EXERCISE OF OPTION #1
----------------------
MARCH 19, 1997
This is the Option Renewal for the Lease by and between Central Valley Limited
Liability Company (Lessor) and DJ&J Software Corporation, a Washington
Corporation, dba Egghead (Lessee) for the premises located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
Lessee exercises its Option to Renew the Lease dated May 15, 1995, for the above
referenced premises. Pursuant to Addendum paragraph #39, this serves as
▇▇▇▇▇▇'s notice to exercise the Year 3 Option.
Rent shall increase to $35,200.00 per month on October 14, 1997, for 12 months
following the end of the current term.
Additional Insureds: Pursuant to paragraph 8(a) Lessee will name the following
as additional Insureds: Central Valley Limited Liability Company (Lessor), A & A
Properties, Inc. (Property Manager) and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Managing Member).
Lessee and Lessor shall remain obligated to all terms and conditions of the
Lease Agreement dated May 15, 1995.
LESSOR LESSEE
CENTRAL VALLEY LIMITED DJ&J SOFTWARE CORPORATION
LIABILITY COMPANY A Washington Corporation, dba
EGGHEAD
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------- ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:
Managing Member
Date: 4-14-97 Date: Mar 24 1997
----------------- ----------------------
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-MODIFIED NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. BASIS PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("Lease"), dated for reference purposes only,
May 15, 1995, is made by and between CENTRAL VALLEY LIMITED LIABILITY COMPANY
("Lessor") and DJ&J SOFTWARE CORPORATION, A Washington Corporation dba EGGHEAD
SOFTWARE ("Lessee"), (collectively the "Parties," or individually a "Party").
1.2(a) PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this
Lease, commonly known by the street address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, with
zip code 95828, as outlined on Exhibit A-2 attached hereto ("Premises"). The
"Building" is that certain building containing the Premises and generally
described as (describe briefly the nature of the Building): approximately
138,380 square feet of warehouse space being a portion of 428,000 square foot
concrete tilt up industrial building to include 7,000 square feet of office
(see Exhibit "A-2" attached). In addition to ▇▇▇▇▇▇'s rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive
rights to the Common Area (as defined in Paragraph 2.7 below) as hereinafter
specified, but shall not have any rights to the roof, exterior walls or
utility raceways of the Building or to any other buildings in the Industrial
Center. The Premises, the Building, the Common Areas, the land upon which
they are located, along with all other buildings and improvements thereon,
are herein collectively referred to as the "Industrial Center." (Also see
Paragraph 2.)
1.2(b) PARKING: 150 unreserved vehicles parking spaces ("Unreserved
Parking Spaces"); and zero reserved parking spaces ("Reserved Parking Spaces").
(Also see Paragraph 2.6)
1.3 TERM: Two (2) years and zero (0) months ("Original Term") commencing
October 1, 1995 ("Commencement Date") and ending September 30, 1997 ("Expiration
Date"). (Also see Paragraph 3.)
1.4 EARLY POSSESSION: See Paragraph 58 ("Early Possession Date"). (Also
see Paragraphs 3.2 3.3.)
1.5 BASE RENT: $ 34,194.00 per month ("Base Rent"), payable on the first
day of each month commencing ___________________ (Also see Paragraph 4.)
[x] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum 1.5, attached hereto.
1.6(a) BASE RENT PAID UPON EXECUTION: $ 34,194.00 as Base Rent for the
period first month's rent.
1.6(b) ▇▇▇▇▇▇'S SHARE OF COMMON AREA OPERATING EXPENSES: thirty two and
thirty-three tenth percent (32.33%) ("Lessee's Share") as determined by [x]
prorate square footage of the Premises as compared to the total square
footage of the Building or [] other criteria as described in Addendum __.
▇▇▇▇▇▇'S SHARE SHALL NOT EXCEED $.06 PER SQUARE FOOT, PER MONTH, FOR THE
FIRST YEAR OF THE LEASE TERM ONLY.
1.7 SECURITY DEPOSIT: $N/A ("Security Deposit"). (Also Sea Paragraph 5.)
1.8 PERMITTED USE: warehousing and distribution ("Permitted Use"). (Also
see Paragraph 6.)
1.9 INSURING PARTY. Lessor is the "Insuring Party." (Also see Paragraph
8.)
1.10(a) REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and consented to by the Parties (check applicable boxes):
[ ]___________________represents Lessor exclusively ("Lessor's Broker");
[ ]___________________represents Lessee exclusively ("Lessee's Broker"); or
[x] BUZZ ▇▇▇▇▇ REAL ESTATE represents both Lessor and Lessee ("Dual Agency").
(Also see Paragraph 15.)
1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease by both
Parties, Lessor shall pay to said ▇▇▇▇▇▇(s) jointly, or in such separate shares
as they may mutually designate in writing, a fee as set forth in a separate
written agreement between ▇▇▇▇▇▇ and said ▇▇▇▇▇▇(s) (or in the event there is no
separate written agreement between ▇▇▇▇▇▇ and said ▇▇▇▇▇▇(s), the sum of $ per
separate agreement) for brokerage services rendered by said ▇▇▇▇▇▇(s) in
connection with this transaction.
1.11 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 57, and Exhibits A through B, all of which
constitute a part of this Lease.
2. PREMISES, PARKING AND COMMON AREAS.
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 and/or Common Area Operating Expenses, is an
approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) 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, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems 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 that any Improvements (other than those constructed by Lessee or at
▇▇▇▇▇▇'s direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement
Date. Lessor further warrants to Lessee that Lessor has no knowledge of any
claim having been made by any governmental agency that a violation or
violations of applicable building codes, regulations, or ordinances exist
with regard to the Premises as of the Commencement Date. Said warranties
shall not apply to any Alterations or Utility Installations (defined in
Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not
comply with said warranties, Lessor shall, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee given within
six (6) months following the Commencement Date and setting forth with
specificity the nature and extent of such non-compliance, take such action,
at Lessor's expense, as may be reasonable or appropriate to rectify the
non-compliance. Lessor makes no warranty that the Permitted Use in Paragraph
1.8 is permitted for the Premises under Applicable Laws (as defined in
Paragraph 2-4).
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) 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, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and any
covenants or restrictions of record (collectively, "APPLICABLE LAWS") and the
present and future suitability of the Premises for ▇▇▇▇▇▇'s intended use;
(b) that ▇▇▇▇▇▇ has made such investigation as it deems necessary with reference
to such matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to ▇▇▇▇▇▇'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 said matters other than as set forth in this Lease. SEE ADDENDUM
PARAGRAPH 64.
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. ▇▇▇▇▇▇ was the owner or occupant of the Premises. In
such event, Lessee shall, at ▇▇▇▇▇▇'s sole cost and expense, correct any
non-compliance of the Premises with said warranties.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "PERMITTED SIZE
VEHICLES." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by ▇▇▇▇▇▇ in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
(c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.
2.7 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Industrial Center and Interior utility raceways within the Premises that
are provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other lessees of the Industrial Center
and their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas. The
Industrial Center is defined as the real property described in Exh. "A-1".
2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Lessor under the terms hereof or under the terms of any rules and regulations
or restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas bE deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Lessor or ▇▇▇▇▇▇'s designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.
