Lessor's expense, in which event this
Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after the date of the occurrence of such
damage of Lessor's intention to cancel and terminate this Lease as of the
date of the occurrence of such damage. In the event Lessor elects to give
such notice of Lessor's intention to cancel and terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice
to give written notice to Lessor of Lessee's intention to repair such
damage at Lessee's expense, without reimbursement from Lessor, in which
event this Lease shall continue in full force and effect, and Lessee shall
proceed to make such repairs as soon as reasonably possible. If Lessee does
not give such notice within such 10-day period this Lease shall be
canceled and terminated as of the date of the occurrence of such damage.
9.3 PREMISES TOTAL DESTRUCTION; PREMISES BUILDING TOTAL DESTRUCTION;
CENTER BUILDINGS TOTAL DESTRUCTION.
(a) Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, and which falls into the classifications of either (i) Premises
Total Destruction, or (ii) Premises Building Total Destruction, or (iii) Center
Buildings Total Destruction, then Lessor may at Lessor's option either (i)
repair such damage or destruction, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible at Lessor's expense, and
this Lease shall continue in full force and effect or (ii) give written notice
to Lessee within thirty (30) days after the date of occurrence of such damage of
Lessor's intention to cancel and terminate this Lease, in which case this Lease
shall be canceled and terminated as of the date of the occurrence of such
damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last six
months of the term of this Lease there is substantial damage, whether or not an
Insured Loss, which falls within the classification of Premises Partial Damage,
Lessor may at Lessor's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Partial Damage during
the last six months of the term of this Lease. If Lessee duly exercises such
option during said twenty (20) day period, Lessor shall, at Lessor's expense,
repair such damage, but not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option during said twenty (20) day
period, then Lessor may at Lessor's option terminate and cancel this Lease as of
the expiration of said twenty (20) day period by giving written notice to Lessee
of Lessor's election to do so within ten (10) days after the expiration of said
twenty (20) day period, notwithstanding any term or provision in the grant of
option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the Premises pursuant to
the provisions of this paragraph 9, the rent payable hereunder for the period
during which such damage, repair or restoration continues shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired.
Except for abatement of rent, if any, Lessee shall have no claim against Lessor
for any damage suffered by reason of any such damage, destruction, repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this paragraph 9 and shall not commence such repair or
restoration within ninety (90) days after such obligation shall accrue, Lessee
may at Lessee's option cancel and terminate this Lease by giving Lessor written
notice of Lessee's election to do so at any time prior to the commencement of
such repair or restoration. In such event this Lease shall terminate as of the
date of such notice.
9.6 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as defined
in paragraph 10.3, applicable to the Center subject to reimbursement by Lessee
of Lessee's Share of such taxes in accordance with the provisions of paragraph
4.2, except as otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying
Lessee's Share of any increase in real property tax specified in the tax
assessor's records and work sheets as being caused by additional improvements
placed upon the Center by other lessees or by Lessor for the exclusive enjoyment
of such other lessees. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Center or any portion thereof by any authority
having the direct or indirect power to tax, including any city, county, state or
federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, as against any legal or
equitable interest of Lessor in the Center or in any portion thereof, as against
Lessors right to rent or other income therefrom, and as against Lessor's
business of leasing the Center. The term "real property tax" shall also include
any tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment or charge hereinabove included within
the definition of "real property tax" or (ii) the nature of which was
hereinbefore included within the definition of "real property tax" or (iii)
which is imposed for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978, or (iv) which is
imposed as a result of a transfer, either partial or total, of Lessor's interest
in the Center or which is added to a tax or charge hereinbefore included within
the definition of real property tax by reason of such transfer, or (v) which is
imposed by reason of this transaction, any modifications or changes hereto, or
any transfers hereof.
