EXHIBIT 10.26
LEASE AGREEMENT
BY AND BETWEEN
HAYWARD INDUSTRIAL PARK ASSOCIATES,
A CALIFORNIA GENERAL PARTNERSHIP
AS LANDLORD
AND
MOHAWK INDUSTRIES, INC.
A GEORGIA CORPORATION
AS TENANT
DATED NOVEMBER 10, 1997
TABLE OF CONTENTS
Page
Basic Lease Information .....................................................iii
1. Demise ................................................................... 1
2. Premises ................................................................. 1
3. Term ..................................................................... 2
4. Rent ..................................................................... 2
5. Utility Expenses ......................................................... 6
6. Late Charge .............................................................. 6
7. Security Deposit ......................................................... 7
8. Possession ............................................................... 7
9. Use of Premises .......................................................... 7
10. Acceptance of Premises .................................................. 8
11. Surrender ............................................................... 9
12. Alterations And Additions ............................................... 9
13. Maintenance and Repairs Of Premises ..................................... 11
14. Landlord's Insurance .................................................... 11
15. Tenant's Insurance ...................................................... 12
16. Indemnification ......................................................... 13
17. Subrogation ............................................................. 13
18. Signs ................................................................... 13
19. Free From Liens ......................................................... 14
20. Entry By Landlord ....................................................... 14
21. Destruction and Damage .................................................. 14
22. Condemnation ............................................................ 16
23. Assignment And Subleasing ............................................... 17
24. Tenant's Default ........................................................ 19
25. Landlord's Remedies ..................................................... 21
26. Landlord's Right to Perform Tenant's Obligations ........................ 23
27. Attorney's Fees ......................................................... 23
28. Taxes ................................................................... 24
29. Effect Of Conveyance .................................................... 24
30. Tenant's Estoppel Certificate ........................................... 24
31. Subordination ........................................................... 25
32. Environmental Covenants ................................................ 25
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33. Notices ................................................................. 28
34. Waiver .................................................................. 28
35. Holding Over ............................................................ 28
36. Successors And Assigns .................................................. 28
37. Time .................................................................... 29
38. Brokers ................................................................. 29
39. Limitation Of Liability ................................................. 29
40. Financial Statements .................................................... 29
41. Rules and Regulations ................................................... 29
42. Mortgagee Protection .................................................... 30
43. Entire Agreement ........................................................ 30
44. Interest ................................................................ 30
45. Construction ............................................................ 30
46. Representations And Warranties Of Tenant ................................ 30
47. Relocation .............................................................. 31
48. Security ................................................................ 31
49. Jury Trial Waiver ....................................................... 31
Exhibit
A Diagram of the Premises
B Tenant Improvements
B-1 Initial Floor Plan
C Commencement and Expiration Date Memorandum
D Rules and Regulations
E Sign Criteria
F Hazardous Materials Disclosure Certificate
G N/A
Addendum 1 Option to Extend Lease
Addendum 2 Early Occupancy Agreement
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LEASE AGREEMENT
BASIC LEASE INFORMATION
Lease Date: November 10, 1997
Landlord: HAYWARD INDUSTRIAL PARK ASSOCIATES,
A California General Partnership
Landlord's Address: c/o Allegis Realty Investors LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All notices sent to Landlord under this Lease
shall be sent to the above address, with copies
to:
Lincoln Property Company Management Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant: Mohawk Industries, Inc.
a Georgia corporation
Tenant's Contact Person: __________________________________________________
Tenant's Address and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone Number: ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Premises Square Footage: Approximately thirty thousand two hundred forty
(30,240) rentable square feet
Premises Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇, ▇ and C
Hayward, California
Project: Hayward Industrial Park, consisting of four (4)
phases ("Phases") containing an aggregate of
approximately 1,108,424 rentable square feet,
together with the land on which the Project is
situated and all Common Areas
Phase: Phase V, consisting of an aggregate of
approximately 310,688 rentable square feet
Building: Four (4), Hayward, California
Tenant's Proportionate
Share of Phase: 9.73% of Phase V
Length of Term: Sixty (60) months
Estimated Commencement
Date: December 15, 1997
Estimated Expiration Date: December 14, 2002
Monthly Base Rent: Monthly Monthly
Months Sq. Ft. Base Rent Base Rent
1-30 30,240 x $0.36 = $10,886.40
31-60 30,240 x $0.37 = $11,188.80
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Escalations: N/A
Prepaid Rent: Ten thousand eight hundred eighty six and 40/100
($10,886.40)
Prepaid Additional Rent: Two thousand two hundred twenty eight and 69/100
($2,228.69)
Month to which Prepaid
Base Rent and Additional
Rent will be Applied: (1st) month of the Term
Security Deposit: Not required
Permitted Use: Warehouse and distribution of carpet products and
related office use, but only to the extent
permitted by the City of Hayward and any and all
entities having jurisdiction.
Unreserved Parking Thirty (30) nonexclusive and undesignated parking
Spaces: spaces
Broker(s): ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ & Associates
(for Tenant) ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇ - BT
Commercial (for Landlord)
Tenant Improvements N/A
Allowance:
Tenant Improvements N/A
Loan:
Architect: N/A
iv
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are
defined in the Basic Lease Information attached to this Lease Agreement ("Basic
Lease Information") shall have the meaning and definition given them in the
Basic Lease Information. The Basic Lease Information, the exhibits, the addendum
or addenda described in the Basic Lease Information, and this Lease Agreement
are and shall be construed as a single instrument and are referred to herein as
the "Lease".
1. DEMISE
In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"Premises"), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.
2. PREMISES
The Premises demised by this Lease is located in that certain building
(the "Building") specified in the Basic Lease Information, which Building is
located in that certain real estate development (the "Project") specified in the
Basic Lease Information. The Premises has the address and contains the square
footage specified in the Basic Lease Information. The location and dimensions of
the Premises are depicted on Exhibit A, which is attached hereto and
incorporated herein by this reference. Tenant shall have the non-exclusive right
(in common with the other tenants, Landlord and any other person granted use by
Landlord) to use the Common Areas (as hereinafter defined), except that, with
respect to parking, Tenant shall have only a license to use the number of
non-exclusive and undesignated parking spaces set forth in the Basic Lease
Information in the Project's parking areas (the "Parking Areas"); provided,
however, that Landlord shall not be required to enforce Tenant's right to use
such parking spaces; and, provided further, that the number of parking spaces
allocated to Tenant hereunder shall be reduced on a proportionate basis in the
event any of the parking spaces in the Parking Areas are taken or otherwise
eliminated as a result of any Condemnation (as hereinafter defined) or casualty
event affecting such Parking Areas. Tenant acknowledges that the overuse by
Tenant or Tenant's Agents of the number of parking spaces allocated to Tenant
hereunder shall constitute a breach of this Lease by Tenant and, without
limiting Landlord's rights and remedies hereunder as a result of such breach,
Landlord shall have the right to assess a parking surcharge of one hundred
dollars ($100.00) per day per vehicle for each vehicle parked in the Parking
Areas by Tenant or Tenant's Agents in excess of the number of parking spaces
allocated to Tenant hereunder as specified in the Basic Lease Information. No
easement for light or air is incorporated in the Premises. For purposes of this
Lease, the term "Common Areas" shall mean all areas and facilities outside the
Premises and within the exterior boundary line of the Project that are provided
and designated by Landlord for the non-exclusive use of Landlord, Tenant and
other tenants of the Project and their respective employees, guests and
invitees.
Tenant understands and agrees that the Premises shall be leased by Tenant
in its as-is condition without any improvements or alterations by Landlord
unless Landlord has expressly agreed to make such improvements or alterations in
a tenant improvement work agreement attached hereto, if at all, as Exhibit B. If
Landlord has agreed to make any such improvements or alterations, then the
Premises demised by this Lease shall include any Tenant Improvements (as that
term is defined in the aforesaid tenant improvement work agreement) to be
constructed by Landlord within the interior of the Premises. Landlord shall
construct any Tenant Improvements on the terms and conditions set forth in
Exhibit B, if attached hereto. Landlord and Tenant agree to and shall be bound
by the terms and conditions of Exhibit B, if any.
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Landlord has the right, in its sole discretion, from time to time, to: (a)
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, ingress, egress, direction of driveways, entrances, corridors and
walkways; (b) close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available; (c) add
additional buildings and improvements to the Common Areas or remove existing
buildings or improvements therefrom; (d) use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project or any
portion thereof; and (e) do and perform any other acts or make any other changes
in, to or with respect to the Common Areas and the Project as Landlord may, in
its sole discretion, deem to be appropriate.
3. TERM
The term of this Lease (the "Term") shall be for the period of months
specified in the Basic Lease Information, commencing on December 1, 1997 (the
"Commencement Date"). Tenant further acknowledges and agrees that the Tenant
Improvements described in Exhibit B attached hereto may be installed and
constructed by Landlord in the Premises during the period of Tenant's occupancy
of the Premises, however the completion of such Tenant Improvements therein
shall not affect Tenant's obligation to pay Rent and to perform all of Tenant's
covenants and obligations under the Lease. Tenant hereby expressly (i) agrees
that Tenant shall have no right or claim to any abatement, offset or other
deduction of the amount of Rent payable by Tenant for the Premises due to the
installation and construction of any of the Tenant Improvements, (ii) grants
Landlord access to any and all of the Premises to perform the Tenant
Improvements, (iii) waives any rights or claims Tenant may have at law or in
equity with respect to any interference with Tenant's conduct of its operations
in and about the Premises during the pendency of the work associated with the
Tenant Improvements, (iv) agrees to use commercially reasonable efforts not to
interfere, and not to allow any of Tenant's Representative to interfere, with
Landlord and its contractors, representatives and consultants in the performance
of the work associated with the completion of the Tenant Improvements, and (v)
agrees that Tenant's employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, unreasonably interfere with Landlord or Landlord's agents or
representatives in performing any of the aforementioned work and any additional
work related thereto, Landlord's work in other areas of the Building or the
Park, or the general operation of the Building.
In the event the actual Commencement Date, as determined pursuant to the
foregoing, is a date other than the Estimated Commencement Date, then Landlord
and Tenant shall promptly execute a Commencement and Expiration Date Memorandum
in the form attached hereto as Exhibit C, wherein the parties shall specify the
Commencement Date, the date on which the Term expires (the "Expiration Date")
and the date on which Tenant is to commence paying Rent.
4. RENT
(a) Base Rent. Tenant shall pay to Landlord, in advance on the first day
of each month, without further notice or demand and without offset or deduction,
the monthly installments of rent specified in the Basic Lease Information (the
"Base Rent").
Upon execution of this Lease, Tenant shall pay to Landlord the
Prepaid Rent and first monthly installment of estimated Additional Rent (as
hereinafter defined) specified in the Basic Lease Information to be applied
toward Base Rent and Additional Rent for the month of the Term specified in the
Basic Lease Information.
(b) Additional Rent. This Lease is intended to be a triple-net Lease with
respect to Landlord; and subject to Paragraph 13(b) below, the Base Rent owing
hereunder is (1) to be paid by Tenant absolutely net of all costs and expenses
relating to Landlord's
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ownership and operation of the Project and the Building, and (2) not to be
reduced, offset to diminished, directly or indirectly, by any cost, charge or
expense payable hereunder by Tenant or by others in connection with the
Premises, the Building and/or the Project or any part thereof. The provisions of
this Paragraph 4(b) for the payment of Tenant's Proportionate Share(s) of
Expenses (as hereinafter defined) are intended to pass on to Tenant its share of
all such costs and expenses. In addition to the Base Rent, Tenant shall pay to
Landlord, in accordance with this Paragraph 4, Tenant's Proportionate Share(s)
of all costs and expenses paid or incurred by Landlord in connection with the
ownership, operation, maintenance, management and repair of the Premises, the
Building and/or the Project or any part thereof (collectively, the "Expenses"),
including, without limitation, all the following items (the "Additional Rent"):
(1) Taxes and Assessments. All real estate taxes and assessments, which
shall include any form of tax, assessment, fee, license fee, business license
fee, levy, penalty (if a result of Tenant's delinquency), or tax (other than net
income, estate, succession, inheritance, transfer or franchise taxes), imposed
by any authority having the direct or indirect power to tax, or by any city,
county, state or federal government or any improvement or other district or
division thereof, whether such tax is (i) determined by the area of the
Premises, the Building and/or the Project or any part thereof, or the Rent and
other sums payable hereunder by Tenant or by other tenants, including, but not
limited to, any gross income or excise tax levied by any of the foregoing
authorities with respect to receipt of Rent and/or other sums due under this
Lease; (ii) upon any legal or equitable interest of Landlord in the Premises,
the Building and/or the Project or any part thereof; (iii) upon this transaction
or any document to which Tenant is a party creating or transferring any interest
in the Premises, the Building and/or the Project; (iv) levied or assessed in
lieu of, in substitution for, or in addition to, existing or additional taxes
against the Premises, the Building and/or the Project, whether or not now
customary or within the contemplation of the parties; or (v) surcharged against
the parking area. Tenant and Landlord acknowledge that Proposition 13 was
adopted by the voters of the State of California in the June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such purposes as fire protection, street, sidewalk, road, utility
construction and maintenance, refuse removal and for other governmental services
which may formerly have been provided without charge to property owners or
occupants. It is the intention of the parties that all new and increased
assessments, taxes, fees, levies and charges due to any cause whatsoever are to
be included within the definition of real property taxes for purposes of this
Lease. "Taxes and assessments" shall also include legal and consultants' fees,
costs and disbursements incurred in connection with proceedings to contest,
determine or reduce taxes, Landlord specifically reserving the right, but not
the obligation, to contest by appropriate legal proceedings the amount or
validity of any taxes.