2.9 COMMON AREAS - CHANGES. Lessor shall have the right, in ▇▇▇▇▇▇'s
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To add additional buildings and improvements to the Common Areas;
(d) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(e) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Industrial Center as Lessor may, in
the exercise of sound business judgement, deem to be appropriate.
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 an Early Possession Date is specified in
Paragraph 1.4 and if Lessee totally or partially occupies the Premises after the
Early Possession Date but prior to the Commencement Date, the obligation to pay
Base Rent shall be abated for the period of such early occupancy. All other
terms of this Lease, however, (including but not limited to the obligations
carry the insurance required by Paragraph 8) 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 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 ▇▇▇▇▇▇ 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 after
the end of said sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, ▇▇▇▇▇▇'s right to cancel this Lease hereunder shall
terminate and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the Original 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 the obligation to pay
Base Rent, if any, that Lessee would otherwise hove enjoyed shall run from the
date of delivery of possession and continue for a period equal to the period
during which the Lessee would have otherwise enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of ▇▇▇▇▇▇.
4. RENT.
4.1 BASE RENT. Lessee shall pay Base Rent and other rent or charges, as
provided herein, to 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 full month shall be prorated based upon the
actual number of days of the 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.
4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, ▇▇▇▇▇▇'s Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of
this Lease, as all costs incurred by Lessor rotating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, of the following:
(aa) The Common Areas, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area
lighting facilities, fences and gates, elevators and roof, and pain of exterior
wall.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common areas.
(iii) Trash disposal, property management and security services
and the costs of any environmental inspections.
(iv) Real Property Taxes (as defined in Paragraph 10.2) to be
paid by Lessor for the Building and the Common Areas under Paragraph 10 hereof.
(v) The cost of the premiums for the insurance policies
maintained by Lessor under Paragraph 8 hereof.
(vi) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(vii) Any other services to be provided by Lessor that are stated
elsewhere in this Lease to be a Common Area Operating Expense.
(b) Any Common Area Operating Expenses and Real Property Taxes that
are specifically attributable to the Building or to any other building in the
Industrial Center or to the operation, repair and maintenance thereof, shall be
allocated entirely to the Building or to such other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.
(c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
(d) ▇▇▇▇▇▇'s Share of Common Area Operating Expenses shall be payable
by Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time of ▇▇▇▇▇▇'s Share of annual
Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lessee
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver
to Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing ▇▇▇▇▇▇'s Share of the actual Common Area
Operating Expenses incurred during the preceding year. If ▇▇▇▇▇▇'s payments
under this Paragraph 4.2(d) during said preceding year exceed ▇▇▇▇▇▇'s Share as
indicated on said statement, Lessor shall be credited the amount of such over-
** which painting, and parking lot striping shall not be done more
often than once every five years.
payment against ▇▇▇▇▇▇'s Share of Common Area Operating Expenses next becoming
due. If ▇▇▇▇▇▇'s payments under this Paragraph 4.2(d) during said preceding
year were less than ▇▇▇▇▇▇'s Share as indicated on said statement, Lessee shall
pay to Lessor the amount of the deficiency within ten (10) days after delivery
by Lessor to Lessee of said statement.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon ▇▇▇▇▇▇'s execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for ▇▇▇▇▇▇'s
faithful performance of ▇▇▇▇▇▇'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 thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefore
deposit monies 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 monies with Lessor as an addition to the Security Deposit so that the
total amount of the Security Deposit shall at all times bear the same proportion
to the then current Base Rent as the initial Security Deposit bears to the
initial Base Rent set forth in Paragraph 1.5. 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 ▇▇▇▇▇▇ has vacated the Premises, return to Lessee (or, at Lessor's option,
to the last assignee, if any, of ▇▇▇▇▇▇'s Interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by ▇▇▇▇▇▇, 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 monies to be paid by Lessee under this Lease.
6. USE
6.1 PERMITTED USE.
(a) Lessee shall use and occupy the Premises only for the Permitted
Use set forth in Paragraph 1.8, or any legal use which is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the use of
the Premises in a manner that is unlawful, creates waste or a nuisance, or that
disturbs owners and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by ▇▇▇▇▇▇, ▇▇▇▇▇▇'s assignees or subtenants, and
by prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair
the structural integrity of the improvements on the Premises or in the Building
or the mechanical or electrical systems therein, does not conflict with uses by
other lessees, is not significantly more burdensome to the Premises or the
Building and the Improvements thereon, and is otherwise permissable pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall
within live (5) business days after such request 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 potential 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 or by-products thereof. Lessee
shall not engage in any activity in 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 Requirements (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, and (iii) the presence in, on or about the Premises
of a Hazardous Substance with respect to which any Applicable Laws require
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, and in compliance with all Applicable Requirements,
use any ordinary and customary materials reasonably required to be used by
Lessee in the normal course of the Permitted Use, so long as such use is not
a Reportable Use and does not expose the Premises or neighboring properties
to any meaningful risk or 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 any Reportable Use of any Hazardous Substance
by 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 therefor, including but not limited to the installation (and, at
Lessor's option, removal on or before Lease expiration or earlier
termination) of reasonably necessary protective modifications to the Premises
(such as concrete encasements).
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or the Building, other than as previously consented to by
Lessor, Lessee shall immediately give Lessor written notice thereof, together
with 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 concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on under or about the Premises
(including, without limitation, through the plumbing or sanitary sewer system).
(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 danger, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee or by anyone under ▇▇▇▇▇▇'s control.
Lessee's obligations under this Paragraph 6.2(c) shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by ▇▇▇▇▇▇, and the cost of investigation
(including consultants' and attorneys' 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, unless specifically so agreed by Lessor in writing at the
time of such agreement. See Addendum
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"APPLICABE REQUIREMENTS," which termis used in this Lease to mean all laws,
rules requlations, ordinances, directives, convenants, easements and
restreictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, 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 (iii) the use, generation,
manufacture, production, installation, maintenance, removal, transportation,
storage, spill, or release of any Hazardous Substance), now in effect or
which may hereafter come into effect. 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 Requirements 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 Requirements.
6.4 INSPECTION; COMPLIANCE WITH LAW, Lessor, Lessor's Agents, employees.
Contractors and Designated Representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lenders") 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 Requirements (as defined in Paragraph 8.3), and Lessor shall be
entitled to employ experts and/or consultants in connection therewith to
advise Lessor with respect to ▇▇▇▇▇▇'s activities, including but not limited
to Lessee's installation, operation, use, monitoring, maintenance, or removal
of any Hazardous Substance 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 by Lessee or a violation of Applicable
Requirements or a contamination, caused or materially contributed to by
Lessee, is found to exist or to 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 such case, ▇▇▇▇▇▇ shall
upon request reimburse Lessor or ▇▇▇▇▇▇'s Lendor, 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 Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or 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 (whether or not such portion of
the Premises requiring repair, 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 specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights, but not
excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below. 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.
(b) Lessee shall, at ▇▇▇▇▇▇'s sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance for
and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilation system
for the Premises. However, Lessor reserves the right, upon notice to ▇▇▇▇▇▇, to
procure and maintain the contract for the heating, air conditioning and
ventilating systems, and if Lessor so selects, ▇▇▇▇▇▇ shall reimburse Lessor,
upon demand, for the cost thereof.
