EXHIBIT 10.30
NET LEASE AGREEMENT
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Auburn, California between Dove Investments, Inc., a California corporation and
Mountain People's Warehouse, Inc., a California corporation December 31, 1996
NET LEASE AGREEMENT
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Auburn, California
Basic Lease Information
Defined Terms: Information:
Lease Date: December 31, 1996
Landlord: Dove Investments, Inc.,
a California corporation
3620 Fair Oaks Boulevard, Suite 150
Sacramento, California 95864
Tenant: Mountain People's Warehouse, Inc.
12745 Earhart Avenue
Auburn, California 95602
Premises: The Premises referred to in this Lease are
located at ________________, Auburn,
California ("Building"), and consists of
approximately seventy-five thousand
(75,000) rentable square feet (75,000
usable square feet) as shown in Exhibit A,
which is seventy-five percent (75.00%)
("Tenant's Proportionate Share") of the
rentable square feet of the Building. The
Building referred to in this Lease
consists of approximately one hundred
thousand (100,000) rentable square feet
and one hundred thousand (100,000) usable
square feet. The rentable and usable
square footage set forth herein is subject
to adjustment pursuant to Section 2(g).
Term: The term shall begin on the Commencement
Date (hereinafter defined) and shall
terminate on June 30, 2008.
Base Rent: Twenty-Eight Thousand One Hundred
Twenty-Five and No/100ths Dollars
($28,125.00) per month based on
seventy-five thousand (75,000) rentable
square feet at Thirty-Seven and One-Half
Cents ($.375) per square foot per month
payable in advance on the first day of
each month, subject to adjustment
pursuant to Section 7 and until increased
as provided in Section 7 hereof.
Use: Warehouse facility and related operations
Security Deposit: Not Applicable
Broker for Tenant: Not Applicable
Broker for Landlord: Not Applicable
LIST OF EXHIBITS
A. Description of Premises
B. Rules and Regulations
C. Agreement of Purchase and Sale
NET LEASE AGREEMENT
This Lease is made and entered into by the Landlord and Tenant referred to in
the Basic Lease Information. The Basic Lease Information attached to this Lease
as page 1 is hereby incorporated into this Lease by this reference.
GENERAL PROVISIONS:
Purchase Transaction. Landlord and Tenant acknowledge and agree that Landlord's
obligations under this Lease are expressly contingent upon Landlord acquiring
fee title in the Real Property ("Real Property") on which the Building is to be
constructed in accordance with the terms and conditions of certain purchase and
sale documentation entered into by Landlord and the current owner of the Real
Property, which transaction is scheduled to close on or about February 28, 1997.
In the event that Landlord does not acquire fee title to the Real Property, for
any reason, notwithstanding any other provision of this Lease to the contrary,
this Lease shall become null and void and of no further force or effect and
Landlord shall immediately return any prepaid Base Rent to Tenant.
1992 Lease. A related affiliate to Landlord and Tenant have previously entered
into an Industrial Real Estate Lease which was amended by that certain (i) First
Addendum dated January 21, 1992, (ii) Second Addendum dated October 31, 1992,
(iii) Third Addendum dated January 5, 1993, (iv) Fourth Addendum dated February
12, 1993, (v) Fifth Addendum dated May 17, 1993, (vi) Sixth Addendum dated May
28, 1993, and (vii) Seventh Addendum dated June 22, 1995, which document, as
amended, is hereinafter referred to as the "1992 Lease." The 1992 Lease concerns
the lease of certain improved property in the immediate vicinity of the
Premises. Landlord and Tenant acknowledge and agree that the provision of this
Lease and the 1992 Lease are separate and distinct obligations of each party
thereto and that there are no dependent obligations existing between such
documents. Specifically, Tenant acknowledges and agrees that, in the event
Tenant exercises its purchase rights in accordance with the 1992 Lease, such
exercise shall not, in any manner, affect Tenant's obligations under this Lease.
BUILDING IMPROVEMENTS:
Preliminary Plans: Following the Lease Date, Landlord shall prepare and deliver
to Tenant draft preliminary plans and specifications ("Preliminary Plans")
setting forth the description of (i) the shell of the Building, (ii) the
materials to be used in the construction of the
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Building, (iii) the electrical, mechanical and HVAC systems to be used within
the Building, and (iv) the space plan of the Premises and the improvements to be
constructed therein. Tenant shall approve or disapprove of the Preliminary Plans
within ten (10) days following Tenant's receipt of such documents by providing
Landlord with written notice ("Objection Notice") of such determination within
such time period. The failure of Tenant to provide such notice within five (5)
days following Tenant's receipt of a second written request from Landlord
indicating that Tenant's ten (10) day review period has expired shall be deemed
Tenant's approval of the Preliminary Plans. In the event that Tenant disapproves
of the Preliminary Plans as provided herein, Landlord and Tenant shall use their
good faith efforts and due diligence to resolve the matters set forth in the
Objection Notice to the reasonable satisfaction of Landlord and Tenant;
provided, however, if Landlord and Tenant have not resolved such matters within
twenty (20) days following Landlord's receipt of the Objection Notice, such
disputed matter shall be submitted to an engineer or architect, reasonably
acceptable to Landlord and Tenant, who shall render a determination of such
matter within five (5) days following such appointment, which determination
shall be binding upon Landlord and Tenant. Upon Landlord and Tenant reaching
agreement upon the Preliminary Plans, such document shall be referred to as the
"Approved Preliminary Plans."
Landlord and Tenant acknowledge that, prior to the Lease Date, the parties have
had discussions and negotiations regarding the Preliminary Plans, which
discussions included the anticipated size of a proposed mezzanine and office
area. In this regard, Tenant is considering whether such improvements should be
downsized from the levels currently contemplated. The parties further
acknowledge that the originally contemplated level of such improvements was a
factor in Landlord's determination of Base Rent. As a result of the foregoing,
for a period of ten (10) days following Landlord and Tenant agreeing upon the
Approved Preliminary Plan, the parties shall discuss and agree upon whether, as
a result of Tenant's election to decrease the size of the proposed mezzanine and
office area within the Premises from that conceptually discussed upon prior to
the Lease Date, an appropriate decrease in Base Rent is warranted, which
determination the parties shall negotiate in good faith. If the parties cannot
agree on whether a decrease in Base Rent is warranted pursuant to the preceding
sentence, such matter shall be determined by an engineer, mutually acceptable to
Landlord and Tenant, who shall render such decision within five (5) days
following his receipt of the appropriate materials from the parties, which
decision shall be binding upon Landlord and Tenant.
Final Plans: Within sixty (60) days following reaching agreement upon the
Approved Preliminary Plans, Landlord shall prepare and deliver to Tenant final
plans and specifications ("Final Plans") substantially in conformity with the
Approved Preliminary Plans. Within ten (10) days after delivery of the Final
Plans, Tenant shall give written notice of any changes necessary to bring the
Final Plans into substantial conformity with the Approved Preliminary Plans;
Tenant shall not object to any logical refinement of the Approved Preliminary
Plans or any change necessitated by applicable governmental laws or regulations.
Failure of Tenant to deliver to Landlord written notice of such changes within
five (5) days following Tenant's receipt of written notice from Landlord
indicating that Tenant's ten (10) day review period has expired shall be deemed
approval of the Final Plans. Upon approval of the Final Plans, both parties
shall endorse their approval on the Final Plans as may be necessary for filing
such documents with the appropriate governmental entity for approval, which
shall be the responsibility of Landlord. Upon obtaining the appropriate
approvals of the Final Plan from the applicable governmental entity, such
document shall be referred to as the "Approved Final Plans."
Construction: Promptly upon obtaining the Approved Final Plans (which shall
comply with all applicable laws), Landlord shall commence construction of the
building shell and improvements described therein, which are collectively
referred to as the "Building Improvements," and diligently prosecute such
construction to completion. Landlord shall use its good faith efforts and due
diligence to cause such improvements to be Ready for Occupancy (hereinafter
defined) on or before July 1, 1997 ("Anticipated Occupancy Date").
Completion and Delivery: The Premises shall be ready for occupancy ("Ready for
Occupancy") when (i) construction of the Building Improvements is substantially
completed in accordance with the Approved Final Plans,(ii) Landlord has obtained
for the Premises any permits (temporary or final) that are legally required for
Tenant's occupancy, but not the operation of Tenant's business, and (iii) any
all utility hook-ups necessary for the use of the Building are in place and are
fully operational. Landlord shall use its good faith efforts to give Tenant
thirty (30) days prior written notice ("Pre-Occupancy Notice") of the date when
the Premises will be Ready for Occupancy.
Early Entry: Tenant may, following its receipt of the Pre-Occupancy Notice or
upon written notice to Landlord prior to Tenant's receipt of the Pre-Occupancy
Notice, at Tenant's sole risk, enter the Premises and install trade fixtures,
equipment and other tenant improvements in the Premises; provided, however, that
(i) Tenant's early entry shall not unreasonably interfere with construction of
the Building Improvements; and (ii) all provisions of this Lease, excepting
Sections 7, 9, 10 and 11, shall apply during such entrance.
Measurement of Premises and Building: Within fifteen (15) days following the
Premises becoming Ready for Occupancy, Landlord shall cause the Premises and the
Building to be measured by Landlord's engineer, or a third party engineer
reasonably acceptable to Landlord and Tenant, to determine the Usable Area (as
hereinafter defined) thereof, which determination shall be binding upon Landlord
and Tenant. In the event that the Usable Area of the Premises and/or Building is
different than that set forth in the Basic Lease Information, Landlord and
Tenant shall execute a written amendment to modify the Usable Area and Rentable
Area of the Premises and/or the Building, as applicable, and Tenant's
Proportionate Share. Landlord anticipates, but is not certain, that there will
not be Building Common Areas (as hereinafter defined) within the Building,
resulting in no difference between the Rentable Area and Usable Area (as such
terms are hereinafter defined) for the Premises.
Condition of Premises: Landlord represents and warrants that the Premises, to
the extent constructed by Landlord, its agents, employees, contractors and
subcontractors, complies with all applicable laws, statutes and ordinances in
effect as of the Commencement Date.
PREMISES: This Lease shall be effective as of the date of execution hereof by
Landlord and Tenant. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord upon the terms and conditions contained herein the Premises.
ACCEPTANCE OF PREMISES: Excepting Punch List Items (as hereinafter defined), if
any, Tenant's taking possession of the Premises shall constitute Tenant's
acknowledgment that the Premises are in good condition and that the Building
Improvements are
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constructed in accordance with the provisions of this Lease and that Tenant
agrees to accept the same in its condition existing as of the date of such entry
and subject to all applicable municipal, county, state and federal statutes,
laws, ordinances, including zoning ordinances, and regulations governing and
relating to the use, occupancy or possession of the Premises, excepting latent
defects. Within thirty (30) days after the Tenant takes possession of the
Premises, Tenant shall deliver to Landlord a list of items ("Punch List Items")
that Tenant reasonably deems that Landlord complete or correct in order for the
Premises to be reasonably acceptable. Following Landlord's receipt of the Punch
List Items, Landlord shall complete and/or correct such items set forth on the
Punch List Items using its good faith efforts and due diligence within thirty
(30) days following Landlord's receipt of such document. If Tenant does not
deliver the Punch List Items to Landlord within five (5) days following Tenant's
receipt of written notice from Landlord indicating that Tenant's thirty (30) day
review period has expired, Tenant shall be deemed to have accepted the condition
of the Premises. Landlord shall use its reasonable efforts to not unreasonably
interfere with Tenant's use of the Premises as a result of such repair work.
DEFINITIONS:
"Building" shall refer to the entire structure in which the Premises are
located, the term "Lot" shall refer to the Assessor's tax parcel on which the
Building is situated, and the term "Project" shall refer to the project as shown
on Exhibit A. This Lease confers no rights either with regard to the subsurface
of the land below the ground level of the Building or with regard to airspace
fifty (50) feet above the roof of the Building.
"Building Common Areas" shall mean the areas on individual floors devoted to
corridors, fire vestibules, lobbies, electric and telephone closets, rest rooms,
mechanical rooms, janitor closets and other similar facilities for the benefit
of all lessees public lobbies, loading docks, and other similar facilities for
the benefit of all lessees, but excluding public stairs, pipe shafts, and the
enclosing walls thereof.
"Project Common Areas" shall refer to all areas and facilities outside the
Premises and within the Project that are provided and designated by Landlord
from time to time for the general nonexclusive use of Landlord, Tenant, and of
other lessees in the Project and their respective employees, suppliers,
shippers, customers, and invitees. Landlord hereby grants to Tenant, during the
term of this Lease, the nonexclusive right to use, in common with others
entitled to such use, the Project Common Areas as they exist from time to time,
subject to any rules, regulations, and restrictions governing the use of the
Project as from time to time made or amended by Landlord. Provided that (i)
Landlord, using its reasonable efforts, does not unreasonably interfere with
Tenant's use of the Premises, and (ii) obtains Tenant's prior written approval,
which shall not be unreasonably withheld, conditioned or delayed (the failure of
Tenant to respond to any requested modification to the Project Common Areas with
in five (5) days of Tenant's receipt of such request shall be deemed Tenant's
approval thereof), Landlord reserves the right at any time and from time to
time, to: (i) make alterations in or additions to the Project and to the Project
Common Areas; and (ii) temporarily close any of the Project Common Areas for
maintenance purposes.
"Rentable Area" shall mean:
as to a floor leased entirely by Tenant, all areas within outside permanent
Building walls, measured to the inside surface of the dominant portion of the
permanent outer Building walls, including restroom, janitorial, telephone and
electrical closets, mechanical areas, excluding any major vertical penetrations
of the floor, balconies, arcades and covered entrances, plus Tenant's pro rata
share of Building Common Areas.
as to a floor only a portion of which is leased by Tenant, the aggregate of the
Usable Area of the portion of that floor occupied by Tenant, plus Tenant's pro
rata share of Building Common Areas on the floor leased in part by Tenant and
Tenant's pro rata share of Building Common Areas.
"Usable Area" shall mean all floor area in the Tenant's space, measured from the
inside surface of the interior walls of the Premises, but excluding any
balconies, arcades and covered entrances.
POSSESSION:
Subject to and upon the terms and conditions set forth herein, the Term shall be
for the period specified in the Base Lease Information, commencing upon the date
on which the Premises is Ready for Occupancy ("Commencement Date"). Landlord
shall cause the Premises to be Ready for Occupancy by the Anticipated Occupancy
Date, plus extensions thereto equal to the durations of (i) any delays beyond
the reasonable control of Landlord, such as acts of God, fire, earthquake, acts
of public enemy, riot, insurrection, unavailability of materials, governmental
restrictions on the sale of materials or supplies or the transportation of such
materials or supplies, strike directly affecting construction or transportation
of materials or supplies, shortages of materials or labor resulting from
governmental controls, weather conditions, or any other cause or events beyond
the reasonable control of Landlord (collectively, "Force Majeure Event"), or
(ii) delays caused or attributable to Tenant. The parties agree that if Landlord
is unable to cause the Premises to be Ready for Occupancy by the Anticipated
Occupancy Date, plus any extensions thereto pursuant to this Section, this Lease
shall not be void or voidable, nor shall Landlord be liable to Tenant for any
loss or damages resulting therefrom, but in such event, Tenant shall not be
liable for any Rent until the Commencement Date; provided, however, if such
delays are caused or attributable to Tenant, Rent shall commence as of the
Anticipated Occupancy Date. Within thirty (30) days after the Commencement Date,
Landlord and Tenant shall execute an amendment to this Lease, setting forth the
Commencement Date and the expiration date of the Term.
Notwithstanding the foregoing, in the event that the Commencement Date is
delayed for in excess of ninety (90) days beyond the Anticipated Occupancy Date,
as may be extended herein, for each day of delay beyond such ninety (90)-day
period until the actual Commencement Date occurs, Landlord shall pay Tenant (as
a credit against Base Rent) the amount of Five Hundred and No/100ths Dollars
($500.00), which amount the parties agree is a reasonable estimate of damages as
a result of such delay.
Notwithstanding the foregoing, in the event that the Commencement Date is
delayed in excess of one hundred eighty (180) days beyond the Anticipated
Occupancy Date, as may be extended herein, for a period of fifteen (15) days
thereafter, Tenant shall have the right to terminate this Lease by providing
Landlord with written notice thereof within such time period. The failure of
Tenant to
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provide such notice shall be deemed Tenant's waiver of its right to terminate
the Lease. If Tenant elects to terminate the Lease, such termination shall be
effective upon Landlord's receipt of such notice, and the parties shall have no
further obligations hereunder.
RENT:
Tenant agrees to pay Landlord, without prior notice, demand, deduction or
offset, a Base Rent in the amount set forth in the Basic Lease Information as
adjusted from time to time in the manner set forth in this Section. In addition
to the Base Rent, for the purpose of this Lease, "Rent" also includes Tenant's
Proportionate Share of Taxes, Insurance and any other amounts owing from Tenant
to Landlord pursuant to the terms of this Lease. The Rent shall be payable in
advance on or before the first day of each month throughout the term of the
Lease. Base Rent for the first month of the term shall be paid upon execution of
this Lease. Base Rent for any period during the term hereof which is for less
than one month shall be a prorated portion of the monthly installment based upon
a thirty (30)-day month.
The Base Rent as shall be increased for each year of the term of this Lease
following the first year ("Subsequent Year") if the Consumer Price Index for All
Urban Consumers, All Items (San Francisco-Oakland-San Jose Metropolitan Area,
1982-84=100) ("Index"), as published by the United States Department of Labor,
Bureau of Labor Statistics, for the "Comparison Month" (described below)
increases over the Index for the calendar month ("Base Month") which is four (4)
months prior to the month in which the term of this Lease commences. The Base
Month Index shall be compared with the Index for the same calendar month for
each Subsequent Year ("Comparison Month"). If the Index for any Comparison Month
is higher than the Base Month Index, then the total Base Rent for the Subsequent
Year following the Comparison Month shall be increased with the first month of
such Subsequent Year by a percentage which shall be calculated by dividing the
Base Month Index into that number which represents the difference, if any, when
subtracting the Base Month Index from the Index for any Comparison Month. In no
event shall the Base Rent after a Comparison Month be less than that in effect
for the immediately preceding year. Should said bureau discontinue the
publication of the above Index, or publish the same less frequently, or alter
the same in some other manner, then Landlord shall adopt a substitute index or
substitute procedure which reasonably reflects and monitors consumer prices.
As soon as an adjustment to the Base Rent has been computed as provided herein,
Landlord shall give Tenant notice of the amount thereof. Tenant shall continue
to pay Base Rent at the previously established amount until it has been given
such notice, at which time the accrued increase shall be due and payable in
full. Tenant shall pay Rent to Landlord at the address shown in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate in writing. The Rent has been established in
contemplation that Tenant will occupy the Premises for the entire Term. In the
event of an assignment of the Lease in whole or in part, or a sublease of all or
any part of the Premises, Landlord and Tenant have agreed that Landlord shall
have the rights provided in Section 15 of this Lease.
SECURITY DEPOSIT: (Intentionally Deleted)
OPERATING EXPENSES: (Intentionally Deleted)
TAXES AND INSURANCE:
Tenant shall pay as additional Rent, Tenant's Proportionate Share of all Taxes.
The term "Taxes" shall include all real property taxes, bonds and assessments
levied against the Project and the various estates therein and the underlying
land, all taxes, assessments and reassessments of every kind and nature
whatsoever levied or assessed in lieu of or in substitution of any existing or
additional real or personal property taxes and assessments on the Project, any
increase in taxes or assessments resulting from a re-evaluation of the Project
resulting from the sale, conveyance, assignment, ground lease or other transfer
thereof, service payments in lieu of such taxes, excises, transit charges and
fees, housing, park and child care assessments, development and other
assessments, reassessments, levies, fees or charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind which
are assessed, levied, charged, confirmed, or imposed by any public authority
upon the Project, its operations or the Rent provided for in this Lease, or
amounts necessary to be expended because of governmental orders, whether general
or special, ordinary or extraordinary, unforeseen as well as foreseen, of any
kind and nature for public improvements, services, benefits, or any other
purposes which are assessed, levied, confirmed, imposed or become a lien upon
the Premises, Building or Project or become payable during the Term. In no event
shall Taxes include any income tax payable by Landlord.
As soon as reasonably possible after Landlord has received the tax bill for the
year, Landlord shall furnish Tenant with a true and correct tax statement, and
within thirty (30) days prior to the delinquency of each required payment,
Tenant shall pay to Landlord the Tenant's Proportionate Share of Taxes.
Notwithstanding the failure of Landlord to timely provide such statement by such
date, such failure shall not constitute a waiver of Landlord of its right to
collect Tenant's share of any Taxes.
Tenant shall pay before delinquent all taxes assessed against and upon
equipment, furniture, fixtures, and other personal property of Tenant. If any
taxes on Tenant's personal property are levied against Landlord or Landlord's
property, or if the assessed value of the Building and other improvements is
increased by the inclusion of a value placed on Tenant's personal property, and
if Landlord pays the taxes on any of these items, Tenant, on demand, shall
immediately reimburse Landlord for the sum of the taxes levied against Landlord,
or the proportion of the taxes resulting from the increase in Landlord's
assessment. Landlord shall have the right to pay these taxes regardless of the
validity of the levy.
Tenant shall pay as additional Rent, Tenant's Proportionate Share of all
Insurance. Landlord shall maintain on the Building hazardous insurance providing
for coverage against all perils customarily referred to as "all risks" coverage
on a full replacement cost basis, with vandalism and malicious mischief
endorsements, to the extent of full replacement value, with a replacement cost
endorsement in any form of insurance deemed prudent by Landlord ("Insurance").
Such insurance policy shall be issued in the name of Landlord and continue to
provide that any proceeds shall made payable to Landlord.
As soon as reasonably possible after Landlord has received an invoice for the
Insurance for the year, Landlord shall furnish Tenant with a copy thereof, and
within thirty (30) days prior to the delinquency date of such required payment,
Tenant shall pay to Landlord Tenant's Proportionate Share of the cost of the
insurance. Notwithstanding the failure of Landlord to timely provide such
statement
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by such due date, such failure shall not constitute a waiver of Landlord of its
right to collect Tenant's Proportionate Share of such costs.
UTILITIES:
Tenant shall be solely responsible for obtaining service and thereafter paying
the cost of all utilities, including, but not limited to, sewer use and
connection fees, water, gas, electricity, telephone, and other utilities (the
"Utilities") provided to the Premises and billed and metered separately to
Tenant. Landlord shall be responsible for the initial connection fees for the
Utilities.
Failure of any Utilities to be provided to the Premises, or any cessation
thereof, shall not render Landlord liable in any respect for damages to either
person or property, nor be construed as an eviction of Tenant, nor cause an
abatement of rent, or relieve Tenant from fulfillment of any covenant or
agreement hereof. Tenant shall have no right to terminate this Lease, and shall
have no claim for rebate of rent or damages on account of any interruptions in
service or in Utilities occasioned thereby or resulting therefrom.
USE: Tenant shall use the Premises for the uses set forth in the Basic Lease
Information and shall not use the Premises for any other purposes. Tenant
warrants that it shall not make any use of the Premises which may cause
contamination of the soil, the subsoil or groundwater. Tenant shall not do,
bring, or keep anything in or about the Premises that will cause a cancellation
of any insurance covering the Premises. If the rate of any insurance carried by
Landlord is increased as a result of Tenant's use, Tenant shall pay to Landlord
within thirty (30) days before the date Landlord is obligated to pay a premium
on the insurance, or within thirty (30) days after Landlord delivers to Tenant a
certified statement from Landlord's insurance carrier stating that the rate
increase was caused solely by an activity of Tenant on the Premises as permitted
in this Lease, whichever date is later, a sum equal to the difference between
the original premium and the increased premium. Landlord reserves the right to
prescribe the weight and position of all safes, fixtures and heavy installations
that Tenant desires to place in the Premises so as to distribute properly the
weight, or to require plans prepared by a qualified structural engineer for such
heavy objects, which shall be prepared at Tenant's sole cost and expense.
