EXHIBIT 10.6
LEASE:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LANDLORD:
Gateway Pacific Properties, Inc.,
a California corporation
TENANT:
OBAGI Medical Products, Inc.,
a California corporation
TABLE OF CONTENTS
ARTICLE PAGE
REFERENCE PAGE............................................... II
1 USE AND RESTRICTIONS ON USE.................................. 1
2 TERM......................................................... 1
3 RENT......................................................... 2
4 TAXES........................................................ 2
5 SECURITY DEPOSIT............................................. 3
6 ALTERATIONS.................................................. 3
7 REPAIR....................................................... 3
8 LIENS........................................................ 4
9 ASSIGNMENT AND SUBLETTING.................................... 4
10 INDEMNIFICATION.............................................. 6
11 INSURANCE.................................................... 6
12 WAIVER OF SUBROGATION........................................ 6
13 SERVICES AND UTILITIES....................................... 6
14 HOLDING OVER................................................. 7
15 SUBORDINATION................................................ 7
16 REENTRY BY LANDLORD.......................................... 7
17 DEFAULT...................................................... 7
18 REMEDIES..................................................... 8
19 TENANT'S BANKRUPTCY OR INSOLVENCY............................ 9
20 QUIET ENJOYMENT.............................................. 10
21 DAMAGE BY FIRE, ETC.......................................... 10
22 EMINENT DOMAIN............................................... 11
23 SALE BY LANDLORD............................................. 12
24 ESTOPPEL CERTIFICATE......................................... 12
25 SURRENDER OF PREMISES........................................ 12
26 NOTICES...................................................... 13
27 TAXES PAYABLE BY TENANT...................................... 13
28 DEFINED TERMS AND HEADINGS................................... 13
29 TENANT'S AUTHORITY........................................... 13
30 COMMISSIONS.................................................. 13
31 TIME AND APPLICABLE LAW...................................... 14
32 SUCCESSORS AND ASSIGNS....................................... 14
33 ENTIRE AGREEMENT............................................. 14
34 EXAMINATION NOT OPTION....................................... 14
35 RECORDATION.................................................. 14
36 AUTHORIZATION OF FINANCIAL INFORMATION....................... 14
37 LANDLORD'S CONSENT........................................... 14
38 TENANT'S PROPORTIONATE SHARE................................. 15
39 SCHEDULE OF RENTS............................................ 15
40 LIMITATION OF LANDLORD'S LIABILITY........................... 15
ADDENDUM 1
EXHIBIT A-PREMISES
EXHIBIT B-INITIAL ALTERATIONS
EXHIBIT C-RULES AND REGULATIONS
EXHIBIT D-SIGN SPECIFICATIONS
EXHIBIT E-HAZARDOUS WASTE MATERIALS (RIDER)
EXHIBIT F-CONTINUING LEASE GUARANTEE (CORPORATE)
SINGLE TENANT NET INDUSTRIAL LEASE
REFERENCE PAGE
BUILDING: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LANDLORD: Gateway Pacific Properties, Inc., a California corporation
LANDLORD'S ADDRESS: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT: OBAGI Medical Products, Inc., a California corporation
TENANT'S ADDRESS: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LEASE REFERENCE DATE: June 30, 1999
PREMISES: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ (See Exhibit "A" for outline of Premises,
attached hereto and incorporated herein by refrence).
PREMISES RENTABLE AREA: approximately 65,519 square feet
USE: Light manufacturing for parts and supply of artificial limbs
and orthopedic equipment.
SCHEDULED COMMENCEMENT DATE: January 1, 2000
TERMINATION DATE: December 31, 2004
TERM OF LEASE: Five (5) years beginning on the Commencement Date and ending on the
Termination Date (unless sooner terminated pursuant to this Lease.)
INITIAL ANNUAL BASE RENT
(Article 3): $472,732.00 (See also Article 39, "SCHEDULE OF RENTS.")
INITIAL MONTHLY INSTALLMENT OF
ANNUAL RENT (Article 3): $39,311.00 (See also Article 39, "SCHEDULE OF RENTS.")
TENANT'S PROPORTIONATE SHARE: CAM Project: 100.00%, Taxes: 100.00% Insurance: 100.00%
(Article 38)
REAL ESTATE BROKER DUE COMMISSION: Not applicable.
SECURITY DEPOSIT: $48,288.00 (See also Article , "SECURITY DEPOSIT")
ASSIGNMENT/SUBLETTING FEE: $500.00
CORPORATE GUARANTOR: Mandarin Partners, LLC, a Delaware limited liability company
The Reference Page information is incorporated into and made part of the Lease.
In the event of any conflict between any Reference Page information and this
Lease, this Lease shall control. The Lease includes Addendum 1 and Exhibits "A"
through "F", all of which are made a part hereof.
LANDLORD: Gateway Pacific Properties, Inc. TENANT: OBAGI Medical Products, Inc.,
a California corporation a California corporation
BY: RREEF MANAGEMENT COMPANY,
a Delaware Corporation By: \s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------
Title: President and CEO
-------------------
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇ Dated: 11-15-99
---------------- -------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Regional Manager
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Dated: 11/18/99 Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------- ---------------------
Title: Vice President and CFO
---------------------
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇ Dated: 11/17/99
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------
Address: 310 Golden Shore
Telephone: (▇▇▇)▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
---------------------
LEASE
By this Lease Londlord leases to Tenant and Tenant leases from Landlord
the Building as set forth and described on the Reference Page (the "Premises").
The Reference Page, including all terms defined thereon, is incorporated as
part of this Lease.
1. USE AND RESTRICTIONS ON USE.
The Premises are to be used solely for the purposes stated on the Reference
Page. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building or injure, annoy, or disturb them or
allow the Premises to be used for any improper, immoral, unlawful, or
objectionable purpose. Tenant shall not do, permit or suffer in, on, or about
the Premises the sale of any alcoholic liquor without the written consent of
Landlord first obtained, or the commission of any waste. Tenant shall comply
with all governmental laws, ordinances and regulations applicable to the use
of the Premises and its occupancy and shall promptly comply with all
governmental orders and directions for the correction, prevention and
abatement of any violations in or upon, or in connection with, the Premises,
all at Tenant's sole expense. Tenant shall not do or permit anything to be
done on or about the Premises or bring or keep anything into the Premises
which will in any way increase the rate of, invalidate or prevent the
procuring of any insurance protecting against loss or damage to the Building
or any of its contents by fire or other casualty or against liability for
damage to property or injury to persons in or about the Building or any part
thereof.
1.1 Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employees, licensees or invitees to at any time handle,
use, manufacture, store or dispose of in or about the Premises or the
Building any (collectively "Hazardous Materials") flammables, explosives,
radioactive materials, hazardous wastes or materials, toxic wastes or
materials, or other similar substances, petroleum products or derivatives or
any substance subject to regualtion by or under any federal, state and local
laws and ordinances relating to the protection of the environment or the
keeping, use or disposition of environmentally hazardous materials,
substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to
any of such laws or ordinances (collectively "Environmental Laws"), nor shall
Tenant suffer or permit any Hazardous Materials to be used in any manner not
fully in compliance with all Environmental Laws, in the Premises or the
Building and appurtenant land or allow the environment to become contaminated
with any Hazardous Materials. Notwithstanding the foregoing, and subject to
Landlord's prior consent, Tenant may handle, store, use or dispose of
products containing small quantities of Hazardous Materials (such as aerosol
cans containing insecticides, toner for copiers, paints, paint remover and
the like) to the extent customary and necessary for the use of the Premises
for general office purposes; provided that Tenant shall always handle, store,
use, and dispose of any such Hazardous Materials in a safe and lawful manner
and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant shall protect,
defend, indemnify and hold each and all of the Landlord Entities (as defined
in Article 28) harmless from and against any and all loss, claims, liability
or costs (including court costs and attorney's fees) incurred by reason of
any actual or asserted failure of Tenant to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or from
the Premises of any Hazardous Materials (even though permissible under all
applicable Environmental Laws or the provisions of this Lease), or by reason
of any actual or asserted failure of Tenant to keep, observe, or perform any
provision of this Section 1.1 except Tenant shall have no obligation or
liability of Hazardous Materials caused by Landlord or third parties other
than Tenant's agents, contractors, or invitees.
2. TERM.
2.1 The Term of this Lease shall begin on the date ("Commencement
Date") which shall be the later of the Scheduled Commencement Date as shown on
the Reference Page and the date that Landlord shall tender possession of the
Premises to Tenant. Landlord shall tender possession of the Premises with all
the work, if any, to be performed by Landlord pursuant to Exhibit B to this
Lease substantially completed. Tenant shall deliver a punch list of items not
completed within 30 days after Landlord tenders possession of the Premises
and Landlord agrees to proceed with due diligence to perform its obligations
regarding such items. Landlord and Tenant shall execute a memorandum setting
forth the actual Commencement Date and Termination Date.
2.1.1 Tenant agrees that in the event of the inability of Landlord
to deliver possession of the Premises on the Scheduled Commencement Date,
Landlord shall not be liable for any damage resulting from such inability, but
Tenant shall not be leable for any rent until the time when Landlord can, after
notice to Tenant, deliver possession of the Premises to Tenant. No such failure
to give possession on the Scheduled Commencement Date shall affect the other
obligations of Tenant under this Lease, except that if Landlord is unable to
deliver possession of the Premises within one hundred twenty (120) days of the
Scheduled Commencement Date (other than as a result of strikes, shortages of
materials, or similar matters beyond the reasonable control of Landlord and
Tenant is notified by Landlord in writing as to such delay), Tenant shall have
the option to terminate this Lease unless said delay is as a result of: (a)
Tenant's failure to agree to plans and specifications; (b) Tenant's request for
materials, finishes or installations other than Landlord's standard except
those, if any, that Landlord shall have expressly
1
agreed to furnish without extension of time agreed by Landlord; (c) Tenant's
change in any plans or specifications; or, (d) performance or completion by a
party employed by Tenant. If any delay is the result of any of the foregoing,
the Commencement Date and the payment of rent under this Lease shall be
accelerated by the number of days of such delay.
2.2 In the event Landlord shall permit Tenant to occupy the Premises prior
to the Commencement Date, such occupancy shall be subject to all the provisions
of this Lease. Said early possession shall not advance the Termination Date.
3. RENT.
3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time
to time by paying the Monthly Installment of Rent then in effect on or before
the first day of each full calendar month during the Term, except that the first
month's rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth of the Annual
Rent in effect at such time. Rent for any period during the Term which is less
than a full month shall be a prorated portion of the Monthly Installment of Rent
based upon a thirty (30) day month. Said rent shall be paid to Landlord, without
deduction or offset and without notice or demand, at the Landlord's address, as
set forth on the Reference Page, or to such other person or at such other place
as Landlord may from time to time designate in writing.
3.2 Tenant recognizes that late payment of any rent or other sum
due under this Lease will result in administrative expense to Landlord, the
extent of which additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if rent or any other
sum is not paid within five (5) days, when due and payable pursuant to this
Lease, a late charge shall be imposed in an amount equal to the greater of:
(a) Fifty Dollars ($50.00), or (b) a sum equal to five percent (5%) per month
of the unpaid rent or other payment. The amount of the late charge to be paid
by Tenant shall be reassessed and added to Tenant's obligation for each
successive monthly period until paid. The provisions of this Section 3.2 in
no way relieve Tenant of the obligation to pay rent or other payments on or
before the date on which they are due, nor do the terms of this Section 3.2
in any way affect Landlord's remedies pursuant to Article 18 in the event
said rent or other payment is unpaid after date due.
4. TAXES.
4.1 Tenant shall pay as additional rent all Taxes incurred on the Building
during the Term. Taxes shall be defined as real estate taxes and any other
taxes, charges and assessments which are levied with respect to the Building or
the land appurtenant to the Building, or with respect to any improvements,
fixtures and equipment or other property of Landlord, real or personal, located
in the Building and used in connection with the operation of the Building and
said land, any payments to any ground lessor in reimbursement of tax payments
made by such lessor; and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building.