(c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on ▇▇▇▇▇▇'s behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs
2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and Building
Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order,
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, exterior roof, fire sprinkler and/or standpipe and
hose (if located in the Common Areas) or other automatic fire extinguishing
system including fire alarm and/or smoke
-3-
detection systems and equipment, fire hydrants, parking lots, walkways,
parkways, driveways, landscaping, fences, signs and utility systems
serving the Common Areas and all parts thereof, as well as providing
the services for which there is a Common Area Operating Expense
pursuant to Paragraph 4.2. Lessor shall not be obligated to paint
the exterior or interior surfaces of exterior walls nor shall Lessor
be obligated to maintain, repair or replace windows, doors or plate
glass of the Premises. Lessee expressly waives the benefit of any
statute now or hereafter in effect which would otherwise afford
Lessee the right to terminate this Lease because of Lessor's failure
to keep the Building, Industrial Center or Common Areas in good
order, condition and repair.
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "Utility
Installations" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
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 which can be
removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the Improvements on the Premises which are
provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures. "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 pursuant to Paragraph 7.4(a).
Lessee shall not make nor cause to be made any Alterations or Utility
Installations in, on, under or about the Premises without ▇▇▇▇▇▇'s prior
written consent. Lessee may, however, make non-structural Utility
Installations to the Interior of the Premises (excluding the roof) without
Lessor's consent but upon notice to Lessor, so long as they are not visible
from the outside of the Premises, do not involve puncturing, relocating or
removing the roof or any existing walls, or changing or interfering with the
fire sprinkler or fire detection systems and the cumulative cost thereof
during the term of this Lease as extended does not exceed $2,500.00.
(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 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 be in compliance with all Applicable Requirements. Lessee
shall promptly upon completion thereof furnish Lessor with as-built plans and
specifications therefor.
(c) LIEN PROTECTION. 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 mechanic's 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, 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 ▇▇▇▇▇▇ 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
attorneys' 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) 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 that their installation may have been consented to by ▇▇▇▇▇▇.
Lessor may require the removal at any time of all or any part of any
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, clean and free of debris and in good operating order,
condition and state of repair, ordinary wear and tear and damage by insured
casualty 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. 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 Lessee-Owned Alterations and 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
Requirements and/or good practice. Lessee's Trade Fixtures shall remain the
property of ▇▇▇▇▇▇ 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 OF PREMIUMS. The cost of the premiums for the insurance
policies maintained by Lessor under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease
shall be prorated to coincide with the corresponding Commencement Date or
Expiration Date. All tenant insurance may be under a blanket policy.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY ▇▇▇▇▇▇. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of
Insurance protecting ▇▇▇▇▇▇, Lessor and any Lender(s) whose names have been
provided to Lessee in writing (as additional insureds) 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
$2,000,000.00 per occurrence with an "Additional Insured--Managers or Lessors
of Premises" endorsement and contain the "Amendment of the Pollution
Exclusion" endorsement 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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ 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 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. Lessor 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 any Lender(s), insuring against
loss or damage to the Premises. Such insurance shall be for full replacement
cost, as the same shall exist from time to time, or the amount required by
any Lender(s), 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. Lessee-Owned Alterations and Utility Installations, Trade
Fixtures and ▇▇▇▇▇▇'s personal property shall be insured by Lessee pursuant
to Paragraph 8.4 If the coverage is available and commercially appropriate,
Lessor's policy or policies shall insure against all risks of direct physical
loss or damage (including the perils of flood and/or earthquake), 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
Building 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
loss, but not including plate glass insurance. Said policy or policies shall
also contain an agreed valuation provision in lieu of any co-insurance
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.
(b) RENTAL VALUE. Lessor shall also 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 any Lender(s), insuring the loss of the full
rental and other charges payable by all lessees of the Building to Lessor for
one year (including all Real Property Taxes, Insurance costs, all Common Area
Operating Expenses and any scheduled rental increases). Said Insurance may
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
co-insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected rental income, Real Property Taxes, insurance premium
costs and other expenses, if any, otherwise payable, for the next 12-month
period. Common Area Operating Expenses shall include any deductible amount in
the event of such loss.
(c) ADJACENT PREMISES. Lessee shall pay for any increase in
the premiums for the property insurance of the Building and for the Common
Areas or other buildings in the Industrial Center if said increase is caused
by ▇▇▇▇▇▇'s acts, omissions, use or occupancy of the Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring
Party, 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.
8.4 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, 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
-4-
this Paragraph 8. Lessee shall cause to be delivered to Lessor, within seven
(7) days after the earlier of the Early Possession Date or the Commencement
Date, certified copies of, or certificates evidencing the existence and
amounts of, the insurance required under Paragraph 8.2(b) and 8.4. No such
policy shall be cancelable 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.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ 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 or damage to their 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 as required, or by any
deductibles applicable thereto. Lessor and Lessee agree to have their
respective insurance companies issuing property damage insurance waive any
right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
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, loss of permits, reasonable
attorneys' and consultants' fees, expenses and/or liabilities arising out of,
involving, or in connection with, the occupancy of the Premises by ▇▇▇▇▇▇,
the conduct of ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'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. In case any action or
proceeding be brought against Lessor by reason of any of the foregoing
matters. Lessee upon notice from ▇▇▇▇▇▇ shall defend the same at ▇▇▇▇▇▇'s
expense by counsel reasonably satisfactory to Lessor and ▇▇▇▇▇▇ 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. Except for Lessor's negligence
and/or breach of express warranties Lessor shall not be liable for injury or
damage to the person of 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 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, 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 lessee of Lessor nor from the failure by
Lessor to enforce the provisions of any other lease in the Industrial Center.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall
under no circumstances be liable for injury to ▇▇▇▇▇▇'s business or for any
loss of income or profit therefrom. Except as stated otherwise in this Lease,
▇▇▇▇▇▇ indemnifies Lessee for ▇▇▇▇▇▇'s obligations under this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" 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 less than fifty percent
(50%) of the then Replacement Cost (as defined in Paragraph 9.1(d)) of the
Premises (excluding Lessee-Owned Alterations and Utility installations and
Trade Fixtures) immediately prior to such damage or destruction.
(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 fifty
percent (50%) or more of the then Replacement Cost of the Premises (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures)
immediately prior to such damage or destruction. In addition, damage or
destruction to the Building, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building, the cost of
which damage or destruction is fifty percent (50%) or more of the then
Replacement Cost (excluding Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building) of the
Building shall, at the option of Lessor, be deemed to be Premises Total
Destruction.
(c) "INSURED LOSS" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 6.3(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 6.2(a), in, on, or under the
Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial Damage
that is an insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessees' Trade Fixtures or Lessee-Owned
Alterations and Utility Installations) as soon as reasonably possible but not
more than 120 days and this Lease shall continue in full force and effect.
