COMMERCIAL LEASE - NET
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(Single Tenant Building)
BASIC LEASE INFORMATION
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Date: December 6, 1994
Landlord: TriNet Essential Facilities XII, Inc., a Maryland corporation
Tenant: Certified Grocers of California, Ltd., a California corporation
Premises (section 1.1): See Exhibit A; Address: 0000 Xxxxxx Xxxxxx, Xxxx
xx Xxxxxxxx, Xxxxxx xx Xxx Xxxxxxx Xxxxx xx Xxxxxxxxxx, consisting of
a four-story building (the "Office Building") and a one-story building
(the "Cafeteria")
Term (section 2.1): Twenty (20) years, plus, if the Commencement Date is
not the first day of a calendar month, the partial month from the
Commencement Date to the end of the calendar month in which the
Commencement Date occurs.
Extension Terms (section 2.4): Two (2) ten (10) year extension terms.
Commencement Date (section 2.1): December 6, 1994
Expiration Date (section 2.1): December 5, 2014
Initial Base Rent (section 3.1(a)): $107,812.50 per month.
Use (section 6.1): As to the Office Building, for office purposes; and as
to the Cafeteria, for office, large meeting and/or cafeteria purposes
for Tenant's employees only.
Liability Insurance (section 10.3): $2,000,000 aggregate; $1,000,000 per
occurrence
Insuring Party for Property Insurance (section 10.4): Tenant.
Landlord's Address (section 23.1): Four Embarcadero Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, XX 00000, Attn: Xx. Xxxxx X. Xxxxxxxx, Facsimile No.:
000-000-0000.
Copy to: TriNet Corporate Realty Trust, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000,
Attn: Xx. Xx Xxx Xxxxxx, Facsimile No.: 000-000-0000
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Tenant's Address (section 23.1): 0000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX
00000, Attn: Corporate Secretary, Facsimile No.: 000-000-0000.
Exhibits and Addenda (section 24.3): Exhibit A - Legal Description of the
Land; Exhibit B - Form of Subordination Agreement; Exhibit C - Form of
Estoppel Certificate; Exhibit D - Memorandum of Lease.
The foregoing BASIC LEASE INFORMATION is incorporated in and made a part of
the Lease to which it is attached. If there is any conflict between the BASIC
LEASE INFORMATION and the Lease, the Lease shall control.
Landlord: Tenant:
TriNet Essential Facilities CERTIFIED GROCERS OF
XII, INC., a Maryland CALIFORNIA, LTD., a
corporation California corporation
By /s/ Xxxxx X. Xxxxxxxx Xx
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Xxxxx X. Xxxxxxxx
Executive Vice President Its
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Tenant's Address (section 23.1): 0000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX
00000, Attn: Corporate Secretary, Facsimile No.: 000-000-0000.
Exhibits and Addenda (section 24.3): Exhibit A - Legal Description of the
Land; Exhibit B - Form of Subordination Agreement; Exhibit C - Form of
Estoppel Certificate; Exhibit D - Memorandum of Lease.
The foregoing BASIC LEASE INFORMATION is incorporated in and made a part of
the Lease to which it is attached. If there is any conflict between the BASIC
LEASE INFORMATION and the Lease, the Lease shall control.
Landlord: Tenant:
TriNet Essential Facilities CERTIFIED GROCERS OF
XII, INC., a Maryland CALIFORNIA, LTD., a
corporation California corporation
By By Xxxxxx X. Xxxx
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Xxxx X. Xxxxxxx
President Its CFO
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TABLE OF CONTENTS
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Page
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Article
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1 Premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Property Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5 Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6 Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7 Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8 Maintenance and Repairs . . . . . . . . . . . . . . . . . . . . . . . 8
9 Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11 Compliance With Legal Requirements. . . . . . . . . . . . . . . . . . 18
12 Assignment or Sublease. . . . . . . . . . . . . . . . . . . . . . . . 19
13 Entry by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . 21
14 Events of Default and Remedies. . . . . . . . . . . . . . . . . . . . 22
15 Damage or Destruction . . . . . . . . . . . . . . . . . . . . . . . . 25
16 Eminent Domain. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
17 Subordination, Xxxxxx and Sale. . . . . . . . . . . . . . . . . . . . 30
18 Estoppel Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 31
19 Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
20 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 32
21 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . 32
22 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
23 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24 Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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25 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . . . . 36
26 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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LEASE
THIS LEASE, made as of the date specified in the BASIC LEASE INFORMATION,
is by and between the landlord specified in the BASIC LEASE INFORMATION
("Landlord"), and the tenant specified in the BASIC LEASE INFORMATION
("Tenant"),
W I T N E S S E T H:
ARTICLE I.
PREMISES
1.1 Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the term and subject to the covenants hereinafter set forth, to
all of which Landlord and Tenant hereby agree, (a) the land described in Exhibit
A hereto, together with all easements and other appurtenances thereto (the
"Land), (b) all improvements now or hereafter located on the Land (the
"Improvements"), including the two buildings described in the Basic Lease
Information, (c) all of Landlord's right, title and interest in and to all
fixtures and heating, ventilating, air conditioning, electrical, mechanical,
plumbing, life safety and other building systems affixed or attached to the Land
or the Improvements (collectively, the "Equipment"), and (d) all of Landlord's
right, title and interest in and to the personal property described on Schedule
I attached hereto (the "Personal Property"). The Land, Improvements, Equipment
and Personal Property are collectively referred to herein as the "Premises."
Landlord hereby grants to Tenant an exclusive license (the "License,,) to use
the following: (a) the contracts described on Schedule II attached hereto (the
"Contracts"); and the permits described in Schedule III attached hereto (the
"Permits"). The License is coupled with an interest, irrevocable and assignable
or sublicensable by Tenant in connection with any permitted assignment or
sublease of this Lease. The License shall automatically terminate, without
notice to Tenant, upon the termination of this Lease, whether upon expiration of
the Lease term or earlier. Tenant hereby assumes and agrees to perform, at
Xxxxxx's sole expense, all obligations of Landlord under the Contracts and
Permits during the term of this Lease. Xxxxxx further agrees during the entire
term of the License to (x) keep the Contracts in full force and effect, unless
Landlord otherwise consents in writing (which consent may be withheld in
Landlord's sole discretion), until the expiration of any Contract by its own
terms (other than as a result of a default by Tenant thereunder), and (y) keep
the Permits in full force and effect until the expiration of the Lease term.
Tenant shall maintain the Personal Property in good condition and repair, except
that Tenant may replace the Personal Property with personal property of
comparable quality when consistent with prudent business practices.
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ARTICLE II.
TERM
2.1 The term of this Lease shall be the term specified in the BASIC LEASE
INFORMATION, which shall commence on the commencement date specified in the
BASIC LEASE INFORMATION (the "Commencement Date") and, unless sooner terminated
as hereinafter provided, shall end on the expiration dte specified in the BASIC
LEASE INFORMATION (the "Expiration Date").
2.2 If the Commencement Date is not the first day of a calendar month,
Tenant shall pay to Landlord the Base Rent payable under section 3.1, calculated
on a per diem basis, for the period from the Commencement Date until the first
day of the next full calendar month. Tenant shall pay the Base Rent in respect
of such period to Landlord on the Commencement Date.
2.3 Tenant shall accept the Premises "as is" on the Commencement Date.
Landlord shall have no obligation to construct or install any improvements in
the Premises. Tenant acknowledges that, prior to the Commencement Date, Xxxxxx
occupied the Premises. Xxxxxx's possession of the Premises shall constitute
Tenant's acknowledgment that the Premises are in all respects in the condition
in which Landlord is required to deliver the Premises to Tenant under this Lease
and that Xxxxxx has examined the Premises and is fully informed to Tenant's
satisfaction of the physical and environmental condition and the utility of the
Premises. Tenant acknowledges that Landlord, its agents and employees and other
persons acting on behalf of Landlord have made no representation or warranty of
any kind in connection with any matter relating to the physical or environmental
condition, value, fitness, use or zoning of the Premises upon which Xxxxxx has
relied directly or indirectly for any purpose.
2.4 Tenant shall have the option to renew this Lease for two (2)
additional terms of ten (10) years each. Tenant shall be conclusively deemed to
have exercised each such option unless Landlord receives written notice from
Tenant that Xxxxxx has elected not to exercise such option at least twelve (12)
months before the expiration of the then-existing term of the Lease. Unless
Landlord timely receives Tenant's notice electing not to exercise an option, the
term of this Lease shall be automatically extended for the applicable ten (10)
year period and Tenant shall continue to lease the Premises on all of the terms
and conditions of this Lease, except that: (a) the Base Rent payable by Tenant
during each renewal term shall be as set forth in section 3.1(b); and (b) after
the second renewal term, Tenant shall have no further renewal options under this
Lease.
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ARTICLE III.
RENT
3.1 Tenant shall pay to Landlord the following amounts as rent for the
Premises:
(a) During the first five (5) years of the initial term of this
Lease, Tenant shall pay to Landlord, as base monthly rent, the amount of monthly
rent specified in the BASIC LEASE INFORMATION (the "Base Rent"). Commencing on
the first day of the sixth, eleventh and sixteenth years of the initial term of
this Lease (each, an "Adjustment Date"), the Base Rent shall be increased by the
percentage increase in the Index (as defined below) during the period commencing
on the first day of the immediately preceding five (5) year period and ending on
the applicable Adjustment Date under this section 3.1(a); provided, however,
Base Rent shall not be increased more than four percent (4%) per annum on a
cumulative basis during each such five (5) year period (i.e., not more than
twenty percent (20%) for each such five (5) year period). As used in this
Lease, the term "Index" shall mean the United States Department of Labor, Bureau
of Labor Statistics, Consumer Price Index for All Urban Consumers (all items for
the Los Angeles-Long Beach-Anaheim area, 1982-1984=100). If the data from the
Department of Labor for the Index are not yet available on any Adjustment Date,
then Tenant shall continue to pay the Base Rent in effect on that Adjustment
Date, until such time as the data for the Index become available. Once the data
become available so that the Base Rent can be increased in accordance with this
section 3.1(a) or section 3.1(b), Tenant shall pay to Landlord, with the next
succeeding installment of Base Rent, the increase in Base Rent that Tenant would
have paid had the Index been revised on the applicable Adjustment Date. If the
Index is no longer published, another generally recognized index shall be
substituted by agreement of the parties. If they are unable to agree within
thirty (30) days after demand by either party, the substitute index shall on
application of either party be selected by the chief officer of the San
Francisco Regional Office of the Bureau of Labor Statistics or its successor.
(b) Commencing on the first day of the first and sixth years of each
renewal term of this Lease (each of which shall also be deemed an Adjustment
Date), the Base Rent shall be increased by the percentage increase in the Index
during the period commencing on the first day of the immediately preceding five
(5) year period and ending on the applicable Adjustment Date under this section
3.1(b); provided, however, Base Rent shall not be increased by less than three
percent (3%) per annum, nor more than four percent (4%) per annum, on a
cumulative basis during each such five (5) year period (i.e., not less than
fifteen percent (15%), nor more than twenty percent (20%), for each such five
(5) year period).
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(c) In the event that Landlord advances the Improvement Allowance (as
defined in Section 9.4), for the period from and after the date of such advance
through and including the Expiration Date, the monthly Base Rent shall be
increased by an amount equal to one-twelfth of (i) the amount of the Improvement
Allowance actually disbursed to Tenant, multiplied by (ii) the Annual Payment
Multiple (as defined below). The term "Annual Payment Multiple" shall mean (1)
eleven and twenty-five hundredths percent (11.25%) if the Improvement Allowance
is advanced prior to the first anniversary of the Commencement Date, (2) eleven
and forty-five hundredths percent (11.45%) if the Improvement Allowance is
advanced after the first anniversary and prior to the second anniversary of the
Commencement Date, (3) eleven and sixty-eight hundredths percent (11.68%) if the
Improvement Allowance is advanced after the second anniversary and prior to the
third anniversary of the Commencement Date, (4) eleven and ninety-four
hundredths percent (11.94%) if the Improvement Allowance is advanced after the
third anniversary and prior to the fourth anniversary of the Commencement Date,
and (5) twelve and twenty-four hundredths percent (12.24%) if the Improvement
Allowance is advanced after the fourth anniversary of the Commencement Date.
(d) Throughout the term of this Lease, Tenant shall pay, as
additional rent, all other amounts of money and charges required to be paid by
Tenant under this Lease, whether or not such amounts of money or charges are
designated "additional rent." As used in this Lease, "rent" shall mean and
include all Base Rent and additional rent payable by Tenant in accordance with
this Lease.
3.2 It is the intention of Landlord and Tenant that the Base Rent payable
by Tenant to Landlord during the entire term of this Lease shall be absolutely
net of all costs and expenses incurred in connection with the management,
operation, maintenance and repair of the Premises in accordance with this Lease.
Landlord shall have no obligations or liabilities whatsoever with respect to the
management, operation, maintenance or repair of the Premises during the term of
this Lease, and Tenant shall manage, operate, maintain and repair the Premises
in accordance with this Lease and shall pay all costs and expenses incurred in
connection therewith before such costs or expenses become delinquent. Without
limiting the generality of the foregoing, throughout the entire term of this
Lease, Tenant shall pay, as additional rent (whether payable to Landlord or the
applicable third parties), all premiums for all property and liability insurance
covering the Premises carried by Landlord or Tenant, all Property Taxes (as
defined in section 4.1) and all Other Taxes (as defined in section 5.1) that
accrue during or are allocable to the term of this Lease.
3.3 Tenant shall pay all Base Rent to Landlord, in advance, on or before
the first day of each and every calendar month during the term of this Lease.
