EXHIBIT 10.50
EXODUS SUBLEASE
THIS EXODUS SUBLEASE ("Sublease"), is made and effective this 1st
day of February, 1999 (if and only if it is executed below where
indicated by Sublessor, Sublessee and Lessor), by and between TALUS
CORPORATION, a California corporation, c/o Electronic Manufacturing
Systems, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Sublessor"), and
EXODUS COMMUNICATIONS, INC., a Delaware corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Sublessee"). Talus Corporation and Exodus
Communications, Inc. are referred to collectively as the "Parties" and
individually as a "Party").
RECITALS
A. Sublessor, formerly known as Scientific Custom Metal Products
International, Inc., as Lessee, entered into a Standard
Industrial/Commercial Single-Tenant Lease - Net including Exhibit
{A} with Mopar, LLC as lessor, dated as of March 1, 1996, as
amended by that certain Lease Amendment, identical counterparts of
which have been dated as of November 14, 1997, and November 20,
1997 (as so amended, the "Original Lease"), for the lease of a
portion of an industrial building of approximately 95,700 square
feet (the "Building") located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇. G&I ▇▇▇▇▇ LLC, a Delaware limited liability company
("Lessor") has purchased the Building from Mopar, LLC, and is
the present Lessor under the Lease. Except as provided herein,
terms shall have the same meanings in this Sublease as in the
Lease (as that term is hereinafter defined).
A. The Original Lease has been or is about to be amended by a further
Lease Amendment dated as of January 29, 1999 (the "January Lease
Amendment").
A. The Original Lease as amended by the January Lease Amendment, all
of which are attached hereto, are hereinafter collectively
referred to as the "Lease." From the Commencement Date through
April 30, 2002, the premises leased to Sublessor under the Lease
(i.e. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇), less the premises leased to ACC (as
generally described below), is hereinafter referred to as the
"Premises." On and after May 1, 2002, and as to any references
which relate to this time period (when Sublessee also rents the
ACC Sublease Premises (as defined below), and as to any time when
Sublessee also rents the ACC Sublease Premises, the term
"Premises" herein shall refer to the entire "Premises" leased
to Sublessor under the Original Lease (regardless of whether the
ACC Sublease Premises is also expressly mentioned).
A. On April 25, 1997, Sublessor agreed to lease to ACC
Microelectronics Corporation, a California corporation, dba Auctor
Corporation ("ACC"), approximately 10,500 rentable feet in the
Building, more or less ("ACC Sublease Premises"), as well as
other terms and conditions pursuant to the Standard Office Lease -
Gross dated April 25, 1997, with attached First Addendum to Lease
Agreement and Rules and Regulations for Standard Office Lease
("Existing ACC Sublease"), also attached hereto.
A. Sublessee's signature below evidences its receipt and careful
review of the terms and conditions contained in all of the above-
mentioned documents.
A. Sublessor desires to sublease to Sublessee and Sublessee desires
to sublease from Sublessor the Premises on the terms and
conditions set forth in this Sublease.
For and in consideration of the foregoing recitals, the mutual
promises and covenants of the parties, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Sublessor and Sublessee hereby covenant and agree as
follows:
ARTICLE I
BASIC SUBLEASE PROVISIONS
1.1 Subleased Premises. Sublessor hereby subleases to Sublessee
and Sublessee hereby rents from Sublessor the Premises. On and after May 1,
2002 (or such earlier date as provided herein or otherwise agreed to in
writing by the Parties), Sublessee also rents from Sublessor the ACC
Sublease Premises which shall also be included in the Premises.
Sublessor shall not be responsible for any delays in delivering
possession of the ACC Sublease Premises to Sublessee so long as it uses
reasonable steps to deliver possession to Sublessee as soon as possible
after May 1, 2002. In the event that Sublessor is unable,
notwithstanding its reasonable steps, to deliver possession of the ACC
Sublease Premises to Sublessee on May 1, 2002, Sublessee's obligations to
pay Base Rent (as set forth below) and other Rent (as defined below)
which is attributable to the ACC Sublease Premises shall be suspended
until Sublessor is able to deliver possession of the ACC Sublease
Premises. In other words, until Sublessor is able to deliver possession
of the ACC Sublease Premises, Sublessee shall pay only Eighty-Nine and
03/100 percent (89.03%) of the Base Rent for the applicable period(s) set
forth below in section 2.1 plus those costs for Additional Rent set forth
in section 2.2 (in lieu of section 2.3) below, in addition to its other
obligations under the Sublease. None of the Existing ACC Sublease
provisions shall apply to this Sublease. Notwithstanding the provisions
of this section 1.1 above, in the event that the Existing ACC Sublease is
terminated prior to May 1, 2002, then so long as Sublessee is not then in
default under the terms of this Sublease, and no event shall have
occurred and be continuing which, under the terms of this Sublease would
constitute a default under the Sublease after the giving of notice or
passage of time, or both, Sublessee shall begin renting the ACC Sublease
Premises immediately following the termination of the Existing ACC
Sublease and the vacancy by ACC of the ACC Sublease Premises. In the
event of such early renting by Sublessee of the ACC Sublease Premises,
then from and after the date of such early renting, in addition to all of
Sublessee's obligations under the Sublease, the Additional Rent shall be
payable by Sublessee in accordance with section 2.3 below, and the
monthly Base Rent set forth in section 2.1 shall be modified in
accordance with the following schedule:
Starting Ending Monthly
Date Date Base Rent
----------- ----------- ------------
02/01/99 01/31/2000 $90,915.00
02/01/2000 01/31/2001 $95,700.00
02/01/2001 01/31/2002 $100,485.00
02/01/2002 01/31/2003 $105,270.00
02/01/2003 01/31/2004 $110,055.00
02/01/2004 05/31/2004 $115,797.00
1.2 Use. Sublessee shall use the Premises as data center processing
and other lawful related uses (restricted, however, for non-hazardous
purposes) only ("Agreed Use"). With respect to the foregoing
restrictions on the use of the Premises, Sublessee agrees to abide by
such restrictions unless Sublessor gives its advance written consent to
another use. Sublessee agrees to comply with all zoning and land use
laws and requirements imposed on the Premises.
1.3 Term. The Term of this Sublease shall commence on the first day
of February, 1999 (hereinafter called the "Commencement Date") and
shall end at twelve o'clock midnight on May 31, 2004 (hereinafter called
the "Expiration Date"), or shall end on such earlier date pursuant to any
of the terms and conditions of this Sublease (which in this and other
provisions herein includes, unless expressly indicated otherwise, the
incorporated Lease).
1.4 Condition of Subleased Premises. Sublessee represents that it
has inspected the Premises (including the ACC Sublease Premises) and is
familiar with the condition of every part thereof including, without
limitation, the occupancy and operation of ACC. Sublessee agrees that it
enters into this Sublease without any representations, promises,
agreements or warranties by Sublessor, its officers, employees, agents,
or representatives, as to the condition or fitness for a particular
purpose or use of the Premises (including the ACC Sublease Premises) or
any part, element or component thereof, including, but not limited to,
electrical, plumbing, fire sprinkler, life safety, lighting, or heating
ventilating and air conditioning ("HVAC") systems, loading doors, roof,
exterior walls, foundations or other structural elements, except as
provided in section 4.1(c) below. Sublessee agrees to accept the
Premises on an "AS-IS, WITH ALL FAULTS" basis, without requiring any
alteration, addition, installation, repair, decoration or other
improvement to be made by Sublessor or at Sublessor's expense.
1.5 Services. Without limiting the effect of the provisions of the
incorporated Lease relating thereto, Sublessor shall not be obligated to
provide any services to Sublessee. Sublessor makes no representations or
warranties as to the availability or adequacy of services.
1.6 Vehicle Parking. So long as Sublessee is not in default, and
subject to the rules and regulations promulgated from time to time by
Sublessor and/or Lessor, Sublessee shall be entitled to use 50.3 % of the
parking spaces for the ▇▇▇▇/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ building project (less,
until Sublessee's rental of the ACC Lease Premises, 42 spaces), for use
by its agents', servants', employees' and invitees' (individually and
collectively referred to as "Sublessee's Agents") passenger vehicles
with 8 or less capacity only. If Sublessor in its sole discretion agrees
in writing to permit Sublessee to use any parking spaces for any other
purpose (e.g., temporary storage of materials, satellite dish
installation, etc.), Sublessee's then current number of parking spaces
will automatically be reduced by the number of spaces utilized for such
purpose plus any spaces which cannot be reasonably used for normal
parking as a result thereof. Sublessee agrees that overnight parking is
prohibited. Sublessee also agrees that under no circumstances shall
Sublessee's Agents in any manner interfere with occupancy and/or access
to the property known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, including, without
limitation, interference with the ingress or egress to the building,
parking lot or shipping and receiving areas. If Sublessee commits,
permits or allows any of the prohibited activities described in the
Sublease (including the incorporated Lease) or the rules and regulations
then in effect, then Sublessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or
tow away the vehicle(s) involved and charge the cost to Sublessee, which
cost shall be immediately payable upon demand by Lessor. Sublessee
agrees that Sublessor may "re-stripe" so as to reconfigure the existing
parking lots, so long as such does not reduce the number of parking
spaces that Sublessee is otherwise entitled. Subject to the prior
written approval of Sublessor and Lessor which shall not be unreasonably
withheld or delayed, Sublessee may also "re-stripe" so as to
reconfigure the existing parking lots, so long as such does not reduce
the number of total parking spaces or unreasonably interfere with the use
or occupancy of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its marketability to prospective
subtenants.
1.7 Sublessee Compliance. Sublessor shall not be required to tender
possession of the Premises to Sublessee until Sublessee provides
satisfactory evidence of insurance pursuant to paragraph 8.5 of the
Lease, delivers the original Letter of Credit (hereinafter defined)
pursuant to section 2.5 below of this Sublease, and delivers the initial
monthly Base Rent payment in the amount of $11,076.00 and a payment of
$7,875.00 (which represents Lessor's fee it is requiring of Sublessor
pursuant to paragraph 12.2(e)). Pending delivery of such evidence of
insurance, Letter of Credit and initial Base Rent payment and paragraph
12.2(e) fee, Sublessee shall be required to perform all of its
obligations under the Sublease from and after the Commencement Date,
including the payment of Rent (as hereinafter defined), notwithstanding
Sublessor's election to withhold possession pending receipt of such
evidence of insurance and Letter of Credit.
ARTICLE II
RENT AND OTHER CHARGES
2.1 Base Rent. Notwithstanding anything contained in this Sublease
(including the incorporated Lease) and regardless of the Commencement
Date, Sublessee agrees to pay Sublessor Base Rent commencing on February
1, 1999, and on the first day of each month thereafter, in accordance
with the schedule set forth below:
Starting Ending Monthly
Date Date Base Rent
----------- ----------- ------------
02/01/99 02/28/99 $11,076.00
03/01/99 03/31/99 $58,403.21
04/01/99 01/31/2000 $80,940.00
02/01/2000 01/31/2001 $85,200.00
02/01/2001 01/31/2002 $89,460.00
02/01/2002 04/30/2002 $93,720.00
05/01/2002 01/31/2003 $105,270.00
02/01/2003 01/31/2004 $110,055.00
02/01/2004 05/31/2004 $115,797.00
2.2 Additional Rent. For the period from March 1, 1999 through
April 30, 2002, Sublessee shall also pay to Sublessor (or such other
party(s) as may be designated in writing by Sublessor) as and when due
under the Lease any and all additional rent and other charges which are
due and payable by Lessee under the Lease, without any deduction or
offset of any kind or nature, including, but not limited to, the costs
associated with:
(a) All maintenance and repair obligations of Lessee
which concern the Premises and/or are caused in
whole or in part, directly or indirectly, by
Sublessee's Agents, as generally set forth in
paragraph 7 of the Lease (without regard to
deduction or offset in this and the following
provisions of this section 2.2 for any payments
by ACC). With respect to other maintenance
and/or repairs which do not only concern the
Premises or are not caused in whole or in part,
directly or indirectly, by Sublessee's Agents,
Sublessee shall pay its pro rata share (as
hereinafter defined) of all such obligations,
(b) All non-Building exterior repairs of the office
building project (i.e., 2401 and ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇) including, without limitation, repairs
of the landscaping, walkways, lawns, parking
lots and exterior lighting (individually and
collectively referred to hereinafter as the
"Exterior Grounds") which are caused in whole
or in part, directly or indirectly, by
Sublessee's Agents, as generally set forth in
paragraph 7 of the Lease. With respect to other
Exterior Grounds repairs which are not caused in
whole or in part, directly or indirectly, by
Sublessee's Agents, as well as maintenance of
the Exterior Grounds, Sublessee shall pay Forty-
Four and 52/100 percent (44.52%) of all such
obligations,
(c) All insurance obligations of Lessee (for which
Sublessor shall pay to Sublessee for the period
March 1, 1999 through April 30, 2002, Ten and
97/100 percent (10.97%) of the reasonable cost
of such insurance directly attributable to the
Premises, except for the cost for insurance
which is attributable to earthquake and flood
coverage which shall be solely borne by
Sublessee, as set forth in section 5.1 below),
generally set forth in paragraph 8 of the Lease,
(d) Sublessee's pro rata share of all Real Property
Taxes obligations of Lessee, and 100% of
Personal Property Taxes obligations of Lessee
for property on the Premises (including any
exterior areas around the Building), generally
set forth in paragraph 10 of the Lease,
(e) All utility obligations of Lessee, generally set
forth in paragraph 11 of the Lease, less the
agreed upon sum of $1,180.00 per month, until
such time as Sublessor installs a meter or
meters to separately monitor the utility
obligations of Sublessee and/or ACC (which are
capable of monitoring) when Sublessee shall then
pay the amounts represented by such meter(s) in
addition to any other utility obligations which
are not capable of monitoring.
(f) All Alterations and improvements made to the
Premises by reason of the laws and requirements of
any public authorities and any application, permit,
inspection or license fees required in connection
therewith or for the operation, use or occupancy of
the Premises.
Sublessee's "pro rata share" shall refer to Eighty-Nine and 03/100
percent (89.03%) of the total costs of the subject item(s).
2.3 Additional Rent. For the period from May 1, 2002 (or such
earlier date as provided herein when Sublessee occupies the ACC Sublease
Premises or otherwise agreed to in writing by the Parties), through the
Expiration Date, Sublessee shall also pay to Sublessor (or such other
party(s) as may be designated in writing by Sublessor) as and when due
under the Lease any and all additional rent and other charges which are
due and payable by Lessee under the Lease, without any deduction or
offset of any kind or nature, including, but not limited to, the costs
associated with:
(a) All maintenance and repair obligations of Lessee
generally set forth in paragraph 7 of the Lease,
(b) All non-Building exterior repairs of the office
building project (i.e., 2401 and ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇) including, without limitation, repairs
of the landscaping, walkways, lawns, parking
lots and exterior lighting (individually and
collectively referred to as "Exterior
Grounds") which are caused in whole or in part,
directly or indirectly, by Sublessee's Agents,
as generally set forth in paragraph 7 of the
Lease. With respect to other Exterior Grounds
repairs which are not caused in whole or in
part, directly or indirectly, by Sublessee's
Agents, as well as maintenance of the Exterior
Grounds, Sublessee shall pay Fifty percent (50%)
of all such obligations,
(c) All insurance obligations of Lessee, generally
set forth in paragraph 8 of the Lease,
(d) All Real Property Taxes obligations of Lessee,
and all Personal Property Taxes obligations of
Lessee for property on the Premises (including
any exterior areas around the Building),
generally set forth in paragraph 10 of the
Lease,
(e) All utilities obligations of Lessee, generally
set forth in paragraph 11 of the Lease, and
(f) All Alterations and improvements made to the
Premises by reason of the laws and requirements of
any public authorities and any application, permit,
inspection or license fees required in connection
therewith or for the operation, use or occupancy of
the Premises.
Notwithstanding anything contained in the Lease, except as expressly
provided to the contrary in this Sublease (e.g., with respect to the ACC
Sublease Premises prior to rental by Sublessee), the Parties agree that
it is the intent of this Sublease that Sublessee perform and pay all
obligations of Lessee under the Lease.
2.4 Payment. The Base Rent, and any additional rent and the other
charges payable herein in the Sublease (and in the Lease incorporated
herein) reserved or payable, shall be paid to Sublessor at its address
first-above stated (directed to the attention of: Controller) or at such
other place as Sublessor may designate in writing, in lawful money of the
United States of America, as and when the same become due and payable,
without demand therefor and without any deduction, notice, offset,
counterclaim or abatement whatsoever, except as otherwise expressly
provided in this Sublease. All monetary obligations of Sublessee to
Sublessor under the terms of the Sublease (except for the Security
Deposit) are deemed to be rent ("Rent"). Rent for any period during
the Term hereof which is for less than one (1) full calendar month shall
be prorated based upon the actual number of days of said month.
Acceptance of a payment which is less than the amount then due shall not
be a waiver of Sublessor's rights to the balance of such Rent, regardless
of Sublessor's endorsement of any check so stating.
2.5 Security Deposit.
(a) Upon execution of this Sublease, Sublessee shall deliver to
Sublessor the Letter of Credit described below as security for
Sublessee's performance of all of Sublessee's covenants and obligations
under this Sublease; provided, however, that neither the Letter of Credit
nor any Letter of Credit Proceeds (as defined below) shall be deemed an
advance rent deposit or an advance payment of any other kind, or a
measure of Sublessor's damages upon Sublessee's Default or Breach. The
Letter of Credit shall be maintained in effect from the date hereof
through the date which is one hundred twenty (120) days after the
Expiration Date, provided that upon Sublessee's surrender of the Premises
at the expiration of the Term, Sublessor and Sublessee shall endeavor to
determine as soon as practicable any amounts owing by Sublessee, and
within five (5) Business Days after payment of such amount and
Sublessee's fulfillment of any other obligations to Sublessor, Sublessor
shall return to Sublessee the Letter of Credit and any Letter of Credit
Proceeds then held by Sublessor (other than those held for application by
Sublessor as provided below). Sublessor shall not be required to
segregate the Letter of Credit Proceeds from its other funds, and in no
event shall Letter of Credit Proceeds or any portion thereof be deemed to
be held in trust for Sublessee. No interest shall accrue or be payable
to Sublessee with respect to the Letter of Credit Proceeds. Sublessor
may (but shall not be required to) draw upon the Letter of Credit and use
the proceeds therefrom (the "Letter of Credit Proceeds") or any portion
thereof to cure any Default or Breach under this Sublease or to
compensate Sublessor for any damage Sublessor incurs as a result of
Sublessee's failure to perform any of its obligations hereunder, it being
understood that any use of the Letter of Credit Proceeds shall not
constitute a bar or defense to any of Sublessor's remedies set forth
herein. In such event and upon written notice from Sublessor to
Sublessee specifying the amount of the Letter of Credit Proceeds so
utilized by Sublessor and the particular purpose for which such amount
was applied, Sublessee shall immediately deliver to Sublessor an
amendment letter of Credit or a replacement Letter of Credit in an amount
equal to one hundred percent (100%) of the amount specified below.
Sublessee's failure to deliver such replacement Letter of Credit to
Sublessor within five (5) business days of Lessor's notice shall
constitute a Breach hereunder. If Sublessee is not in default at the
expiration or termination of this Sublease, within one hundred twenty
(120) days after such expiration or termination, or such earlier date as
provided above, Sublessor shall return to Sublessee the Letter of Credit
or the balance of the Letter of Credit Proceeds then held by Sublessor;
provided, however, that in no event shall any such return be construed as
an admission by Sublessor that Sublessee has performed all of its
obligations hereunder. Under no circumstances shall Sublessor be
required to return the Letter of Credit or Letter of Credit proceeds
before receiving written acknowledgment by Lessor that Sublessor has
fulfilled all of its Sublessor's obligations and is completely released
from liability under the Lease.
(b) As used herein, Letter of Credit shall mean an
unconditional, irrevocable letter of credit (hereinafter referred to as
the "Letter of Credit") issued by a major "money center" bank
satisfactory to Sublessor in its sole and absolute discretion (the
"Bank"), drawings under which may be made at an office of the Bank
located in Denver or Boulder, Colorado, naming Sublessor as beneficiary,
in the amounts set forth below, and otherwise in form and substance
satisfactory to Sublessor. The initial amount of the Letter of Credit
shall be Four Hundred Thousand Dollars ($400,000.00) during the period
from the execution of this Sublease through May 31, 2003, after which the
amount of the Letter of Credit shall be reduced to Three Hundred Thousand
Dollars ($300,000.00) for so long as the Letter of Credit is required to
be maintained pursuant to subsection (a) above. In addition, should the
Agreed Use be amended to accommodate a material change in the business of
Sublessee or to accommodate a sublessee or assignee of Sublessee,
Sublessee shall, upon thirty (30) days' written notice from Sublessor,
cause the amount of the Letter of Credit to be increased to an amount
necessary, in Sublessor's reasonable judgment, to account for any
increased wear and tear that the Premises may suffer as a result thereof.
Furthermore, if a change in control of Sublessee occurs during the term
of this Sublease, and following such change in control, (1) Sublessee is
not a publicly traded company, and (2) the financial condition of
Sublessee is, in Sublessor's reasonable judgment, significantly reduced,
Sublessee shall, upon thirty days' written notice from Sublessor, cause
the amount of the Letter of Credit to be increased, effective on the
later to occur of the expiration of thirty (30) days after Sublessor
gives such notice, or the thirtieth (30th) day prior to the Commencement
Date, to an amount, which, in Sublessor's reasonable judgment, is
commercially reasonable based on such change in financial condition. The
Letter of Credit shall be for an initial term of not less than one year
and shall provide: (i) that Sublessor may make partial and multiple draws
thereunder, up to the face amount thereof, (ii) that Sublessor may draw
upon the Letter of Credit up to the full amount thereof, as determined by
Sublessor, and the Bank will pay to Sublessor the amount of such draw
upon receipt by the Bank of a sight draft signed by Sublessor and
accompanied by a written certification from Sublessor to the Bank stating
either: (A) that a Breach has occurred and is continuing under this Lease
or (B) that Sublessor has not received notice from the Bank that the
Letter of Credit will be renewed by the Bank for at least one (1) year
beyond the then applicable expiration date and Sublessee has not
furnished Sublessor with a replacement Letter of Credit as hereinafter
provided; and (iii) that, in the event of Sublessor's assignment or other
transfer of its interest in this Sublease, the Letter of Credit shall be
freely transferable by Sublessor, without charge and without recourse, to
the assignee or transferee of such interest and the Bank shall confirm
the same to Sublessor and such assignee or transferee. The Letter of
Credit shall further provide that a draw thereon pursuant to clause
(ii)(B) above may only be made during the thirty (30) day period
preceding the then applicable expiration date of the Letter of Credit.