COMPLIANCE WITH THE LAW: Neither, Tenant nor its agents, employees or
contractors shall not use the Premises in any manner which will in any way
conflict with any law, statute, zoning restriction, ordinance or governmental
law or rule, regulation, or requirement of any duly constituted public
authorities now in force or which may hereafter be enacted or promulgated
including, but not limited to, any and all federal, state and local laws,
ordinances, regulations, orders and directives pertaining to any substance
defined as "hazardous wastes", "hazardous substances", "hazardous materials",
"toxic substances" or words to that affect, including but not limited to
petroleum based products, under any applicable current or future federal or
state laws or regulations (collectively, "Hazardous Materials"), or subject
Landlord to any liability for injury to any person or property by reason of any
business operation being conducted in or about the Premises. Following the
Commencement Date, to the extent required by Tenant's specific use of the
Premises or required due to Alterations (as hereinafter defined) constructed by
Tenant, Tenant shall, at its sole cost and expense, promptly comply with all
laws, statutes, ordinances, and governmental rules, regulations, which includes,
but is not limited to, the Americans with Disability Act ("ADA") of 1990 (42
U.S.C. ss. 12101 et seq.), and any amendment thereto or regulations promulgated
thereunder, or requirements of any board or fire insurance underwriters or other
similar bodies, now or hereafter constituted. Subject to the foregoing, the
final judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance, or governmental rule,
regulation, or requirement, shall be conclusive of that fact as between Landlord
and Tenant. Subject to the foregoing, to the extent that such compliance is
imposed upon all landlord's owning properties within the State of California
similar to the Premises, and provided such compliance is not triggered as a
result of any action taken by Tenant, Landlord shall, at its cost, comply with
laws, statutes and ordinances.
Neither Tenant, nor any assignee, sublessee or occupier of any portion of the
Premises, shall permit the introduction, placement, use, generation,
manufacture, storage, disposal or transportation in or around the Premises of
any hazardous, poisonous or toxic substance, material or waste of any kind that
may be hazardous to health and/or the environment, including, without
limitation, substances from time to time identified as such by federal and/or
state laws and regulations, without the prior written consent of Landlord;
provided, however, Tenant shall be entitled to possess and maintain, in
compliance with all applicable laws, statutes and ordinances, within the
Premises reasonable amounts of such Hazardous Materials which are customarily
used in connection with Tenant's permissible use of the Premises as set forth in
this Lease, and Tenant agrees to indemnify, defend and hold Landlord harmless
from any and all costs incurred (whether by Landlord or otherwise) in cleaning,
decontaminating or otherwise correcting the effects of any such introduction,
placement, use, storage or disposal in or about the Premises, as well as all
costs of complying with all applicable laws, rules, regulations or requirements
applicable thereto, including payment of any fines or penalties levied on
account thereof or arising therefrom, and the cost of discharging any lien on
the Premises securing such cost of correction. The provisions of this Section 12
shall survive the expiration of this Lease.
ALTERATIONS AND ADDITIONS: Tenant shall not make or suffer to be made any
alterations, additions, or improvements (collectively, "Alterations") to or of
the Premises, or any part thereof, without first obtaining the written consent
of Landlord, which shall not be unreasonably withheld. Any Alterations to the
Premises, including, but not limited to, wall covering, paneling, and built-in
cabinet work, but excepting movable furniture and trade fixtures, shall on the
expiration of the Term become a part of the realty and belong to Landlord, and
shall be surrendered with the Premises. However, Landlord can, at the time
consent is requested by Tenant, require Tenant remove such Alterations that
Tenant intends to make to the Premises. If Landlord so elects, Tenant, at its
own cost, shall repair any damage caused by the removal of the Alterations.
Before Landlord's consent to such Alterations will be given, Tenant shall submit
detailed specifications, floor plans and necessary permits (if applicable) to
Landlord for review. In no event shall any Alterations affect the structure of
the Building or its facade. As a condition to its consent, Landlord may request
adequate assurance that all contractors who will perform such work have in force
workman's compensation and such other employee and public liability insurance as
Landlord deems necessary. In the event Landlord consents to the making of any
Alterations to the Premises by Tenant, the same shall be made by Tenant at
Tenant's sole cost and expense, comply with all applicable laws, statutes and
ordinances, be completed to the satisfaction of Landlord, and any architect,
contractor or person selected by Tenant to make the same must first be approved
in writing by Landlord. If Tenant makes any Alterations to the Premises, the
Alterations shall not be commenced until five (5) business days after Landlord
has received notice from Tenant stating the date the installation of the
alterations is to commence so that Landlord can post and record an appropriate
notice of
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nonresponsibility. Notwithstanding the foregoing, without the prior consent of
Landlord, but with the prior notice to Landlord, Tenant shall be entitled to
make Alterations within the Premises, provided that (i) the cost of the
constructing such Alterations does not exceed Five Thousand and No/100ths
Dollars ($5,000.00) per project in the aggregate, (ii) does not affect the
structure or mechanical systems of the Building, and (iii) Tenant otherwise
complies with the provisions of this Section. Tenant shall indemnify, defend and
hold the Landlord, the Building and the Premises free and harmless from any
liability, loss, damage, cost, reasonable attorneys' fees and other expenses
incurred on account of such construction, or claims by any person performing
work or furnishing materials or supplies for Tenant or any persons claiming
under Tenant.
REPAIRS AND MAINTENANCE:
Tenant acknowledges that the Building is intended to be leased to multiple
tenants therein ("Other Tenants") who shall be entitled to nonexclusive use of
the Building Common Area and Project Common Area. In this regard, as set forth
in this Section, Tenant shall have the exclusive obligation to maintain and
repair the Building Common Area and the Project Common Area, and both Landlord
and the Other Tenants shall have no obligation to assist Tenant in the
performance of such obligations by Tenant, provided, however, as set forth in
this Section, Landlord shall reimburse Tenant for the Other Tenant's
Proportional Share (as hereinafter defined) of such expenses on a monthly basis
as provided herein.
Except as specified in the following paragraph, Tenant shall, at Tenant's sole
cost and expense, subject to reimbursement from Landlord for the Other Tenants'
Proportionate Share, maintain the Building, Building Common Area and the Project
Common Area (which includes landscaping, driveways, parking lots, fences, and
sidewalks) in first class condition, clean and safe condition and repair and
shall make all replacements necessary to keep the Premises in such condition
(collectively, "Operating Expenses"). Such obligation shall also apply to the
Premises, however, such cost shall not be within the definition of Operating
Expenses. Without limiting the generality of the foregoing, Tenant shall be
solely responsible for maintaining, and repairing all fixtures, electrical
lighting, ceilings and flooring coverings, windows, doors, plate glass, and
interior walls within the Premises. Tenant shall have no obligation to maintain
the premises of the Other Tenants. All repairs and replacements shall be a
quality equal to or exceeding that of the original. In this regard, Tenant shall
do all acts necessary to comply with Applicable Law. With respect to Utilities
servicing the Premises, Tenant shall be responsible for the maintenance and
repair of any such facilities. In addition, Tenant shall be responsible for all
repairs made necessary by Tenant, its employees, agents, contractors or
invitees. Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises except as specifically set forth in this Lease.
Tenant shall contract with a service company licensed and experienced in
servicing heating, ventilating and air conditioning systems of the Premises. If
Tenant fails to maintain the Building, Building Common Area, and/or Project
Common Area in first class condition and repair, as required herein, Landlord
may give Tenant thirty (30) days written notice to do such acts as are
reasonably required to so maintain such areas. If Tenant fails to promptly
commence such work within such time period and diligently prosecute it to
completion, then Landlord shall have the right to do such acts and expend such
funds at the expense of Tenant as are reasonably required to perform such work.
Any amount so expended by Landlord shall be paid by Tenant promptly after demand
with interest at the "Reference Rate" (formerly, "Prime Rate") then being
charged by the San Francisco main office of Bank of America NT & SA plus two
percent (2.00%) per annum, from the date of such work, but not to exceed the
maximum amount then allowed by law. Landlord shall have no liability to Tenant
for any damage, inconvenience, or interference with the use of the Premises by
Tenant as the result of performing any such work.
Notwithstanding Section 15(b), Landlord shall be responsible, at Landlord's sole
cost and expense, for repairing the structure of the Building and any latent
defects in the original construction of the Building. Landlord shall maintain
the roof, structural walls and the foundations of the Building in good, clean
and safe condition and repair. Except as otherwise provided in this Lease,
Landlord shall have no liability to Tenant, nor shall Tenant's obligations under
this Lease be reduced or abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord making any repairs or changes which Landlord is required or permitted
by this Lease or by any other tenants' lease or required by law to make in or to
any portion of the Building or the Premises. Landlord shall use reasonable
efforts to minimize any interference with Tenant's business at the Premises.
Prior to the Commencement Date, and not later than January 30 of each calendar
year thereafter, Landlord and Tenant shall agree upon an annual budget
("Operating Expense Budget") for Operating Expenses for the then calendar year.
Based upon such approved Operating Expense budget, Landlord shall either (a) pay
to Tenant prior to the fifteen (15th) of each calendar month, or (b) authorized
a credit against Base Rent, the amount of one-twelfth (1/12th) of the Other
Tenants' Proportionate Share of the Operating Expense Budget. For the purpose of
this Lease, the "Other Tenants' Proportionate Share" shall be twenty-five
percent (25.00%) (the remaining square footage of the Building not leased by
Tenant). Tenant may not exceed the Operating Expense Budget without the prior
written consent of Landlord. If Landlord and Tenant do not agree upon revised
Operating Expense Budget for a given year, the previously approved Operating
Expense Budget shall remain in effect until such agreement is reached, at which
time any deficiency or reimbursement between Landlord and Tenant shall be
immediately paid in full. Notwithstanding the foregoing, if Tenant encounters an
emergency situation at the Building requiring Tenant's action the cost of which
is not provided for in the Operating Expense Budget, Tenant shall provide
Landlord with a written notice, entitled "Emergency Notice," describing the
situation and the anticipated cost associated therewith. If Landlord has not
objected to such notice within forty-eight (48) hours following the receipt
thereof, Tenant may incur such expense, which cost shall be deemed added to the
Operating Expense Budget for such year.
WASTE: Tenant shall not use the Premises in any manner that will constitute
waste, nuisance, or unreasonable annoyance to owners or occupants of adjacent
properties or to other tenants of the Building.
LIENS: Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by Tenant.
ASSIGNMENT AND SUBLETTING: Tenant shall not assign, transfer, mortgage, pledge,
hypothecate, or encumber this Lease or any interest therein, nor sublet the
Premises or any part thereof, or any right or privilege appurtenant thereto or
permit the use or occupancy by any other party without the written consent of
the Landlord first had and obtained, which consent shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance, or
subletting without such consent shall be
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void and shall constitute a breach of this Lease without the need for notice to
Tenant. Tenant shall give Landlord written notice of Tenant's desire to assign
or sublet all or some portion of the Premises and the date on which Tenant
wishes to make such assignment or sublease, at least thirty (30) days prior to
such date. Such written notice shall set forth the name of the proposed assignee
or sublessee, the nature of the business to be carried on in the Premises, the
space to be assigned or sublet, the material terms and provisions of the
proposed sublease or assignment, and such financial information as Landlord may
reasonably request. Landlord shall then have a period of thirty (30) days
following receipt of such notice and accompanying information within which to
notify Tenant of its decision with respect to the proposed sublease or
assignment. The withholding of Landlord's consent to the assignment or
subletting will be deemed to have been reasonable where based upon Landlord's
good faith determination of: (i) the financial irresponsibility of assignee or
sublessee; (ii) the lack of suitability of assignee's or sublessee's intended
use of the Premises; or (iii) the intended unlawful use of the Premises by
sublessee or assignee; provided, however, that the foregoing enumeration shall
not be exclusive. Landlord shall, within such thirty (30)-day period, notify
Tenant in writing that Landlord elects either (i) in the case of a proposed
assignment only, to terminate this Lease as of the date so specified by Tenant,
in which event Tenant will be relieved of all further obligations hereunder and
the Security Deposit (subject to Section 8) and any other prepaid sums by Tenant
shall be returned to Tenant pro rata, if applicable, pursuant to the provisions
of this Lease, (ii) reasonably withhold its consent to such proposed assignment
or sublease, or (iii) to permit Tenant to make such assignment or sublease
subject to the following:
Any such assignment, sublease or the like must be pursuant to a written
agreement in a form acceptable to Landlord in its reasonable discretion and must
provide that such assignee, sublessee, or other transferee agrees not to violate
the terms and conditions of this Lease. No sublease or assignment by Tenant
shall relieve Tenant of any liability hereunder. Any sublease must provide that
Tenant (Sublessor) has the right to reenter the Premises upon termination of
such sublease. No sublessee or assignee shall further assign or sublet all or
any part of the Premises.
One-half (1/2) of any sums or other economic consideration received by Tenant as
a result of such subletting, which exceed in the aggregate the total sums which
Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to that portion of the Premises subject to such sublease),
plus the cost of (i) reasonable broker's commissions paid by Tenant with regard
to the transfer; and (ii) the cost of improvements approved by Landlord pursuant
to Section 13 made to the subleased premises by Tenant at Tenant's expense for
the purpose of subleasing, shall be payable to Landlord as additional Rent under
this Lease without affecting or reducing any other obligation of Tenant
hereunder.
Any sale or other transfer of the majority of the voting stock of Tenant if
Tenant is a corporation, or a majority of the partnership interest in Tenant if
Tenant is a partnership shall be an assignment for the purposes of this Section.
The sale of Tenant's stock, which does not involve a shifting of the majority of
the voting stock of Tenant, on a publicly traded exchange shall be inapplicable
to the provisions of this Section 18.
Tenant may assign this Lease or sublet the Premises or any portion thereof,
without Landlord's consent, to (i) any corporation which controls, is controlled
by or is under common control with Tenant, (ii) any corporation resulting from
the merger or consolidation of Tenant, provided that, to the extent that
Mountain People's Warehouse no longer exists or its net worth is materially less
than that as of the Lease Date (fifty percent (50.00%) or more decrease), the
resulting entity must have a net worth equal to or greater than Tenant as of the
Lease Date; or (iii) any person or entity acquires all of the assets of Tenant
as an ongoing concern of the business being conducted at the Premises; provided
that (a) the assignee or sublessee assumes, in full, the obligations of Tenant
under this Lease, (b) except if Tenant no longer exists as provided in
Subsection (ii), Tenant remains fully liable under this Lease, (c) the
permissible use of the Premises under this Lease remains unchanged, and (iv)
Landlord receives not less than thirty (30) days' prior written notice of such
assignment or subletting.
If Tenant requests Landlord to consent to a proposed assignment or subletting,
Tenant shall pay Landlord, whether or not consent is ultimately given,
Landlord's reasonable costs, including attorneys' fees (which attorneys' fees
shall not exceed Five Hundred and No/100ths Dollars ($500.00) for each proposed
assignment or subletting) incurred in connection with evaluating such request
and/or documenting such sublease or assignment.
INDEMNITY:
Tenant shall indemnify, defend, protect and hold Landlord, any partner,
co-venturer, officer, director, employee, agent, or representative of Landlord
(collectively, "Landlord Group") harmless against and from all claims, damages
and liabilities, arising from Tenant's use of the Premises or the conduct of
Tenant's business or from any activity, work, or other thing done, permitted or
suffered by Tenant in or about the Building, and shall further indemnify and
hold the Landlord Group harmless against and from any and all claims, damages
and liabilities, directly arising from any breach or default in the performance
of any obligation on Tenant's part to be performed under the terms of this
Lease, or arising from any act or negligence of the Tenant or any officer,
agent, employee, guest, or invitee of Tenant, and from all and against all
costs, reasonable attorneys' fees, expenses, and liabilities incurred in or
about any such claim or any action or proceeding brought thereon, and, in any
case, action, or proceeding brought against Landlord by reason of any such
claim. Notwithstanding anything to the contrary herein, nothing herein shall be
deemed to require Tenant to indemnify, defend, protect and hold the Landlord
Group harmless from any claims, damages or liabilities resulting from the gross
negligence or willful misconduct of Landlord or any members of the Landlord
Group. Tenant, as a material part of the consideration to Landlord under this
Lease, hereby assumes all risk of damage to property or injury to persons in,
upon or about the Premises, except that Tenant shall not assume any risk for
damage resulting from the gross negligence or wrongful act of Landlord or its
authorized representatives.
Landlord shall not be liable for injury or damage which may be sustained by the
person or property of Tenant, its employees, invitees or customers, or any other
person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, or from the breakage, leakage, obstruction or other defects
from pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, whether such damage or injury results from conditions arising
upon the Premises or upon other portions of the Building or from other sources,
except to the extent such damage or injury results from the gross negligence or
willful misconduct of Landlord, its contractors or the Landlord Group. Landlord
shall not be liable for any damages arising from any act or omission from any
other
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tenant of the Building. Tenant agrees that in no case shall Landlord ever be
responsible or liable on any theory for any injury to Tenant's business, loss of
profit, loss of income or other consequential damages.
Landlord shall indemnify, defend, protect and hold Tenant, any partner,
co-venturer, officer, director, employee, agent or representative of Tenant
(collectively, "Tenant Group") harmless against and from all claims, damages and
liabilities arising from Landlord's activities, work or other thing done,
permitted or suffered by Landlord in or about the Building.
DAMAGE TO PREMISES OR BUILDING: All injury to the Premises or the Building
caused by moving the property of Tenant or its employees, agents, guests or
invitees into, in or out of the Building and all breakage done by Tenant or the
agents, servants, employees, and visitors of Tenant shall be repaired as
determined by the Landlord at the expense of the Tenant to the extent not
covered and paid by insurance maintained by Landlord.
TENANT'S INSURANCE/WAIVER OF SUBROGATION:
All insurance required to be carried by Tenant and Landlord shall be issued by
responsible insurance companies which are rated by Best Insurance Reports as
A:VII or better and licensed or authorized to do business in the State of
California. Each policy maintained by Tenant shall name Landlord, and at
Landlord's request, any mortgagee of Landlord, as an additional insured, as
their respective interests may appear. Each policy maintained by Tenant shall
contain (i) a separation of insured's condition, (ii) a provision that such
policy and the coverage evidenced thereby shall be primary and noncontributing
with respect to any policies carried by Landlord and that any coverage carried
by Landlord shall be excess insurance for Landlord's interest only (with respect
to Tenant's policies only), and (iii) a waiver by the insurer of any right of
subrogation against Landlord, its agents, employees and representatives, which
arises or might arise by reason of any payment under such policy or by reason of
any act or omission of Landlord, its agents, employees or representatives. A
copy of each paid up policy (authenticated by the insurer) or certificate of the
insurer evidencing the existence and amount of each insurance policy required
hereunder shall be delivered to Landlord before the date Tenant is given
possession of the Premises, and thereafter, within thirty (30) days after any
demand by Landlord therefor. No such policy maintained by Tenant or Landlord
shall be cancelable, materially changed or reduced in coverage except after
thirty (30) days' written notice to the other party. Tenant shall furnish
Landlord with renewals or "binders" of any such policy at least ten (10) days
prior to the expiration thereof. Tenant shall have the right to provide such
insurance coverage pursuant to blanket policies obtained by the Tenant, provided
such blanket policies expressly afford coverage to the Premises, Landlord,
Landlord's mortgagee and Tenant as required by this Lease.
Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the Term of the Lease, Tenant shall procure, pay
for and maintain in effect policies of property insurance covering (i) any
alterations, additions or improvements as may be made by Tenant pursuant to the
provisions of Section 12 hereof, and (ii) trade fixtures, merchandise and other
personal property from time to time, in, on or about the Premises, in an amount
not less than one hundred percent (100.00%) of their actual replacement cost
from time to time, providing protection against all risks of physical loss or
damage. The proceeds of such insurance shall be used for the repair or
replacement of the property so insured. Upon termination of this Lease following
a casualty as set forth herein, the proceeds under (i) shall be paid to
Landlord, and the proceeds under (ii) above shall be paid to Tenant.
Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the term of the Lease, Tenant shall procure, pay
for and maintain in effect workers' compensation and employer's liability
insurance and commercial general liability insurance which includes coverage for
personal injury, contractual liability and Tenant's independent contractors. The
commercial general liability should be procured and maintained with not less
than One Million and No/100ths Dollars ($1,000,000.00) per occurrence combined
single limit for bodily injury, personal injury or property damage liability. If
such insurance covers more than one location, and general aggregate limit shall
apply on a per location basis. Landlord shall also carry a policy of commercial
general liability with not less than One Million and No/100ths Dollars
($1,000,000.00) per occurrence combined single limit for bodily injury, personal
injury or property damage liability.
Tenant agrees to obtain certificates of insurance evidencing commercial general
liability insurance, including completed operations, and workers' compensation
insurance and employer's liability insurance from any contractors or
subcontractors engaged in repairs or maintenance to the Premises during the term
of the Lease. Such liability insurance must be for minimum limits of One Million
and No/100ths Dollars ($1,000,000.00) per occurrence combined single limit for
bodily injury including death and property damage liability.
Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against and payment is made under any "all risk" insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation as contained in this Lease.
WAIVER: No delay or omission in the exercise of any right or remedy of Landlord
or Tenant on any default by Tenant or Landlord shall impair such a right or
remedy or be construed as a waiver. The subsequent acceptance of Rent by
Landlord after breach by Tenant of any covenant or term of this Lease shall not
be deemed a waiver of such breach, other than a waiver of timely payment for the
particular Rent involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No act or conduct of
Landlord, including without limitation the acceptance of the keys to the
Premises, shall constitute an acceptance of the surrender of the Premises by
Tenant before the expiration of the term. Prior to the scheduled expiration of
the term of the Lease, only a notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish an early termination
of the Lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord or Tenant of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision of
the Lease. The review, approval, or inspection by Landlord of any item to be
reviewed, approved, or inspected by Landlord under the terms of this Lease shall
not constitute the assumption of any responsibility by Landlord for the accuracy
or sufficiency of any such item or the quality or suitability of such item for
its intended use.