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 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), 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 ▇▇▇▇▇▇ of knowledge of the occurrence of such damage of ▇▇▇▇▇▇'s
desire to terminate this Lease as of the date sixty (60) days following the
date of such notice. In the event Lessor elects to give such notice of
▇▇▇▇▇▇'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 ▇▇▇▇▇▇'s commitment to pay for the repair of such damage totally
at ▇▇▇▇▇▇'s expense and without reimbursement from Lessor. Lessee shall
provide Lessor with the required funds or satisfactory assurance thereof
within thirty (30) days following such commitment from Lessee. 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 after 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 Lessors's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
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 ▇▇▇▇▇▇, Lessor shall have the right to recover ▇▇▇▇▇▇'s damages
from ▇▇▇▇▇▇ except as released and waived in Paragraph 9.7.
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 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 (a) exercising such option, and (b)
providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs on or before the earlier of (i)
the date which is ten (10) days after ▇▇▇▇▇▇'s receipt of Lessor's written
notice purporting to terminate this Lease, or (ii) the day prior to the date
upon which such option expires. If Lessee duly exercises such option during
such 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 such period, then this Lease shall
terminate as of the date set forth in the first sentence of this Paragraph
9.5.
9.6 ABATEMENT OF RENT; ▇▇▇▇▇▇'S REMEDIES.
(a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base
Rent, Common Area Operating Expenses and other charges, if any, payable by
Lessee hereunder for the period during which such damage or condition, its
repair, remediation or restoration continues, shall be abated in proportion
to the degree to which ▇▇▇▇▇▇'s use of the Premises is impaired, but not in
excess of proceeds from insurance required to be carried under Paragraph
8.3(b). Except for abatement of Base Rent, Common Area Operating Expenses and
other charges, if any, as aforesaid, all other obligations of Lessee
hereunder shall be performed by ▇▇▇▇▇▇, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair, remediation 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 (30) 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
(20) 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 (20) 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 (20) days
after the receipt of such notice, this Lease shall continue in full force and
effect. "Commence" as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first.
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
Requirements and this Lease shall continue in full force and effect, but
subject
-5-
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13). Lessor may at
Lessors'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.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance
payment made by Lessee to Lessor and so much of ▇▇▇▇▇▇'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 WAIVER OF STATUTES. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby
waived the provisions of any present or future statute to the extent it is
inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes on , or
before their due date, as defined in Paragraph 10.2, applicable to the
Industrial Center, and except as otherwise provided in Paragraph 10.3, any
such amounts shall be included in the calculation of Common Area Operating
Expenses in accordance with the provisions of Paragraph 4.2.
10.2 REAL PROPERTY TAX DEFINITION. 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,
excise, franchise, business and occupation, personal income or estate taxes)
imposed upon the Industrial Center 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 Industrial Center or any portion thereof, 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 by not limited to a change in the ownership of the
Industrial Center 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. In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year
based upon the number of days which such calendar year and tax year have in
common.
10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such
other lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however,
pay to Lessor at the time Common Area Operating Expenses are payable under
Paragraph 4.2, the entirety of any increase in Real Property Taxes if
assessed solely by reason of Alterations, Trade Fixtures or Utility
Installations placed upon the Premises by Lessee or at ▇▇▇▇▇▇'s request.
10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of
the Real Property Taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5 LESSEE'S PROPERTY TAXES. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee contained in the Premises or stored within the Industrial
Center. When possible, Lessee shall cause its Lessee-Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property
of Lessor. If any of ▇▇▇▇▇▇'s said property shall be assessed with ▇▇▇▇▇▇'s
real property, Lessee shall pay Lessor the taxes attributable to ▇▇▇▇▇▇'s
property within the (10) days after receipt of a written statement setting
forth the taxes applicable to ▇▇▇▇▇▇'s property.
11. UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity,
telephone, security, gas and cleaning of the Premises, together with any
taxes thereon. If any such utilities or services are not separately metered
to the Premises or separately billed to the Premises, Lessee shall pay to
Lessor a reasonable proportion to be determined by Lessor of all such
charges jointly metered or billed with other premises in the Building, in the
manner and within the time periods set forth in Paragraph 4.2(d).
12. ASSIGNMENT AND SUBLETTING.
12.1 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING. SEE
ADDENDUM
(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, nor (iii) after 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.
-6-
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" by ▇▇▇▇▇▇ is
defined as a failure by ▇▇▇▇▇▇ to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"BREACH" by ▇▇▇▇▇▇ 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, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:
(a) 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, ▇▇▇▇▇▇'s Share of Common
Area Operating Expenses, or any other monetary payment required to be made by
Lessee hereunder as and when due, the failure by Lessee to provide Lessor
with reasonable evidence of insurance of 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 10 days following written notice thereof by or on behalf of
Lessor to ▇▇▇▇▇▇.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence of (i)
compliance with Applicable Requirements per Paragraph 6.3, (ii) the
inspection, maintenance and service contracts required under Paragraph
7.1(b), (iii) the rescission of an unauthorized assignment or subletting per
Paragraph 12.1, (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 ▇▇▇▇▇▇'s obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements).
(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 ▇▇▇▇▇▇, other than
those described in Subparagraphs 13.1(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 ▇▇▇▇▇▇'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
▇▇▇▇▇▇ of any general arrangement or assignment for the benefit of creditors;
(ii) ▇▇▇▇▇▇'s becoming a "debtor" as defined in 11 U.S. Code Section 101 or
any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially all
of Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where possession is not restored to Lessee within thirty (30) days; or
(iv) the attachment, execution or other judicial seizure of substantially all
of ▇▇▇▇▇▇'s assets located at the Premises or of ▇▇▇▇▇▇'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 13.1(e) is
contrary to any applicable law, such provision shall be of no force or
effect, and shall not affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement of Lessee or
of any Guarantor, given to Lessor by Lessee or any Guarantor, was materially
false.
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 own 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 ▇▇▇▇▇▇ (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 be reason of such Breach, Lessor
may:
(a) Terminate ▇▇▇▇▇▇'s right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate
and ▇▇▇▇▇▇ 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 any leasing commission paid by Lessor in connection
with this Lease 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
immediately preceding sentence shall be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco or the
Federal Reserve Bank District in which the Premises are located at the time
of award plus one percent (1%). Efforts by Lessor to mitigate damages caused
by ▇▇▇▇▇▇'s Default or Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph 13.2. 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 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 Subparagraph 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 the Lessee under any statute authorizing the forfeiture
of leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by Subparagraph 13.1(b),(c) or (d). In such
case, the applicable grace period under the unlawful detainer statue shall
run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two (2) 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 ▇▇▇▇▇▇'s right to possession in effect
(in California under California Civil Code Section 1951.4) after ▇▇▇▇▇▇'s
Breach and recover the rent as it becomes due, provided ▇▇▇▇▇▇ has the right
to sublet or assign, subject only to reasonable limitations. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ agree that the limitations on assignment and subletting in this Lease
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 this 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.