4.2 Prior to the actual determination thereof, Landlord may from time to
time reasonably estimate Tenant's liability for Taxes under Section 4.1, Article
6 and Article 27 for the lease year or portion thereof. Landlord will give
Tenant written notification of the amount of such estimate and Tenant agrees
that it will pay, by increase of its Monthly Installments of Rent due in such
lease year, additional rent in the amount of such estimate. Any such increased
rate of Monthly Installments of Rent pursuant to this Section 4.2 shall remain
in effect until further written notification to Tenant pursuant hereto.
4.3 When the above mentioned actual determination of Tenant's liability
for Taxes is made in any lease year and when Tenant is so notified in writing,
then:
4.3.1 If the total additional rent Tenant actually paid pursuant to
Section 4.2 is more than Tenant's liability for Taxes, then Landlord shall
credit the difference against the then next due payments to be made by Tenant
under this Article 4.
4.4 If the Commencement Date is other than January 1 or if the Termination
Date is other than December 31, Tenant's liability for Taxes for the year in
which said Date occurs shall be prorated based upon a three hundred sixty-five
(365) day year.
4.5 Even though the Term has expired and Tenant has vacated the premises,
when the final determination is made of Tenant's liability for Taxes for the
year in which the Lease terminated, Tenant shall pay any difference due over the
estimated Taxes paid; and conversely any overpayment, less any amounts due
Landlord under this Lease, shall be rebated to Tenant.
2
5. SECURITY DEPOSIT.
Tenant shall deposit the Security Deposit with Landlord upon the execution of
this Lease. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants and conditions of this
Lease to be kept and performed by Tenant and not as an advance rental deposit
or as a measure of Landlord's damage in case of Tenant's default. If Tenant
defaults with respect to any provision of this Lease, Landlord may use any
part of the Security Deposit for the payment of any rent or any other sum in
default, or for the payment of any amount which Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion is so used, Tenant shall within five (5) days after
written demand therefor, deposit with Landlord an amount sufficient to
restore the Security Deposit to its original amount and Tenant's failure to
do so shall be a material breach of this Lease. Except to such extent, if
any, as shall be required by law, Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit or any balance thereof shall be returned to Tenant within sixty (60)
days after termination of this Lease and all of Tenant's obligations under
this Lease have been fulfilled.
6. ALTERATIONS.
6.1 Except for those, if any, specifically provided for in Exhibit B to
this Lease, or nonstructural, nonbuilding systems alterations of less than
$10,000.00 provided Tenant gives Landlord twenty (20) days' Notice before
commencement of any work, Tenant shall not make or suffer to be made any
alterations, additions, or improvements, including, but not limited to, the
attachment of any fixtures or equipment in, on, or to the Premises or any part
thereof or the making of any improvements as required by Article 7, without the
prior written consent of Landlord. When applying for such consent, Tenant shall,
if requested by Landlord, furnish complete plans and specifications for such
alterations, additions and improvements.
6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made using Landlord's
contractor (unless Landlord agrees otherwise) at Tenant's sole cost and expense.
If Tenant shall employ any Contractor other than Landlord's Contractor and such
other Contractor or any Subcontractor of such other Contractor shall employ any
non-union labor or supplier, Tenant shall be responsible for and hold Landlord
harmless from any and all delays, damages and extra costs suffered by Landlord
as a result of any dispute with any labor unions concerning the wage, hours,
terms or conditions of the employment of any such labor. In any event Landlord
may charge Tenant a reasonable charge to cover its overhead as it relates to
such proposed work.
6.3 All alterations, additions or improvements proposed by Tenant shall
be constructed in accordance with all government laws, ordinances, rules and
regulations and Tenant shall, prior to construction, provide the additional
insurance required under Article 11 in such case, and also all such assurances
to Landlord, including but not limited to, waivers of lien, surety company
performance bonds and personal guaranties of individuals of substance as
Landlord shall require to assure payment of the costs thereof and to protect
Landlord and the Building and appurtenant land against any loss from any
mechanic's, materialmen's or other liens.
6.4 All alterations, additions, and improvements in, on, or to the
Premises made or installed by Tenant, including carpeting, shall be and
remain the property of Tenant during the Term but, excepting furniture,
furnishings, movable partitions of less than full height from floor to
ceiling and other trade fixtures, shall become a part of the realty and
belong to Landlord without compensation to Tenant upon expiration or sooner
termination of the Term, at which time title shall pass to Landlord under
this Lease as by a ▇▇▇▇ of sale, unless Landlord elects otherwise. Upon such
election by Landlord, Tenant shall upon demand by Landlord, at Tenant's sole
cost and expense, forthwith and with all due diligence remove any such
alterations, additions or improvements which are designated by Landlord to be
removed, and Tenant shall forthwith and with all due diligence, at its sole
cost and expense, repair and restore the Premises to their original
condition, reasonable wear and tear and damage by fire or other casualty
excepted. With respect to any alterations, additions, or improvements for
which Landlord's consent is required under this Article, Tenant is not
required to remove such alterations, additions, or improvements upon the
expiration or sooner termination of the Term unless Landlord has notified
Tenant at the time of Landlord's consent that such removal is required.
6.5 Tenant shall pay in addition to any sums due pursuant to Article 4,
any increase in real estate taxes attributable to any such alteration, addition
or improvement for so long, during the Term, as such increase is ascertainable;
at Landlord's election said sums shall be paid in the same way as sums due under
Article 4.
7. REPAIR.
7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except that Landlord shall repair and
maintain the exterior walls and foundation at its sole cost and expense and
shall maintain the roof subject to Tenant's reimbursement and as specified in
Exhibit B if attached to this Lease. By taking possession of the Premises,
Tenant accepts them as being in good order, condition and repair and in the
condition in which Landlord is obligated to deliver them. It is hereby
understood and agreed that no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant, except as
specifically set forth in this Lease. Landlord shall not
3
be liable for any failure to make any repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after written
notice of the need of such repairs or maintenance is given to Landlord by
Tenant.
7.2 Tenant shall (except for Landlord's obligations set forth in Section
7.1) at its own cost and expense keep and maintain all parts of the Premises in
good condition, promptly making all necessary repairs and replacements, whether
structural or non-structural, ordinary or extraordinary, with materials and
workmanship of the same character, kind and quality as the original (including,
but not limited to, repair and replacement of all fixtures installed by Tenant,
water heaters serving the Premises, windows, glass and plate glass, doors,
exterior stairs, skylights, any special office entries, interior walls and
finish work, floors and floor coverings, heating and air conditioning systems,
electrical systems and fixtures, sprinkler systems, dock boards, truck doors,
dock bumpers, parking lots, driveways, landscaping, rail tracks serving the
Premises, plumbing work and fixtures, and performance of regular removal of
trash and debris). Tenant as part of its obligations hereunder shall keep the
Premises in a clean and sanitary condition. Tenant will, as far as possible keep
all such parts of the Premises from deterioration due to ordinary wear and from
falling temporarily out of repair, and upon termination of this Lease in any way
Tenant will yield up the Premises to Landlord in good condition and repair, loss
by fire or other casualty excepted (but not excepting any damage to glass).
7.3 Except as provided in Article 21, there shall be no abatement of rent
and no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Tenant's rent shall be
abated only in the event Tenant is denied access to the Premises for in excess
of 25 continuous days as a result of Landlord's repairs, alterations or
improvements.
7.4 Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
approved by Landlord for servicing all heating and air conditioning systems and
equipment serving the Premises (and a copy thereof shall be furnished to
Landlord). The service contract must include all services suggested by the
equipment manufacturer in the operation/maintenance manual and must become
effective within thirty (30) days of the date Tenant takes possession of the
Premises. Landlord may, upon notice to Tenant, enter into such a
maintenance/service contract on behalf of Tenant, or perform the work and in
either case, charge Tenant the cost thereof along with a reasonable amount for
Landlord's overhead.
7.5 Tenant hereby waives and releases its right to make repairs at
Landlord's expense under Section 1941 and 1942 of the California Civil Code and
its right to terminate the Lease under Section 1932(1) of the California Civil
Code or under any similar law, statute or ordinance now or hereafter in effect.
8. LIENS.
Tenant shall keep the Premises, the Building and appurtenant land and Tenant's
leasehold interest in the Premises free from any liens arising out of any
services, work or materials performed, furnished, or contracted for by Tenant,
or obligations incurred by Tenant. In the event that Tenant shall not, within
ten (10) days following the imposition of any such lien, either cause the same
to be released of record or provide Landlord with insurance against the same
issued by a major title insurance company or such other protection against the
same as Landlord shall accept, Landlord shall have the right to cause the same
to be released by such means as it shall deem proper, including payment of the
claim giving rise to such lien. All such sums paid by Landlord and all expenses
incurred by it in connection therewith shall be considered additional rent and
shall be payable to it by Tenant on demand. Landlord shall have the right at all
times to post and keep posted on the Premises any notices permitted or required
by law, or that Landlord shall deem proper, for the protection of Landlord, the
Premises, the Building, and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give to Landlord at least
five business days' prior notice of commencement of any construction on the
Premises.
9. ASSIGNMENT AND SUBLETTING.
9.1 Tenant shall not have the right to assign or pledge this Lease or to
sublet the whole or any part of the Premises whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy without the prior written consent of Landlord, and said restrictions
shall be binding upon any and all assignees of the Lease and subtenants of the
Premises. In the event Tenant desires to sublet, or permit such occupancy of,
the Premises, or any portion thereof, or assign this Lease, Tenant shall give
written notice thereof to Landlord at least Forty-five (45) days but no more
than one hundred eighty (180) days prior to the proposed commencement date of
such subletting or assignment, which notice shall set forth the name of the
proposed subtenant or assignee, the relevant terms of any sublease or assignment
and copies of financial reports and other relevant financial reports and other
relevant financial information of the proposed subtenant or assignee. Tenant
shall have the right to assign this Lease or sublet a portion of the Premises
without Landlord's consent (and without being subject to Landlord's right to
recapture) to any subsidiary or parent corporation of Tenant, to United States
Manufacturing Company, LLC or Polar Vision, provided Mandarin Partners, LLC,
owns in excess of fifty percent (50%) of the voting securities, or to any other
company in which Mandarin Partners, LLC owns in excess of fifty percent (50%) of
voting securities.
9.2 Notwithstanding any assignment or subletting, permitted or otherwise,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for com-
4
pliance with all of its other obligations under the terms, provisions and
covenants of this Lease. Upon the occurrence of an Event of Default, if the
Premises or any part of them are then assigned or sublet, Landlord, in addition
to any other remedies provided in this Lease or provided by law, may, at its
option, collect directly from such assignee or subtenant all rents due and
becoming due to Tenant under such assignment or sublease and apply such rent
against any sums due to Landlord from Tenant under this Lease, and no such
collection shall be construed to constitute a novation or release of Tenant from
the further performance of Tenant's obligations under this Lease.
9.3 In addition to Landlord's right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting or assignment, to terminate this Lease, or in the
case of a proposed subletting of less than the entire Premises, to recapture the
portion of the Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice given by Landlord to Tenant within sixty
(60) days following Landlord's receipt of Tenant's written notice as required
above. If this Lease shall be terminated with respect to the entire Premises
pursuant to this Section, the Term of this Lease shall end on the date stated in
Tenant's notice as the effective date of the sublease or assignment as if that
date had been originally fixed in this Lease for the expiration of the Term. If
Landlord recaptures under this Section only a portion of the Premises, the rent
to be paid from time to time during the unexpired Term shall ▇▇▇▇▇
proportionately based on the proportion by which the approximate square footage
of the remaining portion of the Premises shall be less than that of the Premises
as of the date immediately prior to such recapture. Tenant shall, at Tenant's
own cost and expense, discharge in full any outstanding commission obligation on
the part of Landlord with respect to this Lease, and any commissions which may
be due and owing as a result of any proposed assignment or subletting, whether
or not the Premises are recaptured pursuant to this Section 9.3 and rented by
Landlord to the proposed tenant or any other tenant.