10.4 JOINT ASSESSMENT. If the Center is not separately assessed, Lessee's
Share of the real property tax liability shall be an equitable proportion of
the real property taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable determination
thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible,
Lessee shall cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property
of Lessor.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone or other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to the
Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor or all charges jointly
metered with other premises in the Building.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a breach of
this Lease without the need for notice to Lessee under paragraph 13.1. If
Lessee shall assign or sublet the Leased Premises or request the consent of
Lessor to any assignment or subletting, or if Lessee should request the consent
of Lessor for any act Lessee proposes to do, then Lessee shall pay to Lessor,
within thirty (30) days of receipt of a bill, all reasonable fees and costs
incurred by Lessor for attorneys, accountants, service of notice or any other
services in connection with said assignment or subletting or other act.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by
or is under common control with Lessee, or to any corporation resulting from
the merger or consolidation with Lessee, or to any person or entity which
acquires all the assets of Lessee as a going concern of the business that is
being conducted on the Premises, all of which are referred to as "Lessee
Affiliate" provided that before such assignment shall be effective said
assignee shall assume, in full, the obligations of Lessee under this Lease. Any
such assignment shall not, if any way, affect or limit the liability of Lessee
under the terms of this Lease even if after such assignment or subletting the
terms of this Lease are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary.
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12.3 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless of Lessor's consent, no
assignment shall release Lessee of Lessee's obligations hereunder or after the
primary liability of Lessee to pay the Base Rent and Lessee's Share of Operating
Expenses, and to perform all other obligations to be performed by Lessee
hereunder. Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of rent shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach of
any of the terms or conditions of this paragraph 12 or this Lease. Consent to
one assignment shall not be deemed consent to any subsequent assignment, in the
event of default by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.
Lessor may consent to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.
12.4 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of Lessor's
consent, the following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be included in subleases:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease, provided, however, that until
a default shall occur in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against such sublessee or Lessor for any such rents
so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublease as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublessee shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.
(c) If Leasee's obligations under this Lease have been guaranteed by
third parties, then a sublease, and Lessor's consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease and
the terms thereof.
(d) The consent by Lessor to any subletting shall not release Lessee
from its obligations or alter the primary liability of Lessee to pay the rent
and perform and comply with all of the obligations of Lessee to be performed
under this Lease.
(e) The consent by Lessor to any subletting shall not constitute a
consent to any subsequent subletting by Lessee or to any assignment or
subletting by the sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent and such action shall not relieve such
persons from liability.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to [*] to Lessor, in which event
Lessor shall undertake the obligations of Lessee under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to Lessee or for any other prior defaults of
Lessee under such sublease.
(h) Each and every consent required of Lessee under a sublease shall
also require the consent of Lessor.
(i) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the Premises by
Lessee shall not constitute an acknowledgement that no default then exists
under this Lease of the obligations to be performed by Lessee nor shall such
consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(k) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within ten (10) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee.
12.5 ATTORNEY'S FEES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $350.00 for each such request.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The vacating or abandonment of the Premises by Lessee.
(b) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(c) Except as otherwise provided in this Lease, the failure by Lessee
to observe or perform any of the convenants, conditions or provisions of this
Lease to be observed or performed by Lessee, other than described in paragraph
(b) above, where such failure shall continue for a period of thirty (30) days
after written notice thereof from Lessor to Lessee; provided, however, that if
the nature of Lessee's noncompliance is such that more than thirty (30) days are
reasonably required for its cure, then Lessee shall not be deemed to be in
default if Lessee commenced such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion. To the extent
permitted by law, such thirty (30) day notice shall constitute the sole and
exclusive notice required to be given to Lessee under applicable Unlawful
Detainer statutes.
(d) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in 11 U.S.C. SECTION 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The discovery by Lessor that any financial statement given to
Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor
in interest of Lessee or any guarantor of Lessee's obligation hereunder, was
materially false.
13.2 REMEDIES. In the event of any such material default by Lessee, Lessor
may at any time thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have vacated or abandoned
the Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time, but in no
event later than thirty (30) days after written notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation, provided,
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance than Lessor shall not be in default if
Lessor commences performance within such thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same
to completion.