In the event that no later than thirty (30) days prior to the then
applicable expiration date of the Letter of Credit, neither (1) the Bank
shall have notified Sublessor that the Letter of Credit will be renewed
for at least one (1) year beyond the then applicable expiration date, nor
(2) Sublessee shall have delivered to Sublessor a replacement Letter of
Credit in the amount required hereunder and otherwise meeting the
requirements set forth above, then Sublessor shall be entitled to draw on
the Letter of Credit as provided above, and shall hold the proceeds of
such draw as Letter of Credit Proceeds pursuant to subsection (a) above
and Paragraph 5 of the Lease, provided that such drawing shall not
constitute a waiver of Sublessor's right to declare a Breach of the
Sublease pursuant to paragraph 13.1(c) of the Lease.
(c) At any time during the Term, Sublessee may replace any
Letter of Credit provided hereunder with another Letter of Credit meeting
the requirements hereunder, and Sublessor shall cooperate in arranging a
simultaneous exchange of such Letters of Credit.
ARTICLE III
SUBLESSEE'S AFFIRMATIVE OBLIGATIONS
Without limiting Sublessee's obligations pursuant to the Lease,
including those set forth in paragraph 7, Sublessee also agrees to the
following:
3.1 Alterations. Sublessee agrees that any Alteration, Utility
Installation, addition, improvement, installation of Trade Fixtures,
and/or other installation or decoration after the Commencement Date shall
be made only (a) with the prior written consent of Sublessor which shall
not be unreasonably withheld or delayed (and the Lessor, if required by
the terms of the Lease), (b) by workmen or contractors approved by
Sublessor which shall not be unreasonably withheld or delayed; (c) in
full compliance with all laws, ordinances and regulations of applicable
authorities (including any fire insurance rating organizations having
jurisdiction over the Premises); (d) in accordance with the provisions of
the Lease, and (e) after receipt by Sublessor of such insurance policies
as are reasonably required by Sublessor and Lessor. Notwithstanding
anything to the contrary and without limiting in any manner Sublessee's
obligations under this Sublease, Sublessee shall also be responsible for
all restoration obligations of Lessee under the Lease including, without
limitation, the restoration obligations relating to the items mentioned
in paragraph 10 of the January Lease Amendment.
3.2 Sublessor's Consent. Sublessor hereby consents to Sublessee
making and/or installing the Alterations, Utility Installations and Trade
Fixtures specifically shown and identified with specificity on the plans
and specifications described in Exhibit A attached hereto, which plans
and specifications and Exhibit A are incorporated herein by reference, so
long as prior to any construction whatsoever, Sublessee shall first
furnish to Sublessor a lien and completion bond satisfactory to Sublessor
in an amount equal to the estimated cost of such Alteration(s) or Utility
Installation(s). Notwithstanding anything contained in the Sublease,
Sublessor hereby affirmatively states that it does not approve of or
consent to any Alterations, Utility Installations or Trade Fixtures which
are mentioned or described in the plans and specifications but do not
include specifics as to their location, size, mechanical, architectural
or electrical detail or specifications. Without limiting the foregoing
or Sublessee's obligations under this Sublease, notwithstanding the
January Lease Amendment, Sublessee also agrees to the following
modifications to the January Lease Amendment:
(a) Sublessor hereby consents to the installation by Sublessee
of two (2) above-ground diesel fuel tanks and five (5)
diesel generators at the Premises, provided that such
installation shall be in compliance with all Applicable Law,
and Sublessee shall obtain Sublessor's prior written
approval of the precise location thereof, and of the
protective enclosures or encasements thereof, which approval
shall not be unreasonably withheld or delayed. Sublessee
agrees that reasonable considerations in determining such
approval shall include without limitation whether such
tanks, enclosures, encasements and/or generators
unreasonably interfere with the use or occupancy (including
parking, ingress and egress) of the ACC Space, or the use or
occupancy (including parking, ingress and egress) of ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ or its marketability to prospective subtenants.
(b) Sublessor hereby consents to the installation by Sublessee
satellite dishes not to exceed two (2) feet in diameter, on
the roof of the Building only, so long as prior notice is
provided to Sublessor and Lessor and provided that they are
installed behind a roof screen, are not visible from the
street, and are installed in compliance with Applicable Law.
If Sublessee wishes to use other satellite dishes and/or
install satellite dishes in any other manner or location,
such installation shall be in compliance with all Applicable
Law, and shall not be made without Sublessor's and Lessor's
prior written approval of such installation, which approval
shall not be unreasonably withheld or delayed. Sublessee
agrees that reasonable considerations in determining such
approval shall include without limitation whether such
satellite dishes unreasonably interfere with the use or
occupancy (including parking, ingress and egress) of the ACC
Space, or the use or occupancy (including parking, ingress
and egress) of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its marketability to
prospective subtenants, or increase the restoration
obligations pursuant to paragraph 7.4 of the Lease without
the provision of additional security or payment to
Sublessor.
(c) Sublessor shall not unreasonably withhold or delay the
granting of its consent to Alterations, Utility
Installations or Trade Fixtures which are consistent with
the Alterations, Utility Installations or Trade Fixtures
shown on the plans and specifications (Exhibit A).
Sublessee agrees that reasonable considerations in
determining such approval shall include without limitation
whether such Alterations, Utility Installations and/or Trade
Fixtures unreasonably interfere with the use or occupancy
(including parking, ingress and egress) of the ACC Space, or
the use or occupancy (including parking, ingress and egress)
of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its marketability to prospective
subtenants, or increase the restoration obligations pursuant
to paragraph 7.4 of the Lease without the provision of
additional security or payment to Sublessor.
(d) Sublessor hereby agrees not to unreasonably withhold its
consent to the installation by Sublessee of security fencing
which will in part enclose the Building, provided that such
installation shall be in compliance with all Applicable Law,
and Sublessee shall obtain Sublessor's prior written
approval of the precise location, height and type thereof.
Sublessee agrees that reasonable considerations in
determining such approval shall include without limitation
whether such security fencing unreasonably interferes with
the use or occupancy (including parking, ingress and egress)
of the ACC Space, or the use or occupancy (including
parking, ingress and egress) of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its
marketability to prospective subtenants.
3.3 Maintenance and Repair. Sublessee shall take good care of,
repair and maintain the Premises and the fixtures, equipment and other
improvements and appurtenances therein. All damage or injury to the
Premises and to its fixtures, glass, appurtenances and equipment caused
by the moving of property by Sublessee's Agents in or out of the
Premises, or by the installation or removal by Sublessee's Agents of
furniture, fixtures or other property, or resulting from carelessness,
omission, neglect or improper conduct of Sublessee's Agents, shall be
repaired, restored or replaced promptly by Sublessee, at its sole cost
and expense, to the reasonable satisfaction of Sublessor and Lessor. All
of said repairs and replacements required to be made by Sublessee shall
be in quality and class equal to the original work or installation and
shall be done in a good and workmanlike manner.
3.4 Financial Information. On the first day of February of each
calendar year during the term of this Sublease, Sublessee shall provide
Sublessor, upon request, with copies of all of the most recent financial
statements of Sublessee, and all of its parent and/or subsidiary
company(s). Upon request, Sublessee also agrees to provide any
supplemental financial information as may be from time to time requested
by Sublessor.
3.5 Non-Interference. Sublessee agrees that it will in no manner
disrupt or otherwise interfere with ACC's tenancy and use of the Building
pursuant to the Existing ACC Sublease.
ARTICLE IV
SUBLESSOR'S COVENANTS AND REPRESENTATIONS
4.1 Covenants and Representations. Sublessor covenants and
represents to Sublessee as follows that:
(a) The Lease is in full force and effect, Sublessor has
received no notice of default and, to the best of
Sublessor's knowledge, no default exists thereunder;
(b) During the term of this Sublease, Sublessor will fully and
faithfully perform the terms and conditions of the Lease on
its part to be performed; and
(c) Sublessor has no knowledge or information that the Premises
contain Hazardous Substances.
4.2 Sublessor Indemnity. Notwithstanding any provisions to the
contrary, and in particular paragraph 6 of the Lease, Sublessor shall
defend, indemnify and hold Sublessee harmless from and against any and
all claims, response or remediation costs, losses, damages, penalties,
other costs, actions, judgments, expenses and other liability (including,
without limitation, attorney's fees and expenses of investigation,
remediation or defense) due to Hazardous Substances which were brought
onto the Premises by Sublessor after November 14, 1997 and before the
Commencement Date, and Hazardous Substances brought onto the Premises by
Sublessor during the Term of this Sublease.
ARTICLE V
INSURANCE
5.1 Insurance. Notwithstanding anything to the contrary except as
is expressly provided herein below in this section 5.1, Sublessee shall
procure and maintain at its own cost and expense, throughout the Term of
this Sublease, such policy or policies of insurance with respect to the
entire Premises as Sublessor is required (as Lessee) to maintain pursuant
to the Lease (i.e., including the ACC Sublease Premises) including, but
not limited to, the policies required pursuant to paragraph 8 of the
Lease. Sublessee shall also pay for any insurance policy(s) which Lessor
is required or otherwise permitted to maintain pursuant to the Lease.
All insurance policies must maintain during the policy term a "General
Policyholders Rating" of at least A, IX. Notwithstanding the preceding,
for the period February 1, 1999 through February 28, 1999, Sublessor
shall reimburse Sublessee for the reasonable cost of such insurance
directly attributable to the entire Premises within thirty (30) days of
receipt of invoice(s) and other documentation evidencing such cost
(except for the cost for insurance which is attributable to earthquake
and flood coverage which shall be solely borne by Sublessee).
Notwithstanding the preceding, for the period March 1, 1999 through April
30, 2002, Sublessor shall pay to Sublessee Ten and 97/100 percent
(10.97%) of the reasonable cost of such insurance directly attributable
to the Premises within thirty (30) days of receipt of invoice(s) and
other documentation evidencing such cost (except for the cost for
insurance which is attributable to earthquake and flood coverage which
shall be solely borne by Sublessee). The policies shall also name
Sublessor, Lessor and their respective officers, directors and employees,
as additional insureds, shall insure performance of the indemnities of
Sublessee contained in the Sublease and shall be primary coverage in the
instance of Sublessee's indemnities, so that any insurance coverage
obtained by Lessor or Sublessor shall be in excess thereto. All policies
required under the Sublease shall be endorsed to provide a waiver of
subrogation as to Sublessor and Lessor. Sublessee shall from time to
time upon written request promptly deliver to Sublessor evidence that all
premiums have been paid and all policies are in full force and effect,
all in such form as Sublessor may reasonably request. All policies
required under this Sublease shall include an unconditional agreement by
the insurer that the policy shall not be canceled, terminated, modified
or allowed to expire without 90 days' advance written notice to Sublessor
and Lessor. When Sublessee has any reason to believe that any insurance
policy required under the Lease may be cancelled, modified, expire or
terminate, Sublessee agrees to immediately provide written notice
detailing the same to Sublessor. All policy(s) required of Sublessee
pursuant to the Lease shall be tendered to Sublessee, upon renewal and
modification without request, and at any other time upon Sublessor's
request. Sublessor shall be under no obligation to maintain any
insurance, and if in its sole discretion it elects to do so, Sublessee
shall not be named as an additional insured therein.
ARTICLE VI
LOSS OF SUBLEASED PREMISES
6.1 Casualty. If the Subleased Premises shall be damaged by fire or
other casualty, or be condemned or taken in any manner for a public or
quasi-public use (and if this Sublease shall not have been terminated as
provided in the Lease), Sublessee agrees that Sublessor's obligation, if
any, to repair, restore or rebuild the Premises shall be determined in
accordance with the Lease. If the Premises or any part thereof shall be
damaged by fire or other casualty, Sublessee shall give prompt written
notice to Sublessor.
6.2 Condemnation. In the event of any condemnation or taking of the
Premises, or any portion thereof, Sublessee's rights are limited by the
Lease. Sublessee agrees that under no circumstances is Sublessor
responsible for any payment whatsoever to Sublessee arising from or in
any manner related to any condemnation involving the Premises. In the
event of a taking of all or a portion of the Premises, Sublessee shall
also not be entitled to receive any part of any award made in the
condemnation proceeding; provided, however, that nothing contained herein
shall be deemed to preclude Sublessee from intervening for Sublessee's
own interest in such proceedings to claim or receive from the condemning
authority any compensation to which Sublessee may otherwise be lawfully
entitled, and Sublessee shall be entitled to the benefit of any
diminution in rent granted to Sublessor under the Lease which is
applicable to the portion of the Premises so condemned or taken.
ARTICLE VII
DEFAULT AND BREACH
7.1 Sublessor's Remedies. In the event of any Default and/or Breach
on the part of Sublessee under any of the terms, provisions, covenants or
agreements of the Lease or of this Sublease, Sublessor shall have the
same rights and remedies against Sublessee under this Sublease as are
available to the Lessor against Lessee under the provisions of the Lease
including, but not limited to, those under paragraph 13 of the Lease.
Without limiting the foregoing, the occurrence of any of the following
events shall also constitute a Breach under this Sublease, and Sublessor
shall have all rights and remedies available under the Lease to Lessor in
the event of a Breach as a result of:
(a) The failure of Sublessee to cause the amount of the Letter
of Credit to be increased as and when required in accordance
with the requirements of section 2.5(b) above, where such
failure continues for a period of three (3) business days
following written notice to Sublessee, or
(b) Upon the election of Sublessor, in the event that no later
than thirty (30) days prior to the then applicable
expiration date of the Letter of Credit, neither (1) the
Bank shall have notified Sublessor that the Letter of Credit
will be renewed for at least one (1) year beyond the then
applicable expiration date, nor (2) Sublessee shall have
delivered to Sublessor a replacement Letter of Credit in the
amount required hereunder and otherwise meeting the
requirements set forth in section 2.5 above.
7.2 Sublessee's Remedies. In the event of any Default and/or Breach
on the part of Sublessor under any of the terms, provisions, covenants or
agreements of this Sublease, Sublessee shall have the right to seek
monetary damages or specific performance, but shall not have the right to
terminate this Sublease, except as otherwise expressly provided herein in
this Sublease. Notwithstanding anything contained in this Sublease,
Sublessor shall not be deemed in breach of any obligation under this
Sublease if it is reasonably unable to perform such obligation due to its
status as a Lessee (and not the Lessor) under the Lease. By way of
example but not limitation, if Lessor were required under the Lease to
make certain repairs but refused to do so, and Sublessor (as Lessee under
the Lease) was not permitted under the terms of the Lease to make such
repairs, Sublessor would be reasonably unable to perform such repairs and
therefore, not be deemed in Breach of the Sublease. As to obligations
under the Sublease that Sublessor is reasonably able to perform,
Sublessor shall not be deemed in breach of this Sublease unless Sublessor
fails within a reasonable time to perform an obligation required to be
performed by Sublessor. For purposes of the preceding sentence, a
reasonable time shall in no event be more than thirty (30) days after
receipt by Sublessor of written notice specifying wherein such obligation
of Sublessor has not been performed; provided, however, that if the
nature of Sublessor's obligation is such that more than thirty (30) days
are reasonably required for its performance, then Sublessor shall not be
in breach if performance is commenced within such thirty (30) day period
and thereafter diligently pursued to completion.
ARTICLE VIII
SUBLEASE
8.1 Incorporation of the Lease. Except as set forth herein in this
Sublease, the terms, covenants, conditions and agreements of the Lease,
are incorporated herein and made part of this Sublease as though fully
set forth herein (and references to the Sublease herein shall refer to
both this Sublease and the incorporated Lease regardless of whether the
Lease is expressly mentioned) and are applicable to this Sublease with
the same force and effect as though Sublessor was Lessor under the Lease,
Sublessee was Lessee under the Lease, and the Premises herein were the
Premises under the Lease. In the incorporation of such terms, covenants,
provisions, conditions and agreements, if there is a conflict between the
terms of the Lease and this Sublease, the terms of this Sublease shall
control. By way of example but not limitation, the terms "Breach" and
"Default" shall have the same meanings as those contained in the Lease
and entitle Sublessor to invoke against Sublessee those remedies enjoyed
by Lessor when Lessee causes a Breach and/or Default under the Lease;
however, Sublessee's obligations to pay Base Rent are based on the
amounts set forth in section 2.1 above and not those contained in the
Lease. Without limiting the generality of the foregoing, regardless of
whether certain provisions of the January Lease Amendment refer to
"Exodus" specifically or simply "Lessee," such provisions shall
nonetheless apply to Sublessee (except as set forth below in section
8.2). Sublessor and Sublessee acknowledge and agree that as between them
with respect to the interpretation of provisions of the January Lease
Amendment which is incorporated into this Sublease by reference, the sole
purpose of using the term "Exodus" instead of "Lessee" in the January
Lease Amendment is to clarify certain distinctions being made in the
January Lease Amendment. Additionally, by way of example but not
limitation, when a particular provision in the Lease requires Lessor's
consent, Lessor's approval, Lessor's judgment or comparable language,
such consent, approval, etc., will be required of both Talus
Corporation (which stands in the shoes of the Lessor in the Lease
pursuant to section 8.1 of the Sublease), and G&I ▇▇▇▇▇ LLC (which is the
actual Lessor under the Lease). This Sublease is subject and subordinate
to, and Sublessee accepts this Sublease subject and subordinate to, all
of the terms, covenants, provisions, conditions and agreements contained
in the Lease, Existing ACC Sublease and the matters to which the Lease is
subject and subordinate. This Sublease shall also be subject to any
amendments and supplements to the Lease hereafter made between Lessor and
Sublessor, provided that any such amendment or supplement to the Lease
will not prevent or adversely affect the use by Sublessee of the Premises
in accordance with the terms of this Sublease or additionally increase
the Base Rent, additional rent or other charges required to be paid by
Sublessee under the terms of this Sublease. Sublessee acknowledges and
agrees that it shall not be permitted to exercise any options granted to
Lessee under the Lease.
8.2 Exclusions. Notwithstanding anything contained in the Sublease,
the following provisions of the Lease are expressly excluded from
incorporation herein (as are any references to the following provisions
which are contained in a non-excluded provision): paragraphs 1.1 through
1.12; paragraphs 2.2, 2.3, 2.5, 3.1, 3.2, 4.1, 5, 8.2(b), 13.1(g), 15.1
through 15.6, 37.1, 37.2, 38, 39.1 through 39.4, 48, paragraphs 1, 3 and
4 (and the first sentence of paragraph 2) of Exhibit {A}, the Guaranties,
the Lease Amendment dated November 14, 1997 and November 20, 1997, and
paragraphs 2, 30, 31, 32 and 33 of the January Lease Amendment.
8.3 Sublessee's Additional Duties Regarding the Lease. Without
limiting Sublessee's obligations pursuant to the Sublease relating to the
below matters, Sublessee also covenants and agrees as follows:
(a) To perform and observe all of the terms, covenants,
conditions and agreements of the Lease to be performed on
the part of Sublessor with respect to the Premises to the
extent the same are not expressly modified or inconsistent
with the terms of this Sublease;
(b) That Sublessee will not do or cause to be done or suffer or
permit any act or thing to be done which would or might
cause any Default and/or Breach under this Sublease or the
Lease, or cause the rights of Sublessor as Lessee thereunder
to be canceled, terminated or forfeited, or which would make
Sublessor liable for any damages, claim or penalty;
(c) Except as provided in the Sublease with respect to diesel
fuel, Sublessee shall not cause or permit any Hazardous
Substances to be used, stored, generated or disposed of on
the Premises;
(d) Sublessor shall also have the right to enter the Premises at
any time, in the case of an emergency, and otherwise with 24
hours' advance notice for the purpose of inspecting the
Premises. Sublessor acknowledges that Sublessee intends to
operate a secure internet data center facility at the
Premises. Accordingly, except in the case of an emergency,
Sublessor or its agents shall give Sublessee 24 hours'
advance notice prior to entering the Premises, and Sublessee
shall have the right to require that a representative of
Sublessee accompany any parties entering the Premises. In
the case of an emergency, Sublessor or its agents shall make
such effort as is deemed appropriate by Sublessor or its
agents under the circumstances to contact an on-site
representative of Sublessee, if one is present at the
Premises, prior to entering the Premises; provided, however,
that if an on-site representative cannot be located after
such effort is made or if immediately entry to the Premises
without attempting to locate an on-site representative of
Sublessee is deemed appropriate by Sublessor or its agents
due to the nature of the emergency, Sublessor or its agents
may enter the Premises unaccompanied by a representative of
Sublessee; and
(e) Sublessee acknowledges and agrees that paragraph 40 of the
Lease is applicable to this Sublease since the Premises are
part of a group of buildings controlled by Lessor.
ARTICLE IX
NONDISTURBANCE
9.1 Quiet Possession. If, and so long as Sublessee pays the Base
Rent, additional rent and other charges due and payable described herein
and keeps, observes and performs all of the other covenants, agreements,
terms, provisions and conditions herein contained on the part of
Sublessee to be kept, observed and performed, Sublessee shall have quiet
possession of the Premises, subject, however, to the covenants,
agreements, terms, provisions and conditions of this Sublease, the Lease,
the Existing ACC Sublease, and to the matters to which the Lease is or
becomes subject and/or subordinate.