Initials: [ILLEGIBLE]
------------
/s/ JC
------------
-7-
(d) The expiration or termination of this Lease and/or the
termination of ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'s entering into this Lease, all of
which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS",
shall be deemed conditioned upon ▇▇▇▇▇▇'s full and faithful performance of
all of the terms, covenants and conditions of this Lease to be performed or
observed by ▇▇▇▇▇▇ during the term hereof as the same may be extended. Upon
the occurrence of a Breach (as defined in Paragraph 13.1) of this Lease by
Lessee, 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
▇▇▇▇▇▇. The acceptance by Lessor of rent or the cure of the Breach which
initiated the operation of this Paragraph 13.3 shall not be deemed a waiver
by Lessor of the provisions of this Paragraph 13.3 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 ▇▇▇▇▇▇
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 deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within fifteen (15) 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
▇▇▇▇▇▇. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of ▇▇▇▇▇▇'s Default or Breach with respect to such overdue amount, nor
prevent ▇▇▇▇▇▇ from exercising any of the other rights and remedies granted
hereunder. Rent and other charges may be paid by electronic funds transfer.
13.5 BREACH BY ▇▇▇▇▇▇. 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 ▇▇▇▇▇▇. 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 any Lender(s) whose name and address shall have been
furnished to 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 portion of the Common Areas designated for Lessee's parking, 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
▇▇▇▇▇▇ 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 Premises. No reduction of Base Rent shall occur if the
condemnation does not apply to any portion of the Premises. 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 of 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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'s Share of the legal
and other expenses incurred by ▇▇▇▇▇▇ in the condemnation matter, repair any
damage to the Premises caused by such condemnation authority. Lessee shall be
responsible for the payment of any amount in excess of such net severance
damages required to complete such repair.
15. BROKERS' FEES.
15.1 PROCURING CAUSE. The Broker(s) named in Paragraph 1.10 is/are the
procuring cause of this Lease.
15.2 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of ▇▇▇▇▇▇'s
interest in this Lease, whether such transfer is by agreement or by operation of
law, shall be deemed to have assumed ▇▇▇▇▇▇'s obligation under this Paragraph
15. Each Broker shall be an intended third party beneficiary of the provisions
of Paragraph 1.10 and of this Paragraph 15 to the extent of its interest in any
commission arising from this Lease and may enforce that right directly against
▇▇▇▇▇▇ and its successors.
15.3 REPRESENTATIONS AND WARRANTIES. 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 as named in Paragraph 1.10(a) 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 ▇▇▇▇▇▇(s) is entitled to any commission or finder's fee in
connection with said transaction. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ 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, and/or attorneys' fees
reasonably incurred with respect thereto.
16. TENANCY AND FINANCIAL STATEMENTS.
16.1 TENANCY STATEMENT. 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 a 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 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor a copy
of Tenant's most recent annual report and 10-Q. 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. In the event
of a transfer of ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, 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 ten (10)
days following the date on which it was due, shall bear interest from the
date due at 10% per annum but not exceeding the maximum rate allowed by law,
in addition to the potential 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. Each Broker shall be an intended
third party beneficiary of the provisions of this Paragraph 22.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in 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,
during normal business hours, 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 be written
notice to the other specify a different address for notice purposes. A copy
of all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to ▇▇▇▇▇▇.
23.2 DATE OF NOTICE. 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
-8-
delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If notice is received on
a Saturday or a Sunday or a 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 any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such 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 be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such
consent. Regardless of ▇▇▇▇▇▇'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 Default or Breach by Lessee of any provision hereof. 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. In the event that ▇▇▇▇▇▇ holds over in violation of this
Paragraph 26 then the Base Rent payable from and after the time of the
expiration or earlier termination of this Lease shall be increased to 125% of
the Base Rent applicable during the month immediately preceding such
expiration or earlier termination. Nothing contained herein shall be
construed as a consent by Lessor to any holding over by ▇▇▇▇▇▇.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. 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.
▇▇▇▇▇▇ 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
pursuant to Paragraph 13.5. 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, ▇▇▇▇▇▇ 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 month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this lease, ▇▇▇▇▇▇'s subordination of this
Lease shall be subject to receiving assurance (a "non-disturbance agreement")
from the Lender that ▇▇▇▇▇▇'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 Premises, Lessee and ▇▇▇▇▇▇ 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) in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorneys' 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 defense. The attorneys' fee award shall not be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys' fees reasonably incurred. Broker(s) shall be
intended third party beneficiaries of this Paragraph 31.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and ▇▇▇▇▇▇'s agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times upon prior notice 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, 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 eighty
(180) 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 ▇▇▇▇▇▇'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 exterior of the Premises
or the Building, except that Lessee may, with ▇▇▇▇▇▇'s prior written consent,
install (but not on the roof) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. 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 of the Building, and the right to install
advertising signs on the Building, including the roof, which do not
unreasonably interfere with the conduct of ▇▇▇▇▇▇'s business; Lessor shall be
entitled to all revenues from such advertising signs.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by ▇▇▇▇▇▇, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for
Breach by Lessee, shall automatically terminate any sublease or lesser 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
by not limited to architects', attorneys', engineers' and 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 by
not limited to consents to an assignment a subletting or the presence or use
of a Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of
an Invoice and supporting documentation therefor. ▇▇▇▇▇▇'s consent to any
act, assignment of this Lease or subletting of the Premises by Lessee shall
not constitute an acknowledgment 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.
38. QUIET POSSESSION. Upon payment by ▇▇▇▇▇▇ of the rent for the Premises
and the performance of all of the covenants, conditions and
provisions on ▇▇▇▇▇▇'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.
-9-
39. OPTIONS.
39.1 DEFINITION. As used in this Lease, 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.
39.3 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 separate Defaults
under Paragraph 13.1 during the twelve (12) month period immediately
preceding the exercise of the Option, whether or not the Defaults are cured.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of ▇▇▇▇▇▇'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 separate Defaults 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.
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 the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way,
utility raceways, and dedications that Lessor deems necessary, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights of way, utility raceways, dedications, maps and restrictions do not
reasonably interfere with the use of the Premises by ▇▇▇▇▇▇. ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇,
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 either Lessor or Lessee or ▇▇▇▇▇▇'s
agent or ▇▇▇▇▇▇'s agent and submission of same to Lessee or Lessor shall not
be deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered 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.
-10-
▇▇▇▇▇▇ AND ▇▇▇▇▇▇ 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 YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, 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 ADVISE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS 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 and on the
dates specified above their respective signatures.
Executed at: Sacramento CA Executed at: Issaquah, WA
---------------------- ------------------------
on: July 6, 1995 on: June 26, 1995
------------------------------- ---------------------------------
By LESSOR: By LESSEE:
CENTRAL VALLEY LIMITED LIABILITY COMPANY DJ&J SOFTWARE CORPORATION, A Washington Corporation, dba
EGGHEAD SOFTWARE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- ---------------------------------
Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------- -----------------------
Title: Title: President/CEO
---------------------------- ------------------------------
By: By:
------------------------------- ---------------------------------
Name Printed: Name Printed:
--------------------- -----------------------
Title: Title:
---------------------------- ------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Address: 22011 S.E. 51st St. Box 7004, Issaquah, WA 98027
--------------------------------------- -------------------------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------ --------------------------
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------ --------------------------
BROKER: BROKER:
Executed at: Executed at:
---------------------- ------------------------
on: on:
------------------------------- ---------------------------------
By: By:
------------------------------- ---------------------------------
Name Printed: Name Printed:
--------------------- -----------------------
Title: Title:
---------------------------- ------------------------------
Address: Address:
-------------------------- ----------------------------
Telephone: ( ) Telephone: ( )
------------------------ --------------------------
Facsimile: ( ) Facsimile: ( )
------------------------ --------------------------
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing
the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 345 So.