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ENTRY BY LANDLORD: Landlord reserves, and shall at any and all reasonable times
with reasonable written notice, at least twenty-four (24) hours in advance
(except in the case of emergencies), have the right to enter the Premises to
inspect the same, to supply any service to be provided by Landlord to Tenant
hereunder, to show the Premises to prospective purchasers or tenants (during the
last nine (9) months of the Term), to post notices of nonresponsibility, and to
maintain and repair the Premises and any portion of the Building that Landlord
may deem necessary or desirable, without abatement of Rent, and may for that
purpose erect scaffolding and other necessary structures, where reasonably
required by the character of the work to be performed, always providing that the
entrance to the Premises shall not be blocked thereby and further providing that
the business of the Tenant shall not be interfered with unreasonably. With
regard to any entrance into the Premises pursuant to this Section, Landlord
agrees to use its good faith efforts to not unreasonably interfere with Tenant's
business operations at the Premises. Tenant hereby waives any claims for damages
or for any injury or inconvenience to or interference with Tenant's business,
any loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, provided Landlord complies with the preceding sentence. For
each of the aforesaid purposes, Landlord shall at all times have and retain a
key with which to unlock all of the doors in, upon and about the Premises,
excluding Tenant's vaults, safes and files, and Landlord shall have the right to
use any and all means which Landlord may deem proper to open said doors in the
event of an emergency (as determined by Landlord or its employees or
representatives acting in good faith), in order to obtain entry to the Premises
without liability to Landlord. Any entry to the Premises obtained by Landlord by
any of said means shall not under any circumstances be construed or be deemed to
be a forcible or unlawful entry into, or a detainer of the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
CASUALTY DAMAGE: During the term hereof, if the Premises or any part thereof
shall be damaged by fire or other casualty, Tenant shall give prompt written
notice thereof to Landlord. In case the Building shall be so damaged by fire or
other casualty that substantial alteration or reconstruction of the Building
shall be required (whether or not the Premises shall have been damaged by such
fire or other casualty), (i) if such damage cannot be repaired within ninety
(90) days, following the commencement of such construction, (ii) if any
mortgagee under a mortgage or deed of trust covering the Building requires that
the insurance proceeds payable as a result of said fire or other casualty be
used to retire or reduce such mortgage debt, or (iii) if such damage is not
covered by insurance carried by Landlord, Landlord may, at its option, terminate
this Lease and the term and estate hereby granted by notifying Tenant in writing
of such termination within forty-five (45) days after the date of such damage,
in which event the Rent shall be abated as of the date of such damage. If the
damage does not require substantial alteration or reconstruction or if Landlord
does not thus elect to terminate this Lease, Landlord shall, within sixty (60)
days after the date of such damage, commence to repair and restore the Building
and shall proceed with reasonable diligence to restore the Building (except that
Landlord shall not be responsible for delays outside its control) to
substantially the same condition in which it was immediately prior to the
happening of the casualty, except that Landlord shall not be required to
rebuild, repair or replace any part of Tenant's furniture and furnishings or
fixtures and equipment removable by Tenant under the provisions of this Lease,
but such work shall not exceed the scope of the work done by Landlord in
originally constructing the Building. Tenant shall not be entitled to any
compensation or damages from Landlord, and Landlord shall not be liable, for any
loss of the use of the whole or any part of the Premises, the Building, Tenant's
personal property, or any inconvenience or annoyance occasioned by such loss of
use, damage, repair, reconstruction or restoration, except that, subject to the
provisions of the next sentence, Landlord shall allow Tenant a diminution of
Rent on a square footage basis during the time and to the extent the Premises
are unfit or unavailable for occupancy. Tenant hereby specifically waives any
and all rights it may have under any law, statute, ordinance or regulation to
terminate the Lease by reason of casualty or damage to the Premises or Building,
and the parties hereto specifically agree that the Lease shall not automatically
terminate by law upon destruction of the Premises.
If the Building or the Premises is damaged or destroyed during the last twelve
(12) months of the Term of the Lease, and the Premises or the Building cannot be
fully repaired or restored by Landlord within sixty (60) days after the date of
damage or destruction, either Landlord or Tenant may terminate this Lease upon
written notice to the other, which termination shall become effective upon the
date of receipt of such notice.
CONDEMNATION:
If the whole of the Building or Premises should be condemned, this Lease shall
terminate as of the date when physical possession of the Building or the
Premises is taken by the condemning authority. If less than substantially the
whole of the Building or the Premises is thus taken or sold, this Lease shall be
unaffected by such taking, provided that (i) Tenant shall have the right to
terminate this Lease by written notice to Landlord given within ninety (90) days
after the date Tenant is informed of such taking if twenty percent (20.00%) or
more of the Premises is taken and the remaining area of the Premises is not
reasonably sufficient for Tenant to continue operation of its business, and (ii)
Landlord (whether or not the Premises are affected thereby) may terminate this
Lease by giving written notice thereof to Tenant within sixty (60) days after
the date of such taking, in which event this Lease shall terminate as of the
date when physical possession of such portion of the Building or Premises is
taken by the condemning authority. If, upon any such condemnation of less than
substantially the whole of the Building or the Premises, this Lease shall not be
thus terminated, the Rent payable hereunder shall be diminished by an amount
representing that part of the Rent as shall properly be allocable to the portion
of the Premises which was so condemned, and Landlord shall, at Landlord's sole
expense, restore and reconstruct the remainder of the Building and the Premises
to substantially their former condition to the extent that the same, in
Landlord's reasonable judgment, may be feasible, but such work shall not exceed
the scope of the work done in originally constructing the Building, nor shall
Landlord in any event be required to spend for such work an amount in excess of
the amount received by Landlord as compensation awarded upon a taking of any
part or all of the Building or the Premises. Subject to the rights of any
mortgagee under a mortgage or deed of trust covering the Building, Landlord
shall be entitled to and shall receive the total amount of any award made with
respect to condemnation of the Premises or Building, regardless of whether the
award is based on a single award or a separate award as between the respective
parties, and to the extent that any such award or awards shall be made to Tenant
or to any person claiming through or under Tenant, Tenant hereby irrevocably
assigns to Landlord all of its rights, title and interest in and to any such
awards. No portion of any such award or awards shall be allocated to or paid to
Tenant for any so-called bonus or excess value of this Lease by reason of the
relationship between the rental payable under this Lease and what may at the
time be a fair market rental for the Premises, nor for Tenant's unamortized
costs of leasehold improvements. Tenant hereby specifically waives any and all
rights it may have under any law, statute, ordinance or regulation (including,
without limitation, Sections 1265.120 and 1265.130 of the California Code of
Civil Procedure), to terminate or petition to terminate this
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Lease upon partial condemnation of the Premises or Building, and the parties
hereto specifically agree that this Lease shall not automatically terminate upon
condemnation.
Landlord may, without any obligation or liability to Tenant and without
affecting the validity and existence of this Lease other than as hereafter
expressly provided, agree to sell and/or convey to the condemnor the Premises or
portion thereof sought by the condemnor, without first requiring that any action
or proceeding be instituted, or if such action or proceeding shall have been
instituted, without first requiring any trial or hearing thereof (and Landlord
is expressly empowered to stipulate to judgment therein), free from this Lease
and the rights of Tenant hereunder.
If all or any portion of the Premises is condemned or otherwise taken for a
period (i) of less than one hundred twenty (120) days, this Lease shall remain
in full force and effect and Tenant shall continue to perform all terms and
covenants of this Lease; provided, however, Rent shall abate during such limited
period in proportion to the portion of the Premises that is rendered unusable as
a result of such condemnation or other taking, or (ii) of one hundred twenty
(120) days or more, Tenant shall have the right to terminate this Lease by
providing written notice of such election within thirty (30) days of the date
Tenant is informed of such condemnation. in which case Rent shall be abated as
of the date of such condemnation.
The words "condemnation" or "condemned" as used herein shall mean the taking for
any public or quasi-public use under any governmental law, ordinance, or
regulation, or the exercise of, or the intent to exercise, the power of eminent
domain, expressed in writing, as well as the filing of any action or proceeding
for such purpose, by any person, entity, body, agency, or authority having the
right or power of eminent domain, and shall include a voluntary sale by Landlord
to any such person, entity, body agency or authority, either under threat of
condemnation expressed in writing or while condemnation proceedings are pending,
and shall occur in point of time upon the actual physical taking of possession
pursuant to the exercise of said power of eminent domain.
TENANT'S DEFAULT: The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
The abandonment or vacation of the Premises by Tenant (failure to occupy and
operate the Premises for thirty (30) consecutive days shall be deemed an
abandonment).
The failure by Tenant to make any payment of Rent or any other payment required
to be made by Tenant hereunder as and when due, where such failure shall
continue for a period of five (5) business days following Tenant's receipt of
written notice from Landlord that such payment is due.
Tenant's failure to observe or perform any of the covenants, conditions, or
provisions of this Lease to be observed or performed by Tenant, other than as
described in subparagraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, that if the nature of Tenant's default is such that more than
sixty (60) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said sixty (60) day
period and thereafter diligently prosecutes such cure to completion.
The making by Tenant of any general assignment or general arrangement for the
benefit of creditors, or the appointment of a trustee or a receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days, or the attachment, execution, or other judicial seizure
of substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged in thirty (30)
days.
The filing of any voluntary petition in bankruptcy by Tenant, or the filing of
any involuntary petition by Tenant's creditors, which involuntary petition
remains undischarged for a period of thirty (30) days. In the event that under
applicable law the trustee in bankruptcy or Tenant has the right to affirm this
Lease and perform the obligations of Tenant hereunder, such trustee or Tenant
shall, in such time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date
of the affirmance of this Lease, and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued performance
of Tenant's obligation under this Lease.
Without the prior written consent of Landlord, which shall not be unreasonably
withheld, selling, leasing, assigning, encumbering, hypothecating, transferring,
or otherwise disposing of all or substantially all of the Tenant's assets.
REMEDIES FOR TENANT'S DEFAULT: In the event of Tenant's default, Landlord may:
Terminate Tenant's right to possession of the Premises by any lawful means, in
which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event, Landlord shall be
entitled to recover from Tenant:
the worth at the time of the award of any unpaid rent which had been earned at
the time of such termination; plus
the worth at the time of the award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss which Tenant proves could have been reasonably
avoided, plus
the worth at the time of the award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such
rental loss which Tenant proves could be reasonably avoided, plus
any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom (including, without limitation, the cost of recovering possession of
the Premises, expenses of reletting including necessary renovation and
alteration of the Premises, reasonable attorneys' fees, and real estate
commissions actually paid and that portion of the leasing commission paid by
Landlord and applicable to the unexpired portion of this Lease), plus
such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable California law.
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As used in Subsections (1) and (2) above, the "worth at the time of the award"
shall be computed by allowing interest at the lesser of ten percent (10.00%) per
annum, or the maximum rate permitted by law per annum. As used in Subsection (3)
above, the "worth at the time of award" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1.00%).
Continue this Lease in full force and effect, and the Lease will continue in
effect, as long as Landlord does not terminate Tenant's right to possession, and
Landlord shall have the right to collect Rent when due. During the period Tenant
is in default, Landlord may enter the Premises and relet them, or any part of
them, to third parties for Tenant's account. Tenant shall be liable immediately
to Landlord for all costs Landlord reasonably incurs in reletting the Premises,
including, without limitation, brokers' commissions, expenses of remodeling the
Premises required by the reletting, and like costs. Reletting can be for a
period shorter or longer than the remaining term of this Lease. Tenant shall pay
to Landlord the Rent due under this Lease on the dates the Rent is due, less the
rent Landlord receives from any reletting. In no event shall Tenant be entitled
to any excess rent received by Landlord. No act by Landlord allowed by this
paragraph shall terminate this Lease unless Landlord notifies Tenant in writing
that Landlord elects to terminate this Lease. After Tenant's default and for as
long as Landlord does not terminate Tenant's right to possession of the
Premises, if Tenant obtains Landlord's consent, Tenant shall have the right to
assign or sublet its interest in this Lease, but Tenant shall not be released
from liability.
Cause a receiver to be appointed to collect Rent. Neither the filing of a
petition for the appointment of a receiver nor the appointment itself shall
constitute an election by Landlord to terminate the Lease.
Cure the default at Tenant's cost. If Landlord at any time, by reason of
Tenant's default, reasonably pays any sum or does any act that requires the
payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord at the time the sum is paid, and if paid at a later date
shall bear interest at the lesser of ten percent (10.00%) per annum, or the
maximum rate an individual is permitted by law to charge from the date the sum
is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together
with interest on it, shall be additional Rent.
The foregoing remedies are not exclusive; they are cumulative, in addition to
any remedies now or later allowed by law, to any equitable remedies Landlord may
have, and to any remedies Landlord may have under bankruptcy laws or laws
affecting creditors' rights generally.
SURRENDER OF PREMISES: On expiration of this Lease or within five (5) days after
the earlier termination of the Term, Tenant shall surrender to Landlord the
Premises in good condition (except for ordinary wear and tear, repair and
maintenance which is the obligation of Landlord, and destruction to the Premises
covered by Section 24). Tenant shall remove all its personal property within the
above-stated time. Tenant shall perform all restoration made necessary by the
removal of any alterations or Tenant's personal property within the time periods
stated in this paragraph.
DEFAULT BY LANDLORD:
Landlord shall not be deemed to be in default in the performance of any
obligation required to be performed by it hereunder unless and until it has
failed to perform such obligations within thirty (30) days after written notice
by Tenant to Landlord specifying wherein Landlord has failed to perform such
obligation, provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for its performance, then
Landlord shall not be deemed to be in default if it shall commence such
performance within such thirty (30)-day period and thereafter diligently
prosecute the same to completion. In no event shall Landlord be liable to Tenant
for loss of profits, business interruption, or consequential damages if Landlord
performs its obligations within the time periods specified in this paragraph.
Tenant agrees to give any mortgagee and/or trust deed holders, by registered
mail, a copy of any Notice of Default served upon the Landlord, provided that
prior to such notice Tenant has been notified in writing (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of such mortgagee
and/or trust deed holder. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then the
mortgagees and/or trust deed holders shall have an additional thirty (30) days
within which to cure such default.
PARKING: Tenant shall have the right to park in the Building's parking
facilities in common with other tenants of the Building upon terms and
conditions as may from time to time be established by Landlord. Landlord shall
have the right, in addition to pursuing any other legal remedy available, to tow
any vehicle belonging to Tenant or Tenant's employees which is not in compliance
with the regulations for the parking facility then in effect if a violation
continues after the first notice of such violation, at the reasonable expense of
Tenant; nothing in this Lease, however, shall require Landlord to tow parked
cars or take other actions to free occupied unreserved spaces for Tenant's use.
Landlord shall not be liable for any claims, losses, damages, expenses or
demands with respect to injury or damage to the vehicles of Tenant or Tenant's
customers or employees that park in the parking areas of the Project, except for
such loss or damage as may be caused by the negligence or willful misconduct of
Landlord, its agents, employees, contractors and subcontractors.
ESTOPPEL CERTIFICATE: Tenant shall at any time and from time to time upon not
less than ten (10) business days' prior written notice from Landlord execute,
acknowledge, and deliver to Landlord a statement in writing, (a) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease as modified is in
full force and effect) and the date to which the Rental and other charges are
paid in advance, if any; (b) certifying that the Premises have been accepted by
Tenant; (c) confirming the Commencement Date and the expiration date of the
Lease; and (d) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of the Landlord hereunder, or specifying such
defaults, if any are claimed. Any such statement may be relied upon by a
prospective purchaser or encumbrancer of all or any portion of the real property
of which the Premises are a part.
SALE OF PREMISES: In the event of any sale of the Project, Landlord shall be and
hereby is entirely freed and relieved of all liability under any and all of its
covenants and obligations contained in or derived from this Lease and the
purchaser, at such sale or any subsequent sale of the Premises shall be deemed,
provided such successor assumes in writing the obligations of Landlord hereunder
and any such purchaser, to have assumed and agreed to carry out any and all of
the covenants and obligations of
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Landlord under this Lease. If any security deposit or prepaid Rent has been paid
by Tenant, Landlord will transfer the security deposit and prepaid rent to
Landlord's successor and upon such transfer, Landlord shall be relieved of any
and all further liability with respect thereto.
SUBORDINATION, ATTORNMENT:
This Lease is and shall be subordinate to any encumbrance now of record or
recorded after the date of this Lease affecting the Building, other
improvements, and land of which the Premises are a part. If any mortgagee,
trustee, or ground lessor shall elect to have this Lease and any options granted
hereby prior to the lien of its mortgage, deed of trust, or ground lease, and
shall give written notice thereof to Tenant, this Lease and such options shall
be deemed prior to such mortgage, deed of trust, or ground lease, whether this
Lease or such options are deeded prior or subsequent to the date of said
mortgage, deed of trust, or ground lease, or the date of recording thereof.
In the event any proceedings are brought for foreclosure, or in the event of a
sale or exchange of the real property on which the Building is located, or in
the event of the exercise of the power of sale under any mortgage or deed of
trust made by Landlord covering the Premises, Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease. Tenant agrees to execute any documents required to
effectuate an attornment or to make this Lease or any options granted herein
prior to the lien of any mortgage, deed of trust, or ground lease, as the case
may be.
Landlord agrees that Tenant's obligations to subordinate under this Section to
any future or existing ground lease, mortgage, or deed of trust shall be
conditioned upon Tenant's receipt of a nondisturbance agreement ("Nondisturbance
Agreement") from the party requiring such subordination (which party is referred
to for the purposes of this Section as the "Superior Lienor"). Such
nondisturbance agreement shall provide, at a minimum, that Tenant's possession
of the Premises shall not be interfered with following a foreclosure, provided
Tenant is not in default beyond any applicable cure periods. Landlord's
obligation with respect to such a nondisturbance agreement shall be limited to
obtaining the nondisturbance agreement in such form as the Superior Lienor
generally provides in connection with its standard commercial loans, however,
Tenant shall have the right to negotiate, and Landlord shall use its good faith
efforts and due diligence in assisting Tenant in the negotiation of, revisions
to that nondisturbance directly with the Superior Lienor. Tenant agrees to use
its good faith efforts to reach agreement with the Superior Lienor upon
acceptable terms and conditions of a nondisturbance agreement.
AUTHORITY OF PARTIES:
Tenant's Authority: If Tenant is a corporation, each individual executing this
Lease on behalf of said corporation represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation, and
that this Lease is binding upon said corporation in accordance with its terms.
If Tenant is a partnership, each individual executing this Lease on behalf of
said partnership represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said partnership under the terms of the
partnership agreement of said partnership.
Landlord's Authority: If Landlord is a corporation, each individual executing
this Lease on behalf of said corporation represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation, and
that this Lease is binding upon said corporation in accordance with its terms.
If Landlord is a partnership, each individual executing this Lease on behalf of
said partnership represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said partnership under the terms of the
partnership agreement of said partnership.
BROKER: Landlord and Tenant each warrants that it has had no dealings with any
real estate broker or agents in connection with the negotiation of this Lease,
and it knows of no other real estate broker or agent who is entitled to a
commission in connection with the Lease. Each party shall indemnify and hold
harmless the other from and against any and all liabilities or expenses arising
out of claims made by any broker (other than the Broker stated in the Basic
Lease Information) or individuals for commissions or fees resulting from the
actions of the indemnifying party in connection with the Lease.
HOLDING OVER: Upon termination of the Lease or expiration of the Term hereof, if
Tenant retains possession of the Premises, Tenant's possession shall be deemed a
month-to-month tenancy upon all of the terms and conditions contained in this
Lease, except the base rent portion of the Rent which shall be increased to one
hundred percent (100.00%) of the amount of the Base Rent at the expiration or
earlier termination of the Lease, as the case may be. Rent, as adjusted pursuant
to this Section, shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month-to-month tenancy, it
shall give the other party not less than thirty (30) days' advance written
notice of the date of termination.
RULES AND REGULATIONS: Tenant shall faithfully observe and comply with the
reasonable rules and regulations that Landlord shall from time to time
promulgate and provide written copies thereof to Tenant. Landlord reserves the
right from time to time to make all reasonable nondiscriminatory modifications
to said rules. The additions and modifications to those rules shall be binding
upon Tenant upon delivery of a copy to them to Tenant (a copy of the present
Rules and Regulations is attached hereto as Exhibit B). Landlord shall use its
reasonable efforts to enforce compliance with such rules, but shall not be
responsible to Tenant for the nonperformance of any of said rules by other
tenants or occupants.
CONTEMPLATED EXPANSION: In the event that Tenant, following the Lease Date,
determines to lease the remaining space within the Building, resulting in the
Tenant leasing one hundred percent (100.00%) of the Rentable Area and Usable
Area of the Building, Tenant shall thereafter, for the remaining Term of the
Lease, (i) be responsible for the one hundred percent (100.00%) of all Operating
Expenses, Taxes and Utilities, (ii) assume all maintenance, repair and
replacement obligations of Landlord for the Project Common Areas and the
Building, to the extent set forth in the Lease, excepting latent defects within
the Building, the structural portions of the roof, the structural walls and
foundation of the Building, which shall remain the responsibility of Landlord,
and (iii) be responsible for procuring and maintaining all Utilities and
services provided by Landlord to Tenant the expenses for which are within the
definition of Operating Expenses. In such event, Landlord and Tenant shall enter
into a written amendment to this Lease which addresses the matters set forth
above, and any other matter deemed appropriate by the parties, with the
intention to convert Tenant's leasehold interest in the Premises to a standard
"Single-Tenant, Net, Net, Net" leasing relationship. In the event that Tenant
elects to lease one hundred percent (100.00%) of the Rentable Area and Useable
Area of the Building as set forth in
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this Section, provided that Landlord and Tenant agree upon reasonable terms and
conditions, Landlord would be willing to act as the manager of the Building, on
behalf of Tenant, for a management fee of three and one-half percent (3.50%) of
Rent, as may be modified pursuant to this Section.
NOTICES: All notices and demands required to be sent to the Landlord or Tenant
under the terms of this Lease shall be personally delivered or sent by certified
mail, postage prepaid or by overnight courier (i.e. Federal Express), to the
addresses indicated in the Basic Lease Information, or to such other addresses
as the parties may from time to time designate by notice pursuant to this
paragraph. Notices shall be deemed received upon the earlier of (i) if
personally delivered, the date of delivery to the address of the person to
receive such notice (ii) if mailed, two (2) days following the date of posting
by the U.S. Postal Service, and (iii) if by overnight courier, on the business
day following the deposit of such notice with such courier.
FIRST RIGHT OF REFUSAL: At any time during the term of this Lease, provided that
Tenant is not in default hereunder, if Landlord receives an offer for the
purchase of the Building which Landlord is willing to accept, Landlord shall
provide Tenant with written notice of such offer and Tenant, for a period of
five (5) days following receipt of such notice, shall have the right to purchase
the Building upon the exact terms and conditions set forth in such notice by
providing Landlord with written notice of such election. The failure of Tenant
to provide such notice to Landlord within such time period shall be deemed
Tenant's waiver of the provisions of this Section. If Landlord materially
changes the terms set forth in such notice to Tenant (which is a decrease of
more than ten percent (10.00%) of the purchase price), such revised offer shall
be subject to Tenant's rights pursuant to this Section. The provisions of this
Section shall only be applicable to the named "Landlord" herein and shall not
apply to any other successor or assign of Landlord.
OPTION TO PURCHASE: In addition to all other rights that Tenant has under this
Lease to use and occupy the Premises during the Term, Landlord grants Tenant an
option ("Option") to purchase the Building and Real Property on the following
terms and conditions:
Option Date: This Option may only be exercised during the thirteenth (13th),
fourteenth (14th) and fifteenth (15th) month following the Commencement Date
("Option Date"). If Tenant does not exercise the Option on the Option Date,
Landlord shall be released from all obligations under this Option, and all of
Tenant's rights under this Option, legal or equitable, shall cease.
Transferability of Option: This Option may be assigned only with the prior
written consent of Landlord, which may be withheld in Landlord's sole
discretion. The Option granted under this Lease is personal to Tenant and any
Tenant Affiliate and may not be separated from or transferred independently from
the Lease.
Exercise of Option: The Option shall be exercised by mailing or delivering a
written notice ("Exercise Notice") to Landlord prior to the expiration of the
Option Date. It is a condition to the effectiveness of Tenant's exercise of the
Option that Tenant not then be in default under the Lease beyond any applicable
cure period. If Tenant is in default under this Lease beyond any applicable cure
period at the time Tenant gives the Exercise Notice, the Exercise Notice shall
be void. Simultaneously with Tenant's delivery of the Exercise Notice, Tenant
shall execute and deliver to Landlord, the Agreement of Purchase and Sale
("Purchase Agreement") which shall be in the form of Exhibit C. Within ten (10)
days following Landlord's receipt of the Purchase Agreement, provided that the
Option is effective pursuant to this Section, Landlord shall execute the
Purchase Agreement and return an original thereof to Tenant, and such document
shall control the purchase and sale transaction regarding the Building and Real
Property. The Purchase Agreement shall not be effective for any purpose unless
Tenant timely and effectively exercises the Option. To the extent of any
inconsistencies between the provisions of the Purchase Agreement and the Option,
the provisions of the Option shall prevail.