9.2 Notice of Default and Right to Cure. Sublessor shall provide
Sublessee with copies of any written notice to or from Lessor specifying
a Default by Sublessor under the terms of the Lease within seventy-two
(72) hours of Sublessor's receipt from or delivery of the notice to
Lessor. Upon demand from Sublessee and so long as Sublessee has not
defaulted under the terms of this Sublease, Sublessor shall take all
action reasonably necessary to avoid termination of the Lease or
disturbance of Sublessee's use and occupancy of the Premises as a result
of such Default. Sublessor shall keep Sublessee fully advised as to
Sublessor's efforts to cure or resolve any allegation of a Default and
shall provide Sublessee, at Sublessor's expense, with copies of all non-
privileged correspondence, and documentation, including but not limited
to, any pleadings filed by or on behalf of Sublessor or Lessor in the
course of any litigation which involves an alleged Default relating
thereto. If Sublessor fails to timely cure a Default or contests the
same by appropriate legal proceedings, and Lessor has threatened to
disturb Sublessee's use or occupancy of the Premises or any party
thereof, Sublessee shall have the right so long as it is not in default
under this Sublease, but not the duty, to take whatever action is
reasonably necessary to cure the Default. All reasonable and necessary
costs, expenses and fees (including reasonable attorneys' fees) incurred
by Sublessee in the course of curing a Default shall be fully recoverable
from all payments (including Base Rent and additional rent) that come due
to Sublessor under this Sublease.
ARTICLE X
NOTICE
10.1 Notice. Paragraph 23 of the Lease shall govern notices except
the designated addresses shall be those provided in the initial paragraph
of this Sublease. All notices to Sublessor shall be sent to Sublessor's
address, to the attention of the Controller. All notices to Sublessee
shall be sent to the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, CFO, COO.
10.2 Courtesy Copies. Whenever notice is delivered pursuant to this
Sublease, copies shall also be delivered to the following:
To Sublessor:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Pearson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Sublessee:
▇▇▇▇ ▇▇▇▇▇▇▇▇, IDC Manager
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE XI
SUBLEASING AND ASSIGNMENT BY SUBLESSEE
11.1 No Future Assignment or Sublease.
(a) Except as provided herein in this section 11.1, Sublessee
shall not assign or otherwise transfer, mortgage, pledge,
hypothecate or encumber this Sublease or the Premises, or
any interest therein, and shall not sublet (which term
herein shall also include "sub-subletting") the Premises or
any part thereof, or any right or privilege appurtenant
thereof, or permit any other party to occupy the Premises,
or any portion thereof, except in accordance with the
provisions of paragraph 12 of the Lease. The foregoing
shall also require the written consent of both Sublessor and
Lessor in accordance with the criteria set forth in
paragraph 12 of the Lease. Sublessor's consent to any
assignment, transfer or subletting by Sublessee shall not
relieve Sublessee from any of its obligations under this
Sublease. As a condition to providing such written consent,
Sublessor reserves the right to make such changes in the
Sublease as Sublessor and/or Lessor may require to be made
to the Lease pursuant to paragraph 12 thereof. If Sublessee
violates any of the terms contained in this section 11.1,
such shall constitute a Breach under the terms of this
Sublease.
(b) Notwithstanding anything to the contrary, Sublessee agrees
that Sublessor, as a condition to giving its consent to any
proposed sublease or assignment, in addition to any other
obligations of or amounts due from Sublessee pursuant to the
Lease, shall require that Sublessee pay to Sublessor, as
additional Rent under the Sublease, before execution of any
proposed assignment or sublease (i) any and all amounts
required by Lessor to be paid by Sublessor pursuant to
paragraph 12.2(e) of the Original Lease, (ii) any and all
other amounts which Lessor requires to be paid or delivered
by Sublessor in connection with or in any manner related to
the proposed assignment or sublease, and (iii) all other
reasonable out-of-pocket expenses incurred by Sublessor in
connection with the proposed assignment or sublease,
including, without limitation, attorneys' and consultants'
fees and expenses. The amounts described in subsection
(iii) above shall be referred to (if at all) in the January
Lease Amendment as the "Talus Amounts," and such amounts
shall be paid regardless of and in addition to any amounts
set forth in section 11.1(c) below. The Parties agree that
it is the express intent of this section 11.1(b) to make
Sublessor "whole" by not requiring Sublessor to incur any
expense whatsoever in connection or relating to Sublessee's
subletting(s) or assignment(s), proposed or otherwise, all
such expense to be immediately reimbursed by Sublessee to
Sublessor.
(c) Notwithstanding any provision of paragraph 12 of the Lease,
Sublessor, as a condition to giving its consent to any
proposed sublease or assignment, may also (i.e, in addition
to Sublessee's obligations under the Sublease including
without limitation those set forth in section 11.1(b) above)
require that Sublessee pay to Sublessor, as additional Rent
under the Sublease,
(i) In the case of an assignment where the Sublease is the
only asset assigned by Sublessee to the assignee,
promptly after receipt by Sublessee (or any affiliate
thereof or other person or entity designated by
Sublessee) seventy-five percent (75%) of the amount, if
any, by which (A) any consideration (including, without
limitation, payment for leasehold improvements) paid by
the assignee to Sublessee or such affiliate or other
designated person or entity for the assignment or
otherwise attributable to the value of Sublessee's
interest in the Sublease exceeds (B) the Assignment or
Subletting Costs (as defined below);
(ii) In the case of an assignment where the Sublease is not
the only asset assigned by Sublessee to the assignee
(e.g., an assignment in connection with a sale of
Sublessee's operations at the Premises or an assignment
resulting from a change in control of Sublessee where
Sublessee is not a publicly traded company immediately
following such change in control), on a monthly basis,
seventy-five percent (75%) of the amount, if any, by
which (A) the Prevailing Market Rent (as defined below)
for the Premises for each month of the term of the
Sublease after the date of the assignment exceeds (B)
the total amount of Rent payable hereunder for each such
month; as used herein, the term "Prevailing Market Rent"
for the Premises shall mean the total monthly Rent that
Sublessor could obtain for each month of term of the
Sublease remaining after the date of the assignment from
a third party desiring to lease the Premises for the
remaining term of the Sublease after the date of the
assignment, taking into account the age of the Building,
the size of the Premises, the quality of construction of
the Building, the other terms of this Sublease, the
rental and any other consideration then being obtained
for new leases of space comparable to the Premises in
the locality of the Building and all other factors that
would be relevant to a third party desiring to lease the
Premises for such term in determining the rental such
party would be willing to pay therefor, but excluding
any rental value attributable to any items Sublessee is
permitted to remove from the Premises upon expiration of
the term of this Sublease pursuant to paragraph 7.4 of
the Lease; provided that if Sublessee and Sublessor are
unable to agree upon the Prevailing Market Rent within
thirty (30) days after the date of the assignment, then
the Prevailing Market Rent for the remaining term of
this Sublease shall be determined by appraisal following
the same procedures as set forth in paragraph 39(c) of
the Addendum to the Direct Lease between Exodus
Communications, Inc. and G&I ▇▇▇▇▇ LLC dated January
_____, 1999 (which provision is incorporated herein by
reference solely for purposes of such appraisal
procedures), for the determination of "Fair Market Rent"
for the first year of a Renewal Option Term; and
(iii) in the case of a sublease, on a monthly basis,
seventy-five percent (75%) of the amount, if any, by
which (A) the rent paid to Sublessee (or any affiliate
thereof or other person or entity designated by
Sublessee) for the sublet space by the sublessee (such
rent to include all consideration paid for the sublet
space) for each month exceeds (B) the total amount of
Rent payable under the Sublease attributable to the
sublet space for such month; provided, however, that in
the case of a sublease, prior to paying any amounts to
Sublessor pursuant to this section 11.1(c)(iii),
Sublessee may recover out of the rent or other
consideration payable by the sublessee to Sublessee (or
any affiliate thereof or other person or entity
designated by Sublessee), and use such recovery to
reimburse itself for, a pro rata share of the Assignment
or Subletting Costs incurred in connection with such
sublease, such pro rata share to be determined by
allocating an equal portion of the total amount of
Assignment or Subletting Costs incurred in connection
with such sublease to each month of the term of such
sublease; if there is more than one sublease under this
Sublease, the amounts (if any) to be paid by Sublessee
to Sublessor pursuant to this section 11.1(c)(iii) shall
be separately calculated for each sublease and amounts
due Sublessor with regard to any one sublease may not be
offset against rental and other consideration pertaining
to or due under any other sublease.
As used herein, the term "Assignment or Subletting Costs" means the total
amount of any brokerage commissions paid by Sublessee in connection with
a specific subletting or assignment (not to exceed commissions typically
paid in the market at the time of such subletting or assignment),
Sublessee's reasonable costs of advertising the space for sublease or
assignment, Sublessee's reasonable legal fees and expenses in connection
with such assignment or sublease, and any improvement allowance or other
inducement (such as moving expenses and lease takeover obligations), paid
by Sublessee to the sublessee or assignee; provided that, as a condition
to Sublessee recovering Assignment or Subletting Costs pursuant to
section (i) or (iii) of this section 11.1(c), Sublessee shall provide to
Sublessor, within sixty (60) days of Sublessor's execution of Sublessor's
consent to the assignment or subletting, a detailed accounting of the
Assignment or Subletting Costs and supporting documents, such as receipts
and invoices, except that if any Assignment or Subletting Costs are not
determinable by such date, Sublessee shall so state in its accounting,
identifying with reasonable specificity the costs not determinable, and
promptly after such costs are determinable, but in no event later than
thirty (30) days after effective date of the assignment or ninety (90)
days after the commencement of the term of such sublease, as applicable,
a supplemental accounting shall be delivered to Sublessor setting forth
all Assignment or Subletting Costs and supporting documents (if not
previously delivered).
ARTICLE XII
MISCELLANEOUS
12.1 Binding Effect. The covenants, agreements, terms, provisions
and conditions of this Sublease shall bind and inure to the benefit of
the respective successors and assigns of the parties with the same effect
as if mentioned in each instance where a party is named or referred to,
except that no violation of the provisions of section 11.1 above shall
operate to vest any rights in any successor, assignee or legal
representative of Sublessee.
12.2 Broker. Sublessee warrants and represents that the only person,
firm, brokers or finders with whom it had any dealings in connection
with this transaction are CPS. Sublessee hereby agrees to indemnify,
protect, defend and hold harmless from and against liability for
compensation or charges which may be claimed by any unnamed broker,
finder or other similar party by reason of any dealings or actions of
Sublessee, including any costs, expenses, attorneys' fees reasonably
incurred with respect thereto.
12.3 Sole Agreement. This Sublease with attachments sets forth the
entire agreement between the parties. This Sublease supersedes all prior
negotiations and agreements between Sublessor and Sublessee with respect
to the subject matter of this Sublease. No modification or alteration of
this Sublease shall be effective unless reduced to writing and executed
by Sublessor or Sublessee, together with any necessary consent by Lessor.
12.4 Sublessor's Consent. Whenever the consent and/or approval of
Sublessor is required to be given under the provisions of this Sublease,
Sublessor shall be conclusively deemed not to have unreasonably withheld
its consent and/or approval if the Lessor has refused or withheld its
consent and/or approval thereto for any reason.
12.5 Severability. Should any of the provisions of the Sublease to
any extent be held to be invalid or unenforceable, the remainder of this
Sublease shall continue in full force and effect.
12.6 Headings. The subject headings used in this Sublease are
included for purposes of reference only, and shall not affect the
construction or interpretation of any of its provisions.
12.7 Construction. The Rule of Construction which provides that
ambiguities in a contract shall be construed against the drafter shall
not apply to this Sublease and the Parties waive any such claim or
defense to the terms of this Sublease.
12.8 Further Acts. Upon reasonable request by Sublessor from time to
time, Sublessee shall execute and deliver such additional documents and
instruments and take such other actions as may be reasonably necessary to
give effect to the intents and purposes of this Sublease.
12.9 Non-modification of obligations under the Lease. Nothing
hereinabove in this Sublease is intended to reduce or increase Talus
Corporation's obligations or reduce or increase G & I ▇▇▇▇▇ LLC's
obligations under the Lease.
12.10 Facsimile Signature. The parties hereto agree that a facsimile
signature may substitute for and have the same legal effect as the
original signature.
IN WITNESS WHEREOF, Sublessor and Sublessee have duly executed this
Sublease as of the day and year first above written.
SUBLESSOR:
TALUS CORPORATION
By: _______________________________________
Name: _____________________________________
Title: ___________________________________
SUBLESSEE:
EXODUS COMMUNICATIONS, INC.
By: _______________________________________
Name: _____________________________________
Title: ___________________________________
APPROVAL AND CONSENT OF LESSOR
Lessor's signature below evidences its approval of and consent to the
foregoing Sublease. Lessor's approval of and consent to the foregoing
Sublease does not constitute Lessor's approval of or consent to any
future or further assignment of or subletting under the Lease or the
foregoing Sublease, which shall require the future consent of the Lessor
subject to the conditions set forth in paragraph 12 of the Lease.
Lessor's approval of and consent to the foregoing Sublease shall not
constitute the waiver of any other terms or provisions of the Lease, and
Sublessor and Sublessee shall at all times comply with the terms and
provisions thereof.
LESSOR:
G&I ▇▇▇▇▇ LLC, a Delaware limited liability company
By: G&I Investment ▇▇▇▇▇ LLC, a Delaware
limited liability company, its managing member
By: G&I Investment ▇▇▇▇▇ Corp., a
Delaware corporation, its managing member
By: _______________________________________
Name: _____________________________________
Title: ___________________________________
EXHIBIT A
Plans and Specifications for Exodus New Data Center-SC4, prepared by
Datasphere, Project No. 65098.00, Permit & Bid Set, dated 1/7/99,
consisting of the drawings listed below:
INDEX OF DRAWINGS
SHEET NO. SHEET TITLE
CS-1 COVERSHEET
CIVIL
C101 SITE PLAN - NEW WORK
ARCHITECTURAL
A001 GENERAL NOTES, LEGEND AND ABBREVIATIONS
AD101 DEMOLITION PLAN - FIRST FLOOR
AD102 DEMOLITION PLAN - SECOND FLOOR
AD103 REFLECTED CEILING PLAN - DEMOLITION FIRST FLOOR
AD104 REFLECTED CEILING PLAN - DEMOLITION SECOND FLOOR
A101 NEW WORK PLAN - FIRST FLOOR AND WALL SCHEDULE
A102 NEW WORK PLAN - SECOND FLOOR
A103 PARTIAL PLAN - NEW WORK FIRST FLOOR
A104 PARTIAL PLAN - NEW WORK FIRST FLOOR
A105 ROOF PLAN - NEW WORK
A201 BUILDING ELEVATIONS AND DETAILS
A401 DETAILS
A402 DETAILS
A403 DETAILS
A801 REFLECTED CEILING PLAN - NEW WORK FIRST FLOOR
A901 DOOR AND LOUVER SCHEDULE AND DETAILS
A902 WINDOW SCHEDULE
A903 FINISHES PLAN AND SCHEDULE
STRUCTURAL
S0.1 GENERAL NOTES AND TYPICAL DETAILS
S2.1 FOUNDATION PLAN
S2.2 INTERSTITIAL LEVEL FRAMING PLAN
S2.3 MEZZANINE FRAMING PLAN
S2.4 ROOF FRAMING PLAN
S6.1 CONCRETE AND MASONRY DETAILS
S7.1 STEEL DETAILS
S7.3 METAL STUD DETAILS
S8.1 WOOD DETAILS
MECHANICAL
M001 TITLE 24, NOTES AND LEGEND
M002 SPECIFICATIONS
M101 ROOF AND WAREHOUSE DEMOLITION PLAN
M102 PARTIAL PLAN - DEMOLITION FIRST FLOOR
M103 ROOF PLAN - NEW WORK
M104 PARTIAL PLAN - NEW WORK FIRST FLOOR
M105 PARTIAL COMPUTER ROOM PLAN - FIRST FLOOR
M106 SMOKE DAMPER AND PLENUM PLAN
M201 COMPUTER ROOM SECTION AND SCHEDULES
M301 DETAILS AND CONTROL WORK
ELECTRICAL
E101 SITE ELECTRICAL PLAN
E101 ELECTRICAL SYMBOLS AND NOTES
E201 SINGLE LINE DIAGRAM
E202 SINGLE LINE DIAGRAM
E203 SINGLE LINE DIAGRAM
E204 EPO AND SWITCHBOARD ELEVATIONS
E301 PANEL SCHEDULES
E302 PANEL SCHEDULES
E303 PANEL SCHEDULES
E400 TITLE 24 FORMS, LIGHTING FIXTURE SCHEDULE AND DETAILS
E401 PARTIAL FIRST FLOOR LIGHTING PLAN
E402 PARTIAL FIRST FLOOR LIGHTING PLAN
E501 PARTIAL FIRST FLOOR POWER PLAN
E502 PARTIAL FIRST FLOOR POWER PLAN
E503 ROOF ELECTRICAL PLAN
E601 FIRST FLOOR GOUNDING PLAN
E602 GROUNDING DETAILS AND NOTES
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Amendment") is made as of
January 29, 1999, by and between G&I ▇▇▇▇▇ LLC, a Delaware limited
liability company ("Lessor"), and TALUS CORPORATION, a California
corporation, formerly known as Scientific Custom Metal Products
International, Inc. ("Lessee").
RECITALS
A. Mopar, LLC, Lessor's predecessor-in-interest, and Lessee
have previously entered into that certain Standard
Industrial/Commercial Single-Tenant Lease-Net, dated as of March 1,
1996, as amended by that certain Lease Amendment, identical
counterparts of which have been dated as of November 14, 1997, and
November 20, 1997 (as so amended, the "Original Lease"), covering
certain premises commonly known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (the "Premises"); and
B. Lessee has previously entered into a sublease with ACC
Microelectronics Corporation ("ACC"), dated April 25, 1997 (the
"Existing ACC Sublease"), pursuant to which ACC has subleased a
portion of the Premises consisting of an agreed area of 10,500
rentable square feet (the "ACC Sublease Premises").
▇. ▇▇▇▇▇▇ and Lessee desire to amend the Original Lease in
connection with the proposed subletting by Lessee to Exodus
Communications, Inc., a Delaware corporation ("Exodus") of,
initially, that portion of the Premises other than the ACC Sublease
Premises, and, eventually, the entire Premises, pursuant to that
certain sublease entered into or to be entered into on or about the
date hereof, between Lessee, as sublessor, and Exodus, as sublessee
(the "Exodus Sublease"), upon and subject to the terms, covenants
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the agreements of Lessor and
Lessee herein contained and other valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Lessor and
Lessee hereby agree as follows:
1. Use of Terms. As used herein, terms shall have the same
meanings as in the Original Lease. The term "Lease" as used in
the Original Lease and in this Amendment shall mean the Original
Lease as modified by this Amendment. As used herein, the term
"Talus Corporation" shall mean Talus Corporation, a California
corporation, formerly known as Scientific Custom Metal Products
International, Inc., the present Lessee under the Lease, any
successor-in-interest thereto, or any assignee of its interest
under the Lease. As between Lessor and Talus Corporation, the
terms "Lessee" and "Talus Corporation" are interchangeable.
Lessee and Lessor acknowledge that the sole purpose of using the
term "Talus Corporation" herein instead of "Lessee" is to
facilitate certain distinctions being made in the Exodus Sublease
with respect to provisions of the Lease which are being
incorporated by reference in the Exodus Sublease.
2. Modification of Base Rent.
(a) Effective as of February 1, 1999, the Base Rent payable
under the Lease shall be adjusted as follows:
Starting Date Ending Date Monthly Base Rent
2/1/1999 2/28/1999 $89,580.00
3/1/1999 1/31/2000 $90,012.00
2/1/2000 2/29/2000 $94,272.00
3/1/2000 1/31/2001 $94,726.00
2/1/2001 2/28/2001 $98,986.00
3/1/2001 1/31/2002 $99,462.00
2/1/2002 2/28/2002 $103,722.00
3/1/2002 4/30/2002 $104,222.00
5/1/2002 1/31/2003 $105,270.00
2/1/2003 1/31/2004 $110,055.00
2/1/2004 5/31/2004 $115,797.00
Notwithstanding the foregoing, in the event that pursuant to the
terms of the Exodus Sublease, Exodus begins renting the ACC
Sublease Premises prior to May 1, 2002, then from and after the
date of such early renting, the rent schedule set forth above shall
be replaced with the following rent schedule:
Starting Date Ending Date Monthly Base Rent
2/1/1999 1/31/2000 $90,915.00
2/1/2000 1/31/2001 $95,700.00
2/1/2001 1/31/2002 $100,485.00
2/1/2002 1/31/2003 $105,270.00
2/1/2003 1/31/2004 $110,055.00
2/1/2004 5/31/2004 $115,797.00
(b) Notwithstanding the provisions of Paragraph 2(a), above,
if the Exodus Sublease is terminated as a result of Exodus'
default, then from and after the date of termination of the Exodus
Sublease (the "Exodus Termination Date"), the provisions of
Paragraph 2(a) shall be null and void, and Lessee shall thereafter
pay Base Rent in the amount set forth in the Original Lease without
regard to the adjustment of Base Rent pursuant to Paragraph 2(a) of
this Amendment, but subject to any future adjustment of Base Rent
applicable under the terms of the Lease (other than an adjustment
arising or relating to the subleasing of the Premises to Exodus).