9.4 In the event that Tenant sells, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to
Seventy-five percent (75%) of any Increased Rent (as defined below) when and as
such Increased Rent is received by Tenant. As used in this Section, "Increased
Rent" shall mean the excess of (i) all rent and other consideration which Tenant
is entitled to receive by reason of any sale, sublease, assignment or other
transfer of this Lease, over (ii) the rent otherwise payable by Tenant under
this Lease at such time and any commission payable by Tenant to a licensed real
estate broker as a result of the assignment or sublease. For purposes of the
foregoing, any consideration received by Tenant in form other than cash shall be
valued at its fair market value as determined by Landlord in good faith.
9.5 Notwithstanding any other provision hereof, Tenant shall have no
right to make (and Landlord shall have the absolute right to refuse consent to)
any assignment of this Lease or sublease of any portion of the Premises if at
the time of either Tenant's notice of the proposed assignment or sublease or the
proposed commencement date thereof, there shall exist any uncured default of
Tenant or matter which will become a default of Tenant with passage of time
unless cured; of if the proposed assignee or sublessee is an entity: (a) with
which Landlord is already in negotiation as evidenced by the issuance of a
written proposal; (b) is already an occupant of the Building unless Landlord is
unable to provide the amount of space required by such occupant; (c) is a
governmental agency; (d) is incompatible with the character of occupancy of the
Building; or (e) would subject the Premises to a use which would: (i) involve
increased personnel or wear upon the Building; (ii) violate any exclusive right
granted to another tenant of the Building; (iii) require any addition to or
modification of the Premises or the Building in order to comply with building
code or other governmental requirements; or, (iv) involves a violation of
Section 1.2. Tenant expressly agrees that Landlord shall have the absolute right
to refuse consent to any such assignment or sublease and that for the purposes
of any statutory or other requirement of reasonableness on the part of Landlord
such refusal shall be reasonable.
9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord's
costs, including attorney's fees, incurred in investigating and considering any
proposed or purported assignment or pledge of this Lease or sublease of any of
the Premises (which shall not exceed $1,000.00) regardless of whether Landlord
shall consent to, refuse consent, or determine that Landlord's consent is not
required for, such assignment, pledge or sublease. Any purported sale,
assignment, mortgage, transfer of this Lease or subletting which does not comply
with the provisions of this Article 9 shall be void.
9.7 If Tenant is a corporation, partnership or trust, any transfer or
transfers of or change or changes within any twelve month period in Fifty
percent (50%) of the outstanding voting shares of the corporation, the
general partnership interests in the partnership or the identity of the
persons or entities controlling the activities of such partnership or trust
resulting in the persons or entities owning or controlling a majority of such
shares, partnership interests or activities of such partnership or trust at
the beginning of such period no longer having such ownership or control shall
be regarded as equivalent to an assignment of this Lease to the persons or
entities acquiring such ownership or control and shall be subject to all the
provisions of this Article 9 to the same extent and for all intents and
purposes as though such as assignment.
5
10. INDEMNIFICATION.
None of the Landlord Entities shall be liable and Tenant hereby waives all
claims against them for any damage to any property or any injury to any
person in or about the Premises by or from any cause whatsoever (including
without limiting the foregoing, rain or water leakage of any character from
the roof, windows, walls, basement, pipes, plumbing works or appliances, the
Premises not being in good condition or repair, gas, fire, oil, electricity
or theft), except to the extent caused by or arising from the gross
negligence or willful misconduct of Landlord or its agents, employees or
contractors. Tenant shall protect, indemnify and hold the Landlord Entities
harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney's fees) incurred by reason of (a) any
damage to any property (including but not limited to property of any Landlord
Entity) or any injury (including but not limited to death) to any person
occurring in, on or about the Premises to the extent that such injury or
damage shall be caused by or arise from any actual or alleged act, neglect,
fault, or omission by or of Tenant, its agents, servants, employees,
invitees, or visitors to meet any standards imposed by any duty with
respect to the injury or damage; (b) the conduct or management of any work or
thing whatsoever done by the Tenant in or about the Premises or from
transactions of the Tenant concerning the Premises; (c) Tenant's failure to
comply with any and all governmental laws, ordinances and regulations
applicable to the condition or use of the Premises or its occupancy; or (d)
any breach or default on the part of Tenant in the performance or any
covenant or agreement on the part of the Tenant to be performed pursuant to
this Lease. The provisions of this Article shall survive the termination of
this Lease with respect to any claims or liability accruing prior to such
termination.
11. INSURANCE.
11.1 Tenant shall keep in force throughout the Term: (a) a
Commercial General Liability insurance policy or policies to protect the
Landlord Entities against any liability to the public or to any invitee of
Tenant or a Landlord Entity incidental to the use of or resulting from any
accident occurring in or upon the Premises with a limit of not less than
$1,000,000.00 per occurrence and not less than $2,000,000.00 in the annual
aggregate, or such larger amount as Landlord may prudently require from time
to time, covering bodily injury and property damage liability and $1,000,000
products/completed operations aggregate; (b) Business Auto Liability covering
owned, non-owned and hired vehicles with a limit of not less than $1,000,000
per accident; (c) insurance protecting against liability under Worker's
Compensation Laws with limits at least as required by statute; (d) Employers
Liability with limits of $500,000 each accident, $500,000 disease policy
limit, $500,000 disease-each employee; (e) All Risk or Special Form coverage
protecting Tenant against loss of or damage to Tenant's alterations,
additions, improvements, carpeting, floor coverings, paneling, decorations,
fixtures, inventory and other business personal property situated in or about
the Premises to the full replacement value of the property so insured; and,
(f) Business Interruption Insurance with limit of liability representing
loss of at least approximately six months of income.
11.2 Each of the aforesaid policies shall (a) be provided at Tenant's
expense; (b) name the Landlord and the building management company, if any, as
additional insureds; (c) be issued by an insurance company with a minimum Best's
rating of "A:VII" during the Term; and (d) provide that said insurance shall not
be cancelled unless thirty (30) days prior written notice (ten days for
non-payment of premium) shall have been given to Landlord; and said policy or
policies or certificates thereof shall be delivered to Landlord by Tenant upon
the Commencement Date and at least thirty (30) days prior to each renewal of
said insurance.
11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises ("Work") the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall require; and the policies of or certificates evidencing such insurance
must be delivered to Landlord prior to the commencement of any such Work.
12. WAIVER OF SUBROGATION.
So long as their respective insurers so permit, Tenant and Landlord hereby
mutually waive their respective rights of recovery against each other for any
loss insured by fire, extended coverage, All Risks or other insurance now or
hereafter existing for the benefit of the respective party but only to the
extent of the net insurance proceeds payable under such policies. Each party
shall obtain any special endorsements required by their insurer to evidence
compliance with the aforementioned waiver.
13. SERVICES AND UTILITIES.
Tenant shall pay for all water, gas, heat, light, power, telephone, sewer,
sprinkler system charges and other utilities and services used on or from the
Premises, including without limitation, the cost of any central station
signaling system installed in the Premises together with any taxes, penalties,
and surcharges or the like pertaining thereto and any maintenance charges for
utilities. Any such charges paid by Landlord and assessed against Tenant shall
be
6
immediately payable to Landlord on demand and shall be additional rent
hereunder. Landlord shall in no event be liable for any interruption or failure
of utility services on or to the Premises.
14. HOLDING OVER.
Tenant shall pay Landlord for each day Tenant retains possession of the Premises
or part of them after termination of this Lease by lapse of time or otherwise at
the rate ("Holdover Rate") which shall be 150% of the greater of: the amount of
the Annual Rent for the last period prior to the date of such termination plus
all Rent Adjustments under Article 4; If Landlord gives notice to Tenant of
Landlord's election to that effect, such holding over shall constitute renewal
of this Lease for a period from month to month at the Holdover Rate, but if the
Landlord does not so elect, no such renewal shall result notwithstanding
acceptance by Landlord of any sums due hereunder after such termination; and
instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have
been created. In any event, no provision of this Article 14 shall be deemed to
waive Landlord's right of reentry or any other right under this Lease or at law.
15. SUBORDINATION.
Provided Landlord delivers a non-disturbance and subordination agreement in
terms acceptable to Tenant, this Lease shall be subject and subordinate at
all times to ground or underlying leases and to the lien of any mortgages or
deeds of trust now or hereafter placed on, against or affecting the Building,
Landlord's interest or estate in the Building, or any ground or underlying
lease; provided, however, that if the lessor, mortgagee, trustee, or holder
of any such mortgage or deed of trust elects to have Tenant's interest in
this Lease be superior to any such instrument, then, by notice to Tenant,
this Lease shall be deemed superior, whether this Lease was executed before
or after said instrument. Notwithstanding the foregoing, Tenant covenants and
agrees to execute and deliver upon demand such further instruments evidencing
such subordination or superiority of this Lease as may be required by
Landlord.
16. REENTRY BY LANDLORD
16.1 Landlord reserves and shall at all times have the right to
re-enter the Premises on reasonable notice and at reasonable times except in
an emergency to inspect the same, to show said Premises to prospective
purchasers, mortgagees or tenants, and to alter, improve or repair the
Premises and any portion of the Building, without abatement of rent, and may
for that purpose erect, use and maintain scaffolding, pipes, conduits and
other necessary structures and open any wall, ceiling or floor in and through
the Building and Premises where reasonably required by the character of the
work to be performed, provided entrance to the Premises shall not be blocked
thereby, and further provided that the business of Tenant shall not be
interfered with unreasonably.
16.2 Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by any action
of the Landlord authorized by this Article 16. Tenant agrees to reimburse
Landlord, on demand, as additional rent, for any expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this Lease.
16.3 For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant's vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry
to any portion of the Premises. As to any portion to which access can not be
had by means of a key or keys in Landlord's possession, Landlord is
authorized to gain access by such means as Landlord shall elect and the cost
of repairing any damage occurring in doing so shall be borne by Tenant and
paid to Landlord as additional rent upon demand.
17. DEFAULT
17.1 Except as otherwise provided in Article 19, the following events
shall be deemed to be Events of Default under this Lease:
17.1.1 Tenant shall fail to pay when due any sum of money
becoming due to be paid to Landlord under this Lease, whether such sum be any
installment of the rent reserved by this Lease, any other amount treated as
additional rent under this Lease, or any other payment or reimbursement to
Landlord required by this Lease, whether or not treated as additional rent
under this Lease, and such failure shall continue for a period of five days
after written notice that such payment was not made when due, but if any such
notice shall be given twice for the twelve
7
month period commencing with the date of such notice, the failure to pay
within five days after due any additional sum of money becoming due to be
paid to Landlord under this Lease during such period shall be an Event of
Default, without notice.
17.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such
failure to Tenant, provided that if more than twenty (20) days are reasonably
required to cure such failure, within such longer period as may reasonably be
required for such cure if Tenant commences such cure within such Twenty (20)
day period and thereafter diligently prosecute such cure to completion.
17.1.3 Tenant shall fail to vacate the Premises immediately
upon termination of this Lease, by lapse of time or otherwise, or upon
termination of Tenant's right to possession only.
17.1.4 Tenant shall become insolvent, admit in writing its
inability to pay its debts generally as they become due, file a petition in
bankruptcy or a petition to take advantage of any insolvency statute, make an
assignment for the benefit of creditors, make a transfer in fraud of
creditors, apply for or consent to the appointment of a receiver of itself or
of the whole or any substantial part of its property, or file a petition or
answer seeking reorganization or arrangement under the federal bankruptcy
laws, as now in effect or hereafter amended, or any other applicable law or
statute of the United States or any state thereof.