Tenant shall pay all
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additional rent owing to Landlord on or before the third business day following
written demand therefor given in accordance with section 23.1. Tenant shall pay
all Base Rent and additional rent to Landlord without notice, demand, deduction
or offset, in lawful money of the United States of America, by wire transfer to
an account specified in writing by Landlord from time to time, or to such other
person, by such other method or at such other place as Landlord may from time to
time designate in writing, provided that any change in the method of payment
shall be subject to Tenant's reasonable approval.
3.4 Tenant acknowledges that the late payment by Tenant of any Base Rent
or additional rent payable to Landlord (including the items described in section
3.2 to the extent owed to Landlord) will cause Landlord to incur costs and
expenses, the exact amount of which is extremely difficult and impractical to
fix. Such costs and expenses will include administration and collection costs
and processing and accounting expenses. Therefore, if any Base Rent or
additional rent owed to Landlord is not received by Landlord within three (3)
business days after Landlord gives written notice thereof (by facsimile or other
method of notice permitted by section 23.1) to Tenant, Tenant shall immediately
pay to Landlord a late charge equal to six percent (6%) of such delinquent
amount; provided, however, that after the second such failure in a calendar
year, no notice shall be required, and such late charge shall be due and payable
on the due date if Base Rent or additional rent is not received by Landlord on
the date due. Landlord and Tenant agree that such late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered by Xxxxxx's failure to make timely payment. In
no event shall such late charge be deemed to grant to Tenant a grace period or
extension of time within which to pay any rent or prevent Landlord from
exercising any right or enforcing any remedy available to Landlord upon Tenant's
failure to pay all rent due under this Lease in a timely fashion, including the
right to terminate this Lease. All amounts of money payable by Tenant to
Landlord hereunder, if not paid when due, shall bear interest from the due date
until paid at the Prime Rate (as hereinafter defined) plus five percent (5%) per
annum. "Prime Rate" shall mean the reference rate announced from time to time
by Bank of America NT & SA at its headquarters location.
3.5 Notwithstanding the foregoing, Tenant shall not be deemed to be in
default under this Lease as the result of (a) any failure to pay any Property
Taxes, Other Taxes or other obligation of any nature (including construction
costs) owed to any party other than Landlord, or (b) any failure to comply with
any applicable law, regulation or other applicable legal requirement, so long
as, in each case, (i) such tax, other obligation, law or other legal requirement
is being diligently contested in good faith, and (ii) Tenant has provided
Landlord with assurances reasonably acceptable to Landlord that such
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failure to pay or comply, pending the outcome of such contest, could not
materially impair Xxxxxxxx's rights and interests with respect to the Premises
(including assurance that the applicable contest proceeding will operate during
the pendency thereof to prevent or stay any sale, forfeiture or loss of all or
any portion of the Premises). The right to contest third party obligations and
legal requirements granted to Tenant in this paragraph (subject to the
provisions of this Section 3.5) shall be referred to herein as the "Right to
Contest."
3.6 In the event that Tenant desires from time to time to contest any tax
or other law applicable to the Premises or to commence any lawsuit or other
proceeding relating to the Premises, and in the event that Landlord's
participation is legally required, Landlord shall reasonably cooperate with
Tenant in connection therewith so long as Tenant reimburses Landlord, within ten
(10) business days following written demand from time to time (but no more than
once in any calendar month), for all costs incurred by Landlord as a result of
such cooperation, but only to the extent that such costs exceed any direct
economic benefits to Landlord which result from the final determination of the
applicable contest or proceeding. Landlord shall refund all appropriate amounts
within ten (10) business days following receipt of demand therefor in the event
that any such direct economic benefits make it evident, following any such final
determination, that Xxxxxxxx was over-reimbursed by Tenant prior to such
determination.
ARTICLE IV.
PROPERTY TAXES
4.1 "Property Taxes" shall mean all taxes, assessments, excises, levies,
fees and charges (and any tax, assessment, excise, levy, fee or charge levied
wholly or partly in lieu thereof or as a substitute therefor or as an addition
thereto) of every kind and description, general or special, ordinary or
extraordinary, foreseen or unforeseen, secured or unsecured, whether or not now
customary or within the contemplation of Landlord and Tenant, that are levied,
assessed, charged, confirmed or imposed by any public or government authority on
or against, or otherwise with respect to, the Premises or any part thereof or
any personal property used in connection with the Premises. Unless and until
the Premises receives its own tax parcel identification number, "Property Taxes"
shall also mean all taxes, assessments and other charges included in the
definition of Property Taxes with respect to any real property that is part of
the same tax parcel as any part of the Premises. Property Taxes shall not
include net income (measured by the income of Landlord from all sources or from
sources other than solely rent), franchise, inheritance or capital stock taxes
of Landlord, unless levied or assessed against Landlord in whole or
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in part in lieu of, as a substitute for, or as an addition to any Property
Taxes.
ARTICLE V.
OTHER TAXES
5.1 "Other Taxes" shall mean all taxes, assessments, excises, levies, fees
and charges, including all payments related to the cost of providing facilities
or services, whether or not now customary or within the contemplation of
Landlord and Tenant, that are levied, assessed, charged, confirmed or imposed by
any public or government authority upon, or measured by, or reasonably
attributable to (a) the Premises, (b) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, regardless of whether title to such improvements is vested in Tenant or
Landlord, (c) any rent payable under this Lease, including any gross income tax
or excise tax levied by any public or government authority with respect to the
receipt of any such rent, (d) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
(e) this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises. Other Taxes shall not
include net income (measured by the income of Landlord from all sources or from
sources other than solely rent), franchise, inheritance or capital stock taxes
of Landlord, unless levied or assessed against Landlord in whole or in part in
lieu of, as a substitute for, or as an addition to any Other Taxes.
ARTICLE VI.
USE
6.1 The Premises shall be used only for the purpose specified in the BASIC
LEASE INFORMATION and no other purpose without Xxxxxxxx's prior written consent,
which consent shall not be unreasonably withheld or delayed; provided, however,
Landlord's withholding of consent shall be conclusively presumed reasonable if
the proposed use would substantially increase the wear and tear on or the risk
of damage to the Premises above levels or risks resulting from Tenant's use as
of the date of this Lease or the proposed use is for an illegal purpose. For
purposes of this Lease, "office purposes" shall include incidental uses related
to office purposes, including without limitation printing and reprographic
services incidental to Tenant's business, computer operations for Tenant's
business, quality testing for Tenant's in-house food brand and food preparation
training for the employees of Tenant and Xxxxxx's clients; provided, however,
that any material increase in the
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square footage used for any such incidental use shall be deemed to be a change
in use requiring Landlord's consent as provided above, if such increase in
square footage will overburden or unduly strain the Premises or will exceed the
recommended capacity or impair the operation of any building systems. Tenant
shall not do or permit to be done in, on or about the Premises, nor bring or
keep or permit to be brought or kept therein, anything which is prohibited by or
will in any way conflict with any law, ordinance, rule, regulation or order now
in force or which may hereafter be enacted, or which is prohibited by any
insurance policy for the Premises or will cause a cancellation of any insurance
for the Premises. Tenant shall not do or permit anything to be done in, on or
about the Premises which will in any way obstruct or interfere with the rights
of Landlord. Tenant shall not maintain or permit any nuisance in, on or about
the Premises or commit or suffer to be committed any waste in, on or about the
Premises.
ARTICLE VII.
SERVICES
7.1 Tenant shall, at Tenant's sole cost and expense, supply the Premises
with electricity, heating, ventilating and air conditioning, water, natural gas,
lighting replacement for all lights, restroom supplies, telephone service,
window washing, security service, janitor, scavenger and disposal services, and
such other services as Tenant determines to furnish to the Premises. Landlord
shall not be in default hereunder or be liable for any damage or loss directly
or indirectly resulting from, nor shall the rent be abated or a constructive or
other eviction be deemed to have occurred by reason of, the installation, use or
interruption of use of any equipment in connection with the furnishing of any of
the foregoing services, any failure to furnish or delay in furnishing any such
services, whether such failure or delay is caused by accident or any condition
beyond the control of Landlord or Tenant or by the making of repairs or
improvements to the Premises, or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines. Tenant shall pay the full
cost of all of the foregoing services to the applicable third parties as
additional rent.
ARTICLE VIII.
MAINTENANCE AND REPAIRS
8.1 (a) Tenant shall, at all times during the term of this Lease and at
Tenant's sole cost and expense, maintain and
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repair the Premises and every part thereof and all grounds, landscaping, parking
areas, lighting, roof, walls, foundations, signs, heating, ventilating and air
conditioning, mechanical, electrical, plumbing, sprinkler and life safety
systems, equipment, fixtures, alterations, additions and improvements therein or
thereon and keep all of the foregoing clean and in good order and operating
condition (including, without limitation, painting the exterior of the Premises
as often as reasonably needed to keep such exterior in a good, well painted
condition, cleaning interior and exterior doors, windows and glass, and
repairing and replacing any exterior windows and glass that is broken, cracked
or damaged). Tenant may use qualified employees of Tenant to perform routine
maintenance and routine repairs of the Premises. For all other maintenance and
all non-routine repair services on the heating, ventilating and air
conditioning, mechanical, electrical, plumbing, sprinkler and life safety
systems and equipment in the Premises, Tenant shall engage a duly licensed
independent contractor; provided, however, that Tenant may use its qualified
employees to perform such other maintenance and non-routine repairs with
Landlord's consent, which consent may be withheld if, in Landlord's reasonable
determination, there is a substantial possibility of an increased risk of damage
to the Premises or any systems or equipment located therein if such other
maintenance or repair is performed by Tenant's employee instead of by a licensed
independent contractor. If Landlord does not disapprove Tenant's use of a
designated employee for a particular repair or maintenance project within five
(5) business days after Tenant's notice requesting such approval (which notice
shall be accompanied by an accurate description of the project and the
designated employee's relevant qualifications), Landlord shall be deemed to have
approved such employee's work on such project.
(b) Landlord and its consultants or contractors shall have the right
to inspect the Premises to determine Tenant's compliance with this section 8.1,
and Tenant shall promptly complete any maintenance or repair work reasonably
required by Landlord or its consultants or contractors as a result of any such
inspection. Tenant shall reimburse the Landlord, as additional rent, the costs
incurred by Landlord in engaging Xxxxxxx Engineers or another consultant or
contractor to perform such inspections and provide a report thereof, provided
that Tenant's above-described reimbursement obligation shall be limited to the
cost of one such inspection and report in any calendar year and provided that
Tenant shall not be required to reimburse Landlord more than one thousand five
hundred dollars ($1,500) per year during the first five (5) years of the Lease
term or more than two thousand dollars ($2,000) per year thereafter for such
inspection and report. Tenant hereby waives all rights to make repairs at the
expense of Landlord or in lieu thereof to vacate the Premises. Subject to
section 9.3, Tenant shall, at the end of the term of this Lease, surrender to
Landlord the Premises and all alterations, additions, fixtures and improvements
therein or thereto in the same condition as when received,
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ordinary wear and tear and damage thereto by fire or other casualty excepted.
8.2 Notwithstanding the foregoing, during the last five (5) years of the
Lease term, excluding any extension term, if Tenant is required by the terms of
section 8.1 to perform any substantial repair or replacement the cost of which
would be treated as a capital expense in accordance with generally accepted
accounting principles (a "Capital Repair"), Landlord shall reimburse to Tenant,
by a rent credit applied at the end of the Lease term, an amount equal to
(a) the cost of the Capital Repair, multiplied by (b) a fraction (i) the
numerator of which is the number of years beyond the Lease term the useful life
of the Capital Repair is anticipated to extend, and (ii) the denominator of
which is the total anticipated useful life of the Capital Repair, provided that
each of the following conditions is satisfied: the cost of such Capital Repair
exceeds one hundred thousand dollars ($100,000) (the "Cost-Share Threshold");
fifty percent (50%) or more of the anticipated useful life of the Capital Repair
extends beyond the Lease term; Tenant has not exercised its option, if any, to
extend the Lease term; the anticipated useful life of the Capital Repair is ten
(10) years or more; and Landlord approves the plans and specifications and the
budget for the completion of the Capital Repair. The Cost-Share Threshold shall
be increased annually during the Lease term, including extensions, by an amount
equal to the percentage increase in the Index during the preceding year. Any
rent credit that Landlord is required to give Tenant under this Section 8.2
shall bear interest at the Prime Rate plus two percent (2%) per annum. If
Tenant exercises its right to extend the Lease term, Landlord shall be relieved
of any obligation to reimburse Tenant pursuant to this Section 8.2.
ARTICLE IX.
ALTERATIONS
9.1 Except as specifically permitted in section 9.2, Tenant shall not make
any alterations, additions or improvements in or to the Premises or any part
thereof, or attach any fixtures or equipment thereto, without Xxxxxxxx's prior
written consent. In no event shall Tenant be permitted to install underground
storage tanks or fuel systems on the Premises. Xxxxxxxx's refusal to consent to
the installation of an underground tank or fuel system shall be conclusively
presumed to be reasonable. Except as specifically permitted in section 9.2, all
alterations, additions and improvements in or to the Premises to which Landlord
consents shall be made by Tenant at Tenant's sole cost and expense as foilows:
(a) Tenant shall submit to Landlord, for Landlord's written approval,
complete plans and specifications for all work to be done by Xxxxxx. Such plans
and specifications shall be
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prepared by the licensed architect(s) and engineer(s), shall comply with all
applicable codes, laws, ordinances, rules and regulations, shall not adversely
affect the structural elements of the Premises, shall be in a form sufficient to
secure the approval of all government authorities with jurisdiction over the
Premises, and shall be otherwise satisfactory to Landlord in Landlord's
reasonable discretion.