(2) Insurance. All insurance for the Building and/or the Project or any
part thereof, including premiums for "all risk" fire and extended coverage
insurance, commercial general liability insurance, rent loss or abatement
insurance, earthquake insurance, flood or surface water coverage, and other
insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of any such insurance.
(3) Utilities. The cost of all Utilities (as hereinafter defined) serving
the Premises, the Building and the Project or any part thereof that are not
separately metered to Tenant, any assessments or charges for Utilities or
similar purposes included within any tax ▇▇▇▇ for the Building or the Project or
any part thereof, including without limitation, entitlement fees, allocation
unit fees, and/or any similar fees or charges and any penalties (if a result of
Tenant's delinquency) related thereto, and any amounts, taxes, charges,
surcharges, assessments or impositions levied, assessed or imposed upon the
Premises, the Building or the Project or any part thereof, or upon the Tenant's
use and occupancy thereof, as a result of any rationing of Utility services or
restriction on Utility
3
use affecting the Premises, the Building and/or the Project, as contemplated in
Paragraph 5 below (collectively, "Utility Expenses").
(4) Common Area Expenses. All costs to operate, maintain, repair, replace,
supervise, insure and administer the Common Areas, including supplies,
materials, labor and equipment used in or related to the operation and
maintenance of the Common Areas, including parking areas (including, without
limitation, all costs of resurfacing and restriping parking areas), signs and
directories on the Building and/or the Project, landscaping (including
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.
(5) Parking Charges. Any parking charges or other costs levied, assessed
or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building or
the Project.
(6) Maintenance and Repair Costs. Except for costs which are the
responsibility of Landlord pursuant to Paragraph 13(b) below, all costs to
maintain, repair, and replace the Premises, the Building and/or the Project or
any part thereof, including without limitation, (i) all costs paid under
maintenance, management and service agreements such as contracts for Common Area
janitorial and refuse removal and security (if provided by Landlord), (ii) all
costs to maintain, repair and replace the roof coverings of the Building or the
Project or any part thereof, (iii) subject to Paragraph 13(a) below, all costs
to maintain, repair and replace the heating, ventilating, air conditioning,
plumbing, sewer, drainage, electrical, fire protection, life safety and security
systems and other mechanical and electrical systems and equipment serving the
Premises, the Building and/or the Project or any part thereof (collectively, the
"Systems").
(7) Life Safety Costs. All costs to install, maintain, repair and replace
all life safety systems, including, without limitation, all fire alarm systems,
serving the Premises, the Building and/or the Project or any part thereof
(including all maintenance contracts and fees payable to life safety
consultants) whether such systems are or shall be required by Landlord's
insurance carriers, Laws (as hereinafter defined) or otherwise.
(8) Management and Administration. All costs for management and
administration of the Premises, the Building and/or the Project or any part
thereof, including, without limitation, a property management fee, accounting,
auditing, billing, postage, salaries and benefits for clerical and supervisory
employees, whether located on the Project or off-site, payroll taxes and legal
and accounting costs and fees for licenses and permits related to the ownership
and operation of the Project.
Notwithstanding anything in this Section 4(b) to the contrary, with
respect to all sums payable by Tenant as Additional Rent under this Section 4(b)
for the repair or replacement of any item or the construction of any new item in
connection with the physical operation of the Premises, the Building or the
Project or any part thereof (i.e., HVAC, roof membrane or coverings and parking
area) which is a capital item the repair or replacement of which property would
be capitalized under generally accepted accounting principles. Tenant shall be
required to pay only the pro rata share of the cost of the item falling due
within the Term (including any Renewal Term) based upon the amortization of the
same over the useful life of such item as reasonably determined by Landlord.
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(c) Payment of Additional Rent.
(1) Upon commencement of this Lease, Landlord shall submit to Tenant
an estimate of monthly Additional Rent for the period between the Commencement
Date and the following December 31 and Tenant shall pay such estimated
Additional Rent on a monthly basis, in advance, on the first day of each month.
Tenant shall continue to make said monthly payments until notified by Landlord
of a change therein. By April 1 of each calendar year, Landlord shall endeavor
to provide to Tenant a statement showing the actual Additional Rent due to
Landlord for the prior calendar year, to be prorated during the first year from
the Commencement Date. If the total of the monthly payments of Additional Rent
that Tenant has made for the prior calendar year is less than the actual
Additional Rent chargeable to Tenant for such prior calendar year, then Tenant
shall pay the difference in a lump sum within ten (10) days after receipt of
such statement from Landlord. Any overpayment by Tenant of Additional Rent for
the prior calendar year shall be credited towards the Additional Rent next due.
(2) Landlord's then-current annual operating and capital budgets for
the Building and Project or the pertinent part thereof shall be used for
purposes of calculating Tenant's monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the year in which this Lease
terminates as soon as possible after termination of such year. Even though the
Term has expired and Tenant has vacated the Premises, Tenant shall remain liable
for payment of any amount due to Landlord in excess of the estimated Additional
Rent previously paid by Tenant, and, conversely, Landlord shall promptly return
to Tenant any overpayment. Failure of Landlord to submit statements as called
for herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided.
(3) Tenant understands that, in allocating Expenses of the Project
to tenants for purposes of Paragraph 4(b), Landlord generally allocates such
Expenses to the Phases within the Project, and then to the tenants within each
such Phase based upon the tenants' respective proportionate shares of the
aggregate rentable square footage within such Phase. Tenant's "Proportionate
Share" of the Phase in which the Premises are located shall be the percentage
set forth in the Basic Lease Information as Tenant's Proportionate Share of the
Phase, as adjusted by Landlord from time to time for a remeasurement of or
changes in the physical size of the Premises or the improvements within the
Phase, whether such changes in size are due to an addition to or a sale or
conveyance of a portion of the Phase or otherwise. Notwithstanding the
foregoing, Landlord may revise its method of allocating Expenses among tenants
at any time and from time to time, and, in the event of such a revision,
Tenant's "Proportionate Share" shall be a percentage calculated by Landlord from
time to time in its sole discretion and furnished to Tenant in writing.
Notwithstanding anything in this Agreement to the contrary, Landlord may
equitably adjust Tenant's Proportionate Share(s) for all or part of any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement,
or service that benefits only the Premises or only a portion of the Building
and/or the Project or that varies with the occupancy of the Building and/or the
Project. Without limiting the generality of the foregoing, Tenant understands
and agrees that Landlord shall have the right to adjust Tenant's Proportionate
Share(s) of any Utility Expenses based upon Tenant's use of the Utilities or
similar services as reasonably estimated and determined by Landlord based upon
factors such as size of the Premises and intensity of use of such Utilities by
Tenant such that Tenant shall pay the portion of such charges reasonably
consistent with Tenant's use of such Utilities and similar services. If Tenant
disputes any such estimate or determination of Utility Expenses, then Tenant
shall either pay the estimated amount or cause the Premises to be separately
metered at Tenant's sole expense.
(d) General Payment Terms. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, including, without limitation,
payments of principal and interest on the Tenant Improvements Loan (as defined
in Exhibit B hereto), if any, late charges assessed pursuant to Paragraph 6
below and any interest assessed
5
pursuant to Paragraph 45 below, are referred to as the "Rent". All Rent shall be
paid without deduction, offset or abatement in lawful money of the United States
of America. Checks are to be made payable to Hayward Industrial Park Associates
and shall be mailed to: Lincoln Property Company Management Services, Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or to such
other person or place as Landlord may, from time to time, designate to Tenant in
writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month.
5. UTILITY EXPENSES
(a) Tenant shall pay the cost of all water, sewer use, sewer discharge
fees and permit costs and sewer connection fees, gas, heat, electricity, refuse
pick-up, janitorial service, telephone and all materials and services or other
utilities (collectively, "Utilities") billed or metered separately to the
Premises and/or Tenant, together with all taxes, assessments, charges and
penalties added to or included within such cost. Tenant acknowledges that the
Premises, the Building and/or the Project may become subject to the rationing of
Utility services or restrictions on Utility use as required by a public utility
company, governmental agency or other similar entity having jurisdiction
thereof. Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing or restrictions as may be imposed
upon Landlord, Tenant, the Premises, the Building and/or the Project, and Tenant
shall in no event be excused or relieved from any covenant or obligation to be
kept or performed by Tenant by reason of any such rationing or restrictions.
Tenant agrees to comply with energy conservation programs implemented by
Landlord by reason of rationing restrictions or Laws.
(b) Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance. No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder. In no event
shall Landlord be liable to Tenant for any damage to the Premises or for any
loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes
(including, without limitation, water, steam, and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or washstands, or other similar
cause in, above, upon or about the Premises, the Building, or the Project.
6. LATE CHARGE
Notwithstanding any other provision of this Lease, Tenant hereby
acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within five (5) days after their due date, then Tenant shall
pay to Landlord a late charge equal to ten percent (10%) of such overdue amount,
plus any costs and attorneys' fees incurred by Landlord by reason of Tenant's
failure to pay Rent and/or other charges when due hereunder. Landlord and Tenant
hereby agree that such late charges represent a fair and reasonable estimate of
the cost that Landlord will incur by reason of Tenant's late payment and shall
not be construed as a penalty. Landlord's acceptance of such late charges shall
not constitute a waiver of Tenant's default with respect to such overdue amount
or estop Landlord from exercising any of the other rights and remedies granted
under this Lease.
Initials: Landlord _____ Tenant _____
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7. SECURITY DEPOSIT
Intentionally omitted.
8. POSSESSION
(a) Tenant's Right of Possession. Subject to Paragraph 8(b). Tenant shall
be entitled to possession of the Premises upon commencement of the Term.
(b) Delay in Delivering Possession. If for any reason whatsoever, Landlord
cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date, this Lease shall not be void or avoidable, nor shall
Landlord, or Landlord's agents, advisors, employees, partners, shareholders,
directors, invitees, or independent contractors (collectively, "Landlord's
Agents"), be liable to Tenant for any loss or damage resulting therefrom. Tenant
shall not be liable for Rent until Landlord delivers possession of the Premises
to Tenant. The Expiration Date shall be extended by the same number of days that
Tenant's possession of the Premises was delayed beyond the Estimated
Commencement Date.
9. USE OF PREMISES
(a) Permitted Use. The use of the Premises by Tenant and Tenant's agents,
advisors, employees, partners, shareholders, directors, invitees, or independent
contractors (collectively, "Tenant's Agents"), shall be solely for the Permitted
Use specified in the Basic Lease Information and for no other use. Tenant shall
not permit any objectionable or unpleasant odor, smoke, dust, gas, noise or
vibration to emanate from or near the Premises. The Premises shall not be used
to create any nuisance or trespass, for any illegal purpose, for any purpose not
permitted by Laws, for any purpose that would invalidate the insurance or
increase the premiums for insurance on the Premises, the Building or the Project
or for any purpose or in any manner that would interfere with other tenants' use
or occupancy of the Project. Tenant agrees to pay to Landlord, as Additional
Rent, any increases in premiums on policies resulting from Tenant's Permitted
Use or any other use or action by Tenant or Tenant's Agents which increases
Landlord's premiums or requires additional coverages by Landlord to insure the
Premises. Tenant agrees not to overload the floor(s) of the Building.
(b) Compliance with Governmental Regulations and Private Restrictions.
