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Exhibit 10
STANDARD INDUSTRIAL LEASE
1. BASIC LEASE PROVISIONS.
1.1 DATE: May 16, 2000
1.2 LANDLORD: The Realty Associates Fund IV, L.P., a Delaware limited partnership
1.3 TENANT: Jabil Circuit, Inc., a Delaware corporation
1.4 PREMISES ADDRESS: ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
1.5 APPROXIMATE LEASABLE AREA
OF PREMISES: 99,576 square feet
(in square feet)
1.6 USE: Sales, testing and assembly of electronic components and
associated office uses
1.7 TERM: Seven (7) years and two (2) months
1.8 COMMENCEMENT DATE: July 1, 2000
1.9 MONTHLY BASE RENT: Commencement Date through date that is 60 days after the
Commencement Date: No Base Rent or Operating Expenses
payable by Tenant
61 days after the Commencement Date through 14th full
calendar month: $124,470.00
15th month through 26th month: $129,448.80
27th month through 38th month: $134,626.75
39th month through 50th month: $140,011.82
51st month through 62nd month: $145,612.30
63rd month through 74th month: $151,436.79
75th month through 86th month: $157,494.26
1.10 BASE RENT PAID UPON EXECUTION: $124,470.00
APPLIED TO: Third full calendar month of Lease term
(insert month(s))
1.11 SECURITY DEPOSIT: $157,494.26
1.12 REAL ESTATE BROKER:
LANDLORD: Insignia/ESG, Inc.
TENANT: ▇▇▇▇▇ & ▇▇▇▇▇
1.13 EXHIBITS ATTACHED TO LEASE: Exhibit A - "Premises;" Exhibit B - "Verification Letter;"
Exhibit C - "Form of HazMat"
1.14 ADDRESSES FOR NOTICES:
LANDLORD: c/o TA Associates Realty
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Asset Manager
WITH A COPY TO: Insignia/ESG
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▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Property Manager
TENANT: Jabil Circuit, Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Manager
2. PREMISES.
2.1 ACCEPTANCE. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises (including all parking), to have and to hold
for the term of this Lease, subject to the terms, covenants and
conditions of this Lease. The Premises is depicted on Exhibit "A"
attached hereto and contains one or more buildings (collectively, the
"BUILDING") and the other areas depicted on Exhibit "A" as being part
of the Premises. Tenant accepts the Premises in its condition as of
the Commencement Date, subject to all applicable laws, ordinances,
regulations, covenants, conditions, restrictions and easements, and
except as set forth in Exhibit D and as may be otherwise expressly
provided herein, Landlord shall not be obligated to make any repairs
or alterations to the Premises. Tenant acknowledges that Landlord has
made no representation or warranty as to the suitability of the
Premises for the conduct of Tenant's business, and Tenant waives any
implied warranty that the Premises are suitable for Tenant's intended
purposes.
3. TERM.
3.1 TERM AND COMMENCEMENT DATE. The term and Commencement Date of
this Lease are as specified in sections 1.7 and 1.8. The Commencement Date set
forth in section 1.8 is an estimated Commencement Date. Subject to the
limitations contained in section 3.3 below, the actual Commencement Date shall
be the date possession of the Premises is tendered to Tenant in accordance with
section 3.4 below; provided, however, that the term of this Lease shall be
computed
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from the first day of the calendar month following the Commencement Date. When
the actual Commencement Date is established by Landlord, Tenant shall, within
five (5) days after Landlord's request, complete and execute the letter
attached hereto as Exhibit "B" and deliver it to Landlord. Tenant's failure to
execute the letter attached hereto as Exhibit "B" within said five (5) day
period shall be a material default hereunder and shall constitute Tenant's
acknowledgment of the truth of the facts contained in the letter delivered by
Landlord to Tenant.
3.2 DELAY IN POSSESSION. Notwithstanding the estimated
Commencement Date specified in section 1.8, if for any reason Landlord cannot
deliver possession of the Premises to Tenant on said date, Landlord shall not
be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder; provided,
however, in such a case, Tenant shall not be obligated to pay rent or perform
any other obligation of Tenant under this Lease, except as may be otherwise
provided in this Lease, until possession of the Premises is tendered to Tenant,
as defined in section 3.4. If Landlord shall not have tendered possession of
the Premises to Tenant within forty-five (45) days following the estimated
Commencement Date specified in section 1.8, as the same may be adjusted in
accordance with section 3.3 or in accordance with the terms of any work letter
agreement entered into by Landlord and Tenant, Tenant may, at Tenant's option,
by notice in writing to Landlord within ten (10) days after the expiration of
the forty-five (45) day period, terminate this Lease. If Tenant terminates this
Lease as provided in the preceding sentence, the parties shall be discharged
from all obligations hereunder, except that Landlord shall return any money
previously deposited with Landlord by Tenant; and provided further, that if
such written notice by Tenant is not received by Landlord within said ten (10)
day period, Tenant shall not have the right to terminate this Lease as provided
above unless Landlord fails to tender possession of the Premises to Tenant
within ninety (90) days following the estimated Commencement Date specified in
section 1.8, as the same may be adjusted in accordance with section 3.3 or in
accordance with the terms of any work letter agreement entered into by Landlord
and Tenant. If Landlord is unable to deliver possession of the Premises to
Tenant on the Commencement Date due to a Force Majeure Event, the Commencement
Date shall be extended by the period of the delay caused by the Force Majeure
Event. A "FORCE MAJEURE EVENT" shall mean fire, earthquake, weather delays or
other acts of God, strikes, boycotts, war, riot, insurrection, embargoes,
shortages of equipment, labor or materials, delays in issuance of governmental
permits or approvals, or any other cause beyond the reasonable control of
Landlord.
3.3 DELAYS CAUSED BY TENANT. There shall be no abatement of rent,
and the forty-five (45) day period and the ninety (90) day period specified in
section 3.2 shall be deemed extended, to the extent of any delays caused by
acts or omissions of Tenant, Tenant's agents, employees and contractors, or for
Tenant delays as defined in any work letter agreement attached to this Lease,
if any (hereinafter "TENANT DELAYS"). Tenant shall pay to Landlord an amount
equal to one thirtieth (1/30th) of the Base Rent due for the first full
calendar month of the Lease term for each day of Tenant Delay. For purposes of
the foregoing calculation, the Base Rent payable for the first full calendar
month of the term of this Lease shall not be reduced by any abated rent,
conditionally waived rent, free rent or similar rental concessions, if any.
Landlord and Tenant agree that the foregoing payment constitutes a fair and
reasonable estimate of the damages Landlord will incur as the result of a
Tenant Delay. Within thirty (30) days after Landlord tenders possession of the
Premises to Tenant, Landlord shall notify Tenant of Landlord's reasonable
estimate of the date Landlord could have delivered possession of the Premises
to Tenant but for the Tenant Delays. After delivery of said notice, Tenant
shall immediately pay to Landlord the amount described above for the period of
Tenant Delay.
3.4 TENDER OF POSSESSION. Possession of the Premises shall be
deemed tendered to Tenant when Landlord's architect or agent has determined
that (a) utilities are ready for use in the Premises, (b) Tenant has reasonable
access to the Premises, and (c) Landlord has offered Tenant possession of the
Premises.