Notices: The Exercise Notice shall be delivered to Landlord in accordance with
the notice requirements set forth in this Lease.
Effect of Exercise: In the event that Buyer elects to exercise the Option and
thereafter does not acquire fee title to the Project for any reason, this Lease
shall remain effective and in full force.
RIGHT OF FIRST NEGOTIATIONS: At any time during the term of this Lease, provided
that Tenant is not in default hereunder, Landlord agrees to give to Tenant a
right of first negotiation to purchase the Building on the terms set forth in
this Section. Before marketing the Building for sale, Landlord must provide
Tenant with a notice ("Sale Notice") of Landlord's intent to sell the Building.
During the forty (40)-day period following Tenant's receipt of the Sale Notice,
Tenant shall have a first right to negotiate with Landlord for the purchase of
the Building. The Sale Notice shall include all material terms and conditions on
which Landlord is prepared to sell the Building to Tenant. Landlord and Tenant
shall negotiate all material terms and conditions in good faith during such
forty (40) day period. If Landlord and Tenant have not reached agreement on all
material terms and conditions applicable to the sale of the Building during the
aforesaid forty (40) day period, then Landlord shall be free to sell the
Building to any other party for a period of six (6) months following Tenant's
receipt of the Sale Notice; provided, however, that, in the event that Landlord
materially alters the terms and conditions last offered to Tenant during such
forty (40)-day period, then Landlord shall reoffer the Building to Tenant on
such amended terms and conditions. (Without limiting the foregoing, a decrease
of more than five percent (5.00%) in the net sale proceeds to be received by
Landlord shall be deemed a material alteration of terms and conditions.) In the
case of any such reoffer of the Building as aforesaid, Tenant shall accept or
reject such reoffered terms within twenty (20) days of Tenant's receipt of such
reoffer (which shall include the same detail as referred to in this Section
above). The right of first negotiation under this Section shall not apply to (i)
any sale, lease, exchange or other transfer to any controlled affiliate of
Landlord, including any constituent partner of Landlord or any entity owned,
controlled by or under common control or ownership with Landlord or any
constituent partner thereof, or (ii) any transfer by Landlord solely for estate
planning or asset protection purposes. The provisions of this Section shall only
be applicable to the named "Landlord" herein and shall not apply to any other
successor or assign Landlord.
MISCELLANEOUS:
Exhibits: Exhibits affixed to this Lease are a part hereof.
Joint Obligation: If there be more than one Tenant, the obligations hereunder
imposed upon Tenant shall be joint and several.
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Marginal Headings: The marginal headings and titles to the paragraphs of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
Time: Time is of the essence in this Lease and with respect to each and all of
its provisions in which performance is a factor.
Quiet Possession: Upon Tenant paying the Rent reserved hereunder, and observing
and performing all of the covenants, conditions, and provisions on Tenant's part
to be observed and performed hereunder, Tenant shall have quiet possession of
the Premises for the entire term hereof, subject to all the provisions of this
Lease.
Prior Agreements: This Lease contains all of the agreements of the parties
hereto with respect to any matter covered or mentioned in this Lease, and no
prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
Inability to Perform: This Lease and Landlord's and Tenant's obligations
hereunder (excepting Tenant's payment of Rent) shall not be affected or impaired
if the performance of an obligation is prevented due to a Force Majeure Event.
Landlord or Tenant, as the case may be, shall provide the other party with
written notice of the occurrence of such Force Majeure Event and a description
of the performance of the obligations delayed thereby, which Force Majeure Event
may be objected to by such other party within five (5) days following its
receipt of such notice. If objection is made to such Force Majeure Event, and
such objection is not resolved within ten (10) days thereafter, the disputed
matter shall be submitted to Arbitration for determination.
Jury Trial: The parties hereto shall, and they hereby do, waive trial by jury in
any action, proceeding, or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
or occupancy of the Premises and/or any claim of injury or damage.
Landlord's Personal Liability: The liability of Landlord (which, for purposes of
this paragraph, shall include the owner of the Building if other than Landlord,
affiliates, officers, employees, partners or principals) to Tenant for any
default by Landlord under the terms of this Lease shall be limited to the
interest of Landlord in the Building. Except as provided in this Section,
neither Landlord nor any partner, co-venturer, co-tenant, officer, director,
employee, agent, or representative of Landlord shall have any personal liability
whatsoever with respect thereto.
(j) Severability: Any provisions of this Lease which shall prove to be invalid,
void, and illegal shall in no way affect, impair, or invalidate any other
provision hereof, and such other provisions shall remain in full force and
effect.
Choice of Law: This Lease shall be governed by the laws of the State in which
the Premises are located.
Signs: Tenant shall not place any sign upon the Premises without Landlord's
prior written consent. Any sign that Tenant has the right to place, construct,
and maintain shall comply with all laws, and Tenant shall obtain any approval
required by such laws. Landlord makes no representation with respect to Tenant's
ability to obtain such approval.
Project Name: Tenant may use the name of the Project in which the Premises are
located in all Tenant's advertising in connection with Tenant's business at the
Premises and for no other purpose, except with Landlord's consent. Tenant shall
not have or acquire any property right or interest in the name of the Project.
Landlord reserves the right to change the name, title, or address of the Project
or the address of the Premises at any time, and Tenant waives all claims for
damages caused by such change.
Late Charges: Tenant acknowledges that late payment by Tenant to Landlord of
Rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs being extremely difficult and impracticable to fix.
Such costs include, without limitation, processing charges, accounting charges,
and late charges that may be imposed on Landlord by the terms of any encumbrance
and note secured by any encumbrance covering the Premises. Therefore, if any
delinquent installment of Rent or other sums due from Tenant is not received by
Landlord within ten (10) days after the same are due, Tenant shall pay to
Landlord an additional sum equal to one percent (1.00%) of such overdue amount
as a late charge. The parties agree that this late charge represents a fair and
reasonable estimate of the administrative and other costs that Landlord will
incur by reason of late payment by Tenant. Acceptance of any late charge [nrv1]
shall not constitute a waiver of Tenant's default with respect to the overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies available to Landlord.
LANDLORD: TENANT:
________________ ________________ (Initials)
Interest: Notwithstanding any other provisions of this Lease, any installment of
Rent or other amounts due under this Lease not paid to Landlord when due shall
bear interest from the date due or from the date of expenditure by Landlord for
the account of Tenant, until the same have been fully paid, at a rate per annum
which is the lesser of the "prime" or "reference" rate of interest announced or
internally posted by the Bank of America, N.T. & S.A., plus two (2) percentage
points, but not to exceed the highest rate permitted under applicable law. The
payment of such interest shall not constitute a waiver of any default by Tenant
hereunder.
Attorneys' Fees: In the event any legal action is brought to enforce or
interpret the provisions of this Lease, the prevailing party therein shall be
entitled to recover all costs and expenses including reasonable attorneys' fees.
In addition, if either party becomes a party to any litigation concerning this
Lease, the Premises, or the Building or other improvements, by reason of any act
or omission of the other party or its authorized representatives, and not by any
act or omission of the party that becomes a party to that litigation or any act
or omission of its authorized representatives, the party that causes the other
party to become involved in the litigation shall be liable to that party for
reasonable attorneys' fees and court costs incurred by it in the litigation.
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Modification: This Lease contains the entire agreement between the parties
relating to the rights herein granted and the obligations herein assumed. Any
oral representations or modifications concerning this Lease shall be of no force
or effect, excepting a subsequent modification in writing signed by the party to
be charged.
Execution: Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or an option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both Landlord
and Tenant.
Successors and Assigns: Subject to the provisions of this Lease, this Lease and
each of its covenants and conditions shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
Waiver of California Code Sections: Notwithstanding any other provision of this
Lease and in addition to any waivers which may be contained in this Lease,
Tenant waives the provisions of Civil Code Sections 1932(2) and 1933(4) with
respect to the destruction of the Premises; Civil Code Sections 1932(1), 1941
and 1942 with respect to Landlord's repair duties and Tenant's right of repair;
and Code of Civil Procedure Section 1265.130 allowing either party to petition
the Superior Court to terminate this Lease in the event of a partial taking of
the Premises for public or quasi-public use by statute, by right of eminent
domain, or by purchase in lieu of eminent domain; and any right of redemption or
reinstatement of Tenant under any present or future case law or statutory
provision (including Code of Civil Procedure Section 473, 1174(c) and 1179 and
Civil Code Section 3275) in the event Tenant is dispossessed from the premises
for any reason. This waiver applies to future statutes enacted in addition or in
substitution to the statute specified herein, and this waiver shall apply even
though Tenant may be the subject of a voluntary or involuntary petition in
bankruptcy.
Government Energy or Utility Controls: In the event of imposition of federal,
state or local governmental controls, regulations or restrictions on the use or
consumption of energy or other utilities during the term, both Landlord and
Tenant shall be bound thereby.
Accord and Satisfaction; Allocation of Payments: No payment by Tenant or receipt
by Landlord of a lesser amount than the Rent provided for in this Lease shall be
deemed to be other than on account of the earliest due Rent, nor shall any
endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant which is then due or delinquent.
Changes Requested by Lender: Neither Landlord nor Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as these changes do not alter the Base
Rent or other basic business terms of this Lease or otherwise diminish any right
or increase any obligations of the party from whom consent to such change or
amendment is requested.
Furnishing Financial Statements: In order to induce Landlord to enter into this
Lease, prior to the Commencement Date, Tenant agrees that it shall promptly
furnish Landlord and Landlord's lender, from time to time, upon Landlord's
written request, with financial statements reflecting Tenant's current financial
condition. Tenant represents and warrants that all financial statements, records
and information furnished by Tenant to Landlord and Landlord's lender in
connection with the Lease are true, correct and complete in all material
respects.
Objection to Statements: Tenant's failure to object to any statement, invoice or
billing rendered by Landlord within a period of ninety (90) days after receipt
thereof shall constitute Tenant's acquiesce with respect thereto and shall
render such statement, invoice or billing an account stated between Landlord and
Tenant.
Recording: No memorandum or short form of this Lease shall be recorded.
Execution of Lease, No Options: The submission of this Lease to Tenant shall be
for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to Lease, or otherwise created any interest
of Tenant in the Premises or any other Premises within the Building. Execution
of this Lease by Tenant and its return to Landlord shall not be binding on
Landlord notwithstanding any time interval, until Landlord has in fact signed
and delivered this Lease to Tenant.
IN WITNESS WHEREOF, this Lease is executed on the date and year first above
written.
LANDLORD: TENANT:
DOVE INVESTMENTS, INC., MOUNTAIN PEOPLE'S WAREHOUSE,
a California corporation a California corporation
By: By:
Its: Its:
Date: Date:
EXHIBIT A
Description of Premises
EXHIBIT B
Rules and Regulations
Landlord shall have the right to control and operate the public portions of the
Building and the public facilities, as well as facilities furnished for the
common use of the tenants, in such manner as it deems best for the benefit of
the tenants generally. No tenant
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shall invite to the demised Premises, or permit the visit of, persons in such
numbers or under such conditions as to interfere with the use and enjoyment of
the entrances, corridors, elevators and facilities of the Building by other
tenants.
Landlord reserves the right to close and keep locked all entrance and exit doors
of the Building outside of normal business hours as Landlord may deem to be
advisable for the protection of the property. All tenants, their employees, or
other persons entering or leaving the Building at any time when it is so locked
may be required to sign the Building register when so doing, and the watchman in
charge may refuse to admit to the Building while it is so locked Tenant or any
of Tenant's employees, or any other person, without a pass previously arranged,
or other satisfactory identification showing his right of access to the Building
at such time. Landlord assumes no responsibility and shall not be liable for any
damage resulting from any error in regard to any such pass or identification, or
from the admission of any unauthorized person to the Building.
Landlord reserves the right to exclude or expel from the Building or in regard
to any such pass or identification, or from the admission of any unauthorized
person to the Building, or any person who, in the judgment of Landlord, is
intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of the Rules and Regulations of the
Building or in violation of any law, order, ordinance, or governmental
regulation.
The entries, corridors, stairways and elevators shall not be obstructed by any
tenant, or used for any other purpose than ingress or egress to and from its
respective offices. Tenant shall not bring into or keep within the Building any
animal or vehicle.
Freight, furniture, business equipment, merchandise and bulky matter of any
description ordinarily shall be delivered to and removed from the demised
Premises only in the designated the service entrances and corridors, but special
arrangements will be made for moving large quantities or heavy items of
equipment and supplies into or out of the Building.
All entrance doors in the demised Premises shall be left locked when the demised
Premises are not in use.
Tenant shall not attach or permit to be attached additional locks or similar
devices to any door, transom or window of the demised Premises; change existing
locks or the mechanism thereof; or make or permit to be made any keys for any
door thereof other than those provided by Landlord. (If more than two keys for
one lock are desired, Landlord will provide them upon payment therefor by
Tenant).
Canvassing, soliciting or peddling in the Building is prohibited and each tenant
shall cooperate to prevent the same.
Tenant shall not advertise the business, profession or activities of Tenant in
any manner which violates the letter or spirit of any code of ethics adopted by
any recognized association or organization pertaining thereto or use the name of
the Building for any purpose other than the business address of the Tenant.
The drinking fountains, lavatories, water closets and urinals shall not be used
for any purpose other than those for which they were installed.
No awnings or other projections over or around the windows or entrances of the
demised Premises shall be installed by any tenant. Tenant shall not change the
draperies or the color of induction unit enclosures in any manner which will
alter the Building's appearance from the outside of the Building.
Rooms or other areas used in common by tenants shall be subject to such
regulations.
Landlord is not responsible to any tenant for the nonobservance or violation of
the Rules and Regulations by any other tenant.
Landlord reserves the right by written notice to Tenant, to rescind, alter to
waive any rule or regulation at any time prescribed for the Building when, in
Landlord's reasonable judgment, it is necessary, desirable or proper for the
best interest of the Building and its tenants.
The Tenant shall not exhibit, sell or offer for sale on the demised Premises or
in the Building any article or thing except those articles and things
essentially connected with the stated use of the demised Premises by the Tenant
without the advance consent of the Landlord.
The Tenant shall never use any picture or likeness of the Building in any
circulars, notices, advertisements or correspondence without the Landlord's
consent.
The Tenant shall cooperate fully with the Landlord to assure the effective
operation of the Building's air conditioning system. If Tenant shall so use the
demised Premises that noxious or objectionable fumes, vapors and odors exist
beyond the extent to which they are discharged or eliminated by means of the
flues and other devices contemplated by the various plans, specifications and
leases, then Tenant shall provide proper ventilating equipment for the discharge
of such excess fumes, vapors and odors so that they shall not enter into the air
conditioning system or be discharged into other vents or flues of the Building
or annoy any of the tenants of the Building or adjacent properties. The design,
location and installation of such equipment shall be subject to Landlord's
approval.
All loading and unloading of merchandise, supplies, materials, garbage and
refuse shall be made only through such entryways and elevators and at such times
as the Landlord shall designate. In its use of the loading areas in the
basement, the Tenant shall not obstruct or permit the obstruction of said
loading area and at no time shall park or allow its officers, agents or
employees to park vehicles therein except for loading or unloading.
There shall not be used or kept anywhere in the Building by any tenant or
persons or firms visiting or transacting business with a tenant any hand trucks,
except those equipped with rubber tires and side guards, or other vehicles of
any kind.
The Tenant shall not contract for any work or service which might involve the
employment of labor incompatible with the Building employees or employees of
contractors doing work or performing services by or on behalf of the Landlord.
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No curtains, blinds, shades or screens shall be attached to or hung in, or used
in connection with any window or door of the demised Premises without the prior
written consent of the Landlord.
No sign, advertisement notice or other lettering shall be exhibited, inscribed,
painted or affixed by Tenant on any part of the outside or inside of the demised
Premises or of the Building, without the prior written consent of Landlord. In
the event of any violation of the foregoing by Tenant, Landlord may remove same
without any liability, and may charge the expense incurred by such removal to
Tenant. Interior signs on doors and directory tablet shall be inscribed, painted
or affixed for Tenant by Landlord at the expense of Tenant, and shall be of a
quality, quantity, type, design, color, size, style, composition, material,
location and general appearance acceptable to Landlord.
The sashes, sash doors, skylights, windows and doors that reflect or admit light
or air into the halls, passageways or other public places in the Building shall
not be covered or obstructed by Tenant, nor shall any bottles, parcels, or other
articles be placed on the window sills, or in the public portions of the
Building.
Tenant shall not mark, paint, drill into or in any way deface any part of the
demised Premises or the Building. No boring, cutting or stringing of wires shall
be permitted, except with the prior written consent of Landlord, and as Landlord
may direct.
No animal or bird of any kind shall be brought into or kept in or about the
demised Premises or the Building.
Neither Tenant nor any of Tenant's agents, servants, employees, contractors,
visitors or licensees shall at any time bring or keep upon the demised Premises
any inflammable, combustible or explosive fluid, chemical or substance.
No additional locks, bolts or mail slots of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any change be made in existing locks
or the mechanism thereof. Tenant must, upon the termination of the tenancy,
restore to Landlord all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by Tenant, and in the event of the loss of
any keys so furnished, Tenant shall pay to Landlord the cost thereof.
Landlord shall have the right to prohibit any advertising referring to the
Building which, in Landlord's reasonable opinion, tends to impair the reputation
of the Building or its desirability as a first-class building for offices, and
upon notice from Landlord, Tenant shall refrain from or discontinue such
advertising.
Tenant's contractors shall, while in the Building or elsewhere in the complex of
which the Building forms a part, be subject to and under the control and
direction of the Superintendent of the Building (but not as agent or servant of
said Superintendent or of Landlord).
If the demised Premises is or becomes infested with vermin as a result of the
use or any misuse or neglect of the demised Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith
at Tenant's expense cause the same to be exterminated from time to time to the
satisfaction of Landlord and shall employ such licensed exterminators as shall
be approved in writing in advance by Landlord.
The requirements of Tenant will be attended to only upon application at the
office of the Building. Building personnel shall not perform any work or do
anything outside of their regular duties, unless under special instructions from
the office of Landlord.
No water cooler, air conditioning unit or system or other apparatus shall be
installed or used by Tenant without the written consent of Landlord.
Tenant shall install and maintain, at Tenant's sole cost and expense, an
adequate visibly marked (at all times properly operational) fire extinguisher
next to any duplicating or photocopying machine or similar heat producing
equipment, which may or may not contain combustible material, in the demised
Premises.
Tenant shall not use the name of the Building for any purpose other than as the
address of the business to be conducted by Tenant in the demised Premises, nor
shall Tenant use any picture of the Building in its advertising, stationery or
in any other manner without the prior written permission of Landlord. Landlord
expressly reserves the right at any time to change said name without in any
manner being liable to Tenant therefor.
EXHIBIT C
Agreement of Purchase and Sale
This Agreement of Purchase and Sale ("Agreement"), dated for reference purposes
only ___________, 19___, is entered into by and between DOVE INVESTMENTS, INC.,
a California corporation, ("Seller"), and MOUNTAIN PEOPLE'S WAREHOUSE, INC., a
California corporation ("Buyer").
Recitals
Seller is the owner of certain real property ("Real Property"), located in
Auburn ("City"), Placer County ("County"), California ("State"), also known as
Assessor's Parcel Number ___________________.
The Real Property has constructed thereon a certain building, containing
approximately one hundred thousand (100,000) gross square feet,
("Improvements"). The Real Property and Improvements are collectively referred
to as the "Project," which is commonly known as ___________________, Auburn,
California.
The Real Property, Improvements, Personal Property (as hereinafter defined), and
Seller's interest in the Leases and Service Contracts (each of which are
hereinafter defined) are hereinafter collectively referred to as the "Property."
Buyer, as tenant, and Seller, as Landlord, prior to the Effective Date, have
entered into a certain Net Lease Agreement ("Lease") dated December __, 1996,
pursuant to which Buyer and Seller have entered into this Agreement.
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Buyer desires to purchase from Seller and Seller desires to sell to Buyer the
Property pursuant to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
Agreement
Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees
to purchase from Seller, the Property on the terms and subject to the conditions
set forth in this Agreement. For the purposes of this Agreement, the date which
the last party executes this Agreement and delivers it to the other party shall
hereinafter be referred to as the "Effective Date."
Purchase Price. The purchase price ("Purchase Price") for the Property shall be
Forty-Eight and 50/100ths Dollars ($48.50) multiplied by the gross square
footage of the Improvements (which is approximately one hundred thousand
(100,000) square feet).
Payment of Purchase Price. The Purchase Price for the Property shall be payable
by Buyer as follows:
Initial Deposit. On or before the fifth (5th) day following the Effective Date,
Buyer shall deposit with Stewart Title of Sacramento ("Escrow Holder") the
amount of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) ("Initial
Deposit"). The Initial Deposit shall be invested by Escrow Holder with a
financial institution acceptable to Seller in a federally insured
interest-bearing demand account, and the Initial Deposit, and all interest
accrued thereon, shall be credited to the Purchase Price upon the Close of
Escrow.
Final Deposit. On or before the expiration of the Contingency Period (as
hereinafter defined), unless this Agreement has been previously terminated by
Buyer pursuant to its rights set forth in this Agreement, Buyer shall deposit
with Escrow Holder the amount of One Hundred Thousand and No/100ths Dollars
($100,000.00) ("Final Deposit"). Upon Buyer's delivery of the Final Deposit to
Escrow Holder, (i) the Final Deposit shall be invested by Escrow Holder in the
interest-bearing account as is required for the Initial Deposit in Section 3(a)
above, (ii) the Initial Deposit and the Final Deposit (collectively, "Deposit"),
totalling One Hundred Twenty Five Thousand and No/100ths Dollars ($125,000.00),
and all interest accrued thereon, shall be credited to the Purchase Price at
Close of Escrow, and (iii) the Deposit shall become nonrefundable, become the
sole and absolute property of Seller, except as otherwise provided herein.
Cash at Close of Escrow. On or before the Close of Escrow, Buyer shall deposit
with Escrow Holder the remaining portion of the Purchase Price, in immediately
available funds, which shall be paid to Seller at Close of Escrow.
Escrow.
Opening of Escrow. Within two (2) days following the Effective Date, Buyer shall
open an escrow ("Escrow") with Escrow Holder. Buyer and Seller agree to execute
and deliver to Escrow Holder, in a timely manner, all escrow instructions
necessary to consummate the transaction contemplated by this Agreement. Any such
instructions shall not conflict with, amend or supersede any portion of this
Agreement. If there is any inconsistency between such instructions and this
Agreement, this Agreement shall control.
Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be
defined as the date that the Grant Deed (as hereinafter defined) is recorded in
the Official Records of the County. The Close of Escrow shall occur ten (10)
days following the expiration of the Contingency Period ("Outside Date"), unless
extended by the mutual written consent of the parties.
Conditions of Title. It shall be a condition to the Close of Escrow that title
to the Project be conveyed to Buyer by Seller by a Grant Deed, which shall be in
the form customarily used by Escrow Holder in the County ("Grant Deed"), subject
only to (a) a lien to secure payment of real estate taxes, not yet due and
payable; (b) the lien of supplemental taxes, not yet due and payable; (c)
exceptions which are approved and/or accepted by Buyer in writing in accordance
with this Agreement; and (d) all applicable laws, ordinances, rules and
governmental regulations (including, but not limited to those relative to
building, zoning and land use) affecting the development, use, occupancy or
enjoyment of the Property (collectively, "Approved Conditions of Title").