After the Exodus Termination Date, if and when Lessee recovers any
amounts payable by Exodus under the Exodus Sublease from time to
time, including, but not limited to, any recovery from any letter
of credit or other security deposit held by Lessee (an "Exodus
Recovery"), such amounts shall be applied by Lessee in the
following order of priority:
(i) first, whether or not the Lease has terminated prior
to the date Lessee receives the Exodus Recovery, Lessee shall
retain an amount from the Exodus Recovery not to exceed the amount
of Lessee's reasonable attorneys' fees and costs incurred in
obtaining the Exodus Recovery;
(ii) second, whether or not the Lease has terminated
prior to the date Lessee receives the Exodus Recovery, Lessee shall
retain an amount from the Exodus Recovery not to exceed the amount
of any unpaid Base Rent and Additional Rent under the Exodus
Sublease through the Exodus Termination Date;
(iii) third, whether or not the Lease has terminated
prior to the date Lessee receives the Exodus Recovery, Lessee shall
retain from the Exodus Recovery an amount not to exceed the amount
of Allocated Rent (as defined below) payable by Lessee under the
Lease for any period of time from and after the Exodus Termination
Date through and including the earlier of the date Lessee receives
the Exodus Recovery or the date of termination of the Lease, for
which no sublessee (other than ACC under the Existing ACC Sublease,
if the Existing ACC Sublease is in effect) is paying sublease rent
to Lessee;
(iv) fourth, whether or not the Lease has terminated
prior to the date Lessee receives the Exodus Recovery, if Lessee
subsequently subleases the Premises or any portion thereof to one
or more sublessees (other than ACC under the Existing ACC
Sublease), then, only with respect to any period of time from and
after the Exodus Termination Date through and including the earlier
of the date Lessee receives the Exodus Recovery or the date of
termination of the Lease, during which period of time the total
sublease rent payable by the sublessee(s) (other than ACC under the
Existing ACC Sublease, if the Existing ACC Sublease is in effect)
to Lessee is less than the total amount of Allocated Rent payable
by Lessee under the Lease for the same period of time, Lessee shall
retain from the Exodus Recovery an amount not to exceed: (A) the
total amount of Allocated Rent payable by Lessee under the Lease
for the same period of time, minus (B) the total amount of sublease
rent received by Lessee from sublessee(s) (other than ACC under the
Existing ACC Sublease, if the Existing ACC Sublease is in effect)
for the same period of time; and
(v) fifth, whether or not the Lease has terminated prior
to the date Lessee receives the Exodus Recovery, Lessee shall
retain from the Exodus Recovery an amount not to exceed the total
amount of any non-contingent obligations owing from Exodus to
Lessee in connection with the Exodus Sublease as of the date Lessee
receives the Exodus Recovery, which obligations have not been
satisfied by the amounts retained by Lessee pursuant to clauses
(ii), (iii) and (iv), above,
(vi) sixth, provided that the Exodus Recovery has not
been exhausted by the operation of subparagraphs (i) through (v),
above,
(A) if the Lease has terminated prior to the date
Lessee receives the Exodus Recovery, and such termination occurred
prior to the scheduled Expiration Date (i.e., May 31, 2004) as a
result of Lessee's default under the Lease, then, if Lessee has
paid to Lessor any amounts owing to Lessor as a result of such
default, Lessee may retain from the Exodus Recovery an amount not
to exceed the total amount paid by Lessee to Lessor as a result of
such default, and Lessee shall pay the remainder of the Exodus
Recovery, if any, to Lessor within three (3) business days after
receipt thereof, as additional rent under this Lease, in addition
to Base Rent and Additional Rent previously received by Lessor;
provided that any amounts paid to Lessor pursuant to this clause
(A) shall first be credited against any amounts owing from Lessee
to Lessor, or
(B) if the Lease has terminated prior to the date
Lessee receives the Exodus Recovery under any circumstances other
than as describe in clause (A), above, Lessee shall pay the
remainder of the Exodus Recovery, if any, to Lessor within
three (3) business days after receipt thereof, as additional rent
under this Lease, in addition to Base Rent and Additional Rent
previously received by Lessor; provided that any amounts paid to
Lessor pursuant to this clause (B) shall first be credited against
any amounts owing from Lessee to Lessor, or
(C) if the Lease has not terminated prior to the
date Lessee receives the Exodus Recovery, Lessee shall deposit the
remainder of the Exodus Recovery, if any, within three (3) business
days after receipt thereof, into a deposit account opened jointly
in the name of Lessee and Lessor, at a bank located in California,
mutually agreeable to Lessee and Lessor (the "Exodus Recovery
Account"), for disbursement pursuant to Paragraph 2(c), below. All
interest earned on the funds deposited in the Exodus Recovery
Account shall belong to Lessee and shall be disbursed to Lessee as
and when paid by the depository.
As used in this Paragraph 2(b) and in Paragraph 2(c), below, the
term "Additional Rent" means all regular recurring monetary
obligations payable by Lessee under the Lease other than Base Rent,
for items such as Real Property Taxes, insurance, utilities and
other items paid by Lessee a part of the "triple net" arrangement
under the Lease; "Additional Rent" shall not, however, include
items such as obligations under indemnity provisions or other non-
recurring items. As used in this Paragraph 2(b) and in
Paragraph 2(c), below, the term "Allocated Rent" shall mean:
(1) for any period of time during which Lessee, itself, does not
occupy any portion of the Premises, and during which ACC occupies
the ACC Sublease Premises, an amount equal to eighty-nine percent
(89%) of the total amount of Base Rent and Additional Rent payable
by Lessee under the Lease for the relevant period of time, or
(2) for any period of time during which Lessee, itself, does not
occupy any portion of the Premises, and during which ACC does not
occupy the ACC Sublease Premises, an amount equal to the total
amount of Base Rent and Additional Rent payable by Lessee under the
Lease for the relevant period of time, or (3) for any period of
time during which Lessee, itself, occupies any portion of the
Premises, and during which ACC occupies the ACC Sublease Premises,
an amount equal to the total amount of Base Rent and Additional
Rent payable by Lessee under the Lease for the relevant period of
time which is applicable to that portion (only) of the Premises
which neither Lessee, itself, nor ACC occupies, determined by
apportioning the Base Rent and Additional Rent on an equal per-
square-foot basis over the Premises, or (4) for any period of time
during which Lessee, itself, occupies any portion of the Premises,
and during which ACC does not occupy the ACC Sublease Premises, an
amount equal to the total amount of Base Rent and Additional Rent
payable by Lessee under the Lease for the relevant period of time
which is applicable to that portion (only) of the Premises which
Lessee, itself, does not occupy, determined by apportioning the
Base Rent and Additional Rent on an equal per-square-foot basis
over the Premises.
(c) On the first day of each month, Lessee and Lessor shall
arrange for disbursement of funds from the Exodus Recovery Account
in an amount which will reimburse Lessee for the following amounts
actually paid by Lessee to Lessor with respect to the immediately
preceding month:
(i) for any portion of the immediately preceding month
for which no sublessee (other than ACC under the Existing ACC
Sublease, if the Existing ACC Sublease is in effect) is paying
sublease rent to Lessee, an amount not to exceed the amount of
Allocated Rent for such portion of the month payable by Lessee
under the Lease; and
(ii) if Lessee subsequently subleases the Premises or
any portion thereof to one or more sublessees (other than ACC under
the Existing ACC Sublease), then, only with respect to any portion
of the immediately preceding month during which the total sublease
rent payable by the sublessee(s) (other than ACC under the Existing
ACC Sublease, if the Existing ACC Sublease is in effect) to Lessee
is less than the total amount of Allocated Rent payable by Lessee
under the Lease for the same period of time, an amount not to
exceed: (A) the total amount of Allocated Rent payable by Lessee
under the Lease for said period of time, minus (B) the total amount
of sublease rent received by Lessee from sublessee(s) (other than
ACC under the Existing ACC Sublease, if the Existing ACC Sublease
is in effect) for the same period of time.
If, upon termination of the Lease, any funds remain on deposit in
the Exodus Recovery Account, after payment of all sums Lessee is
entitled to receive pursuant to Paragraph 2(b), above, and this
Paragraph 2(c) through the termination of the Lease, Lessee and
Lessor shall arrange for disbursement of all remaining funds on
deposit in the Exodus Recovery Account to Lessor, within three (3)
business days after termination of the Lease, as additional rent
under the Lease, in addition to Base Rent and Additional Rent
previously received by Lessor; provided that any amounts paid to
Lessor pursuant to this sentence shall first be credited against
any amounts owing from Lessee to Lessor.
(d) Notwithstanding the provisions of Paragraphs 2(b) and
2(c), above, if Lessee subsequently subleases the Premises or any
portion thereof to one or more sublessees, Lessor reserves the
right to adjust the Base Rent payable under the Lease in accordance
with the provisions of Paragraph 12.2(h) thereof.
3. Termination of Options to Extend. All options for Lessee to
extend the term of the Lease beyond May 31, 2004, are hereby
terminated, and shall be of no further force or effect.
4. Permitted Use. Paragraph 1.8 of the Original Lease is
modified to add data center processing and other lawful related
uses as additional permitted uses.
5. Modification of Paragraph 6.2; Consent to Diesel Fuel
Tank(s). In the fourth and fifth lines of Paragraph 6.2(a) the
words: ", or (iii) a basis for liability . common law theory" are
hereby deleted. Pursuant to Paragraph 6.2(a) of the Original
Lease, Lessor hereby consents to the installation by Exodus of one
or more above-ground diesel fuel tanks at the Premises, provided
that such installation shall be in compliance with all Applicable
Law, and Exodus shall obtain Lessor's prior approval of the precise
location thereof, and of the protective enclosures or encasements
thereof, which approval shall not be unreasonably withheld or
delayed.
6. Modification of Paragraph 6.3. In the fourth line of
Paragraph 6.3, following the word "consultants" and preceding the
comma which follows the word "consultants" the following shall be
added: "as the same pertain to interpretation of the foregoing".
7. Modification of Paragraph 6.4. In the second line of
Paragraph 6.4, following the word "times" and preceding the comma
which follows the word "times" the following shall be added: "in
accordance with Paragraph 26 of the Second Amendment to this
Lease". In the seventh line of Paragraph 6.4, the words "or be
imminent" (which follow the words "to exist") are deleted. In
the seventh and eighth lines of Paragraph 6.4, the words "as the
result of any such existing or imminent violation or contamination"
are deleted. In the eighth and ninth lines of Paragraph 6.4, the
words "or Lessor's Lender, as the case may be, for the costs and
expenses of such inspections." are deleted and replaced with the
following: "for the reasonable cost of such inspections, so long
as such inspection is reasonably related to the violation or
contamination."
8. Modification of Paragraph 7.1. The last sentence of
Paragraph 7.1 is hereby deleted and replaced with the following:
"Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in good and tenantable condition
consistent with the exterior appearance of other similar facilities
of comparable age and size in the vicinity, including, when
necessary, the exterior repainting of the Building."
9. Modification of Paragraph 7.3. In the first line of
Paragraph 7.3(a), the word "carpeting," is deleted and replaced
with "floor and". In the third line of Paragraph 7.3(a), the
words "in, on or about" are deleted and replaced with "in or
on". In the fourth and fifth lines of Paragraph 7.3(a), the words
"on the Premises from that which are provided by Lessor under the
terms of this Lease" are hereby deleted. In the sixth and seventh
lines of Paragraph 7.3(a), the words "as defined in
Paragraph 7.4(a)" are deleted and replaced with "pursuant to
Paragraph 7.4(a) or that Exodus is permitted to remove pursuant to
Paragraph 10 of the Second Amendment to this Lease". In the eighth
line of Paragraph 7.3(a), the words "(excluding the roof)" are
hereby deleted. In the ninth line of Paragraph 7.3(a), the words
"the roof or" are hereby deleted. In the tenth line of
Paragraph 7.3(a), the word "$25,000." is hereby deleted and
replaced with "$100,000 in any one year." The following sentences
are added to the end of Paragraph 7.3(a) of the Lease: "In
addition, Lessee may install satellite dishes, not to exceed two
(2) feet in diameter, on the roof of the Building only, without
Lessor's consent, but upon notice to Lessor, provided that such
satellite dishes are installed behind a roof screen, are not
visible from the street, and are installed in compliance with
Applicable Law. If Lessee wishes to use other satellite dishes
and/or install satellite dishes in any other manner or location,
such installation shall be in compliance with Applicable Law, and
shall not be made without Lessor's prior written approval of such
installation, which approval shall not be unreasonably withheld or
delayed." In the seventh line of Paragraph 7.3(b), following the
word "therefor" and preceding the period which follows the word
"therefor" the following shall be added: "whether or not such
Alterations or Utility Installations require Lessor's consent". In
the ninth line of Paragraph 7.3(b), the words "under Paragraph 36
hereof" are deleted. Lessor hereby consents to Exodus making
and/or installing upon commencement of the term of the Exodus
Sublease, the Alterations, Utility Installations and Trade Fixtures
shown on the plans and specifications set forth on Exhibit A to
this Amendment. In addition, Lessor shall not unreasonably
withhold or delay the granting of its consent to future
Alterations, Utility Installations or Trade Fixtures which are
consistent with the Alterations, Utility Installations or Trade
Fixtures shown on the plans and specifications set forth on
Exhibit A to this Amendment. Lessor hereby consents to the
installation of separate meters for monitoring utilities for the
ACC Sublease Premises and/or the portion of the Premises to be
subleased by Exodus. Lessor shall not unreasonably withhold or
delay the granting of its consent to the installation by Exodus of
security fencing which will in part enclose the Building, provided
that such installation shall be in compliance with Applicable Law,
and Lessee shall obtain Lessor's prior written approval of the
precise location, height and type thereof. Lessee agrees that
reasonable considerations in determining such approval shall
include, but not be limited to, whether such security fencing
unreasonably interferes with the use or occupancy (including
parking, ingress and egress) of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its
marketability to prospective tenants or subtenants.
10. Modification of Paragraph 7.4. In the second line of
Paragraph 7.4(c), following the word "thereof" and preceding the
word "clean" the following is added: "(except for those which
Lessee is permitted to remove pursuant to Paragraph 10 of the
Second Amendment to this Lease or required to remove pursuant to
subparagraph 7.4(b) above) broom". In the third through the fifth
lines of Paragraph 7.4(c) the words "or by Lessee performing .
include the Utility Installations." are deleted. In the sixth line
of Paragraph 7.4(c), following the word "and" and preceding the
word "Alterations" the following is added: "Lessee Owned".
Notwithstanding any provision of the Lease to the contrary, so long
as Exodus remains in possession of the Premises following the
termination of the Lease, pursuant to a direct lease between Lessor
and Exodus (the "Exodus Direct Lease"), Lessee shall have no
obligations to remove any Lessee Owned Alterations or Utility
Installations or to restore the Premises upon the termination of
the Lease, and thereafter Lessor shall look solely to Exodus with
respect to any damage caused to the Premises by Exodus, whether
during the term of the Exodus Sublease or during the term of the
Exodus Direct Lease. Notwithstanding any provisions of
Paragraph 7.4(a) to the contrary, Lessor acknowledges that the
following items installed at the Premises by Exodus shall at all
times during the term of this Lease be and remain the Property of
Exodus, and Exodus shall have the right to remove the same upon the
expiration of the term of the Lease, subject to Lessee's
obligations under Paragraph 7.4(c):
(a) Raised Flooring, Racking, Cage materials, cabinets
and patch panels.
(b) UPS Battery Systems including electrical switch
gear.
(c) FM200 fire suppression canisters, piping and
nozzles.
(d) VESDA or smoke sensor stations in ceiling or floor
area.
(e) Inside or outside security cameras, access card
reader stations, VCR, multiplexer, monitors and
computers.
(f) Partition and conference room furniture systems and
freestanding, cabinets, storage units.
(g) Telephone and voice mail system with desk stations
and receptionist, computers, servers, printers,
phone sets.
(h) Fiber Muxes or other Telco equipment installed in
MPOE rooms.
(i) Emergency distribution board and telephone
backboard with connectors.
(j) Maintenance bypass electronic and manual switch
gear.
(k) Kitchen appliances like microwaves, refrigerators
and vending machines.
(l) Console monitors, screen projection and screens in
command center.
(m) Bulletproof/resistant glass, provided that removal
of the same shall be conditioned upon replacement
of the openings with other glazing suitable in
Lessor's reasonable judgment.
(n) Satellite dishes or other communications equipment,
provided that removal of the same from the roof
shall be conditioned upon Lessee's or Exodus'
repair of all roof penetrations so that the
integrity of the roof is not compromised in any
manner, as determined by Lessor in its reasonable
judgment.
(o) Customer and vendor equipment and related materials
of the type listed above in this Paragraph 10.
(p) Exodus, Exodus Customer and Exodus Vendor personal
property which is not attached to the Premises.
(q) Any Trade Fixtures similar or related to the
foregoing items that were installed by or for
Exodus pursuant to the terms of the Lease.
Notwithstanding anything in the Lease to the contrary, under no
circumstances shall Talus Corporation be obligated to restore the
Premises with respect to, or to remove, any Alterations, Utility
Installations or other improvements to be installed by Exodus
pursuant to the plans and specifications described in Exhibit A
other than removal of the items listed in subparagraphs (a) through
(q) above (excluding any raised flooring), and any restoration
related to such removal. Without limiting the generality of the
foregoing, Talus Corporation shall have no obligation or right to
remove the following Alterations, Utility Installations or other
improvements to be installed by Exodus pursuant to the plans and
specifications described in Exhibit A:
(r) Permanent and temporary generator systems including
enclosures and fuel tanks with the associated
electronic and manual switch gear.
(s) Independent, stand-alone air-conditioning units or
any other components of the HVAC system at the
Premises.
(t) Electrical distribution equipment consisting of an
automatic transfer switch, parallel switch and
bypass unit, parallel UPS Units and several power
distribution units installed inside the Building by
Lessee, inward from the most inward point(s) of
connection to all transformers, switches, meters
and other electrical distribution equipment
installed by the public utility providing power to
the Building, or any electrical distribution
equipment installed by the City of Santa ▇▇▇▇▇
Power and Electric Company to add two new 3000 AMP
services to the Building, including two
transformers placed on the exterior of the Building
(one for each 3000 AMP service), and one or more
power switches and metering boxes inside the
Building.
(u) The mezzanine floor.
(v) Any raised flooring.
(w) Security fencing.
11. Modification of Paragraph 8.1. Notwithstanding the
provisions of Paragraph 8.1, Lessor, and not Lessee shall pay any
increase in the premiums for the property insurance covering the
Premises carried by Lessor pursuant to Paragraph 8.3 to the extent
such increase results from any acts or omissions occurring on, or
the use or occupancy of, any building(s) owned by Lessor which are
adjacent to the Building, and which are not occupied by Lessee,
either as a direct tenant of Lessor, or as a subtenant.
12. Insuring Party. The first sentence of Paragraph 2 of
Exhibit {A} of the Original Lease is hereby deleted. Lessor shall
be the "Insuring Party" under the Lease.
13. Deletion of Paragraph 8.2(b). Paragraph 8.2(b) of the Lease
is hereby deleted in its entirety.
14. Modification of Paragraph 8.3. Notwithstanding the
provisions of Paragraph 8.3(a), the deductible for earthquake
insurance (if applicable) may exceed $5,000, but shall not exceed
the greater of $100,000 or 20% of the replacement cost of the
building at the Premises, as determined by the insurer issuing the
earthquake insurance policy.
15. Modification of Paragraph 8.4. Paragraph 8.4 is hereby
deleted in its entirety and replaced with the following: "8.4
Lessee's Property Insurance. Lessee shall obtain and maintain
insurance coverage on all of Lessee's personal property, Trade
Fixtures, and Lessee Owned Alterations and Utility Installations.
Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $5,000 per occurrence. The proceeds of
any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and
Utility Installations, except in the case of a casualty occurring
during the final year of the term of this Lease. Lessee shall
provide Lessor with written evidence that such insurance is in
force. Lessor makes no representation that the limits or forms of
coverage of insurance specified herein are adequate to cover
Lessee's property, business operations or obligations under this
Lease."
16. Modification of Paragraph 8.5. In the fourth line of
Paragraph 8.5, the words "If Lessee is the Insuring Party," are
deleted. The following sentence is added to Paragraph 8.5,
immediately preceding the final sentence thereof: "Such policies
shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less." In the next to
the last line of Paragraph 8.5, the words "the Insuring Party" are
deleted both places where they appear, and in the first such place,
they are replaced with the words "either Party", and in the second
such place they are replaced with the words "it".
17. Additional Matter Pertaining to Insurance. During the term
of the Exodus Sublease, any insurance required to be provided by
Lessee under the terms of the Lease may be provided by either Talus
Corporation or Exodus, and Lessor shall not require Talus
Corporation and Exodus to carry duplicative insurance, provided
that all insurance required under the terms of the Lease shall be
maintained by one or the other of them in accordance with the
requirements of the Lease.
18. Modification of Paragraph 9.2. The following is added to
the end of the last sentence of Paragraph 9.2: "; provided,
however, that if Lessor actually receives proceeds sufficient to
cover the fully amount of the loss, excluding any deductible, this
Paragraph 9.2 shall govern."
19. Modification of Paragraph 9.5. Notwithstanding the
provisions of Paragraph 9.5, in the event Exodus confirms in
writing to Talus Corporation and Lessor within twenty (20) days
after the occurrence of any damage which would entitle Lessor to
terminate the Lease pursuant to Paragraph 9.5, that Exodus shall
not terminate either the Exodus Sublease or the direct lease
between Exodus and Lessor which commences immediately following the
termination of this Lease, on account of such damage, then Lessor
shall have no right to terminate the Lease pursuant to
Paragraph 9.5.
20. Modification of Paragraph 9.6. The last sentence of
Paragraph 9.6(b) is deleted and replaced with the following:
"`Commence' as used in this Paragraph shall mean the beginning of
actual work on the Premises." If Lessor shall be obligated to
repair or restore the Premises pursuant to any provision of
Article 9, and it is possible, at additional cost, to commence such
repair or restoration earlier than ninety (90) days after such
obligation shall accrue and/or to accelerate the work so that the
same shall be completed prior to the deadline for Lessor to
complete the same pursuant to the applicable provision of this
Article 9, then upon Lessee's written request, and subject to the
conditions set forth below, Lessor shall use its best efforts to
commence such repair or restoration as soon as is possible, subject
to availability of labor and materials; provided that (1) prior to
incurring any additional costs to commence such repair or
restoration earlier than Lessor is obligated to do so or to
accelerate the work, Lessee shall have agreed, in writing, to pay
all such additional costs, and shall have deposited with Lessor,
funds equal to the amount reasonably estimated by Lessor as the
total amount of such additional costs to be incurred (provided that
the amount of such deposit shall not limit Lessee's liability to
pay such additional costs, and Lessor shall refund to Lessee upon
completion of the repair and restoration, the amount of such
deposit, if any, in excess of the additional costs incurred); and
(2) in no event will Lessor be obligated to commence any repair or
restoration prior to obtaining all necessary governmental permits
and approvals therefor.