3.5 EARLY POSSESSION. If Tenant occupies the Premises prior to
the Commencement Date, such occupancy shall be subject to all provisions of
this Lease, such occupancy shall not change the termination date, and Tenant
shall pay Base Rent and all other charges provided for in this Lease during the
period of such occupancy. Provided that Tenant does not interfere with or delay
the completion by Landlord or its agents or contractors of the construction of
any improvements, and provided Landlord has possession of the Premises, Tenant
shall have the right to enter the Premises up to sixty (60) days prior to the
anticipated Commencement Date for the purpose of installing furniture, trade
fixtures, equipment, and similar items. Tenant shall be liable for any damages
or delays caused by Tenant's activities at the Premises. Provided that Tenant
has not begun operating its business from the Premises, and subject to all of
the terms and conditions of the Lease, the foregoing activity shall not
constitute the delivery of possession of the Premises to Tenant, and the Lease
term shall not commence as a result of said activities. Prior to entering the
Premises, Tenant shall obtain all insurance it is required to obtain by the
Lease and shall provide certificates of said insurance to Landlord. Tenant
shall coordinate such entry with Landlord's manager, and such entry shall be
made in compliance with all terms and conditions of this Lease and the Rules
and Regulations attached hereto.
4. USE.
4.1 PERMITTED USE. The Premises shall be used only for the
purpose described in section 1.6 and for no other purpose. Landlord makes no
representation or warranty that Tenant's use is permitted by applicable zoning
laws or other laws and regulations. In no event shall any portion of the
Premises be used for retail sales. Tenant shall not initiate, submit an
application for, or otherwise request, any land use approvals or entitlements
with respect to the Premises, without limitation, any variance, conditional use
permit or rezoning, without first obtaining Landlord's prior written consent,
which may be given or withheld in Landlord's sole discretion. Tenant shall not
(a) permit any animals or pets to be brought to or kept in the Premises, (b)
install any antenna, dish or other device on the roof of the Building or
outside of the Premises, (c) make any penetrations into the roof of the
Building, (d) place loads upon floors, walls or ceilings in excess of the load
such items were designed to carry, (e) place or store, nor permit any other
person or entity to place or store, any property, equipment, materials,
supplies or other items outside of the Premises is located or (f) change the
exterior of the Premises or the Building.
4.2 COMPLIANCE WITH LAWS. Tenant shall, at Tenant's sole expense,
promptly comply with all applicable laws, ordinances, rules, regulations,
orders, certificates of occupancy, conditional use or other permits, variances,
covenants, conditions, restrictions, easements, the commercially reasonable
recommendations of Landlord's engineers or other consultants, and requirements
of any fire insurance underwriters, rating bureaus or government agencies, now
in effect or which may hereafter come into effect, whether or not they reflect
a change in policy from that now existing, during the term or any part of the
term hereof, relating in any manner to the Premises or the occupation and use
by Tenant of the Premises. Tenant shall, at Tenant's sole expense, comply with
all requirements of the Americans With Disabilities Act that relate to the
Premises, and all federal, state and local laws and regulations governing
occupational safety and health. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
disturb, unreasonably interfere with or endanger Landlord or persons or
property within the vicinity of the Premises. Tenant shall obtain, at its sole
expense, any permit or other governmental authorization required to operate its
business from the Premises.
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5. RENT.
5.1 BASE RENT. Tenant shall pay Base Rent in the amount set forth
on the first page of this Lease. The first month's Base Rent, the Security
Deposit shall be due and payable on the date this Lease is executed by Tenant,
and Tenant promises to pay to Landlord in advance, without demand, deduction or
set-off, monthly installments of Base Rent on or before the first day of each
calendar month succeeding the Commencement Date. Payments of Base Rent for any
fractional calendar month shall be prorated. All payments required to be made
by Tenant to Landlord hereunder shall be payable at such address as Landlord
may specify from time to time by written notice delivered in accordance
herewith. Tenant shall have no right at any time to ▇▇▇▇▇, reduce, or set off
any rent due hereunder except where expressly provided in this Lease.
5.2 OPERATING EXPENSES. Tenant shall pay all expenses and
disbursements of every kind which Landlord incurs, pays or becomes obligated to
pay in connection with the ownership, operation, and maintenance of the
Premises, including, but not limited to, the following:
(a) the commercially reasonable cost of all accounting
fees, management fees, legal fees and consulting fees attributable to the
operation, ownership, management, maintenance or repair of the Premises;
(b) payments made by Landlord under any easement, license,
operating agreement, declaration, restrictive covenant or other agreement
relating to the sharing of costs among property owners;
(c) commercially reasonable reserves created by Landlord,
in Landlord's sole discretion, for future expenses relating to the Premises
(e.g., parking lot replacement, roof replacement etc.); and
(d) the cost of all business licenses, permits or similar
fees relating to the operation, ownership, repair or maintenance of the
Premises Landlord is obligated to obtain.
Except as otherwise provided in this Lease, nothing set forth above shall be
interpreted to obligate Landlord to perform any repair or to provide any
maintenance to the Premises, and Landlord shall have the right to require
Tenant to perform all repairs and maintenance to the Premises in accordance
with the terms and conditions of this Lease. Operating Expenses shall be
payable by Tenant within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Tenant by Landlord. At Landlord's option,
however, Landlord may, from time to time, estimate what Operating Expenses will
be, and the same shall be payable by Tenant monthly during each calendar year
of the Lease term, on the same day as the Base Rent is due hereunder. Operating
Expense payments made by Tenant for reserves shall not be refunded to Tenant
because the item being reserved for is not completed during the term of the
Lease.
6. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it
executes this Lease the security deposit set forth in section 1.11 as security
for Tenant's faithful performance of Tenant's obligations hereunder. If Tenant
fails to pay Base Rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Landlord may use all or any
portion of said deposit for the payment of any Base Rent or other charge due
hereunder, to pay any other sum to which Landlord may become obligated by
reason of Tenant's default, or to compensate Landlord for any loss or damage
which Landlord may suffer thereby. If Landlord so uses or applies all or any
portion of said deposit, Tenant shall within ten (10) days after written demand
therefor deposit cash with Landlord in an amount sufficient to restore said
deposit to its full amount. Landlord shall not be required to keep said
security deposit separate from its general accounts. If Tenant performs all of
Tenant's obligations hereunder, said deposit, or so much thereof as has not
heretofore been applied by Landlord, shall be returned, without payment of
interest or other amount for its use, to Tenant (or, at Landlord's option, to
the last assignee, if any, of Tenant's interest hereunder) at the expiration of
the term hereof, and after Tenant has vacated the Premises. No trust
relationship is created herein between Landlord and Tenant with respect to said
security deposit. Tenant acknowledges that the security deposit is not an
advance payment of any kind or a measure of Landlord's damages in the event of
Tenant's default.