Tenant and Tenant's Agents shall, at Tenant's expense, faithfully observe and
comply with (1) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, "Laws"), now in
force or which may hereafter be in force pertaining to the Premises or Tenant's
use of the Premises, the Building or the Project, including without limitation,
any Laws requiring installation of fire sprinkler systems, seismic reinforcement
and related alterations, and removal of asbestos, whether substantial in cost or
otherwise, provided, however, that except as provided in Paragraph 9(c) below,
Tenant shall not be required to make or, except as provided in Paragraph 4
above, pay for, structural changes to the Premises or the Building not related
to Tenant's specific use of the Premises unless the requirement for such changes
is imposed as a result of any improvements or additions made or proposed to be
made at Tenant's request; (2) all recorded covenants, conditions, and
restrictions affecting the Project ("Private Restrictions") now in force or
which may hereafter be in force, including, without limitation the Declaration
of Covenants, Conditions and Restrictions described as Lots 1 to 15 inclusive,
Tract 4454, filed August 25, 1980, in Book 120 of Maps Page 69, in the Official
Records of Alameda County; and (3) any and all rules and regulations set forth
in Exhibit D and any other rules and regulations now or hereafter promulgated by
Landlord related to parking or the operation of the Premises, the Building
and/or the Project (collectively, the "Rules and Regulations"). The judgement of
any court of competent jurisdiction, or the admission of Tenant in any action or
proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such
7
Laws or Private Restrictions, shall be conclusive of that fact as between
Landlord and Tenant.
(c) Compliance with Americans with Disabilities Act. Landlord and Tenant
hereby agree and acknowledge that the Premises, the Building and/or the Project
may be subject to, among other Laws, the requirements of the Americans with
Disabilities Act, a federal law codified at 42 U.S.C 12101 et seq. including,
but not limited to Title III thereof, and all regulations and guidelines related
thereto, together with all laws, rules, regulations, ordinances, codes and
statutes now or hereafter enacted by local or state agencies having jurisdiction
thereof, including all requirements of Title 24 of the State of California, as
the same may be in effect on the date of this Lease and may be hereafter
modified, amended or supplemented (collectively, the "ADA"). Any Tenant
Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly complies with all requirements of the ADA. Subject
to reimbursement pursuant to Paragraph 4 above, if any barrier removal work or
other work is required to the Building, the Common Areas or the Project under
the ADA, then such work shall be the responsibility of Landlord; provided, if
such work is required under the ADA as a result of Tenant's use of the Premises
or any work or Alteration (as hereinafter defined) made to the Premises by or on
behalf of Tenant, then such work shall be performed by Landlord at the sole cost
and expense of Tenant. Except as otherwise expressly provided in this provision,
Tenant shall be responsible at its sole cost and expense for fully and
faithfully complying with all applicable requirements of the ADA, including,
without limitation, not discriminating against any disabled persons in the
operation of Tenant's business in our about the Premises, and offering or
otherwise providing auxiliary aids and services as, and when, required by the
ADA. Within ten (10) days after receipt, Tenant shall advise Landlord in
writing, and provide Landlord with copies of (as applicable), any notices
alleging violation of the ADA relating to any portion of the Premises, the
Building or the Project; any claims made or threatened orally or in writing
regarding noncompliance with ADA and relating to any portion of the Premises,
the Building, or the Project; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises, the Building or the Project. Tenant
shall and hereby agrees to protect, defend (with counsel acceptable to Landlord)
and hold Landlord and Landlord's Agents harmless and indemnify Landlord and
Landlord's Agents from and against all liabilities, damages, claims, losses,
penalties, judgments, charges and expenses (including attorney's fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from or in any way related
to, directly or indirectly, Tenant's or Tenant's Agents' violation or alleged
violation of the ADA. Tenant agrees that the obligation of Tenant herein shall
survive the expiration or earlier termination of this Lease.
10. ACCEPTANCE OF PREMISES
By entry hereunder, Tenant accepts the Premises as suitable for Tenant's
intended use and as being in good and sanitary operating order, condition and
repair, AS IS, and without representation or warranty by Landlord as to the
condition, use or occupancy which may be made thereof. Any exceptions to the
foregoing must be by written agreement executed by Landlord and Tenant.
Notwithstanding the foregoing, Landlord shall deliver the Premises to Tenant
with all mechanical systems in good working condition. Tenant shall not be
responsible for any repairs of such systems during the first sixty (60) days of
the initial Lease Term. After such sixty (60) day period Tenant shall maintain
such systems as stated in Paragraph 13 of this Lease.
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11. SURRENDER
Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord (a)
in good condition and repair (damage by acts of God, fire, and normal wear and
tear excepted), but with all interior walls painted or cleaned so they appear
painted, any carpets cleaned, all floors cleaned and waxed, all non-working
light bulbs and ballasts replaced and all roll-up doors and plumbing fixtures in
good condition and working order, and (b) otherwise in accordance with Paragraph
32(h). Normal wear and tear shall not include any damage or deterioration to the
floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains on any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant, or Tenant otherwise performing all of its
obligations under this Lease. On or before the expiration or sooner termination
of this Lease, (i) Tenant shall remove all of Tenant's Property (as hereinafter
defined) and Tenant's signage from the Premises, the Building and the Project
and repair any damage caused by such removal, and (ii) Landlord may, by notice
to Tenant given not later than ninety (90) days prior to the Expiration Date
(except in the event of a termination of this Lease prior to the scheduled
Expiration Date, in which event no advance notice shall be required), require
Tenant at Tenant's expense to remove any or all Alterations and/or the initial
Tenant Improvements constructed and installed pursuant to Exhibit B hereto, and
to repair any damage caused by such removal. Any of Tenant's property not so
removed by Tenant as required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant's expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord's
retention and disposition of such property; provided, however, that Tenant shall
remain liable to Landlord for all costs incurred in storing and disposing of
such abandoned property of Tenant. All Tenant Improvements and Alterations
except those which Landlord requires Tenant to remove shall remain in the
Premises as the property of Landlord. If the Premises are not surrendered at the
end of the Term or sooner termination of this Lease, and in accordance with the
provisions of this Paragraph 11 and Paragraph 32(b) below, Tenant shall continue
to be responsible for the payment of Rent (as the same may be increased pursuant
to Paragraph 35 below) until the Premises are so surrendered in accordance with
said Paragraphs, and Tenant shall indemnify, defend, and hold Landlord harmless
from and against any and all loss or liability resulting from delay by Tenant in
so surrendering the Premises including, without limitation, any loss or
liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorneys' fees and costs.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an "Alteration" and
collectively as the "Alterations") to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the structural portions of the Premises, the Building or the
Project or the Systems serving the Premises, the Building and/or the Project or
any portion thereof.
(b) Any Alteration to the Premises shall be at Tenant's sole cost and
expense, in compliance with all applicable Laws and all requirements requested
by Landlord, including, without limitation, the requirements of any insurer
providing coverage for the Premises or the Project or any part thereof, and in
accordance with plans and specifications approved in writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord. As further condition to giving consent,
9
Landlord may require Tenant to provide Landlord, at Tenant's sole cost and
expense, a payment and performance bond in form acceptable to Landlord, in a
principal amount not less than one and one half times the estimated costs of
such Alterations, to ensure Landlord against any liability for mechanic's and
materialmen's liens and to ensure completion of work. Before Alterations may
begin, valid building permits or other permits or licenses required must be
furnished to Landlord, and, once the Alterations begin, Tenant will diligently
and continuously pursue their completion. Landlord may monitor construction of
the Alterations and Tenant shall reimburse Landlord from its costs (including,
without limitation, the costs of any construction manager retained by Landlord)
in reviewing plans and documents and in monitoring construction. Tenant shall
maintain during the course of construction, at its sole cost and expense,
builders' risk insurance for the amount of the completed value of the
Alterations on an all-risk non-reporting form covering all improvements under
construction, including building materials, and other insurance in amounts and
against such risks as Landlord shall reasonably require in connection with the
Alterations. In addition to and without limitation on the generality of the
foregoing, Tenant shall ensure that its contractor(s) procure and maintain in
full force and effect during the course of construction a "broad form"
commercial general liability and property damage policy of insurance naming
Landlord, Tenant and Landlord's lenders as additional insureds. The minimum
limit of coverage of the aforesaid policy shall be in the amount of not less
than Three Million Dollars ($3,000,000.00) for injury or death of one person in
any one accident or occurrence and in the amount of not less than Three Million
dollars ($3,000,000.00) for injury or death of one more than one person in any
one accident or occurrence, and shall contain a severability of interest clause
or a cross liability endorsement. Such insurance shall further insure Landlord
and Tenant against liability for property damage of at least One Million Dollars
($1,000,000.00).
(c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
panelling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises or
the Building, shall at once be and become the property of Landlord, and shall
not be deemed trade fixtures or Tenant's Property. If requested by Landlord,
Tenant will pay, prior to the commencement of construction, an amount determined
by Landlord necessary to cover the costs of demolishing such Alterations and/or
the cost of returning the Premises and the Building to its condition prior to
such Alterations.
(d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's prior
written consent. If Landlord gives such consent, all equipment must be installed
within the Premises and, at the request of Landlord made at any time prior to
the expiration of the Term, removed upon the expiration or sooner termination of
this Lease and the Premises restored to the same condition as before such
installation.
(e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high power usage equipment in the Premises, Tenant
shall obtain the written permission of Landlord. Landlord may refuse to grant
such permission unless Tenant agrees to pay the costs to Landlord for
installation of supplementary air conditioning capacity or electrical systems
necessitated by such equipment.
(f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
10
13. MAINTENANCE AND REPAIRS OF PREMISES
(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole
expense, (1) keep and maintain in good order and condition the Premises, and
repair and replace every part thereof, including glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, interior lighting (including, without limitation, light bulbs and
ballasts), the plumbing and electrical systems exclusively serving the Premises,
all communications systems serving the Premises, Tenant's signage, interior
demising walls and partitions, equipment, interior painting and interior walls
and floors, and the roll-up doors, ramps and dock equipment, including, without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock lights
located in or on the Premises (excepting only those portions of the Building or
the Project to be maintained by Landlord, as provided in Paragraph 13(b) below),
(2) furnish all expendables, including light bulbs, paper goods and soaps, used
in the Premises, and (3) keep and maintain in good order and condition, repair
and replace all of Tenant's security systems in or about or serving the
Premises. Tenant shall not do nor shall Tenant allow Tenant's Agents to do
anything to cause damage, deterioration or unsightliness to the Premises, the
Building or the Project.
(b) Maintenance by Landlord. Subject to the provisions of Paragraphs
13(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's
Proportionate Share(s) of the cost and expense of the following items, Landlord
agrees to repair and maintain the following items: the roof coverings (provided
that Tenant installs no additional air conditioning or other equipment on the
roof that damages the roof covering, in which event Tenant shall pay all costs
resulting from the presence of such additional equipment); the Systems serving
the Premises and the Building, excluding the plumbing and electrical systems
exclusively serving the Premises; and the Parking Areas, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the
Common Areas. Subject to the provisions of Paragraphs 13(a), 22 and 23,
Landlord, at its own cost and expense, agrees to repair and maintain the
following items: the structural portions of the roof (specifically excluding the
roof coverings), the foundation, the footings, the floor slab, and the load
bearing walls and exterior walls of the Building (excluding any glass and any
routine maintenance, including, without limitation, any painting, sealing,
patching and waterproofing of such walls). Notwithstanding anything in this
Paragraph 13 to the contrary, Landlord shall have the right to either repair or
to require Tenant to repair any damage to any portion of the Premises, the
Building and/or the Project caused by or created due to any act, omission,
negligence or willful misconduct of Tenant or Tenant's Agents and to restore the
Premises, the Building and/or the Project, as applicable, to the condition
existing prior to the occurrence of such damage; provided, however, that in the
event Landlord elects to perform such repair and restoration work, Tenant shall
reimburse Landlord upon demand for all costs and expenses incurred by Landlord
in connection therewith. Landlord's obligation hereunder to repair and maintain
is subject to the condition precedent that Landlord shall have received written
notice of the need for such repairs and maintenance and a reasonable time to
perform such repair and maintenance. Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant responsible to
Landlord for any liability incurred by Landlord by reason of such condition.
(c) Tenant's Waiver of Rights. Tenant hereby expressly waives all rights
to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932(1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
14. LANDLORD'S INSURANCE
Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project. Tenant shall, at its sole
cost and
11
expense, comply with any and all reasonable requirements pertaining to the
Premises, the Building and the Project of any insurer necessary for the
maintenance of reasonable fire and commercial general liability insurance,
covering the Building and the Project. Landlord, at Tenant's cost, may maintain
"Loss of Rents" insurance, insuring that the Rent will be paid in a timely
manner to Landlord for a period of a least twelve (12) months if the Premises,
the Building or the Project or any portion there of are destroyed or rendered
unusable or inaccessible by any cause insured against under this Lease.