▇▇▇▇▇▇▇▇ St., M-▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (▇▇▇)▇▇▇-▇▇▇▇.
-11-
ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT LEASE-NET DATED MAY 15,
1995 BY AND BETWEEN CENTRAL VALLEY LIMITED LIABILITY COMPANY (LESSOR) AND DJ&J
SOFTWARE CORPORATION DBA EGGHEAD SOFTWARE (LESSEE).
1.5 BASE RENT (CONT.) MONTHLY
Years 1 - 2 $34,194.00 per month
6.2(d). HAZARDOUS SUBSTANCES (CONT.) Landlord hereby warrants to Tenant
that the Premises do not contain any asbestos. Landlord also represents and
warrants that it has not yet received notification of any kind from any
governmental agency regarding actual, potential, or threatened contamination
of the Property by Hazardous Substances. ▇▇▇▇▇▇▇▇ agrees to indemnify and
hold Tenant harmless from any and all costs of any governmental required
remedial action or cleanup suffered or incurred by Tenant arising out of or
related to any use of the Premises, building or Property or presence of
asbestos or Hazardous Substances in any such areas or portion thereof
occurring prior to the Lease Commencement Date.
12.2(a). ASSIGNMENT (CONT.) Notwithstanding any contrary provision of this
Paragraph 12.2 (a), Lessor shall release Lessee from its obligations under the
Lease of the assignee's net worth (or that of its parent company, to the extent
such parent shall guaranty assignee's obligations under this Lease) is in excess
of One Hundred Million Dollars ($100,000,000.00) as evidenced by annual
financial statements provided to Lessor by assignee's accountants or by reports
published in accordance with the Securities and Exchange Commission's reporting
requirements for publicly traded companies, as computed in accordance with
generally accepted accounting principles.
39. OPTIONS (CONT). Lessee is granted eight (8) one (1) year options. Lessee
shall exercise "Options" for years 3-10 by notifying Lessor in writing 180 days
prior to the commencement of said Option Term.
Option (Year 3) $35,220.00 per month
Option (Year 4) $36,277.00 per month
Option (Year 5) $37,365.00 per month
Option (Year 6) $38,299.00 per month
Option (Year 7) $39,256.00 per month
Option (Year 8) $40,237.00 per month
Option (Year 9) $41,243.00 per month
Option (Year 10) $42,274.00 per month
49. MOVE OUT PENALTY. If ▇▇▇▇▇▇ elects to vacate the Premises prior to Year 6,
▇▇▇▇▇▇ agrees to pay the following penalty in cash within 90 days prior to
Lessee vacating the Premises:
The office improvement cost is hereby established at $375,000.00. The cost of
the move out penalty will equal one-half (1/2) the remaining unamortized balance
of the office improvement cost. The original amount shall be amortized at 9%
per annum over 8 years. If ▇▇▇▇▇▇ remains in the Premises for five (5) years,
there shall be no move out penalty.
Example: Penalty after 2 years: 81.3% of the original balance divided by 2 =
move out penalty cost.
Penalty after 3 years: 70.6% of the original balance divided by 2 =
move out penalty cost.
Penalty after 4 years: 58.9% of the original balance divided by 2 =
move out penalty cost.
THE EXACT PENALTY SHALL BE COMPUTED AS OF THE ACTUAL MOVE-OUT DATE.
50. RIGHT OF FIRST REFUSAL. Lessor hereby grants Lessee a one (1) time first
right of refusal to lease the adjacent 19,720 square foot bay, shown on Exhibit
"A" as "1st Right Area". Lessee shall pay to Lessor $8,000.00 in advance to
move the demising wall. ▇▇▇▇▇▇'s exercise of the first right of refusal shall
be effective provided:
A. Lessee is not in default under any of the conditions and provisions of this
Lease.
▇. ▇▇▇▇▇▇ agrees to lease adjacent bay in its entirety. Lessor shall not be
required to make any improvements other than moving the demising wall.
C. Upon written notification from Lessor to Lessee of a bonafide offer to
lease adjacent space, Lessee shall have five (5) working days to exercise right
of first refusal and execute a Lease Amendment.
51. SIZE REDUCTION. Only at the end of the two (2) year term, Lessee may
reduce size of warehouse by 1 or 2 bays of 19,720 square feet each, shown on
Exhibit "A" as "Reduction Area". Lessee may not reduce total space to less than
98,940 square feet. ▇▇▇▇▇▇ agrees to pay $8,000.00 to move demising wall if
Lessee elects to reduce space. The monthly rent shall be reduced $4,338.00 per
bay.
52. ADDITIONAL IMPROVEMENTS. In the event Lessee requests additional
improvements or changes in the above Lessee Improvements listed in Exhibit
"B: attached, Lessor shall respond to such requests with written change orders.
All parties shall sign each change order prior to construction of such changes.
Lessor shall bill Lessee upon completion of each approved change order. Lessee
shall pay the total costs of all change orders in cash within 10 days of Lease
Commencement.
ADDENDUM TO STANDARD INDUSTRIAL COMMERCIAL MULTI-TENANT LEASE-NET DATED MAY 15,
1995 BY AND BETWEEN CENTRAL VALLEY, A LIMITED LIABILITY COMPANY (LESSOR) AND
DJ&J SOFTWARE CORPORATION DBA EGGHEAD SOFTWARE (LESSEE).
PAGE TWO
53. FLOOD: Lessee expressly acknowledges and assumes the risk that the
Premises and improvements may be subject to flooding. Lessee unconditionally
waives any flood-related property damage claim asserting liability on the
part of the Lessor. ▇▇▇▇▇▇'s predecessors and successors-in-interest, the
City of Sacramento or its officers, agents, or employees premised on the
issuance of a permit for construction of the improvements, whether or not the
issuance of this permit is due to the negligence of Lessor, ▇▇▇▇▇▇'s
predecessors or successors, the City or its officers, agents or employees.
54. ADA: Lessor warrants that any new construction by Lessor pursuant to
this Lease shall be in conformity with the building plans and permits, and
shall comply with current interpretations of the Americans With Disabilities
Act of 1990 ("ADA") regarding the type of building and/or tenant improvements
constructed by Lessor. However, if any governmental authority should require
any additional improvements, permits or approvals, under ADA or otherwise,
due to Lessee's particular use, or Lessee's employees, customers, or
invitees, other than those which are stated in this Lease, and other than
requirements generally for buildings of this type, including without
limitation additional fire protection equipment or flow capacity, use
permits, or zoning variances, such improvements or changes to the permitted
uses shall be made at Lessee's sole expense.
55. FIRE EXTINGUISHERS: Lessee responsible for supplying fire extinguishers
(2A10:BC) as required per code within 75 feet of any door in space.
56. FORKLIFT RESTRICTIONS: Asphaltic cement can not withstand non-inflatable
forklift tires. In the event the asphalt is damaged by ▇▇▇▇▇▇'s use of a
forklift with non-inflatable tires, it will be Lessee's obligation to repair the
damage asphaltic cement at Lessee's sole expense.