7. UTILITIES.
7.1 PAYMENT. Tenant shall pay for all water, gas, electricity,
telephone, sewer, sprinkler services, refuse and trash collection, and other
utilities and services used at the Premises (collectively "SERVICES"), together
with any taxes, penalties, surcharges or the like pertaining thereto. Tenant
shall contract directly with all providers of Services. Tenant agrees to limit
use of water and sewer for normal restroom use and nothing herein contained
shall impose upon Landlord any duty to provide sewer or water usage for other
than normal restroom usage.
7.2 INTERRUPTIONS. Tenant shall be solely responsible for
obtaining all Services, and Landlord shall have no liability to Tenant if
Tenant is unable to obtain Services for any reason including, but not limited
to, repairs, replacements or improvements, by any strike, lockout or other
labor trouble, by inability to secure electricity, gas, water, telephone
service or other utility at the Premises, by any accident, casualty or event
arising from any cause whatsoever, including the negligence of Landlord, its
employees, agents and contractors, by act, negligence or default of Tenant or
any other person or entity, or by any other cause, and such failures shall
never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from the obligation of paying rent
or performing any of its obligations under this Lease. Furthermore, Landlord
shall not be liable under any circumstances for loss of property or for injury
to, or interference with, Tenant's business, including, without limitation,
loss of profits, however occurring, through or in connection with or incidental
to Tenant's inability to obtain Services. Landlord may comply with voluntary
controls or guidelines promulgated by any governmental entity relating to the
use or conservation of energy, water, gas, light or electricity or the
reduction of automobile or other emissions without creating any liability of
Landlord to Tenant under this Lease.
7.3 RAILROAD SPURS. If the Premises is served by a railroad spur,
Tenant shall execute any agreement required by the railroad company serving the
railroad spur, and such agreement shall be satisfactory to Landlord, in
Landlord's sole discretion. Tenant shall pay the cost of maintaining the
railroad spur, at Tenant's sole cost and expense.
8. REAL AND PERSONAL PROPERTY TAXES.
8.1 PAYMENT OF TAXES. Tenant shall pay to Landlord during the
term of this Lease, in addition to Base Rent all "Real Property Taxes" (as
defined below). Real Property Taxes shall be payable by Tenant within twenty
(20) days after a reasonably detailed statement of actual expenses is presented
to Tenant by Landlord. At Landlord's option, however, Landlord may, from time
to time, estimate what Real Property Taxes will be, and the same shall be
payable by Tenant monthly during each calendar year of the Lease term, on the
same day as the Base Rent is due hereunder. In the event that Tenant pays
Landlord's estimate of Real Property Taxes, Landlord shall use its best efforts
to deliver to Tenant within one hundred eighty (180) days after the expiration
of each calendar year a reasonably detailed statement (the "STATEMENT") showing
the Real Property Taxes incurred during such year. Landlord's failure to
deliver the Statement to Tenant within said period shall not constitute
Landlord's waiver of its right to collect said amounts or otherwise prejudice
Landlord's rights hereunder. If Tenant's payments under this section during
said calendar year exceed the Real Property Taxes as indicated on the
Statement, Tenant shall be entitled to credit the amount of such overpayment
against the Base Rent next falling due. If
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Tenant's payments under this section during said calendar year were less than
Real Property Taxes as indicated on the Statement, Tenant shall pay to Landlord
the amount of the deficiency within thirty (30) days after delivery by Landlord
to Tenant of the Statement. Landlord and Tenant shall forthwith adjust between
them by cash payment any balance determined to exist with respect to that
portion of the last calendar year for which Tenant is responsible for Real
Property Taxes, notwithstanding that the Lease term may have terminated before
the end of such calendar year; and this provision shall survive the expiration
or earlier termination of the Lease.
8.2 DEFINITION OF REAL PROPERTY TAX. As used herein, the term
"REAL PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, improvement bond or bonds imposed
on the Premises or any portion thereof by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, sanitary, fire, street, drainage or other
improvement district thereof, as against any legal or equitable interest of
Landlord in the Premises or in any portion thereof. Real Property Taxes shall
not include income, inheritance and gift taxes.
8.3 PERSONAL PROPERTY TAXES. Tenant shall pay prior to
delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or related to Tenant's use of the Premises. If any of Tenant's
personal property shall be assessed with Landlord's real or personal property,
Tenant shall pay to Landlord the taxes attributable to Tenant within ten (10)
days after receipt of a written statement from Landlord setting forth the taxes
applicable to Tenant's property.
9. INSURANCE.
9.1 INSURANCE-TENANT.
(a) Tenant shall obtain and keep in force during the term
of this Lease a commercial general liability policy of insurance with coverages
acceptable to Landlord, in Landlord's reasonable discretion, which, by way of
example and not limitation, protects Tenant and Landlord (as an additional
insured) against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single-limit coverage in an amount
not less than $2,000,000 per occurrence with an "Additional Insured-Managers
and Landlords of Premises Endorsement" and contain the "Amendment of the
Pollution Exclusion" for damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as between
insured persons or organizations, but shall include coverage for liability
assumed under this Lease as an "insured contract" for the performance of
Tenant's indemnity obligations under this Lease.
(b) Tenant shall obtain and keep in force during the term
of this Lease "all-risk" extended coverage property insurance with coverages
acceptable to Landlord, in Landlord's reasonable discretion. Said insurance
shall be written on a one hundred percent (100%) replacement cost basis on
Tenant's personal property, all tenant improvements installed at the Premises
by Landlord or Tenant, Tenant's trade fixtures and other property. By way of
example, and not limitation, such policies shall provide protection against any
peril included within the classification "fire and extended coverage," against
vandalism and malicious mischief, theft, sprinkler leakage, earthquake damage
and flood damage.
(c) Tenant shall, at all times during the term hereof,
maintain in effect workers' compensation insurance as required by applicable
law and business interruption and extra expense insurance reasonably
satisfactory to Landlord.
9.2 INSURANCE-LANDLORD.
(a) Landlord shall obtain and keep in force a policy of
general liability insurance with coverage against such risks and in such
amounts as Landlord deems advisable insuring Landlord against liability arising
out of the ownership, operation and management of the Premises.
(b) Landlord shall also obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or damage to
the Premises in the amount of not less than eighty percent (80%) of the full
replacement cost thereof, as determined by Landlord from time to time. The
terms and conditions of said policies and the perils and risks covered thereby
shall be determined by Landlord, from time to time, in Landlord's sole
discretion. In addition, at Landlord's option, Landlord shall obtain and keep
in force, during the term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance shall, at Landlord's
option, also cover all Real Property Taxes. Tenant will not be named as an
additional insured in any insurance policies carried by Landlord and shall have
no right to any proceeds therefrom. The policies purchased by Landlord shall
contain such deductibles as Landlord may determine. Tenant shall pay at
Tenant's sole expense any increase in the property insurance premiums for the
Premises over what was payable immediately prior to the increase to the extent
the increase is specified by Landlord's insurance carrier as being caused by
the nature of Tenant's occupancy or any act or omission of Tenant.
(c) Tenant shall reimburse Landlord for all insurance
purchased by Landlord pursuant to this section 9.2 in the same manner as Tenant
reimburses Landlord for Real Property Taxes.