15. TENANT'S INSURANCE
(a) Commercial General Liability Insurance. Tenant shall, at Tenant's
expense, secure and keep in force a "broad form" commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord and its lenders as additional insureds, against any liability
arising out of the ownership, use, occupancy or maintenance of the Premises. The
minimum limit of coverage of such policy shall be in the amount of not less than
Three Million Dollars ($3,000,000.00) for injury or death of one person in any
one accident or occurrence and in the amount of not less than Three Million
dollars ($3,000,000.00) for injury or death of more than one person in any one
accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for
Tenant's indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least Three Million Dollars ($3,000,000.00). Landlord may from time to
time require reasonable increases in any such limits if Landlord believes that
additional coverage is necessary or desirable. The limit of any insurance shall
not limit the liability of Tenant hereunder. No policy maintained by Tenant
under this Paragraph 15(a) shall contain a deductible greater than two thousand
five hundred dollars ($2,500.00). No policy shall be cancelable or subject to
reduction of coverage without thirty (30) days prior written notice to Landlord,
and loss payable clauses shall be subject to Landlord's approval. Such policies
of insurance shall be issued as primary policies and not contributing with or in
excess of coverage that Landlord may carry, by an insurance company authorized
to do business in the State of California for the issuance of such type of
insurance coverage and rated A:XIII or better in Best's Key Rating Guide.
(b) Personal Property Insurance. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnishings, trade or
business fixtures and equipment (collectively, "Tenant's Property") on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than two thousand
five hundred dollars ($2,500.00). During the term of the Lease the proceeds from
any such policy or policies of insurance shall be used for the repair or
replacement of the fixtures and equipment so insured. Landlord shall have no
interest in the insurance upon Tenant's equipment and fixtures and will sign all
documents reasonably necessary in connection with the settlement of any claim or
loss by Tenant. Landlord will not carry insurance on Tenant's possessions.
(c) Worker's Compensation Insurance; Employer's Liability Insurance.
Tenant shall, at Tenant's expense, maintain in full force and effect worker's
compensation insurance with not less than the minimum limits required by law,
and employer's liability insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000).
(d) Evidence of Coverage. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least thirty (30)
days prior to expiration of each policy, furnish Landlord with certificates of
renewal or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except
after thirty (30) days prior written notice to Landlord and
12
the other parties named as additional insureds as required in this Lease (except
for cancellation for nonpayment of premium, in which event cancellation shall
not take effect until at least ten (10) days notice has been given to Landlord).
16. INDEMNIFICATION
(a) Of Landlord. Tenant shall indemnify and hold harmless Landlord,
Landlord's investment advisor and agent, Allegis Realty Investors LLC, and
Landlord's Agents against and from any and all claims, liabilities, judgments,
costs, demands, causes of action and expenses (including, without limitation,
reasonable attorney's fees) arising from (1) the use of the Premises, the
Building or the Project by Tenant or Tenant's Agents, or from any activity done,
permitted or suffered by Tenant or Tenant's Agents in or about the Premises, the
Building or the Project, and (2) any act, neglect, fault, willful misconduct or
omission of Tenant or Tenant's Agents, or from any breach or default in the
terms of this Lease by Tenant or Tenant's Agents, and (3) any action or
proceeding brought on account of any matter items (1) or (2). If any action or
proceeding is brought against Landlord by reason of any such claim, upon notice
from Landlord, Tenant shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. As a material part of the consideration to
Landlord, Tenant hereby releases Landlord and Landlord's Agents from
responsibility for, waives it entire claim of recovery for and assumes all risk
of (i) damage to property or injury to persons in or about the Premises, the
Building or the Project from any cause whatsoever (except that which is caused
by the sole active gross negligence or willful misconduct of Landlord or
Landlord's Agents or by the failure of Landlord to observe any of the terms and
conditions of this Lease, if such failure has persisted for an unreasonable
period of time after written notice of such failure), or (ii) loss resulting
from business interruption or loss of income at the Premises. The obligations of
Tenant under this Paragraph 16 shall survive any termination of this Lease.
(b) No Impairment of Insurance. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.
17. SUBROGATION
Landlord and Tenant hereby mutually waive any claim against the other and
its Agents for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
now agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and shall have their insurance policies endorsed to prevent
the invalidation of the insurance coverage because of these waivers. Nothing in
this Paragraph 17 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.
18. SIGNS
Tenant shall not place or permit to be placed in, upon, or about the
Premises, the Building or the Project any exterior lights, decorations,
balloons, flags, pennants, banners, advertisements or notices, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior the Premises
without obtaining Landlord's prior written consent or without complying with
Landlord's signage criteria specified on Exhibit E hereto, as the same may be
modified by Landlord from time to time, and with all applicable Laws and will
not conduct, or permit to be conducted, any sale by auction on the Premises or
otherwise
13
on the Project. Tenant shall remove any sign, advertisement or notice placed on
the Premises, the Building or the project by Tenant upon the expiration of the
term or sooner termination of this Lease, and Tenant shall repair any damage or
injury to the Premises, the Building or the Project caused thereby, all at
Tenant's expense. If any signs are not removed, or necessary repairs not made,
Landlord shall have the right to remove the signs and repair any damage or
injury to the Premises, the Building or the Project at Tenant's sole cost and
expense.
19. FREE FROM LIENS
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the lien to be released of
record by payment or posting of a proper bond, Landlord shall have in addition
to all other remedies provided herein and by law the right but not the
obligation to cause same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, attorneys' fees) shall be payable to Landlord by tenant upon
demand. Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises, the Building and the
Project, from mechanics' and materialmens' liens. Tenant shall give to Landlord
at least five (5) business days' prior written notice of commencement of any
repair or construction on the Premises.
20. ENTRY BY LANDLORD
Tenant shall permit Landlord and Landlord's agents to enter into and upon
the Premises at all reasonable times, upon reasonable notice (except in the case
of an emergency, for which no notice shall be required), and subject to Tenant's
reasonable security arrangements, for the purpose of inspecting the same or
showing the Premises to prospective purchasers, lenders or tenants to alter,
improve, maintain and repair the Premises or the Building as required or
permitted of Landlord under the terms hereof, or for any other business purpose,
without any rebate of rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Premises thereby occasioned (except for
actual damages resulting from the sole active gross negligence or willful
misconduct of Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary "for sale" or "for lease" signs. No such entry
shall be construed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant from the Premises. Landlord may
temporarily close entrances, doors, corridors, elevators or other facilities
without liability to Tenant by reason of such closure in the case of an
emergency and when Landlord otherwise deems such closure necessary.
21. DESTRUCTION AND DAMAGE
(a) If the Premises are damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) In the event of total destruction (which shall mean destruction
or damage in excess of twenty-five (25%) percent of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
date (the "Casualty Discovery Date") Landlord obtains actual knowledge of such
destruction. If Landlord elects not to restore the Premises, this Lease shall be
deemed to have terminated as of the date of such total destruction.
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(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within one hundred eighty (180) days from
the Casualty Discovery Date, Landlord shall commence and proceed diligently with
the work of repair and restoration, in which event the Lease shall continue in
full force and effect. If such repair and restoration requires longer than one
hundred eighty (180) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair and restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects not
to restore the Premises, this Lease shall be deemed to have terminated as of the
date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord may elect to terminate this Lease by
written notice of such election given to Tenant within thirty (30) days after
the Casualty Discovery Date.
(b) If the Premises are damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect, or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the Casualty Discovery Date. If Landlord elects not to restore the
Premises, this Lease shall be deemed to have terminated as of the date on which
Tenant surrenders possession of the Premises to Landlord, except that if the
damage to the Premises materially impairs Tenant's ability to continue its
business operation in the Premises, then this Lease shall be deemed to have
terminated as of the date such damage occurred.
(c) Notwithstanding anything to the contrary in this ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ shall have the option to terminate this Lease, exercisable by notice to
Tenant within sixty (60) days after the Casualty Discovery Date, in each of the
following instances:
(1) If more than twenty five percent (25%) of the full insurable
value of the Building or the Project is destroyed, regardless of whether or not
the Premises are destroyed.
(2) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
one hundred eighty (180) days from the Casualty Discovery Date.
(3) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration.
(4) If the Building or the Project or any portion thereof is damaged
or destroyed during the last twelve (12) months of the Term.
(d) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration, but only to the extent of rental abatement insurance proceeds
received by Landlord; provided, however,
15
that Tenant shall not be entitled to such abatement to the extent that such
damage or destruction resulted from the acts or inaction of Tenant or Tenant's
Agents. Except as expressly provided in the immediately preceding sentence with
respect to abatement of Base Rent, Tenant shall have no claim against Landlord
for, and hereby releases Landlord and Landlord's Agents from responsibility for
and waives its entire claim of recovery for any cost, loss or expense suffered
or incurred by Tenant as a result of any damage to or destruction of the
Premises, the Building or the Project or the repair or restoration thereof,
including, without limitation, any cost, loss or expense resulting from any loss
of use of the whole or any part of the Premises, the Building or the Project
and/or any inconvenience or annoyance occasioned by such damage, repair or
restoration.
(e) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial tenant improvements,
if any, constructed by landlord in the Premises pursuant to the terms of this
Lease, substantially to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant's expense, Tenant's Alterations which were not constructed by
Landlord.
(f) Tenant hereby waives the provisions of California Civil Code Section
1932(2) and Section 1933(4) which permit termination of a lease upon destruction
of the leased premises, and the provisions of any similar law now or hereinafter
in effect, and the provisions of Paragraph 22 shall govern exclusively in case
of such destruction.
22. CONDEMNATION
(a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the parking areas for the Building or the Project is
taken for any public or quasi-public purpose by any lawful governmental power or
authority, by exercise of the right of appropriation, inverse condemnation,
condemnation or eminent domain, or sold to prevent such taking (each such event
being referred to as a "Condemnation"), Landlord may, at its option, terminate
this Lease as of the date title vests in the condemning party. If twenty-five
percent (25%) or more of the Premises is taken and if the Premises remaining
after such Condemnation and any repairs by Landlord would be untenantable for
the conduct of Tenant's business operations, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. If
either party elects to terminate this Lease as provided herein, such election
shall be made by written notice to the other party given within thirty (30) days
after the nature and extent of such Condemnation have been finally determined.
If neither Landlord nor Tenant elects to terminate this Lease to the extent
permitted above, Landlord shall promptly proceed to restore the premises, to the
extent of any Condemnation award received by Landlord, to substantially the same
condition as existed prior to such Condemnation, allowing for the reasonable
effects of such Condemnation, and a proportionate abatement shall be made to the
Base Rent corresponding to the time during which, and to the portion of the
floor area of the Premises (adjusted for any increase thereto resulting from any
reconstruction) of which Tenant is deprived on account of such Condemnation and
restoration, as reasonably determined by Landlord. Except as expressly provided
in the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any Condemnation or the repair or restoration of the Premises, the
Building or the Project or the parking areas for the Building or the Project
following such Condemnation, including, without limitation, any cost, loss or
expense resulting from any loss of use of the whole or any part of the Premises,
the Building, the Project or the parking areas and/or any inconvenience or
annoyance occasioned by such Condemnation, repair or restoration. The provisions
of California Code of Civil Procedure Section 1265.130, which allows either
party to petition the Superior Court to terminate the lease in the event of a
partial taking of the
16
Premises, the Building or the Project or the parking areas for the Building or
the Project, and any other applicable law now or hereafter enacted, are hereby
waived by Tenant.
(b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant's relocation expenses
or the value of Tenant's Property (specifically excluding fixtures, Alterations
and other components of the Premises which under this Lease or by law are or at
the expiration of the Term will become the property of Landlord), provided that
such award does not reduce any award otherwise allocable or payable to Landlord.
23. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (2) assign or
transfer this Lease or any interest herein, sublease the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of
Landlord, which consent shall not be withheld unreasonably provided that (i)
Tenant is not then in Default under this Lease nor is any event then occurring
which with the giving of notice or the passage of time, or both, would
constitute a Default hereunder, and (ii) Tenant has not previously assigned or
transferred this Lease or any interest herein or subleased the Premises or any
part thereof. When Tenant requests Landlord's consent to such assignment or
subletting, it shall notify Landlord in writing of the name and address of the
proposed assignee or subtenant and the nature and character of the business of
the proposed assignee or subtenant and shall provide current and prior financial
statements for the proposed assignee or subtenant prepared in accordance with
generally accepted accounting principles. Tenant shall also provide landlord
with a copy of the proposed sublease or assignment agreement, including all
material terms and conditions thereof. Landlord shall have the option, to be
exercised within thirty (30) days of receipt of the foregoing, to (1) terminate
this Lease as of the commencement date stated in the proposed sublease or
assignment, (2) sublease or take and assignment, as the case may be, from Tenant
of the interest, or any portion thereof, in this Lease and/or the Premises that
Tenant proposes to assign or sublease, on the same terms and conditions as
stated in the proposed sublet or assignment agreement, (3) consent to the
proposed assignment or sublease, or (4) refuse to consent to the proposed
assignment or sublease, providing that such consent shall not be unreasonably
withheld so long as Tenant is not then in Default under this Lease nor is any
event then occurring which with the giving of notice or the passage of time, or
both, would constitute a default hereunder. In the event Landlord elects to
terminate this Lease or sublease or take an assignment from Tenant of the
interest, or portion thereof, in the Lease and/or the Premises that Tenant
proposes to assign or sublease as provided in the foregoing clauses (1) and (2),
respectively, then Landlord shall have the additional right to negotiate
directly with Tenant's proposed assignee or subtenant and to enter into a direct
lease or occupancy agreement with such party on such terms as shall be
acceptable to Landlord in its sole and absolute discretion, and Tenant hereby
waives any claims against Landlord related thereto, including, without
limitation, any claims for any compensation or profit related to such lease or
occupancy agreement.