(b) Landlord shall notify Tenant promptly in writing whether Landlord
approves or disapproves such plans and specifications and, if Landlord
disapproves such plans and specifications, Landlord shall describe the reasons
for disapproval. Tenant may submit to Landlord revised plans and specifications
for Landlord's prior written approval. Tenant shall pay all costs, including
the fees and expenses of the licensed architect(s) and engineer(s), in preparing
such plans and specifications. If Landlord fails to notify Tenant within thirty
(30) days of Landlord's receipt of the plans and specifications for the work to
be done by Xxxxxx and all other information reasonably required by Landlord
regarding such work, then Landlord shall be deemed to have consented to such
work. With respect to alterations or improvements requiring Landlord's consent,
Landlord shall have the right to condition its consent on Tenant's agreement to
remove such alterations or improvements from the Premises upon the termination
of the Lease; provided, however, that Landlord shall only be permitted to
require Tenant to remove such alterations or improvements if failure to remove
them, in Landlord's reasonable opinion, would adversely affect the value of the
Premises or Landlord's ability to lease the Premises to a new tenant for office
purposes.
(c) All changes in the plans and specifications approved by Landlord
shall be subject to Landlord's prior written approval. If Tenant wishes to make
any such change in such approved plans and specifications, Tenant shall have
such architect(s) and engineer(s) prepare plans and specifications for such
change and submit them to Landlord for Landlord's written approval. Landlord
shall notify Tenant in writing promptly whether Landlord approves or disapproves
such change and, if Landlord disapproves such change, Landlord shall describe
the reasons for disapproval. Tenant may submit to Landlord revised plans and
specifications for such change for Landlord's written approval. After
Landlord's written approval of such change, such change shall become part of the
plans and specifications approved by Landlord.
(d) Tenant shall obtain and comply with all building permits and
other governmental permits and approvals required in connection with the work.
Tenant shall, through Xxxxxx's licensed contractor, perform the work
substantially in accordance with (i) the plans and specifications approved in
writing by Landlord, (ii) the permits obtained by Tenant, and (iii) all
applicable codes, laws, ordinances, rules and regulations. Notwithstanding the
foregoing sentence, Tenant may
-11-
use its qualified employees to perform such work, instead of a licensed
contractor, with Xxxxxxxx's consent, which consent may be withheld by Landlord
if, in Landlord's reasonable determination, there is a substantial risk that the
work performed by Xxxxxx's employees would be of lesser quality than work
performed by a licensed of contractor. Tenant shall pay the applicable third
parties, as additional rent, the entire cost of all work (including the cost of
all utilities, permits, fees, taxes, and property and liability insurance
premiums in connection therewith) required to make the alterations, additions
and improvements, subject to the Right to Contest. Under no circumstances shall
Landlord be liable to Tenant for any damage, loss, cost or expense incurred by
Tenant on account of any plans and specifications, contractors or
subcontractors, design of any work, construction of any work, or delay in
completion of any work, except to the extent that the same results from a breach
by Landlord of its obligations under this Lease.
(e) Tenant shall give written notice to Landlord of the date on which
construction of any work will be commenced at least ten (10) days prior to such
date; provided that no such notice shall be required for work to be performed by
Xxxxxx's qualified employees as permitted under Section 9.1(d) if such work does
not require the issuance of a building permit under applicable codes. Subject
to the Right to Contest, Tenant shall keep the Premises free from mechanics',
materialmen's and all other liens arising out of any work performed, labor
supplied, materials furnished or other obligations incurred by Tenant. Subject
to the Right to Contest, Tenant shall promptly and fully pay and discharge all
claims on which any such lien could be based. Landlord shall have the right to
post and keep posted on the Premises any notices that may be provided by law or
which Landlord may deem to be proper for the protection of Landlord and the
Premises from such liens, and to take any other action Landlord deems necessary
to remove or discharge liens or encumbrances at the expense of Tenant.
9.2 Tenant may make such alterations, additions or improvements without
Landlord's consent only if the total cost of such alterations, additions or
improvements is two hundred fifty thousand dollars ($250,000) (increased
annually by an amount equal to the percentage increase in the Index during the
preceding year) or less for any project or series of related projects and such
alterations, additions or improvements will not affect in any way the
structural, exterior or roof elements of the Premises and will not materially
impair the mechanical, electrical, plumbing, utility or life safety systems of
the Premises, but Tenant shall give Landlord prior written notice of any such
alterations, additions or improvements; provided that no such notice shall be
required for alterations, additions or improvements to be performed by Xxxxxx's
qualified employees as permitted under Section 9.1(d) if such work does not
require the issuance of a building permit under applicable codes. In addi-
-12-
tion, Landlord acknowledges that Tenant intends to construct non-structural,
interior improvements on the fourth floor of the Office Building. Tenant agrees
to complete such improvements before the end of fifth year of the initial term
of this Lease; provided, however, that if Landlord's mortgagee or a third party
purchaser acquires the Premises through a foreclosure sale, deed in lieu of
foreclosure or similar transfer, and such mortgagee or third party purchaser
refuses to agree in writing, after request from Xxxxxx, to fund the Improvement
Allowance (as hereinafter defined) in accordance with Section 9.4, Tenant shall
not be obligated to complete such improvements until the end of the tenth year
of the initial term of this Lease. Provided that such improvements (i) are
substantially similar to the nature and quality of the improvements on the
first, second and third floors of the Office Building and (ii) will not affect
in any way the structural, exterior or roof elements of the Premises, and will
not materially impair the mechanical, electrical, plumbing, utility or life
safety systems of the Premises, then Landlord agrees it shall not have the right
to approve Tenant's plans and specifications for such improvements. For all
alterations, additions and improvements performed in accordance with this
Section 9.2, Tenant shall comply with all provisions of section 9.1 other than
those provisions requiring Landlord's consent to plans and specifications in
constructing such improvements.
9.3 All alterations, additions, fixtures and improvements, whether
temporary or permanent in character, made in or to the Premises by Tenant, shall
become part of the Premises and Landlord's property excluding, however,
underground tanks which shall remain the property of Tenant and shall be
registered in the name of Tenant so long as this Lease remains in effect. Upon
termination of this Lease, Landlord shall have the right, at Landlord's option,
by giving written notice to Tenant at any time before or within ten (10) days
after such termination with respect to any alterations, additions, fixtures or
improvements to which Landlord did not consent or with respect to which
Xxxxxxxx's consent was conditioned on Tenant's removal of such alteration,
addition, fixture or improvement from the Premises upon termination of the
Lease, to retain all such alterations, additions, fixtures and improvements in
the Premises, without compensation to Tenant, or (if failure to remove such
alterations or improvements would, in Landlord's reasonable opinion, adversely
affect the value of the Premises or Landlord's ability to lease the Premises to
a new tenant for office purposes) to remove all such alterations, additions,
fixtures and improvements from the Premises, repair all damage caused by any
such removal, and restore the Premises to the condition in which the Premises
existed before such alterations, additions, fixtures and improvements were made,
and in the latter case Tenant shall pay to Landlord, upon billing by Landlord,
the cost of such removal, repair and restoration (including a reasonable charge
for Landlord's overhead and profit). All movable furniture, equipment, trade
fixtures and other personal property shall
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remain the property of Tenant. Upon termination of this Lease, Tenant shall, at
Tenant's expense, remove all such movable furniture, equipment, trade fixtures
other personal property from the Premises and repair all damage caused by any
such removal. Termination of this Lease shall not affect the obligations of
Tenant pursuant to this section 9.3 to be performed after such termination.
9.4 Subject to the terms and conditions of this Section 9.4, Landlord
shall provide Tenant an allowance (the "Improvement Allowance") in an amount
requested by Tenant, but not exceeding five hundred thousand dollars ($500,000),
to reimburse Tenant for costs incurred in constructing the interior improvements
on the fourth floor of the Office Building as described in Section 9.2 (the
"Fourth Floor Work"). Landlord shall disburse the Improvement Allowance to
Tenant in one lump sum, within thirty (30) days after notice from Tenant
requesting such disbursement and specifying the requested amount, which notice
shall be accompanied by paid invoices for labor and materials in connection with
the Fourth Floor Work and final unconditional lien releases from the contractor,
all subcontractors and all suppliers providing labor or materials for the Fourth
Floor Work. Notwithstanding the preceding sentence, if Tenant is unable to
provide Landlord with an unconditional lien release for reasons other than that
the work is not substantially completed, and provided all other conditions set
forth in this Section 9.4 are satisfied, Landlord shall disburse the Improvement
Allowance LESS two times the amount or amounts to which the missing lien
releases correspond (the "Hold Back"), and when Landlord has received all
unconditional lien releases (or the last day for filing the applicable lien
passes and, on the tenth (10th) day thereafter, no lien has been filed and/or
Tenant has removed any lien that is filed, by bonding or otherwise), Landlord
will disburse the Hold Back in one lump sum. Landlord's obligation to disburse
the Improvement Allowance is conditioned upon Landlord's receipt prior to the
fifth anniversary of the Commencement Date (the "Improvement Completion
Deadline") of (a) a certificate of Tenant's architect or engineer, in form
reasonably satisfactory to Landlord, certifying that the Fourth Floor Work has
been substantially completed, was constructed in compliance with all applicable
codes, laws, ordinances, rules and regulations and is free of material defects
(other than latent defects), and (b) a certificate of occupancy with respect to
the Fourth Floor Work. The Improvement Completion Deadline shall be extended by
one (1) day for each day that Tenant or Tenant's contractor, subcontractors or
suppliers are prevented from providing labor or materials for the Fourth Floor
Work for reasons beyond the reasonable control of the party from whom
performance is required, such as acts of nature, a strike or other labor
disturbance, war or riots; provided, however, that the Improvement Completion
Deadline shall in no event be extended more than one hundred eighty (180) days.
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ARTICLE 10
INSURANCE
10.1 Landlord shall not be liable to Tenant for any damage to or loss or
theft of any property or for any bodily or personal injury, illness or death of
any person in, on or about the Premises arising at any time and from any cause
whatsoever, except to the extent caused by the gross negligence or willful
misconduct of Landlord. Tenant waives all claims against Landlord arising from
any liability described in this section 10.1, except to the extent caused by the
gross negligence or willful misconduct of Landlord.
10.2 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, losses, costs and
expenses, including reasonable attorneys' fees and disbursements, arising from
or related to any use or occupancy of the Premises, or any condition of the
Premises, or any default in the performance of Tenant's obligations, or any
damage to any property (including property of employees and invitees of Tenant)
or any bodily or personal injury, illness or death of any person (including
employees and invitees of Tenant) occurring in, on or about the Premises or any
part thereof or any part of the building or the land containing the Premises
arising at any time and from any cause whatsoever (except to the extent caused
by the gross negligence or willful misconduct of Landlord) or occurring outside
the Premises when such damage, bodily or personal injury, illness or death is
caused by any act or omission of Tenant or its agents, officers, employees,
contractors, invitees or licensees. This section 10.2 shall survive the
termination of this Lease with respect to any damage, bodily or personal injury,
illness or death occurring prior to such termination.
10.3 Tenant shall, at all times during the term of this Lease and at
Tenant's sole cost and expense, obtain and keep in force comprehensive general
liability insurance, including contractual liability (covering this Lease),
cross liability, and premises operations, all on an "occurrence" policy form,
with a minimum combined single limit in the amount specified in the BASIC LEASE
INFORMATION per occurrence for bodily or personal injury to, illness of, or
death of persons and damage to property occurring in, on or about the Premises,
such insurance shall name the Landlord and any other parties designated by
Landlord as additional insureds. Tenant shall, at Xxxxxx's sole cost and
expense, be responsible for insuring Tenant's furniture, equipment, fixtures,
computers, office machines and personal property, to the extent Tenant elects to
do so.
10.4 Tenant shall, at all times during the term of this Lease and at
Xxxxxx's sole cost and expense, obtain and keep in force Worker's compensation
and employer's liability insurance in all states in which the Premises and any
other operations of
-15-
the Tenant are located and any other state in which the Tenant or its
contractors or subcontractors may be subject to any statutory or other liability
arising in any manner whatsoever out of the actual or alleged employment of
others. The total limits of the employer's liability coverage required
hereunder shall not be less than the amounts specified in section 10.3.
10.5 The insuring party for property insurance specified in the Basic
Lease Information shall, at all times during the term of this Lease, at such
party's sole cost and expense, obtain and keep in force (a) insurance against
loss or damage to the Premises by fire and all other risks of physical loss
covered by insurance of the type now known as "all risk," including coverage
for flood (if the Premises is located in an area identified as an area having
special flood hazards) and earthquake (subject to the limitations set forth
in the following sentence), with difference in conditions coverage, in an
amount not less than the full replacement cost of the Premises (without
deduction for depreciation), including the cost of debris removal and such
endorsements as Landlord may reasonably require, and containing the
"Replacement Cost Endorsement"; (b) boiler and machinery insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping, heating,
ventilation and air conditioning equipment, and elevator and escalator
equipment, provided the Premises contain equipment of such nature and
insurance against loss of occupancy or use arising from any breakdown of any
such items, in such amounts as Landlord may reasonably determine; and (c)
plate glass insurance in such amounts as Landlord may reasonably determine if
the Premises contain plate glass. Tenant shall only be required to maintain
earthquake insurance on the Premises if the annual premium (or the allocated
premium if Tenant's earthquake insurance policy insures property in addition
to the Premises) does not exceed twenty thousand five hundred dollars
($20,500), increased annually during the Lease term, including extensions, by
an amount equal to the percentage increase in the Index during the preceding
year (as increased, the "Premium Cap"). If for any year the annual premium
for the earthquake insurance exceeds the Premium Cap, Tenant shall not be
obligated to carry earthquake insurance, but if Landlord elects to cover the
Premises under an earthquake insurance policy, including a blanket policy,
carried by Landlord for any such year, Tenant shall pay to the Landlord for
that year the lesser of (a) the Premium Cap, or (b) the portion of the
earthquake insurance premium paid by Landlord allocable to the Premises. If
Landlord elects to carry earthquake insurance on the Premises in accordance
herewith, then upon request by Xxxxxx, Landlord shall furnish Tenant with
evidence of Landlord's premium allocation.