Conditions to Close of Escrow.
Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligations
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions (or Buyer's written waiver thereof)
which are for Buyer's sole benefit, on or prior to the dates designated below
for the satisfaction of such conditions, or the Close of Escrow in absence of a
specified date:
Title. Buyer shall have the right to approve any and all matters of and
exceptions to title of the Project, including the legal description, as
disclosed by the following documents and instruments (collectively, "Title
Documents"): (A) a Preliminary Report ("Preliminary Report") issued by Escrow
Holder with respect to the Project and all matters referenced therein; and (B)
legible copies of all documents, whether recorded or unrecorded, referred to in
such Preliminary Report. Buyer shall cause Escrow Holder to deliver the Title
Documents to Buyer and Seller within ten (10) calendar days following the
Effective Date. Buyer shall have ten (10) calendar days following its receipt of
the Title Documents to give Seller and Escrow Holder written notice ("Buyer's
Title Notice") of Buyer's approval or disapproval, which shall be made in
Buyer's sole and absolute discretion, of the legal description and every item or
exception disclosed by the Title Documents. The failure of Buyer to give Buyer's
Title Notice to Seller within the specified time period shall be deemed Buyer's
disapproval of title to the Project, in which case the Agreement shall be
canceled pursuant to the provisions of this Section. In the event that Buyer's
Title Notice disapproves of any matter of title shown in the Title Documents,
Seller shall, within seven (7) calendar days after Buyer's Title Notice is
received by Seller, give Buyer written notice ("Seller's Title Notice") of those
disapproved title matters, if any, which Seller is unable or unwilling to have
eliminated from title to the Project by Close of Escrow. In the event that
Seller is unable to remove all of the title matters objected to by Buyer in
Buyer's Title Notice, Buyer shall have three (3) calendar days from receipt of
Seller's Title Notice to notify Seller in writing that either (1) Buyer is
willing to purchase the Project subject to such disapproved exceptions, or (2)
Buyer elects to cancel this transaction. Failure of Buyer to take either one of
the actions described in Subsection (1) or (2) above shall be deemed to be
Buyer's election to take the action described in Subsection (1) above. In the
event this Agreement is canceled or deemed canceled pursuant to this Section,
except as
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otherwise provided herein, the parties shall have no further obligations under
this Agreement, and all monies delivered to Escrow Holder by Buyer shall
immediately be returned to Buyer.
Inspections and Studies. For a period of thirty (30) days following the
Effective Date ("Contingency Period"), Buyer shall have the right to review and
approve the (A) Documents and Materials (as hereinafter defined), and (B)
conduct any and all inspections, investigations, tests and studies (including,
without limitation, investigations with regard to zoning, building codes and
other governmental regulations, architectural inspections, engineering tests,
economic feasibility studies, soils, seismic and geologic reports and
environmental testing) with respect to the Property as Buyer may elect to make
or maintain. Prior to the expiration of the Contingency Period, Buyer shall
deliver to Seller and Escrow Holder written notice of its approval or
disapproval, which shall be made in Buyer's sole and absolute discretion, of the
Property and the Documents and Materials. The failure of Buyer to deliver such
notice prior to the expiration of the Contingency Period shall be deemed to
constitute Buyer's disapproval of such matters, in which case the Agreement
shall be canceled pursuant to the provisions of this Section. The cost of any
such inspections, tests and/or studies shall be borne by Buyer. Between the
Effective Date and the Close of Escrow, Buyer, its agents, contractors and
subcontractors shall have the right to enter upon the Project at reasonable
times during ordinary business hours to make any and all inspections and tests
as may be necessary or desirable in Buyer's sole judgment and discretion. Buyer
shall use its good faith efforts not to interfere with the use of the
Improvements by the Tenants (as hereinafter defined). Buyer shall indemnify,
defend (with counsel reasonably satisfactory to Seller) and hold Seller, its
agents, employees, trustee, directors and officers, and the Property harmless
from any and all damage arising out of or in connection with such entry and/or
activities upon the Project by Buyer, its agents, employees or contractors. In
the event Buyer disapproves or is deemed to have disapproved of the condition of
the Property and/or the Documents and Materials prior to the expiration of the
Contingency Period, except as otherwise provided herein, the parties shall have
no further obligations under this Agreement, all monies delivered to Escrow
Holder by Buyer shall be immediately returned to Buyer, and Buyer shall deliver
to Seller copies of any and all reports, studies, inspections, or other
materials Buyer caused to be prepared pursuant to its inspection right set forth
in this Section.
Tenant Estoppel Certificate. On or before the Close of Escrow, Buyer shall have
received from Seller estoppel certificates ("Tenant Estoppel Certificates"),
duly executed by each of the Tenants, to be dated not more than forty-five (45)
days prior to the Close of Escrow. The Tenant Estoppel Certificate shall be in
the form of Exhibit A attached hereto. In this regard, Buyer's failure to object
to any Tenant Estoppel Certificate within five (5) days following Buyer's
receipt thereof shall be deemed (i) Buyer's approval of such document, and (ii)
a satisfaction of the condition precedent set forth in this Section 6(a)(iii) as
it relates to such Tenant.
Title Insurance. As of the Close of Escrow, Title Company (as hereinafter
defined) shall have issued or shall have committed to issue the Title Policy (as
hereinafter defined) to Buyer.
Seller's Obligations. As of the Close of Escrow, Seller shall have performed all
of the obligations required to be performed by Seller under this Agreement.
Seller's Representations. As of the Close of Escrow, all representations and
warranties made by Seller to Buyer in this Agreement shall be true and correct.
Conditions to Seller's Obligations. The Close of Escrow and Seller's obligations
to consummate the transaction contemplated by this Agreement are subject to the
satisfaction of the following conditions (or Seller's waiver thereof) which are
for Seller's sole benefit, on or prior to the dates designated below for the
satisfaction of such conditions, or the Close of Escrow in absence of a
specified date:
Buyer's Obligations. As of the Close of Escrow, Buyer shall have timely
performed all of the obligations required by the terms of this Agreement to be
performed by Buyer.
Buyer's Representations. As of the Close of Escrow, all representations and
warranties made by Buyer to Seller in this Agreement shall be true and correct
as of the Close of Escrow.
Tenant Estoppel Certificates. On or before the Close of Escrow, Buyer shall have
received Tenant Estoppel Certificates duly executed by all Tenants.
Outside Date. The Close of Escrow shall occur on or before the Outside Date.
Failure of Condition to Close of Escrow. Except as provided in Section 6(a) or
6(b), in the event any of the conditions set forth in Section 6(a) or 6(b) are
not timely satisfied or waived by the appropriate benefitted party, for a reason
other than the default of Buyer or Seller, this Agreement shall terminate, and
if applicable, the Deposit, and all interest accrued thereon, and all other
monies delivered to Escrow Holder by Buyer shall be immediately be returned to
Buyer, and, except as otherwise provided herein, the parties shall have no
further obligations hereunder.
Deposits by Seller. Unless otherwise provided in this Section, at least one (1)
business day prior to the Close of Escrow, Seller shall deposit with Escrow
Holder the following documents:
Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by
Seller, conveying fee title to the Project to Buyer subject only to the Approved
Conditions of Title.
FIRPTA Certificate. A certification, acceptable to Escrow Holder and duly
executed by Seller under penalty of perjury setting forth Seller's address and
federal tax identification number in accordance with and/or for the purpose of
the provisions of Sections 7701 and 1445, as may be amended, of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder.
California Franchise Tax Withholding. Evidence satisfactory to Buyer and Escrow
Holder that Seller is exempt from the provisions of the withholding requirements
of the California Revenue and Taxation Code, as amended, and that neither Buyer
nor Escrow Holder is required to withhold any amounts from the Purchase Price
pursuant to such provisions.
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Bill of Sale. A bill of sale ("Bill of Sale") duly executed and acknowledged by
Seller in favor of Buyer, assigning and conveying to Buyer all of Seller's
right, title and interest in and to the Personal Property. The Bill of Sale
shall be in the form of, and upon the terms contained in, Exhibit B attached
hereto.
Assignment of Leases. An Assignment of Leases ("Tenant Lease Assignment") duly
executed and acknowledged by Seller in recordable form, assigning to Buyer all
of Seller's right, title and interest in and to all of the Leases. The Tenant
Lease Assignment shall be in the form of, and upon the terms contained in,
Exhibit C attached hereto.
General Assignment. An assignment ("General Assignment"), duly executed by
Seller, assigning to Buyer all of Seller's right, title and interest in the
Service Contracts. The General Assignment shall be in the form of, and upon the
terms contained in, Exhibit D attached hereto.
Tenant Notification Letter. A letter to the Tenants ("Tenant Notification
Letter"), duly executed by Seller and dated as of the Close of Escrow, notifying
each Tenant that: (1) the Project has been sold to Buyer; (2) all of Seller's
right, title and interest in and to the Leases have been assigned to Buyer; and
(3) commencing immediately, all rent and other payments and any notices under
the Leases are to be paid and sent to Buyer.
Lease. The original Leases.
Service Agreements. The original Service Agreements.
Keys. Keys to all entrance doors to the Improvements and keys to all Personal
Property located on the Project, which keys shall be properly tagged for
identification.
Reimbursable Operating Statement. A statement setting forth the operating
expenses incurred by Seller for the year in which the Close of Escrow occurs,
for which Tenants have not yet been billed but for which Tenants are required to
reimburse Seller pursuant to the Leases; provided, however, if such information
is not reasonably available at Close of Escrow, Seller may deliver such
statement to Buyer as soon as practicable after the Close of Escrow.
Deposits By Buyer. At least one (1) business day prior to the Close of Escrow,
Buyer shall deposit or cause to be deposited with Escrow Holder (a) the required
funds which are to be applied towards the payment of the Purchase Price; (b) a
counterpart of the Bill of Sale executed and acknowledged by Buyer; (c) a
counterpart of the Tenant Lease Assignment executed and acknowledged by Buyer;
and (d) a counterpart of the General Assignment executed and acknowledged by
Buyer.
Issuance of Title Insurance. At the Close of Escrow, Escrow Holder's title
insurer ("Title Company"), shall issue to Buyer its standard form California
Land Title Association ("CLTA") Owner's Policy of Title Insurance showing fee
title to the Project vested in Buyer subject only to the Approved Conditions of
Title ("Title Policy"). The Title Policy shall be issued with liability in an
amount equal to the Purchase Price. Seller shall pay for the expense of the
Title Policy. If Buyer elects to have Title Company issue its American Land
Title Association ("ALTA") Owner's Policy of Title Insurance, Buyer shall pay
for the expense of such ALTA premium increment, any endorsement thereto and any
survey costs.
Costs and Expenses. Except as otherwise specified in this Agreement, Seller and
Buyer shall equally divide (a) all escrow fees and costs; (b) any document
recording charges; and (c) documentary transfer tax charged by the County and
any other transfer tax charged by the City. All other costs and expense of
escrow and title shall be shared pursuant to the custom in the County. Buyer and
Seller shall each pay all legal and professional fees and fees of other
consultants incurred by Buyer and Seller, respectively.
Prorations.
Revenues. Rentals, revenues, and other income, if any, from the Property, and
any form operating expenses pass-throughs relating to the Leases, if any,
affecting the Property shall be prorated as of 11:59 p.m. on the day following
the Close of Escrow. "Rentals" as used herein include fixed monthly rentals,
additional rentals, percentage rentals, escalation rentals, retroactive rentals,
and any other sums and charges payable by Tenants under the Leases.
Delinquent Rentals. Rentals are delinquent when payment thereof is due on or
prior to the Close of Escrow but has not been made by the Close of Escrow.
Delinquent Rentals shall be prorated between Buyer and Seller as of the Close of
Escrow but not until they are actually collected by Buyer. Buyer shall use its
good faith efforts and due diligence to collect any delinquent Rentals, if any.
After the Close of Escrow, without the prior consent of Buyer, which shall not
be unreasonably withheld, Seller shall not take any action against a Tenant
owing delinquent Rentals. Seller shall be entitled to any Rentals received by
Buyer from Tenants after the Close of Escrow to the extent such Rentals relate
to amounts owing prior to the Close of Escrow. Buyer agrees that any payments
due to Seller as a result of collected delinquent Rentals shall be payable by
Buyer to Seller upon receipt thereof, less Buyer's reasonable cost of
collection.
Operating Cost Pass-Throughs. Operating cost pass-throughs, or charges payable
by Tenants which accrue to the Close of Escrow but which are not then due and
payable, shall be prorated as of the Close of Escrow; provided, however, no
payment thereof shall be made to Seller unless and until Buyer collects same
from the Tenants, which Buyer shall use its good faith efforts an due diligence
to collect following the Close of Escrow. When Buyer collects such operating
cost pass-throughs, or charges from a Tenant, Buyer shall pay Seller an amount
equal to all such operating cost pass-throughs, or charges accruing prior to the
Close of Escrow. Payments of such prorated amounts shall be made to Seller upon
receipt and shall be accompanied by a report showing such amount was calculated
and such supporting documentation as Seller reasonably requests.
Tenant Deposits. Buyer shall be credited and Seller shall be debited with an
amount equal to all deposits from Tenants (and any interest accrued thereon for
the benefit of a Tenant) being held by Seller under the Leases.
Taxes/Assessments. All nondelinquent real estate taxes on the Project shall be
prorated as of 11:59 p.m. on the day following the Close of Escrow based on the
actual current tax bill, but if such tax bill has not yet been received by
Seller by the Close of Escrow, then the current year's taxes shall be deemed to
be one hundred two percent (102.00%) of the amount of the previous year's tax
bill
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for the Project. All delinquent taxes and all assessments, if any, on the
Project shall be paid at the Close of Escrow from funds accruing to Seller.
Other Expenses. All other expenses for the Property shall be prorated as of
11:59 p.m. on the day following to the Close of Escrow between the parties based
upon the latest available information.
Corrections. If any errors or omissions are made regarding adjustments and
prorations as set forth herein, the parties shall make the appropriate
corrections promptly upon discovery thereof. If any estimates are made at the
Close of Escrow regarding adjustments or prorations, the party shall make the
appropriate correction promptly when accurate information becomes available. Any
corrected adjustment or proration shall be paid in cash to the party entitled
thereto.
Review of Documents and Materials. Within five (5) calendar days following the
Effective Date, Seller shall deliver to Buyer, all documents and materials
(collectively, "Documents and Materials") relating to the Property to the extent
in Seller's possession; provided, however, in no event shall Seller be required
to disclose any "attorney-client" privileged information or internal appraisals.
Seller makes no representation or warranty regarding the truth or accuracy of
the Documents and Materials.
Condition and Inspection of Property. Seller makes no representation or warranty
regarding the condition of the Property, its past use, or its suitability for
Buyer's intended use, and the Property is sold AS-IS, WHERE-IS, WITH ALL FAULTS,
AND THERE IS NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE
PROPERTY. Buyer is relying solely upon, and as of the expiration of the
Contingency Period shall have conducted its own independent inspection,
investigation, and analysis of the Property as it deems necessary or appropriate
in so acquiring the Property from Seller, including, without limitation, any and
all matters concerning the condition, use and/or sale of the Property.
Liquidated Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE REMOVED BY THE
SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT, AND THAT IF THIS
AGREEMENT IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, IT WOULD BE EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER.
THE PARTIES HAVE DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT
WOULD BE SUFFERED BY SELLER AS A RESULT OF ANY SUCH DEFAULT IS DIFFICULT OR
IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS AGREEMENT AND THAT THE DEPOSIT
IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE
PARTIES AGREE THAT IF THIS PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF
BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN OF THE DEPOSIT, AS
LIQUIDATED DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER
HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER
AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY
RELIEF OR OTHER REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO
WHICH SELLER MIGHT OTHERWISE BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN
EQUITY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY. NOTHING
CONTAINED HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE BY
SELLER PURSUANT TO [nrv2]
AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR INDEMNIFICATION PROVISION HEREOF.
Seller _________ Buyer _________
Condemnation and Destruction.
Eminent Domain or Taking. If, prior to the Close of Escrow, any material portion
of the Real Property or Improvements is taken by eminent domain or otherwise,
Seller shall immediately notify Buyer of such fact. If such taking is
"material," Buyer shall have the option, in its reasonable discretion, to
terminate this Agreement upon written notice to Seller given not later than ten
(10) days after receipt of Seller's notice. If this Agreement is terminated
pursuant to this Section, the provisions of Section 6(c) shall govern. If Buyer
does not exercise this option to terminate this Agreement, or if there has not
been a material taking by eminent domain or otherwise to give rise to such
option, neither party shall have the right to terminate this Agreement, but the
Seller shall assign and turn over, and the Buyer shall be entitled to receive
and keep, all awards for the taking by eminent domain which accrue to Seller and
the parties shall proceed to the Close of Escrow pursuant to the terms hereof,
without modification of the terms of this Agreement and without any reduction in
the Purchase Price. For the purpose hereof, "material" shall be deemed to be any
diminution in the value of the Property as a result of a taking by eminent
domain or otherwise which exceeds Fifty Thousand and No/100ths Dollars
($50,000.00), as determined by Seller using its good faith judgment.
Fire or Casualty. Prior to the Close of Escrow, the entire risk of loss or
damage by earthquake, flood, landslide, fire or other casualty shall be borne
and assumed by Seller, except as otherwise provided in this Section. If, prior
to the Close of Escrow, any part of the Improvements are damaged or destroyed by
earthquake, flood, landslide, fire or other casualty, Seller shall immediately
notify Buyer of such fact. If such damage or destruction is "material", Buyer
shall have the option to terminate this Agreement upon written notice to the
Seller given not later than ten (10) days after receipt of Seller's notice. For
purposes hereof, "material" shall be deemed to be any uninsured damage or
destruction to the Project or any insured damage or destruction where the cost
of repair or replacement is estimated to be Fifty Thousand Dollars ($50,000.00)
or more or shall take more than ninety (90) days to repair, in Seller's good
faith judgment; provided, however, in the case of uninsured damage or
destruction, Seller may, at Seller's option, elect to repair such damage and
destruction and keep this Agreement in full force and effect so long as such
repair can be and is completed by Seller prior to the Close of Escrow. If this
Agreement is so terminated, the provisions of Section 6(c) shall govern. If
Buyer does not exercise this option to terminate this Agreement, or if the
casualty is not material, neither party shall have the right to terminate this
Agreement but Seller shall assign and turn over, and Buyer shall be entitled to
receive and keep, all insurance proceeds payable to it with respect to such
destruction, and the parties shall proceed to the Close of Escrow pursuant to
the terms hereof without modification of the terms of this Agreement and without
any reduction in the Purchase Price.
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Notices. All notices or other communications required or permitted hereunder
shall be in writing, and shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or sent by electronic
facsimile and shall be deemed received upon the earlier of (i) if personally
delivered, the date of delivery to the address of the person to receive such
notice, (ii) if mailed, on the date of posting by the United States Post Office,
or (iii) if given by electronic facsimile, when received by the other party.
TO BUYER: Mountain People's Warehouse, Inc.
12745 Earhart Avenue
Auburn, California 95602
Telephone: ______________
Facsimile: ______________
Attention: ______________
TO SELLER: Dove Investments, Inc.
3620 Fair Oaks Boulevard, Suite 150
Sacramento, California
Telephone: (916) 920-4400
Facsimile: (916) 920-0854
Attention: Benjamin S. Catlin
WITH COPY TO: Trainor Robertson
701 University Avenue, Suite 200
Sacramento, California 95825
Telephone: (916) 929-7000
Facsimile: (916) 929-7111
Attention: Jay Heckenlively
TO ESCROW HOLDER:
Telephone:
Facsimile:
Attention:
Notice of change of address shall be given by written notice in the manner
described in this Section.
Brokers. The parties acknowledge and agree that there is no real estate broker
involved in this transaction.
Exchange. The parties to this Agreement acknowledge that either party may desire
to structure the sale and/or the purchase of the Property as an exchange for
like-kind property pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended, in order to defer recognition of income from the disposition
of the Property and other properties. The parties agree to reasonably cooperate
with each other to accomplish such exchange(s) and each party hereby agrees that
any and all costs associated with said exchange shall be borne solely by the
exchanging party and shall in no way be attributable to the nonexchanging party.
In no event shall the nonexchanging party be required to take title to the
exchanged property(ies) to effectuate the tax deferred exchange contemplated by
this Section.
Miscellaneous.
Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid, and shall be enforced
to the fullest extent permitted by law.
Waivers. No waiver of any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of time for
performance of any other obligation or act except those of the waiving party,
which shall be extended by a period of time equal to the period of the delay.
Survival of Representations. The indemnification, defense and hold harmless
obligations, and the representations and warranties made by each party herein
shall survive (1) the Close of Escrow and shall not merge into the Grant Deed
and the recordation thereof, and (2) the termination and/or cancellation of this
Agreement.
Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the permitted successors and assigns of the parties hereto.
Professional Fees. If either party commences an action against the other to
interpret or enforce any of the terms of this Agreement or because of the breach
by the other party of any of the terms hereof, the losing party shall pay to the
prevailing party reasonable attorneys' fees, costs and expenses and court costs
and other costs of action incurred in connection with the prosecution or defense
of such action, whether or not the action is prosecuted to a final judgment. For
the purpose of this Agreement, the terms "attorneys' fees" or "attorneys' fees
and costs" shall mean the fees and expenses of counsel to the parties hereto,
which may include printing, photostating, duplicating and other expenses, air
freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. The terms "attorneys' fees" or "attorneys' fees and
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<PAGE>
costs" shall also include, without limitation, all such fees and expenses
incurred with respect to appeals, arbitrations and bankruptcy proceedings, and
whether or not any action or proceeding is brought with respect to the matter
for which said fees and expenses were incurred. The term "attorney" shall have
the same meaning as the term "counsel."
Entire Agreement. This Agreement (including all exhibits attached hereto) is the
final expression of, and contains the entire agreement between, the parties with
respect to the subject matter hereof and supersedes all prior understandings
with respect thereto. This Agreement may not be modified, changed, supplemented,
superseded, canceled or terminated, nor may any obligations hereunder be waived,
except by written instrument signed by the party to be charged or by its agent
duly authorized in writing or as otherwise expressly permitted herein. The
parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto and lawful assignees.
Assignment. Buyer may not assign its right, title or interest in this Agreement
to any other party without the prior written consent of Seller, which
determination may be withheld in Seller's sole and absolute discretion. Any
attempted assignment without the prior written consent of Seller shall be void
and be deemed a default of Buyer hereunder. Any permitted assignment shall not
relieve the assigning party from any liability under this Agreement.
Time of Essence. Seller and Buyer hereby acknowledge and agree that time is
strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and that failure to timely perform any of the
terms, conditions, obligations or provisions hereof by either party shall
constitute a material breach of and a noncurable (but waivable) default under
this Agreement by the party so failing to perform.
Relationship of Parties. Nothing contained in this Agreement shall be deemed or
construed by the parties to create the relationship of principal and agent, a
partnership, joint venture or any other association between Buyer and Seller.
Construction. Headings at the beginning of each paragraph and subparagraph are
solely for the convenience of the parties and are not a part of the Agreement.
Whenever required by the context of this Agreement, the singular shall include
the plural and the masculine shall include the feminine and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to paragraphs, sections, subparagraphs and subsections
are to this Agreement. All exhibits referred to in this Agreement are attached
and incorporated by this reference.