17.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the
United States, as now in effect or hereafter amended, or any state thereof,
and such order, judgment or decree shall not be vacated or set aside or
stayed within thirty (30) days from the date of entry thereof.
18. REMEDIES.
18.1 Upon the occurrence of any of such events of default described
in Article 18.1 or elsewhere in this Lease, Landlord shall have the following
rights and remedies in addition to all other rights or remedies available to
Landlord in law or equity:
18.1.1 The rights and remedies provided by California Civil
Code Section 1951.2, including, but not limited to, the right to terminate
Tenant's right to possession of the Premises and to recover the worth at the
time of award of the amount by which the unpaid rent for the balance of the
Term after the time of award exceeds the amount of rental loss for the same
period that the Tenant proves could be reasonably avoided, as computed
pursuant to subsection (b) of said Section 1951.2;
18.1.2 The rights and remedies provided by California Civil
Code Section 1951.4, that allows Landlord to continue this Lease in effect
and to enforce all of its rights and remedies under this Lease, including the
right to recover rent as it becomes due, for so long as Landlord does not
terminate Tenant's right to possession; provided, however, if Landlord elects
to exercise its remedies described in this subsection and Landlord does not
terminate this Lease, and if Tenant requests Landlord's consent to an
assignment of this Lease or a sublease of the Premises at such time as
Tenant is in default, Landlord shall not unreasonably withhold its consent to
such assignment or sublease. Acts of maintenance or preservation, efforts to
relet the Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's right to possession;
18.1.3 The right to terminate this Lease by giving notice to
Tenant in accordance with applicable law;
18.1.4 The right to enter the Premises and remove therefrom all
persons and property, to store such property in a public warehouse or
elsewhere at the cost of and for the account of Tenant, and to sell such
property and apply the proceeds therefrom pursuant to applicable California
law. Landlord may from time to time sublet the Premises or any part thereof
for such term or terms (which may extend beyond the Term) and at such rent
and such other terms as Landlord in its sole discretion may deem advisable,
with the right to make alterations and repairs to the Premises. Upon each
such subletting, (i)Tenant shall be immediately liable for payment to
Landlord of, in addition to indebtedness other than rent due hereunder, the
cost of such subletting and such alterations and repairs incurred by Landlord
and the amount, if any, by which the rent for the period of such subletting
(to the extent such period does not exceed the Term) exceeds the amount to be
paid as rent for the Premises for such period, or (ii) at the option of
Landlord, rents received from such subletting shall be applied, first, to
payment of any indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any costs of such subletting and of such
alterations and repairs; third, to payment of rent due and unpaid hereunder;
and the residue, if any, shall be held by Landlord and applied in payment of
future rent as the same become due hereunder. If Tenant has been credited
with any rent to be received
8
by such subletting under clause (i) and such rent shall not be promptly paid
to Landlord by the subtenant(s), or if such rentals received from such
subletting under clause (ii) during any month are less than those to be paid
during that month by Tenant hereunder, Tenant shall pay any such deficiency
to Landlord. Such deficiency shall be calculated and paid monthly. No taking
of possession of the Premises by Landlord, shall be construed as an election
on its part to terminate this Lease unless a written notice of such intention
is given to Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach; and
18.1.5 The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and
remedies granted to Landlord as attorney-in-fact for Tenant pursuant to
subparagraph 18.1.4.
18.1.6 For purposes of this Article 18: "worth at the time of
award" shall be computed by allowing interest at a per annum rate of ten
percent and rent with respect to each month shall be deemed to be a monthly
rental arrived at by adding (i) one twelfth of the Annual Rent, plus (ii) an
amount equal to the monthly average of all the percentage rental received by
or payable to Landlord during the period that Tenant was conducting Tenant's
business in the Premises in the manner and to the extent required by this
Lease, plus (iii) one twelfth of any items of additional rent paid or payable
by Tenant hereunder during the 12 consecutive month period prior to the month
in which Tenant's default occurs or one twelfth of the annualized amount of
the additional rent paid or payable and the last day of the calendar month
prior to the month in which such default occurs, if such default occurs
during the first 12 calendar months of the Term).
18.2 If, on account of any breach or default by Tenant in Tenant's
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney
concerning or to enforce or defend any of Landlord's rights or remedies
arising under this Lease, Tenant agrees to pay all Landlord's attorney's
fees so incurred. Tenant expressly waives any right to: (a) trial by jury;
and (b) service of any notice required by any present or future law or
ordinance applicable to landlords or tenants but not required by the terms of
this Lease.
18.3 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided in this Lease or any other
remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy provided in this Lease constitute a forfeiture or
waiver of any rent due to Landlord under this Lease or of any damages
accruing to Landlord by reason of the violation of any of the terms,
provisions and covenants contained in this Lease.
18.4 No act or thing done by Landlord or its agents during the Term
shall be deemed a termination of this Lease or an acceptance of the surrender
of the Premises, and no agreement to terminate this Lease or accept a
surrender of said Premises shall be valid, unless in writing signed by
Landlord. No waiver by Landlord of any violation or breach of any of the
terms, provisions and covenants contained in this Lease shall be deemed or
construed to constitute a waiver of any other violation or breach of any of
the terms, provisions and covenants contained in this Lease. Landlord's
acceptance of the payment of rental or other payments after the occurrence of
an Event of Default shall not be construed as a waiver of such Default,
unless Landlord so notifies Tenant in writing. Forbearance by Landlord in
enforcing one or more of the remedies provided in this Lease upon an Event of
Default shall not be deemed or construed to constitute a waiver of such
Default or of Landlord's right to enforce any such remedies with respect to
such Default or any subsequent Default.
18.5 To secure the payment of all rentals and other sums of money
becoming due from Tenant under this Lease, Landlord shall have and Tenant
grants to Landlord a first lien upon the leasehold interest of Tenant under
this Lease, which lien may be enforced in equity,
19. TENANT'S BANKRUPTCY OR INSOLVENCY.
19.1 If at any time and for so long as Tenant shall be subjected to
the provisions of the United States Bankruptcy Code or other law of the
United States or any state thereof for the protection of debtors as in effect
at such time (each a "Debtor's Law"):
9
19.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or
receiver of Tenant's assets (each a "Tenant's Representative") shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor's Law. Without limitation of the
generality of the foregoing, any right of any Tenant's Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:
19.1.1.1 Such Debtor's Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's Representative
shall have timely exercised and Tenant's Representative shall have fully cured
any default of Tenant under this Lease.
19.1.1.2 Tenant's Representative or the proposed assignee,
as the case shall be, shall have deposited with Landlord as security for the
timely payment of rent an amount equal to the larger of: (a) three months' Rent
and other monetary charges accruing under this Lease; and (b) any sum specified
in Article 5; and shall have provided Landlord with adequate other assurance of
the future performance of the obligations of the Tenant under this Lease.
Without limitation, such assurances shall include, at least, in the case of
assumption of this Lease, demonstration to the satisfaction of the Landlord that
Tenant's Representative has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that Tenant's Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant, reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant's obligations under this Lease.
19.1.1.3 The assumption or any contemplated assignment of this
Lease or subleasing any part of the Premises, as shall be the case, will not
breach any provision in any other lease, mortgage, financing agreement or other
agreement by which Landlord is bound.
19.1.1.4 Landlord shall have, or would have had absent the
Debtor's law, no right under Article 9 to refuse consent to the proposed
assignment or sublease by reason of the identity or nature of the proposed
assignee or sublessee or the proposed use of the Premises concerned.
20. QUIET ENJOYMENT.
Landlord represents and warrants that it has full right and authority to enter
into this Lease and that Tenant, while paying the rental and performing its
other covenants and agreement contained in this Lease, shall peaceably and
quietly have, hold and enjoy the Premises for the Term without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
Landlord shall not be liable for any interference or disturbance by other
tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.
21. DAMAGE BY FIRE, ETC.
21.1 Landlord shall maintain all insurance policies deemed by Landlord to
be reasonably necessary or desirable and relating in any manner to the
protection, preservation or operation of the Premises, including by not limited
to, standard fire and extended coverage insurance covering the Premises in an
amount not less than ninety percent (90%) of the replacement cost thereof
insuring against the perils of fire and lightning and including extended
coverage, or, at Landlord's option, all risk coverage and, if Landlord so
elects, earthquake, flood and wind coverages and Tenant shall pay, as additional
rent, the cost of such policies upon demand by Landlord. Such insurance shall be
for the sole benefit of Landlord and under its sole control. Tenantcy shall not
take out separate insurance concurrent in form or contributing in the event of
loss with that required to be maintained by Landlord hereunder unless Landlord
is included as a loss payee thereon. Tenant shall immediately notify Landlord
whenever any such separate insurance is taken out and shall promptly deliver to
Landlord the policy or policies of such insurance.
21.2 In the event the Premises or Building are damaged by fire or other
cause and in Landlord's reasonable estimation such damage can be materially
restored within Two Hundred Thirty (230) days, Landlord shall forthwith repair
the same and this Lease shall remain in full force and effect, except that
Tenant shall be entitled to a proportionate abatement in rent from the date of
such damage. Such abatement of rent shall be made pro rata in accordance with
the extent to which the damage and the making of such repairs shall interfere
with the use and occupancy by Tenant of the Premises from time to time. Within
forty-five (45) days from the date of such damage, Landlord shall notify Tenant,
in writing, of Landlord's reasonable estimation of the length of time within
which materials restoration can be made, and Landlord's determination shall be
binding on Tenant. For purposes of this
10
Lease, the Building or Premises shall be deemed "materially restored" if they
are in such condition as would not prevent or materially interfere with Tenant's
use of the Premises for the purpose for which it was being used immediately
before such damage.
21.3 If such repairs cannot, in Landlord's reasonable estimation be made
within Two Hundred Thirty (230) days, Landlord and Tenant shall each have the
option of giving the other, at any time within sixty (60) days after such
damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 21.2.
21.4 Landlord shall not be required to repair or replace any damage or
loss by or from fire or other cause to any panelings, decorations,
partitions, additions, railings, ceilings, floor coverings, office fixtures or
any other property or improvements installed on the Premises or belonging to
Tenant. Any insurance which may be carried by Landlord or Tenant against loss
or damage to the Building or Premises shall be for the sole benefit of the
party carrying such insurance and under its sole control.
21.5 In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 21.5, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
the Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in the Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions, or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed.
21.6 Notwithstanding anything to the contrary contained in the Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 21 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days after
receipt of Landlord's notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.
21.7 In the event of any damage or destruction to the Building or Premises
by any peril covered by the provision of the Article 21, it shall be Tenant's
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.
21.8 The provisions of this Lease, including this Article, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, all or any part of the Premises or the Building and any
statute or regulation of the State of California, including without limitation,
Sections 1932(2) and 1934(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the absence of an
express agreement between the parties, and any other statute or regulation, now
or hereafter in effect, shall have no application to the Lease or any damage or
destruction to all or any part of the Premises or the Building.
22. EMINENT DOMAIN.
If all or any substantial part of the Premises shall be taken or appropriated by
any public or quasi-public authority under the power of eminent domain, or
conveyance in lieu of such appropriation, either party to this Lease shall have
the right, at its option, of giving the other, at any time within thirty (30)
days after such taking, notice terminating this Lease, except that Tenant may
only terminate this Lease by reason of taking or appropriation, if such taking
or appropriation shall be so substantial as to materially interfere with
Tenant's use and occupancy of the Premises. If neither party to this Lease shall
so elect to terminate this Lease, the rental thereafter to be paid shall be
adjusted on a fair and equitable basis under the circumstances. In addition to
the rights of Landlord above, if any substantial part of the Building shall be
taken or appropriated by any public or quasi-public authority under
11
the power of eminent domain or conveyance in lieu thereof, and regardless of
whether the Premises or any part thereof are so taken or appropriated, Landlord
shall have the right, at its sole option, to terminate this Lease. Landlord
shall be entitled to any and all income, rent, award, or any interest whatsoever
in or upon any such sum, which may be paid or made in connection with any such
public or quasi-public use or purpose, and Tenant hereby assigns to Landlord any
interest it may have in or claim to all or any part of such sums, other than any
separate award which may be made with respect to Tenant's trade fixtures and
moving expenses; Tenant shall made no claim for the value of any unexpired Term.