9.3 INSURANCE POLICIES. Tenant shall deliver to Landlord
certificates of the insurance policies required under section 9.1 within
fifteen (15) days prior to the Commencement Date of this Lease. Tenant's
insurance policies shall not be cancelable or subject to reduction of coverage
or other modification except after thirty (30) days prior written notice to
Landlord. Tenant shall, at least thirty (30) days prior to the expiration of
such policies, furnish Landlord with certificates evidencing the renewal
thereof. Tenant's insurance policies shall be issued by insurance companies
authorized to do business in the state in which the Premises is located, and
said companies shall maintain during the policy term a "General Policyholder's
Rating" of at least A and a financial rating of at least "Class X" (or such
other rating as may be required by any lender having a lien on the Premises) as
set forth in the most recent edition of "Best Insurance Reports." All insurance
obtained by Tenant shall be primary to and not contributory with any similar
insurance carried by Landlord, whose insurance shall be considered excess
insurance only. Landlord and, at Landlord's option, the holder of any mortgage
or deed of trust encumbering the Premises and any person or entity managing the
Premises on behalf of Landlord, shall be named as an additional insured on all
insurance policies Tenant is obligated to obtain by section 9.1 above. Tenant's
insurance policies shall not include deductibles in excess of Five Thousand
Dollars ($5,000).
9.4 WAIVER OF SUBROGATION. Landlord waives any and all rights of
recovery against Tenant, Tenant's employees and agents for or arising out of
damage to, or destruction of, the Premises to the extent that Landlord's
insurance policies then in force insure against such damage or destruction.
Landlord's waiver shall not relieve Tenant from liability under section 18
below except to the extent Landlord's insurance company actually satisfies
Tenant's obligations under section 18 in accordance with the requirements of
section 18. Tenant waives any and all rights of recovery against Landlord,
Landlord's employees, agents and contractors for liability or damages if such
liability or damage is covered by Tenant's insurance
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policies then in force or the insurance policies Tenant is required to obtain
by section 9.1 (whether or not the insurance Tenant is required to obtain by
section 9.1 is then in force and effect), whichever is broader. Tenant's waiver
shall not be limited by the amount of insurance then carried by Tenant or the
deductibles applicable thereto. Tenant shall cause the insurance policies it
obtains in accordance with this section 9 to provide that the insurance company
waives all right of recovery by subrogation against Landlord in connection with
any liability or damage covered by Tenant's insurance policies.
9.5 COVERAGE. Landlord makes no representation to Tenant that the
limits or forms of coverage specified above or approved by Landlord are
adequate to insure Tenant's property or Tenant's obligations under this Lease,
and the limits of any insurance carried by Tenant shall not limit Tenant's
obligations or liability under any indemnity provision included in this Lease
or under any other provision of this Lease.
10. LANDLORD'S REPAIRS. Landlord shall maintain, at Landlord's expense,
only the structural elements of the roof of the Building (excluding the roof
membrane), the structural soundness of the foundation of the Building and the
structural elements of the exterior walls of the Building. Tenant shall
reimburse Landlord for the cost of any maintenance, repair or replacement of
the foregoing necessitated by Tenant's misuse, negligence, alterations to the
Premises or any breach of its obligations under this Lease. By way of example,
and not limitation, the term "EXTERIOR WALLS" as used in this section shall not
include windows, glass or plate glass, doors or overhead doors, special store
fronts, dock bumpers, dock plates or levelers, or office entries. Tenant shall
immediately give Landlord written notice of any repair required by Landlord
pursuant to this section, after which Landlord shall have a reasonable time in
which to complete the repair. Nothing contained in this section shall be
construed to obligate Landlord to seal or otherwise maintain the surface of any
foundation, floor or slab. Tenant expressly waives the benefits of any statute
now or hereafter in effect which would otherwise afford Tenant the right to
make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and repair.
11. TENANT'S REPAIRS.
11.1 OBLIGATIONS OF TENANT. Subject to section 11.2 below, Tenant
shall, at its sole cost and expense, keep and maintain all parts of the
Premises (except those listed as Landlord's responsibility in section 10 above)
in good and sanitary condition, promptly making all necessary repairs and
replacements, including but not limited to, windows, glass and plate glass,
doors, skylights, roof membranes, any special store front or office entry,
walls and finish work, floors and floor coverings, heating and air conditioning
systems, dock boards, bumpers, plates, seals, levelers and lights, plumbing
work and fixtures (including periodic backflow testing), electrical systems,
lighting facilities and bulbs, sprinkler systems, alarm systems, fire detection
systems, termite and pest extermination, parking lots, asphalt, curbs, gutters,
fencing, landscaped areas, irrigation systems, light standards, gates, tenant
signage and regular removal of trash and debris. Tenant shall notify Landlord
in writing prior to making any repair or performing any maintenance pursuant to
this section, and Landlord shall have the right to designate the contractor
Tenant shall use to make any repair or to perform any maintenance on the roof,
heating, ventilation and air conditioning systems ("HVAC"), plumbing systems,
electrical systems, sprinkler systems, fire alarm systems or fire detection
systems located at the Premises. Tenant shall not paint or otherwise change the
exterior appearance of the Premises without Landlord's prior written consent,
which may be given or withheld in Landlord's sole discretion. If Tenant fails
to keep the Premises in good condition and repair, Landlord may, but shall not
be obligated to, make any necessary repairs. If Landlord makes such repairs,
Landlord may ▇▇▇▇ Tenant for the cost of the repairs as additional rent, and
said additional rent shall be payable by Tenant within ten (10) days after
demand by Landlord.
11.2 PERFORMANCE OF WORK BY LANDLORD. Notwithstanding Tenant's
obligation to keep the roof membranes, HVAC units, sprinkler systems, fire
alarm systems, fire detection systems and exterior walls of the Premises in
good condition and repair, Landlord shall employ contractors to perform all
repairs, maintenance and replacements of the roof membranes, HVAC units,
sprinkler systems, fire alarm systems, fire detection systems and exterior
walls of the Premises. The items described in the previous sentence that
Landlord will cause to be repaired, maintained and replaced are hereinafter
referred to as the "LANDLORD MAINTENANCE ITEMS." Tenant shall reimburse
Landlord as additional rent for all costs Landlord incurs in performing the
Landlord Maintenance Items within ten (10) days after written demand by
Landlord. Landlord shall determine in its sole discretion the scope and timing
of the performance of such Landlord Maintenance Items, and Tenant shall not
perform such Landlord Maintenance Items. Landlord's maintenance of the exterior
walls of the Premises shall include the right, but not the obligation, of
Landlord to paint from time to time all or some of the exterior walls,
canopies, doors, windows, gutters, handrails and other exterior parts of the
Premises with colors selected by Landlord, and Tenant shall reimburse Landlord
as provided above for all costs incurred by Landlord in painting such items. If
the Premises contains landscaped areas ("LANDSCAPED AREAS"), Landlord shall
maintain the Landscaped Areas, and Tenant shall reimburse Landlord for all
costs incurred by Landlord in maintaining the Landscaped Areas within ten (10)
days after written demand by Landlord; provided, however, Landlord shall have
the right to estimate the monthly cost of maintaining the Landscaped Areas, and
Tenant shall pay such amount to Landlord as additional rent each month at the
same time Tenant pays Base Rent. Tenant shall immediately give Landlord written
notice of any repair or maintenance required by Landlord pursuant to this
section, after which Landlord shall have a reasonable time in which to complete
such repair or maintenance. Landlord shall have the right at any time, and from
time to time, to elect upon written notice to Tenant to have Tenant perform
some or all of the Landlord Maintenance Items and/or the maintenance of the
Landscaped Areas, in which event Tenant shall employ contractors designated by
Landlord to perform such work and shall pay for all such work at Tenant's sole
cost and expense, all in accordance with the requirements of section 11.1.