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13.4 LATE CHARGES. Should Lessee fail to pay, when due and payable,
the minimum monthly rental or any additional rental, such unpaid amounts shall
bear interest at the maximum legal rate from the date the debt was incurred to
the date of ultimate payment. Said interest amount shall be in addition to, and
not in lieu of, any late charge assessed for the debt incurred. Late charges
shall not be included in calculating interest due. In addition to such
interest, Lessee stipulates that the late payment by Lessee of any monthly
rental/additional rental will cause Lessor to incur certain costs and expenses
not contemplated by the parties/lease hereto, the exact amount of which costs
are extremely difficult to ascertain. As such, if any installment is not
received by Lessor from Lessee within five (5) days of its due date, Lessee
shall forthwith pay as additional rent, a late charge of ten percent (10%) of
that amount due. Lessor and Lessee agree that such late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Lessor for the loss caused by Lessee's nonpayment. Payment(s) made by Lessee
shall be applied by Lessor, subject to Lessor's sole discretion, first to late
charges incurred, then to common area maintenance/operating expense as
additional rent, and lastly to base rent. Lessor's acceptance of this late
charge shall not constitute a waiver of Lessee's default with respect to
nonpayment of the subject debt, nor prevent Lessor from exercising all other
rights, claims, or remedies, known or unknown, available to Lessor pursuant to
this lease or under California or federal law.
14. CONDEMNATION. If the Premises or any portion thereof or the Center are
taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than ten
percent of the floor area of the Premises, or more than twenty-five percent of
that portion of the Common Areas designated as parking for the Center is taken
by condemnation, Lessee may, at Lessee's option, to be exercised in writing only
within ten (10) days after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession) terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the premises remaining, except
that the rent shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises. No reduction of
rent shall occur if the only area taken is that which does not have the Premises
located thereon. Any award for the taking of all or any part of the Premises
under the power of eminent domain or any payment made under threat of the
exercise of such power shall be the property of Lessor, whether such award shall
be made as compensation for diminution in value of the leasehold or for the
taking of the fee, or as severance damages; provided, however, that Lessee shall
be entitled to any award for loss of or damage to Lessee's trade fixtures and
removable personal property. In the event that this Lease is not terminated by
reason of such condemnation, Lessor shall to the extent of severance damages
received by Lessor in connection with such condemnation, repair any damage to
the Premises caused by such condemnation except to the extent that Lessee has
been reimbursed therefor by the condemning authority. Lessee shall pay any
amount in excess of such severance damages required to complete such repair.
15. BROKER'S FEE.
(a) Upon execution of this Lease by both parties, upon occupancy of the
premises by Lessee, and receipt of any deposits and/or initial rental payment,
Lessor shall pay to ELKINS-ZIRPOLO, INC., licensed real estate broker(s), a fee
as set forth in a separate agreement between Lessor and said broker(s), or in
the event there is no separate agreement between Lessor and said broker(s), the
sum of $ PER CONTRACT AGREEMENT , for brokerage services rendered by said
broker(s) to Lessor in this transaction.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not less
than ten (10) days' prior written notice from the other party ("requesting
party") execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Premises or of the business
of the requesting party.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.
(c) If Lessor desires to finance, refinance, or sell the Property, or any
part thereof, Lessee and all Guarantors of Lessee's performance hereunder
hereby agrees to deliver to any lender or purchaser designated by Lessor such
financial statements of Lessee and such Guarantors as may be reasonably
required by such lender or purchaser. Such statements shall include the past
three (3) years' financial statements of Lessee. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein, shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Center, and except as expressly provided in
paragraph 15, in the event of any transfer of such title or interest, Lessor
herein named (and in case of any subsequent transfers than the grantor) shall
be relieved from and after the date of such transfer of all liability as
respects Lessor's obligations thereafter to be performed, provided that any
funds in the hands of Lessor or the then grantor at the time of such transfer,
in which Lessee has an interest, shall be delivered to the grantee. The
obligations contained in this Lease to be performed by Lessor shall, subject as
aforesaid, be binding on Lessors successors and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to Lessor not paid when due shall bear interest at the maximum
rate then allowable by law from the date due. Payment of such interest shall
not excuse or cure any default by Lessee under this Lease; provided, however,
that interest shall not be payable on late charges incurred by Lessee nor on
any amounts upon which late charges are paid by Lessee.
20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expenses and insurance and tax expenses payable shall be deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the Lessor or any employee or agents of any of said persons has made any
oral or written warranties or representations to Lessee relative to the
condition or use by Lessee of the Premises or the Property and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during
the term of this Lease except as otherwise specifically stated in this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified mail, and if
given personally or by mail, shall be deemed sufficiently given if addressed to
Lessee or to Lessor at the address noted below the signature of the respective
parties, as the case may be. Either party may by notice to the other specify a
different address for notice purposes except that upon Lessee's taking
possession of the Premises, the Premises shall constitute Lessee's address for
notice purposes. A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to such party or parties at
such addresses as Lessor may from time to time hereafter designate by notice to
Lessee.