(b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable
criteria including, but not limited to, the following: (1) whether or not the
proposed subtenant or assignee is engaged in a business which, and the use of
the Premises will be in a manner which, is in keeping with the then character
and nature of all other tenancies in the Project, (2) whether the use to be made
of the Premises by the proposed subtenant or assignee will conflict with any
so-called "exclusive" use then in favor of any other tenant of the
17
Building or the Project, and whether such use would be prohibited by any other
portion of this Lease, including, but not limited to, any rules and regulations
then in effect, or under applicable Laws, and whether such use imposes a greater
load upon the Premises and the Building and Project services then imposed by
Tenant, (3) the business reputation of the proposed individuals who will be
managing and operating the business operations of the assignee or subtenant, and
the long-term financial and competitive business prospects of the proposed
assignee or subtenant, and (4) the creditworthiness and financial stability of
the proposed assignee or subtenant in light of the responsibilities involved. In
any event, Landlord may withhold its consent to any assignment or sublease, if
(i) the actual use proposed to be conducted in the Premises or portion thereof
conflicts with the provisions of Paragraph 8(a) or (b) above or with any other
lease which restricts the use to which any space in the Building or the Project
may be put, or (ii) the proposed assignment or sublease requires alterations,
improvements or additions to the Premises or portions thereof.
(c) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as additional rent 75% of the difference, if any
between (1) the Base Rent plus Additional Rent allocable to that part of the
Premises affected by such assignment or sublease pursuant to the provisions of
this Lease, and (2) the rent and any additional rent payable by the assignee or
sublessee to Tenant, less reasonable and customary market-based leasing
commissions, if any, incurred by Tenant in connection with such assignment or
sublease. The assignment or sublease agreement, as the case may be, after
approval by Landlord, shall not be amended without Landlord's prior written
consent, and shall contain a provision directing the assignee or subtenant to
pay the rent and other sums due thereunder directly to Landlord upon receiving
written notice from Landlord that Tenant is in default under this Lease with
respect to the payment of Rent. In the event that, notwithstanding the giving of
such notice, Tenant collects any rent or other sums from assignee or subtenant,
then Tenant shall hold such sums in trust for the benefit of Landlord and shall
immediately forward the same to Landlord. Landlord's collection of such rent and
other sums shall not constitute an acceptance by Landlord of attornment by such
assignee or subtenant. A consent to one assignment, subletting, occupation or
use shall not be deemed to be a consent to any other or subsequent assignment,
subletting, occupation or use, and consent to any assignment or subletting shall
in no way relieve Tenant of any liability under this Lease. Any assignment or
subletting without Landlord's consent shall be void, and shall, at the option of
Landlord, constitute a Default under this Lease.
(d) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of the Rent and for compliance with
all of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has been obtained for any such assignment or subletting).
(e) Tenant shall pay Landlord's reasonable fees (including, without
limitation, the fees of Landlord's counsel), incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.
(f) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 24, Tenant's assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises. In furtherance of the
foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee
or subtenant claiming under it (and any such assignee or subtenant by accepting
such assignment or sublease shall be deemed to acknowledge and agree) that no
sub-subleases or further assignments of this Lease shall be permitted at any
time.
(g) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 24 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or
18
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof, are, for the purposes of California
Civil Code Section 1951.4, as amended from time to time, and for all other
purposes, reasonable at the time that the Lease was entered into, and shall be
deemed to be reasonable at the time that Tenant seeks to assign or transfer this
Lease or any interest herein, to sublet the Premises or any part thereof, to
transfer or assign any right or privilege appurtenant to the Premises, or to
allow any other person to occupy or use the Premises or any portion thereof.
So long as Tenant delivers to Landlord (1) at least thirty (30) days prior
written notice of its intention to assign or sublease the Premises to any
Related Entity, which notice shall set forth the name of the Related Entity, (2)
a copy of the proposed agreement pursuant to which such assignment or sublease
shall be effectuated, and (3) such other information concerning the Related
Entity as Landlord may reasonably require, including without limitation,
information regarding any change in the proposed use of any portion of the
Premises and any financial information with respect to such Related Entity, and
so long as (i) Landlord approves, in writing of any change in the proposed use
of the subject portion of the Premises and such financial information and (ii)
such Related Entity expressly assumes all of the obligations, duties and
provisions under the Lease and no such assignment shall act as a release of the
originally named Tenant from such obligations, duties and provisions, then
tenant may assign this Lease or sublease any portion of the premises (X) to any
Related Entity, or (Y) in connection with any merger, consolidation or sale of
substantially all of the assets of Tenant, without having to obtain the prior
written consent of Landlord thereto. For purposes of this Lease the term
"Related Entity" shall mean and refer to any corporation or entity which
controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry, and with an equal or greater
net worth as Tenant has as of the proposed transfer date.
24. TENANT'S DEFAULT
The occurrence of any one of the following events shall constitute an
event of default on the part of Tenant ("Default"):
(a) The vacation or abandonment of the Premises by Tenant for a period of
ten (10) consecutive days or any vacation or abandonment of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse, or the failure of Tenant to continuously operate Tenant's business in the
Premises, in each of the foregoing cases irrespective of whether or not Tenant
is then in monetary default under this Lease. Tenant agrees to notice and
service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
(b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of three (3) days after
the same is due;
(c) A general assignment by Tenant or any guarantor or surety of Tenant's
obligations hereunder (collectively, "Guarantor") for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;
19
(e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;
(f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person or the failure by Tenant or any Guarantor to
maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;
(g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required Paragraphs 30 or 31 or 42;
(h) An assignment or sublease, or attempted assignment or sublease, of
this Lease or the Premises by Tenant contrary to the provision of Paragraph 24,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;
(i) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;
(j) Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
subparagraphs (b), (l) or (m) above or any other subparagraphs of this Paragraph
25, which shall be governed by such other Paragraphs), which failure continues
for ten (10) days after written notice thereof from Landlord to Tenant, provided
that, if Tenant has exercised reasonable diligence to cure such failure and such
failure cannot be cured within such ten (10) day period despite reasonable
diligence, Tenant shall not be in default under this subparagraph so long as
Tenant thereafter diligently and continuously prosecutes the cure to completion
and actually completes such cure within thirty (30) days after the giving of the
aforesaid written notice;
(k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within three (3) days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any period of twelve (12) months. In the event of a Chronic Delinquency,
in addition to Landlord's other remedies for Default provided in this Lease, at
Landlord's option, Landlord shall have the right to require that Rent be paid by
Tenant quarterly, in advance;
(l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. "Chronic
Overuse" shall mean use by Tenant or Tenant's Agents of a number of parking
spaces greater than the number of parking spaces set forth in the Basic Lease
Information more than three (3) times during the Term after written notice by
Landlord;
(m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and
(n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within ten (10) days
after the date such lien or encumbrance is filed or recorded against the Project
or any part thereof.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
25(j), (k) or (l) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
20
(o) Any default by any Guarantor under any guaranty of this Lease
("Guaranty"), or any Guaranty, shall, at any time after its respective execution
and delivery and for any reason, cease to be in full force and effect or be
declared null and void, or the validity or enforceability thereof shall be
contested by any Guarantor or any stockholder, partner or member of any
Guarantor, or any Guarantor shall deny that it has any or further liability or
obligation under any Guaranty to which it is a party.
25. LANDLORD'S REMEDIES
(a) Termination. In the event of any Default by Tenant, then in addition
to any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus
(2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligation under
this Lease or which in the ordinary course would be likely to result therefrom,
including, without limitation, (A) any costs or expenses incurred by Landlord
(1) in retaking possession of the Premises; (2) in maintaining, repairing,
preserving, restoring, replacing, cleaning, altering, remodeling or
rehabilitating the Premises or any affected portions of the Building or the
Project, including such actions undertaken in connection with the reletting or
attempted reletting of the Premises to a new tenant or tenants; (3) for leasing
commissions, advertising costs and other expenses of reletting the Premises; or
(4) in carrying the Premises, including taxes, insurance premiums, utilities and
security precautions; (B) any unearned brokerage commissions paid in connection
with this Lease; (C) reimbursement of any previously waived or abated Base Rent
or Additional Rent or any free rent or reduced rental rate granted hereunder;
and (D) any concession made or paid by Landlord to the benefit of Tenant in
consideration of this Lease including, but not limited to, any moving
allowances, contributions, payments or loans by Landlord for tenant improvements
or build-out allowances (including without limitation, any unamortized portion
of the Tenant Improvement Allowance (such Tenant Improvement Allowance to be
amortized over the Term in the manner reasonably determined by Landlord), if
any, and any outstanding balance (principal and accrued interest) of the Tenant
Improvement Loan, if any), or assumptions by Landlord of any of Tenant's
previous lease obligations; plus
(5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
(6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above,
21
the "worth at the time of award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award,
plus one percent (1%). Tenant waives redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 and 1179, or under any other
pertinent present or future Law, in the event Tenant is evicted or Landlord
takes possession of the Premises by reason of any Default of Tenant hereunder.
(b) Continuation of Lease. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet or assign, subject only to reasonable limitations). In
addition, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises. For purposes of this Paragraph 26(b), the
following acts by Landlord will not constitute the termination of Tenant's right
to possession of the Premises:
(1) Acts of maintenance or preservation or efforts to relet the
Premises, including but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any part thereof; or
(2) The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.
(c) Re-entry. the event of any Default by Tenant, Landlord shall also have
the right, with or without terminating this Lease, in compliance with applicable
law, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored in a public warehouse or
elsewhere at the coat of and for the account of Tenant.
(d) Reletting. In the event of the abandonment of the Premises by Tenant
or in the event that Landlord shall elect to re-enter as provided in Paragraph
26(c) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in ▇▇▇▇▇▇▇▇▇ ▇▇(▇), ▇▇▇▇▇▇▇▇ may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord's sole discretion.
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (1) to
reasonable attorneys' fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (2) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (3) to the payment of any costs of such reletting; (4) to the payment
of the costs of any alterations and repairs to the Premises; (5) to the payment
of Rent due and unpaid hereunder; and (6) the residue, if any, shall be held by
Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder. Should that portion
of such rentals received from such reletting during any month, which is applied
to the payment of Rent hereunder, be less than the Rent payable during the month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(e) Termination. No re-entry or taking of possession of the Premises by
Landlord pursuant this Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless to termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting
22
without termination by Landlord because of any Default by Tenant, Landlord may
at any time after such reletting elect to terminate this Lease for any such
Default.
(f) Cumulative Remedies. The remedies herein provided are not exclusive
and Landlord shall have any and all other remedies provided herein or by law or
in equity.
(g) No Surrender. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgement of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.
26. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
(a) Without limiting the rights and remedies of Landlord contained in
Paragraph 26 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, Landlord may at Landlord's option, without any
obligation to do so, and without notice to Tenant perform any such term,
provision, covenant, or condition, or make any such payment and Landlord by
reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant's Agents.
(b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord's option, without any obligation to do
so, to perform any of Tenant's covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.
(c) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the date of payment by Landlord at the lower of (1) ten percent
(10%) per annum, or (2) the highest rate permitted by applicable law.
27. ATTORNEY'S FEES
(a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees and
disbursements. Any such attorneys' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees
23
obligation is intended to be severable from the other provisions of this Lease
and to survive and not be merged into any such judgment.
(b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant of in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys' fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.
28. TAXES
Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant pursuant
to Paragraph 11 or any of Tenant's Property is assessed and taxed with the
Project or Building, Tenant shall pay such taxes to Landlord within (10) days
after delivery to Tenant of a statement therefor.