11.3 MAINTENANCE CONTRACTS. Landlord shall enter into regularly
scheduled preventative maintenance/service contracts for some or all of the
following: the HVAC units servicing the Premises, the sprinkler, fire alarm and
fire detection systems servicing the Premises, backflow testing for the
plumbing servicing the Premises and for the roof membrane of the Premises (the
"MAINTENANCE CONTRACTS"). The Maintenance Contracts shall include maintenance
services satisfactory to Landlord, in Landlord's sole discretion. Tenant shall
reimburse Landlord for the cost of the Maintenance Contracts within ten (10)
days after written demand by Landlord; provided, however, Landlord shall have
the right to estimate the monthly cost of the Maintenance Contracts, and Tenant
shall pay such amount to Landlord as additional rent each month at the same
time Tenant pays Base Rent. Landlord shall have the right at any time, and from
time to time, to elect upon written notice to Tenant to have Tenant purchase
some or all of the Maintenance Contracts, in which event Tenant shall purchase
such contracts from persons designated or approved by Landlord and shall pay
for such Maintenance Contracts at Tenant's sole cost and expense.
12. ALTERATIONS AND SURRENDER.
12.1 CONSENT OF LANDLORD. Tenant shall not, without Landlord's
prior written consent, which may be given or withheld in Landlord's reasonable
discretion, make any alterations, improvements, additions, utility
installations or repairs (hereinafter collectively referred to as
"ALTERATIONS") in, on or about the Premises. Alterations shall include, but
shall not be limited to, the installation or alteration of security or fire
protection systems, communication systems, millwork, shelving, retrieval or
storage systems, carpeting or other floor covering, painting, window and wall
coverings, electrical distribution
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systems, lighting fixtures, telephone or computer system wiring, HVAC and
plumbing. At the expiration of the term, Landlord may require the removal of
any Alterations installed by Tenant and the restoration of the Premises to its
prior condition, at Tenant's expense. Should Landlord permit Tenant to make its
own Alterations, Tenant shall use only such architect and contractor as has
been expressly approved by Landlord, and Landlord may require Tenant to provide
to Landlord, at Tenant's sole cost and expense, a lien and completion bond in
an amount equal to one and one-half times the estimated cost of such
Alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work. In addition, Tenant
shall reimburse Landlord for the commercially reasonable actual out-of-pocket
costs paid by Landlord to its property manager and/or other third parties to
approve and monitor the construction of the Alterations, and Landlord shall
provide Tenant with evidence of such costs. Should Tenant make any Alterations
without the prior approval of Landlord, or use a contractor not expressly
approved by Landlord, Landlord may, at any time during the term of this Lease,
require that Tenant remove all or part of the Alterations and return the
Premises to the condition it was in prior to the making of the Alternations. In
the event Tenant makes any Alterations, Tenant agrees to obtain or cause its
contractor to obtain, prior to the commencement of any work, "builders all
risk" insurance in an amount approved by Landlord, workers compensation
insurance and any other insurance requested by Landlord, in Landlord's sole
discretion.
12.2 PERMITS. Any Alterations in or about the Premises that Tenant
shall desire to make shall be presented to Landlord in written form, with plans
and specifications which are sufficiently detailed to obtain a building permit.
If Landlord consents to an Alteration, the consent shall be deemed conditioned
upon Tenant acquiring a building permit from the applicable governmental
agencies, furnishing a copy thereof to Landlord prior to the commencement of
the work, and compliance by Tenant with all conditions of said permit in a
prompt and expeditious manner. Tenant shall provide Landlord with as-built
plans and specifications for any Alterations made to the Premises.
12.3 MECHANICS LIENS. Tenant shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Tenant
at or for use in the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premises, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond satisfactory to Landlord in an amount
equal to not less than one and one-half times the amount of such contested lien
claim indemnifying Landlord against liability arising out of such lien or
claim. Such bond shall be sufficient in form and amount to free the Premises
from the effect of such lien. In addition, Landlord may require Tenant to pay
Landlord's reasonable attorneys' fees and costs in participating in such
action.
12.4 NOTICE. Tenant shall give Landlord not less than ten (10)
days' advance written notice prior to the commencement of any work in the
Premises by Tenant, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises.
12.5 SURRENDER. Subject to Landlord's right to require removal or
to elect ownership as hereinafter provided, all Alterations made by Tenant to
the Premises shall be the property of Tenant, but shall be considered to be a
part of the Premises. Unless Landlord gives Tenant written notice of its
election not to become the owner of the Alterations at the end of the term of
this Lease, the Alterations shall become the property of Landlord at the end of
the term of this Lease. Landlord may require, on notice to Tenant, that some or
all Alterations be removed prior to the end of the term of this Lease and that
any damages caused by such removal be repaired at Tenant's sole expense. On the
last day of the term hereof, or on any sooner termination, Tenant shall
surrender the Premises (including, but not limited to, all doors, windows,
floors and floor coverings, skylights, heating and air conditioning systems,
dock boards, truck doors, dock bumpers, plumbing work and fixtures, electrical
systems, lighting facilities, sprinkler systems, fire detection systems and
nonstructural elements of the exterior walls, foundation and roof (collectively
the "ELEMENTS OF THE PREMISES")) to Landlord in the same condition as received,
ordinary wear and tear and casualty damage excepted, clean and free of debris
and Tenant's personal property, trade fixtures and equipment. Tenant's personal
property shall include all computer wiring and cabling installed by Tenant.
Provided, however, if Landlord has not elected to have Tenant remove the
Alterations, Tenant shall leave the Alterations at the Premises in good
condition and repair, ordinary wear and tear excepted. Tenant shall repair any
damage to the Premises occasioned by the installation or removal of Tenant's
trade fixtures, furnishings and equipment. Damage to or deterioration of any
Element of the Premises or any other item Tenant is required to repair or
maintain at the Premises shall not be deemed ordinary wear and tear if the same
could have been prevented by good maintenance practices. If the Premises are
not surrendered at the expiration of the term or earlier termination of this
Lease in accordance with the provisions of this section, at Landlord's option,
Tenant shall continue to be responsible for the payment of Base Rent and all
other amounts due under this Lease until the Premises are so surrendered in
accordance with said provisions. Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all damages, expenses, costs, losses
or liabilities arising from any delay by Tenant in so surrendering the Premises
including, without limitation, any damages, expenses, costs, losses or
liabilities arising from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
and damages suffered by 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.
12.6 FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is
terminated due to the expiration of its term or otherwise, and Tenant fails to
remove its property, in addition to any other remedies available to Landlord
under this Lease, and subject to any other right or remedy Landlord may have
under applicable law, Landlord may remove any property of Tenant from the
Premises and store the same elsewhere at the expense and risk of Tenant.