21. Modification of Paragraph 9.7. Notwithstanding any
provision of Paragraph 9.7, Lessor shall not be permitted to
exercise the termination option under clause (ii) of Paragraph 9.7,
(1) if Lessor is subject to an order of a governmental agency with
jurisdiction over the Hazardous Substance Condition requiring
Lessor to remediate the same, unless such remediation cannot
practicably be accomplished with Lessee remaining in possession of
the Premises, or (2) unless in Lessor's reasonable judgment,
continued occupancy of the Premises by Lessee without remediation
of the Hazardous Substance Condition poses a risk of potential
liability to Lessor. Furthermore, and notwithstanding any
provision of Paragraph 9.7, Lessor shall be under no duty to
remediate any Hazardous Substance Condition except to the extent
Lessor is subject to an order of a governmental agency with
jurisdiction over the Hazardous Substance Condition requiring
Lessor to remediate the same. To the extent Lessor is subject to
an order of a governmental agency with jurisdiction over the
Hazardous Substance Condition requiring Lessor to remediate the
same, Lessor shall diligently proceed with such remediation, in
accordance with any remedial action plan approved by the
appropriate governmental agency(ies). In the event that in the
opinion of the environmental consultant hired by Lessor to oversee
the remediation, the remediation cannot practicably be completed
without Lessee vacating the Premises for a period which will exceed
six (6) months, Lessee shall have the option to terminate this
Lease by giving notice to Lessor within thirty (30) days after
Lessee is notified by Lessor that the remediation cannot
practicably be completed without Lessee vacating the Premises for a
period which will exceed six (6) months (which notification shall
include notice of the date Lessor requires Lessee to vacate the
Premises for such remediation, which date shall not be earlier than
six(6) months after the date of such notification, except to the
extent it is reasonably necessary for Lessor to commence such
remediation on an earlier date in order to comply with any order of
a governmental agency requiring Lessor to remediate the same,
including any remedial action plan approved by the appropriate
governmental agency(ies)), such termination to be effective upon
the date set forth in Lessor's notice that Lessor requires Lessee
to vacate the Premises.
22. Modification of Paragraph 10.1. In the first line of
Paragraph 10.1(b), the words "In order to assure payment . Real
Property Taxes," are deleted and replaced with the following: "In
the event Lessee incurs a late charge on any Rent payment two (2)
times during any twelve (12) month period,". Lessee may contest
the amount of Real Property Taxes assessed against the Premises, at
its sole cost and expense, including, but not limited to, any
penalties or fees associated with an unsuccessful contest. In the
event Lessee elects to contest the amount of Real Property Taxes,
Lessee must pay the contested Real Property Taxes under protest,
and apply for a refund, or provide such security as Lessor may
require to prevent such taxes from becoming a delinquent lien upon
the Premises. Any refund of Real Property Taxes paid by Lessee
with respect to the term of this Lease shall belong to Lessee,
whether received as a result of a contest by Lessee or otherwise,
and regardless of when received. Lessee shall have no right to any
refund of Property Taxes applicable to any period of time other
than the term of this Lease, even if such refund is received during
the term of this Lease.
23. Modification of Paragraph 10.2. On the fifth line of
Paragraph 10.2, the words "other income therefrom" are deleted and
replaced with "gross revenues therefrom (but not any tax on
Lessor's net income from all sources)".
24. Modification of Paragraph 10.3. On the second line of
Paragraph 10.3, following the word "be", and prior to the word
"determined", the word "reasonably" shall be inserted.
25. Modification of Article 12 With Respect to Subletting or
Assignment by Exodus. Notwithstanding any provision of Article 12
of the Lease, (i) in the event of any change in the control of
Exodus, such change in control shall not constitute an assignment
of the Lease or the Exodus Sublease so long as Exodus is a publicly
traded company immediately following such change in control, and
(ii) the granting of a security interest in the Exodus Sublease by
Exodus in connection with a senior secured credit facility provided
by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ("GS"), shall not constitute an assignment
of the Lease or the Exodus Sublease, and shall not require Lessor's
consent under the Lease; provided that GS shall not be entitled to
foreclose such security interest or otherwise take any possessory
interest in the Premises or any portion thereof, unless GS assumes
all of Exodus' obligations under the Exodus Sublease and the Exodus
Direct Lease, and cures all then uncured defaults (if any) under
the Exodus Sublease and the Exodus Direct Lease. Any other
assignment of, or subletting under, the Exodus Sublease shall
require Lessor's prior written consent, in accordance with the
provisions of Article 12 of the Lease, provided that Lessor agrees
that it shall not unreasonably withhold or delay its consent to any
proposed assignment of the Exodus Sublease by Exodus or any
proposed subletting thereunder by Exodus. In the event Talus
Corporation receives any consideration from Exodus in connection
with any assignment of, or subletting under, the Exodus Sublease,
in excess of the rent and other consideration payable by Exodus to
Talus Corporation under the Exodus Sublease in the absence of such
assignment or subletting, Talus Corporation shall pay to Lessor,
the entire amount of such excess consideration, excluding the Talus
Amounts (as defined below) which shall be retained by Talus
Corporation, as additional rent under the Lease, as and when
received by Talus Corporation, in lieu of any adjustment of the
rent payable under the Lease pursuant to Paragraph 12.2(h) on
account of such assignment of, or subletting under, the Exodus
Sublease. As used in this Paragraph 25, the term "Talus Amounts"
shall mean any amounts which Talus Corporation collects from
Exodus, which amounts are expressly designated between Talus
Corporation and Exodus as reimbursement of reasonable out-of pocket
expenses incurred by Talus Corporation in connection with any
assignment or subletting (or proposed assignment or subletting) by
Exodus under the Exodus Sublease, including, but not limited to,
attorneys' and consultants' fees and expenses. Notwithstanding the
foregoing, in the event that the Exodus Sublease provides that any
amounts to be paid to Talus Corporation in connection with any
assignment or subletting by Exodus are to be determined based on
"market rent," "fair market rent," "prevailing market rent," or
other similar concept, (a) Talus Corporation shall not agree with
Exodus as to the determination of the same without obtaining
Lessor's prior written consent, which consent may be granted or
withheld in Lessor's sole and absolute discretion, (b) if an
appraisal procedure is used to determine "market rent," "fair
market rent," "prevailing market rent," or other similar concept,
Talus Corporation shall obtain Lessor's prior written approval of
any appraiser to be appointed by it, which approval may be withheld
or granted in Lessor's sole and absolute discretion, (c) Talus
Corporation agrees to notify Lessor of the initiation of any
appraisal procedure by Talus Corporation or Exodus within three (3)
business day after such initiation by Talus Corporation or after
Talus Corporation receives notice of such initiation by Exodus,
whichever is applicable, and (d) Lessor may, if it elects to do so,
participate in all negotiations and appraisal procedures between
Talus Corporation and Exodus with regard to the determination of
"market rent," "fair market rent," "prevailing market rent," or
other similar concept.
26. Modification of Paragraph 32. In the first line of
Paragraph 32, following the words "Lessor's agents" and preceding
the words "shall have the right", the words "and any Lender and
its agents" shall be inserted. In the second line of Paragraph 32,
following the words "or lessees," and preceding the words "and
making such", the words "inspecting the Premises," shall be
inserted. Lessor acknowledges that Exodus intends to operate a
secure internet data center facility at the Premises. Accordingly,
except in the case of an emergency, Lessor, its agents, any Lender
or its agents shall give Exodus twenty-four (24) hours' advance
notice prior to entering the Premises, and Exodus shall have the
right to require that a representative of Exodus accompany any
parties entering the Premises. In the case of an emergency, Lessor
or its agents shall make such effort as is deemed appropriate by
Lessor or its agents under the circumstances to contact an on-site
representative of Exodus, if one is present at the Premises, prior
to entering the Premises; provided, however, that if an on-site
representative cannot be located after such effort is made, or if
immediate entry to the Premises without attempting to locate an on-
site representative of Exodus is deemed appropriate by Lessor or
its agents due to the nature of the emergency, Lessor or its agents
may enter the Premises unaccompanied by a representative of Exodus.
27. Modification of Paragraph 34. Paragraph 34 is deleted in
its entirety and replaced with the following: "34. Signs. Except
for ordinary `For Sublease' signs, Lessee shall not place any sign
upon the Premises without Lessor's prior written consent, which
consent shall not be unreasonably withheld or delayed. All signs
must comply with all Applicable Law."
28. Modification of Paragraph 41. The following words are added
to the end of the last sentence of Paragraph 41: ", except those
resulting from Lessor's willful misconduct or gross negligence."
29. Parking.
(a) Subject to the rules and regulations promulgated from
time to time by Lessor, Lessee shall be entitled to use 50.3% of
the parking spaces for the ▇▇▇▇/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ complex for use
by its agents, servants, employees and invitees (individually and
collectively referred to as "Lessee's Invitees"). If Lessor in
its sole discretion agrees in writing to permit Lessee to use any
parking spaces or areas which could be used for parking spaces for
any other purpose (e.g., temporary storage of materials, satellite
dish installation, etc.), Lessee's then current number of parking
spaces will automatically be reduced by the number of spaces
utilized for such purpose plus any spaces which cannot be
reasonably used for normal parking as a result thereof. Lessee
also agrees that under no circumstances shall Lessee's Invitees in
any manner interfere with occupancy and/or access to the property
known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, including, without limitation,
interference with the ingress or egress to the building, parking
lot or shipping and receiving areas. Lessee agrees that Lessor may
re-stripe the existing parking lots so as to reconfigure the same,
so long as such re-striping or reconfiguration does not reduce the
number of parking spaces that Lessee is otherwise entitled to use
under the Lease. Subject to the prior written approval of Lessor,
which approval shall not be unreasonably withheld or delayed,
Lessee may re-stripe the existing parking lots so as to reconfigure
the same, so long as such re-striping or reconfiguration does not
reduce the number of total parking spaces for the ▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ complex or unreasonably interfere with the use or occupancy
of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or its marketability to prospective tenants
and subtenants.
(b) Provided that Lessee shall have obtained Lessor's
approval of such restriping as required under this Paragraph 29,
then notwithstanding anything contained in the Lease, Lessee shall
not have any obligation to change the striping or configuration of
the parking lots back to the original configuration at the
termination of the Lease.
30. Consent to Assignment and Subletting Required. Execution of
this Second Amendment does not constitute Lessor's consent to Talus
Corporation's subletting of the Premises to Exodus; such consent
shall be indicated only by Lessor's specific written consent on a
copy of the proposed Exodus Sublease which has been fully executed
by both Talus Corporation and Exodus. Except as provided in
Paragraph 25 hereof, nothing in this Second Amendment shall
constitute Lessor's consent to any future assignment or subletting
by Talus Corporation or Exodus, should it become a sublessee of the
Premises, which consent shall be granted only in accordance with
the provisions of Paragraph 12 of the Lease.
31. Reservation of Rights. By executing this Amendment, Lessor
is not waiving any rights with respect to any transaction (other
than the Exodus Sublease, upon execution of Lessor's consent
thereto) which occurred during the term of the Lease, and which
under terms of Paragraph 12 of the Lease constitutes an assignment
or subletting by Talus Corporation, or otherwise requires Lessor's
consent pursuant to Paragraph 11, including, but not limited to,
any change in control of Talus Corporation, and to which Lessor (or
its predecessor-in-interest) has not previously granted its
consent. By executing this Amendment, Talus Corporation is not
waiving any rights to contend that no transaction occurred during
the term of the Lease without Lessor's (or its predecessor-in-
interest's) consent pursuant to Paragraph 12 of the Lease, which
under terms of Paragraph 12 of the Lease constitutes an assignment
or subletting by Talus Corporation, or otherwise requires Lessor's
consent (or otherwise required Lessor's predecessor-in-interest's
consent) pursuant to Paragraph 12, including, but not limited to
any change in control of Talus Corporation. Talus Corporation also
reserves all of its rights under the Original Lease, including all
rights in connection with defending any such claim(s) or
contention(s) by Lessor. Notwithstanding anything contained in
this Amendment, Lessor agrees that it shall not seek to modify the
provisions of Paragraph 2(a) for any period of time prior to the
Exodus Termination Date; provided that the foregoing shall not
preclude Lessor from receiving any amounts Lessor is entitled to
receive pursuant to Paragraph 25 of this Amendment.
32. Return of Security Deposit. Provided that Exodus remains in
possession of the Premises following the termination of the Lease
pursuant to the Exodus Direct Lease, Lessor shall return the
Security Deposit, less any deductions Lessor is entitled to make
therefrom, to Lessee, within thirty (30) days after the termination
of the Lease.
33. Lessee's Right to Extend Term Under Limited Circumstances.
If the Exodus Sublease is terminated as a result of Exodus'
default, and the Exodus Termination Date occurs after April 1,
2004, and provided that the Lease has not otherwise terminated,
then Lessee shall have the right to extend the term of the Lease to
a date which is not later than sixty (60) days after the Exodus
Termination Date, by giving notice of such extension to Lessor
within five (5) business days after the Exodus Termination Date;
provided that the Monthly Base Rent payable during the term of such
extension shall be $115,797.00, prorated for any partial month.
34. Payment of Processing Fee. Within five (5) business days
after the execution by Lessor of this Amendment and of Lessor's
consent to the Exodus Sublease, Lessee shall pay to Lessor the sum
of Seven Thousand Eight Hundred Seventy-Five Dollars ($7,875.00),
as payment in full of all amounts owing by Lessee to Lessor under
Paragraph 12.2(e) of the Lease, as consideration for Lessor's
considering and processing of its consent to the Exodus Sublease.
35. Counterparts; Facsimile Signatures. This Amendment may be
signed in counterparts, and delivered by facsimile, and such
facsimile counterparts shall be valid and binding on Lessor and
Lessee (subject to Paragraph 38, below) with the same effect as if
original signatures had been exchanged.
36. Ratification. The Original Lease, as modified hereby, is
hereby ratified and confirmed in all respects.
37. Successors and Assigns. This Amendment shall bind and inure
to the benefit of Lessor and Lessee and their respective legal
representatives and successors and assigns.
38. Effectiveness of This Amendment. Notwithstanding any
provision of this Amendment to the contrary, (1) this Amendment
shall not be come effective unless and until Talus Corporation and
Exodus shall have both fully executed and delivered the Exodus
Sublease, and Lessor shall have given its specific written consent
thereto on a copy thereof; and (2) in the event that termination of
the Exodus Sublease does not occur concurrently with the
termination of the Lease, then from and after the date of
termination of the Exodus Sublease, Paragraphs 3 through 9,
inclusive, 11, 15 through 28, inclusive, and 29(a) of this
Amendment shall become null and void, but said provisions shall
continue to govern with respect to the period of time during which
the Exodus Sublease was in effect.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment
as of the date first above written.
Lessee:
TALUS CORPORATION,
a California corporation,
formerly known as Scientific Custom
Metal Products International, Inc.
By:
Print Name:
Title:
Lessor:
G&I ▇▇▇▇▇ LLC,
a Delaware limited liability company
By: G&I Investment ▇▇▇▇▇ LLC,
a Delaware limited liability
company,
its managing member
By: G&I Investment ▇▇▇▇▇ Corp.,
a Delaware corporation,
its managing member
By:
Name:
Title:
CONSENT OF GUARANTOR
WHEREAS, ELECTRONIC MANUFACTURING SYSTEMS, INC., a Delaware corporation
("EMS"), did execute that certain Lease Guaranty, dated as of
November 20, 1997 (the "Lease Guaranty") whereby EMS did guaranty
Lessee's obligations under the Original Lease (as defined in the
foregoing Second Amendment to Lease);
NOW, THEREFORE, EMS hereby consents to the terms and conditions of
the foregoing Second Amendment to Lease, and hereby ratifies and
confirms that the Lease Guaranty, remains in full force and effect
as a valid and binding obligation of EMS, with respect to Lessee's
obligations under the Original Lease as modified by the foregoing
Second Amendment to Lease (whether such obligations are stated as
being obligations of "Lessee" or obligations of "Talus
Corporation").
Dated: January 29, 1999
ELECTRONIC MANUFACTURING SYSTEMS, INC.,
a Delaware corporation
By:
Print Name:
Title:
[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
(Do not use this form for Multi-Tenant Property)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
March 1, 1996, is made by and between MOPAR, LLC ("LESSOR") and
Scientific Custom Metal Products International, Inc. ("LESSEE"),
(collectively the "PARTIES," or individually a "PARTY").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Santa ▇▇▇▇▇,
located in the County of Santa ▇▇▇▇▇, State of California, and generally
described as (describe briefly the nature of the property) Industrial
Building, approximately 95,700 square feet; APN ▇▇▇-▇▇-▇▇▇ (parcel #2)
("PREMISES"). (See Paragraph 2 for further provisions.)
1.3 TERM: 19 years and 0 months ("ORIGINAL TERM") commencing March 1,
1997 ("COMMENCEMENT DATE") and ending February 28, 2016 ("EXPIRATION
DATE"). (See Paragraph 3 for further provisions.)
1.4 EARLY POSSESSION: N/A ("EARLY POSSESSION DATE"). (See Paragraphs
3.2 and 3.3 for further provisions.)
1.5 BASE RENT: $40,000 per month ("BASE RENT"), payable on the 1st
day of each month commencing March 1, 1997, and thereafter according to
the rent schedule as set forth on Exhibit (A) to this agreement. See
Paragraph 4 for further provisions.)
[X] If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted.
1.6 BASE RENT PAID UPON EXECUTION: $40,000 as Base Rent for the
period March 1, 1997 through March 31, 1997, and thereafter as set forth
in Exhibit (A) to this agreement.
1.7 SECURITY DEPOSIT: $ 10,000 ("SECURITY DEPOSIT"). (See Paragraph 5
for further provisions.)
1.8 PERMITTED USE: Light manufacturing, Office, and R&D. (See
Paragraph 6 for further provisions.)
1.9 INSURING PARTY. Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See Paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):
None represents [ ] Lessor exclusively ("LESSOR'S BROKER"); [ ] both
Lessor and Lessee, and None represents [ ] Lessee exclusively ("LESSEE'S
BROKER"); [ ] both Lessee and Lessor. (See Paragraph 15 for further
provisions.)
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to
be guaranteed by Scientific Custom Metal Products International, Inc.
("GUARANTOR"). (See Paragraph 37 for further provisions.)
1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of
Paragraphs __ through __ and Exhibits A and the Guarantee Agreement all
of which constitute a part of this Lease.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless
otherwise provided herein, any statement of square footage set forth in
this Lease, or that may have been used in calculating rental, is an
approximation which Lessor and Lessee agree is reasonable and the rental
based thereon is not subject to revision whether or not the actual square
footage is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the
existing plumbing, fire sprinkler system, lighting, air conditioning
heating, and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of
the Commencement Date, Lessor shall, except as otherwise provided in this
Lease, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify
same at Lessor's expense. If Lessee does not give Lessor written notice
of a non-compliance with this warranty within thirty (30) days after the
Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building
codes, regulations and ordinances in effect on the Commencement Date.
Said warranty does not apply to the use to which Lessee will put the
Premises or to any Alterations or Utility Installations (as defined in
Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not
comply with said warranty, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance,
rectify the same at Lessor's expense. If Lessee does not give Lessor
written notice of a non-compliance with this warranty within six (6)
months following the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it
has been advised by the Brokers to satisfy itself with respect to the
condition of the Premises, (including but not limited to the electrical
and fire sprinkler systems, security, environmental aspects, compliance
with Applicable Law, as defined in Paragraph 6.3) and the present and
future suitability of the Premises for Lessee's intended use, (b) that
Lessee has made such investigation as it deems necessary with reference
to such matters and assumes all responsibility therefor as the same
relate to Lessee's occupancy of the Premises and/or the terms of this
Lease, and (c) that neither Lessor, nor any of Lessor's agents, has made
any oral or written representations or warranties with respect to the
said matters other than as set forth in this Lease.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately prior to
the date set forth in Paragraph 1.1 Lessee was the owner or occupant of
the Premises. In such event, Lessee shall, at Lessee's sole cost and
expense, correct any non-compliance of the Premises with said warranties.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such early possession. All other terms
of this Lease, however, (including but not limited to the obligations to
pay Real Property Taxes and insurance premiums and to maintain the
Premises) shall be in effect during such period. Any such early
possession shall not affect nor advance the Expiration Date of the
Original Term.
3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver
possession of the Premises to Lessee as agreed herein by the Early
Possession Date, if one is specified in Paragraph 1,4, or, if no Early
Possession Date is specified, by the Commencement Date, Lessor shall not
be subject to any liability therefor, nor shall such failure affect the
validity of this Lease, or the obligations of Lessee hereunder, or extend
the term hereof, but in such case, Lessee shall not, except as otherwise
provided herein, be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease until Lessee Date delivers
possession of the Premises to Lessee. If possession of the Premises is
not delivered to Lessee within sixty (60) days after the Commencement
Date, Lessee may, at its option, by notice in writing to Lessor within
ten (10) days thereafter, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder; provided, however,
that if such written notice by Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel the Lease shall
terminate and be of no further force or effect. Except as may be
otherwise provided, and regardless of when the term actually commences,
if possession is not tendered to Lessee when required by this Lease and
Lessee does not terminate this Lease, as aforesaid, the period free of
obligation to pay Base Rent, if any, that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and continue
for a period equal to what Lessee would otherwise have enjoyed under the
terms hereof, but minus any days of delay caused by the acts, changes or
omissions of Lessee.