24. WAIVERS. No waiver by Lessor or any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all provisions of this
Lease pertaining to the obligations of Lessee, but all Options, if any, granted
under the terms of this Lease shall be deemed terminated and be of no further
effect during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.
29. BINDING EFFECT: CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of
paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State where the Center is located and any litigation concerning
this Lease between the parties hereto shall be initiated in the county in
which the Center is located.
30. SUBORDINATION.
(a) This Lease, and any Option granted hereby, at Lessor's option, shall
be subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation of security now or hereafter placed upon the Center and to any
and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgages, trustee or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
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(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination [illegible] make this Lease or any Option granted
herein prior to the lien of any mortgage, deed of trust or ground lease, as the
case may be. Lessee's failure to execute such documents within ten (10) days
after written demand shall constitute a material default by Lessee hereunder
without further notice to Lessee or, at Lessor's option, Lessor shall execute
such documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does
hereby make, constitute and irrevocably appoint Lessor as Lessee's
attorney-in-fact and in Lessee's name, place and stead, to execute such
documents in accordance with is paragraph 30(b).
31. ATTORNEY'S FEES. If either party or the broker(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, on trial or appeal, shall be entitled to his
reasonable attorney's fees to be paid by the losing party as fixed by the court.
The provisions of this paragraph shall inure to the benefit of the broker named
herein who seeks to enforce a right hereunder.
32. LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times for the purposes of inspecting the same,
showing the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are part as Lessor may deem necessary or desirable.
Lessor may at any time place on or about the Premises or the Building any
ordinary "For Sale" signs and Lessor may at any time during the last 120 days of
the term hereof place on or about the Premises any ordinary "For Lease" signs.
All activities of Lessor pursuant to this paragraph shall be without abatement
of rent, nor shall Lessor have any liability to Lessee for the same.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent.
34. SIGNS. Lessee shall not place any sign upon the Premises of the Center
without Lessor's prior written consent. Under no circumstances shall Lessee
place a sign on any roof of the Center.
35. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
36. CONSENTS. Except for paragraph 33 hereof, wherever in this Lease the
consent of one party is required to an act of the other party such consent
shall not be unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Property. Landlord shall not be liable for any damage arising from acts or
neglects of co-tenants, or other occupants of the same building, or of any
owners or occupants of adjacent or contiguous property.
39. OPTIONS.
39.1 DEFINITION. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of
first refusal to lease other space within the Center or other property of
Lessor or the right of first offer to lease other space within the Center or
other property of Lessor; (3) the right or option to purchase the Premises or
the Center, or the right of first refusal to purchase the Premises or the
Center, or the right of first offer to purchase the Premises or the Center, or
the right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.
39.2 OPTIONS PERSONAL. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original
Lessee while occupying the Premises who does so without the intent of
thereafter assigning this Lease or subletting the Premises or any portion
thereof, and may not be exercised or be assigned, voluntarily or involuntarily,
by or to any person or entity other than Lessee, provided, however, that an
Option may be exercised by or assigned to any Lessee Affiliate as defined in
paragraph 12.2 of this Lease. The Options, if any, herein granted to Lessee are
not assignable separate and apart from this Lease, nor may any Option be
separated from this Lease in any manner, either by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple options
to extend or renew this Lease a later option cannot be exercised unless the
prior option to extend or renew this Lease has been so exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(b) or 13.1(c) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing
on the date after a monetary obligation to Lessor is due from Lessee and
unpaid (without necessity for notice thereof to Lessee) and continuing until
the obligation is paid, or (iii) at any time after an event of default
described in paragraphs 13.1(a), 13.1(d), or 13.1(e) (without any necessity of
Lessor to give notice of such default to Lessee), nor (iv) in the event that
Lessor has given to Lessee three or more notices of default under paragraph
13.1(b), or paragraph 13.1(c), whether or not the defaults are cured, during the
12 month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option. If, after such exercise and during the term
of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessee fails to commence to cure a default specified in paragraph 13.1(c)
within thirty (30) days after the date that Lessor gives notice to Lessee of
such default and/or Lessee fails thereafter to diligently prosecute
said cure to completion, or (iii) Lessee commits a default described in
paragraph 13.1(a), 13.1(d) or 13.1(e) (without any necessity of Lessor to give
notice of such default to Lessee) or (iv) Lessor gives to Lessee three or more
notices of default under paragraph 13.1(b), or paragraph 13.1(c), whether or not
the defaults are cured.