57. LESSEE'S FENCE: Subject to applicable governmental regulation, Lessee may,
at its sole cost, construct additional fencing on the east side of the building,
north of the demising wall, to restrict access to Lessee's parking and dock
areas.
58. EARLY POSSESSION: Lessee may have early possession on the earlier to occur
of August 1, 1995 or after completion of the demising wall, which shall be at
least 30 days prior to completion of all improvements.
59. LESSOR'S FENCE: Lessor may, at Lessor's sole cost, erect a fence or other
barrier 75' south of the northwest corner of the building preventing Lessee from
access and parking on the entire west side of the building.
EXHIBIT "A-1"
CERTIFICATE OF COMPLIANCE
FOR
"PARCEL A" IN THAT CERTAIN CERTIFICATE OF COMPLIANCE
RECORDED IN BOOK 83-03-23 PAGE NO 1969, OFFICIAL RECORDS. AND
LOT 32, AS SHOWN ON THE "PLAT OF FLORIN DEPOT INDUSTRIAL PARK"
FILED IN OFFICE OF THE COUNTY RECORDER OF THE SACRAMENTO
COUNTY ON FEBRUARY 6, 1966, IN BOOK 167 OF MAPS, MAP NO.18
[PLAT MAP]
EXHIBIT "A-2"
[MAP OF PROPOSED WAREHOUSE]
EXHIBIT "B-1"
A. Landlord, at ▇▇▇▇▇▇▇▇'s sole cost and expense, shall construct
approximately 7,000 square feet of the following standard office
improvements located and in accordance with plan and specifications
prepared by Landlord and approved by Tenant, as shown on Exhibit "B-3".
B. Landlord to provide a metal full height demising wall.
C. Six (6) 5'x4' sliding windows.
D. Counter between reception and lobby area with glass window separator and
sliding glass window for reception operator.
E. Two (2) sets of double doors (see Office Exhibit).
F. Restrooms and lockers as shown on Exhibit "B-4". Lessee shall provide and
install lockers.
G. 800 amp 277/480 volt 3-phase electrical main service with distribution to
office and warehouse lighting only.
BUILDING STANDARD WORK OFFICE AREA
1. PARTITIONING:
Landlord shall provide one hundred (100) lineal feet of partitioning per
one thousand (1,000) square feet of leased area.
2. DOORS:
In addition to required exterior entry door(s), Landlord shall provide
three (3) doors per one thousand (1,000) square feet of leased area.
Walnut legacy hollow core, hung in Timely brown tone metal jams with
Schlage "F" series hardware.
3. CEILING:
2'x4' ▇▇▇▇ grid (white) & Random fissured with acoustical tile ceiling will
be provided at building standard.
4. FLOORING:
Building standard carpet 26 oz. level loop, linoleum Armstrong ▇▇▇▇▇▇▇,
V.C.T. 3/32" all with 4" rubber base will be installed.
5. HEATING/AIR CONDITIONING:
Heating and air conditioning will be provided throughout the leased area in
accordance with sound engineering practice.
6. ELECTRICAL OUTLETS:
One (1) standard wall duplex outlet will be provided for every one hundred
(100) square feet of leased area.
7. TELEPHONE OUTLETS:
None - one (1) conduit only for future telephones to be installed by
▇▇▇▇▇▇.
8. SWITCHES:
One (1) switch will be provided per two hundred (200) square feet of leased
area.
9. LIGHT FIXTURES:
One (1) 2'x4' lay-in fluorescent fixture with Prismatic lens will be
provided for every seventy-five (75) square feet of leased area.
10. PAINTING:
All walls shall be painted with one (1) finish coat. Flat Latex-
Sherwin/▇▇▇▇▇▇▇▇ paint textured walls.
11. INSULATION:
All perimeter walls and ceilings next to unconditioned spaces.
12. TOILET PARTITIONING:
▇▇▇▇▇▇▇▇▇▇▇▇▇ baked enamel metal. (where required)
13. RESTROOMS:
Toilet paper dispensers and handicapped fixtures.
EXHIBIT "B-2"
SPECIFICATIONS
LESSOR shall construct various improvements in accordance with the Plans
described below.
IN THE EVENT OF A CONFLICT BETWEEN THE PLANS AND THE SPECIFICATIONS STATED IN
THE LEASE, THE PLANS SHALL GOVERN THE SPECIFICATIONS STATED IN THE LEASE.
PLAN SHEET INDEX
▇▇▇ ▇▇▇▇▇▇▇ - Engineer - Dated: 10/29/93
Job # 0-1-660
1 SITE PLAN
2-4 FLOOR PLAN
5-6 ELEVATIONS
7-9 FOUNDATION PLANS
10-11 TYPICAL CONCRETE SECTIONS/STRUCTURAL PANEL ELEVATIONS
TENANT IMPROVEMENT PLANS FOR FRAMING. MECHANICAL, ELECTRICAL, AND PLUMBING SHALL
BE REVIEWED AND APPROVED BY THE PARTIES AS SUCH PLANS ARE COMPLETED.
[FLOOR PLAN]
EXHIBIT "B-3"
[FLOOR PLAN]
EXHIBIT "B-4"
NOTICE OF DISCLOSURE AND AGREEMENT
DATE: MAY 15, 1995
__________________________
LANDLORD/
SELLER: CENTRAL VALLEY LIMITED LIABILITY COMPANY
______________________________________________________
TENANT/
PURCHASER: EGGHEAD SOFTWARE
______________________________________________________
PROPERTY: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, SACRAMENTO, CA 95828
______________________________________________________
BROKERS: BUZZ ▇▇▇▇▇ REAL ESTATE REPRESENTING CENTRAL VALLEY
__________________
BUZZ ▇▇▇▇▇ REAL ESTATE REPRESENTING EGGHEAD SOFTWARE
______________________ __________________
BROKER REPRESENTATION
X
--- check if applicable. Seller/Landlord and Purchaser/Tenant hereby
acknowledge that Broker represents both parties hereto; and both parties
consent thereto.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ NOTIFICATION: ▇▇▇▇▇▇▇-▇▇▇▇▇▇ EARTHQUAKE FAULT ZONING ACT
The property is or may be situated in an Earthquake Fault Zone as designated
under the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ earthquake Fault Zoning Act, Section 2621-2630,
inclusive, of the California Public Resources Code; and, as such, the
construction or development on the Property of any structure for human
occupancy may be subject to the findings of a geologic report prepared by a
geologist registered in the State of California, unless such report is waived
by the city or county under the terms of that Act. No representations on the
subject are made by Seller/Landlord or by BUZZ OATES REAL ESTATE, or its
agents or employees, and the Purchaser/Tenant should make his/her/its own
inquiry or investigation.
Special Studies Zone yes X no Source Fault-Rupture Hazard Zones in
-- -- California Special Publication 42,
Figure 4-H
----------------------------------
NOTIFICATION RE: NATIONAL FLOOD INSURANCE PROGRAM
This Property is or may be located in a Special Flood Hazard Area on United
State Department of Housing and urban Development (HUD) "Special Flood Zone
Area Maps". Federal law requires that as a condition of obtaining federally
related financing on most properties located in "flood zones", banks, savings
and loan associations, and some insurance lenders require flood insurance to
be carried where the property, real or personal, is security for a loan. This
requirement is mandated by the National Flood Insurance Act of 1968 and the
Flood Disaster Protection Act of 1973. The purpose of the program is to
provide flood insurance to property owners at a reasonable cost. cities or
counties participating in the National Flood Insurance Program may have
adopted building or zoning restrictions, or other measures, as part of their
participation in the program. You should contact the city of county in which
the Property is located to determine any such restrictions. The extent of
coverage available in your area and the cost of this coverage, may vary and
for further information, you should consult your lender or insurance carrier.