23. SALE BY LANDLORD.
In event of a sale or conveyance by Landlord of the Building, the same shall
operate to release Landlord from any future liability upon any of the covenants
or conditions, expressed or implied, contained in this Lease in favor of Tenant,
and in such event Tenant agrees to look solely to the responsibility of the
successor in interest of Landlord in and to this Lease. Except as set forth in
this Article 23, this Lease shall not be affected by any such sale and Tenant
agrees to attorn to the purchaser or assignee. If any security has been given by
Tenant to secure the faithful performance of any of the covenants of this Lease,
Landlord may transfer or deliver said security, as such, to Landlord's successor
in interest and thereupon Landlord shall be discharged from any further
liability with regard to said security.
24. ESTOPPEL CERTIFICATES.
Within ten (10) days following any written request which Landlord may make from
time to time, Tenant shall execute and deliver to Landlord or mortgagee or
prospective mortgagee a sworn statement certifying: (a) the date of commencement
of this Lease; (b) the fact that this Lease is unmodified and in full force and
effect (or, if there have been modifications to this Lease, that this Lease is
in full force and effect, as modified, and stating the date and nature of such
modifications); (c) the date to which the rent and other sums payable under this
Lease have been paid; (d) the fact that there are no current defaults under this
Lease by either Landlord or Tenant except as specified in Tenant's statement;
and (e) such other matters as may be requested by Landlord. Landlord and Tenant
intend that any statement delivered pursuant to this Article 24 may be relied
upon by any mortgagee, beneficiary or purchaser and Tenant shall be liable for
all loss, cost or expense resulting from the failure of any sale or funding of
any loan caused by any material misstatement contained in such estoppel
certificate. Tenant irrevocably agrees that if Tenant fails to execute and
deliver such certificate within such ten (10) day period Landlord or Landlord's
beneficiary or agent may execute and deliver such certificate on Tenant's
behalf, and that such certificate shall be fully binding on Tenant.
25. SURRENDER OF PREMISES.
25.1 Prior to the end of Term of the Lease, Landlord shall arrange to meet
Tenant for a joint inspection of the Premises. In the event of Tenant's failure
to participate in such inspection to be held prior to vacating the Premises,
Landlord's inspection at or after Tenant's vacating the Premises shall be
conclusively deemed correct for purposes of determining Tenant's responsibility
for repairs and restoration.
25.2 At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all improvements or additions upon or
belonging to the same, by whomsoever made, in the same conditions received or
first installed, broom clean and free of all debris, excepting only ordinary
wear and tear and damage by fire or other casualty. Tenant may, and at
Landlord's request shall, at Tenant's sole cost, remove upon termination of
this Lease, any and all furniture, furnishings, movable partitions of less
than full height from floor to ceiling, trade fixtures and other property
installed by Tenant, title to which shall not be in or pass automatically to
Landlord upon such termination, repairing all damage caused by such removal.
Property not so removed shall, unless requested to be removed, be deemed
abandoned by the Tenant and title to the same shall thereupon pass to Landlord
under this Lease as by a ▇▇▇▇ of sale. All other alterations, additions and
improvements in, on or to the Premises shall be dealt with and disposed of as
provided in Article 6.
25.3 All obligations of Tenant under this Lease not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term. In the event that Tenant's failure to
perform prevents Landlord from releasing the Premises, Tenant shall continue to
pay rent pursuant to the provisions of Article 14 until such performance is
complete. Upon the expiration or earlier termination of the Term, Tenant shall
pay to Landlord the amount, as reasonably estimated by Landlord, necessary to
repair and restore the Premises, as provided in this Lease and/or to discharge
Tenant's obligation for unpaid amounts due or to become due to Landlord. All
such amounts shall be used and held by Landlord for payment of such obligations
of Tenant, with Tenant being liable for any additional costs upon demand by
Landlord, or with any excess to be returned to Tenant after all such
obligations have been determined and satisfied. Any otherwise unused Security
Deposit shall be credited against the amount payable by Tenant under this
Lease.
12
26. NOTICES.
Any notice or document required or permitted to be delivered under this Lease
shall be addressed to the intended recipient, shall be transmitted personally,
by fully prepaid registered or certified United States Mail return receipt
requested, or by reputable independent contract delivery service furnishing a
written record of attempted or actual delivery, and shall be deemed to be
delivered when tendered for delivery to the addressee at its address set forth
on the Reference Page, or at such other address as it has then last specified by
written notice delivered in accordance with this Article 26, or if to Tenant at
either its aforesaid address or its last known registered office or home of a
general partner or individual owner, whether or not actually accepted or
received by the addressee.
27. TAXES PAYABLE BY TENANT.
In addition to rent and other charges to be paid by Tenant under this Lease,
Tenant shall reimburse to Landlord, upon demand, any and all taxes payable by
Landlord (other than net income taxes) whether or not now customary or within
the contemplation of the parties to this Lease: (a) upon, allocable to, or
measured by or on the gross or net rent payable under this Lease, including
without limitation any gross income tax or excise tax levied by the State, any
political subdivision thereof, or the Federal Government with respect to the
receipt of such rent; (b) upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy of the
Premises or any portion thereof, including any sales, use or service tax imposed
as a result thereof; (c) upon or measured by the Tenant's gross receipts or
payroll or the value of Tenant's equipment, furniture, fixtures and other
personal property of Tenant or leasehold improvements, alterations or additions
located in the Premises; or (d) upon this transaction or any document to which
Tenant is a party creating or transferring any interest of Tenant in this Lease
or the Premises. In addition to the foregoing, Tenant agrees to pay, before
delinquency, any and all taxes levied or assessed against Tenant and which
become payable during the term hereof upon Tenant's equipment, furniture,
fixtures and other personal property of Tenant located in the Premises.
28. DEFINED TERMS AND HEADINGS.
The Article headings shown in this Lease are for convenience of reference and
shall in no way define, increase, limit or describe the scope or intent of any
provision of this Lease. Any indemnification or insurance of Landlord shall
apply to and inure to the benefit of all the following "Landlord Entities",
being Landlord, Landlord's investment manager, and the trustees, boards of
directors, officers, general partners, beneficiaries, stockholders, employees
and agents of each of them. Any option granted to Landlord shall also include or
be exercisable by Landlord's trustee, beneficiary, agents and employees, as the
case may be. In any case where this Lease is signed by more than one person, the
obligations under the Lease shall be joint and several. The terms "Tenant" and
"Landlord" or any pronoun used in place thereof shall indicate and include the
masculine or feminine, the singular or plural number, individuals, firms or
corporations, and each of their respective successors, executors, administrators
and permitted assigns, according to the context hereof. The term "rentable area"
shall mean the rentable area of the Premises of the Building as calculated by
the Landlord on the basis of the plans and specifications of the Building
including a proportionate share of any common areas. Tenant hereby accepts and
agrees to be bound by the figures for the rentable square footage of the
Premises and Tenant's Proportionate Share shown on the Reference Page.
29. TENANT'S AUTHORITY.
If Tenant signs as a corporation each of the persons executing this Lease on
behalf of Tenant represents and warrants that Tenant has been and is qualified
to do business in the state in which the Building is located, that the
corporation has full right and authority to enter into this Lease, and that all
persons signing on behalf of the corporation were authorized to do so by
appropriate corporate actions. If Tenant signs as a partnership, trust or other
legal entity, each of the persons executing this Lease on behalf of Tenant
represents and warrants that Tenant has complied with all applicable laws,
rules, and governmental regulations relative to its right to do business in the
state and that such entity on behalf of the Tenant was authorized to do so by
any and all appropriate partnership, trust or other actions. Tenant agrees to
furnish promptly upon request a corporate resolution, proof of due authorization
by partners, or other appropriate documentation evidencing the due
authorization of Tenant to enter into this Lease.
30. COMMISSIONS.
Each of the parties represents and warrants to the other that it has not dealt
with any broker or finder in connection with this Lease, except as described on
the Reference Page.
13
31. TIME AND APPLICABLE LAW.
Time is of the essence of this Lease and all of its provisions. This Lease
shall in all respects be governed by the laws of the state in which the
Building is located.
32. SUCCESSORS AND ASSIGNS.
Subject to the provisions of Article 9, the terms, covenants and conditions
contained in this Lease shall be binding upon and inure to the benefit of the
heirs, successors, executors, administrators and assigns of the parties to this
Lease.
33. ENTIRE AGREEMENTS.
This Lease, together with its exhibits, contains all agreements of the parties
to this Lease and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
others than those set forth in this Lease and its exhibits. This Lease may not
be modified except by a written instrument duly executed by the parties to this
Lease.
34. EXAMINATION NOT OPTION.
Submission of this Lease shall not be deemed to be a reservation of the
Premises. Landlord shall not be bound by this Lease until it has received a
copy of this Lease duly executed by Tenant and has delivered to Tenant a copy of
this Lease duly executed by Landlord, and until such delivery Landlord reserves
to right to exhibit and lease the Premises to other prospective tenants.
Notwithstanding anything contained in this Lease to the contrary, Landlord may
withhold delivery of possession of the Premises from Tenant until such time as
Tenant has paid to Landlord any security deposit required by Article 5, the
first month's rent as set forth in Article 3 and any sum owed pursuant to this
Lease.
35. RECORDATION.
Tenant shall not record or register this Lease or a short form memorandum hereof
without the prior written consent of Landlord, and then shall pay all charges
and taxes incident such recording or registration.
36. AUTHORIZATION OF FINANCIAL INFORMATION.
Tenant hereby authorizes Landlord to verify past and present business and
employment earning records, bank accounts, stock holdings, and any other asset
balances Landlord deems necessary to verify Tenant's financial and credit
situation. Tenant further authorizes Landlord to order a consumer credit report
and to verify other credit information, including past and present loans,
extensions of credit, and landlord references. This authorization includes the
reverification of any of the information that the Landlord shall be originally
authorized to obtain and verify and such information may by obtained and
verified by Landlord's agents and/or affiliates and any investors and/or
assigns.
37. LANDLORD'S CONSENT.
Notwithstanding any provision of this Lease, or any present or future statute,
law, rule or ordinance, to the contrary, Landlord and Tenant hereby expressly
agree that if a court of competent jurisdiction determines that Landlord
unreasonably withheld consent to a proposed sublease, assignment or other
transfer by Tenant, then Tenant's sole and exclusive remedy for such breach by
Landlord shall be limited to electing either to (i) consummate such proposed
assignment, sublease or other transfer, subject to the other provisions of this
Lease, of (ii) keep the Lease in full force and effect without consummating such
assignment, sublease or other transfer, and Tenant hereby expressly waives in
all events the right to recover any monetary damages of whatever kind for such
breach. If a court determines that Landlord unreasonably withheld consent to the
proposed transfer, Landlord shall pay Tenant's reasonable attorneys' fees
related to such proceeding; if the court determined that Landlord acted
reasonably in denying such consent, Tenant shall by Landlord's reasonable
attorneys' fees related to such proceeding.