10.6 All insurance required to be maintained by Tenant under this
Article 10 and all renewals thereof shall be issued by good and responsible
companies qualified to do and doing business in the state where the Premises
are located and having
-16-
a rating in Best's Insurance Guide of at least A-IX. No deductible amount
under any such insurance policy shall exceed twenty-five thousand dollars
($25,000), except for the deductible for Tenant's earthquake insurance
policy, which deductible shall not exceed five percent (5%) of the value of
the Premises. Each policy to be maintained by Tenant shall expressly provide
that the policy shall not be canceled or altered without sixty (60) days'
prior written notice to Landlord and shall remain in effect notwithstanding
any such cancellation or alteration until such notice shall have been given
to Landlord and such period of sixty (60) days shall have expired. All
insurance under this Article 10 to be maintained by Tenant shall name
Landlord and any other parties designated by Landlord as an additional
insured, shall be primary and noncontributing with any insurance which may be
carried by Landlord, shall afford coverage for all claims based on any act,
omission, event or condition that occurred or arose (or the onset of which
occurred or arose) during the policy period, and shall expressly provide that
Landlord, although named as an insured, shall nevertheless be entitled to
recover under the policy for any loss, injury or damage to Landlord. Upon the
issuance of each such policy to be maintained by Tenant, Tenant shall deliver
each such policy or a certified copy and a certificate thereof to Landlord
for retention by Landlord. The insurance required to be maintained by Tenant
under this Article 10 may be provided for in the form of a blanket policy or
policies of insurance, provided all of the requirements of this Article 10
are satisfied by such blanket policy or policies. If Tenant fails to insure
or fails to furnish to Landlord upon notice to do so any policy to be
maintained by Tenant or certified copy and certificate thereof as required,
Landlord shall have the right from time to time to effect such insurance for
the benefit of Tenant and Landlord or both of them and all premiums paid by
Landlord shall be payable by Tenant as additional rent on demand. Tenant
shall pay to Landlord, immediately upon demand all costs incurred by Landlord
as a result of Xxxxxx's failure to obtain and maintain in effect the policies
of insurance required under this Article 10.
10.7 Tenant waives on behalf of all insurers under all policies of
property, liability and other insurance (excluding workers' compensation) now
or hereafter carried by Tenant insuring or covering the Premises, or any
portion or any contents thereof, or any operations therein, all rights of
subrogation which any insurer might otherwise, if at all, have to any claims
of Tenant against Landlord. Landlord waives on behalf of all insurers under
all policies of property, liability and other insurance (excluding workers'
compensation) now or hereafter carried by Landlord insuring or covering the
Premises or any portion or any contents thereof, or any operations therein,
all rights of subrogation which any insurer might otherwise, if at all, have
to any claims of Landlord against Tenant. Tenant shall, prior to or
immediately after the date of this Lease, procure from each of the insurers
under all policies
-17-
of property, liability and other insurance (excluding workers, compensation) now
or hereafter carried by Tenant insuring or covering the Premises, or any portion
or any contents thereof, or any operations therein, a waiver (of all rights of
subrogation which the insurer might otherwise, if at all, have to any claims of
Tenant against Landlord as required by this section 10.6.
ARTICLE 11
COMPLIANCE WITH LEGAL REQUIREMENTS
11.1 Subject to the Right to Contest, Tenant shall, at Tenant's sole
cost and expense, promptly comply with all laws, ordinances, rules,
regulations, orders and other requirements of any government or public
authority now in force or which may hereafter be in force with all
requirements of any board of fire underwriters or other similar body now or
hereafter constituted, and with all directions and certificates of occupancy
issued pursuant to any law by any governmental agency or officer, insofar as
any thereof relate to or are required by the condition, use or occupancy of
the Premises or the operation, use or maintenance of any personal property,
fixtures, machinery, equipment or improvements in the Premises.
11.2 Notwithstanding the foregoing, during the last five (5) years of the
Lease term, excluding any extension term, if Tenant is required, pursuant to
section 11.1, to make any substantial repair or improvement to the Premises the
cost of which would be treated as a capital expense in accordance with generally
accepted accounting principles (a "Required Improvement"), Landlord shall
reimburse to Tenant, by a rent credit applied at the end of the Lease term, an
amount equal to (a) the cost of the Required Improvement, multiplied by (b) a
fraction (i) the numerator of which is the number of years beyond the Lease term
the useful life of the Required Improvement is anticipated to extend, and
(ii) the denominator of which is the total anticipated useful life of the
Required Improvement, provided that each of the following conditions is
satisfied: the cost of such Required Improvement exceeds the Cost-Share
Threshold, as adjusted pursuant to Section 8.2; fifty percent (50%) or more of
the anticipated useful life of the Required Improvement extends beyond the Lease
term; Tenant has not exercised its option, if any, to extend the Lease term; the
anticipated useful life of the Required Improvement is ten (10) years or more;
and Landlord approves the plans and specifications and the budget for the
construction or installation of the Required Improvement. If Tenant exercises
its right to extend the Lease term, Landlord shall be relieved of any obligation
to reimburse Tenant pursuant to this Section 11.2.
11.3 Landlord shall reasonably cooperate with Tenant from time to time,
upon Xxxxxx's request and at Xxxxxx's expense, to the extent that Xxxxxxxx's
signature, consent or participation
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(or any other action of Landlord) is legally required in connection with
(a) petitions, or other applications for changes to, laws, taxes, assessments or
other monetary impositions relating to the Premises, (b) applications for,
modifications of, disputes with respect to, or other actions, proceedings or
negotiations relating to permits, licenses and/or other authorizations relating
to the Premises, (c) existing easements, covenants, conditions and/or
restrictions relating to the Premises (or modifications thereto) or supplemental
or additional agreements of such type, (d) dedications or transfers of
unimproved portions of the Premises for road or other public purposes,
(e) petitions to have the Premises annexed to any utility or service district or
other similar entity, and/or (f) any other agreements, transactions, disputes,
proceedings or other matters, whether involving governmental or quasi-
governmental authorities or private parties, with respect to which Landlord's
cooperation is legally required; provided that Landlord may refuse to cooperate
as set forth herein (i) in the event that the activity with respect to which
Tenant is seeking such cooperation is prohibited by this Lease, or (ii) in the
event that all of the following are true: (A) the activity with respect to which
Tenant is seeking such cooperation is not expressly permitted by this Lease,
(B) no other provision of this Lease would obligate Landlord to provide such
cooperation, and (C) Landlord reasonably determines that the result that Tenant
is seeking to accomplish would materially and adversely affect Landlord's
interests with respect to the Premises.
ARTICLE 12
ASSIGNMENT OR SUBLEASE
12.1 Tenant shall not, directly or indirectly, without the prior
written consent of Landlord (which consent shall not be unreasonably
withheld), assign this Lease or any interest herein or sublease the Premises
or any part thereof (except as provided in section 12.4), or permit the use
or occupancy of the Premises by any person or entity other than Tenant. This
Lease shall not, nor shall any interest herein, be assignable as to the
interest of Tenant involuntarily or by operation of law without the prior
written consent of Landlord. Any of the foregoing acts without such prior
written consent of Landlord shall be void and shall, at the option of
Landlord, constitute a default that entitles Landlord to terminate this
Lease. Xxxxxx agrees that the instrument, by which any assignment to which
Landlord consents or which is permitted by section 12.4 is accomplished,
shall expressly provide that the assignee will perform all of the covenants
to be performed by Tenant under this Lease as and when performance is due
after the effective date of the assignment and that Landlord will have the
right to enforce such covenants directly against such assignee. Xxxxxx
agrees that the instrument, by which any sublease to which Landlord consents
or which is permitted by section 12.4 is accomplished, shall
-19-
expressly provide that it is subject and subordinate to the Lease. Any
purported assignment or sublease without an instrument containing the
foregoing provisions shall be void. Tenant shall in all cases remain liable
for the performance by any assignee or subtenant of all such covenants.
12.2 If Landlord consents in writing, Xxxxxx may complete the intended
assignment or sublease, provided, however, that no assignment or sublease
shall be valid and no assignee or subtenant shall take possession of the
Premises or any part thereof until an executed duplicate original of such
assignment or sublease, in compliance with section 12.1, has been delivered
to Landlord.
12.3 No assignment or sublease whatsoever shall release Tenant from
Tenant's obligations and liabilities under this Lease or alter the primary
liability of Tenant to pay all rent and to perform all obligations to be paid
and performed by Tenant during the term of this Lease, including all
extension terms (whether or not Tenant consents to such extension by an
assignee). The acceptance of rent by Landlord from any other person or
entity shall not be deemed to be a waiver by Landlord of any provision of
this Lease. Consent to one assignment or sublease shall not be deemed
consent to any subsequent assignment or sublease. If any assignee, subtenant
or successor of Tenant defaults in the performance of any obligation to be
performed by Tenant under this Lease, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against such assignee,
subtenant or successor. Landlord may consent to subsequent assignments or
subleases or amendments or modifications to this Lease with assignees,
subtenants or successors of Tenant, without notifying Tenant or any successor
of Tenant and without obtaining any consent thereto from Tenant or any
successor of Tenant, and such action shall not release Tenant from liability
under this Lease; provided, however, that if Landlord and Xxxxxx's assignee
agree to increase Base Rent in excess of the amount of Base Rent otherwise
payable under section 3.1, then Tenant shall not be liable to Landlord for
payment of such excess Base Rent.
12.4 Tenant may sublease all or any portion of the Premises to its
Affiliates, and may sublease less than ten thousand (10,000) square feet of
the Office Building to any person or entity, without Landlord's prior-written
consent so long as such subtenant's proposed use of the Premises: (a) shall
be permitted hereunder and under all legal and other requirements described
in Article 11; (b) shall not substantially increase the wear and tear on or
the risk of damage to the Premises above levels or risks resulting from
Xxxxxx's use as of the date of this Lease; and (c) is not for any illegal
purpose. All provisions of this Article 12 applicable to subletting, other
than the requirement of obtaining Landlord's prior consent, shall apply to
any subletting under this 12.4. As used in this Lease, the term "Affiliates"
means an entity which
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controls, is controlled by or is under common control with Tenant.
12.5 Notwithstanding anything to the contrary set forth in this Article 12,
Xxxxxxxx's consent shall not be required to (a) any temporary, rent-free use of
up to twenty thousand (20,000) square feet of the Premises by Xxxxxx's
suppliers, customers or other persons with whom Tenant conducts business,
provided that Tenant retains the right to terminate each such persons' use of
the Premises at any time and Tenant shall use diligent efforts to assure that
such users comply with all of the applicable terms and provisions of this Lease;
(b) a consolidation or merger of Tenant or a sale of all or substantially all of
Tenant's assets, provided the tangible net worth of Tenant's successor
immediately after such consolidation, merger or sale is equal to or greater than
Tenant's tangible net worth immediately prior to such consolidation, merger or
sale, all as evidenced by audited balance sheets; (c) any sublease of the
Cafeteria for a period of one (1) week or less; or (d) any cafeteria operating
agreement (in the event that any such agreement is construed to constitute a
sublease).
ARTICLE 13
ENTRY BY LANDLORD
13.1 Landlord shall have the right, following no less than one (1) business
day's advance notice (except in emergencies), to enter the Premises at any
reasonable time to (a) inspect the Premises, (b) exhibit the Premises to
prospective purchasers, to lenders, or during the last twelve (12) months of the
term of this Lease to tenants, (c) determine whether Tenant is performing all of
Tenant's obligations, (d) perform any obligations of Tenant in accordance with
section 14.5, (e) post notices of nonresponsibility, "For sale", and during the
last twelve (12) months of the term of this Lease "For lease" signs, in and
about the Premises, (f) make any repairs to the Premises which Landlord is
entitled to make and (g) investigate and perform tests to determine Tenant's
compliance with Article 21. Tenant waives all claims for damages for any injury
or inconvenience to or interference with Xxxxxx's business, any loss of
occupancy or quiet enjoyment of the Premises or any other loss occasioned by
such entry. Tenant shall be entitled to have one of its agents or other
representatives accompany Landlord at all times during any such entry (except in
emergencies), and Landlord shall reasonably cooperate with Tenant to minimize
any unavoidable disruption of Tenant's operations resuiting from any such entry.
If Landlord removes any existing underground tanks and fueling system from the
Premises, Landlord shall have no obligation to replace them or provide alternate
tanks or a fueling system. Landlord shall at ail times have a key to unlock all
such doors and Landlord shall have the right to use
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any and all means which Landlord may deem proper to open such doors in an
emergency to obtain entry to the Premises. Any entry to the Premises obtained
by Landlord by any of such means shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into or a detainer of the Premises
or an eviction, actual or constructive, of Tenant from the Premises or any
portion thereof.