40. SECURITY MEASURES. Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Center. Lessee assumes all responsibility
for the protection of Lessee, its agents, and invitees and the property of
Lessee and of Lessee's agents and invitees from acts of third parties. Nothing
herein contained shall prevent Lessor, at Lessor's sole option, from providing
security protection for the Industrial Center or any part thereof, in which
event the cost thereof shall be included within the definition of Operating
Expenses, as set forth in paragraph 4.2(b).
41. EASEMENTS. Lessor reserves to itself the right, from time to time to grant
such easements, rights and dedications that Lessor deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee shall
sign any of the aforementioned documents upon request of Lessor and failure to
do so shall constitute a material default of this Lease by Lessee without the
need for further notice to Lessee.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the right
on the part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said party
to pay such sum or any part thereof, said party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
43. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of said entity. If Lessee is a corporation, trust
or partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
45. OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease. This Lease
shall become binding upon Lessor and Lessee only when fully executed by Lessor
and Lessee.
46. ADDENDUM. Attached hereto is an addendum or addenda containing paragraphs
47 through 52 which constitute a part of this Lease.
47. PARKING. Lessee is allowed 2.5 cars per 1,000 square feet Lessee has
leased. Your 2.5 cars per 1,000 square feet should be used for executive
management and customers only. All employees must park on City streets. Please
note below license numbers of management. Please notify landlord of any change
in management parking.
A._______________ B._____________ C._____________ D.____________ E._____________
The following Exhibits are hereby attached and made part of this lease
agreement:
Exhibit "A" Estimated Budget
Exhibit "B" Guarantee of Lease
Exhibit "C" Rules and Regulations
Exhibit "D" Site Plan
Exhibit "E" Floor Plan
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<PAGE>
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
LESSOR LESSEE
THE FOUR AMIGOS, A CALIFORNIA RED ENVELOPE, INC.
LIMITED PARTNERSHIP
By: [ILLEGIBLE] By: [ILLEGIBLE]
--------------------------- ---------------------------
Title: Title: President & CEO
------------------------ ------------------------
Date: 5/15/00 Date: 5/1/00
------------------------- --------------------------
(Corporate Seal) (Corporate Seal)
ADDRESS FOR NOTICES AND RENT ADDRESS FOR NOTICES AND RENT
4607 MISSION GORGE PLACE 4562 ALVARADO CANYON ROAD,
SAN DIEGO, CA 92120 SUITE A and M
SAN DIEGO, CA 92120
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<PAGE>
ADDENDUM
TO STANDARD INDUSTRIAL LEASE
DATED MARCH 28, 2000
BY AND BETWEEN
THE FOUR AMIGOS, A CALIFORNIA LIMITED PARTNERSHIP
AND
RED ENVELOPE, INC.
48 ENVIRONMENTAL MATTERS
48.1 NO USE OF HAZARDOUS MATERIALS. Lessee agrees that Lessee shall not keep,
use, generate, store, release, threaten release or dispose of any Hazardous
Materials (as defined below) on or about the Premises without the prior express
written consent of Lessor, which consent may be withheld by Lessor in its sole
and absolute discretion. Lessee represents that the presence of Hazardous
Materials on the Premises is not necessary to the conduct of its business or its
use of the Premises and Lessee acknowledges that it is probable that Lessor will
withhold its consent to any requested use of Hazardous Materials on the
Premises. For purposes of this provision, "Hazardous Materials" shall include
all oil, flammable explosives, asbestos, urea formaldehyde, radioactive
materials or waste, or other hazardous, toxic, contaminated, or polluting
materials, substances or wastes, including, without limitation, substances
defined as "hazardous substances", "hazardous materials", "hazardous wastes", or
"toxic substances" under any laws ordinances or regulations heretofore or
hereafter enacted or adopted.