13. DAMAGE AND DESTRUCTION.
13.1 EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the
Premises is damaged by fire, earthquake, flood, explosion, the elements, riot,
the release or existence of Hazardous Materials (as defined below) or by any
other cause whatsoever (hereinafter collectively referred to as "DAMAGES"), but
the damages are not material (as defined in section 13.2 below), Landlord shall
repair the damages to the Premises as soon as is reasonably possible, and this
Lease shall remain in full force and effect. If all or part of the Premises is
destroyed or materially damaged (as defined in section 13.2 below), Landlord
shall have the right, in its sole and complete discretion, to repair or to
rebuild the Premises or to terminate this Lease. Landlord shall within ninety
(90) days after the discovery of such material damage or destruction notify
Tenant in writing of Landlord's intention to repair or to rebuild or to
terminate this Lease. Tenant shall in no event be entitled to compensation or
damages on account of annoyance or inconvenience in making any repairs, or on
account of construction, or on account of Landlord's election to terminate this
Lease. Notwithstanding the foregoing, if Landlord shall elect to rebuild or
repair the Premises after material damage or destruction, but in good faith
determines that the Premises cannot be substantially repaired within two
hundred ten (210) days after the date of the discovery of the material damage
or destruction, without payment of overtime or other premiums, and the damage
to the Premises will render the entire Premises unusable during said two
hundred ten (210) day period, Landlord shall notify Tenant thereof in writing
at the time of Landlord's election to rebuild or repair, and Tenant shall
thereafter have a period of fifteen (15) days within which Tenant may elect to
terminate this Lease, upon thirty (30) days' advance written notice to
Landlord. Tenant's termination right described in the preceding sentence shall
not apply if the damage was caused by the negligent or intentional acts of
Tenant or its employees, agents, contractors or invitees. Failure of Tenant to
exercise said election within said fifteen (15) day period shall constitute
Tenant's
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agreement to accept delivery of the Premises under this Lease whenever tendered
by Landlord, provided Landlord thereafter pursues reconstruction or restoration
diligently to completion, subject to delays caused by Force Majeure Events. If
Landlord is unable to repair the damage to the Premises during such two hundred
ten (210) day period due to Force Majeure Events, the two hundred ten (210) day
period shall be extended by the period of delay caused by the Force Majeure
Events. Subject to section 13.3 below, if Landlord or Tenant terminates this
Lease in accordance with this section 13.1, Tenant shall continue to pay all
Base Rent and other amounts due hereunder which arise prior to the date of
termination.
13.2 DEFINITION OF MATERIAL DAMAGE. Damage to the Premises shall
be deemed material if, in Landlord's reasonable judgment, the uninsured cost of
repairing the damage will exceed Two Hundred Fifty Thousand Dollars
($250,000.00). If insurance proceeds are available to Landlord in an amount
which is sufficient to pay the entire cost of repairing all of the damage to
the Premises the damage shall be deemed material if the cost of repairing the
damage exceeds Two Hundred Fifty Thousand Dollars ($250,000.00). Damage to the
Premises shall also be deemed material if (a) the Premises cannot be rebuilt or
repaired to substantially the same condition it was in prior to the damage due
to laws or regulations in effect at the time the repairs will be made, (b) the
holder of any mortgage or deed of trust encumbering the Premises requires that
insurance proceeds available to repair the damage in excess of Two Hundred
Fifty Thousand Dollars ($250,000.00) be applied to the repayment of the
indebtedness secured by the mortgage or the deed of trust, or (c) the damage
occurs during the last twelve (12) months of the Lease term.
13.3 ABATEMENT OF RENT. If Landlord elects to repair damage to the
Premises and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired,
and the damage was not caused by the negligence or intentional acts of Tenant
or its employees, agents, contractors or invitees, Tenant's Base Rent shall be
abated until the repairs are completed in proportion to the amount of the
Premises which is unusable or inaccessible to Tenant in the ordinary conduct of
its business. Notwithstanding the foregoing, there shall be no abatement of
Base Rent by reason of any portion of the Premises being unusable or
inaccessible for a period equal to five (5) consecutive business days or less.
13.4 TENANT'S ACTS. If such damage or destruction occurs as a
result of the negligence or the intentional acts of Tenant or Tenant's
employees, agents, contractors or invitees, and the proceeds of insurance which
are actually received by Landlord are not sufficient to pay for the repair of
all of the damage, Tenant shall pay, at Tenant's sole cost and expense, to
Landlord upon demand, the difference between the cost of repairing the damage
and the insurance proceeds received by Landlord.
13.5 TENANT'S PROPERTY. Landlord shall not be liable to Tenant or
its employees, agents, contractors, invitees or customers for loss or damage to
merchandise, tenant improvements, fixtures, automobiles, furniture, equipment,
computers, files or other property (hereinafter collectively "TENANT'S
PROPERTY") located at the Premises. Tenant shall repair or replace all of
Tenant's property at Tenant's sole cost and expense. Tenant acknowledges that
it is Tenant's sole responsibility to obtain adequate insurance coverage to
compensate Tenant for damage to Tenant's property.
13.6 WAIVER. Landlord and Tenant hereby waive the provisions of
any present or future statutes which relate to the termination of leases when
leased property is damaged or destroyed and agree that such event shall be
governed by the terms of this Lease.
14. CONDEMNATION. If any portion of the Premises is are taken under the
power of eminent domain, or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs; provided that if so much of the Premises is
taken by such condemnation as would substantially and adversely affect the
operation and profitability of Tenant's business conducted from the Premises,
and said taking lasts for ninety (90) days or more, Tenant shall have the
option, to be exercised only in writing within thirty (30) days after Landlord
shall have given Tenant written notice of such taking (or in the absence of
such notice, within thirty (30) days after the condemning authority shall have
taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. If a taking lasts for less than ninety (90)
days, Tenant's rent shall be abated during said period but Tenant shall not
have the right to terminate this Lease. If Tenant does not terminate this Lease
in accordance with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base Rent
shall be reduced in the proportion that the usable floor area of the Premises
taken bears to the total usable floor area of the Premises. Landlord shall have
the option in its sole discretion to terminate this Lease as of the taking of
possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of a taking by
condemnation of any part of the Premises. Any award for the taking of all or
any part of the Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Landlord,
whether such award shall be made as compensation for diminution in value of the
leasehold, for good will, for the taking of the fee, as severance damages, or
as damages for tenant improvements; provided, however, that Tenant shall be
entitled to any separate award for loss of or damage to Tenant's removable
personal property and for moving expenses. In the event that this Lease is not
terminated by reason of such condemnation, and subject to the requirements of
any lender that has made a loan to Landlord encumbering the Premises, Landlord
shall to the extent of severance damages received by Landlord in connection
with such condemnation, repair any damage to the Premises caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority. This section, not general principles of law or
California Code of Civil Procedure sections 1230.010 et seq., shall govern the
rights and obligations of Landlord and Tenant with respect to the condemnation
of all or any portion of the Premises.