29. EFFECT OF CONVEYANCE
The term "Landlord" as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and it shall be deemed and construed, without further
agreement between the parties and the purchaser at any such sale, that the
purchaser of the Building or the Project has assumed and agreed to carry out any
and all covenants and obligations of Landlord hereunder.
30. TENANT'S ESTOPPEL CERTIFICATE
From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a written certificate
stating (a) the date this Lease was executed, the Commencement Date of the Term
and the date the Term expires; (b) the date Tenant entered into occupancy of the
Premises; (c) the amount of Rent and the date to which such Rent has been paid;
(d) that this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (or, if assigned, modified,
supplemented or amended, specifying the date and terms of any agreement so
affecting this Lease); (e) that this Lease represents the entire agreement
between the parties with respect to Tenant's right to use and occupy the
Premises (or such other agreements, if any); (f) that all obligations under this
Lease to be performed by Landlord as of the date of such certificate have been
satisfied (or specifying those as to which Tenant claims that Landlord has yet
to perform); (g) that all required contributions by Landlord to Tenant on
account of Tenant's improvements have been received (or stating exceptions
thereto); (h) that on such date there exist no defenses or offsets that Tenant
has against the enforcement of this Lease by Landlord (or stating exceptions
thereto); (i) that no Rent or other sum payable by Tenant hereunder has been
paid more than one (1) month in advance (or stating exception thereto); (j) that
security has been deposited with Landlord, stating the original amount thereof
and any increases thereto; and (k) any other matters evidencing the status of
this Lease that may be required either by a lender making a loan to Landlord to
be secured by a deed of trust covering the Building or the Project or by a
purchaser of the Building or the Project. Any such certificate delivered
pursuant to this Paragraph 30 may be relied upon by a prospective purchaser of
Landlord's interest or a mortgagee of Landlord's interest or assignee of any
mortgage upon Landlord's interest in the Premises. If Tenant shall fail to
provide such certificate within ten (l0) days of receipt by Tenant of a written
request by Landlord as herein provided, such failure shall, at Landlord's
election, constitute a Default under this Lease, and Tenant shall be deemed to
have given such certificates as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee.
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31. SUBORDINATION
Landlord shall have the right to cause this Lease to be and remain subject
and subordinate to any and all mortgages, deeds of trust and ground leases, if
any ("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only, that in the event of termination of any such ground
lease or upon foreclosure of any such mortgage or deed of trust, so long as
Tenant is not in default, the holder thereof ("Holder") shall agree to recognize
Tenant's rights under this Lease as long as Tenant shall pay the Rent and
observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within ten (10) days after Landlord's written request,
Tenant shall execute, acknowledge and deliver any and all reasonable documents
required by Landlord or the Holder to effectuate such subordination. If Tenant
fails to do so, such failure shall constitute a Default by Tenant under this
Lease. Notwithstanding anything to the contrary set forth in this Paragraph 31,
Tenant hereby attorns and agrees to attorn to any person or entity purchasing or
otherwise acquiring the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers or remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS
(a) Prior to executing this Lease, Tenant has completed. executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("Initial
Disclosure Certificate"), a fully completed copy of which is attached hereto as
Exhibit F and incorporated herein by this reference. Tenant covenants,
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes the
Hazardous Materials which will be manufactured, treated, used or stored on or
about the Premises by Tenant or Tenant's Agents. Tenant shall, on each
anniversary of the Commencement Date and at such other times as Tenant desires
to manufacture, treat, use or store on or about the Premises new or additional
Hazardous Materials which were not listed on the Initial Disclosure Certificate,
complete, execute and deliver to Landlord an updated Disclosure Certificate
(each, an "Updated Disclosure Certificate") describing Tenant's then current and
proposed future uses of Hazardous Materials on or about the Premises, which
Updated Disclosure Certificates shall be in the same format as that which is set
forth in Exhibit F or in such updated format as Landlord may require from time
to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not
less than thirty (30) days prior to the date Tenant intends to commence the
manufacture, treatment, use or storage of new or additional Hazardous Materials
on or about the Premises, and Landlord shall have the right to approve or
disapprove such new or additional Hazardous Materials in its sole and absolute
discretion. Tenant shall make no use of Hazardous Materials on or about the
Premises except as described in the Initial Disclosure Certificate or as
otherwise approved by Landlord in writing in accordance with this Paragraph
32(a).
(b) As used in this Lease, the term "Hazardous Materials" shall mean and
include any substance that is or contains (1) any "hazardous substance" as now
or hereafter defined in (S)(S) 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA")(42
U.S.C. (S)(S) 9601 et seq.) or any regulations promulgated under CERCLA; (2) any
"hazardous waste" as now or hereafter defined in the Resource Conservation and
Recovery Act, as amended ("RCRA") (42 U.S.C. (S)(S) 6901 et seq.) or any
regulations promulgated under RCRA; (3) any substance now or hereafter regulated
by the Toxic Substance Control Act, as amended ("TSCA") (15 U.S.C. (S)(S) 2601
et seq.) or any regulations promulgated under TSCA; (4) petroleum, petroleum by-
products, gasoline, diesel fuel, or other petroleum hydrocarbons; (5) asbestos
and asbestos-containing material, in any form, whether friable or non-friable;
(6) polychlorinated biphenyls; (7) lead and lead-containing materials or
25
(8) any additional substance, material or waste (A) the presence of which on or
about the Premises (i) requires reporting, investigation or remediation under
any Environmental Laws (as hereinafter defined), (ii) causes or threatens to
cause a nuisance on the Premises or any adjacent area or property or poses or
threatens to pose a hazard to the health or safety of persons on the Premises or
any adjacent area or property, or (iii) which, if it emanated or migrated from
the Premises, could constitute a trespass, or (B) which is now or is hereafter
classified or considered to be hazardous or toxic under any Environmental Laws.
(c) As used in this Lease, the term "Environmental Laws" shall mean and
include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or
regulation of human health, natural resources or the environment, (C) the
treatment, storage or disposal of Hazardous Materials, or (D) the emission,
discharge, release or threatened release of Hazardous Materials into the
environment.
(d) Tenant agrees that during its use and occupancy of the Premises it
will (1) not (A) permit Hazardous Materials to be present on or about the
Premises except in a manner and quantity necessary for the ordinary performance
of Tenant's business or (B) release, discharge or dispose of any Hazardous
Materials on, in, at, under, or emanating from, the Premises, the Building or
the Project; (2) comply with all Environmental Laws relating to the Premises and
the use of Hazardous Materials on or about the Premises and not engage in or
permit others to engage in any activity at the Premises in violation of any
Environmental Laws; and (3) immediately notify Landlord of (A) an inquiry, test,
investigation or enforcement proceeding by any governmental agency or authority
against Tenant, Landlord or the Premises, Building or Project relating to any
Hazardous Materials or under any Environmental Laws or (B) the occurrence of any
event or existence of any condition that would cause a breach of any of the
covenants set forth this Paragraph 32.
(e) If Tenant's use of Hazardous Materials on or about the Premises
results in a release, discharge or disposal of Hazardous Materials on, in, at,
under, or emanating from, the Premises, the Building or the Project, Tenant
agrees to investigate, clean up, remove or remediate such Hazardous Materials in
full compliance with (1) the requirements of (A) all Environmental Laws and (B)
any governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (2) any additional requirements of Landlord that are
reasonably necessary to protect the value of the Premises, the Building or the
Project.
(f) Upon reasonable notice to Tenant Landlord may inspect the Premises and
surrounding areas for the purpose of determining whether there exists on or
about the Premises any Hazardous Material or other condition or activity that is
in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or
adjacent property with drill rigs or other machinery for the purpose of
obtaining laboratory samples. Landlord shall not be limited in the number of
such inspections during the Term of this Lease. In the event (1) such
inspections reveal the presence of any such Hazardous Material or other
condition or activity in violation of the requirements of this Lease or of any
Environmental Laws, or (2) ▇▇▇▇▇ or its Agents contribute or knowingly consent
to the presence of any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project or exacerbate the condition of or the
conditions caused by any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project, Tenant shall reimburse Landlord for the
cost of such inspections within ten (10) days of receipt of a written statement
therefor. Tenant will supply to Landlord such historical and operational
information regarding the Premises and surrounding areas as may be reasonably
requested to facilitate any such inspection and will make available for meetings
appropriate personnel having knowledge of such matters. Tenant agrees to give
Landlord at least sixty (60) days' prior notice of its intentions to vacate the
Premises so
26
that Landlord will have an opportunity to perform such an inspection prior to
such vacation. The right granted to Landlord herein to perform inspections shall
not create a duty on Landlord's part to inspect the Premises, or liability on
the part of Landlord for Tenant's use, storage, treatment or disposal of
Hazardous Materials, it being understood that Tenant shall be solely responsible
for all liability in connection therewith.
(g) Landlord shall have the right, but not the obligation, prior or
subsequent to a Default, without in any way limiting Landlord's other rights and
remedies under this Lease, to enter upon the Premises, or to take such other
actions as it deems necessary or advisable, to investigate, clean up, remove or
remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the Premises, the Building or the
Project in violation of Tenant's obligations under this Lease or under any
Environmental Laws. Notwithstanding any other provision of this Lease, Landlord
shall also have the right, at its election, in it own name or as Tenant's agent,
to negotiate, defend, approve and appeal, at Tenant's expense, any action taken
or order issued by any governmental agency or authority with regard to any such
Hazardous Materials or contamination by Hazardous Materials. All costs and
expenses paid or incurred by Landlord in the exercise of the rights set forth in
this Paragraph 32 shall be payable by Tenant upon demand.
(h) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on, about or near the Premises by Tenant or Tenant's Agents, and in a
condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project, including, without limitation, the
obtaining of any closure permits or other governmental permits or approvals
related to Tenant's use of Hazardous Materials in or about the Premises.
Tenant's obligations and liabilities pursuant to the provisions of this
Paragraph 32 shall survive the expiration or earlier termination of this Lease.
If it is determined by Landlord that the condition of all or any portion of the
Premises, the Building, and/or the Project is not in compliance with the
provisions of this Lease with respect to Hazardous Materials, including, without
limitation, all Environmental Laws, at the expiration or earlier termination of
this Lease, then at the Landlord's sole option, Landlord may require Tenant to
hold over possession of the Premises until Tenant can surrender the Premises to
Landlord in the condition in which the Premises existed as of the Commencement
Date and prior to the appearance of such Hazardous Materials except for normal
wear and tear, including, without limitation, the conduct or performance of any
closure as required by any Environmental Laws. The burden of proof hereunder
shall be upon Tenant. For purposes hereof, the term "normal wear and tear" shall
not include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with Landlord's consent, will not be terminable by
Tenant in any event or circumstance and will otherwise be subject to the
provisions of Paragraph 35 of this Lease.
(i) As between Landlord and Tenant, Tenant shall not be required to pay
for the clean up of any contamination caused by the acts or omissions of a prior
tenant of the Premises, if Tenant can demonstrate to Landlord's reasonable
satisfaction that Tenant: (1) did not introduce, spill, release or deposit any
Hazardous materials, in or about the Premises, the Building or the Outside
areas; and (2) has not contributed to, exacerbated or permitted, directly or
indirectly, the presence, migration or release of any Hazardous Materials or
contamination in, on or about the Premises, the Building or the Outside Areas.
(j) Tenant agrees to indemnify and hold harmless Landlord from and against
any and all claims, losses (including, without limitation, loss in value of the
Premises, the Building or the Project, liabilities and expenses (including
attorney's fees)) sustained by Landlord attributable to (1) any Hazardous
Materials placed on or about the Premises, the
27
Building or the Project by Tenant or Tenant's Agents, or (2) Tenant's breach of
any provisions of this Paragraph 32.
(k) The provision of this Paragraph 32 shall survive the expiration or
earlier termination of this Lease.
33. NOTICES
All notices and demands which are required or may be permitted to be given
to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
overnight courier, addressed to the addressee at Tenant's Address or Landlord's
Address as specified in the Basic Lease Information, or to such other place as
either party may form time to time designate in a notice to the other party
given as provided herein. Copies of all notices and demands given to Landlord
shall additionally be sent to Landlord's property manager at the address
specified in the Basic Lease Information or at such other address as Landlord
may specify in writing from time to time. Notice shall be deemed gives upon
actual receipt (or attempted delivery if delivery is refused), if personally
delivered, or one (1) business day following deposit with a reputable overnight
courier that provides a receipt, or on the third (3rd) day following deposit in
the United States mail in the manner described above.
34. WAIVER
The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provision of
this Lease.