48.2 COMPLIANCE WITH ENVIRONMENTAL LAWS. If Lessor consents in writing to the
presence, use, generation, storage, release or disposition of Hazardous
Materials (collectively, "Use of Hazardous Materials") on or about the Premises,
then Lessee shall conduct such Use of Hazardous Materials subject to, and in
full compliance with, all local, state, federal and other laws and regulations
governing the Use of Hazardous Materials. Lessee shall, at its own expense,
procure, maintain in effect and comply with, all conditions of any and all
permits, licenses and other governmental and regulatory approvals required for
Lessee's use of the Premises, including without limitation, discharge of
appropriately treated materials or wastes. Lessee shall cause any known
Hazardous Materials located on or about the Premises to be removed and
transported from the Premises solely by duly licensed haulers to duly licensed
facilities for final disposal of such materials and wastes. Lessee shall in all
respects handle, treat, deal with and manage any and all Hazardous Materials in,
on, under or about the Premises in total conformity with all applicable laws and
regulations governing the Use of Hazardous Materials and prudent industrial
practices regarding management of such Hazardous Materials. Upon regarding
management of such Hazardous Materials. Upon expiration or earlier termination
of the term of this Lease, Lessee shall cause all Hazardous Materials to be
removed from the Premises and transported for use, storage or disposal in
accordance and compliance with all applicable laws and regulations governing the
Use of Hazardous Materials.
48.3 NOTICES. Lessee shall immediately notify Lessor in writing of: (i) any
enforcement, clean-up, removal or other governmental or regulatory actions
instituted, completed or threatened pursuant to any laws or regulations
governing the use of Hazardous Materials; (ii) any claim made or threatened
against Lessee or the Premises relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
hazardous materials; and (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in or removed from
the Premises, including any complaints, notices, warnings or asserted violations
in connection therewith. Lessee shall also supply to Lessor as promptly as
possible, and in any event within five (5) business days after Lessee first
receives or sends the same, with copies of all claims, reports, complaints,
notices, warnings or asserted violations relating in any way to the Premises or
Lessee's use thereof. Lessee shall promptly deliver to Lessor copies of
hazardous waste manifests reflecting the legal and proper disposal of all
Hazardous Materials removed from the Premises.
48.4 INDEMNIFICATION. Lessee hereby agrees to indemnify, defend and hold
harmless Lessor, its trustees, officers, employees and agents, and the
beneficiary or mortgagee under any deed of trust or mortgage now or hereafter
encumbering all or any portion of the Premise, from and against any and all
suits, actions, legal or administrative proceedings, claims, demands, damages,
fines, punitive damages, losses, costs, liabilities, interest, attorneys' fees
(including any such fees and expenses incurred in enforcing this indemnity),
resulting from or relating to, directly or indirectly, the Use of Hazardous
Materials on or about the Premises. The indemnity set forth herein shall
include, without limitation, the cost of any required or necessary repair,
clean-
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<PAGE>
up or detoxification of the Premises and the surrounding property and shall
survive the expiration or earlier termination of the term of this Lease.
48.5 ADDITIONAL INSURANCE OR FINANCIAL CAPACITY. If at any time it reasonably
appears to Lessor that Lessee is not maintaining sufficient insurance or other
means of financial capacity to enable Lessee to fulfill its obligation to
Lessor hereunder, whether or not then accrued, liquidated, conditional or
contingent, Lessee shall procure and thereafter maintain in full force and
effect such insurance or other form of financial assurance, with or from
companies or persons and in forms reasonably acceptable to Lessor as Lessor may
from time to time reasonably request.
THE FOUR AMIGOS, A CALIFORNIA RED ENVELOPE, INC.
LIMITED PARTNERSHIP
By: [ILLEGIBLE] By: [ILLEGIBLE]
--------------------------- ---------------------------
Title: Title: President & CEO
------------------------ ------------------------
Date: 5/15/00 Date: 5/1/00
------------------------- --------------------------
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A D D E N D U M
TO STANDARD INDUSTRIAL LEASE
DATED MARCH 28, 2000
BY AND BETWEEN
THE FOUR AMIGOS, A CALIFORNIA LIMITED PARTNERSHIP
AND
RED ENVELOPE, INC.