4. RENT.
4.1 BASE RENT. Lessee shall cause payment of Base Rent and other
rent or charges, as the same may be adjusted from time to time, to be
received by Lessor in lawful money of the United States, without offset
or deduction, on or before the day on which it is due under the terms of
this Lease. Base Rent and all other rent and charges for any period
during the term hereof which is for less than one (1) full calendar month
shall be prorated based upon the actual number of days of the calendar
month involved. Payment of Base Rent and other charges shall be made to
Lessor at its address stated herein or to such other persons or at such
other addresses as Lessor may from time to time designate in writing to
Lessee.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for
Lessee's faithful performance of Lessee's obligations under this Lease.
If Lessee fails to pay Base Rent or other rent or charges due hereunder,
or otherwise Defaults under this Lease (as defined in Paragraph 13.1),
Lessor may use, apply or retain all or any portion of said Security
Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, cost, expense, loss or damage
(including attorneys' fees) which Lessor may suffer or incur by reason
hereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefor
deposit moneys with Lessor sufficient to restore said Security Deposit to
the full amount required by this Lease. Any time the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from
Lessor, deposit additional moneys with Lessor sufficient to maintain the
same ratio between the Security Deposit and the Base Rent as those
amounts are specified in the Basic Provisions. Lessor shall not be
required to keep all or any part of the Security Deposit separate from
its general accounts. Lessor shall, at the expiration or earlier
termination of the term hereof and after Lessee has vacated the Premises,
return to Lessee (or, at Lessor's option, to the last assignee, if any,
of Lessee's interest herein), that portion of the Security Deposit not
used or applied by Lessor. Unless otherwise expressly agreed in writing
by Lessor, no part of the Security Deposit shall be considered to be held
in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the
purposes set forth in Paragraph 1.8, or any other use which is comparable
thereto, and for no other purpose. Lessee shall not use or permit the use
of the Premises in a manner that creates waste or a nuisance, or that
disturbs owners and/or occupants of, or causes damage to, neighboring
premises or properties. Lessor hereby agrees to not unreasonably withhold
or delay its consent to any written request by Lessee, Lessees assignees
or subtenants, and by prospective assignees and subtenants of the Lessee,
its assignees and subtenants, for a modification of said permitted
purpose for which the premises may be used or occupied, so long as the
same will not impair the structural integrity of the improvements on the
Premises, the mechanical or electrical systems therein, is not
significantly more burdensome to the Premises and the improvements
thereon, and is otherwise permissible pursuant to this Paragraph 6. If
Lessor elects to withhold such consent, Lessor shall within five (5)
business days give a written notification of same, which notice shall
include an explanation of Lessor's reasonable objections to the change in
use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous Substance"
as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected
to be on the Premises, is either: (i) potentially injurious to the public
health, safety or welfare, the environment or the Premises, (ii)
regulated or monitored by any governmental authority, or (iii) a basis
for liability of Lessor to any governmental agency or third party under
any applicable statute or common law theory. Hazardous Substance shall
include, but not be limited to, hydrocarbons, petroleum, gasoline, crude
oil or any products, by-products or fractions thereof. Lessee shall not
engage in any activity in, on or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without
the express prior written consent of Lessor and compliance in a timely
manner (at Lessee's sole cost and expense) with all Applicable Law (as
defined in Paragraph 6.3). "Reportable Use" shall mean (i) the
installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which
a report, notice, registration or business plan is required to be filed
with, any governmental authority. Reportable Use shall also include
Lessee's being responsible for the presence in, on or about the Premises
of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the
Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may, without Lessor's prior consent, but in compliance with all
Applicable Law, use any ordinary and customary materials reasonably
required to be used by Lessee in the normal course of Lessee's business
permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any
liability therefor. In addition, Lessor may (but without any obligation
to do so) condition its consent to the use or presence of any Hazardous
Substance, activity or storage tank by Lessee upon Lessee's giving Lessor
such additional assurances as Lessor, in its reasonable discretion, deems
necessary to protect itself, the public, the Premises and the environment
against damage, contamination or injury and/or liability therefrom or
therefor, including, but not limited to, the installation (and removal on
or before Lease expiration or earlier termination) or reasonably
necessary protective modifications to the Premises (such as concrete
encasements) and/or the deposit of an additional Security Deposit under
Paragraph 6 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance, or a condition involving or
resulting from same, has come to be located in, on, under or about the
Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor. Lessee shall also
immediately give Lessor a copy of any statement, report, notice,
registration, application, permit, business plan, license, claim, action
or proceeding given to, or received from, any governmental authority or
private party, or persons entering or occupying the Premises, concerning
the presence, spill, release, discharge of, or exposure to, any Hazardous
Substance or contamination in, on, or about the Premises, including but
not limited to all such documents as may be involving in any Reportable
Uses Involving the Premises.
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if any,
and the Premises, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, costs, claims, liens, expenses,
penalties, permits and attorney's and consultant's fees arising out of or
involving any Hazardous Substance or storage tank brought onto the
Premises by or for Lessee or under Lessee's control, Lessee's obligations
under this Paragraph 6 shall include, but not be limited to, the effects
of any contamination or injury to person, property or the environment
created or suffered by Lessee, and the cost of investigation (including
consultant's and attorney's fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein
involved, and shall survive the expiration or earlier termination of this
Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this
Lease with respect to Hazardous Substances or storage tanks, unless
specifically so agreed by Lessor in writing at the time of such
agreement.
6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in
this Lease, Lessee, shall, at Lessee's sole cost and expense, fully,
diligently and in a timely manner, comply with all "Applicable Law,"
which term is used in this Lease to include all laws, rules, regulations,
ordinances, directives, covenants, easements and restrictions of record,
permits, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or
consultants, relating in any manner to the Premises (including but not
limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including
soil and groundwater conditions, and (ii) the use, generation,
manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or
storage tank), now in effect or which may hereafter come into effect, and
whether or not reflecting a change in policy from any previously existing
policy. Lessee shall, within five (5) days after receipt of Lessor's
written request, provide Lessor with copies of all documents and
information, including, but not limited to, permits, registrations,
manifests, applications, reports and certificates, evidencing Lessee's
compliance with any Applicable Law specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving failure by Lessee
or the Premises to comply with any Applicable Law.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as
defined in Paragraph 8.3(a)) shall have the right to enter the Premises
at any time, in the case of an emergency, and otherwise at reasonable
times, for the purpose of inspecting the condition of the Premises and
for verifying compliance by Lessee with this Lease and all Applicable
Laws (as defined in Paragraph 6.3), and to employ experts and/or
consultants in connection therewith and/or to advise Lessor with respect
to Lessee's activities, including but not limited to the installation,
operation, use, monitoring, maintenance, or removal of any Hazardous
Substance or storage tank on or from the Premises. The costs and expenses
of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable Law, or
a contamination, caused or materially contributed to by Lessee is found
to exist or be imminent, or unless the inspection is requested or ordered
by a governmental authority as the result of any such existing or
imminent violation or contamination, in any such case, Lessee shall upon
request reimburse Lessor or Lessor's Lender, as the case may be, for the
costs and expenses of such inspections.
7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraph 2.2 (Lessor's warranty
as to condition), 2.3 (Lessor's warranty as to compliance with covenants,
etc), 7.2 (Lessor's obligations to repair), -- (damage and destruction),
and 14 (condemnation), Lessee shall, at Lessee's sole cost and expense
and at all times, keep the Premises and every part thereof in good order,
condition and repair, structural and non-structural (whether or not such
portion of the Premises requiring repairs, or the means of repairing the
same, are reasonably or readily accessible to Lessee, and whether or not
the need for such repairs occurs as a result of Lessee's use, any prior
use, the elements or the age of such portion of the Premises), including,
without limiting the generality of the foregoing, all equipment or
facilities serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers,
fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing system, including fire alarm
and/or smoke detection systems and equipment, fire hydrants, fixtures,
walls (interior and exterior), foundations, ceilings, roofs, floors,
windows, doors, plate glass, skylights landscaping, driveways, parking
lots, fences, retaining walls, signs, sidewalks and parkways located in,
on, about, or adjacent to the Premises. Lessee shall not cause or permit
any Hazardous Substance to be spilled or released in, on, under or about
the Premises (including through the plumbing or sanitary sewer system)
and shall promptly, at Lessee's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered
or required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of the Premises, the elements
surrounding same, or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance and/or storage tank brought onto the Premises by or
for Lessee or under its control, Lessee, in keeping the Premises in good
order, condition and repair, shall exercise and perform good maintenance
practices. Lessee's obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements
thereon or a part thereof in good order, condition and state of repair.
If Lessee occupies the Premises for seven (7) years or more, Lessor may
require Lessee to repaint the exterior of the buildings on the Premises
as reasonably required, but not more frequently than once every seven (7)
years.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain contracts, with copies to Lessor, in customary form and
substance for, and with contractors specializing and experienced in, the
inspection, maintenance and service of the following equipment and
improvements, if any, located on the Premises: (i) heating, air
conditioning and ventilation equipment, (ii) boiler, fired or unfired
pressure vessels, (iii) fire sprinkler and/or standpipe and hose or other
automatic fire extinguishing systems, including fire alarm and/or smoke
detection, (iv) landscaping and irrigation systems, (v) roof covering and
drain maintenance and (vi) asphalt and parking lot maintenance.
7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the
Premises), 2.3 (relating to compliance with covenants, restrictions and
building code), 9 (relating to destruction of the Premises) and 14
(relating to condemnation of the Premises), it is intended by the Parties
hereto that Lessor have no obligation, in any manner whatsoever, to
repair and maintain the Premises, the improvements located thereon, or
the equipment therein, whether structural or nonstructural, all of which
obligations are intended to be that of the Lessee under Paragraph 7.1
hereof. It is the intention of the Parties that the terms of this Lease
govern the respective obligations of the Parties as to maintenance and
repair of the Premises. Lessee and Lessor expressly waive the benefit of
any statute now or hereafter in effect to the extent it is inconsistent
with the terms of this Lease with respect to, or which affords Lessee the
right to make repairs at the expense of Lessor or to terminate this Lease
by reason of any needed repairs.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "Utility Installations"
is used in this Lease to refer to all carpeting, window coverings, air
lines, power panels, electrical distribution, security, fire protection
systems, communication systems, lighting fixtures, heating, ventilating,
and air conditioning equipment, plumbing, and fencing in, on or about the
Premises. The term "TRADE FIXTURES" shall mean Lessee's machinery and
equipment that can be removed without doing material damage to the
Premises. The term "ALTERATIONS" shall mean any modification of the
improvements on the Premises from that which are provided by Lessor under
the terms of this Lease, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "Lessee Owned Alterations
and/or Utility Installations" are defined as Alterations and/or Utility
Installations made by lessee that are not yet owned by Lessor as defined
in Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations in, on, under or about the Premises without Lessor's prior
written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof), as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative
cost thereof during the term of this Lease as extended does not exceed
$25.000.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All
consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon; (i)
Lessee's acquiring all applicable permits required by governmental
authorities, (ii) the furnishing of copies of such permits together with
a copy of the plans and specifications for the Alteration or Utility
Installation to Lessor prior to commencement of the work thereon, and
(iii) the compliance by Lessee with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility Installations
by Lessee during the term of this Lease shall be done in a good and
workmanlike manner, with good and sufficient materials, and in compliance
with all Applicable Law. Lessee shall promptly upon completion thereof
furnish Lessor with as-built plans and specifications therefor. Lessor
may (but without obligation to do so) condition its consent to any
requested Alteration or Utility Installation that costs $10,000 or more
upon Lessee's providing Lessor with a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured
by any mechanics' or materialmen's lien against the Premises or any
interest therein. Lessee shall give Lessor not less than ten (10) days'
notice prior to the commencement of any work in, on or about the
Premises, and Lessor shall have the right to post notices of non-
responsibility in or on the Premises as provided by law. If Lessee shall,
in good faith, contest the validity of any such lien, claim or demand,
then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises. If Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an
amount equal to one and one-half times the amount of such contested lien
claim or demand, indemnifying Lessor against liability for the same, as
required by law for the holding of the Premises free from the effect of
such lien or claim. In addition, Lessor may require Lessee to pay
Lessor's attorney's fees and costs in participating in such action if
Lessor shall decide it is to its best interest to do so.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their removal
or become the owner thereof as hereinafter provided in this Paragraph
7.4, all Alterations and Utility Additions made to the Premises by Lessee
shall be the property of and owned by Lessee, but considered a part of
the Premises. Lessor may, at any time and at its option, elect in writing
to Lessee to be the owner of all or any specified part of the Lessee
Owned Alterations and Utility Installations. Unless otherwise instructed
per subparagraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or earlier termination of this
Lease, become the property of Lessor and remain upon and be surrendered
by Lessee with the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease,
notwithstanding their installation may have been consented to by Lessor.
Lessor may require the removal at any time of all or any part of any
Lessee Owned Alterations or Utility Installations made without the
required consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the end of the last day of the Lease term or any earlier termination
date, with all of the improvements, parts and surfaces thereof clean and
free of debris and in good operating order, condition and state of
repair, ordinary wear and tear excepted. "Ordinary Wear and Tear" shall
not include any damage or deterioration that would have been prevented by
good maintenance practice or by Lessee performing all of its obligations
under this Lease. Except as otherwise agreed or specified in writing by
Lessor, the Premises, as surrendered, shall include the Utility
Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation, maintenance or removal of Lessee's
Trade Fixtures, furnishings, equipment, and Alterations and/or Utility
Installations, as well as the removal of any storage tank installed by or
for Lessee, and the removal, replacement, or remediation of any soil,
material or ground water contaminated by Lessee, all as may then be
required by Applicable Law and/or good service practice. Lessee's Trade
Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per
this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee
is the Insuring Party, Lessee shall pay for all insurance required under
this Paragraph 8 except to the extent of the cost attributable to
liability insurance carried by Lessor in excess of $1,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending
beyond the Lease term shall be prorated to correspond to the Lease term.
Payment shall be made by Lessee to Lessor within ten (10) days following
receipt of an invoice for any amount due.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims
for bodily injury, personal injury and property damage based upon,
involving or arising out of the ownership, use, occupancy or maintenance
of the Premises and all areas appurtenant thereto. Such insurance shall
be on an occurrence basis providing single limit coverage in an amount
not less than $1,000,000 per occurrence with an "Additional Insured-
Managers or Lessors of Premises" Endorsement and contain the "Amendment
of the Pollution Exclusion" for damage caused by heat, smoke or fumes
from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an "insured contract"
for the performance of Lessee's indemnity obligations under this Lease.
The limits of said insurance required by this Lease or as carried by
Lessee shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder. All insurance to be carried by Lessee
shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance
only.
(b) CARRIED BY LESSOR. In the event Lessor is the Insuring Party,
Lessor shall also maintain liability insurance described in Paragraph
8.2(a), above, in addition to, and not in lieu of, the insurance required
to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force during the term of this Lease a policy or policies in the
name of Lessor, with loss payable to Lessor and to the holders of any
mortgages, deeds of trust or ground leases on the Premises ("LENDER(S)"),
insuring loss of damage to the Premises. The amount of such insurance
shall be equal to the full replacement cost of the Premises, as the same
shall exist from time to time, or the amount required by Lenders, but in
no event more than the commercially reasonable and available insurable
value thereof if, by reason of the unique nature or age of the
improvements involved, such latter amount is less than full replacement
cost. If Lessor is the Insuring Party, however, Lessee Owned Alterations
and Utility Installations shall be insured by Lessee under Paragraph 8.4
rather than by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of
direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for any
additional costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Premises
required to be demolished or removed by reason of the enforcement of any
building, zoning, safety or land use laws as the result of a covered
cause of loss. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the
annual property insurance coverage amount by a factor of not less than
the adjusted U.S. Department of Labor Consumer Price Index for All Urban
Consumers for the city nearest to where the Premises are located. If such
insurance coverage has a deductible clause, the deductible amount shall
not exceed $1,000 per occurrence, and Lessee shall be liable for such
deductible amount in the event of an Insured Loss, as defined in
Paragraph 9.1(c).
(b) RENTAL VALUE. The Insuring Party shall, in addition, obtain and
keep in force during the term of this Lease a policy or policies in the
name of Lessor, with loss payable to Lessor and Lender(s), insuring the
loss of the full rental and other charges payable by Lessee to Lessor
under this Lease for one (1) year (including all real estate taxes,
insurance costs, and any scheduled rental increases). Said insurance
shall provide that in the event the Lease is terminated by reason of an
insured loss, the period of indemnity for such coverage shall be extended
beyond the date of the completion of repairs or replacement of the
Premises, to provide for one full year's loss of rental revenues from the
date of any such loss. Said insurance shall contain an agreed valuation
provision in lieu of any coinsurance clause, and the amount of coverage
shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any,
otherwise payable by Lessee, for the next twelve (12) month period.
Lessee shall be liable for any deductible amount in the event of such
loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or if the Premises are part of a group of buildings owned by
Lessor which are adjacent to the Premises, the Lessee shall pay for any
increase in the premiums for the property insurance of such building or
buildings if said increase is caused by Lessee's acts, omissions, use or
occupancy of the Premises.
(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring Party, the
Lessor shall not be required to insure Lessee Owned Alterations and
Utility Installations unless the item in question has become the property
of Lessor under the terms of this Lease. If Lessee is the Insuring Party,
the policy carried by Lessee under this Paragraph 8.3 shall insure Lessee
Owned Alterations and Utility Installations.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain
insurance coverage on all of Lessee's personal property, Lessee Owned
Alterations and Utility Installations in, on, or about the Premises
similar in coverage to that carried by the Insuring Party under Paragraph
8.3. Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $1,000 per occurrence. The proceeds from any
such insurance shall be used by Lessee for the replacement of personal
property or the restoration of Lessee Owned Alterations and Utility
Installations. Lessee shall be the Insuring Party with respect to the
insurance required by this Paragraph 8.4 and shall provide Lessor with
written evidence that such insurance is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, or such other rating as may be
required by a Lender having a lien on the Premises, as set forth in the
most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. If Lessee is the Insuring Party, Lessee
shall cause to be delivered to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of
such insurance with the insureds and loss payable clauses as required by
this Lease. No such policy shall be cancellable or subject to
modification except after thirty (30) days prior written notice to
Lessor. Lessee shall at least thirty (30) days prior to the expiration of
such policies, furnish Lessor with evidence of renewals or "Insurance
binders" evidencing renewal thereof, or Lessor may order such insurance
and charge the cost thereof to Lessee, which amount shall be payable by
Lessee to Lessor upon demand. If the Insuring Party shall fail to procure
and maintain the insurance required to be carried by the Insuring Party
under this Paragraph 8, the other Party may, but shall not be required
to, procure and maintain the same, but at Lessee's expense.
8.6 WAIVER OF SUBROGRATION. Without affecting any other rights or
remedies, Lessee and Lessor ("WAIVING PARTY") each hereby release and
relieve the other, and waive their entire right to recover damages
(whether in contract or in tort) against the other, for loss of or damage
to the Waiving Party's property arising out of or incident to the perils
required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited
by the amount of insurance carried or required, or by any deductibles
applicable thereto.
8.7 INDEMNITY. Except for Lessor's negligence and/or breach of
express warranties, Lessee shall indemnify, protect, defend and hold
harmless the Premises, Lessor and its agents, Lessor's master or ground
lessor, partners and Lenders, from and against any and all claims, loss
of rents and/or damages, costs, liens, judgments, penalties, permits,
attorney's and consultant's fees, expenses and/or liabilities arising out
of, involving, or in dealing with, the occupancy of the Premises by
Lessee, the conduct of Lessee's business, any act, omission or neglect of
Lessee, its agents, contractors, employees or invitees, and out of any
Default or Breach by Lessee in the performance in a timely manner of any
obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of
any claim or any action or proceeding involved therein, and whether or
not (in the case of claims made against Lessor) litigated and/or reduced
to judgment, and whether well founded or not. In case any action or
proceeding be brought against Lessor by reason of any of the foregoing
matters, Lessee upon notice from Lessor shall defend the same at Lessee's
expense by counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid
any such claim in order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers,
or any other person in or about the Premises, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether the said injury or
damage results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a part, or from other
sources or places, and regardless of whether the cause of such damage or
injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. Notwithstanding Lessor's negligence or breach
of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is
less than 50% of the then Replacement Cost of the Premises immediately
prior to such damage or destruction, excluding from such calculation the
value of the land and Lessee Owned Alterations and Utility Installations.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility
Installations the repair cost of which damage or destruction is 50% or
more of the then Replacement Cost of the Premises immediately prior to
such damage or destruction, excluding from such calculation the value of
the land and Lessee Owned Alterations and Utility Installations.