ARTICLE 14
EVENTS OF DEFAULT AND REMEDIES
14.1 The occurrence of any one or more of the following events ("Event of
Default") shall constitute a breach of this Lease by Tenant:
(a) Tenant fails to pay any Base Rent and such failure continues for more
than three (3) business days after Landlord gives written notice thereof to
Tenant; provided, however, that after the second such failure in a calendar
year, only the passage of time, but no further notice shall be required to
establish an Event of Default in the same calendar year; or
(b) Tenant fails to pay any additional rent or other amount of money or
charge payable by Tenant hereunder as and when such additional rent or amount or
charge becomes due and payable and such failure continues for more than ten (10)
days after Xxxxxxxx gives written notice thereof to Tenant; provided, however,
that after the second such failure in a calendar year, only the passage of time,
but no further notice, shall be required to establish an Event of Default in the
same calendar year; or
(c) Tenant fails to perform or breaches any other agreement or covenant of
this Lease to be performed or observed by Xxxxxx as and when performance or
observance is due (subject to the Right to Contest) and such failure or breach
continues for more than ten (10) days after Xxxxxxxx gives written notice
thereof to Tenant; provided, however, that if, by the nature of such agreement
or covenant, such failure or breach cannot reasonably be cured within such
period of ten (10) days, an Event of Default shall not exist as long as Tenant
commences with due diligence and dispatch the curing of such failure or breach
within such period of ten (10) days and, having so commenced, thereafter
prosecutes with diligence and dispatch and completes the curing of such failure
or breach within a reasonable time; or
(d) Tenant (i) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction, (ii)
makes an
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assignment for the benefit of its creditors, (iii) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers of Tenant
or of any substantial part of Tenant's property, or (iv) takes action for the
purpose of any of the foregoing; or
(e) Without consent by Xxxxxx, a court or government authority enters an
order, and such order is not vacated within sixty (60) days, (i) appointing a
custodian, receiver, trustee or other officer with similar powers with respect
to Tenant or with respect to any substantial part of Tenant's property, or (ii)
constituting an order for relief or approving a petition for relief or
reorganization or arrangement or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy, insolvency or other debtors'
relief law of any jurisdiction, or (iii) ordering the dissolution, winding-up or
liquidation of Tenant; or
(f) This Lease or any estate of Tenant hereunder (other than particular
items of Equipment whose aggregate value does not exceed one hundred thousand
dollars ($100,000)) is levied upon under any attachment or execution and such
attachment or execution is not vacated within sixty (60) days; or
(g) Tenant abandons the Premises.
14.2 If an Event of Default occurs, Landlord shall have the right at any
time to give a written termination notice to Tenant and, on the date specified
in such notice, Tenant's right to possession shall terminate and this Lease
shall terminate. Upon such termination, Landlord shall have the right to
recover from Tenant:
(a) The worth at the time of award of all unpaid rent which had been earned
at the time of termination;
(b) The worth at the time of award of the amount by which all unpaid rent
which would have been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided;
(c) The worth at the time of award of the amount by which all unpaid rent
for the balance of the term of this Lease after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(d) All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Xxxxxx's failure to perform all of Tenant's
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom. The "worth at the time of award" of the amounts
referred to in clauses (a) and (b) above shall be computed by allowing interest
at the maximum annual interest rate allowed by law for business loans (not
primarily for personal, family or household
-23-
purposes) not exempt from the usury law at the time of termination or, if there
is no such maximum annual interest rate, at the rate of eighteen percent (18%)
per annum. The "worth at the time of award" of the amount referred to in clause
(c) above shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank located nearest the Premises at the time of award plus
one percent (1%). For the purpose of determining unpaid rent under clauses (a),
(b) and (c) above, the rent reserved in this Lease shall be deemed to be the
total rent payable by Tenant under Articles 3 and 5 hereof.
14.3 Even though Xxxxxx has breached this Lease, this Lease shall continue
in effect for so long as Landlord does not terminate Xxxxxx's right to
possession, and Landlord shall have the right to enforce all its rights and
remedies under this Lease, including the right to recover all rent as it becomes
due under this Lease. Acts of maintenance or preservation or efforts to relet
the Premises or the appointment of a receiver upon initiative of Landlord to
protect Xxxxxxxx's interest under this Lease shall not constitute a termination
of Tenant's right to possession unless written notice of termination is given by
Landlord to Tenant.
14.4 The remedies provided for in this Lease are in addition to all other
remedies available to Landlord at law or in equity by statute or otherwise.
14.5 All agreements and covenants to be performed or observed by Tenant
under this Lease shall be at Tenant's sole cost and expense and without any
abatement of rent. If Tenant fails to pay any sum of money to be paid by Tenant
or to perform any other act to be performed by Tenant under this Lease, Landlord
shall have the right, but shall not be obligated, and without waiving or
releasing Tenant from any obligations of Tenant, to make any such payment or to
perform any such other act on behalf of Tenant in accordance with this Lease.
All sums so paid by Xxxxxxxx and all necessary incidental costs shall be deemed
additional rent hereunder and shall be payable by Tenant to Landlord on demand,
together with interest on all such sums from the date of expenditure by Landlord
to the date of repayment by Xxxxxx at the maximum annual interest rate allowed
by law for business loans (not primarily for personal, family or household
purposes) not exempt from the usury law at the date of expenditure or, if there
is no such maximum annual interest rate, at the rate of eighteen percent (18%)
per annum. Landlord shall have, in addition to all other rights and remedies of
Landlord, the same rights and remedies in the event of the nonpayment of such
sums plus interest by Xxxxxx as in the case of default by Xxxxxx in the payment
of rent.
14.6 If Xxxxxx abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade fixtures or
personal property belonging to Tenant and left in the Premises shall be deemed
to be
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abandoned, at the option of Landlord, and Landlord shall have the right to sell
or otherwise dispose of such personal property in any commercially reasonable
manner.
ARTICLE 15
DAMAGE OR DESTRUCTION
15.1 Landlord and Tenant acknowledge that, pursuant to Section 19.03.093
(as the same may be amended from time to time and together with any successor
section, the "Use Section") of the Zoning Ordinance of the City of Commerce,
California (as the same may be amended from time to time and together with any
successor ordinance, the "Zoning Ordinance"), if the Premises are "destroyed"
(as such term is used in the Use Ordinance) and not replaced within a specified
period of time, the use of the Premises for office purposes could cease to be a
permitted nonconforming use ("Permitted Use Termination") under the Zoning
Ordinance. If the Premises, or any part thereof, is damaged by fire or other
casualty during the term of this Lease and neither Landlord nor its Lender
reasonably determine that such damage is of such nature and or/magnitude that,
under all of the circumstances, there is a material risk that a Permitted Use
Termination could result pursuant to the Use Section, then Tenant shall restore
the Premises, and insurance proceeds shall be made available to Tenant
therefor, pursuant to Section 15.2 hereof. If the Premises, or any part
thereof, is damaged by fire or other casualty during the term of this Lease and
Landlord or its Lender determine, in their reasonable judgment, that such damage
is of such nature and/or magnitude that, under all of the circumstances, there
is a material risk that a Permitted Use Termination could result pursuant to the
Use Section, then Tenant shall diligently seek to obtain "reasonably
satisfactory assurances" (as hereinafter defined) that the Premises' permitted
office use pursuant to the Zoning Ordinance will continue after restoration of
the Premises. If Tenant does obtain "reasonably satisfactory assurances" within
sixty (60) days after the casualty event, then Tenant shall restore the
Premises, and insurance proceeds shall be made available to Tenant therefor,
pursuant to Section 15.2 hereof. If Tenant does not obtain "reasonably
satisfactory assurances" within sixty (60) days after the casualty event, then
Landlord shall have the right to elect, by giving Tenant written notice of such
election within one hundred five (105) days after the casualty event, to either:
(a) continue the Lease in effect, in which case Tenant shall restore the
Premises, and insurance proceeds shall be made available therefore, pursuant to
Section 15.2 hereof; or (b) terminate the Lease and reconvey the Premises to
Tenant "as is." If Landlord elects, pursuant to subsection (b) of the preceding
sentence, to reconvey the Premises to Tenant (a "Landlord Put"), then Landlord
shall deliver to Tenant a grant deed and a bill of sale conveying the Premises,
an assigranent of the Contracts and Permits and an assigranent of any unpaid
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casualty insurance proceeds relating to the Premises to which Landlord is
entitied, within sixty (60) days after Tenant receives Landlord's election
notice, in exchange for the following: (x) if Landlord has received casualty
insurance proceeds on account of such casualty cn or before the reconveyance
date, Landlord shall retain such proceeds and Tenant shall pay to Landlord the
difference, if any, between the applicable amount (the "Total Stipulated
Amount") set forth on the Stipulated Amount Schedule attached hereto as Schedule
IV and the casualty insurance proceeds actually received by Landlord; or (y) if
Landlord has not received any casualty insurance proceeds on account of such
casualty on or before the reconveyance date, Tenant shall pay to Landlord the
applicable Total Stipulated Amount. In the case of a Landlord Put, Landlord
shall reconvey the Premises to Tenant free and clear of all monetary liens, and
Tenant shall be solely responsible for any transfer taxes and all other closing
costs (except Xxxxxxxx's attorney's fees) as sociated with the reconveyance.
"Reasonably satisfactory assurances" means written assurance from the
responsible city authorities (or other reasonably equivalent assurances)
indicating, to the reasonable satisfaction of Landlord and its lender, that no
Permitted Use Termination will result from the casualty and that the permitted
office use of the Premises pursuant to the Zoning Ordinance shall continue in
effect after restoration of the Premises notwithstanding any delays that may
cause restoration to be completed after expiration of the time period specified
in the Use Section. "Reasonably satisfactory assurances" may include an
extension of the time period referred to in the Use Section, so long as such
extension is sufficient to leave no reasonable possibility that the restoration
will not be completed within the extended time. Reasonably satisfactory
assurances" may include satisfactory written confirmation that the casualty
damage was not of such nature and/or magnitude as to constitute "destruction" of
the Premises (as such term is used in the Use Section).
15.2 If under Section 15.1 of this Lease Tenant is required to restore the
Premises following a fire or other casualty event, then Tenant shall repair such
damage and restore the Premises to substantially the same or better condition as
existed before the occurrence of such fire or other casualty, Tenant shall
repair and replace all furniture, equipment, trade fixtures and personal
property of Landlord (or, in lieu of the foregoing repair and replacement,
Tenant shall construct and install other Improvements and Equipment in
accordance with the requirements of Article 9), and this Lease shall remain in
full force and effect. Such repair and replacement by Tenant shall be done in
accordance with Article 9. Tenant's obligation to rebuild, and Xxxxxx's
obligation to pay the full rent specified in this Lease, as herein provided
shall not be affected in any way by such damage or destruction even if the
casualty results in the loss of the permitted non-conforming use status of the
Premises that allows the Premises to be used as an office
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building; provided, however, that in such event Landlord shall not unreasonably
withhold consent to (x) a modification of the use provisions of this Lease to
the extent necessary to allow Tenant (or its permitted assignees or subtenants)
to make reasonable beneficial use of the Premises in accordance with applicable
land use restrictions, and (y) changes to the Improvements reasonably necessary
to facilitate any such change in use, subject to the applicable terms and
provisions of Article 9 of this Lease. In no event shall rent xxxxx. Provided
Tenant is not in default under this Lease (and no event has occurred which, with
the passage of time, the giving of notice, or both, would constitute a default),
and provided Tenant has (i) delivered to Landlord plans and specifications and a
budget for such repair and restoration (all of which Landlord shall have
approved pursuant to Article 9), and (ii) deposited with Landlord cash in the
sum equal to the excess, if any, of the total cost set forth in such approved
budget (the "Estimated Repair Cost") over the amount of insurance proceeds
received on account of such casualty (the "Insurance Proceeds"), then Landlord
shall make available to Tenant all insurance proceeds actually received by
Landlord on account of such casualty, for application to the costs of such
approved repair and restoration, as follows:
(a) No more frequently than once per calendar month, Xxxxxx may request
that Landlord either (at Tenant's option) reimburse Tenant for costs incurred by
Tenant or pay Tenant's contractors or subcontractors directly for work in place
to repair and restore the Premises during the immediately preceding calendar
month. Tenant's request shall certify that all work for which payment is
requested was performed in compliance with the plans and specifications approved
by Landlord pursuant to Article 9 and all applicable codes, laws, ordinances,
rules and regulations, and shall include reasonably satisfactory evidence of the
costs incurred by Tenant or due to Tenant's contractors or subcontractors, as
the case may be, and lien releases in form and substance required by applicable
law executed by all mechanics, materialmen, laborers, suppliers and contractors
who performed any portion of the repair work or supplied materials.
(b) within five (5) business days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall not
be unreasonably withheld, by written notice to Xxxxxx. If Landlord approves all
or any portion of a request and Landlord has received (and not previously
disbursed) insurance proceeds, then Landlord's approval shall include a check in
the amount approved by Landlord. If Landlord disapproves all or any portion of
a request, then Xxxxxxxx's notice shall state the reasons for that disapproval.
Xxxxxxxx's failure to deliver a notice approving or disapproving a request shall
be conclusively deemed Xxxxxxxx's approval of the request. In addition,
Landlord shall have the right to impose other conditions upon disbursement so
long as they are consistent with customary construction loan disbursement
practices.
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If, after all repair and restoration has been completed, the total actual cost
to complete such repair and restoration (the "Actual Repair Cost") is less than
the Estimated Repair Cost and Tenant was required to deposit cash with Landlord
to make up the difference between the Estimated Repair Cost and the Insurance
Proceeds pursuant to this section 15.2, Landlord shall return to Tenant the
lesser of (i) the difference between the Estimated Repair Cost and the Actual
Repair Cost and (ii) the amount of the cash deposited by Tenant with Landlord.
15.3 In addition to Landlord's rights under Section 15.1 hereof, if the
Premises, or any part thereof, is damaged by fire or other casualty and (a) such
fire or other casualty occurs during the last twelve (12) months of the term of
this Lease and the repair and restoration work to be performed by Tenant in
accordance with section 15.2 cannot, as reasonably estimated by Xxxxxxxx, be
completed within two (2) months after the occurrence of such fire or other
casualty, or (b) the insurance proceeds received by Landlord and Tenant in
respect of such damage are not adequate to pay the entire cost, as reasonably
estimated by Landlord, of the repair and restoration work to be performed by
Tenant in accordance with section 15.2 and Tenant does not deposit such
shortfall with Landlord, then, in any such event, Landlord shall have the right,
by giving written notice to Tenant within forty-five (45) days after the
occurrence of such fire or other casualty, to terminate this Lease as of the
date of such notice, in which case all insurance proceeds on account of such
casualty shall be paid to Landlord. If Landlord does not exercise the right to
terminate this Lease in accordance with this section 15.3, Tenant shall repair
such damage and restore the Premises in accordance with section 15.2 and this
Lease shall remain in full force and effect.