35. HOLDING OVER
Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this lease, such holding over shall be construed
to be a tenancy at sufferance, at a rental rate of one hundred fifty percent
(150%) of the Base Rent last due in this Lease, plus Additional Rent, and shall
otherwise be on the terms and conditions herein specified, so far as applicable;
provided however, in no event shall any renewal or expansion option or other
similar right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance. If the Premises are not surrendered at the end of the
Term or sooner termination of this Lease, and in accordance with the provisions
of Paragraphs 11 and 32(h). Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by
Tenant in so surrendering the Premises including, without limitation, any loss
or liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorney's fees and costs.
36. SUCCESSORS AND ASSIGNS
The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and
28
assigns of all of the parties hereto. If Tenant shall consist of more than one
entity or person, the obligations of Tenant under this Lease shall be joint and
several.
37. TIME
Time is of the essence of this Lease and each and every term, conditions
and provision herein.
38. Brokers
Landlord and Tenant each represents and warrant so the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorney's fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.
39. LIMITATION OF LIABILITY
Tenant agrees that, in the event of any default or breach by Landlord with
respect to any of the terms of the Lease to be observed and performed by
Landlord (1) Tenant shall look solely to the then-current landlord's interest in
the Building for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by Landlord;
(2) no other property or assets of Landlord, its partner, shareholder, officers,
directors or any successor in interest shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies; (3) no
personal liability shall at any time be asserted or enforceable against
Landlord's partners or successors in interest (except to the extent permitted in
(1) above), or against Landlord's shareholders, officers or directors, or their
respective partners, shareholders, officers, directors, or successors in
interest; and (4) no judgment will be taken against any partner, shareholder,
officer or director of Landlord. The provisions of this section shall apply only
to the Landlord and the parties herein described, and shall not be for the
benefit of any insurer nor any other third party.
40. FINANCIAL STATEMENTS
Within ten (10) days after Landlord's request, Tenant shall deliver to
Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), prepared or compiled by a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied.
41. RULES AND REGULATIONS
Tenant agrees to comply with such reasonable rules and regulations as
Landlord may adopt from time to time for the orderly and proper operation of the
Building and the Project. Such rules may included but shall not be limited to
the following: (a) restriction of employee parking to a limited, designated area
or areas; and (b) regulation of the removal, storage and disposal of Tenant's
refuse and other rubbish at the sole cost and expense of Tenant. The then
current rules and regulations shall be binding upon Tenant upon delivery of a
copy of them to Tenant. Landlord shall not be responsible to Tenant for the
failure of any other person to observe and abide by any of said rules and
regulations. Landlord's current rules and regulations are attached to this Lease
as Exhibit D.
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42. MORTGAGE PROTECTION
(a) Modifications for Lender. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its contents to such
modifications, provided such modifications do not materially adversely affect
Tenant's right or increase Tenant's obligation under this Lease.
(b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage
holder ("Holder"), by registered mail, at the same time as it is given to
Landlord, a copy of any notice of default given to Landlord, provided that prior
to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b)), whichever shall last occur within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary if within such twenty (20) days, any Holder has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary to effect such cure), in which event this Lease shall not be
terminated.
43. ENTIRE AGREEMENT
This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect.
44. INTEREST
Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within ten (10) days from under when the same
is due shall bear interest from the date such payment was originally due under
this Lease until paid at an annual rate equal to the maximum rate of interest
permitted by Law. Payment of such interest shall not excuse or cure any Default
by Tenant. In addition, Tenant shall pay all costs and attorneys' fees incurred
by Landlord in collection of such amounts.
45. CONSTRUCTION
This Lease shall be construed and interpreted in accordance with the laws
of the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease, including
the Exhibits and any Addenda attached hereto. All captions in this Lease are for
reference only and shall not be used in the interpretation of this Lease.
Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any
provision of this Lease shall be determined to be illegal or unenforceable, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect.
46. REPRESENTATIONS AND WARRANTIES OF TENANT
Tenant hereby makes the following representations and warranties, each of
which is material and being relied upon by Landlord, is true in all respects as
of the date of this Lease, and shall survive the expiration or termination of
the Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization and the persons
executing this
30
Lease on behalf of Tenant have the full right and authority to execute this
Lease on behalf of Tenant and to bind Tenant without the consent or approval of
any other persons or entity. Tenant has full power, capacity, authority and
legal right to execute and deliver this Lease and to perform all of its
obligations hereunder. This lease is a legal, valid and binding obligation of
Tenant, enforceable in accordance with its terms.
(b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.
47. RELOCATION
Intentionally omitted.
48. SECURITY
(a) Tenant acknowledges and agrees that, while Landlord may engage
security personnel to patrol the Building or the Project, Landlord is not
providing any security services with respect to the Premises, the Building or
the Project and that Landlord shall not be liable to Tenant for, and Tenant
waives any claim against Landlord with respect to, any loss by theft or any
other damage suffered or incurred by Tenant in connection with any unauthorized
entry into the Premises or any other breach of security with respect to the
Premises, the Building or the Project.
(b) Tenant hereby agrees to the exercise by Landlord and Landlord's
Agents, within their sole discretion, of such security measure as, but not
limited to, the evacuation of the Premises, the Building or the Project for
cause, suspected cause or for drill purposes, the denial of any access to the
Premises, the Building or the Project and other similarly related actions that
it deems necessary to prevent any threat of property damage or bodily injury.
The exercise of such security measures by Landlord and Landlord's Agents, and
the resulting interruption of service and cessation of Tenant's business, if
any, shall not be deemed an eviction or disturbance of Tenant's use and
possession of the Premises, or any part thereof, or render Landlord or
Landlord's Agents liable to Tenant for any resulting damages or relieve Tenant
from Tenant's obligations under this Lease.
49. JURY TRIAL WAIVER
Intentionally omitted.
Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information
Landlord Tenant
HAYWARD INDUSTRIAL PARK ASSOCIATES, Mohawk Industries, Inc.
A California General Partnership A Georgia Corporation
By: Lincoln Property Company By: /s/ ▇. ▇. ▇▇▇▇▇▇
Management Services, Inc ---------------------------------
As Manager and Agent for Landlord Print Name: ▇. ▇. ▇▇▇▇▇▇
-------------------------
By: /s/ [ILLEGIBLE] Its: Executive Vice President
----------------------------- --------------------------------
Senior Vice President
31
EXHIBIT A
DIAGRAM OF THE PREMISES
[GRAPHIC OMITTED] HAYWARD INDUSTRIAL PARK
Hayward, California
[GRAPHIC OMITTED]
Leased Premises:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇, ▇, ▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Approximately 30,240
rentable square feet.
EXHIBIT B - TENANT IMPROVEMENTS
Lease dated November 11, 1997
This exhibit, entitled "Tenant Improvements", is and shall constitute
Exhibit B to the Lease Agreement, dated November 10, 1997, by and between
Landlord and Tenant for the leasing of the Premises ( the "Lease"). The terms
and conditions of this Exhibit B are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein, but not otherwise defined
herein, shall have the meanings ascribed to such terms in the Lease.
1. Tenant agrees to, and shall, accept the Premises on an "as-is" basis,
except that Landlord will install and complete those certain tenant improvement
described in Paragraph 2 below ("Tenant Improvements").
2. Landlord, at Landlord's sole cost and expense, will install and
construct, or cause the installation and construction of, the following
described Tenant Improvements to the Premises:
(a) Demolish and remove office areas and convert two windows to
dock-high roll-up doors as shown in Exhibit B-1, attached hereto and
made part thereof;
(b) Refurbish existing restrooms:
(c) Paint existing office area: and
(d) Remove debris from warehouse.
3. Landlord will not be obligated to pay for the cost of, nor shall
Landlord be required to undertake nor perform, any improvements to the Premises
not specifically set forth in Paragraph 2 above.
4. Tenant and Landlord acknowledge and agree that the Tenant Improvements
will not be completed prior to the Commencement Date. Tenant agrees to work in
harmony with Landlord's contractors and to not interfere in any manner with the
Tenant Improvements work.
Initials:
Tenant: /s/ [ILLEGIBLE]
-----------------------
Landlord: /s/ [ILLEGIBLE]
----------------------
EXHIBIT B-1
INITIAL FLOOR PLAN
[GRAPHIC OMITTED]
EXHIBIT C
COMMENCEMENT AND EXPIRATION DATE MEMORANDUM
LANDLORD: HAYWARD INDUSTRIAL PARK ASSOCIATES,
A CALIFORNIA GENERAL PARTNERSHIP
TENANT: Mohawk Industries, Inc.
LEASE DATE: November 10, 1997
PREMISES: Located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Tenant hereby accepts the Premises as being in the condition required
under the Lease, with all Tenant Improvements completed (except for the minor
punchlist items which Landlord agrees to complete).
The Commencement Date of the Lease is hereby established as _____________,
1997 and the Expiration Date is _____________, _____.
TENANT: Mohawk Industries, Inc.
a Georgia corporation
By: __________________________________
Print Name: __________________________
Its: _________________________________
Approved and Agreed:
LANDLORD:
HAYWARD INDUSTRIAL PARK ASSOCIATES,
A CALIFORNIA GENERAL PARTNERSHIP
By: Lincoln Property Company
Management Services, Inc.,
As Manager and Agent for Landlord
By: __________________________________
Senior Vice President
C-1
EXHIBIT D
RULES AND REGULATIONS
This exhibit, entitled "Rules and Regulations," is and shall constitute
Exhibit D to the Lease Agreement, dated as of the Lease Date, by and between
landlord and Tenant for the Premises. The terms and conditions of this Exhibit D
are hereby incorporated into and are made a part of the Lease. Capitalized terms
used, but not otherwise defined, in this Exhibit D have the meanings ascribed to
such terms in the Lease.
1. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the consent of Landlord.
2. All window coverings installed by Tenant and visible form the outside
of the building require the prior written approval of Landlord.
3. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on or around
the Premises, except to the extent that Tenant is permitted to use the same
under the terms of Paragraph 32 of the Lease.
4. Tenant shall not alter any lock or install any new locks or belts on
any door at the Premises without the prior consent of Landlord.
5. Tenant shall not make any duplicate keys without prior consent of
Landlord.
6. Tenant shall park motor vehicles designated by Landlord except for
loading and unloading. During those periods of loading and unloading, Tenant
shall not unreasonably interfere with traffic flow around the Building or the
Project and loading and unloading areas of other tenants. Tenant shall not park
motor vehicles in designated parking area after the conclusion of normal
business activity.
7. Tenant shall not disturb, solicit or canvas any tenant or other
occupant of the Building or Project and shall cooperate to prevent the same.
8. No person shall go on the roof without Landlord's permission.
9. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted so the structure of the
Building, to such a degree as to be objectionable to Landlord or other tenants,
shall be placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or in noise dampening housing or other devices sufficient to
eliminate noise or vibration.
10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.
11. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks under the
dolly wheels to prevent damage to the asphalt paving surfaces. No parking or
storing of such trailers will be permitted in the auto parking areas of the
Project or on streets adjacent thereto.
12. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
13. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable receptacles
stored behind screened enclosures at locations approved by Landlord.
D-1
14. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales or merchandise shall be allowed in the parking lots or other common
areas.
15. Tenant shall not permit any animals, including but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Project or any other common areas.
Initials:
Tenant: /s/ [ILLEGIBLE]
-----------------------
Landlord: /s/ [ILLEGIBLE]
----------------------
D-2
EXHIBIT E
SIGN CRITERIA
In an effort to maintain a professional and uniform appearance throughout
Hayward Industrial Park, the following sign criteria have been established:
[BODY ILLEGIBLE]
EXHIBIT F
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord to evaluate your proposed uses of the premises ( the
"Premises") and to determine whether to enter into a lease agreement with you as
a tenant. If a lease agreement is signed by you and the Landlord (the "Lease
Agreement"), on an annual basis in accordance with the provisions of Paragraph
32 of the Lease Agreement, you are to provide an update to the information
initially provided by you in this certificate. Any questions regarding this
certificate should be directed to, and when completed, the certificate should be
delivered to:
Landlord: c/o Lincoln Property Company Management
Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name of (Prospective) Tenant: _____________________________________________
Mailing Address: __________________________________________________________
__________________________________________________________________________
Contact Person, Title and Telephone Number(s): ____________________________
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): ______________________________________________________
__________________________________________________________________________
Address of (Prospective) Premises: ________________________________________
Length of (Prospective) initial Term: _____________________________________
__________________________________________________________________________
1. GENERAL INFORMATION
Describe the proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled, and services and activities to be provided or
otherwise conducted. Existing tenants should describe any proposed changes
to on-going operations.
__________________________________________________________________________
__________________________________________________________________________
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials (as hereinafter defined) be used,
generated, treated, stored, or disposed of in, on or about the
Premises? Existing tenants should describe any Hazardous Materials
which continue to be used, generated, treated, stored or disposed of
in, on or about the Premises.