Governing Law. The parties hereto acknowledge that this Agreement has been
negotiated and entered into in the State of California. The parties hereto
expressly agree that this Agreement shall be governed by, interpreted under, and
construed and enforced in accordance with the laws of the State of California.
Possession of Property. Buyer shall be entitled to the possession of the
Property immediately following the Close of Escrow.
Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute
one and the same instrument.
Days of Week. If any date for performance herein falls on a Saturday, Sunday or
holiday, as defined in Section 6700 of the California Government Code, the time
for such performance shall be extended to 5:00 p.m. on the next business day.
Representation by Counsel. Notwithstanding any rule or maxim of construction to
the contrary, any ambiguity or uncertainty shall not be construed against either
Seller or Buyer based upon authorship of any of the provisions hereof. Seller
and Buyer each hereby warrant, represent and certify to the other as follows:
(a) that the contents of this Agreement have been completely and carefully read
by the representing party and counsel for the representing party; (b) that the
representing party has been separately represented by counsel and the
representing party is satisfied with such representation; (c) that the
representing party's counsel has advised the representing party of, and the
representing party fully understands, the legal consequences of this Agreement;
and (d) that no other person (whether a party to this Agreement or not) has made
any threats, promises or representations of any kind whatsoever to induce the
execution hereof, other than the performance of the terms and provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
dates set forth below.
BUYER: SELLER:
MOUNTAIN PEOPLE'S WAREHOUSE, DOVE INVESTMENTS, INC.,
a California corporation a California corporation
By: By:
Its: Its:
Date: Date:
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FIRST AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)
This First Amendment to Net Lease Agreement ("First Amendment"), dated for
reference purposes as August 11, 1998, is entered into by and between LOCKSLEY
LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED
NATURAL FOODS, INC., a Delaware corporation ("Tenant").
Recitals
A. On or about December 31, 1996, Landlord's predecessor-in-interest and
Tenant's predecessor-in-interest entered into that certain Net Lease Agreement
("Lease") concerning the lease of the "Premises," more particularly described
therein. As of the Effective Date (as hereinafter defined) of this First
Amendment, the Lease remains effective and in full force and effect.
B. Landlord and Tenant now desire to amend the terms and conditions of the
Lease in accordance with the provisions of this First Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
Agreement
1. Definitions. Unless otherwise specified herein, all capitalized terms used in
this First Amendment are used as defined in the Lease.
2. Effective Date. This First Amendment shall become effective on the date it is
executed by both Landlord and Tenant, which date is hereinafter referred to as
the "Effective Date."
3. Confirmation. Tenant acknowledges and agrees that Landlord has previously
accepted the assignment from Dove Investment, Inc., a California corporation, of
its interest in the Lease as the "Landlord".
4. Free Base Rent. Notwithstanding the provisions of Section 7 of the Lease,
Landlord agrees that for the first sixty (60) days following the Commencement
Date, Tenant shall be entitled to Base Rent-Free possession of the Premises.
5. Term. Landlord and Tenant agree that the "Term," as defined in the Basic
Lease Information, shall expire ten (10) years following the Commencement Date.
6. Section 2c of the Lease. Landlord and Tenant agree that the "Anticipated
Occupancy Date," set forth in Section 2c of the Lease, is hereby amended from
"July 1, 1997" to "February 1, 1999."
7. Premises Section of the Basic Lease Information. Landlord and Tenant hereby
agree that the first sentence of the section entitled "Premises" in the Basic
Lease Information is deleted in its entirety and replaced with the following:
"The Premises referred to in this Lease are located at 12600 Locksley Lane,
Auburn, California ("Building"), and consist of approximately sixty-two thousand
eight hundred seventy-five (62,875) rentable square feet as shown in Exhibit A,
which is sixty-two and 875/1000ths percent (62.875%) ("Tenant's Proportionate
Share") of the rentable square feet of the Building."
8. Base Rent Section of the Basic Lease Information. Landlord and Tenant hereby
agree that the Base Rent section entitled "Base Rent" in the Basic Lease
Information is hereby deleted in its entirety and replaced with the following:
"Twenty-Three Thousand Five Hundred Seventy-Eight and 13/100ths Dollars
($23,578.13) per month based on sixty-two thousand eight hundred seventy-five
(62,875) rentable square feet at $.3750 per square foot per month payable in
advance on the first day of each month, subject to adjustment pursuant to
Section 7 of the Lease and until increased as provided in Section 7 of the
Lease."
9. Change Orders. Landlord and Tenant acknowledge and agree that they have (i)
approved of certain change orders ("Change Orders") to the Approved Final Plans,
as defined in Section 2 of the Lease, and (ii) allocated the responsibility for
payment of the Change Orders. A summary of the Change Orders and the designation
of the party responsible for such expense ("Change Order Summary") is attached
hereto as Exhibit A-1.
10. Truck Turn-Around. At all times during the term of this Lease, Landlord
shall provide sufficient driveway area adjacent to the Building that shall allow
any truck's utilized by Tenant to ingress the driveway areas of the Building,
turn around, and back up to the trucking docks for the Premises without having
to "blind side in" (as such term is customarily used in the trucking industry).
Upon Landlord's finalization of the improvement plans for the driveway/parking
areas for the Building, Landlord shall forward a copy thereof to Tenant for
review and reasonable approval.
11. Ratification. Except as modified by this First Amendment, the Lease is
ratified, affirmed, in full force and effect, there are not existing defaults by
the parties thereunder, and incorporated herein by this reference.
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<PAGE>
NOW, THEREFORE, the parties have executed this First Amendment as of the
date set forth below.
LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: ________________________ By: ________________________
Its: ________________________ Its: ________________________
Date: ________________________ Date: ________________________
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SECOND AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)
This Second Amendment to Net Lease Agreement ("Second Amendment"), dated for
reference purposes as June 14, 1999, is entered into by and between LOCKSLEY
LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED
NATURAL FOODS, INC., a Delaware corporation ("Tenant").
Recitals
C. On or about December 31, 1996, Landlord's predecessor-in-interest and
Tenant's predecessor-in-interest entered into that certain Net Lease Agreement
("Net Lease") concerning the lease of the "Premises," more particularly
described therein.
D. On or about August 11, 1998, Landlord and Tenant amended certain terms and
conditions of the Net Lease by that certain First Amendment to Net Lease
Agreement ("First Amendment"). The Net Lease, as amended by the First Amendment,
is hereinafter collectively referred to as, the "Lease." As of the Effective
Date (as hereinafter defined) of this Second Amendment, the Lease remains in
full force and effect.
E. Pursuant to the First Amendment, Landlord and Tenant agreed that the sum of
Eighty-Nine Thousand Twenty and No/100ths dollars ($89,020.00) is the accurate
total cost of the Tenant requested Change Orders.
F. Landlord and Tenant now desire to amend the terms and conditions of the Lease
in accordance with the provisions of this Second Amendment.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, the parties agree as follows:
Agreement
1. Definitions. Unless otherwise specified herein, all capitalized terms used in
this Second Amendment are used as defined in the Lease.
2. Effective Date. This Second Amendment shall become effective on the date upon
which the last party hereto executes this Second Amendment ("Effective Date").
3. Section 2(c) of the Lease.
(a) Landlord and Tenant hereby agree upon the summary of events contained in
this Section 3(a) that have affected the provisions of Section 6(b) of the Net
Lease. The Anticipated Occupancy Date was amended to be February 1, 1999 by the
First Amendment. The ninetieth (90th) day following February 1, 1999, is May 1,
1999, whereupon Landlord would have incurred the penalties set forth in Section
6(b) of the Net Lease but for the fact that there were delays totaling
forty-seven (47) days, which delays arose out of Force Majeure Events. Due to
such delays, the revised date upon which Landlord would incur penalties pursuant
to Section 6(b) of the Net Lease is currently June 16, 1999.
(b) In consideration of the foregoing Section 3(a), Landlord and Tenant hereby
agree and acknowledge that the "Anticipated Occupancy Date," set forth in
Section 2(c) of the Lease, is hereby amended from "February 1, 1999" to
"September 7, 1999."
(c) Notwithstanding anything to the contrary contained in this Section 3, the
provisions of Section 6(b) of the Net Lease regarding extensions of the
Anticipated Occupancy Date as a result of delays caused by the Tenant and/or
Force Majeure Events, remain in full force and effect.
4. Construction.
(a) Schedule. Attached hereto as Exhibit A and incorporated herein by this
reference, is a schedule for the construction of the Building Improvements
("Construction Schedule"). Landlord anticipates that the Premises will be Ready
for Occupancy (i) as of September 7, 1999 with respect to the "warehouse
portion" ("Warehouse Portion"), and (ii) as of September 24, 1999 with respect
to the "office portion" ("Office Portion") each of which is designated on the
site plan attached hereto as Exhibit B and incorporated herein by this
reference.
(b) Early Occupancy. Landlord shall notify Tenant of the date upon which it
shall be granted early occupancy of the Premises ("Early Occupancy"), which date
shall be forty (40) days prior to the Anticipated Occupancy Date ("Early
Occupancy Date"). The purpose of the Early Occupancy is to facilitate the
installation of the warehouse racks ("Racks") by Tenant's subcontractor, which
construction is set forth on the Construction Schedule. The Early Occupancy
shall be free of (i) Rent pursuant to Section 7 of the Lease, (ii) Operating
Expenses pursuant to Section 15 of the Lease, (iii) cost for Utilities, if any,
pursuant to Section 11 of the Lease, and (iv) any costs specified in the Lease
as additional Rent, but otherwise subject to all terms and conditions of the
Lease. In the event the Racks are not installed and ready for use twenty-five
(25) days following the Early Occupancy Date, each day of delay thereafter that
is not caused by Landlord shall be defined as a Force Majeure Event which shall
accordingly extend the Anticipated Occupancy Date.
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5. Plans Schedule. Attached hereto as Exhibit C and incorporated herein by this
reference, is a copy of the schedule for the Approved Final Plans listing all
applicable architectural and engineering plans.
6. Freezer. In connection with the freezer required by Tenant to be installed in
the Premises ("Freezer"), Landlord and Tenant agree as follows:
(a) Freezer Improvements. In preparation for the installation of the Freezer,
certain improvements shall be made to the Building including, without
limitation, plumbing improvements, structural reinforcement, and drainage
provisions (collectively, "Freezer Improvements"), the costs of which will not
exceed those more particularly described in the change order approved by
Landlord and Tenant ("Freezer Change Order"), which Freezer Change Order is
attached hereto as Exhibit D and incorporated herein by this reference. Landlord
shall cause its contractors to install the Freezer Improvements pursuant to the
Freezer Change Order.
(b) Cost of Freezer Improvements. All costs identified in Exhibit D shall be
paid by Tenant including, without limitation, design fees, engineering fees,
cost of materials, contractor fees, and permit costs (collectively, "Freezer
Costs"). Landlord shall periodically submit to Tenant, invoices for the Freezer
Costs. Tenant shall pay Landlord the amount reflected in such invoices within
fifteen (15) business days following its receipt thereof and the failure to
timely make such payments shall be deemed a late payment in accordance with the
provisions of Section 43(n) of the Net Lease.
(c) Freezer Subcontractor. Landlord and Tenant acknowledge that, upon (i)
completion of the Freezer Improvements and (ii) Landlord's receipt of all
amounts reflected in the invoices for the Freezer Costs, Tenant's freezer
subcontractor ("Subcontractor") will install the Freezer in the Premises. All
costs and expenses incurred in connection with the installation of the Freezer
by the Subcontractor shall be the sole obligation and responsibility of Tenant.
7. Cost Offset. Section 6(b) of the Net Lease is hereby deleted in its entirety
and replaced with the following paragraph:
"(b) Penalty; Cost Off-Set. Notwithstanding anything to the contrary
contained in the Net Lease, Landlord and Tenant acknowledge that as of June 16,
1999, Landlord is obligated to pay Tenant the amount of Five Hundred and
No/100ths Dollars ($500.00) ("Penalty") per day for each day beyond June 16,
1999 until a Certificate of Occupancy is issued for the Warehouse Portion;
provided, however, such date shall be extended due to delays caused by Tenant or
Force Majeure Events. The Penalty shall be paid by Landlord by way of a credit
against (a) increased costs for the Change Orders requested by Tenant and such
additional Change Orders as may be approved after the Effective Date, and (b)
the Freezer Costs. The parties acknowledge such amount as a reasonable estimate
of damages as a result of delays and delivery and is the sole remedy as a result
thereof. In no event shall the Commencement Date be deemed to have occurred
unless and until Certificates of Occupancy for the Premises have been issued."
8. Ratification. Except as modified by this Second Amendment, the Lease is
ratified, affirmed, in full force and effect, and incorporated herein by this
reference and the parties acknowledge that there are currently no defaults
pursuant to the Lease by either party.
9. Counterparts and Facsimiles. The parties hereto may execute this Second
Amendment simultaneously, in any number of counterparts, or on facsimile copies,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Second Amendment.
NOW, THEREFORE, the parties have executed this Second Amendment as of the date
set forth below.
LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: ________________________ By: ________________________
Its: ________________________ Its: ________________________
Date: ________________________ Date: ________________________
Exhibit A
Construction Schedule
Exhibit B
Site Plan
Exhibit C
Schedule for Approved Final Plans
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Exhibit D
Freezer Change Order
THIRD AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)
This Third Amendment to Net Lease Agreement ("Third Amendment"), dated for
reference purposes as September 27, 1999, is entered into by and between
LOCKSLEY LANE INVESTORS, L.P., a California limited partnership ("Landlord"),
and UNITED NATURAL FOODS, INC., a Delaware corporation ("Tenant").
Recitals
G. On or about December 31, 1996, Landlord's predecessor-in-interest and
Tenant's predecessor-in-interest entered into that certain Net Lease Agreement
("Original Lease") concerning the lease of the "Premises," within the
"Building," both of which are more particularly described therein.
H. On or about August 11, 1998, Landlord and Tenant amended the provisions of
the Original Lease pursuant to that certain First Amendment to Net Lease
Agreement ("First Amendment"). Thereafter, on or about July 12, 1999, Landlord
and Tenant further amended the provisions of the Original Lease pursuant to that
certain Second Amendment to Net Lease Agreement ("Second Amendment"). The
Original Lease, as amended by the First Amendment and the Second Amendment, is
hereinafter referred to as the "Lease."
I. On or about the date that the parties are entering into this Third Amendment,
Landlord, as "Seller," and Tenant, as "Buyer," intend to enter into a certain
"Agreement of Purchase and Sale" concerning the Project.
J. Landlord and Tenant now desire to amend the terms and conditions of the Lease
in accordance with the provisions of this Third Amendment.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, the parties agree as follows:
Agreement
1. Definitions. Unless otherwise specified herein, all capitalized terms used in
this Third Amendment are used as defined in the Lease.
2. Effective Date. This Third Amendment shall become effective on the date it is
executed by both Landlord and Tenant, which date is hereinafter referred to as
the "Effective Date."
3. Expansion of Premises. Tenant desires to expand the Premises to include the
remaining approximately thirty-seven thousand one hundred twenty five (37,125)
usable and rentable square feet of the Building ("Expansion Area"), which area
is more particularly described in Exhibit A attached hereto, to the existing
Premises, which area currently contains approximately sixty-two thousand eight
hundred seventy five (62,875) usable and rentable square feet. The usable and
rentable area of the Expansion Area and the Premises total one hundred thousand
(100,000) square feet. Landlord hereby leases to Tenant the Expansion Area upon
the terms and conditions set forth in this Third Amendment.
4. Expansion Area Commencement Date. The commencement date of the Lease with
respect to the Expansion Area ("Expansion Area Commencement Date") shall be
sixty (60) days following the date when Landlord's construction of the Expansion
Area improvements ("Expansion Area Improvements") described pursuant to the Work
Letter Agreement attached hereto as Exhibit B are substantially complete,
excepting (i) Punch List Items for the Expansion Area Improvements pursuant to
the procedures set forth in Section 4 of the Original Lease, and (ii) such
modifications to the shell of the Building as may be required in connection with
the Freezer Installation. In no event shall the Expansion Area Commencement Date
occur prior to September 1, 1999.
5. Amendment of Lease Provisions. Unless otherwise stated below, upon the
Expansion Area Commencement Date, the Lease shall be amended as follows:
(d) Any and all references to "Premises" in the Lease shall be deemed to include
the "Expansion Area."
(e) The usable and rentable square footage of the Premises shall be increased to
one hundred thousand (100,000) square feet.
(f) The Tenant's Proportionate Share shall be increased to one hundred percent
(100.00%).
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(g) The initial Base Rent, set forth in the Basic Lease Information, shall be
amended to Thirty-Seven Thousand Five Hundred and No/100ths Dollars ($37,500.00)
per month and shall be adjusted concurrent with the scheduled adjustments
pursuant to Section 7 of the Original Lease with respect to the Premises.
(h) Tenant shall be responsible for all maintenance, repair and replacement
obligations of Tenant set forth in the Original Lease and all obligations of
Landlord with respect to the Project Common Areas and the Building, excepting
latent defects within the Building, the structural portions of the roof, the
structural walls and foundation of the Building, which shall remain the
responsibility of Landlord.
(i) Tenant shall be responsible for one hundred percent (100.00%) of all
Operating Expenses, Taxes and Utilities and shall be responsible for procuring
and maintaining all Utilities and services contemplated by the Original Lease to
be provided by Landlord to Tenant, the expenses for which are within the
definition of Operating Expenses. Notwithstanding the foregoing, upon completion
of the Lot Split (as hereinafter defined), in no event shall (i) Tenant incur
additional expense as a result of such parcelization, and (ii) Tenant's share of
Operating Expenses, Taxes and Utilities, increased above amounts otherwise
payable by Tenant as if the Lot Split had not occurred. For clarification
purposes, in furtherance of the parties original intent as mentioned in Section
6 of this Third Amendment, notwithstanding the occurrence of the Lot Split or
the provisions of the Lease, in no event shall Tenant be responsible for
Operating Expenses, Taxes and/or Utilities applicable to the Adjacent Parcel (as
defined below) whether created or not pursuant to Section 6.
6. Lot Split. In the event that the transaction described by the Agreement of
Purchase and Sale is not closed, and only in such event, in order to effectuate
the original intent of the parties and facilitate Landlord's performance
concerning certain rights granted by Landlord to Tenant in the Lease, Landlord
and Tenant hereby acknowledge and agree that Landlord shall have the right to
cause the "Real Property" defined in Section 1(a) of the Original Lease, to
become two separate legal parcels in compliance with the California Subdivision
Map Act. In the event that Landlord causes such subdivision of the Real Property
("Lot Split"), the terms "Real Property," "Project Common Area," and any other
defined term in the Lease shall exclude the Adjacent Property (as hereinafter
defined). The Lot Split shall be done in accordance with all applicable laws,
statutes and ordinances and Landlord represents and warrants that such action
shall be consistent with applicable zoning ordinances. Specifically, Tenant
further acknowledges and agrees that, as a material consideration for Landlord
agreeing to enter into this Third Amendment, (i) the First Right of Refusal
described in Section 40 of the Original Lease, (ii) the Option to Purchase
described in Section 41 of the Original Lease, and (iii) the First Right of
Negotiation described in Section 42 of the Original Lease shall only apply with
respect to that legal parcel upon which the Building is constructed ("Building
Parcel") following the Lot Split. In the event that the Lot Split is
accomplished, the newly created parcel adjacent to the Building Parcel shall be
referred to as the "Adjacent Parcel." As a condition precedent to finalization
of the Lot Split, Landlord and Tenant shall reach agreement upon the terms and
conditions of certain encumbrances concerning both the Building Parcel and
Adjacent Parcel (drafts of which shall be prepared by Landlord and delivered to
Tenant for review), which encumbrances include, without limitation, easements
for ingress and egress to and from the parcels, reciprocal easements reasonably
required to effect emergency and/or necessary repairs, the right to construct
additional improvements (on the Adjacent Property) abutting the Building, the
right, pursuant to this Section 6 to establish a new lot line within the north
wall of the Building, the right to attach to existing electrical and plumbing
utilities within the Building (provided such usage shall not increase Tenant's
costs pursuant to the Lease), and such other connections with services, the
Building, the Building Parcel, the Real Property, and/or utilities as are
reasonably necessary to accommodate future development of the Adjacent Property;
provided, however, in no event shall Tenant's existing parking rights at the
Premises be adversely effected by such documentation (collectively,
"Encumbrances").
7. Expansion Area Improvements/Early Occupancy.
(a) Landlord agrees to construct the Expansion Area Improvements pursuant to the
terms and conditions of the Work Letter Agreement attached hereto as Exhibit B
and incorporated herein by this reference. In addition to the foregoing,
Landlord agrees to contribute the "Landlord Allowance" towards Tenant's
construction of the "Freezer" (as such terms are defined in the Work Letter
Agreement), toward the construction by Tenant of certain improvements in the
Expansion Area pursuant to the terms and conditions of the Work Letter
Agreement.
(b) Tenant shall be granted early occupancy of the Expansion Area for purposes
of implementing the Freezer Installation and Expansion Area Improvements ("Early
Occupancy"). The Early Occupancy shall be free of (i) Rent pursuant to Section 7
of the Lease, (ii) Operating Expenses pursuant to Section 15 of the Lease, (iii)
cost for utilities, if any, pursuant to Section 11 of the Lease, and (iv) any
costs specified in the Lease as additional Rent, but otherwise subject to all
terms and conditions of the Lease.
8. Ratification. Except as modified by this Third Amendment, the Lease is
ratified, affirmed, in full force and effect, and incorporated herein by this
reference.
NOW, THEREFORE, the parties have executed this Third Amendment as of the date
set forth below.
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LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: _________ By: _________
Its: _________ Its: _________
Date: _________ Date: _________
EXHIBIT A
Expansion Area
EXHIBIT B
Work Letter Agreement
Ladies and Gentlemen:
You (hereinafter called "Tenant") and we (hereinafter called "Landlord") are
executing simultaneously with this Work Letter Agreement ("Agreement"), a
written Third Amendment to Net Lease Agreement (the "Third Amendment") covering
those certain premises more particularly described in Exhibit A to the Third
Amendment (the "Expansion Area") in the building located in Auburn, California,
and more particularly described in the Lease (as hereinafter defined).
To induce Tenant to enter into the Third Amendment (which is hereby incorporated
by reference to the extent that the provisions of this Agreement may apply
thereto) and in consideration of the mutual covenants hereinafter contained,
Landlord and Tenant mutually agree as follows:
1. DEFINITIONS. Unless otherwise defined in this Agreement, the capitalized
terms used herein shall have the meaning assigned to them in that certain Net
Lease Agreement between Landlord's predecessor-in-interest and Tenant's
predecessor-in-interest, dated December 31, 1996, as amended ("Lease").
2. REPRESENTATIVES. Landlord hereby appoints Paul O'Sullivan as Landlord's
representative to act for Landlord in all matters covered by this Agreement.
Tenant hereby appoints Michael Michel as Tenant's representative to act for
Tenant in all matters covered by this Agreement. All inquiries, requests,
instructions, authorizations and other communications with respect to the
matters covered by this Agreement shall be related to Landlord's representative
or Tenant's representative, as the case may be. Tenant will not make any
inquiries of or request to, and will not give any instructions or authorizations
to, any other employee or agent of Landlord, including Landlord's architects,
engineers, and contractors or any of their agents or employees, with regard to
matters covered by this Agreement. Either Landlord or Tenant may change its
representative at any time by written notice to the other.
3. TENANT WORKING DRAWINGS. The working drawings for the improvements to the
Expansion Area (the "Tenant Working Drawings"), describing the Expansion Area
Improvements only, as approved by Landlord and Tenant are attached hereto as
Exhibit B-1 and incorporated herein by this reference. Tenant's preparation or
approval of the Tenant Working Drawings, and any other plans or specifications
shall not constitute any representation as to the adequacy, efficiency,
performance or desirability of any space plan or improvements.