ARTICLE 16
EMINENT DOMAIN
16.1 If a substantial portion of the Premises is taken and the remaining
portion of the Premises is not reasonably suitable for Tenant's purposes, or if
a portion of the Premises is taken resulting in loss of access to and from the
Premises without reasonable substitute access being available, Landlord and
Tenant each shall have the right, by giving written notice to the other within
thirty (30) days after the date of such taking, to terminate this Lease. If
either Landlord or Tenant exercises such right to terminate this Lease in
accordance with this section 16.1, this Lease shall terminate as of the date of
such taking. If neither Landiord nor Tenant exercises such right to terminate
this Lease in accordance with this section 16.1, this Lease shall terminate as
to the portion of the Premises so taken as of the date of such taking and shall
remain in full force and effect as to the portion of the Premises not so taken,
Tenant shall restore the portion of the Premises not so taken to an
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integrated architectural unit in accordance with Article 9 and the Base Rent
shall be reduced as of the date of such taking in the proportion that the
rentable area of the Premises so taken bears to the total rentable area of the
Premises. If all of the Premises is taken by exercise of the power of eminent
domain before the Commencement Date or during the term of this Lease, this Lease
shall terminate as of the date of such taking.
16.2 If all or any part of the Premises is taken by exercise of the power
of eminent domain, all awards, compensation, damages, income, rent and interest
payable in connection with such taking shall, except as expressly set forth in
this section 16.2, be paid to and become the property of Landlord, and Tenant
hereby assigns to Landlord all of the foregoing. Without limiting the
generality of the foregoing, Tenant shall have no claim against Landlord or the
entity exercising the power of eminent domain for the value of the leasehold
estate created by this Lease or any unexpired term of this Lease. Tenant shall
have the right to claim and receive directly from the entity exercising the
power of eminent domain only the share of any award determined to be owing to
Tenant for the taking of improvements installed in the portion of the Premises
so taken by Tenant at Tenant's sole cost and expense based on the unamortized
cost actually paid by Tenant for such improvements, for the taking of Tenant's
movable furniture, equipment, trade fixtures and personal property, for loss of
goodwill, for interference with or interruption of Tenant's business, or for
removal and relocation expenses.
16.3 In the event of any taking other than a taking referred to in section
16.1, this Lease shall continue in full force and effect, Tenant shall continue
to pay all of the rent and to perform all of the covenants of Tenant in
accordance with this Lease and Tenant shall restore the Premises to an
integrated architectural unit in accordance with Article 9. Provided Tenant is
not in default under this Lease (and no event has occurred which, with the
passage of time, the giving of notice, or both, would constitute a default), and
provided Tenant has (i) delivered to Landlord plans and specifications and a
budget for such repair and restoration (all of which Landlord shall have
approved pursuant to Article 9), and (ii) deposited with Landlord cash in the
sum equal to the excess, if any, of the total cost set forth in such approved
budget (the "Estimated Restoration Cost") over the amount of condemnation award
proceeds received on account of such taking (the "Condemnation Proceeds"), then
Landlord shall make available to Tenant all condemnation award proceeds actually
received by Landlord on account of such taking, for application to the costs of
such approved repair and restoration, as follows:
(a) No more frequently than once per calendar month, Tenant may request
that Landlord either (at Xxxxxx's option) reimburse Tenant for costs incurred by
Tenant or pay Xxxxxx's
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contractors or subcontractors directly for work in place to repair and restore
the Premises during the immediately preceding calendar month. Tenant's request
shall certify that all work for which payment is requested was performed in
compliance with the plans and specifications approved by Landlord pursuant to
Article 9 and all applicable codes, laws, ordinances, rules and regulations, and
shall include reasonably satisfactory evidence of the costs incurred by Xxxxxx
and lien releases in fo= and substance required by applicable law executed by
all mechanics, materialmen, laborers, suppliers and contractors who performed
any portion of the repair work or supplied materials.
(b) Within five (5) business days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall not
be unreasonably withheld, by written notice to Xxxxxx. If Landlord approves all
or any portion of a request and Landlord has received (and not previously
disbursed) condemnation award proceeds, then Landlord's approval shall include a
check in the amount Approved by Landlord. If Landlord disapproves all or any
portion of a request, then Xxxxxxxx's notice shall state the reasons for that
disapproval. Xxxxxxxx's failure to deliver a notice approving or disapproving a
request shall be conclusively deemed Xxxxxxxx's approval of the request. In
addition, Landlord shall have the right to impose other conditions upon
disbursement so long as they are consistent with customary construction loan
disbursement practices.
If, after all repair and restoration has been completed, the total actual cost
to complete such repair and restoration (the "Actual Restoration Cost") is less
than the Estimated Restoration Cost and Tenant was required to deposit cash with
Landlord to make up the difference between the Estimated Restoration Cost and
the Condemnation Proceeds pursuant to this section 16.3, Landlord shall return
to Tenant the lesser of (i) the difference between the Estimated Restoration
Cost and the Actual Restoration Cost, and (ii) the amount of cash deposited by
Tenant with Landlord.
16.4 As used in this Article 16, a "taking" means the acquisition of all or
part of the Premises for a public use by exercise of the power of eminent domain
(or a sale of any or all of the Premises in lieu, or under threat, thereof) and
the taking shall be considered to occur as of the earlier of the date on which
possession of the Premises (or part so taken) by the entity exercising the power
of eminent domain is authorized as stated in an order for possession or the date
on which title to the Premises (or part so taken) vests in the entity exercising
the power of eminent domain.
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ARTICLE 17
SUBORDINATION, MERGER AND SALE
17.1 This Lease shall be subject and subordinate at all times to the lien
of all mortgages and deeds of trust securing any amount or amounts whatsoever
which may now exist or hereafter be placed on or against the Premises or on or
against Landlord's interest or estate therein, all without the necessity of
having further instruments executed by Tenant to effect such subordination.
Notwithstanding the foregoing, in the event of a foreclosure of any such
mortgage or deed of trust or of any other action or proceeding for the
enforcement thereof, or of any sale thereunder, this Lease shall not be
terminated or extinguished, nor shall the rights and possession of Tenant
hereunder be disturbed (except that, at any time when an Event of Default exists
under this Lease, any person who acquires Landlord's interest hereunder shall
have all of the rights and remedies provided under Article 14), and Tenant shall
attorn to the person who acquires Landlord's interest hereunder through any such
mortgage or deed of trust. Xxxxxx agrees to execute, acknowledge and deliver
upon demand such further instruments evidencing such subordination of this Lease
to the lien of all such mortgages and deeds of trust as may reasonably be
required by Landlord, but Xxxxxx's covenant to subordinate this Lease to
mortgages or deeds of trust hereafter executed is conditioned upon each such
senior mortgage or deed of trust, or a separate subordination agreement,
containing the commitments specified in the preceding sentence. Without
limiting the generality of the foregoing, Xxxxxx agrees to enter into a
subordination, nondisturbance and attornment agreement substantially in the form
attached hereto as Exhibit B.
17.2 The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or operate as
an assignment to Landlord of any or all such subleases or subtenancies.
17.3 If the original Landlord hereunder, or any successor owner of the
Premises, sells or conveys the Premises, all liabilities and obligations on
the part of the original Landlord, or such successor owner, under this Lease
accruing after such sale or conveyance shall terminate and the original
Landlord, or such successor owner, shall automatically be released therefrom,
and thereupon all such liabilities and obligations shall be binding upon the
new owner, and such new owner shall be deemed to have assumed all such
liabilities and obligations. Xxxxxx agrees to attorn to such new owner.
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ARTICLE 18
ESTOPPEL CERTIFICATE
18.1 At any time and from time to time, Tenant shall, within ten (10) days
after written request by Landlord, execute, acknowledge and deliver to Landlord
a certificate, in the form attached as Exhibit C, certifying: (a) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
stating the date and nature of each modification); (b) the Commencement Date and
the Expiration Date determined in accordance with Article 2 and the date, if
any, to which all rent and other sums payable hereunder have been paid; (c) that
no notice has been received by Tenant of any default by Tenant hereunder which
has not been cured, except as to defaults specified in such certificate; (d)
that Landlord is not in default under this Lease, except as to defaults
specified in such certificate; and (e) such other matters as may be reasonably
requested by Landlord or any actual or prospective purchaser or mortgage lender.
Any such certificate may be relied upon by Landlord and any actual or
prospective purchaser or mortgage lender of the Premises or any part thereof.
18.2 Landlord shall execute and deliver to Tenant, within ten (10) days
following written request by Xxxxxx, a certificate, in a form reasonably
acceptable to Landlord, pursuant to which Landlord certifies and agrees, for the
benefit of an assignee or subtenant of Tenant, except as otherwise expressly set
forth in such certificate: (a) that attached to the certificate is a true and
comelete copy of this Lease and all modifications thereto, each of which is in
full force and effect and which constitute all of the agreements presently in
effect between Landlord and Tenant with respect to the Premises; (b) that, to
the best of Landlord's knowledge, Tenant is not materially in default with
respect to this Lease; and (c) all other certifications and agreements
reasonably required by Tenant that do not impair Landlord's rights hereunder or
under any other agreement.
ARTICLE 19
HOLDING OVER
19.1 If, without objection by Landlord, Xxxxxx holds possession of the
Premises after expiration of the term of this Lease, Tenant shall become a
tenant from month to month upon the terms herein specified but at a Base Rent
equal to one hundred fifty percent (150%) of the Base Rent in effect at the
expiration of the term of this Lease pursuant to Article 3, payable in advance
on or before the first day of each month. Such month to month tenancy may be
terminated by either Landlord or Tenant by
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giving thirty (30) days' written notice of termination to the other at any time.
ARTICLE 20
FINANCIAL STATEMENTS
20.1 On or before April 1 of each year, Tenant shall deliver to Landlord
Tenant's audited financial statements ("Financial Statements") for the previous
fiscal year of Tenant, which Financial Statements shall include an audited
consolidated balance sheet of Tenant and its consolidated subsidiaries as at the
end of such fiscal year, a consolidated statement of operations of Tenant and
its consolidated subsidiaries for such fiscal year, and a certificate of
Tenant's auditor (which shall be a recognized national independent accounting
firm) to the effect that such Financial Statements were prepared in accordance
with generally accepted accounting principals consistently applied and fairly
present the financial condition and operations of Tenant and its consolidated
subsidiaries for and as at the end of such fiscal year. Xxxxxx's fiscal year
ends on the Saturday falling closest to August 31.
ARTICLE 21
HAZARDOUS MATERIALS
21.1 As used herein, the term "Hazardous Material" means any hazardous
or toxic substance, material or waste, or any pollutant or contaminant, or
words of similar import, which is or becomes regulated by any local
governmental authority, the state in which the Premises are located, or the
United States Government. The term "Hazardous Material" includes, but is not
limited to, any material or substance which is, (i) designated as a
"hazardous substance" pursuant to section 311 of the Federal Water Pollution
Control Act (33 U.S.C. section 1317), (ii) defined as a "hazardous waste"
pursuant to section 1004 of the Federal Resource Conservation and Recovery
Act, 42 U.S.C. section 6901, et seq. (42 U.S.C. section 6903), (iii)
defined as a "hazardous substance" pursuant to section 101 of the
Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. section 9601, et seq.), (iv) asbestos, (v) petroleum (including crude
oil or any fraction thereof, natural gas, natural gas liquids, liquified
natural gas, or synthetic gas natural usable for fuel, or any mixture
thereof), (vi) petroleum products, (vii) polychlorinated biphenyls, (viii)
urea formaldehyde, (ix) radon gas, (x) radioactive matter, (xi) medical
waste, and (xii) chemicals which may cause cancer or reproductive toxicity.
21.2 As used herein, the term "Environmental Requirements" means all laws,
ordinances, rules, regulations, orders and other
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requirements of any government or public authority now in force or which may
hereafter be in force relating to protection of human health or the environment
from Hazardous Material, including all requirements pertaining to reporting,
licensing, permitting, investigation and remediation of emissions, discharges,
storage, disposal or releases of Hazardous Materials and all requirements
pertaining to the protection of the health and safety of employees or the public
with respect to Hazardous Material.
21.3 Tenant shall not permit or conduct the handling, use, generation,
treatment, storage or disposal on, in or about the Premises of any Hazardous
Material without prior written notice to Landlord. Any such notice by Tenant to
Landlord shall be in writing and shall demonstrate to the reasonable
satisfaction of Landlord that such Hazardous Material is necessary to the
business of Tenant and will be handled, used, generated, treated, stored or
disposed of in a manner that complies with all Environmental Requirements. Any
such handling, use, generation, treatment, storage or disposal of any Hazardous
Material permitted by Landlord hereunder shall be in compliance with all
Environmental Requirements.
21.4 Tenant shall, within five (5) days after the receipt thereof, give
written notice to Landlord of any notice or other communication regarding any
(a) actual or alleged violation of Environmental Requirements by Tenant or with
respect to the Premises, (b) actual or threatened migration of Hazardous
Material from the Premises, or (c) the existence of Hazardous Material in or on
the Premises or regarding any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceeding, complaint, notice,
order, writ or injunction relating to any of the foregoing.