(c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility
Installations, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible
amounts or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition,
debris removal and upgrading required by the operation of applicable
building codes, ordinances or laws, and without deduction for
depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination
by, a Hazardous Substance as defined in Paragraph 8.2(a), in, on, or
under the Premises.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations
and Utility Installations) as soon as reasonably possible and this Lease
shall continue in full force and effect; provided, however, that Lessee
shall, at Lessor's election, make the repair of any damage or destruction
the total cost to repair of which is $10,000 or less, and, in such event,
Lessor shall make the insurance proceeds available to Lessee on a
reasonable basis for that purpose. Notwithstanding the foregoing, if the
required insurance was not in force or the insurance proceeds are not
sufficient to effect such repair, the Insuring Party shall promptly
contribute the shortage in proceeds (except as to the deductible which is
Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that,
by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor
shall have no obligation to pay for the shortage in insurance proceeds or
to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance
thereof, within ten (10) days following receipt of written notice of such
shortage and request therefor. If Lessor receives said funds or adequate
assurance thereof within said ten (10) day period, the party responsible
for making the repairs shall complete them as soon as reasonably possible
and this Lease shall remain in full force and effect. If Lessor does not
receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days
thereafter to make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case
this Lease shall remain in full force and effect. If in such case Lessor
does not so elect, then this Lease shall terminate sixty (60) days
following the occurrence of the damage or destruction. Unless otherwise
agreed, Lessee shall in no event have any right to reimbursement from
Lessor for [TEXT ILLEGIBLE] to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to
Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that there may
be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage
that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense and this Lease shall continue in full force and effect,
but subject to Lessor's rights under Paragraph 13), Lessor may at
Lessor's option, either: (i) repair such damage as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in
full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence
of such damage of Lessor's desire to terminate this Lease as of the date
sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease,
Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's commitment to
pay for the repair of such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required
funds or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full
force and effect, and Lessor shall proceed to make such repairs as soon
as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the funds or assurance thereof
within the times specified above, this Lease shall terminate as of the
date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs (including any destruction required
by any authorized public authority), this Lease shall terminate sixty
(60) days following the date of such Premises Total Destruction, whether
or not the damage or destruction is an Insured Loss or was caused by a
negligent or willful act of Lessee. In the event, however, that the
damage or destruction was caused by Lessee, Lessor shall have the right
to recover Lessor's damages from Lessee except as released and waived in
Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to
repair exceeds one (1) month's Base Rent, whether or not an Insured Loss,
Lessor may, at Lessor's option, terminate this Lease effective sixty (60)
days following the date of occurrence of such damage by giving written
notice to Lessee of Lessor's election to do so within thirty (30) days
after the date of occurrence of such damage. Provided, however, if Lessee
at that time has an exercisable option to extend this Lease or to
purchase the Premises, then Lessee may preserve this Lease by, within
twenty (20) days following the occurrence of the damage, or before the
expiration of the time provided in such option for its exercise,
whichever is earlier ("Exercise Period"), (i) exercising such option and
(ii) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the repairs. If Lessee duly
exercises such option during said Exercise Period and provides Lessor
with funds (or adequate assurance thereof) to cover any shortage in
insurance proceeds, Lessor shall, at Lessor's expense repair such damage
as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide
such funds or assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty
(60) day period following the occurrence of such damage by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after
the expiration of the Exercise Period, notwithstanding any term or
provision in the grant of option to the contrary.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage - Insured), whether or not Lessor or Lessee repairs or restores
the Premises, the Base Rent, Real Property Taxes, insurance premiums, and
other charges, if any, payable by Lessee hereunder for the period during
which such damage, its repair or the restoration continues (not to exceed
the period for which rental value insurance is required under Paragraph
8.3(b)), shall be abated in proportion to the degree to which Lessee's
use of the Premises is impaired. Except for abatement of Base Rent, Real
Property Taxes, insurance premiums, and other charges, if any, as
aforesaid, all other obligations of Lessee hereunder shall be performed
by Lessee, and Lessee shall have no claim against Lessor for any damage
suffered by reason of any such repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall accrue, Lessee may,
at any time prior to the commencement of such repair or restoration, give
written notice to Lessor and to any Lenders of which Lessee has actual
notice of Lessee's election to terminate this Lease on a date not less
than sixty (60) days following the giving of such notice. If Lessee gives
such notice to Lessor and such Lenders and such repair or restoration is
not commenced within thirty (30) days after receipt of such notice, this
Lease shall terminate as of the date specified in said notice. If Lessor
or a Lender commences the repair or restoration of the Premises within
thirty (30) days after receipt of such notice, this Lease shall continue
in full force and effect. "Commence" as used in this Paragraph shall mean
either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever
first occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which
case Lessee shall make the investigation and remediation thereof required
by Applicable Law and this Lease shall continue in full force and effect,
but subject to Lessor's rights under Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force
and effect, or (ii) if the estimated cost to investigate and remediate
such condition exceeds twelve (12) times the then monthly Base Rent or
$100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence
of such Hazardous Substance Condition of Lessor's desire to terminate
this Lease as of the date sixty (60) days following the giving of such
notice. In the event Lessor elects to give such notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten
(10) days after the receipt of such notice to give written notice to
Lessor of Lessee's commitment to pay for the investigation and
remediation of such Hazardous Substance Condition totally at Lessee's
expense and without reimbursement from Lessor except to the extent of an
amount equal to twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with the funds required
of Lessee or satisfactory assurance thereof within thirty (30) days
following Lessee's said commitment. In such event this Lease shall
continue in full force and effect, and Lessor shall proceed to make such
investigation and remediation as soon as reasonably possible and the
required funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the times
specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination. If a Hazardous Substance Condition occurs
for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligations under this Lease to the same extent as provided in
Paragraph 9.6(a) for a period of not to exceed twelve (12) months.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by
Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee's Security Deposit as has not been, or is not then required to be,
used by Lessor under the terms of this Lease.
9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent
inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes,
as defined in Paragraph 10.2, applicable to the Premises during the term
of this Lease. Subject to Paragraph 10.1(b), all such payments shall be
made at least ten (10) days prior to the delinquency date of the
applicable installment. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any such taxes
to be paid by Lessee shall cover any period of time prior to or after the
expiration or earlier termination of the term hereof, Lessee's share of
such taxes shall be equitably prorated to cover only the period of time
within the tax fiscal year this Lease is in effect, and Lessor shall
reimburse Lessee for any overpayment after such proration. If Lessee
shall fail to pay any Real Property Taxes required by this Lease to be
paid by Lessee, Lessor shall have the right to pay the same, and Lessee
shall reimburse Lessor therefor upon demand.
(b) ADVANCE PAYMENT. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right,
at Lessor's option, to estimate the current Real Property Taxes
applicable to the Premises, and to require such current year's Real
Property Taxes to be paid in advance to Lessor by Lessee, either: (i) in
a lump sum amount equal to the installment due, at least twenty (20) days
prior to the applicable delinquency date, or (ii) monthly in advance with
the payment of the Base Rent. If Lessor elects to require payment monthly
in advance, the monthly payment shall be that equal monthly amount which,
over the number of months remaining before the month in which the
applicable tax installment would become delinquent (and without interest
thereon), would provide a fund large enough to fully discharge before
delinquency the estimated installment of taxes to be paid. When the
actual amount of the applicable tax ▇▇▇▇ is known, the amount of such
equal monthly advance payment shall be adjusted as required to provide
the fund needed to pay the applicable taxes before delinquency. If the
amounts paid to Lessor by Lessee under the provisions of this Paragraph
are insufficient to discharge the obligations of Lessee to pay such Real
Property Taxes as the same become due, Lessee shall pay to Lessor, upon
Lessor's demand, such additional sums as are necessary to pay such
obligations. All moneys paid to Lessor under this Paragraph may be
intermingled with other moneys of Lessor and shall not bear interest. In
the event of a Breach by Lessee in the performance of the obligations of
Lessee under this Lease, then any balance of funds paid to Lessor under
the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional
Security Deposit under Paragraph 5.
10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term
"Real Property Taxes" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license
fee, commercial rental tax, improvement bond or bonds, levy or tax (other
than inheritance, personal income or estate taxes) imposed upon the
Premises by any authority having the direct or indirect power to tax,
including any city, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement
district thereof, levied against any legal or equitable interest of
Lessor in the Premises or in the real property of which the Premises are
a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "Real Property Taxes" shall
also include any tax, fee, levy, assessment or charge, or any increase
therein, imposed by reason of events occurring, or changes in applicable
law taking effect, during the term of this Lease, including but not
limited to a change in the ownership of the Premises or in the
improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the
Parties.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel
assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations,
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause its Trade Fixtures, furnishings, equipment
and all other personal property to be assessed and billed separately from
the real property of Lessor. If any of Lessee's said personal property
shall be assessed with Lessor's real property, Lessee shall pay Lessor
the taxes attributable to Lessee within ten (10) days after receipt of a
written statement setting forth the taxes applicable to Lessee's property
or, at Lessor's option, as provided in Paragraph 10.1(b).
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are
not separately metered to Lessee, Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered
with other premises.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively,
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this
Lease or in the Premises without Lessor's prior written consent given
under and subject to the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a cumulative
basis, of twenty-five percent (25%) or more of the voting control of
Lessee shall constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a
formal assignment or hypothecation of this Lease or Lessee's assets
occurs, which results or will result in a reduction of the Net Worth of
Lessee, as hereinafter defined, by an amount equal to or greater than
twenty-five percent (25%) of such Net Worth of Lessee as it was
represented to Lessor at the time of the execution by Lessor of this
Lease or at the time of the most recent assignment to which Lessor has
consented, or as it still exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net
Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably withhold its consent.
"NET WORTH OF LESSEE" for purposes of this Lease shall be the net worth
of Lessee (excluding any guarantors) established under generally accepted
accounting principles consistently applied.
(d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a
noncurable Breach without the necessity of any notice and grace period.
If Lessor elects to treat such unconsented to assignment or subletting as
a noncurable Breach, Lessor shall have the right to either: (i) terminate
this Lease, or (ii) upon thirty (30) days written notice ("LESSOR'S
NOTICE"), increase the monthly Base Rent to fair market rental value or
one hundred ten percent (110%) of the Base Rent then in effect, whichever
is greater. Pending determination of the new fair market rental value, if
disputed by Lessee, Lessee shall pay the amount set forth in Lessor's
Notice, with any overpayment credited against the next installment(s) of
Base Rent coming due, and any underpayment for the period retroactively
to the effective date of the adjustment being due and payable immediately
upon the determination thereof. Further, in the event of such Breach and
market value adjustment, (i) the purchase price of any option to purchase
the Premises held by Lessee shall be subject to similar adjustment to the
then fair market value (without the Lease being considered an encumbrance
or any deduction for depreciation or obsolescence, and considering the
Premises at its highest and best use and in good condition), or one
hundred ten percent (110%) of the price previously in effect, whichever
is greater, (ii) any index-oriented rental or price adjustment formulas
contained in this Lease shall be adjusted to require that the base index
be determined with reference to the index applicable to the time of such
adjustment, and (iii) any fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased in the same ratio as the
new market rental bears to the Base Rent in effect immediately prior to
the market value adjustment.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by
Lessor shall be limited to compensatory damages and injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease,
(ii) release Lessee of any obligations hereunder, or (iii) alter the
primary liability of Lessee for the payment of Base Rent and other sums
due Lessor hereunder or for the performance of any other obligations to
be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of any rent or
performance shall constitute a waiver or estoppel of Lessor's right to
exercise its remedies for the Default or Breach by Lessee of any of the
terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
sublessee. However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent, and such action shall not relieve
such persons from liability under this Lease or sublease.
(d) In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or any one else responsible for the performance of the
Lessee's obligations under this Lease, including the sublessee, without
first exhausting Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor or Lessee.
(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the Premises,
if any, together with a non-refundable deposit of $1,000 or ten percent
(10%) of the current monthly Base Rent, whichever is greater, as
reasonable consideration for Lessor's considering and processing the
request for consent. Lessee agrees to provide Lessor with such other or
additional information and/or documentation as may be reasonably
requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform
and comply with each and every term, covenant, condition and obligation
herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased to an amount equal to six (6) times the
then monthly Base Rent, and Lessor may make the actual receipt by Lessor
of the amount required to establish such Security Deposit a condition to
Lessor's consent to such transaction.
(h) Lessor, as a condition to giving its consent to any assignment
or subletting, may require that the amount and adjustment structure of
the rent payable under this Lease be adjusted to what is then the market
value and/or adjustment structure for property similar to the Premises as
then constituted.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a
portion of the Premises heretofore or hereafter made by Lessee, and
Lessor may collect such rent and income and apply same toward Lessee's
obligations under this Lease; provided, however, that until a Breach (as
defined in Paragraph 13.1) shall occur in the performance of Lessee's
obligations under this Lease, Lessee may, except as otherwise provided in
this Lease, receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of
such sublease to Lessor, nor by reason of the collection of the rents
from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such
sublessee under such sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents and other charges due and to
become due under the sublease. Sublessee shall rely upon any such
statement and request from Lessor and shall pay such rents and other
charges to Lessor without any obligation or right to inquire as to
whether such Breach exists and notwithstanding any notice from or claim
from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for
any such rents and other charges so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in
which event Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not be
liable for any prepaid rents or security deposit paid by such sublessee
to such sublessor or for any other prior Defaults or Breaches of such
sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach
by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such
occurrence for legal services and costs in the preparation and service of
a notice of Default, and that Lessor may include the cost of such
services and costs in said notice as rent due and payable to cure said
Default. A "Default" is defined as a failure by the Lessee to observe,
comply with or perform any of the terms, covenants, conditions or rules
applicable to Lessee under this Lease. A "Breach" is defined as the
occurrence of any one or more of the following Defaults, and, where a
grace period for cure after notice is specified herein, the failure by
Lessee to cure such Default prior to the expiration of the applicable
grace period, shall entitle Lessor to pursue the remedies set forth in
Paragraphs 13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to reoccupy
same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent or any other or
monetary payment required to be made by Lessee hereunder, whether to
Lessor or to a third party, as and when due, the failure by Lessee to
provide Lessor with reasonable evidence of insurance or surety bond
required under this Lease, or the failure of Lessee to fulfill any
obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of three (3) days
following written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in
duly executed original form, if applicable) of (i) compliance with
Applicable Law per Paragraph 6.3, (ii) the inspection, maintenance and
service contracts required under Paragraph 7.1(b), (iii) the recission of
an unauthorized assignment or subletting per Paragraph 12.1(b), (iv) a
Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or non-
subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Lessee's obligations under this Lease if required under
Paragraphs 1.11 and 37, (vii) the execution of any document requested
under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms
of this Lease, where any such failure continues for a period of ten (10)
days following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40
hereof, that are to be observed, complied with or performed by Lessee,
other than those described in subparagraphs (a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written
notice thereof by or on behalf of Lessor to Lessee; provided, however,
that if the nature of Lessee's Default is such that more than thirty (30)
days are reasonably required for its cure, then it shall not be deemed to
be a Breach of this Lease by Lessee if Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such
cure to completion.
(e) The occurrence of any of the following events: (i) The making by
lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C.
Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed with sixty (60)
days); (iii) the appointment of a trustee or receiver to take possession
of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where possession is not restored to
Lessee within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where such seizure is
not discharged within thirty (30) days; provided, however, in the event
that any provision of this subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect, and not affect the
validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a guarantor, (ii) the termination of a
guarantor's liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a guarantor's becoming insolvent
or the subject of a bankruptcy filing, (iv) a guarantor's refusal to
honor the guaranty, or (v) a guarantor's breach of its guaranty
obligation on an anticipatory breach basis, and Lessee's failure, within
sixty (60) days following written notice by or on behalf of Lessor to
Lessee of any such event, to provide Lessor with written alternative
assurance or security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources
of Lessee and the guarantors that existed at the time of execution of
this Lease.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written
notice to Lessee (or in case of an emergency, without notice), Lessor may
at its option (but without obligation to do so), perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining
of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. The costs and expenses of any such
performance by Lessor shall be due and payable by Lessee to Lessor upon
invoice therefor. If any check given to Lessor by Lessee shall not be
honored by the bank upon which it is drawn, Lessor, at its option, may
require all future payments to be made under this Lease by Lessee to be
made only by cashier's check. In the event of a Breach of this Lease by
Lessee, as defined in Paragraph 13.1, with or without further notice or
demand, and without limiting Lessor in the exercise of any right or
remedy which Lessor may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the
Premises to Lessor. In such event Lessor shall be entitled to recover
from Lessee: (i) the worth at the time of the award of the unpaid rent
which had been earned at the time of termination; (ii) the worth at the
time of 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 that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably
avoided; and (iv) any other amount necessary to compensate Lessor for all
the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including but not limited to the
cost of recovering possession of the Premises, expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and that portion of the leasing commission paid by
Lessor applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the prior
sentence 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%). Efforts by Lessor to mitigate damages caused by
Lessee's Default or Breach of this Lease shall not waive Lessor's right
to recover damages under this Paragraph. If termination of this Lease is
obtained through the provisional remedy of unlawful detainer, Lessor
shall have the right to recover in such proceeding the unpaid rent and
damages as are recoverable therein, or Lessor may reserve therein the
right to recover all or any part thereof in a separate suit for such rent
and/or damages. If a notice and grace period required under subparagraphs
13.1(b), (c) or (d) was not previously given, a notice to pay rent or
quit, or to perform or quit, as the case may be, given to Lessee under
any statute authorizing the forfeiture of leases for unlawful detainer
shall also constitute the applicable notice for grace period purposes
required by subparagraphs 13.1(b), (c) or (d). In such case, the
applicable grace period under subparagraphs 13.1(b), (c) or (d) and under
the unlawful detainer statute shall run concurrently after the one such
statutory notice, and the failure of Lessee to cure the Default within
the greater of the two such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect
(in California under California Civil Code Section 1951.4) after Lessee's
Breach and abandonment and recover the rent as it becomes due, provided
Lessee has the right to sublet or assign, subject only to reasonable
limitations. See Paragraphs 12 and 36 for the limitations on assignment
and subletting which limitations Lessee and Lessor agree are reasonable.
Acts of maintenance or preservation, efforts to relet the Premises, or
the appointment of a receiver to protect the Lessor's interest under the
Lease, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises
are located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters
occurring or accruing during the term hereof or by reason of Lessee's
occupancy of the Premises.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises, or
for the giving or paying by Lessor to or for Lessee of any cash or other
bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "Inducement
Provisions," shall be deemed conditioned upon lessee's full and faithful
performance of all of the terms, covenants and conditions of this Lease
to be performed or observed by Lessee during the term hereof as the same
may be extended. Upon the occurrence of a Breach of this Lease by Lessee,
as defined in Paragraph 13.1, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force
or effect, and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement
Provision shall be immediately due and payable by Lessee to Lessor, and
recoverable by Lessor as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of rent or the cure of the Breach which initiated
the operation of this Paragraph shall not be deemed a waiver by Lessor of
the provisions of this Paragraph unless specifically so stated in writing
by Lessor at the time of such acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor
to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may
be imposed upon Lessor by the terms of any ground lease, mortgage or
trust deed covering the Premises. Accordingly, if any installment of rent
or any other sum due from Lessee shall not be received by Lessor or
Lessor's designee within five (5) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to
Lessor a late charge equal to six percent (6%) of such overdue amount.
The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late
payment by Lessee. Acceptance of such late charge by Lessor shall in no
event constitute a waiver of Lessee's Default or Breach with respect to
such overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any
other provision of this Lease to the contrary. Base Rent shall, at
Lessor's option, become due and payable quarterly in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph 13.5, a reasonable time shall in no event be less than thirty
(30) days after receipt by Lessor, and by the holders of any ground
lease, mortgage or deed of trust covering the Premises whose name and
address shall have been furnished Lessee in writing for such purpose, of
written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days after such notice are reasonably
required for its performance, then Lessor shall not be in breach of this
Lease if performance is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of
said power (all of which are herein called "condemnation"), this Lease
shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than
ten percent (10%) of the floor area of the Premises, or more than twenty-
five percent (25%) of the land area not occupied by any building, is
taken by condemnation, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of such notice, within ten (10)
days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with
the foregoing, this Lease shall remain in full force and effect as to the
portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises
taken bears to the total rentable floor area of the building located on
the Premises. No reduction of Base Rent shall occur if the only portion
of the Premises taken is land on which the there is no building. Any
award for the taking of all or any part of the Premises under the power
of eminent domain or any payment made under threat of the exercise of
such power shall be the property of Lessor, whether such award shall be
made as compensation for diminution in value of the leasehold or for the
taking of the fee, or as severance damages; provided, however, that
Lessee shall be entitled to any compensation separately awarded to Lessee
for Lessee's relocation expenses and/or loss of Lessee's Trade Fixtures.
In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall to the extent of its net severance damages
received, over and above the legal and other expenses incurred by Lessor
in the condemnation matter, repair any damage to the Premises caused by
such condemnation, except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required to
complete such repair.
15. BROKER'S FEES.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease. 15.2 Upon execution of this Lease by both Parties, Lessor
shall pay to said Brokers jointly, or in such separate shares as they may
mutually designate in writing, a fee as set forth in a separate written
agreement between Lessor and said Brokers (or in the event there is no
separate written agreement between Lessor and said Brokers, the sum of $
None) for brokerage services rendered by said Brokers to Lessor in this
transaction. 15.3 Unless Lessor and Brokers have otherwise agreed in
writing, Lessor further agrees that: (a) if Lessee exercises any Option
(as defined in Paragraph 39.1) or any Option subsequently granted which
is substantially similar to an Option granted to Lessee in this Lease, or
(b) if Lessee acquires any rights to the Premises or other premises
described in this Lease which are substantially similar to what Lessee
would have acquired had an Option herein granted to Lessee been
exercised, or (c) if Lessee remains in possession of the Premises, with
the consent of Lessor, after the expiration of the term of this Lease
after having failed to exercise an Option, or (d) if said Brokers are the
procuring cause of any other lease or sale entered into between the
Parties pertaining to the Premises and/or any adjacent property in which
Lessor has an interest, or (e) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then as to any of
said transactions, Lessor shall pay said Brokers a fee in accordance with
the schedule of said Brokers in effect at the time of the execution of
this Lease. 15.4 Any buyer of transferee of Lessor's interest in this
Lease, whether such transfer is by agreement or by operation of law,
shall be deemed to have assumed Lessor's obligation under this Paragraph
15. Each Broker shall be a third party beneficiary of the provisions of
this Paragraph 15 to the extent of its interest in any commission arising
from this Lease and may enforce that right directly against Lessor and
its successors. 15.5 Lessee and Lessor each represent and warrant to the
other that it has had no dealings with any person, firm, broker or finder
(other than the Brokers, if any named in Paragraph 1.10) in connection
with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and that no broker or other person, firm
or entity other than said named Brokers is entitled to any commission or
finder's fee in connection with said transaction,. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the Indemnifying Party, including
any costs, expenses, attorney's fees reasonably incurred with respect
thereto. 15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.