4. EFFECT OF APPROVAL. Landlord's approval of the Tenant Working Drawings
(initial or revised) will constitute acknowledgment that such drawings correctly
depict the proper layout and design for any and all improvements to the Premises
desired by Tenant. With respect to improvements affecting the shell of the
Building, Landlord's approval of the Tenant Working Drawings shall not be
unreasonably withheld. Landlord's approval of the Tenant Working Drawings will
constitute authorization to Tenant to proceed with and complete construction of
the Expansion Area Improvements in the Expansion Area. All of the work called
for by the Tenant Working Drawings will be performed by one or more contractors
engaged by Tenant. Tenant agrees to submit the Tenant Working Drawings to the
appropriate governmental authorities for necessary approvals and building
permits. Landlord shall submit to appropriate County authorities for approval,
revised shell drawings indicating (i) the relocation of the compressor pad and
(ii) the in-filling of six (6) loading dock doors.
5. CHANGE ORDERS. Tenant may authorize changes in the work during construction
of the Expansion Area Improvements only by written instructions to Landlord's
representative on a form approved by Landlord. Changes that affect the shell of
the Building in any way shall be subject to Landlord's prior written approval,
which approval may be withheld for any reason or for no reason at all. Before
commencing any change, Landlord will prepare and deliver to Tenant, for Tenant's
approval, the change order
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setting forth the cost of such change, which will include associated
architectural, engineering and construction fees, if any, and the cost of such
change for Landlord's contractor's overhead. If Tenant fails to approve such
change order within three (3) days, Tenant will be deemed to have withdrawn the
proposed change and Landlord will not proceed to perform that change. If Tenant
timely approves such change order, Tenant will within ten (10) days of
substantial completion of the Tenant Improvements pay to Landlord any amounts
payable by Tenant in connection with the change orders provided for in this
Paragraph.
6. TENANT'S INSTALLATION OF THE FREEZER. Tenant desires, through its
subcontractor, to cause its subcontractors to install a certain freezer and
refrigeration related improvements (collectively, "Freezer") into the Expansion
Area. The installation of the Freezer with respect to the Expansion Area
("Freezer Installation") shall be pursuant to the provisions of Paragraphs 7, 8,
9, 10 and 11 of this Work Letter Agreement. Tenant acknowledges that the Freezer
Installation will require modifications to the shell of the Building and neither
such modifications, nor any improvements referenced in this Section 6 shall be
within the definition of "Expansion Area Improvements."
(a) The plans and specifications and all design and construction relating to the
Freezer Installation shall comply with all applicable statutes, ordinances,
regulations, laws, codes and industry standards, including, but not limited to,
requirements of Landlord's fire insurance underwriters.
(b) Tenant shall, at its own cost and expense, obtain all required permits with
respect to the Freezer. Tenant's failure to obtain such permits shall not cause
a delay in the Expansion Area Commencement Date or the obligation to pay Rent or
any other obligations set forth in the Lease.
(c) Tenant's subcontractors shall be licensed contractors, possessing good labor
relations, capable of performing quality workmanship and working in harmony with
Landlord's contractors and subcontractors. All work shall be coordinated with
any other construction or other work in the Building in order not to adversely
affect construction work being performed by or for Landlord.
(d) Tenant shall use only new, first-class materials in the Freezer
Installation. All work in connection with the Freezer Installation shall be done
in a good and workmanlike manner.
(e) Tenant and Tenant's subcontractors shall make all efforts and take all steps
appropriate to assure that all construction activities undertaken do not
unreasonably interfere with the operation of the Building. In any event, Tenant
shall comply with all reasonable rules and regulations existing from time to
time at the Building. Tenant and Tenant's subcontractors shall take all
precautionary steps to minimize dust, noise and construction traffic.
(f) Landlord shall have the right to order Tenant or its subcontractors if they
violate the requirements imposed on Tenant or Tenant's subcontractors in
performing work, to cease work and remove their equipment and employees from the
Building. No such action by Landlord shall delay the Expansion Area Commencement
Date or the obligation to pay Rent or any other obligations therein set forth.
(g) Utility costs or charges for any service (including HVAC, hoisting or
freight elevator and the like) to the Expansion Area shall be the responsibility
of Tenant from the date Tenant is obligated to commence or commences the Freezer
Installation and shall be paid for by Tenant at Landlord's standard rates then
in effect. Tenant shall apply and pay for all utility meters required. Tenant
shall pay for all support services provided by Landlord's contractors at
Tenant's request or at Landlord's discretion resulting from breaches or defaults
by Tenant under this Work Letter Agreement. All use of freight elevators is
subject to scheduling by Landlord and the rules and regulations of the Building.
Tenant shall arrange and pay for removal of construction debris. If required by
Landlord, Tenant shall sort and separate its waste and debris for recycling
and/or environmental law compliance purposes.
(h) Tenant shall proceed with its work expeditiously, continuously and
efficiently, and shall use its reasonable efforts to complete the same on or
before thirty (30) days after the date Landlord tenders possession of the
Expansion Area to Tenant for the Freezer Installation.
(i) Tenant shall furnish to Landlord "as-built" drawings of the Freezer
Installation within thirty (30) days after completion of the Freezer
Installation.
7. INSURANCE AND INDEMNIFICATION. Tenant's obligation to procure insurance, set
forth in Section 21 of the Lease, and Tenant's indemnification, hold harmless
and defense obligations, set forth in Section 19 of the Lease, shall apply to
all construction activities concerning the Freezer installation done by Tenant,
its agents, employees, contractors and/or subcontractors.
8. COST OF FREEZER INSTALLATION. In connection with the Freezer Installation to
be performed by Tenant, Landlord shall contribute an amount equal to Twenty
Thousand and No/100ths Dollars ($20,000.00) ("Landlord Allowance"). The balance,
if any, of the cost in completing the Freezer Installation ("Above-Allowance
Work"), including, but not limited, to the cost of overhead, supervision and
profit, shall be paid by Tenant. A schedule of the estimated costs to complete
the Freezer Installation is attached hereto Exhibit B-2. The Landlord Allowance
shall be paid to Tenant upon completion of the Freezer Installation and Tenant's
satisfaction of all requirements set forth in this Work Letter Agreement. Tenant
shall not be entitled to any payment or credit in the event that the cost of the
Freezer Installation is less than the Landlord Allowance.
9. LANDLORD ALLOWANCE; EXCESS AMOUNTS. Upon completion of the Freezer
Installation, Tenant shall furnish Landlord with full and final waivers of liens
and contractors' affidavits and statements, in such form as may be required by
Landlord, Landlord's title insurance company and Landlord's construction or
permanent lender, if any, from all parties performing labor or supplying
materials or services in connection with the Freezer Installation showing that
all of said parties have been compensated in full and waiving all liens in
connection with the Building and the Expansion Area. Tenant shall submit to
Landlord a detailed breakdown of Tenant's total construction costs, together
with such evidence of payment as is reasonably satisfactory to Landlord.
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10. ALTERATIONS. Any alterations or improvements described by Tenant after
Landlord's delivery of the Expansion Area shall be subject to the provisions of
the Lease.
If the foregoing correctly sets forth our understanding, please sign this
Agreement where indicated below.
LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: _________ By: _________
Its: _________ Its: _________
Date: _________ Date: _________
FOURTH AMENDMENT TO NET LEASE AGREEMENT
(Auburn, California)
This Fourth Amendment to Net Lease Agreement ("Fourth Amendment"), dated for
reference purposes as December 15, 1999, is entered into by and between LOCKSLEY
LANE INVESTORS, L.P., a California limited partnership ("Landlord"), and UNITED
NATURAL FOODS, INC., a Delaware corporation ("Tenant").
Recitals
On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's
predecessor-in-interest entered into that certain Net Lease Agreement ("Original
Lease") concerning the lease of the "Premises," within the "Building," located
at 12600 Earhart Avenue, Auburn, California, both of which are more particularly
described in the Original Lease.
On or about August 11, 1998, Landlord and Tenant amended the provisions of the
Original Lease pursuant to that certain First Amendment to Net Lease Agreement
("First Amendment"). On or about June 14, 1999, Landlord and Tenant further
amended the provisions of the Original Lease pursuant to that certain Second
Amendment to Net Lease Agreement ("Second Amendment"). On or about September 27,
1999, Landlord and Tenant further amended the provisions of the Original Lease
pursuant to that certain Third Amendment to Net Lease Agreement ("Third
Amendment"). The Original Lease, as amended by the First Amendment, the Second
Amendment and the Third Amendment, is hereinafter referred to as the "Lease."
Landlord and Tenant now desire to amend the terms and conditions of the Lease in
accordance with the provisions of this Fourth Amendment.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, the parties agree as follows:
Agreement
Definitions. Unless otherwise specified herein, all capitalized terms used in
this Fourth Amendment are used as defined in the Lease.
Effective Date. This Fourth Amendment shall become effective on the date it is
executed by both the Landlord and Tenant, which date is hereinafter referred to
as the "Effective Date."
Expansion of Premises. Tenant desires to expand the Premises to include all of
the approximately two and one-half (2-1/2) acres of real property and related
improvements ("Expansion Land") located adjacent to the Premises and more
particularly identified as the cross-hatched portion of the parcel shown on the
Site Plan attached hereto as Exhibit A and incorporated herein by this
reference. Pursuant to the terms and conditions of the Third Amendment, Landlord
and Tenant agreed that the parcel of real property upon which the Building is
constructed may be subdivided pursuant to the "Lot Split" more particularly set
forth in Section 6 of such Third Amendment. In lieu of such Lot Split, Landlord
and Tenant now agree that the "Real Property" shall remain one (1) separate
legal parcel and Tenant will lease from Landlord all of such "Real Property"
together with all improvements constructed thereon. Landlord hereby leases to
Tenant the Expansion Land upon the terms and conditions set forth in this Fourth
Amendment.
Expansion Land Term. The Commencement Date of the Lease with respect to the
Expansion Land ("Expansion Land Commencement Date") shall be December 1, 1999.
The expiration date of the Lease with respect to the Expansion Land shall be
September 26, 2009, which date is coterminous with the termination of the Lease
with respect to the Premises.
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Base Rent. The Base Rent with respect to the Expansion Land shall be Six
Thousand Four Hundred Sixteen and 67/100ths Dollars ($6,416.67) per month, which
amount shall be adjusted concurrent with the scheduled adjustments pursuant to
Section 7 of the Original Lease.
Operating Expenses, Taxes and Utilities. Tenant shall be responsible for one
hundred percent (100%) of all Operating Expenses, Taxes and Utilities and shall
be responsible for procuring and maintaining all utilities and services
contemplated by the Original Lease attributable to the Expansion Land.
Use of Expansion Land. Tenant is permitted to use the Expansion Land only for
those purposes specifically allowed under the Lease in connection with its
operations on the Premises, which uses shall be subject to the approval of all
governmental agencies having jurisdiction over the Expansion Land. All
construction upon the Expansion Land shall be at the sole cost and expense of
Tenant, together with the cost of obtaining all permits in connection therewith.
Landlord agrees to cooperate with Tenant, at no cost to Landlord, in connection
with Tenant's obtaining of necessary permits. Tenant shall obtain the written
consent of Landlord, which shall not be unreasonably withheld, prior to
commencement of any construction of improvements upon the Expansion Land and all
such construction shall be performed in accordance with the requirements of
Section 14 of the Original Lease. Subject to the foregoing requirements, Tenant
shall have the right to construct improvements, including buildings, upon the
Expansion Land which do not adversely affect the Building or its operations.
Section 41 of the Original Lease, Option to Purchase. Landlord and Tenant hereby
agree that the "Purchase Price" contemplated pursuant to Exhibit C of the
Original Lease is amended to Five Million Five Hundred Fifty Thousand and
No/100ths Dollars ($5,550,000.00) (which amount has been increased by the sum of
Seven Hundred Thousand and No/100ths Dollars ($700,000.00) to include the
purchase and sale of the Expansion Land). As a material part of the
consideration for Tenant's agreement to enter into this Fourth Amendment,
Landlord has agreed to reduce such Purchase Price by Twenty-Five Thousand and
No/100ths Dollars ($25,000.00), for a total Purchase Price of Five Million Five
Hundred Twenty-Five Thousand and No/100ths Dollars ($5,525,000.00). The Purchase
Price set forth in this Section 8, shall be inclusive of the Premises and the
Expansion Land, collectively. Nothing contained herein shall in any manner amend
the "Option Date" set forth in Section 41 of the Original Lease. In no event
shall Tenant have the right to exercise the "Option" with respect to any lesser
portion of the Real Property other than the entire legal parcel containing the
Premises and the Expansion Land.
Purchase Agreement. Landlord and Tenant hereby acknowledge and agree that the
"Purchase Agreement" referenced in Section 41 and attached as Exhibit C, to the
Original Lease, is deleted in its entirety and replaced with the Purchase
Agreement attached hereto as Exhibit B and incorporated herein by this
reference.
Ratification. Except as modified by this Fourth Amendment, the Lease is
ratified, affirmed, in full force and effect, and incorporated herein by this
reference.
NOW THEREFORE, the parties have executed this Fourth Amendment as of the date
set forth below.
LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: _____________________________ By: ____________________________
Its: ____________________________ Its: ___________________________
Date: ___________________________ Date: __________________________
EXHIBIT A
Site Plan of Expansion Land
EXHIBIT B
Agreement of Purchase and Sale
(12600 Locksley Lane, Auburn, California)
This Agreement of Purchase and Sale ("Agreement"), dated for reference
purposes only ______________, is entered into by and between LOCKSLEY LANE
INVESTORS, L.P., a California limited partnership, ("Seller"), and UNITED
NATURAL FOODS, INC., a Delaware corporation ("Buyer").
Recitals
Seller is the owner of certain real property ("Real Property"), located in
Auburn ("City"), Placer County ("County"), California ("State"), more
particularly described on Exhibit A attached hereto.
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The Real Property has constructed thereon a certain building, containing
approximately one hundred thousand (100,000) gross square feet ("Improvements").
The Real Property and Improvements are collectively referred to as the
"Project," which is commonly known as "12600 Locksley Lane, Auburn, California."
The Real Property, Improvements, Personal Property (as hereinafter defined), and
Seller's interest in the Lease and Service Contracts (each of which are
hereinafter defined) are hereinafter collectively referred to as the "Property."
Buyer's predecessor-in-interest, as tenant, and Seller's
predecessor-in-interest, as Landlord, prior to the Effective Date, have entered
into a certain Net Lease Agreement ("Original Lease") dated December 31, 1996.
This Original Lease was thereafter amended by that certain (i) First Amendment
to Net Lease ("First Amendment to Net Lease") dated August 11, 1998, (ii) Second
Amendment to Net Lease "Second Amendment to Net Lease") dated June 14, 1999,
(iii) Third Amendment to Net Lease ("Third Amendment to Net Lease") dated
September 27, 1999, (iv) Fourth Amendment to Net Lease ("Fourth Amendment to Net
Lease") dated December 15, 1999, and (iv) Fifth Amendment to Net Lease and
Acknowledgment ("Fifth Amendment to Net Lease") dated December 16, 1999.
Buyer desires to purchase from Seller and Seller desires to sell to Buyer the
Property pursuant to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
Agreement
Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees
to purchase from Seller, the Property on the terms and subject to the conditions
set forth in this Agreement. For the purposes of this Agreement, the date which
the last party executes this Agreement and delivers it to the other party shall
hereinafter be referred to as the "Effective Date."
Purchase Price. The purchase price ("Purchase Price") for the Property shall be
Five Million Five Hundred Twenty-Five Thousand and No/100ths Dollars
($5,525,000.00).
Payment of Purchase Price. The Purchase Price for the Property shall be payable
by Buyer as follows:
Initial Deposit. On or before the fifth (5th) day following the Effective Date,
Buyer shall deposit with Stewart Title of Sacramento ("Escrow Holder") the
amount of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) ("Initial
Deposit"). The Initial Deposit shall be invested by Escrow Holder with a
financial institution acceptable to Seller in a federally-insured
interest-bearing demand account, and the Initial Deposit, and all interest
accrued thereon, shall be credited to the Purchase Price upon the Close of
Escrow.
Final Deposit. On or before the expiration of the Contingency Period (as
hereinafter defined), unless this Agreement has been previously terminated by
Buyer pursuant to its rights set forth in this Agreement, Buyer shall deposit
with Escrow Holder the amount of One Hundred Thousand and No/100ths Dollars
($100,000.00) ("Final Deposit"). Upon Buyer's delivery of the Final Deposit to
Escrow Holder, (i) the Final Deposit shall be invested by Escrow Holder in the
interest-bearing account as is required for the Initial Deposit in Section 3(a)
above, (ii) the Initial Deposit and the Final Deposit (collectively, "Deposit"),
totaling One Hundred Twenty-Five Thousand and No/100ths Dollars ($125,000.00),
and all interest accrued thereon, shall be credited to the Purchase Price at
Close of Escrow, and (iii) the Deposit shall become non-refundable, become the
sole and absolute property of Seller, except as otherwise provided herein.
Cash at Close of Escrow. On or before the Close of Escrow, Buyer shall deposit
with Escrow Holder the remaining portion of the Purchase Price, in immediately
available funds, which shall be paid to Seller at Close of Escrow.
Escrow.
Opening of Escrow. Within two (2) days following the Effective Date, Buyer shall
open an escrow ("Escrow") with Escrow Holder. Buyer and Seller agree to execute
and deliver to Escrow Holder, in a timely manner, all escrow instructions
necessary to consummate the transaction contemplated by this Agreement. Any such
instructions shall not conflict with, amend or supersede any portion of this
Agreement. If there is any inconsistency between such instructions and this
Agreement, this Agreement shall control.
Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be
defined as the date that the Grant Deed (as hereinafter defined) is recorded in
the Official Records of the County. The Close of Escrow shall occur on or before
fifteen (15) days following the expiration of the Contingency Period, unless
extended by the mutual written consent of the parties.
Conditions of Title. It shall be a condition to the Close of Escrow that title
to the Project be conveyed to Buyer by Seller by a Grant Deed, which shall be in
the form customarily used by Escrow Holder in the County ("Grant Deed"), subject
only to (a) a lien to secure payment of real estate taxes, not yet due and
payable; (b) the lien of supplemental taxes, not yet due and payable; (c)
exceptions which are approved and/or accepted by Buyer in writing in accordance
with this Agreement; and (d) all applicable laws, ordinances, rules and
governmental regulations (including, but not limited to those relative to
building, zoning and land use) affecting the development, use, occupancy or
enjoyment of the Property, and (e) those title exceptions set forth in the
Preliminary Report ("Preliminary Report"), dated ______________, Order no.
______, issued by Escrow Holder [to be approved by Buyer], excepting exception
numbers ________, which shall be removed by Seller at Close of Escrow
(collectively, "Approved Conditions of Title").
Conditions to Close of Escrow.
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Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligations
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions (or Buyer's written waiver thereof)
which are for Buyer's sole benefit, on or prior to the dates designated below
for the satisfaction of such conditions, or the Close of Escrow in absence of a
specified date:
Inspections and Studies. For a period of thirty (30) days following the
Effective Date ("Contingency Period"), Buyer shall have the right to review and
approve the (A) Documents and Materials (as hereinafter defined), and (B)
conduct any and all inspections, investigations, tests and studies (including,
without limitation, investigations with regard to zoning, building codes and
other governmental regulations, architectural inspections, engineering tests,
economic feasibility studies, soils, seismic and geologic reports and
environmental testing) with respect to the Property as Buyer may elect to make
or maintain. Prior to the expiration of the Contingency Period, Buyer shall
deliver to Seller and Escrow Holder written notice of its approval or
disapproval, which shall be made in Buyer's sole and absolute discretion, of the
Property and the Documents and Materials. The failure of Buyer to deliver such
notice prior to the expiration of the Contingency Period shall be deemed to
constitute Buyer's disapproval of such matters, in which case the Agreement
shall be canceled pursuant to the provisions of this Section. The cost of any
such inspections, tests and/or studies shall be borne by Buyer. Between the
Effective Date and the Close of Escrow, Buyer, its agents, contractors and
subcontractors shall have the right to enter upon the Project at reasonable
times during ordinary business hours to make any and all inspections and tests
as may be necessary or desirable in Buyer's sole judgment and discretion. Buyer
shall use its good faith efforts not to interfere with the use of the
Improvements by the Tenants (as hereinafter defined). Buyer shall indemnify,
defend (with counsel reasonably satisfactory to Seller) and hold Seller, its
agents, employees, trustee, directors and officers, and the Property harmless
from any and all damage arising out of or in connection with such entry and/or
activities upon the Project by Buyer, its agents, employees or contractors. In
the event Buyer disapproves or is deemed to have disapproved of the condition of
the Property and/or the Documents and Materials prior to the expiration of the
Contingency Period, except as otherwise provided herein, the parties shall have
no further obligations under this Agreement, all monies delivered to Escrow
Holder by Buyer shall be immediately returned to Buyer, and Buyer shall deliver
to Seller copies of any and all reports, studies, inspections, or other
materials Buyer caused to be prepared pursuant to its inspection right set forth
in this Section.
Title Insurance. As of the Close of Escrow, Title Company (as hereinafter
defined) shall have issued or shall have committed to issue the Title Policy (as
hereinafter defined) to Buyer.
Seller's Obligations. As of the Close of Escrow, Seller shall have performed all
of the obligations required to be performed by Seller under this Agreement.
Seller's Representations. As of the Close of Escrow, all representations and
warranties made by Seller to Buyer in this Agreement shall be true and correct.
Conditions to Seller's Obligations. The Close of Escrow and Seller's obligations
to consummate the transaction contemplated by this Agreement are subject to the
satisfaction of the following conditions (or Seller's waiver thereof) which are
for Seller's sole benefit, on or prior to the dates designated below for the
satisfaction of such conditions, or the Close of Escrow in absence of a
specified date:
Buyer's Obligations. As of the Close of Escrow, Buyer shall have timely
performed all of the obligations required by the terms of this Agreement to be
performed by Buyer.
Buyer's Representations. As of the Close of Escrow, all representations and
warranties made by Buyer to Seller in this Agreement shall be true and correct
as of the Close of Escrow.
Failure of Condition to Close of Escrow. Except as provided in Section 6(a) or
6(b), in the event any of the conditions set forth in Section 6(a) or 6(b) are
not timely satisfied or waived by the appropriate benefited party, for a reason
other than the default of Buyer or Seller, this Agreement shall terminate, and
if applicable, the Deposit, and all interest accrued thereon, and all other
monies delivered to Escrow Holder by Buyer shall be immediately be returned to
Buyer, and, except as otherwise provided herein, the parties shall have no
further obligations hereunder.
Deposits By Seller. Unless otherwise provided in this Section, at least one (1)
business day prior to the Close of Escrow, Seller shall deposit with Escrow
Holder the following documents:
Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by
Seller, conveying fee title to the Project to Buyer subject only to the Approved
Conditions of Title.
FIRPTA Certificate. A certification, acceptable to Escrow Holder and duly
executed by Seller under penalty of perjury setting forth Seller's address and
federal tax identification number in accordance with and/or for the purpose of
the provisions of Sections 7701 and 1445, as may be amended, of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder.
California Franchise Tax Withholding. Evidence satisfactory to Buyer and Escrow
Holder that Seller is exempt from the provisions of the withholding requirements
of the California Revenue and Taxation Code, as amended, and that neither Buyer
nor Escrow Holder is required to withhold any amounts from the Purchase Price
pursuant to such provisions.