49 R E N T E S C A L A T I O N S
Base rent under Section 4 of this Lease shall be adjusted annually, effective
on the 1st day of JANUARY of each year of the Lease term, including option
periods, if any. The adjustment shall be made for changes in the current
purchasing power of lawful money of the United States, as reported by the U.S.
Bureau of Labor Statistics and Consumer Price Index for all Urban Consumers in
the Los Angeles-Anaheim-Riverside, California, as published by the United
States Department of Labor's Bureau of Labor Statistics (Index Base Year
1982-4=100). If said Index is not published, but the United States Government
provides a substitute therefore and the means of adjustment, such substitute
shall be used. If no official substitute is provided, the Parties shall agree
upon another source by arbitration pursuant to the provisions of the California
Code of Civil Procedure. The monthly rent during each such annual period shall
be the greater of the rent specified in section 4 hereof, said rent amount
multiplied by a fraction, the numerator of which is the most recent Index
number available ten (10) days before the effective date of the adjustment and
the denominator of which is the Index number for the calendar month which is
four (4) months prior to the month the original Lease term commences.
Notwithstanding the foregoing, the amount of an individual cost of living
increase for a given Lease or option year shall not be less than FOUR PERCENT
(4%).
50 P R O P E R T Y T A X E S
The estimated budget for Property Taxes is attached hereto and made a part
hereof. Lessee agrees Property Taxes are to be paid concurrently with rental
payment due and payable on the first day of each month.
51 M A I N T E N A N C E F E E S
The established budget for maintenance cost is attached hereto and made a part
hereof. Lessee agrees maintenance fees are to be paid concurrently with rental
payment due and payable on the first day of each month.
52 C O N D I T I O N O F S P A C E
Condition of Space: Tenant to accept the space in its "as-is" condition.
THE FOUR AMIGOS, A CALIFORNIA RED ENVELOPE, INC.
LIMITED PARTNERSHIP
By: /s/ [Illegible] By: /s/ [Illegible]
--------------------------------- ---------------------------------
Title: Title: President & CEO
------------------------------ ------------------------------
Date 5/15/01 Date 5/1/00
------------------------------- -------------------------------
Initials TMB
---
---
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<PAGE>
EXHIBIT A
FOUR AMIGOS
MISSION VALLEY BUSINESS CENTER
2004 ESTIMATED BUDGET
1. Property Management Fee
2. Maintenance
3. Landscaping
4. Security
5. Insurance
6. Gas & Electric
7. Water
8. Sweeping
9. Window Washing
10. Trash
11. Alarm Telephone
12. Reserve
13. Legal
14. Audit
15. Property Taxes
16. Association Dues
17. Franchise Tax
================================================================================
Premises - approximately 13,004 rentable Square Feet = 20.89% of Total Building
Area - 62,261 sq. ft.
$2600.80 Estimated Monthly Maintenance & Tax Costs for year 2004
Lessor: FOUR AMIGOS, a California Lessee: RED ENVELOPE, INC.
Limited Partnership
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
----------------------------- -----------------------------
Title: Title: President & CEO
-------------------------- --------------------------
5/15/00 5/1/00
--------------------------------- ---------------------------------
Date Date
<PAGE>
EXHIBIT B
GUARANTEE OF LEASE-INTENTIONALLY DELETED
Initials TMB
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12
<PAGE>
EXHIBIT C
MISSION VALLEY BUSINESS CENTER
RULES & REGULATIONS
A. TENANT AGREES AS FOLLOWS:
1. All loading and unloading of goods shall be done only at such times,
in the areas and through the entrances designated for such purposes by
Landlord.
2. The delivery or shipping of merchandise, supplies and fixtures to and
from leased premises shall be subject to such rules and regulations as
in the judgment of Landlord are necessary for the proper operation of
the leased premises or shopping center.
3. All garbage and refuse shall be kept in the kind of container
specified by Landlord and shall be placed outside of the premises,
prepared for collection in the manner and at the times and places
specified by Landlord. If Landlord shall provide or designate a
service for picking up refuse and garbage, Tenant shall use same at
Tenant's cost. Tenant shall pay the cost of removal of any of Tenant's
refuse or rubbish.