21.5 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, fines, encumbrances,
liens, losses, costs and expenses, including reasonable attorneys' fees and
disbursements, and costs and expenses of investigation, arising from or related
to the existence on or after the Commencement Date of Hazardous Material in or
on the Premises or the actual or threatened migration on or after the
Commencement Date of Hazardous Material from the Premises or the existence on or
after the Commencement Date of a violation of Environmental Requirements by
Tenant or with respect to the Premises. Notwithstanding the foregoing, Tenant
shall not be required to indemnify, defend or hold harmless Landlord with
respect to Hazardous Materials brought or migrating onto the Premises after the
Lease term expires or for violations of Environmental Requirements with respect
to the Premises that occur after the Lease term expires, unless Tenant or its
successor or assign is responsible for bringing the Hazardous Materials onto the
Premises, for causing the migration or for the violation of Environmental
Requirements. The obligations of Tenant under
-34-
this section 21.5 shall not be affected by any investigation by or on behalf of
Landlord or by any information which Landlord may have or obtain with respect
thereto. Tenant shall, to the reasonable satisfaction of Landlord, perform all
remedial actions necessary to remove any Hazardous Material in or on the
Premises on or after the Commencement Date or to remedy actual or threatened
migration from the Premises of any Hazardous Material or to remedy any actual or
threatened violation of Environmental Requirements, provided such remedial
action is required under Environmental Requirements. This section 21.5 shall
survive termination of this Lease.
21.6 If, at any time when the term of this Lease (including any renewal
term) would expire but for the terms of this section 21.6, a Hazardous Material
exists in, on, about or under the Premises, then the term of this Lease shall
automatically be extended and this Lease shall remain in effect until the
earlier of (i) the completion of all remedial action required under section
21.5, or (ii) the date specified in a written notice from Landlord to Tenant
terminating this Lease. During any such extension period, Tenant shall perform
all of its obligations under this Lease including payments of all rent due
hereunder (for which purpose the monthly Base Rent shall remain unchanged).
21.7 Notwithstanding the foregoing, Landlord acknowledges and agrees that
Tenant shall be permitted to store and use on the Premises from time to time
certain Hazardous Material whose nature and quantities are customary in
connection with the office, cafeteria and other permitted uses of the Premises
(and in connection with any permitted Alterations performed by Tenant), and that
Tenant shall not be required to provide Landlord with specific notice of any
such storage or use; provided that Tenant shall at all times comply with all
Environmental Requirements pertaining to any such Hazardous Material.
ARTICLE 22
WAIVER
22.1 The waiver by Landlord or Tenant of any breach of any covenant in this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other covenant in this Lease, nor shall any custom or practice which may
grow up between Landlord and Tenant in the administration of this Lease be
construed to waive or to lessen the right of Landlord or Tenant to insist upon
the performance by Landlord or Tenant in strict accordance with this Lease. The
subsequent acceptance of rent hereunder by Xxxxxxxx or the payment of rent by
Tenant shall not waive any preceding breach by Landlord or Tenant of any
covenant in this Lease, nor cure any Event of Default, nor waive any forfeiture
of this Lease or unlawful detainer action, other than the failure of Tenant to
pay the particular rent so
-35-
accepted, regardless of Landlord's or Xxxxxx's knowledge of such preceding
breach at the time of acceptance or payment of such rent.
ARTICLE 23
NOTICES
23.1 All requests, approvals, consents, notices and other communications
given by Landlord or Tenant under this Lease shall be properly given only if
made in writing and either deposited in the United States mail, postage prepaid,
certified with return receipt requested, or delivered by hand (which may be
through a messenger or recognized delivery or courier service), or by electronic
facsimile transmission and addressed as follows: To Landlord at the address of
Landlord specified in the BASIC LEASE INFORMATION, or at such other place as
Landlord may from time to time designate in a written notice to Tenant; and to
Tenant, before the Commencement Date, at the address of Tenant specified in the
BASIC LEASE INFORMATION, and after the Commencement Date, at the Premises, or at
such other place as Tenant may from time to time designate in a written notice
to Landlord. Such requests, approvals, consents, notices and other
communications shall be effective on the date of receipt (evidenced by the
certified mail receipt) if mailed or on the date of delivery if hand delivered.
ARTICLE 24
TRADE NAMES
24.1 All trade names used by Xxxxxx from time to time in connection with
its operations in the Premises, all patents and other intellectual property
rights of Tenant, and all other intangible personal property of Tenant used or
arising in connection with Xxxxxx's operations in the Premises shall not be
subject to any lien or claim of ownership by Landlord. Tenant may use any trade
name(s) that it chooses in connection with its operations in the Premises and
may change such trade name(s) from time to time.
ARTICLE 25
MEMORANDUM OF LEASE
25.1 Concurrently with the execution of this Lease, Xxxxxxxx shall execute
and deliver to Tenant a memorandum of lease, in the form attached hereto as
Exhibit D.
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ARTICLE 26
MISCELLANEOUS
26.1 The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." Tenant shall
indemnify and defend Landlord against and hold Landlord harmless from all
claims, demands, liabilities, damages, losses, costs and expenses, including
reasonable attorneys' fees and disbursements, arising out of or resulting from
any failure by Tenant to perform any of its obligations or any breach by Tenant
of any of its representations or warranties in accordance with this Lease. If
there is more than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several. Time is of the essence of this Lease and each and
all of its provisions. Submission of this instrument for examination or
signature by Xxxxxx does not constitute a reservation of or option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant. Subject to Article 12, this Lease shall benefit and
bind Landlord and Xxxxxx and the personal representatives, heirs, successors and
assigns of Landlord and Xxxxxx. If any provision of this Lease is determined to
be illegal or unenforceable, such determination shall not affect any other
provision of this Lease and all such other provisions shall remain in full force
and effect. This Lease shall be governed by and construed in accordance with
the laws of the state where the Premises are located.
26.2 If there is any legal action or proceeding between Landlord and Tenant
to enforce this Lease or to protect or establish any right or remedy under this
Lease, the unsuccessful party to such action or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred by such prevailing party in such action or
proceeding and in any appeal in connection therewith. If such prevailing party
recovers a judgment in any such action, proceeding or appeal, such costs,
expenses and attorneys' fees and disbursements shall be included in and as a
part of such judgment.
26.3 The exhibits and addenda, if any, specified in the BASIC LEASE
INFORMATION are attached to and made a part of this Lease.
26.4 Tenant warrants and represents to Landlord that Tenant and has not
authorized or employed, or acted by implication to authorize or to employ, any
real estate broker or salesman to act for Tenant in connection with this Lease.
26.5 Tenant and each person executing this Lease on behalf of Tenant
represents and warrants to Landlord that (a) Tenant is a corporation, duly
organized and validly existing under the
-37-
laws of the State of California, (b) Tenant is qualified to do business in the
state where the Premises is located, (c) Tenant has full right, power and
authority to enter into this Lease and to perform all of Tenant's obligations
hereunder, and (d) each person signing this Lease on behalf of Tenant is duly
and validly authorized to do so. Landlord and each person executing this Lease
on behalf of Landlord represents and warrants to Tenant that (a) Landlord is a
corporation duly organized and validly existing under the laws of the State of
Maryland, (b) Landlord is (to the extent so required) qualified to do business
in California, (c) Landlord has full right, power and authority to enter into
this Lease and to perform all of Landlord's obligations hereunder, and (d) each
person signing this Lease on behalf of Landlord is duly and validly authorized
to do so.
26.6 There are no oral agreements between Landlord and Tenant affecting
this Lease, alnd this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, offers, agreements and understandings,
oral or written, if any, between Landlord and Tenant or displayed by Landlord to
Tenant with respect to the subject matter of this Lease or the Premises. There
are no representations between Landlord and Tenant or between any real estate
broker and Tenant other than those expressly set forth in this Lease and all
reliance with respect to any representations is solely upon representations
expressly set forth in this Lease. This Lease may not be amended or modified in
any respect whatsoever except by an instrument in writing signed by Landlord and
Tenant.
26.7 Except for determinations expressly described as being in the "sole"
or "absolute" discretion of the applicable party (or other similar words or
phrases), neither Landlord nor Tenant shall unreasonably withhold or delay any
consent,
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approval or other determination provided for hereunder, and determinations
subject to sole or absolute discretion (or other similar words or phrases) shall
not be unreasonably delayed.
IN WITNESS WHEREOF, Xxxxxxxx and Xxxxxx have executed this Lease as of the
date first hereinabove written.
Landlord: Tenant:
TriNet Essential Facilities XII, CERTIFIED GROCERS OF CALIFORNIA,
INC., a Maryland corporation LTD., a California corporation
By /s/ Xxxxx X. Xxxxxxxx By
---------------------------------- --------------------------------
Its Executive Vice President Its
------------------------------ -----------------------------
-39-
approval or other determination provided for hereunder, and determinations
subject to sole or absolute discretion (or other similar words or phrases) shall
not be unreasonably delayed.
IN WITNESS WHEREOF, Xxxxxxxx and Xxxxxx have executed this Lease as of the
date first hereinabove written.
Landlord: Tenant:
TriNet Essential Facilities XII, CERTIFIED GROCERS OF CALIFORNIA,
INC., a Maryland corporation LTD., a California corporation
By By /s/ Xxxxxx X. Xxxx
--------------------------------- --------------------------------
Its Its CFO
------------------------------ ---------------------------
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LEGAL DESCRIPTION OF THE LAND
All of the real property located in the City of Commerce, County of
Los Angeles, State of California, described as follows:
PARCEL 1:
PARCELS 2 AND 3 OF PARCEL MAP NO. 11171, IN THE CITY OF COMMERCE, IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 113, PAGE 7 OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THAT PORTION OF PARCEL 3 DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST WESTERLY CORNER OF SAID PARCEL 3; THENCE ALONG THE
NORTHWESTERLY LINE OF SAID PARCEL NORTH 22 DEG. 23' 00", EAST 361.13 FEET;
THENCE LEAVING SAID NORTHWESTERLY LINE SOUTH 67 DEG. 37' 12" EAST 396.81 FEET
TO A POINT ON THE SOUTHEASTERLY LINE OF SAID PARCEL 3; SAID POINT BEING
DISTANT NORTH 22 DEG. 16' 55" EAST 360.65 FEET FROM THE MOST SOUTHERLY CORNER
OF SAID PARCEL; THENCE ALONG SAID SOUTHEASTERLY LINE SOUTH 22 DEG. 16' 55"
WEST 360.65 FEET TO THE MOST SOUTHERLY CORNER OF SAID PARCEL; THENCE ALONG
THE SOUTHWESTERLY LINE OF SAID PARCEL NORTH 67 DEG. 41' 22" WEST 397.44 FEET
TO THE POINT OF BEGINNING.
ALSO EXCEPTING THE ENTIRE MINERAL ESTATE IN THE PROPERTY DESCRIBED LYING NOT
LESS THAN 500 FEET BENEATH THE NATURAL SURFACE; FOR THE PURPOSES OF THIS
RESERVATION THE MINERAL ESTATE SHALL INCLUDE ALL SUBSTANCES WHICH HAVE BEEN
DISCOVERED OR WHICH MAY IN THE FUTURE BE DISCOVERED UPON OR UNDER THE PROPERTY
DESCRIBED, WHICH ARE NOW OR MAY IN THE FUTURE BE VALUABLE, AND WHICH ARE NOW OR
MAY BE IN THE FUTURE ENJOYED THROUGH EXTRACTION FROM THE PROPERTY DESCRIBED,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE MINERAL ESTATE SHALL
INCLUDE ALL FORMS OF GENERALITY OF THE FOREGOING, THE MINERAL ESTATE SHALL
INCLUDE ALL FORMS OF THE GEOTHERMAL ENERGY, ALL COAL, ALL GASES, ALL HYDROCARBON
SUBSTANCES, ALL FISSIONABLE MATERIALS, ALL METALLIC MINERALS, AND ALL
NON-METALLIC MINERALS.
NOTWITHSTANDING OWNERSHIP OF THE MINERAL ESTATE, NEITHER GRANTOR NOR ITS
SUCCESSORS OR ASSIGNS SHALL HAVE THE RIGHT TO ENTER UPON THE SURFACE OF THE
PROPERTY DESCRIBED FOR THE PURPOSE OF EXTRACTING ANY CONSTITUENTS OF THE MINERAL
ESTATE. GRANTOR RESERVES THE RIGHT, ON BEHALF OF ITSELF, ITS SUCCESSOR AND
ASSIGNS, (1) TO EXTRACT THE CONSTITUENTS OF THE MINERAL ESTATE FROM THE PROPERTY
DESCRIBED BY MEANS OF XXXXX, SHAFTS, TUNNELS, OR OTHER SUBSURFACE ACCESSES WHICH
MAY BE CONSTRUCTED, DRILLED OR DUG ON OR FROM OTHER LAND AND WHICH MAY PENETRATE
INTO THE PROPERTY DESCRIBED BELOW A DEPTH OF 500 FEET, AND (2) TO EXCAVATE,
CONSTRUCT, MAINTAIN, AND OPERATE SUBSURFACE FACILITIES BELOW A DEPTH OF 500 FEET
OF THE PROPERTY DESCRIBED FOR THE EXTRACTION OF THE CONSTITUENTS OF THE MINERAL
ESTATE SO LONG AS THE SUBSURFACE FACILITIES DO NOT UNREASONABLY INTERFERE WITH
THE USE AND ENJOYMENT OF THE SURFACE ESTATE IN THE PROPERTY DESCRIBED, AS
RESERVED BY SANTA FE PACIFIC REALTY CORPORATION, SUCCESSOR BY MERGER WITH SANTA
FE LAND IMPROVEMENT COMPANY, IN DEED RECORDED AUGUST 15, 1989 AS INSTRUMENT NO.
89-1309080, OFFICIAL RECORDS.