14
38. TENANT'S PROPORTIONATE SHARE.
Notwithstanding anything to the contrary, Landlord will maintain and repair the
roof and landscaping subject to Tenant's reimbursement of such cost as part of
the Project Common Area Expense (CAM Project). Tenant's proportionate share is
defined as follows: (i) with respect to CAM Project which also includes
insurance, landscaping and water, the percentage obtained by dividing the number
of square feet in the premises (65,519) by the total number of leasable square
feet of the property (65,519), which is 100.00% and (ii) with respect to taxes,
the building is separately parceled and Tenant's share is 100.00%
39. SCHEDULE OF RENTS.
Rent for the period January 1, 2000 through December 31, 2000 shall be
$39,311.00 per month.
Rent for the period January 1, 2001 through December 31, 2001 shall be
$40,884.00 per month.
Rent for the period January 1, 2002 through December 31, 2002 shall be
$42,519.00 per month.
Rent for the period January 1, 2003 through December 31, 2003 shall be
$44,220.00 per month.
Rent for the period January 1, 2004 through December 31, 2004 shall be
$45,989.00 per month.
40. LIMITATION OF LANDLORD'S LIABILITY.
Redress for any claim against Landlord under this Lease shall be limited to and
enforceable only against and to the extent of Landlord's interest in the
Building. The obligations of Landlord under this Lease are not intended to and
shall not be personally binding on, nor shall any resort be had to the private
properties of, any of its trustees or board of directors and officers, as the
case may be, its investment manager, the general partners thereof, or any
beneficiaries, stockholders, employees, or agents of Landlord or the investment
manager.
LANDLORD: Gateway Pacific TENANT: OBAGI Medical Products, Inc.,
Properties, Inc.
a California corporation a California corporation
BY: RREEF MANAGEMENT COMPANY,
a Delaware corporation By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: President and CEO
------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ Dated: 11-15-99
---------------------- ------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Regional Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Dated: 11/18/99 Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- ------------------------------
Title: Vice President and CFO
------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Dated: 11/17/99
Suite A ------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇ Address: 310 Golden Shore
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇ ------------------------------
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------
Phone: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------
Facsimile:
------------------------------
15
EXHIBIT "A"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant, for the Premises commonly known as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
PREMISES
Exhibit A is intended only to show the general layout of the Premises with
respect to the Project as of the beginning of the Term of this Lease. It does
not in any way supersede any of Landlord's rights set forth in Section 17.2
with respect to arrangements and/or locations of public parts of the Building
and changes in such arrangements and/or locations. It is not to scale; any
measurements or distances shown should be taken as approximate.
[MAP]
ALASKA BUILDING
EXHIBIT "A"
page one of one
EXHIBIT "A-1"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant, for the Premises commonly known as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
PREMISES
Exhibit A-1 is intended only to show the general layout of the Premises as of
the beginning of the Term of this Lease. It does not in any way supersede any
of Landlord's rights set forth in Section 17.2 with respect to arrangements
and/or locations of public parts of the Building and changes in such
arrangements and/or locations. It is not to scale; any measurements or
distances shown should be taken as approximate.
FLOOR PLAN
[MAP]
EXHIBIT "A-1"
page one of one
EXHIBIT "B"
attached to and made a part of the Lease bearing the Lease Reference Date
of June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
INITIAL ALTERATIONS
Tenant hereby accepts the demised Premises in an "as-is" condition. Landlord
shall ensure that all mechanical equipment, including electrical, plumbing,
heating, ventilating and air conditioning systems, are in good operating
order at the time of occupancy by Tenant.
EXHIBIT "B"
page one of one
EXHIBIT "C"
attached to and made a part of the Lease bearing the Lease Reference Date
of June 30, 1999, by and between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord, and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside of the Building
without the prior written consent of the Landlord. Landlord shall have the
right to remove, at Tenant's expense and without notice, any sign installed
or displayed in violation of this rule. All approved signs or lettering on
doors and walls shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person or vendor chosen by Landlord. In addition,
Landlord reserves the right to change from time to time the format of the
signs or lettering and to require previously approved signs or lettering to
be appropriately altered.
2. If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or
allow anything to be placed against or near any glass partitions or doors or
windows which may appear unsightly, in the opinion of Landlord, from outside
the Premises.
3. No birds, fish or animals shall be brought into or kept in or about the
Building, with the exception of a cat.
4. Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, elevators, escalators or stairways of the Building. The halls,
passages, exits, entrances, elevators and stairways are not for the general
public, and Landlord shall in all cases retain the right to control and
prevent access thereto of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character, reputation and
interests of the Building and its tenants provided that nothing herein
contained shall be construed to prevent such access to persons with whom any
tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No tenant and no employee or
invitee or any tenant shall go upon the roof of the Building.
5. The directory of the Building will be provided exclusively for the
display of the name and location of tenants only and Landlord reserves the
right to exclude any other names therefrom.
6. Landlord will furnish Tenant free of charge with two keys to each door
lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and
Tenant shall not alter any lock or install a new or additional lock or bolt
on any door of its Premises. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys of all doors which have been furnished to
Tenant, and in the event of loss of any keys so furnished, shall pay Landlord
therefor.
7. Tenant shall not at any time park or permit the parking of Tenant's
vehicles, or the vehicles of others, adjacent to loading areas or so as to
interfere in any way with the use of such areas. Tenant shall not park or
permit to be parked any inoperative vehicles or equipment on any portion of
the parking or loading areas. Tenant agrees not to overburden the parking
facilities and agrees to cooperate with Landlord and other tenants in the use
of parking facilities. Landlord reserves the right in its absolute discretion
to determine whether parking facilities are becoming crowded and, in such event,
to allocate and assign parking spaces among Tenant and other tenants. The
parking ratio is 1:1.
8. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions in
their installation.
9. Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by
law. Landlord shall have the right to prescribe the weight, size and position
of all equipment, materials, furniture or other property brought into the
Building. Heavy objects shall, stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight. Business machines
and mechanical equipment belonging to Tenant which cause noise or vibration
that may be transmitted to the structure of the Building or to any space
therein to such a degree as to be objectionable to Landlord or to any tenants
shall be placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate noise or vibration. The
persons employed to move such equipment in or out of the Building must be
acceptable to Landlord. Landlord will not be responsible for loss of, or
damage to, any such equipment or other property from any cause, and all
damage done to the Building by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.
EXHIBIT "C"
page one of two
EXHIBIT "C"
(Continued)
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, by and between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord, and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
RULES AND REGULATIONS
10. Tenant shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus and electricity, gas or air
outlets before Tenant and its employees leave the Premises. Tenant shall be
responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.
11. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed,
no foreign substance of any kind whatsoever shall be thrown therein, and the
expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.
12. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Building or elsewhere.
13. Except as approved by Landlord or where otherwise provided in the Lease,
Tenant shall not ▇▇▇▇, drive nails, screw or drill into the partitions,
woodwork or plaster or in any way deface the premises. Tenant shall not cut
or bore holes for wires. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except as approved by Landlord. Tenant
shall repair any damage resulting from noncompliance with this rule.
14. Tenant may install, maintain and operate upon the Premises a vending
machine.
15. Tenant shall store all its trash and garbage within its Premises.
Tenant shall not place into any trash box or receptacle any material which
cannot be disposed of in the ordinary and customary manner of trash and garbage
disposal. All garbage and refuse disposal shall be made in accordance with
directions issued from time to time by Landlord.
16. No cooking shall be done or permitted by any Tenant on the Premises,
except that use by the Tenant of Underwriters' Laboratory approved equipment
for brewing coffee, tea, hot chocolate and similar beverages, including a
microwave oven, shall be permitted, provided that such equipment and use is
in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations.
17. Tenant shall not use any space or in the public halls or the Building
any hand trucks except those equipped with the rubber tires and side guards
or such other material-handling equipment as Landlord may approve. Tenant
shall not bring any other vehicles of any kind into the Building.
18. Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant except as Tenant's address.
19. The requirements of Tenant will be attended to only upon appropriate
application to the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from Landlord, and
no employee of Landlord will admit any person (Tenant or otherwise) to any
space without specific instructions from Landlord.
20. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in
favor or any other tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any or all of the tenants of
the Building.
21. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of premises in the Building.
22. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgement may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the
preservation of good order therein. Tenant agrees to abide by all such rules
and regulations hereinabove stated and any additional rules and regulations
which are adopted.
23. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and guests.
EXHIBIT "C"
page two of two
EXHIBIT "D"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
SIGN SPECIFICATIONS
1. The intent of this sign criteria is to provide the guidelines necessary
to achieve a visually coordinated, balanced and appealing signage environment
at the above mentioned project for the mutual benefit of all Tenants, and to
comply with the regulations of the city of ▇▇▇▇▇▇.
2. Performance of this sign criteria shall be rigorously enforced and any
unapproved or non conforming signs shall be removed by the Tenant or his sign
contractor at the Tenant's expense, upon demand by the Landlord.
3. Exceptions to these standards shall be reviewed by the Landlord,
however, based on field experience, deviations generally result in serious
inequities between Tenants. Accordingly, the Landlord retains full right of
approval of any sign used in the center.
4. All signs are subject to prior written approval by the Landlord and the
City of Torrance.
5. Each Tenant shall submit to Landlord for written approval, two (2)
copies of a detailed shop drawing of his proposed sign, indicating
conformance to the Sign Specifications herein outlined. Send to: RREEF
Management Company, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
6. The Tenant, or his sign contractor, shall submit a sign drawing
approved by the Landlord to the City of ▇▇▇▇▇▇ for approval and permits prior
to start of any sign construction.
7. The Tenant, or his sign contractor, is responsible for obtaining all
necessary building permits from the City of ▇▇▇▇▇▇ prior to manufacture.
8. Maintenance of signs is the Tenant's responsibility. Should the Tenant
fail to maintain or repair his sign within 30 days of notice by Landlord,
the Landlord reserves the right to order needed repairs at Tenant's expense.
9. All signs, lettering, etc. shall be done by a licensed and insured
professional sign contractor.
10. Upon termination of lease, the Tenant shall be responsible for the
removal of all signs and restoration of the fascia as needed and shall pay
for same.
11. Any Tenant sign left after thirty (30) days of Tenant's vacating
premises shall be considered abandoned and shall become property of the
Landlord, unless previous written arrangements have been agreed to by
Landlord and Tenant.
12. All signs and their installation must comply with all local and
applicable city codes.
EXHIBIT "D"
page one of one
EXHIBIT "E"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
HAZARDOUS WASTE MATERIALS RIDER
(a) Tenant agrees that Tenant, its agents and contractors, licensees, or
invitees shall not handle, use, manufacture, store or dispose of any
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives (collectively "Hazardous Materials") on, under, or about the
Premises, without Landlord's prior written consent (which consent shall not
be unreasonably withheld as long as Tenant demonstrates and documents to
Landlord's reasonable satisfaction (i) that such Hazardous Materials (A) are
necessary or useful to Tenant's business; and (B) will be used, kept, and
stored in compliance with all laws relating to any Hazardous Materials so
brought or used or kept in or about the Premises; and (ii) that Tenant will
give all required notices concerning the presence in or on the Premises or the
release of such Hazardous Materials from the Premises) provided that Tenant
may handle, store, use or dispose of products containing small quantities of
Hazardous Materials, which products are of a type customarily found in
offices and households (such as aerosol cans containing insecticides, toner
for copies, paints, paint remover, and the like), provided further that
Tenant shall handle, store, use and dispose of any such Hazardous Materials
in a safe and lawful manner and shall not allow such Hazardous Materials to
contaminate the Premises or the environment.
(b) Tenant further agrees that Tenant will not permit any substance
suspected of causing cancer or reproductive toxicity to come into contact
with groundwater under the Premises. Any such substance coming into contact
with groundwater shall be considered a Hazardous Material for purposes of
this Rider.