15. ASSIGNMENT AND SUBLETTING.
15.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or
by operation of law assign, transfer, hypothecate, mortgage, sublet, or
otherwise transfer or encumber all or any part of Tenant's interest in this
Lease or in the Premises (hereinafter collectively a "TRANSFER"), without
Landlord's prior written consent, which shall not be unreasonably withheld.
Landlord shall respond to Tenant's written request for consent hereunder within
thirty (30) days after Landlord's receipt of the written request from Tenant.
Any attempted Transfer without such consent shall be void and shall constitute
a material default and breach of this Lease. Tenant's written request for
Landlord's consent shall include, and Landlord's thirty (30) day response
period referred to above shall not commence, unless and until Landlord has
received from Tenant, all of the following information: (a) financial
statements for the proposed assignee or subtenant for the past three (3) years
prepared in accordance with generally accepted accounting principles, (b)
federal tax returns for the proposed assignee or subtenant for the past three
(3) years, (c) a TRW credit report or similar report on the proposed assignee
or subtenant, (d) a detailed description of the business the assignee or
subtenant intends to operate at the Premises, (e) the proposed effective date
of the assignment or sublease, (f) a copy of the proposed sublease or
assignment agreement which includes all of the terms and conditions of the
proposed assignment or sublease, (g) a detailed description of any ownership or
commercial relationship between Tenant and the proposed assignee or subtenant,
(h) a detailed description of any Alterations the proposed assignee or
subtenant desires to make to the Premises, and (i) a Hazardous Materials
Disclosure Certificate substantially in the form of
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Exhibit C attached hereto (the "TRANSFEREE HAZMAT CERTIFICATE"). If the
obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant's written request shall not be considered complete
until the information described in (a), (b) and (c) of the previous sentence
has been provided with respect to each proposed guarantor. "TRANSFER" shall
also include the transfer (a) if Tenant is a corporation, and Tenant's stock is
not publicly traded over a recognized securities exchange, of more than fifty
percent (50%) of the voting stock of such corporation during the term of this
Lease (whether or not in one or more transfers) or the dissolution, merger or
liquidation of the corporation, or (b) if Tenant is a partnership, limited
liability company, limited liability partnership or other entity, of more than
fifty percent (50%) of the profit and loss participation in such partnership or
entity during the term of this Lease (whether or not in one or more transfers)
or the dissolution, merger or liquidation of the partnership, limited liability
company, limited liability partnership or other entity. If Tenant is a limited
or general partnership (or is comprised of two or more persons, individually or
as co-partners), Tenant shall not be entitled to change or convert to (i) a
limited liability company, (ii) a limited liability partnership or (iii) any
other entity which possesses the characteristics of limited liability without
the prior written consent of Landlord, which consent may be given or withheld
in Landlord's sole discretion. Tenant's sole remedy in the event that Landlord
shall wrongfully withhold consent to or disapprove any assignment or sublease
shall be to obtain an order by a court of competent jurisdiction that Landlord
grant such consent; in no event shall Landlord be liable for damages with
respect to its granting or withholding consent to any proposed assignment or
sublease. If Landlord shall exercise any option to recapture the Premises, or
shall deny a request for consent to a proposed assignment or sublease, Tenant
shall indemnify, defend and hold Landlord harmless from and against any and all
losses, liabilities, damages, costs and claims that may be made against
Landlord by the proposed assignee or subtenant, or by any brokers or other
persons claiming a commission or similar compensation in connection with the
proposed assignment or sublease.
15.2 LEVERAGED BUY-OUT. The involvement by Tenant or its assets in
any transaction, or series of transactions (by way of merger, sale,
acquisition, financing, refinancing, transfer, leveraged buy-out or otherwise)
whether or not a formal assignment or hypothecation of this Lease or Tenant's
assets occurs, which results or will result in a reduction of the "Net Worth"
of Tenant as hereinafter defined, by an amount equal to or greater than fifty
percent (50%) of such Net Worth of Tenant as it is represented to Landlord at
the time of the execution by Landlord of this Lease, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, at whichever time said Net Worth of Tenant was or is greater, shall
be considered to be an assignment of this Lease by Tenant to which Landlord may
reasonably withhold its consent. "NET WORTH" of Tenant for purposes of this
section shall be the net worth of Tenant (excluding any guarantors) established
under generally accepted accounting principles consistently applied.
15.3 STANDARD FOR APPROVAL. Landlord shall not unreasonably
withhold its consent to a Transfer provided that Tenant has complied with each
and every requirement, term and condition of this section 15. Tenant
acknowledges and agrees that each requirement, term and condition in this
section 15 is a reasonable requirement, term or condition. It shall be deemed
reasonable for Landlord to withhold its consent to a Transfer if any
requirement, term or condition of this section 15 is not complied with or: (a)
the Transfer would cause Landlord to be in violation of its obligations under
another lease or agreement to which Landlord is a party; (b) in Landlord's
reasonable judgment, a proposed assignee or subtenant is not financially able
to pay the rents due under this Lease as and when they are due and payable; (c)
a proposed assignee's or subtenant's business will impose a burden on the
Premises' parking facilities or utilities that is greater than the burden
imposed by Tenant, in Landlord's reasonable judgment; (d) the terms of a
proposed assignment or subletting will allow the proposed assignee or subtenant
to exercise a right of renewal, right of expansion, right of first offer, right
of first refusal or similar right held by Tenant; (e) a proposed assignee or
subtenant refuses to enter into a written assignment agreement or sublease,
reasonably satisfactory to Landlord, which provides that it will abide by and
assume all of the terms and conditions of this Lease for the term of any
assignment or sublease and containing such other commercially reasonable terms
and conditions requested by Landlord; (f) the use of the Premises by the
proposed assignee or subtenant will be a use permitted by this Lease; (g) any
guarantor of this Lease refuses to consent to the Transfer or to execute a
written agreement reaffirming the guaranty; (h) Tenant is in default as defined
in section 16 at the time of the request; (i) if requested by Landlord, the
assignee or subtenant refuses to sign a non-disturbance and attornment
agreement in favor of Landlord's lender; (j) Landlord has sued or been sued by
the proposed assignee or subtenant or has otherwise been involved in a legal
dispute with the proposed assignee or subtenant; (k) the assignment or sublease
will result in there being more than one subtenant of the Premises; (l) the
assignee or subtenant is a governmental or quasi-governmental entity or an
agency, department or instrumentality of a governmental or quasi-governmental
agency; or (m) the assignee or subtenant will use, store or handle Hazardous
Materials in or about the Premises of a type, nature, quantity not acceptable
to Landlord, in Landlord's sole discretion.
15.4 ADDITIONAL TERMS AND CONDITIONS. The following terms and
conditions shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall
release Tenant from Tenant's obligations hereunder or alter the primary
liability of Tenant to pay the rent and other sums due Landlord hereunder and
to perform all other obligations to be performed by Tenant hereunder or release
any guarantor from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than
Tenant pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a
Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of
Landlord's right to exercise its rights and remedies for the breach of any of
the terms or conditions of this section 15.
(d) The consent by Landlord to any Transfer shall not
constitute a consent to any subsequent Transfer by Tenant or to any subsequent
or successive Transfer by an assignee or subtenant. However, Landlord may
consent to subsequent Transfers or any amendments or modifications thereto.