EXHIBIT A
-1-
PARCEL 2
AN EASEMENT FOR LANDSCAPING, UTILITIES, AND OPEN SPACE ON, OVER AND ACROSS A
STRIP OF LAND 10.00 FEET IN WIDTH BY 174.25 FEET IN LENGTH AS SHOWN ON PARCEL
MAP NO. 11171 AS PER MAP FILED IN BOOK 113 PAGE 7 OF PARCEL MAPS.
EXHIBIT A
-2-
Recording Requested By, and
When Recorded, Mail to:
Xxxxxxx Xxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx, Esq.
-------------------------------------------------------------------------------
(Space above line for recorder's use)
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-------------------------------------------------------
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement"), made as of____________, 1994 by and among BANKERS TRUST COMPANY
("Trustee"), as trustee for NOMURA ASSET CAPITAL CORPORATION, a Delaware
corporation ("NACC"), having an office in care of Bankers Trust Company of
California, N.A., 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, XXXXXXXXX
GROCERS OF CALIFORNIA, LTD., a California corporation ("Tenant"), having an
office at 0000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Xx.
Xxxxxx X. Xxxxxxx, and TriNet Essential Facilities XII, INC., a Maryland
corporation ("TriNet"), having an office at Four Embarcadero Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, XX 00000, Attn: Xx. Xxxxx X. Xxxxxxxx.
W I T N E S S E T H:
WHEREAS, Tenant is the tenant under that certain Commercial Lease-Net,
dated as of ____________, 1994 (the "Lease"), between TriNet as landlord
(together with its successors and assigns, the "Landlord"), and Tenant, as
tenant, which Lease demises certain premises (the "Premises") known by the
street address _________________________________________________ in the City of
Commerce, County of Los Angeles, State of California, as more particularly
described in Exhibit A annexed hereto;
WHEREAS, NACC has made a mortgage loan (the "Loan") to Landlord, which Xxxx
is secured by, among other things, a certain mortgage, mortgage deed or deed of
trust (the "Mortgage") encumbering the Premises;
WHEREAS, Trustee and Tenant wish to confirm the subordination of the Lease
to the Mortgage on the terms hereinafter set forth; and
WHEREAS, Xxxxxx wants to be assured of the continued possession of the
Premises.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, Trustee and Xxxxxx hereby agree as follows:
EXHIBIT B
-1-
1. The Lease and any extensions, renewals, replacements or modifications
thereof and all of the right, title and interest of Tenant thereunder in and to
the Premises (including, without limitation, any and all options to purchase the
Premises and rights of first refusal or offer held by Tenant with respect to the
Premises) shall be subject and subordinate to the lien of the Mortgage, and to
all of the terms and conditions of the Mortgage, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Tenant
hereby consents to, and waives any right of first refusal or offer which may
exist under the Lease with respect to, any transfer of title to the Premises to
Trustee in connection with the Loan and related transactions.
2. So long as Tenant shall not be in default under the Lease, Trustee
shall not name or join Tenant as a party defendant in any action or proceeding
to foreclose the Mortgage for the purpose of terminating the Lease or
otherwise affecting Tenant's rights thereunder unless Tenant or any person
claiming through or under Tenant is deemed a necessary party by the court, in
which event such party may be named or joined but such naming or joining shall
not otherwise be in derogation of the rights of Tenant set forth in this
Agreement. Tenant's quiet enjoyment of the Premises will not be disturbed by
Trustee, NACC or a purchaser of the Premises, except that any time a default
exists under the Lease, any person who acquires Landlord's interest thereunder
shall have all of the rights and remedies provided under Article 14 of the
Lease.
3. If Trustee or NACC shall succeed to the interest of Landlord, whether
through possession or foreclosure action or a deed in lieu of foreclosure, or if
the Premises shall be sold as a result of any action or proceeding to foreclose
the Mortgage or deed in lieu thereof,
(i) The Lease shall continue in full force and effect as a direct
lease between Tenant and Trustee, NACC or the purchaser of the Premises,
as the case may be,
(ii) Provided that Trustee, NACC or such purchaser of the Premises
assumes in writing (subject to the provisions of this Agreement) the
obligations of landlord accruing on or after the date Trustee, NACC or
such purchaser acquired title to the Premises, Tenant shall and does
hereby attorn to and recognize Trustee, NACC or the purchaser of the
Premises, as the case may be, as Tenant's landlord under the Lease, and
Trustee, NACC or such purchaser shall, subject to the terms hereof, accept
such attornment and recognize Tenant as Trustee's, NACC's or such
purchaser's tenant under the Lease, said attornment to be effective and
self-operative without the execution of any further instruments on the
part of any of the parties hereto
EXHIBIT B
-2-
immediately upon Trustee, NACC or such purchaser succeeding to the interest
of Landlord in the Premises. Tenant agrees, however, upon the election of
and written demand of Trustee, NACC or such purchaser within twenty (20)
days after Trustee, NACC or such purchaser receives title to the Premises,
to execute an instrument received in confirmation of the foregoing
provisions, satisfactory to Trustee, NACC or such purchaser in which Tenant
shall acknowledge such attornment and set forth the terms and conditions of
its tenancy, provided that Trustee, NACC or such purchaser shall include in
such instrument a nondisturbance provision as set forth in paragraph 2
hereof,
(iii) In the event that any security deposit has been delivered to the
prior landlord in the form of a letter of credit or other instrument,
Xxxxxx agrees to amend or have reissued such letter of credit or other
instrument for the benefit of Trustee or such purchaser, and
(iv) Trustee, NACC or such purchaser shall not:
(a) be bound by any prepayment of more than one calendar month's
rent,
(b) be bound by any modification of the Lease made without the
written consent of Trustee,
(c) be subject to any offsets or defenses against any prior
landlord, including Landlord, or be liable for any previous act or
omission of any prior landlord, including Landlord, under the Lease;
provided, however, that Trustee, NACC or such purchaser, as
applicable, shall be obligated to cure any continuing nonmonetary
default by any prior landlord (including Landlord) that is
reasonably susceptible of cure by Trustee, NACC or such purchaser, as
applicable, within a reasonable time following its acquisition of the
Premises, unless the applicable landlord obligation is of a type for
which Trustee, NACC or such purchaser is expressly relieved of
liability pursuant to the other provisions of this Agreement,
(d) be required to repair, restore, rebuild or replace the
Premises or any part thereof in the event of damage or destruction by
fire or other casualty or in the event of condemnation,
EXHIBIT B
-3-
(e) be required to make any capital improve ments to the
Premises, or to construct, erect, or complete any construction or
renovation of all or any portion of the improvements at the Premises
which the Landlord may have agreed to make but has not commenced or
completed, or to perform any work, or provide any services, to
prepare the Premises for occupancy by Tenant,
(f) be bound by any notice of termination, other than a notice
of termination as a result of Tenant's default under the Lease, given
by Land lord or any prior landlord to Tenant without Trustee's
concurrent written consent thereto,
(g) be personally liable under the Lease, and Trustee's, NACC's
or such purchaser's liabil ity under the Lease ' shall be limited to
its ownership interest in the Premises, or
(h) be bound to any obligation of Landlord to make any payments
or contributions to Tenant, other than attorneys' fees, letter of
credit fees referenced in paragraph 7 of the Agreement re Letter of
Credit dated as of the date hereof (the "Letter of Credit
Agreement"), between Landlord and Tenant and any insurance or
condemnation proceeds and Tenant-deposited funds that Landlord would
be required to disburse to Tenant pursuant to Section 15.2 or 16.3 of
the Lease.
4. Tenant shall provide Trustee with copies of all written notices sent to
Landlord pursuant to the Lease simultaneously with transmission of such notices
to Landlord. Tenant shall not cancel the Lease or claim a partial or total
eviction or any abatement of the rents, additional rents or other sums payable
under the Lease, or a set-off against Tenant's obligation for any such rent,
additional rent or other sums, and agrees that, notwithstanding any provisions
of the Lease to the contrary, Tenant will not exercise any such right or make
any such claim, until (i) it has given written notice to Trustee of the act or
omission which would entitle Tenant to exercise such right or make such claim,
and (ii) a reasonable period (but in no event less than thirty (30) days) for
remedying such act or omission shall have elapsed following the giving of such
notice and provided Trustee shall, with reasonable diligence, give Tenant notice
of intention to, and commence and continue to, remedy such act or omission or
cause the same to be remedied, following the time when Trustee shall have
obtained possession of the Premises and/or otherwise become entitled under the
Mortgage to remedy the same (which shall in no event be less than the period to
which Landlord would be entitled under the Lease to effect such remedy).
Notwithstanding the preceding sentence, if Trustee must obtain
EXHIBIT B
-4-
possession of the Premises to remedy such act or omission, and Trustee ceases to
diligently pursue obtaining possession of the Premises, then Tenant shall have
the right to exercise any right or remedy to which Tenant is entitled. Under no
circumstances shall Trustee be obligated to remedy such act or omission.
5. Notwithstanding any provisions of the Lease to the contrary, Xxxxxx
agrees and acknowledges that while the Premises are encumbered by the Mortgage
each and every right of Landlord under the Lease to terminate or cancel the
Lease or to release the Tenant from any liability thereunder shall be subject to
the prior written consent of Trustee and that any attempt by Landlord to
terminate or cancel the Lease or release the Tenant from any liability
thereunder, without the prior written consent of Trustee, shall be null and void
between Tenant and Landlord. In situations where the notice of termination must
be delivered to Tenant within a specified time period, the termination shall not
be effective unless Tenant has received a notice of termination from Landlord
and trustee within such time period.
6. Notwithstanding any provisions of the Lease to the contrary, Tenant
hereby agrees not to settle or compromise any claim for insurance proceeds or
condemnation awards without the prior written approval of Trustee; provided,
however, Tenant may settle or compromise any such claim with respect to Xxxxxx's
personal property or fixtures without Trustee's prior written approval.
7. All notices, consents and other communications required or permitted
pursuant to the provisions of this Agreement shall be in writing and fhall be
sent by registered or certified mail, return receipt requested, postage prepaid,
or by hand-delivery or overnight courier, and shall be deemed given when
received if sent by hand-delivery, one (1) day after delivered to the courier
service if sent by overnight courier or three (3) days after postmarked if
mailed and properly addressed as follows:
If to Trustee:
At the address hereinabove designated to the
attention of Xx. Xxxxxx Xxxxxxxxx.
with a copy to:
Xxxxxxx Xxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx, Esq.
EXHIBIT B
-5-
and to:
Nomura Asset Capital Corporation
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
If to Tenant:
At the address hereinabove designated.
with a copy to:
Xxxxxxxx, Xxxxxx, Xxxxxxx & Xxxxxxx
000 X. Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esq.
If to Landlord:
At the address hereinabove designated.
with a copy to:
Pillsbury Madison & Sutro
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Each party may designate a change of address by notice to the other
parties, given in the manner provided for in th'-s Paragraph, which notice shall
be given at least fifteen (15) days before such change of address is to become
effective.
8. The provisions of this Agreement shall bind and inure
to the benefit of the parties hereunder and their successors and
assigns.
9. Tenant hereby agrees that, in the event that Trustee delivers to Tenant
a notice (i) stating that an Event of Default (as defined in the Mortgage) has
occurred under the Mortgage and (ii) requesting that all rent and additional
rent due to Landlord under the Lease be thereafter paid to Trustee, Tenant shall
pay such rent and additional rent directly to Trustee. Delivery to Tenant of
the aforedescribed notice from Trustee shall be conclusive evidence of the right
of Trustee to receive such rents and payment of the rents by Tenant to Trustee
pursuant to such notice shall constitute performance in full of Tenant's
obligation under the Lease to pay such rents to Landlord. If and to the extent
that the Lease or any provision of law shall entitle Tenant to notice of any
mortgage, Tenant acknowledges and agrees that this Agreement shall constitute
such notice to
EXHIBIT B
-6-
Tenant of the existence of the Mortgage. Tenant acknowledges that it has notice
that the Lease and the rents and aii other sums due thereunder have been
assigned to Trustee as part of the security for the Loan Documents (as defined
in the Mortgage).
10. Tenant represents and warrants to Trustee that, as of the date hereof,
there are no agreements other than the Lease in existence or contemplated
between Landlord and Tenant relating to the Tenant's occupancy of the Premises,
other than the Letter of Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date and year first above written.
CERTIFIED GROCERS OF CALIFORNIA,
LTD., a California corporation, as
Tenant
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY, as trustee for
NOMURA ASSET CAPITAL CORPORATION, as
Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TriNet Essential Facilities XII,
INC.,
a Maryland corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
-7-
STATE OF CALIFORNIA, )
) ss.
County of Los Angeles. )
On ______________, 1994, before me, _____________________________________,
a Notary Public in and for the State of California, personally appeared ______
___________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument, and acknowledged to me that he executed the within instrument
in his authorized capacity and that, by his signature on the within instrument,
the person or entity upon behalf of which he acted executed the within
instrument.
WITNESS my hand and official seal.
Signature (Seal)
---------------------------
EXHIBIT B
-8-
STATE OF CALIFORNIA, )
) ss.
County of Orange. )
On ______________, 1994, before me, _____________________________________,
a Notary Public in and for the State of California, personally appeared ______
________________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument, and acknowledged to me that he executed the within instrument
in his authorized capacity and that, by his signature on the within instrument,
the person or entity upon behalf of which he acted executed the within
instrument.
WITNESS my hand and official seal.
Signature (Seal)
---------------------------
EXHIBIT B
-9-
STATE OF CALIFORNIA, )
) ss.
County of San Francisco. )
On ____________, 1994, before me, ______________________________________,
a Notary Public in and for the State of California, personally appeared ______
____________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument, and acknowledged to me that he executed the within instrument
in his authorized capacity and that, by his signature on the within instrument,
the person or entity upon behalf of which he acted executed the within
instrument.
WITNESS my hand and official seal.
Signature (Seal)
---------------------------
EXHIBIT B
-10-