(c) (i) Notwithstanding the provisions of Paragraph (a), Tenant may handle,
store, and use Hazardous Materials, limited to the types, amounts, and use
identified in the Hazardous Materials Exhibit attached hereto. If no
Hazardous Materials Exhibit is attached to this Lease, then this Paragraph
(c) shall be of no force and effect. Tenant hereby certifies to Landlord
that the information provided by Tenant pursuant to this Paragraph is true,
correct, and complete. Tenant covenants to comply with the use restrictions
shown on the attached Hazardous Materials Exhibit. Tenant's business and
operations, and more especially its handling, storage, use and disposal of
Hazardous Materials shall at all times comply with all applicable laws
pertaining to Hazardous Materials. Tenant shall secure and abide by all
permits necessary for Tenant's operations on the Premises. Tenant shall give
or post all notices required by all applicable laws pertaining to Hazardous
Materials. If Tenant shall at any time fail to comply with this Paragraph,
Tenant shall immediately notify Landlord in writing of such noncompliance;
(ii) Tenant shall provide Landlord with copies of any Material Safety Data
Sheets (as required by the Occupational Safety and Health Act) relating to
any Hazardous Materials to be used, kept, or stored at or on the Premises, at
least 30 days prior to the first use, placement, or storage of such Hazardous
Material on the Premises. Landlord shall have 10 days following delivery of
such Material Safety Data Sheets to approve or forbid, in its sole discretion
subject to the limitation contained in Paragraph (a) above, such use,
placement, or storage of a Hazardous Material on the Premises; (iii) Tenant
shall not store hazardous wastes on the premises for more than 90 days;
"hazardous waste" has the meaning given it by the Resource Conservation and
Recovery Act of 1976, as amended. Tenant shall not install any underground or
above ground storage tanks on the Premises. Tenant shall not dispose of any
Hazardous Material or solid waste on the Premises. In performing any
alterations of the Premises permitted by the Lease, Tenant shall not install
any Hazardous Material in the Premises without the specific consent of
Landlord attached as an exhibit to this Rider; (iv) Any increase in the
premiums for necessary insurance on the Property which arises from Tenant's
use and/or storage of Hazardous Materials shall be solely at Tenant's
expense. Tenant shall procure and maintain at its sole expense such
additional insurance as may be necessary to comply with any requirement of
any Federal, State or local governmental agency with jurisdiction.
(d) If Landlord, in its sole discretion, believes that the Premises or the
environment have become contaminated with Hazardous Materials that must be
removed under the laws of the state where the Premises are located, in breach
of the provisions of this Lease, Landlord, in addition to its other rights
under this Lease, may enter upon the Premises and obtain samples from the
Premises, including without limitation the soil and groundwater under the
Premises, for the purposes of analyzing the same to determine whether and to
what extent the Premises or the environment have become so contaminated.
Tenant shall reimburse Landlord for the costs of any inspection, sampling and
analysis that discloses contamination for which Tenant is liable under the
terms of this Rider. Tenant may not perform any sampling, testing, or drilling
to locate any Hazardous Materials on the Premises without Landlord's prior
written consent.
EXHIBIT "E"
page one of three
EXHIBIT "E"
(Continued)
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
(e) Without limiting the above, Tenant shall reimburse, defend, indemnify
and hold Landlord harmless from and against any and all claims, losses,
liabilities, damages, costs and expenses, including without limitation, loss
of rental income, loss due to business interruption, and attorneys fees and
costs, arising out of or in any way connected with the use, manufacture,
storage, or disposal of Hazardous Materials by Tenant, its agents or
contractors on, under or about the Premises including, without limitation,
the costs of any required or necessary investigation, repair, cleanup or
detoxification and the preparation of any closure or other required plans in
connection herewith, whether voluntary or compelled by governmental
authority. The indemnity obligations of Tenant under this clause shall
survive any termination of the Lease. At Landlord's option, Tenant shall
perform any required or necessary investigation, repair, cleanup, or
detoxification of the Premises. In such case, Landlord shall have the right,
in its sole discretion, to approve all plans, consultants, and cleanup
standards. Tenant shall provide Landlord on a timely basis with (i) copies of
all documents, reports, and communications with governmental authorities; and
(ii) notice and an opportunity to attend all meetings with regulatory
authorities. Tenant shall comply with all notice requirements and Landlord
and Tenant agree to cooperate with governmental authorities seeking access to
the Premises for purposes of sampling or inspection. No disturbance of
Tenant's use of the Premises resulting from activities conducted pursuant to
this Paragraph shall constitute an actual or constructive eviction of Tenant
from the Premises. In the event that such cleanup extends beyond the
termination of the Lease, Tenant's obligation to pay rent (including
additional rent and percentage rent, if any) shall continue until such
cleanup is completed and any certificate of clearance or similar document has
been delivered to Landlord. Rent during such holdover period shall be at
market rent; if the parties are unable to agree upon the amount of such
market rent, then Landlord shall have the option of (a) increasing the rent
for the period of such holdover based upon the increase in the cost-of-living
from the third month preceding the commencement date to the third month
preceding the start of the holdover period, using such indices and
assumptions and calculations as Landlord in its sole reasonable judgment
shall determine are necessary; or (b) having Landlord and Tenant each appoint
a qualified MAI appraiser doing business in the area; in turn, these two
independent MAI appraisers shall appoint a third MAI appraiser and the
majority shall decide upon the fair market rental for Premises as of the
expiration of the then current term. Landlord and Tenant shall equally share
in the expense of this appraisal except that in the event the rent is found to
be within fifteen percent of the original rate quoted by Landlord, then
Tenant shall bear the full cost of all the appraisal process. In no event
shall the rent be subject to determination or modification by any person,
entity, court, or authority other than as set forth expressly herein, and in
no event shall the rent for any holdover period be less that the rent due in
the preceding period.
(f) Notwithstanding anything set forth in this Lease, Tenant shall only be
responsible for contamination of Hazardous Materials or any cleanup resulting
directly therefrom, resulting directly from matters occurring or Hazardous
Materials deposited by Tenant, its agents or contractors (other than by
contractors, agents or representatives controlled by Landlord) during the
Lease term, and any other period of time during which Tenant is in actual or
constructive occupancy of the Premises. Tenant shall take reasonable
precautions to prevent the contamination of the Premise with Hazardous
Materials by third parties.
(g) It shall not be unreasonable for Landlord to withhold its consent to
any proposed Assignment or Sublease if (i) the proposed Assignee's or
SubTenant's anticipated use of the premises involves the generation, storage,
use, treatment or disposal of Hazardous Materials; (ii) the proposed Assignee
or SubTenant has been required by any prior Landlord, lender, or governmental
authority to take remedial action in connection with Hazardous Materials
contaminating a property if the contamination resulted from such Assignee's
or SubTenant's actions or use of the property in question; or (iii) the
proposed Assignee or SubTenant is subject to an enforcement order issued by
any governmental authority in connection with the use, disposal, or storage
of hazardous material.
(h) Any of Tenant's insurance insuring against claims of the type dealt
with in this Rider shall be considered primary coverage for claims against
the Property arising out of or under this paragraph.
(i) In the event of (i) any transfer of Tenant's interest under this Lease;
or (ii) the termination of this Lease, by lapse of time or otherwise, Tenant
shall be solely responsible for compliance with any and all then effective
federal, state or local laws concerning (i) the physical condition of the
Premises, Building, or Property; or (ii) the presence of hazardous or toxic
materials in or on the Premises, Building, or Property (for example, the New
Jersey Environmental Cleanup Responsibility Act, the Illinois Responsible
Property Transfer Act, or similar applicable state laws), including but not
limited to any reporting or filing requirements imposed by such laws.
Tenant's duty to pay rent, additional rent, and percentage rent shall
continue until the obligations imposed by such laws are satisfied in full and
any certificate of clearance or similar document has been delivered to
Landlord.
EXHIBIT "E"
page two of three
EXHIBIT "E"
(Continued)
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
(j) Notwithstanding the provisions of this Rider, if Tenant desires to
handle and store hazardous cargo in the Premises, Tenant shall provide
Landlord seven (7) business days prior written notice of the nature and
amount of such cargo, and the time such cargo will be, or is expected to be,
stored. Tenant shall have no right to handle or store the hazardous cargo if
Landlord objects by written notice to Tenant within seven (7) days of
Landlord's receipt of Tenant's request to handle and store hazardous cargo.
Tenant shall adhere to all laws and all provisions of this Rider with respect
to the handling and storage of any hazardous cargo permitted by Landlord."
(k) All consents given by Landlord pursuant to this Rider shall be in
writing and shall be attached as amendments to this Rider. If such consents
are not attached to this Rider, then such consents will be deemed withheld.
Tenant agrees that Tenant, its agents and contractors, licensees, or
invitees, shall not handle, use, manufacture, store or dispose of any
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives (collectively, "Hazardous Materials") on, under, or about the
Premises, without Landlord's prior written consent (which consent may be
given or withheld in Landlord's sole discretion), provided that Tenant may
handle, store, use or dispose of products containing small quantities of
Hazardous Materials, which products are of a type customarily found in
offices and households (such as aerosol cans containing insecticides, toner
for copies, paints, paint remover, and the like), provided further that
Tenant shall handle, store, use and dispose of any such Hazardous Materials
in a safe and lawful manner and shall not allow such Hazardous Materials to
contaminate the Premises or the environment.
EXHIBIT "E"
page three of three
EXHIBIT "F"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
CONTINUING LEASE GUARANTEE
(Corporate)
Whereas OBAGI Medical Products, Inc., a California corporation organized
under the laws of the State of California ("Lessee") is (a) engaged in
business as a corporate affiliate of the undersigned. Because of our
intercorporate or business relations, or by reason of any of the foregoing,
it will be in our direct interest in advantage to assist Lessee in securing a
lease. Therefore, in consideration of making of the Lease agreement by and
between GATEWAY PACIFIC PROPERTIES, INC., a California corporation as Lessor,
and OBAGI Medical Products, Inc., a California corporation as Lessee, dated
June 30, 1999 for the premises commonly described as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (hereinafter referred to as the "Lease") and for the
purpose of inducing Lessor to enter into and make the Lease, the undersigned
hereby unconditionally guarantees the full and prompt payment of rent and all
other sums required to be paid by Lessee under the Lease ("Guaranteed
Payments") and the full and faithful performance of all terms, conditions,
covenants, obligations and agreements contained in the Lease on the Lessee's
part to be performed ("Guaranteed Obligations") and the undersigned further
promises to pay all of Lessor's costs and expenses (including reasonable
attorney's fees) incurred in endeavoring to collect the Guaranteed Payments
or to enforce the Guaranteed Obligations or incurred in enforcing this
guarantee.
1. Lessor may at any time and from time to time, without notice to the
undersigned, take any or all of the following actions without affecting or
impairing the liability and obligations of the undersigned on this guaranty:
▇. ▇▇▇▇▇ an extension or extensions of time of payment of any Guaranteed
Payment or time for performance of any Guaranteed Obligation;
▇. ▇▇▇▇▇ an indulgence or indulgences in any Guaranteed Payment or in
the performance of any Guaranteed Obligation;
c. modify or amend the Lease or any term thereof, or any obligation of
Lessee arising thereunder (other than an extension of the Term of the Lease);
d. consent to any assignment or assignments, sublease or subleases and
successive assignments or subleases by Lessee or the Lessee's assigns or
sublessees or a change or different use of the leased premises;
e. accept other guarantors; and/or
f. release any person primarily or secondarily liable.
The liability of the undersigned under this guaranty shall in no way be
affected or impaired by any failure or delay in enforcing any Guaranteed
Payment or Guaranteed Obligation or this guaranty or any security therefor or
in exercising any right or power in respect thereto, or by any compromise,
waiver, settlement, change, subordination, modification or disposition of any
Guaranteed Payment or Guaranteed Obligation or any security therefore. In
order to hold the undersigned liable hereunder, there shall be no obligation
on the part of Lessor, at any time, to resort for payment to Lessee or any
other guaranty or to any security or other rights and remedies, and Lessor
shall have the right to enforce this guaranty irrespective of whether or not
other proceedings or steps are pending or being taken seeking resort to or
realization upon or from any of the foregoing.