16. TENANCY STATEMENT. 16.1 Each Party (as "Responding Party") shall
within ten (10) days after written notice from the other Party (the
"Requesting Party") execute, acknowledge and deliver to the Requesting
Party a statement in writing in form similar to the then most current
"Tenancy Statement" form published by the American Industrial Real
Estate Association, plus such additional information, confirmation
and/or statements as may be reasonably requested by the Requesting
Party. 16.2 If Lessor desires to finance, refinance, or sell the
Premises, any part thereof, or the building of which the Premises are
a part, Lessee and all Guarantors of Lessee's performance hereunder
shall deliver to any potential lender or purchaser designated by
Lessor such financial statements of Lessee and such Guarantors as may
be reasonably required by such lender or purchaser, including but not
limited to Lessee's financial statements for the past three (3) years.
All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the
purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean
the owner or owners at the time in question of the fee title to the
Premises, or, if this is a sublease, of the Lessee's interest in the
prior lease. In the event of a transfer of Lessor's title or interest in
the Premises or in this Lease, Lessor shall deliver to the transferee or
assignee (in cash or by credit) any unused Security Deposit held by
Lessor at the time of such transfer or assignment. Except as provided in
Paragraph 15, upon such transfer or assignment and delivery of the
Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this
Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the
Lessor shall be binding only upon the Lessor as hereinabove defined.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect
the validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within thirty
(30) days following the date on which it was due, shall bear interest
from the thirty-first (31st) day after it was due at the rate of 12% per
annum, but not exceeding the maximum rate allowed by law, in addition to
the late charge provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties
under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under
the terms of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease
contains all agreements between the Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective. Lessor and Lessee each represents and
warrants to the Brokers that it has made, and is relying solely upon, its
own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the nature,
quality and character of the Premises. Brokers have no responsibility
with respect thereto or with respect to any default or breach hereof by
either Party.
23. NOTICES. 23.1 All notices required or permitted by this Lease shall
be writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered
mail or U.S. Postal Service Express Mail, with postage prepaid, or by
facsimile transmission, and shall be deemed sufficiently given if
served in a manner specified in this Paragraph 23. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's
address for delivery or mailing of notice purposes. Either Party may
by written notice to the other specify a different address for notice
purposes, except that upon Lessee's taking possession of the Premises,
the Premises shall constitute Lessee's address for the purpose of
mailing or delivering notices to Lessee. A copy of all notices
required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as
Lessor may from time to time hereafter designate by written notice to
Lessee. 23.2 Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown
on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail the notice shall be deemed given
forty-eight (48) hours after the same is addressed as required herein
and mailed with postage prepaid. Notices delivered by United States
Express Mail or overnight courier that guarantees next day delivery
shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If any notice is
transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone confirmation of receipt
of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Sunday or legal holiday,
it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor's consent to, or approval of, any act shall not be deemed
to render unnecessary the obtaining of Lessor's consent to, or approval
of, any subsequent or similar act by Lessee, or to be construed as the
basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. Regardless of Lessor's knowledge of a Default or
Breach at the time of accepting rent, the acceptance of rent by Lessor
shall not be a waiver of any preceding Default or Breach by Lessee of any
provision hereof, other than the failure of Lessee to pay the particular
rent so accepted. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection
therewith, which such statements and/or conditions shall be of no force
or effect whatsoever unless specifically agreed to in writing by Lessor
at or before the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the
other, execute, acknowledge and deliver to the other a short form
memorandum of this Lease for recording purposes. The Party requesting
recordation shall be responsible for payment of any fees or taxes
applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or earlier
termination of this Lease.
27. CUMULATIVE ?? . No remedy of election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed
or performed by Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1. SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "SECURITY DEVICE"),
now or hereafter placed by Lessor upon the real property of which the
Premises are a part, to any and all advances made on the security
thereof, and to all renewals, modifications, consolidations, replacements
and extensions thereof. Lessee agrees that the Lenders holding any such
Security Device shall have no duty, liability or obligation to perform
any of the obligations of Lessor under this Lease, but that in the event
of Lessor's default with respect to any such obligation, Lessee will give
any Lender whose name and address have been furnished Lessee in writing
for such purpose notice of Lessor's default and allow such Lender thirty
(30) days following receipt of such notice for the cure of said default
before invoking any remedies Lessee may have by reason thereof. If any
Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party
who acquires ownership of the Premises by reason of a foreclosure of a
Security Device, and that in the event of such foreclosure, such new
owner shall not: (i) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of
ownership, (ii) be subject to any offsets or defenses which Lessee might
have against any prior lessor, or (iii) be bound by prepayment of more
than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving assurance (a "NON-DISTURBANCE
AGREEMENT") from the Lender that Lessee's possession and this Lease,
including any options to extend the term hereof, will not be disturbed so
long as Lessee is not in Breach hereof and attorns to the record owner of
the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents;
provided, however, that, upon written request from Lessor or a Lender in
connection with a sale, financing or refinancing of the Premises, Lessee
and Lessor shall execute such further writings as may be reasonably
required to separately document any such subordination or non-
subordination, attornment and/or non-disturbance agreement as is provided
for herein.
31. ATTORNEY'S FEES. If any Party or Broker brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) or Broker in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorney's
fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to
decision or judgment. The term, "PREVAILING PARTY" shall include, without
limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement,
judgment, or the abandonment by the other Party or Broker of its claim or
defenses. The attorney's fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to
attorney's fees, costs and expenses incurred in the preparation and
service of notices of Default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's
agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times for the purpose
of showing the same to prospective purchasers, lenders, or lessees, and
making such alterations, repairs, improvements or additions to the
Premises or to the building of which they are a part, as Lessor may
reasonably deem necessary. Lessor may at any time place on or about the
Premises or building any ordinary "For Sale" signs and Lessor may at any
time during the last one hundred twenty (120) days of the term hereof
place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to
Lessee.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Lessor's prior written consent.
Notwithstanding anything to the contrary in this Lease, Lessor shall not
be obligated to exercise any standard of reasonableness in determining
whether to grant such consent.
34. SIGNS. Lessee shall not place any sign upon the Premises, except that
Lessee may, with Lessor's prior written consent, install (but not on the
roof) such signs as are reasonably required to advertise Lessee's own
business. The installation of any sign on the Premises by or for Lessee
shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs,
Utility Installations, Trade Fixtures and Alterations). Unless otherwise
expressly agreed herein, Lessor reserves all rights to the use of the
roof and the right to install, and all revenues from the installation of,
such advertising signs on the Premises, including the roof, as do not
unreasonably interfere with the conduct of Lessee's business.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by
Lessor for Breach by Lessee, shall automatically terminate any sublease
or lessor estate in the Premises; provided, however, Lessor shall, in the
event of any such surrender, termination or cancellation, have the option
to continue any one or all of any existing subtenancies. Lessor's failure
within ten (10) days following any such event to make a written election
to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor's election to have such event
constitute the termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an
act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers' or
other consultants' fees) incurred in the consideration of, or response
to, a request by Lessee for any Lessor consent pertaining to this Lease
or the Premises, including but not limited to consents to an assignment,
a subletting or the presence or use of a Hazardous Substance, practice or
storage tank, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. Subject to Paragraph
12.2(a) (applicable to assignment or subletting), Lessor may, as a
condition to considering any such request by Lessee, require that Lessee
deposit with Lessor an amount of money (in addition to the Security
Deposit held under Paragraph 5) reasonably calculated by Lessor to
represent the cost Lessor will incur in considering and responding to
Lessee's request. Except as otherwise provided, any unused portion of
said deposit shall be refunded to Lessee without interest. Lessor's
consent to any act, assignment of this Lease or subletting of the
Premises by Lessee shall not constitute an acknowledgement that no
Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may
be otherwise specifically stated in writing by Lessor at the time of such
consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein
any particular condition to Lessor's consent shall not preclude the
imposition by Lessor at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter
for which consent is being given.
37. GUARANTOR.
37.1 If there are to be any Guarantors of this Lease per Paragraph
1.11, the form of the guaranty to be executed by each such Guarantor
shall be in the form most recently published by the American Industrial
Real Estate Association, and each said Guarantor shall have the same
obligations as Lessee under this Lease, including but not limited to the
obligation to provide the Tenancy Statement and information called for by
Paragraph 18.
37.2 It shall constitute a Default of the Lessee under this Lease if
any such Guarantor fails or refuses, upon reasonable request by Lessor to
give: (a) evidence of the due execution of the guaranty called for by
this Lease, including the authority of the Guarantor (and of the party
signing on Guarantor's behalf) to obligate such Guarantor on said
guaranty, and including in the case of a corporate Guarantor, a certified
copy of a resolution of its board of directors authorizing the making of
such guaranty, together with a certificate of incumbency showing the
signature of the persons authorized to sign on its behalf, (b) current
financial statements of Guarantor as may from time to time be requested
by Lessor, (c) a Tenancy Statement, or (d) written confirmation that the
guaranty is still in effect.
38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises
and the observance and performance of all of the covenants, conditions
and provisions of Lessee's part to be observed and performed under this
Lease, Lessee shall have quiet possession of the Premises for the entire
term hereof subject to all of the provisions of this Lease.
39. OPTIONS.
39.1 DEFINITION. As used in this Paragraph 39 the word "Option" has
the following meaning: (a) the right to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right
of first refusal to lease other property of Lessor or the right of first
offer to lease other property of Lessor; (c) the right to purchase the
Premises, or the right of first refusal to purchase the Premises, or the
right of first offer to purchase the Premises, or the right to purchase
other property of Lessor, or the right of first refusal to purchase other
property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in
Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned
or exercised by any person or entity other than said original Lessee
while the original Lessee is in full and actual possession of the
Premises and without the intention of thereafter assigning or subletting.
The Options, if any, herein granted to Lessee are not assignable, either
as a part of an assignment of this Lease or separately or apart
therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any Multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Options to extend or renew this Lease have been validly
exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary; (i)
during the period commencing with the giving of any notice of Default
under Paragraph 13.1 and continuing until the noticed Default is cured,
or (ii) during the period of time any monetary obligation due Lessor from
Lessee is unpaid (without regard to whether notice thereof is given
Lessee), or (iii) during the time Lessee is in Breach of this Lease, or
(iv) in the event that Lessor has given to Lessee three (3) or more
notices of Default under Paragraph 13.1, whether or not the Defaults are
cured, during the twelve (12) month period immediately preceding the
exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of the Option, if, after such exercise and during
the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such
obligation becomes due (without any necessity of Lessor to give notice
thereof to Lessee), or (ii) Lessor gives to Lessee three (3) or more
notices of Default under Paragraph 13.1 during any twelve (12) month
period, whether or not the Defaults are cured, or (iii) if Lessee commits
a Breach of this Lease.
40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and
observe all reasonable rules and regulations which Lessor may make from
time to time for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and the preservation of
good order, as well as for the convenience of other occupants or tenants
of such other buildings and their invitees, and that Lessee will pay its
fair share of common expenses incurred in connection therewith.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental
payable to Lessor hereunder does not include the cost of guard service or
other security measures, and that Lessor shall have no obligation
whatsoever to provide same. Lessee assumes all responsibility for the
protection of the Premises, Lessee, its agents and invitees and their
property from the acts of third parties.
42. RESERVATIONS. Lessor reserves to itself the right, from time to
time, to grant, without the consent or joinder of Lessee, such easements,
rights and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements,
rights, dedications, maps and restrictions do not unreasonably interfere
with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement
rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as
to any amount or sum of money to be paid by one Party to the other under
the provisions hereof, the Party against whom the obligation to pay the
money is asserted shall have the right to make payment "under protest"
and such payment shall not be regarded as a voluntary payment and there
shall survive the right on the part of said Party to institute suit for
recovery of such sum. If it shall be adjudged that there was no legal
obligation on the part of said Party to pay such sum or any part thereof,
said Party shall be entitled to recover such sum or so much thereof as it
was not legally required to pay under the provisions of this Lease.
44. AUTHORITY. If either Party hereto is a corporation, trust, or
general or limited partnership, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly
authorized to execute and deliver this Lease on its behalf. If Lessee is
a corporation, trust or partnership, Lessee shall, within thirty (30)
days after request by Lessor, deliver to Lessor evidence satisfactory to
Lessor of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease to
Lessee. This Lease is not intended to be binding until executed by all
Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by
the Parties in interest at the time of the modification. The parties
shall amend this Lease from time to time to reflect any adjustments that
are made to the Base Rent or other rent payable under this Lease. As long
as they do not materially change Lessee's obligations hereunder, Lessee
agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by an institutional, insurance company, or
pension plan Lender in connection with the obtaining of normal financing
or refinancing of the property of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Lessor or
Lessee, the obligations of such Multiple Parties shall be the joint and
several responsibility of all persons or entities named herein as such
Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE
SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY
IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE
STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
THE PARTIES HERETO HAVE EXECUTED THIS LEASE AT THE PLACE ON THE DATES
SPECIFIED ABOVE TO THEIR RESPECTIVE SIGNATURES.
EXECUTED AT Santa Clara, CA EXECUTED AT Santa Clara, CA
on March 1, 1996 on March 1, 1996
by LESSOR: by LESSEE:
MOPAR, LLC Scientific Custom Metal
Products International, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CEO Title: President
By By
Name Printed: Name Printed:
Title: Title:
Address: Address:
Tel. No. ( ) Fax No.( ) Tel. No. ( ) Fax No.( )
EXHIBIT (A)
This Exhibit is part of that certain real property lease dated March
1, 1996, between MOPAR, LLC, Lessor, and Scientific Custom Metal Products
International Inc., Lessee. The following additional terms and conditions
are part of said lease, and are hereby incorporated therein, and made a
part thereof:
1. RENT INDEXING. The base rent as set forth in paragraph 1.5 of the
lease agreement, shall be adjusted annually at each anniversary by an
amount equal to the CPI as published in the Wall Street Journal, or the
Rent Schedule shown on page two of this Exhibit, whichever is greater.
2. INSURANCE. The 'Insuring Party' as set forth in paragraph 1.9 of
the lease agreement shall be changed from the Lessor, to the Lessee. The
amount of insurance coverage set forth in paragraphs 8.1 and 8.2 of the
lease agreement shall be changed from $1,000,000 to $10,000,000. The
insurance deductible amounts set forth in paragraphs 8.3 and 8.4 of the
lease agreement shall be changed from $1,000 to $5,000.
3. OPTION TO EXTEND. In the event that Lessee is not in default in
the performance of any term or condition of this lease, then upon the
expiration of the lease term as set forth in paragraph 1.3 of the
original lease agreement, Lessee shall have the option to renew the lease
for an additional term of 10 years. During such renewal period, all of
the terms and conditions of the lease shall remain in effect, except that
the new base rent shall be equal to the rent payable during the last year
of the original lease, or adjusted to the then current market rent
determined by appraisal, whichever is greater. Lessee shall provide
Lessor with not less than eighteen (18) months advance written notice of
its intention to exercise this option, or this option will become null
and void.
4. SUBLETTING. Notwithstanding the provisions of paragraphs 12.1,
12.2 and 12.3 of the lease agreement, and if Lessee is not in default of
any other terms or conditions of the lease agreement, then Lessee shall
have the right to sublet portions of the leased spaces to a sub-
tenant(s), however it shall be Lessee's responsibility to ensure that
such sub-tenancy complies with the spirit and intention of the lease
agreement between Lessor and Lessee. If in Lessor's sole discretion such
sub-tenancy does not comply, then paragraphs 12.1, 12.2 and 12.3 of the
lease agreement shall fully apply.
LESSEE LESSOR
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________ _____________________________
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President CEO
Scientific Custom Metal MOPAR, LLC
Products Int., Inc.
Date: 3/1/96 Date: 3/1/96
RENT SCHEDULE-2401 LEASE
MOPAR, LLC - SCMPINTERNATIONAL LEASE
RENT SCHEDULE: ▇▇▇▇. ▇▇▇▇
LEASE COMMENCEMENT DATE: MARCH 1, 1997
YEAR
LEASE ENDING STARTING MONTHLY NUMBER OF
YEAR # (FEBRUARY) DATE RENTAL MONTHS
----------- ---------- ----------- ----------- ----------
1 1998 01-Mar-97 $40,000 2
1998 01-May-97 $75,000 10
2 1999 01-Mar-98 $78,750 12
3 2000 01-Mar-99 $82,688 12
4 2001 01-Mar-00 $86,822 12
5 2002 01-Mar-01 $91,163 12
6 2003 01-Mar-02 $95,721 12
7 2004 01-Mar-03 $100,507 12
8 2005 01-Mar-04 $105,533 12
9 2006 01-Mar-05 $110,809 12
10 2007 01-Mar-06 $116,350 12
11 2008 01-Mar-07 $122,167 12
12 2009 01-Mar-08 $128,275 12
13 2010 01-Mar-09 $134,689 12
14 2011 01-Mar-10 $141,424 12
15 2012 01-Mar-11 $148,495 12
16 2013 01-Mar-12 $155,920 12
17 2014 01-Mar-13 $163,716 12
18 2015 01-Mar-14 $171,901 12
19 2016 01-Mar-15 $180,496 12
[GUARANTY OF LEASE LOGO]
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
WHEREAS, MOPAR, LLC referred to as "Lessor", and Scientific Custom
Metal Products International, Inc. hereinafter referred to as "Lessee",
are about to execute a document entitled "Lease" dated March 1, 1996
concerning the premises commonly known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇ wherein Lessor will lease the premises to Lessee and
WHEREAS, Scientific Custom Metal Products International, Inc.
hereinafter referred to as "Guarantors" have a financial interest in
Lessee and
WHEREAS, Lessor would not execute the Lease if Guarantor did not
execute and deliver to Lessor this Guarantee of Lease.
NOW THEREFORE, for and in consideration of the execution of the
foregoing Lease by Lessor and as a material inducement to Lessor to
execute said Lease, Guarantors hereby jointly, severally, unconditionally
and irrevocably guarantee the prompt payment by Lessee of all rentals and
all other sums payable by Lessee under said Lease and the faithful and
prompt performance by Lessee of each and every one of the terms,
conditions and covenants of said Lease to be kept and performed by
Lessee.
It is specifically agreed and understood that the terms of the
foregoing Lease may be altered, affected, modified or changed by
agreement between Lessor and Lessee, or by a course of conduct, and said
Lease may be assigned by Lessor or any assignee of Lessor without consent
or notice to Guarantors and that this Guaranty shall thereupon and
thereafter guarantee the performance of said Lease as so changed,
modified, altered or assigned.
This Guaranty shall not be released, modified or affected by failure
or delay on the part of Lessor to enforce any of the rights or remedies
of the Lessor under said Lease, whether pursuant to the terms thereof or
at law or in equity.
No notice of default need be given to Guarantors, it being
specifically agreed and understood that the guarantee of the undersigned
is a continuing guarantee under which Lessor may proceed forthwith and
immediately against Lessee or against Guarantors following any breach or
default by Lessee or for the enforcement of any rights which Lessor may
have as against Lessee pursuant to or under the terms of the within Lease
or at law or in equity.
Lessor shall have the right to proceed against Guarantors hereunder
following any breach or default by Lessee without first proceeding
against Lessee and without previous notice to or demand upon either
Lessee or Guarantors.
Guarantors hereby waive(s) notice of acceptance of this Guaranty. (b)
demand of payment, presentation and protest, (c) all right to assert or
plead any statute of limitations as to or relating to this Guaranty and
the Lease, (d) any right to require the Lessor to proceed against the
Lessee or any other Guarantor or any other person or entity liable to
Lessor. (e) any right to require Lessor to apply to any default any
security deposit or other security it may hold under the Lease. (f) any
right to require Lessor to proceed under any other remedy Lessor may have
before proceeding against Guarantors. (g) any right of subrogation.
Guarantors do hereby subrogate all existing or future indebtedness of
Lessee to Guarantors to the obligations owed to Lessor under the Lease
and this Guaranty.
Any married woman who signs this Guaranty expressly agrees that
recourse may be had against her separate property for all of her
obligations hereunder.
The obligations of Lessee under the Lease to execute and deliver
estoppel statements and financial statements, as therein provided, shall
be deemed to also require the Guarantors hereunder to do and provide the
same relative to Guarantors.
The term "Lessor" whenever hereinabove used refers to and means the
Lessor in the foregoing Lease specifically named and also any assignee of
said Lessor, whether by outright assignment or by assignment for
security, and also any successor to the interest of said Lessor or of any
assignee in such Lease or any part thereof, whether by assignment or
otherwise. So long as the Lessor's interest in or to the leased premises
or the rents, issues and profits therefrom, or in, to or under said
Lease, are subject to any mortgage or deed of trust or assignment for
security, no acquisition by Guarantors of the Lessor's interest in the
leased premises or under said Lease shall affect the continuing
obligation of Guarantors under this Guaranty which shall nevertheless
continue in full force and effect for the benefit of the mortgagee,
beneficiary, trustee or assignee under such mortgage, deed of trust or
assignment, of any purchase at sale by judicial foreclosure or under
private power of sale, and of the successors and assigns of any such
mortgagee, beneficiary, trustee, assignee or purchaser.
The term "Lessee" whenever hereinabove used refers to and means the
Lessee in the forgoing Lease specifically named and also any assignee or
sublessee of said Lease and also any successor to the interests of said
Lessee, assignee or sublessee of such Lease or any part thereof, whether
by assignment, sublease or otherwise.
In the event any action be brought by said Lessor against Guarantor
hereunder to enforce the obligation of Guarantors hereunder, the
unsuccessful party in such action shall pay to the prevailing party
therein a reasonable attorney's fee which shall be fixed by the court.
IF THIS FORM HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS FORM OR THE
TRANSACTION RELATING THERETO.
Executed at Santa Clara, CA /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
on March 1, 1996 By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
Address ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Scientific Custom Metal Products
International, Inc.
"GUARANTORS"