Bill of Sale. A bill of sale ("Bill of Sale") duly executed and acknowledged by
Seller in favor of Buyer, assigning and conveying to Buyer all of Seller's
right, title and interest in and to the Personal Property. The Bill of Sale
shall be in the form of, and upon the terms contained in, Exhibit B attached
hereto.
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General Assignment. An assignment ("General Assignment"), duly executed by
Seller, assigning to Buyer all of Seller's right, title and interest in the
Service Contracts. The General Assignment shall be in the form of, and upon the
terms contained in, Exhibit D attached hereto.
Service Agreements. The original Service Agreements.
Keys. Keys to all entrance doors to the Improvements and keys to all Personal
Property located on the Project, which keys shall be properly tagged for
identification.
Deposits By Buyer. At least one (1) business day prior to the Close of Escrow,
Buyer shall deposit or cause to be deposited with Escrow Holder (a) the required
funds which are to be applied towards the payment of the Purchase Price; (b) a
counterpart of the Bill of Sale executed and acknowledged by Buyer; and (c) a
counterpart of the General Assignment executed and acknowledged by Buyer.
Issuance of Title Insurance. At the Close of Escrow, Escrow Holder's title
insurer ("Title Company"), shall issue to Buyer its standard form California
Land Title Association ("CLTA") Owner's Policy of Title Insurance showing fee
title to the Project vested in Buyer subject only to the Approved Conditions of
Title ("Title Policy"). The Title Policy shall be issued with liability in an
amount equal to the Purchase Price. Seller shall pay for the expense of the
Title Policy. If Buyer elects to have Title Company issue its American Land
Title Association ("ALTA") Owner's Policy of Title Insurance, Buyer shall pay
for the expense of such ALTA premium increment, any endorsement thereto and any
survey costs.
Costs and Expenses. Except as otherwise specified in this Agreement, Seller and
Buyer shall equally divide (a) all escrow fees and costs; (b) any document
recording charges; and (c) documentary transfer tax charged by the County and
any other transfer tax charged by the City. All other costs and expense of
escrow and title shall be shared pursuant to the custom in the County. Buyer and
Seller shall each pay all legal and professional fees and fees of other
consultants incurred by Buyer and Seller, respectively.
Prorations.
Revenues. Rentals, revenues, and other income, if any, from the Property, and
any form operating expenses pass-throughs relating to the Leases, if any,
affecting the Property shall be prorated as of 11:59 p.m. on the day following
the Close of Escrow. "Rentals" as used herein include fixed monthly rentals,
additional rentals, percentage rentals, escalation rentals, retroactive rentals,
and any other sums and charges payable by Tenants under the Leases.
Taxes/Assessments. All non-delinquent real estate taxes on the Project shall be
prorated as of 11:59 p.m. on the day following the Close of Escrow based on the
actual current tax bill, but if such tax bill has not yet been received by
Seller by the Close of Escrow, then the current year's taxes shall be deemed to
be one hundred two percent
(102%) of the amount of the previous year's tax bill for the Project. All
delinquent taxes and all assessments, if any, on the Project shall be paid at
the Close of Escrow from funds accruing to Seller.
Other Expenses. All other expenses for the Property shall be prorated as of
11:59 p.m. on the day following to the Close of Escrow between the parties based
upon the latest available information.
Corrections. If any errors or omissions are made regarding adjustments and
prorations as set forth herein, the parties shall make the appropriate
corrections promptly upon discovery thereof. If any estimates are made at the
Close of Escrow regarding adjustments or prorations, the party shall make the
appropriate correction promptly when accurate information becomes available. Any
corrected adjustment or proration shall be paid in cash to the party entitled
thereto.
Seller's Representations and Warranties. In consideration of Buyer entering into
this Agreement, Seller makes only the representations and warranties set forth
in this Section, which are material and are being relied upon by Buyer (the
continued truth and accuracy of which shall constitute a condition precedent to
Buyer's obligations hereunder). For the purpose of this Agreement, usage of "to
the best of Seller's knowledge," or words to such effect, shall mean the actual
knowledge of Benjamin S. Catlin, as the Managing Member of the General Partner
of Seller, without any independent duty or inquiry or investigation existing as
of the Effective Date.
(a) To the best of Seller's knowledge, the original construction of all
improvements constructed by Seller (collectively, "Seller Improvements")
complied with all then existing applicable laws, ordinances, regulations,
resolutions and other governmental requirements;
(b) To the best of Seller's knowledge, all permit, mitigation, utility and
similar fees required to be paid in connection with the construction of the
Seller Improvements have been paid;
(c) To the best of Seller's knowledge, there is presently no claim, litigation,
proceeding or governmental investigation pending or, to the best of Seller's
knowledge, threatened against or relating to the Property or the transaction
contemplated hereby. Seller shall give Buyer prompt notice of such claim,
litigation, proceeding or investigation which becomes known to it prior to the
Close of Escrow;
(d) To the best of Seller's knowledge, no uncured notice of violation of any
applicable zoning regulation or ordinance or other law, order, ordinance,
permit, rule, regulation or requirements, or any covenants, conditions or
restrictions affecting or relating to the use or occupancy of the Property has
been given to Seller by any governmental agency having jurisdiction or by any
other person entitled to enforce the same;
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(e) To the best of Seller's knowledge, there is no pending or, to the best of
Seller's knowledge, contemplated condemnation of the Property or any part
thereof; and
(f) To the best of Seller's knowledge, the closing of the sale contemplated by
this Agreement will not constitute or result in any default or event that, with
notice or lapse of time, or both, would be a default, breach or violation of any
lease, mortgage, deed of trust, covenant or other agreement, instrument or
arrangement by which Seller or the Property is bound.
Review of Documents and Materials. Within five (5) calendar days following the
Effective Date, Seller shall deliver to Buyer, all documents and materials
(collectively, "Documents and Materials") relating to the Property to the extent
in Seller's possession; provided, however, in no event shall Seller be required
to disclose any "attorney-client" privileged information or internal appraisals.
Seller makes no representation or warranty regarding the truth or accuracy of
the Documents and Materials.
Condition and Inspection of Property. Except as provided in this Agreement,
Seller makes no representation or warranty regarding the condition of the
Property, its past use, or its suitability for Buyer's intended use, and the
Property is sold AS-IS, WHERE-IS, WITH ALL FAULTS, AND THERE IS NO WARRANTY,
EXPRESS OR IMPLIED, REGARDING THE CONDITION OF THE PROPERTY. Buyer is relying
solely upon, and as of the expiration of the Contingency Period shall have
conducted its own independent inspection, investigation, and analysis of the
Property as it deems necessary or appropriate in so acquiring the Property from
Seller, including, without limitation, any and all matters concerning the
condition, use and/or sale of the Property.
Liquidated Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE REMOVED BY THE
SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT, AND THAT IF THIS
AGREEMENT IS NOT CONSUMMATED BECAUSE OF BUYER'S DEFAULT, IT WOULD BE EXTREMELY
DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER.
THE PARTIES HAVE DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT
WOULD BE SUFFERED BY SELLER AS A RESULT OF ANY SUCH DEFAULT IS DIFFICULT OR
IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS AGREEMENT AND THAT THE DEPOSIT
IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE
PARTIES AGREE THAT IF THIS PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF
BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN OF THE DEPOSIT, AS
LIQUIDATED DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO
SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER
HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER
AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY
RELIEF OR OTHER REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO
WHICH SELLER MIGHT OTHERWISE BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN
EQUITY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE RIGHT AND REMEDY. NOTHING
CONTAINED HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF DAMAGES OBTAINABLE BY
SELLER PURSUANT TO AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR INDEMNIFICATION
PROVISION HEREOF.
Seller ______ Buyer ______
Condemnation and Destruction.
Eminent Domain or Taking. If, prior to the Close of Escrow, any material portion
of the Real Property or Improvements is taken by eminent domain or otherwise,
Seller shall immediately notify Buyer of such fact. If such taking is
"material," Buyer shall have the option, in its reasonable discretion, to
terminate this Agreement upon written notice to Seller given not later than ten
(10) days after receipt of Seller's notice. If this Agreement is terminated
pursuant to this Section, the provisions of Section 6(c) shall govern. If Buyer
does not exercise this option to terminate this Agreement, or if there has not
been a material taking by eminent domain or otherwise to give rise to such
option, neither party shall have the right to terminate this Agreement, but the
Seller shall assign and turn over, and the Buyer shall be entitled to receive
and keep, all awards for the taking by eminent domain which accrue to Seller and
the parties shall proceed to the Close of Escrow pursuant to the terms hereof,
without modification of the terms of this Agreement and without any reduction in
the Purchase Price. For the purpose hereof, "material" shall be deemed to be any
diminution in the value of the Property as a result of a taking by eminent
domain or otherwise which exceeds Fifty Thousand and No/100ths Dollars
($50,000.00), as determined by Seller using its good faith judgment.
Fire or Casualty. Prior to the Close of Escrow, the entire risk of loss or
damage by earthquake, flood, landslide, fire or other casualty shall be borne
and assumed by Seller, except as otherwise provided in this Section. If, prior
to the Close of Escrow, any part of the Improvements are damaged or destroyed by
earthquake, flood, landslide, fire or other casualty, Seller shall immediately
notify Buyer of such fact. If such damage or destruction is "material", Buyer
shall have the option to terminate this Agreement upon written notice to the
Seller given not later than ten (10) days after receipt of Seller's notice. For
purposes hereof, "material" shall be deemed to be any uninsured damage or
destruction to the Project or any insured damage or destruction where the cost
of repair or replacement is estimated to be Fifty Thousand Dollars ($50,000.00)
or more or shall take more than ninety (90) days to repair, in Seller's good
faith judgment; provided, however, in the case of uninsured damage or
destruction, Seller may, at Seller's option, elect to repair such damage and
destruction and keep this Agreement in full force and effect so long as such
repair can be and is completed by Seller prior to the Close of Escrow. If this
Agreement is so terminated, the provisions of Section 6(c) shall govern. If
Buyer does not exercise this option to terminate this Agreement, or if the
casualty is not material, neither party shall have the right to terminate this
Agreement but Seller shall assign and turn over, and Buyer shall be entitled to
receive and keep, all insurance proceeds payable to it with respect to such
destruction, and the parties shall proceed to the Close of Escrow pursuant to
the terms hereof without modification of the terms of this Agreement and without
any reduction in the Purchase Price.
Notices. All notices or other communications required or permitted hereunder
shall be in writing, and shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or sent by electronic
facsimile and shall be deemed
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received upon the earlier of (i) if personally delivered, the date of delivery
to the address of the person to receive such notice, (ii) if mailed, on the date
of posting by the United States Post Office, or (iii) if given by electronic
facsimile, when received by the other party.
TO BUYER: United National Foods, Inc.
12745 Earhart Avenue
Auburn, California 95602
Telephone: ______________
Facsimile: ______________
Attention: ______________
TO SELLER: Locksley Lane Investors, L.P.
3620 Fair Oaks Boulevard, Suite 150
Sacramento, California
Telephone: (916) 920-4400
Facsimile: (916) 920-0854
Attention: Benjamin S. Catlin and
Paul O'Sullivan
WITH COPY TO: Trainor Robertson
701 University Avenue, Suite 200
Sacramento, California 95825
Telephone: (916) 929-7000
Facsimile: (916) 929-7111
Attention: Jay Heckenlively
TO ESCROW HOLDER: Stewart Title of Sacramento
555 Capitol Mall, Suite 280
Sacramento, California 95814
Telephone: (916) 441-4950
Facsimile: (916) 444-8691
Attention: Vince Balbi
Notice of change of address shall be given by written notice in the manner
described in this Section.
Brokers. The parties acknowledge and agree that there is no real estate broker
involved in this transaction.
Exchange. The parties to this Agreement acknowledge that either party may desire
to structure the sale and/or the purchase of the Property as an exchange for
like-kind property pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended, in order to defer recognition of income from the disposition
of the Property and other properties. The parties agree to reasonably cooperate
with each other to accomplish such exchange(s) and each party hereby agrees that
any and all costs associated with said exchange shall be borne solely by the
exchanging party and shall in no way be attributable to the non-exchanging
party. In no event shall the non-exchanging party be required to take title to
the exchanged property(ies) to effectuate the tax deferred exchange contemplated
by this Section.
Purchase Rights in Lease. The parties agree that, as of the Effective Date, this
Agreement replaces and supersedes, in total, any right of the Buyer, as
"Tenant," to acquire fee title to the Property pursuant to the Lease, which
purchase rights are hereby deleted in their entirety from the Lease; provided,
however, in the event that Seller defaults under this Agreement, the provisions
of this Section 20 shall be ineffective.
Miscellaneous.
Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
such term and provision of this Agreement shall be valid, and shall be enforced
to the fullest extent permitted by law.
Waivers. No waiver of any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension of time for
performance of any other obligation or act except those of the waiving party,
which shall be extended by a period of time equal to the period of the delay.
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Survival of Representations. The indemnification, defense and hold harmless
obligations, and the representations and warranties made by each party herein
shall survive (1) the Close of Escrow and shall not merge into the Grant Deed
and the recordation thereof, and (2) the termination and/or cancellation of this
Agreement.
Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the permitted successors and assigns of the parties hereto.
Professional Fees. If either party commences an action against the other to
interpret or enforce any of the terms of this Agreement or because of the breach
by the other party of any of the terms hereof, the losing party shall pay to the
prevailing party reasonable attorneys' fees, costs and expenses and court costs
and other costs of action incurred in connection with the prosecution or defense
of such action, whether or not the action is prosecuted to a final judgment. For
the purpose of this Agreement, the terms "attorneys' fees" or "attorneys' fees
and costs" shall mean the fees and expenses of counsel to the parties hereto,
which may include printing, photostating, duplicating and other expenses, air
freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but performing services under the supervision of
an attorney. The terms "attorneys' fees" or "attorneys' fees and costs" shall
also include, without limitation, all such fees and expenses incurred with
respect to appeals, arbitrations and bankruptcy proceedings, and whether or not
any action or proceeding is brought with respect to the matter for which said
fees and expenses were incurred. The term "attorney" shall have the same meaning
as the term "counsel."
Entire Agreement. This Agreement (including all Exhibits attached hereto) is the
final expression of, and contains the entire agreement between, the parties with
respect to the subject matter hereof and supersedes all prior understandings
with respect thereto. This Agreement may not be modified, changed, supplemented,
superseded, canceled or terminated, nor may any obligations hereunder be waived,
except by written instrument signed by the party to be charged or by its agent
duly authorized in writing or as otherwise expressly permitted herein. The
parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto and lawful assignees.
Assignment. Buyer may not assign its right, title or interest in this Agreement
to any other party without the prior written consent of Seller, which
determination may be withheld in Seller's sole and absolute discretion. Any
attempted assignment without the prior written consent of Seller shall be void
and be deemed a default of Buyer hereunder. Any permitted assignment shall not
relieve the assigning party from any liability under this Agreement.
Time of Essence. Seller and Buyer hereby acknowledge and agree that time is
strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and that failure to timely perform any of the
terms, conditions, obligations or provisions hereof by either party shall
constitute a material breach of and a non-curable (but waivable) default under
this Agreement by the party so failing to perform.
Relationship of Parties. Nothing contained in this Agreement shall be deemed or
construed by the parties to create the relationship of principal and agent, a
partnership, joint venture or any other association between Buyer and Seller.
Construction. Headings at the beginning of each paragraph and subparagraph are
solely for the convenience of the parties and are not a part of the Agreement.
Whenever required by the context of this Agreement, the singular shall include
the plural and the masculine shall include the feminine and vice versa. This
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to paragraphs, sections, subparagraphs and subsections
are to this Agreement. All exhibits referred to in this Agreement are attached
and incorporated by this reference.
Governing Law. The parties hereto acknowledge that this Agreement has been
negotiated and entered into in the State of California. The parties hereto
expressly agree that this Agreement shall be governed by, interpreted under, and
construed and enforced in accordance with the laws of the State of California.
Possession of Property. Buyer shall be entitled to the possession of the
Property immediately following the Close of Escrow.
Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute
one and the same instrument.
Days of Week. If any date for performance herein falls on a Saturday, Sunday or
holiday, as defined in Section 6700 of the California Government Code, the time
for such performance shall be extended to 5:00 p.m. on the next business day.
Representation by Counsel. Notwithstanding any rule or maxim of construction to
the contrary, any ambiguity or uncertainty shall not be construed against either
Seller or Buyer based upon authorship of any of the provisions hereof. Seller
and Buyer each hereby warrant, represent and certify to the other as follows:
(a) that the contents of this Agreement have been completely and carefully read
by the representing party and counsel for the representing party; (b) that the
representing party has been separately represented by counsel and the
representing party is satisfied with such representation; (c) that the
representing party's counsel has advised the representing party of, and the
representing party fully understands, the legal consequences of this Agreement;
and (d) that no other person (whether a party to this Agreement or not) has made
any threats, promises or representations of any kind whatsoever to induce the
execution hereof, other than the performance of the terms and provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates set forth below.
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BUYER: SELLER:
UNITED NATIONAL FOODS, INC., LOCKSLEY LANE INVESTORS, L.P.,
a Delaware corporation a California limited partnership
By: _____________________________ By: ______________________________
Its: ____________________________ Its: _____________________________
Date: ___________________________ Date: ____________________________
FIFTH AMENDMENT TO NET LEASE AGREEMENT AND ACKNOWLEDGMENT
(Auburn, California)
This Fifth Amendment to Net Lease Agreement and Acknowledgment ("Fifth
Amendment") is made as of December 16, 1999, with reference to that certain Net
Lease Agreement ("Original Lease") by and between the predecessor-in-interest to
Locksley Lane Investors, L.P., a California limited partnership ("Landlord"),
and the predecessor-in-interest to United Natural Foods, Inc., a Delaware
corporation ("Tenant"), regarding those certain premises within the building
("Building") located at 12600 Earhart Avenue, Auburn, California, both of which
are more particularly described in the Original Lease.
The undersigned hereby confirm the following and the provisions of the Lease (as
hereinafter defined) are amended hereby:
On or about December 31, 1996, Landlord's predecessor-in-interest and Tenant's
predecessor-in-interest entered in the Original Lease, as was subsequently
amended by that certain First Amendment to Net Lease Agreement dated on or about
August 11, 1998 ("First Amendment"), that certain Second Amendment to Net Lease
Agreement dated June 14, 1999 ("Second Amendment"), that certain Third Amendment
to Net Lease Agreement dated on or about September 27, 1999 ("Third Amendment")
and that certain Fourth Amendment to Net Lease Agreement dated December 15, 1999
("Fourth Amendment"). The Original Lease, as amended by the First Amendment, the
Second Amendment, the Third Amendment and the Fourth Amendment, is collectively
referred to as the "Lease."
Pursuant to the terms and conditions of the Original Lease, Tenant has leased
from Landlord sixty-two thousand eight hundred seventy-five (62,875) usable and
rentable square feet within the Building ("Original Premises"). Pursuant to the
terms and conditions of the Third Amendment, Tenant has leased from Landlord the
remaining thirty-seven thousand one hundred twenty-five (37,125) usable and
rentable square feet within the Building ("Expansion Area"). Pursuant to the
terms and conditions of the Fourth Amendment, Tenant has leased from Landlord
approximately two and one-half (2 1/2) acres of real property ("Expansion Land")
located adjacent to the Original Premises. The Original Premises, the Expansion
Area and the Expansion Land (collectively, "Premises") constitute one hundred
thousand (100,000) usable and rentable square feet and equal the entire usable
and rentable area of the Building, together with the two and one-half (2 1/2)
acres of land located adjacent thereto.
The "Commencement Date" with respect to the Original Premises occurred on
September 27, 1999. The "Commencement Date" with respect to the Expansion Area
shall occur on November 27, 1999. The "Commencement Date" with respect to the
Expansion Land shall occur on December 1, 1999. Unless sooner terminated, the
expiration date of the term of the Lease with respect to the Original Premises
and the Expansion Area and the Expansion Land is September 26, 2009.
Tenant acknowledges that the Premises are as represented by Landlord, in good
condition and repair; and the improvements required to be constructed for Tenant
by Landlord pursuant to the requirements of the Lease have been so constructed
and are satisfactorily completed in all respects excepting only those items
("Punchlist Items") listed on Exhibit A attached hereto and incorporated herein
by this reference.
All conditions which are to be satisfied prior to the full effectiveness of the
Lease have been satisfied and Landlord has fulfilled all of its duties of an
inducement nature.
The Lease is in full force and effect and it represents the entire agreement
between Landlord and Tenant concerning Tenant's lease of the Premises.
To the best of Tenant's knowledge, there are no existing defenses which Tenant
has against the enforcement of the Lease by Landlord, and no offsets or credits
against any amounts owed by Tenant exist pursuant to the Lease. Tenant has no
claims or defenses against Landlord concerning the dates upon which the
"Commencement Date" occurred with respect to either the Original Premises or the
Expansion Area.
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Tenant's obligations to pay "Base Rent" for the Original Premises in the amount
of Twenty-Three Thousand Five Hundred Seventy-Eight and 12/100ths Dollars
($23,578.12) per month shall commence to accrue on November 27, 1999.
Notwithstanding the foregoing sentence, Tenant's obligations to pay the costs of
maintenance, repair and replacements and obligations with respect to the Project
Common Areas, the Building, and all Operating Expenses, Taxes and Utilities and
all other additional Rent required pursuant to the Lease, commenced to accrue
with respect to the Original Premises on September 27, 1999.
Tenant's obligations to pay "Base Rent" for the Expansion Area in the amount of
Thirteen Thousand Nine Hundred Twenty-One and 88/100ths Dollars ($13,921.88) per
month shall commence to accrue on November 27, 1999. Tenant's obligations to pay
the costs of maintenance, repair and replacements and obligations with respect
to the Project Common Areas, the Building, and all Operating Expenses, Taxes and
Utilities and all other additional Rent required pursuant to the Lease, shall
commence to accrue with respect to the Expansion Area on November 27, 1999.
Tenant's obligations to pay "Base Rent" for the Expansion Land in the amount of
Six Thousand Four Hundred Sixteen and 67/100ths Dollars ($6,416.67) per month
shall commence to accrue on December 1, 1999. Tenant's obligations to pay the
costs of maintenance, repair and replacements and obligations with respect to
the Project Common Areas, the Building, the Expansion Land and all Operating
Expenses, Taxes and Utilities and all other additional Rent required pursuant to
the Lease, shall commence to accrue with respect to the Expansion Land on
December 1, 1999.
Pursuant to the provisions of Section 8, Section 9 and Section 10 above,
commencing upon December 1, 1999, Tenant shall be obligated to pay Base Rent for
the Premises in the amount of Forty-Three Thousand Nine Hundred Sixteen and
67/100ths Dollars ($43,916.67) per month. In addition to payment of Base Rent,
commencing upon December 1, 1999, Tenant shall be responsible for maintenance,
repair and replacement obligations of Tenant set forth in the Original Lease and
obligations of Landlord with respect to the Project Common Areas, the Building,
the Expansion Land and all Operating Expenses, Taxes and Utilities and all other
additional Rent required pursuant to the Lease.
Tenant has not made any prior assignment, hypothecation or pledge of the Lease
or of any of the rents thereunder.
Except as modified herein, the Lease remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Fifth Amendment as of the
date set forth below.
LANDLORD: TENANT:
LOCKSLEY LANE INVESTORS, L.P., UNITED NATURAL FOODS, INC.,
a California limited partnership a Delaware corporation
By: __________ By: __________
Its: _________ Its: _________
Date: ________ Date: ________
EXHIBIT A
Punchlist Items
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