Flood Zone Designation: Zone X Source FEMA Map #060243-0017D
---
HAZARDOUS WASTE OR SUBSTANCES AND UNDERGROUND STORAGE TANKS
Comprehensive federal and state laws and regulations have been enacted in the
past several years in an effort to control the use, storage, handling,
clean-up, removal and disposal of hazardous waste or substances. Some of
these laws and regulations (such as, for example, the Comprehensive
Environmental Response Compensation and Liability Act [CERCLA] provide for
broad liability on the part of owners, tenants, or other users of property
for clean-up costs and damages, regardless of fault.) Other laws and
regulations set standards for the handling of asbestos, and establish
requirements for the use, modification, abandonment and closure of
underground storage tanks.
It is not practical or possible to list all such laws and regulations in this
Notice. Therefore, Seller/Landlords and Purchaser/Tenants are urged to
consult legal counsel to determine their prospective rights and liabilities
with respect to the issues described in this Notice, as well as all other
aspects of the proposed transaction. If hazardous wastes or substances have
been, or are going to be used, stored, handled or disposed on the Property,
or if the Property has been or may have underground storage tanks, it is
essential that legal and technical advice be obtained to determine, among
other things, the nature of permits and approvals which have been obtained or
may be required; the estimated costs and expenses associated with the use,
storage, handling, clean-up, disposal or removal of hazardous wastes or
substances; and the nature and extent of contractual provisions necessary or
desirable in this transactio. ▇▇▇▇▇▇ recommends expert assistance and site
investigation to determine past uses of the Property, which may provide
valuable information as to the likelihood of hazardous wastes or substances,
or underground storage tanks, being on the Property.
Seller/Landlord agree to disclose to Broker and to Purchaser/Tenant any and
all information which he/she/it has regarding present and future zoning and
environmental matters affecting the Property and regarding the condition of
the Property, including, but not limited to, structural, mechanical and soil
conditions, the presence and location of asbestos, PCB transformers, other
toxic, hazardous or contaminated substances and underground storage tanks,
in, on or about the Property.
▇▇▇▇▇▇ has conducted no investigations regarding the subject matter hereof,
except as may be contained in a separate written document signed by ▇▇▇▇▇▇.
Broker makes no representations concerning the existence or nonexistence of
hazardous wastes or substances, or underground storage tanks, in, on or about
the Property. Purchaser/Tenant should contact a professional, such as a civil
engineer, industrial hygienist or other persons with experience in these
matters, to advise on these matters.
The term "hazardous wastes or substances" is used in its very broad sense and
includes, but is not limited to, petroleum based products, paints and
solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonium
compounds, asbestos, PCB's and other chemical products. Hazardous wastes or
substances and underground storage tanks may be presented on all types of
real property. This Notice is intended to apply to any transaction involving
any type of real property, whether improved or unimproved.
1
BROKER DISCLOSURE
The parties hereby expressly acknowledge that broker has made no independent
determination or investigation regarding the following: present or future use
or zoning of the property; environmental matter affecting the Property; the
condition of the Property, including, but not limited to, structural,
mechanical and soils condition, as well as issues surrounding hazardous
wastes or substances as set out above; violations of the Occupational Safety
and Health Act or any other federal, state, county or municipal laws,
ordinances or statutes; measurements of land and/or buildings.
Purchaser/▇▇▇▇▇▇ agrees to make its own investigation and determination
regarding such items.
COMPLIANCE WITH LAWS
The parties hereto agree to comply with all applicable federal, state and
local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this
Agreement, including, but not limited to, the 1964 civil Rights Act and all
amendments thereto, the Foreign Investment in Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and the
Americans With Disabilities Act.
AMERICANS WITH DISABILITIES ACT (ADA)
Owners or tenants of real property may be subject to the American With
Disabilities Act (ADA), a federal law codified at 42 USC Section 12101 et
seq. Among other requirements of the ADA that could apply to your property,
Title III of the Act requires owners and tenants of "public accommodations"
to remove barriers to access by disabled persons and provide auxiliary aids
and services for hearing, vision, or speech impaired persons. The regulations
under Title III of the ADA are codified at 28 CFR Part 36.
EARTHQUAKE SAFETY (CALIFORNIA ONLY)
Owners or their agents who are involved in the transfer of a precast concrete
or reinforced or unreinforced masonry building with wood frame, floors, or
roof which was built before January 1, 1975, must deliver to the transferee a
copy of a state publication entitled "The Commercial Property Owner's Guide
to Earthquake Safety" published by the California Seismic Safety Commission.
If applicable to the subject property, the undersigned Purchaser/Tenant of
the real property herein described acknowledges that BUZZ ▇▇▇▇▇ REAL ESTATE
has delivered to the undersigned a copy thereof in accordance with California
Government Code Section 8875.6 and Sections 8893 et seq.
Receipt of a copy of this Notice of Disclosure and Agreement is hereby
acknowledged.
Dated: May 15, 1995 /s/(Illegible Signature)
---------- -- --------------------------------
Seller/Landlord
--------------------------------
Seller/Landlord
Dated: May 15, 1995
---------- -- --------------------------------
Purchaser/Tenant
--------------------------------
Purchaser/Tenant
CONSULT YOUR ADVISORS - This lease/purchase agreement has been prepared for
approval by your attorney. No representation or recommendation is made by
Buzz Oates Real Estate, as to the legal sufficiency or tax consequences of
this document or the transaction to which it relates, the National Flood
Insurance Program, nor other legislation referred to herein. These are
questions for your attorney or accountant.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist, or other
person, with experience, in evaluating the condition of the Property,
including the possible presence of asbestos, hazardous materials, and
underground storage tanks.
2
COMMENCEMENT OF LEASE AGREEMENT
WHEREAS, by Lease dated May 15, 1995 has been amended by and
between CENTRAL VALLEY L.L.C. (LANDLORD) and DJ&J Software (TENANT) for
the area described therein in the industrial/office building situated at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇; approximately 138,380 square feet in a 428,000
square foot building.
WHEREAS, ▇▇▇▇▇▇▇▇'s work has been substantially completed;
NOW, THEREFORE, in accordance with the above, the parties hereto
agree that the term of said two (2) years shall commence on October 14,
1995 (actual move-in) and expire on October 13, 1997.**
All other terms and conditions of said ▇▇▇▇▇ are hereby reaffirmed
as being in full force and effect.
LESSOR: LESSEE:
CENTRAL VALLEY L.L.C. DJ&J SOFTWARE
dba EGGHEAD SOFTWARE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President & CEO
Date: 11-9-95 Date: 11/01/95
------------------------ -----------------------
** These dates shall serve as the commencement and expiration date of
the original two year lease term.