4. No radio or television or other similar device shall be installed
without first obtaining in each instance Landlord's consent in
writing. No aerial shall be erected on the roof or exterior walls of
the premises, or on the grounds, without in each instance the written
consent of the Landlord. Any aerial so installed without such written
consent shall be subject to removal without notice at any time.
5. No loud speakers, televisions, phonographs, radios or other devices
shall be used in a manner so as to be heard or seen outside of the
premises without the prior written consent of Landlord.
6. The outside areas immediately adjoining the premises shall be kept
clean and free from dirt and rubbish by Tenant to the satisfaction of
Landlord, and Tenant shall not place or permit any obstructions or
merchandise in such areas.
7. Tenant and Tenant's employees shall park their cars only in those
portions of the parking area designated for that purpose by Landlord.
Tenant shall furnish Landlord with State automobile license numbers
assigned to Tenant's car or cars and cars of Tenant's employee, within
five days after taking possession of the premises and shall thereafter
notify Landlord of any changes within five days after such changes
occur. In the event Tenant or its employees fail to park their cars in
designated parking areas as aforesaid, then Landlord at its option
shall charge Tenant $50.00 per day per car parked in any area other
than those designated, as and for liquidated damages.
8. The plumbing facilities shall not be used for any other purpose than
that for which they are constructed, and no foreign substance of any
kind shall be thrown therein, and the expense of any breakage,
stoppage, or damage resulting from a violation of this provision shall
be borne by Tenant, who shall, or whose employees, agents or invitees
shall have caused it.
9. Tenant shall use at Tenant's cost such pest extermination contractor
as Landlord may direct and at such intervals as Landlord may require.
10. Tenant shall not burn any trash or garbage of any kind in or about the
leased premises, the shopping center, or within one mile of the
outside property line of the shopping center.
11. All public entrances and exits to the leased premises shall be kept
unobstructed and open to the public at all times during normal
business hours.
12. Tenant shall not cause or permit any obnoxious or foul odors that
disturb the public or other tenants. Should such odors be evident,
Tenant shall be required to take immediate steps to remedy same upon
written notice from Landlord.
13. All signs will be uniform in material, shape, design, color and
lettering.
Initials /s/ TMB
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13
<PAGE>
MISSION VALLEY BUSINESS CENTER RULES & REGULATIONS
(CONTINUED)
14. All employees except the Manager will park in off-site parking
areas. Parking lot will be for customers only. Vehicles may not be
left in parking lot area for longer than a 24 hour period.
15. The outside areas immediately adjoining the premises shall be kept
clean and free from dirt and rubbish by Tenant to the satisfaction
of the Owner, and Tenant shall not place or permit any obstruction
or merchandise in such areas.
16. Lessee shall not fasten nor cause to be fastened, any machinery to
any party wall or ceiling that will be a nuisance or shall tend to
disturb neighbors.
B. Tenant agrees to comply with all such rules and regulations.
C. Owner reserves the right from time to time to amend or supplement the
foregoing rules and regulations, and to adopt and promulgate additional
rules and regulations applicable to the leased premises. Reasonable notice
of such rules and regulations and amendments and supplements thereto, if
any, shall be given to the Tenant.
BY: Red Envelope, Inc.
Lessee: [/s/ illegible]
---------------------------------
Date: 5/1/00
-----------------------------------
Initials
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14
<PAGE>
EXHIBIT "D"
SITE PLAN
MISSION VALLEY BUSINESS CENTER
[GRAPHIC OF MISSION VALLEY BUSINESS CENTER vs LAYOUT]
/S/ [illegible] /s/ [illegible]
---------------------------------- ----------------------------------------
Lessee Lessor
5/1/00 5/15/00
Date: --------------------------- Date:-----------------------------------
<PAGE>
EXHIBIT "D"
SITE PLAN
[GRAPHIC OF SITE PLAN]
/s/ [illegible] /s/ [illegible]
-------------------------- -----------------------------
Lessee Lessor
Date: 5/1/00 Date: 5/15/00
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EXHIBIT "E"
FLOOR PLAN
[GRAPHIC OF FLOOR PLAN]
/s/ [illegible] /s/ [illegible]
-------------------------- -----------------------------
Lessee Lessor
Date: 5/1/00 Date: 5/15/00
--------------------- ------------------------