Wastes Yes |_| No |_|
Chemical Products Yes |_| No |_|
Other Yes |_| No |_|
If Yes is marked, please explain: __________________________________
____________________________________________________________________
____________________________________________________________________
F-1
2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, treated, stored or disposed of in,
on or about the Premises, including the applicable hazard class and
an estimate of the quantities of such Hazardous Materials to be
present on or about the Premises at any given time; estimated
annual throughput; the proposed location(s) and method of storage
(excluding nominal amounts of ordinary household cleaners and
janitorial applies which are not regulated by any Environmental
Laws, as hereinafter defined); and the proposed location(s) and
method(s) of treatment or disposal for each Hazardous Material,
including, the estimated frequency, and the proposed contractors or
subcontractors. Existing tenants should attach a list setting forth
the information requested above and such list should include actual
data from on-going operations and the identification of any
variations in such information from the prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage or treatment of gasoline,
diesel, petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposes activities.
Yes No
If yes, please explain:_____________________________________________
____________________________________________________________________
____________________________________________________________________
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes No
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes No
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
____ storm drain? ____ sewer?
____ surface water? ____ no wastewater or other wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
____________________________________________________________________
____________________________________________________________________
F-2
5.2 Will any such wastewater or waste be treated before discharge?
Yes No
If yes, describe the type of treatment proposed to be conducted.
Existing tenants should describe the actual treatment conducted.
____________________________________________________________________
____________________________________________________________________
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be used in
your company's operations in, on or about the Premises that will
discharge into the air, and will such air emissions be monitored?
Existing tenants should indicate whether or not there are any such
air filtration systems or stacks in use in, on or about the Premises
which discharge into the air and whether such air emissions are
being monitored.
Yes No
If yes, please describe:____________________________________________
____________________________________________________________________
____________________________________________________________________
6.2 Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing
tenants should specify any such equipment being operated in, on or
about the Premises.
____ Spray booth(s) ____ Incinerator(s)
____ Dip tank(s) ____ Other (Please describe)
____ Drying oven (s) ____ No Equipment Requiring Air Permits
If yes, please describe:____________________________________________
____________________________________________________________________
____________________________________________________________________
6.3 Please describe (and submit copies of with this Hazardous Materials
Disclosure Certificate) any reports you have filed in the past
[thirty-six] months any governmental or quasi-governmental agencies
or authorities related to air discharges or clean air requirements
and any such reports which have been issued during such period by
any such agencies or authorities with respect to you or your
business operations.
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company proposed or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") or Hazardous
Materials Business Plan and Inventory ("Business Plan") pursuant to
Fire Department or other governmental or regulatory agencies'
requirements? Existing tenants should indicate whether or not a
Management Plan is required and has been prepared.
Yes No
If yes, attach a copy of the Management Plan or Business Plan.
Existing tenants should attach a copy of any required updates to the
Management Plan or Business Plan.
F-3
7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises
listed or regulated under Proposition 65? Existing tenants should
indicate whether or not there are any new Hazardous Materials being
so used which are listed or regulated under Proposition 65.
Yes No
If yes, please explain: ____________________________________________
____________________________________________________________________
____________________________________________________________________
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees or has your company
received requests for information, notice or demand letters, or any
other inquiries regarding its operations? Existing tenants should
indicate whether or not any such actions, orders or decrees have
been, or are in the process of being, undertaken or if any such
requests have been received.
Yes No
If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders
or decrees and also describe any requests, notices or demands, and
attach a copy of all such documents. Existing tenants should
describe and attach a copy of any new actions, orders, decrees,
requests, notices or demands not already delivered to Landlord
pursuant to the provisions of Paragraph 32 of the Lease Agreement.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
8.2 Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety
concerns?
Yes No
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and other documents
related thereto as requested by Landlord. Existing tenants should
describe and attach a copy of any new complaint(s),
cross-complaints, pleadings and other related documents not already
delivered to Landlord pursuant to the provisions of Paragraph 32 of
the Lease Agreement.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
F-4
8.3 Have there been any problems of complaints from adjacent tenants,
owners or other neighbors at your company's current facility with
regard to environmental or health and safety concerns? Existing
tenants should indicate whether or not there have been any such
problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Premises and the current status of
any such problems or complaints.
Yes No
If yes, please describe. Existing tenants should describe any such
problems or complaints not already disclosed to Landlord under the
provisions of the signed Lease Agreement and the current status of
any such problems or complaints.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
9. PERMITS AND LICENSES
9.1 Attach copies of all permits and licenses issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any Hazardous Materials
permits, wastewater discharge permits, air emissions permits, and
use permits or approvals. Existing tenants should attach copies of
any new permits and licenses as well as any renewals of permits or
licenses previously issued.
As used herein, "Hazardous Materials" shall mean and include any substance
that is or contains (a) any "hazardous substance" as now or hereafter defined in
(S)(S) 101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. (S)(S) 9601 et seq.) or
any regulations promulgated under CERCLA; (b) any "hazardous waste" as now or
hereafter defined in the Resource Conservation and Recovery Act, as amended
("RCRA") (S)(S) (43 U.S.C. (S)(S) 6901 et seq.) or any regulations promulgated
under RCRA; (c) any substance now or hereafter regulated by the Toxic Substances
Control Act, as amended ("TSCA") (15 U.S.C. (S)(S) 2601 et seq.) or any
regulations promulgated under TSCA; (d) petroleum, petroleum by-products,
gasoline, diesel fuel, or other petroleum hydrocarbons; (e) asbestos and
asbestos-containing material, in any form, whether friable or non-friable; (f)
polychlorinated biphenyls; (g) lead and lead-containing materials; or (h) any
additional substance, material or waste (A) the presence of which on or about
the Premises (i) requires reporting, investigation or remediation under any
Environmental Laws (as hereinafter defined), (ii) causes or threatens to cause a
nuisance on the Premises or any adjacent property or poses or threatens to pose
a hazard to the health or safety of persons on the Premises or any adjacent
property, or (iii) which, if it emanated or migrated from the Premises, could
constitute a trespass, or (B) which is now or is hereafter classified or
considered to be hazardous or toxic under any Environmental Laws; and
"Environmental Laws" shall mean and include (a) CERCLA, RCRA and TSCA; and (b)
any other federal, state or local laws, ordinances, statutes, codes, rules,
regulations, orders or decrees now or hereinafter in effect relating to (i)
pollution, (ii) the protection or regulation of human health, natural resources
or the environment, (iii) the treatment, storage or disposal of Hazardous
Materials, or (iv) the emission, discharge, release or threatened release of
Hazardous Materials into the environment.
The undersigned hereby acknowledges and agrees that this Hazardous
Materials Disclosure Certificate is being delivered to Landlord in connection
with the evaluation of a Lease Agreement and, if such Lease Agreement is
executed, will be attached thereto as an exhibit. The undersigned further
acknowledges and agrees that if such Lease Agreement is executed, this Hazardous
Materials Disclosure Certificate will be updated from time to time in accordance
with Paragraph 32 of the Lease Agreement. The undersigned further acknowledges
and agrees that the Landlord and its partners, lenders
F-5
and representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement. I [print name]
_________________, acting with full authority to bind the (proposed) Tenant and
on behalf of the (proposed) Tenant, certify, represent and warrant that the
information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By: [ILLEGIBLE]
----------------------
Title: Exec. V.P.
----------------------
Date: 12-10-97
----------------------
INITIALS:
TENANT: [ILLEGIBLE]
---------------------
LANDLORD: [ILLEGIBLE]
---------------------
F-6
ADDENDUM 1
OPTION TO EXTEND THE LEASE
This Addendum 1 is incorporated as a part of that certain Lease Agreement dated
November 10, 1997 (the "Lease"), by and between Mohawk Industries, Inc., a
Georgia corporation ("Tenant"), and Hayward Industrial Park Associates, a
California general partnership ("Landlord"), for the leasing of those certain
premises located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
1. Grant of Extension Option. Subject to the provisions, limitations and
conditions set forth in Paragraph 5 below, Tenant shall have an Option
("Option") to extend the term of the Lease for five (5) years (the "Extended
Term").
2. Tenant's Option Notice. If Landlord does not receive written notice from
Tenant of its exercise of this Option on a date which is not more than two
hundred forty (240) days nor less than one hundred eighty (180) days prior to
the end of the initial term of the Lease (the "Option Notice"), all rights under
this Option shall automatically terminate and shall be of no further force or
effect.
3. Establishing the Initial Monthly Base Rent for the Extended Term. The initial
monthly Base Rent for the Extended Term shall be the then current market rent
for the highest and best use for similar space within the competitive market
area of the Premises (the "Fair Rental Value"). "Fair Rental Value" of the
Premises means the fair market rental value of the Premises as of the
commencement of the Extended Term, taking into consideration all relevant
factors, including length of term, the uses permitted under the Lease, the
quality, size, design and location of the Premises, including the condition and
value of existing tenant improvements, and the monthly base rent paid by tenants
for premises comparable to the Premises, and located within the competitive
market area of the Premises as reasonably determined by Landlord.
Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within ten (10)
days of receipt by Landlord of the Option Notice, Landlord and Tenant being
obligated only to act in good faith, this Option shall automatically terminate
and the Lease shall terminate at the end of its initial term.
In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the initial monthly Base Rent for the Extended Term
in accordance with the terms outlined above, Landlord and Tenant shall
immediately execute, at Landlord's sole option, either the standard lease
agreement then in use by Landlord, or an Amendment to this Lease. Such new lease
agreement or amendment, as the case may be, shall set forth among other things,
the initial monthly Base Rent for the Extended Term and the actual commencement
date and expiration date of the Extended Term. Tenant shall have no other right
to extend the term of the Lease under this Addendum 1 unless Landlord and Tenant
otherwise agree in writing.
4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then "As-Is"
condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder's
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant ("Tenant's
Broker") in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant's Broker.
5. Limitations On, and Conditions To, Extension Option. This Option is personal
to Tenant and may not be assigned, voluntarily or involuntarily, separate from
or as part of the Lease. At Landlord's option, all rights of Tenant under this
Option shall terminate and be of no force or effect if any of the following
individual events occur or any combination thereof occur: (1) Tenant has been in
default at any time during the initial term of the Lease, or is currently in
default of any provision of the Lease; and/or (2) Tenant has assigned its rights
and obligations under all or part of the Lease or Tenant has subleased all or
part of the Premises; and/or (3) Tenant's financial condition is unacceptable to
Landlord at the time the Option Notice is delivered to Landlord; and/or (4)
Tenant has failed to properly exercise this Option in a timely manner in strict
accordance with the provisions of this Addendum 1; and/or (5) Tenant no longer
has possession of all or any part of the Premises under the Lease, or if the
Lease has been terminated earlier, pursuant to the terms of the Lease.
6. Time is of the Essence. Time is of the essence with respect to each and every
time period described in this Addendum.
INITIALS:
TENANT: [ILLEGIBLE]
---------------------
LANDLORD: [ILLEGIBLE]
---------------------
ADDENDUM 2
EARLY OCCUPANCY AGREEMENT
Page 1 of 1
This Addendum No. 2 is incorporated as a part of that certain Lease Agreement
dated November 10, 1997 (the "Lease"), by and between Mohawk Industries, Inc., a
Georgia Corporation ("Tenant"), and HAYWARD INDUSTRIAL PARK ASSOCIATES, A
CALIFORNIA GENERAL PARTNERSHIP ("Landlord"), of the premises located at 3624
Munster Avenue, Unit A, B, and C, Hayward, California, (the "Premises").
Notwithstanding anything in the Lease to the contrary, Tenant shall have the
right to enter the Premises after the Lease has been fully executed and prior to
the Commencement Date, of December 15, 1997 ("Occupancy Date"). In this event,
Tenant shall have the right to occupy the Premises free of Base Rent from the
Occupancy Date until the Commencement Date ("Early Occupancy Period"). During
the Early Occupancy Period Tenant shall be obligated to pay the utilities and
the Additional Rent, defined in Section 6 of the Lease, which is attributable to
the Early Occupancy Period.
Tenant's early occupancy shall be subject to the conditions detailed
hereinbelow:
1. Landlord shall receive from Tenant a certificate of general
liability insurance as specified in the Lease, naming Landlord as
additional insured.
2. All the terms and conditions of the Lease, except the payment of
Base Rent, shall be in full force and effect as of the Occupancy
Date and possession of the Premises.
3. By entry, Tenant accepts the Premises as being in good order,
condition and repair as of the Occupancy Date.
Unless otherwise defined in this Addendum, all terms not defined in this
Addendum shall have the meaning set forth in the Lease.
INITIALS:
TENANT: [ILLEGIBLE]
---------------------
LANDLORD: [ILLEGIBLE]
---------------------