2. The undersigned waives all diligence in collection or in protection of any
security, presentment, protest, demand, notice of dishonor or default, notice
of acceptance of this guaranty, notice of any extensions granted or other
action taken in reliance hereon and all demands and notices of any kind in
connection with this guaranty or any Guaranteed Payment or Guaranteed
Obligation.
3. The undersigned hereby acknowledges full and complete notice and knowledge
of all of the terms, conditions, covenants, obligations and agreements of the
Lease.
4. The payment by the undersigned of any amount pursuant to this guaranty
shall not in any way entitle the undersigned to any right, title or interest
(whether by subrogation or otherwise) of the Lessee under the Lease or to any
security being held for any Guaranteed Payment or Guaranteed Obligation.
EXHIBIT "F"
page one of four
EXHIBIT "F"
EXHIBIT "F"
(Continued)
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999 between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
5. This guaranty shall be continuing, absolute and unconditional and remain
in full force and effect until all Guaranteed Payments are made, all
Guaranteed Obligations are performed, and all obligations of the undersigned
under this guaranty are fulfilled.
6. This guaranty shall also bind the successors and assigns of the
undersigned and inure to the benefit of Lessor, its successors and assigns.
This guaranty shall be construed according to the laws of California, in
which state it shall be performed by the undersigned. The remainder of this
guaranty shall continue in full force and effect and the invalid provision
shall be construed as if it were not contained herein.
7. If this guaranty is executed by more than one person, all singular nouns
and verbs herein relating to the undersigned shall include the plural number
and the obligations of the several guarantors shall be joint and several.
8. The Lessor and the undersigned intend and believe that each provision of
this guaranty comports with all applicable law. However, if any provision of
this guaranty is found by a court to be invalid for any reason, the parties
intend that the remainder of this guarantee shall continue in full force and
affect and the invalid provisions shall be construed as if it were not
contained herein.
IN WITNESS WHEREOF, the undersigned has caused this guaranty to be executed
by its duly authorized officers this 10 day of November, 1999.
MANDARIN PARTNERS, LLC
a Delaware limited liability company
BY: ▇▇▇▇▇ ▇▇▇▇
------------------------------
NAME: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
TITLE: President
DATED: 11-10-99
----------------------------
EXHIBIT "F"
page two of four
EXHIBIT "F"
attached to and made a part of the Lease bearing the Lease Reference Date of
June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
CONTINUING LEASE GUARANTEE
(Corporate)
Whereas OBAGI Medical Products, Inc., a California corporation organized
under the laws of the State of California ("Lessee") is (a) engaged in
business as a corporate affiliate of the undersigned. Because of our
intercorporate or business relations, or by reason of any of the foregoing,
it will be in our direct interest in advantage to assist Lessee in securing a
lease. Therefore, in consideration of making of the Lease agreement by and
between GATEWAY PACIFIC PROPERTIES, INC., a California corporation as Lessor,
and OBAGI Medical Products, Inc., a California corporation as Lessee, dated
June 30, 1999 for the premises commonly described as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (hereinafter referred to as the "Lease") and for the
purpose of inducing Lessor to enter into and make the Lease, the undersigned
hereby unconditionally guarantees the full and prompt payment of rent and all
other sums required to be paid by Lessee under the Lease ("Guaranteed
Payments") and the full and faithful performance of all terms, conditions,
covenants, obligations and agreements contained in the Lease on the Lessee's
part to be performed ("Guaranteed Obligations") and the undersigned further
promises to pay all of Lessor's costs and expenses (including reasonable
attorney's fees) incurred in endeavoring to collect the Guaranteed Payments
or to enforce the Guaranteed Obligations or incurred in enforcing this
guarantee.
1. Lessor may at any time and from time to time, without notice to the
undersigned, take any or all of the following actions without affecting or
impairing the liability and obligations of the undersigned on this guaranty:
▇. ▇▇▇▇▇ an extension or extensions of time of payment of any
Guaranteed Payment or time for performance of any Guaranteed Obligation;
▇. ▇▇▇▇▇ an indulgence or indulgences in any Guaranteed Payment or in
the performance of any Guaranteed Obligation;
c. modify or amend the Lease or any term thereof, or any obligation of
Lessee arising thereunder (other than an extension of the Term of the Lease);
d. consent to any assignment or assignments, sublease or subleases and
successive assignments or subleases by Lessee or the Lessee's assigns or
sublessees or a change or different use of the leased premises;
e. accept other guarantors; and/or
f. release any person primarily or secondarily liable.
The liability of the undersigned under this guaranty shall in no way be
affected or impaired by any failure or delay in enforcing any Guaranteed
Payment or Guaranteed Obligation or this guaranty or any security therefor or
in exercising any right or power in respect thereto, or by any compromise,
waiver, settlement, change, subordination, modification or disposition of any
Guaranteed Payment or Guaranteed Obligation or any security therefore. In
order to hold the undersigned liable hereunder, there shall be no obligation
on the part of Lessor, at any time, to resort for payment to Lessee or any
other guaranty or to any security or other rights and remedies, and Lessor
shall have the right to enforce this guaranty irrespective of whether or not
other proceedings or steps are pending or being taken seeking resort to or
realization upon or from any of the foregoing.
2. The undersigned waives all diligence in collection or in protection of
any security, presentment, protest, demand, notice of dishonor or default,
notice of acceptance of this guaranty, notice of any extensions granted or
other action taken in reliance hereon and all demands and notices of any kind
in connection with this guaranty or any Guaranteed Payment or Guaranteed
Obligation.
3. The undersigned hereby acknowledges full and complete notice and
knowledge of all of the terms, conditions, covenants, obligations and
agreements of the Lease.
4. The payment by the undersigned of any amount pursuant to this guaranty
shall not in any way entitle the undersigned to any right, title or interest
(whether by subrogation or otherwise) of the Lessee under the Lease or to
any security being held for any Guaranteed Payment or Guaranteed Obligation.
EXHIBIT "F"
page three of four
EXHIBIT "F"
(Continued)
attached to and made a part of the Lease bearing the Lease Reference Date
of June 30, 1999 between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
5. This guaranty shall be continuing, absolute and unconditional and
remain in full force and effect until all Guaranteed Payments are made, all
Guaranteed Obligations are performed, and all obligations of the undersigned
under this guaranty are fulfilled.
6. This guaranty shall also bind the successors and assigns of the
undersigned and inure to the benefit of Lessor, its successors and assigns.
This guaranty shall be construed according to the laws of California, in
which state it shall be performed by the undersigned. The remainder of this
guaranty shall continue in full force and effect and the invalid provision
shall be construed as if it were not contained herein.
7. If this guaranty is executed by more than one person, all singular nouns
and verbs herein relating to the undersigned shall include the plural number
and the obligations of the several guarantors shall be joint and several.
8. The Lessor and the undersigned intend and believe that each provision of
this guaranty comports with all applicable law. However, if any provision of
this guaranty is found by a court to be invalid for any reason, the parties
intend that the remainder of this guarantee shall continue in full force and
affect and the invalid provisions shall be construed as if it were not
contained herein.
IN WITNESS WHEREOF, the undersigned has caused this guaranty to be executed
by its duly authorized officers this 15 day of November, 1999.
MANDARIN PARTNERS, LLC
a Delaware limited liability company
BY: ▇▇▇ ▇▇▇▇▇▇
-----------------
NAME: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: Vice President
DATE: 11/15/99
-----------------
EXHIBIT "F"
page four of four
ADDENDUM 1
attached to and made a part of the Lease bearing the Lease Reference Date
of June 30, 1999, between GATEWAY PACIFIC PROPERTIES, INC., a California
corporation, as Landlord and OBAGI Medical Products, Inc., a California
corporation, as Tenant.
1. ASSIGNMENT AND SUBLETTING: Reference is made to Article 9 of this Lease
page 5, 9.8:
Notwithstanding the foregoing provisions of this Article to the contrary,
Tenant shall be permitted to assign this Lease, or sublet all or a portion
of the Premises, to an Affiliate of Tenant without the prior consent of
Landlord, if all the following conditions are first satisfied: (a) Tenant
shall not then be in default under this Lease; (b) a fully executed copy of
such assignment of sublease, the assumption of this Lease by the assignee
or acceptance of the sublease by the sublessee, and such other information
regarding the assignment or sublease as Landlord may reasonably request
shall have been delivered to Landlord; (c) the Premises shall continue to
be operated solely for the use specified in the Reference Page or other
use acceptable to Landlord in its sole discretion; and (d) Tenant shall
pay all costs reasonably incurred by Landlord in connection with such
assignment or subletting, including without limitation, attorneys' fees.
Tenant acknowledges (and, at Landlord's request, at the time of such
assignment or subletting shall confirm) that in each instance Tenant shall
remain liable for performance of the terms and conditions of the Lease
despite such assignment or subletting. As used herein, the term "Affiliate"
shall mean any entity which (i) directly or indirectly controls Tenant or
(ii) is under the direct or indirect control of Tenant or (iii) is under
common direct or indirect control with Tenant. Control shall mean ownership
of fifty-one percent (51%) or more of the voting securities or rights of the
controlled entity.
ADDENDUM 1
page one of one
CONSENT TO SUBLEASE
The undersigned, as Landlord under that certain Lease dated June 30,
1999, as more fully set forth in the attached Sublease Agreement (the
"Lease"), hereby consents to the foregoing Sublease between OBAGI Medical
Products, Inc., a California corporation ("Sublessor") and UNITED STATES
MANUFACTURING COMPANY, LLC, a Delaware limited liability company ("Sublessee").
This consent is given upon the expressed following conditions:
1. Sublessor shall continue to remain primarily liable for the payment of
all amounts of rental and other sums and performance of all covenants
required of Sublessor under the Lease.
2. There shall be no modifications or amendments of the Sublease
Agreement without the prior written consent of Landlord.
3. Consent by Landlord to this subletting shall not include consent to the
assignment or transferring of any lease renewal option rights or space
option rights, special privileges or extra services granted to Sublessor
by the Lease, or addendum or amendment hereto or letter of agreement
(and such options, right, privileges or services shall terminate upon
such assignment or transfer).
4. In the event of any default under the terms and provisions of the Lease,
Landlord shall have the right to collect the rental attributable to the
Sublease Premises directly from Sublessee without waiving any of
Landlord's rights against Sublessor as a result of such default.
5. Consent to the sublease is without waiver of restrictions concerning
future subleases or extensions of the foregoing sublease.
6. Sublessor shall pay Landlord the sum of $0.00 to defray Landlord's costs
in approving this subletting.
7. Landlord shall not be liable for, and Sublessor hereby indemnifies and
holds Landlord harmless from, any commission payable associated with the
sublease agreement.
8. In the event of any conflict between the terms and provisions of the
Lease and the aforementioned sublease, the terms and provisions of the
Lease shall control.
9. Redress for any claims against Landlord under the Lease or this Consent
shall only be made against Landlord to the extent of Landlord's interest
in the property of which the Premises are a part. The obligations of
Landlord under the Lease and this Consent shall not be personally
binding on, nor shall any resort be had to the private properties of,
any of its trustees or board of directors and officers, as the case may
be, the general partners thereof or any beneficiaries, stockholders,
employees or agents of Landlord, or its investment manager.
LANDLORD: SUBLESSOR:
GATEWAY PACIFIC PROPERTIES, INC., OBAGI Medical Products, Inc.,
a California corporation a California corporation
and RREEF Management Company
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------- --------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Regional Manager Title: President and CEO
Date: 11/18/99 Date: 11/15/99
-------------- -------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and CFO
Date: 11/17/99
-------------
SUBLESSEE:
UNITED STATES MANUFACTURING
COMPANY, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
Date: 11/18/99
-------------