(e) In the event of any default under this Lease, Landlord
may proceed directly against Tenant, any guarantors or anyone else responsible
for the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant
shall not constitute an acknowledgment that no default then exists under this
Lease nor shall such consent be deemed a waiver of any then-existing default.
(g) The discovery of the fact that any financial statement
relied upon by Landlord in giving its consent to an assignment or subletting
was materially false shall, at Landlord's election, render Landlord's consent
null and void.
(h) Landlord shall not be liable under this Lease or under
any sublease to any subtenant, and Landlord's liability under this Lease shall
continue to be solely to Tenant.
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(i) No assignment or sublease may be modified or amended
without Landlord's prior written consent.
(j) The occurrence of a transaction described in section
15.2 shall give Landlord the right (but not the obligation) to require that
Tenant immediately provide Landlord with an additional security deposit equal
to twelve (12) times the monthly Base Rent payable under the Lease, and
Landlord may make its receipt of such amount a condition to Landlord's consent
to such transaction.
(k) Any assignee of, or subtenant under, this Lease shall,
by reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Landlord, to have assumed and agreed to conform and
comply with each and every term, covenant, condition and obligation herein to
be observed or performed by Tenant during the term of said assignment or
sublease, other than such obligations as are contrary or inconsistent with
provisions of an assignment or sublease to which Landlord has specifically
consented in writing.
(l) At Landlord's request, Tenant shall deliver to
Landlord, Landlord's standard consent to assignment or consent to sublease
agreement, as applicable, executed by Tenant, the assignee and the subtenant,
as applicable.
15.5 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all
or any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns
and transfers to Landlord all of Tenant's interest in all rentals and income
arising from any sublease entered into by Tenant, and Landlord may collect such
rent and income and apply same toward Tenant's obligations under this Lease;
provided, however, that until a default shall occur in the performance of
Tenant's obligations under this Lease, Tenant may receive, collect and enjoy
the rents accruing under such sublease. Landlord shall not, by reason of this
or any other assignment of such rents to Landlord nor by reason of the
collection of the rents from a subtenant, be deemed to have assumed or
recognized any sublease or to be liable to the subtenant for any failure of
Tenant to perform and comply with any of Tenant's obligations to such subtenant
under such sublease, including, but not limited to, Tenant's obligation to
return any security deposit. Tenant hereby irrevocably authorizes and directs
any such subtenant, upon receipt of a written notice from Landlord stating that
a default exists in the performance of Tenant's obligations under this Lease,
to pay to Landlord the rents due as they become due under the sublease. Tenant
agrees that such subtenant shall have the right to rely upon any such statement
and request from Landlord, and that such subtenant shall pay such rents to
Landlord without any obligation or right to inquire as to whether such default
exists and notwithstanding any notice or claim from Tenant to the contrary.
(b) In the event Tenant shall default in the performance of
its obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in which
event Landlord shall undertake the obligations of Tenant under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Landlord shall not be liable for any prepaid rents
or security deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
15.6 TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord
shall be entitled to receive from Tenant (as and when received by Tenant) as an
item of additional rent one-half of all amounts received by Tenant from the
subtenant or assignee in excess of the amounts payable by Tenant to Landlord
hereunder (the "TRANSFER Premium"). The Transfer Premium shall be reduced by
the reasonable brokerage commissions and legal fees actually paid by Tenant in
order to assign the Lease or to sublet a portion of the Premises. The Transfer
Premium shall include all Base Rent, additional rent or other consideration of
any type whatsoever payable by the assignee or subtenant in excess of the Base
Rent and additional rent payable by Tenant under this Lease. If less than all
of the Premises is transferred, the Base Rent and the additional rent shall be
determined on a per-leasable-square-foot basis. "TRANSFER PREMIUM" shall also
include, but not be limited to, key money and bonus money paid by the assignee
or subtenant to Tenant in connection with such Transfer, and any payment in
excess of fair-market value for services rendered by Tenant to the assignee or
subtenant or for assets, fixtures, inventory, equipment or furniture
transferred by Tenant to the assignee or subtenant in connection with such
Transfer.
15.7 LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding
anything to the contrary contained in this section 15, and provided that
Landlord has not previously agreed in writing to the requested assignment,
sublease or Transfer of the Lease, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request
by Tenant to assign this Lease or to sublease space in the Premises, to
terminate this Lease with respect to said space as of the date thirty (30) days
after Landlord's election; provided, however, Landlord shall not have the right
to recapture space subleased by Tenant if such sublease satisfies both of the
following conditions: (a) the sublease is for less than the entire Premises and
(b) the sublease is for a term that is at least ninety (90) days less than the
remaining term of the Lease. In the event of a recapture by Landlord, if this
Lease shall be canceled with respect to less than the entire Premises, the Base
Rent and the number of parking spaces Tenant may use shall be adjusted on the
basis of the number of rentable square feet retained by Tenant in proportion to
the number of rentable square feet contained in the original Premises, and this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party, the parties shall execute written confirmation of
same. If Landlord recaptures only a portion of the Premises, it shall construct
and erect at its sole cost such partitions as may be required to sever the
space to be retained by Tenant from the space recaptured by Landlord. Landlord
may, at its option, lease any recaptured portion of the Premises to the
proposed subtenant or assignee or to any other person or entity without
liability to Tenant. Tenant shall not be entitled to any portion of the profit,
if any, Landlord may realize on account of such termination and reletting. Upon
any such recapture, Tenant shall be automatically relieved from liability under
this Lease with respect to the recaptured portion of the Premises. Tenant
acknowledges that the purpose of this section is to enable Landlord to receive
profit in the form of higher rent or other consideration to be received from an
assignee or subtenant and to permit Landlord to control the leasing of space in
the Premises. Tenant acknowledges and agrees that the requirements of this
section are commercially reasonable and are consistent with the intentions of
Landlord and Tenant.
15.8 LANDLORD'S EXPENSES. In the event Tenant shall assign this
Lease or sublet the Premises or request the consent of Landlord to any
Transfer, then Tenant shall pay Landlord's reasonable costs and expenses
incurred in connection therewith, including, but not limited to, attorneys',
architects', accountants', engineers' or other consultants' fees; provided,
however, with respect to any one Transfer, Tenant shall not be obligated to
reimburse Landlord for legal fees that exceed Two Thousand Five Hundred Dollars
($2,500.00).
16. DEFAULT; REMEDIES.
16.1 DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in section 16.2. Landlord or Landlord's authorized agent shall have
the right to execute and to deliver any notice of default, notice to pay rent
or quit or any other notice Landlord gives Tenant.
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(a) Tenant's failure to make any payment of Base Rent, Real
Property Taxes or any other payment required to be made by Tenant hereunder, as
and when due, where such failure shall continue for a period of five (5) days
after written notice thereof from Landlord to Tenant. In the event that
Landlord serves Tenant with a notice to pay rent or quit pursuant to applicable
unlawful detainer statutes, such notice shall also constitute the notice
required by this section 16.1(a).
(b) The abandonment of the Premises by Tenant, in which
event Landlord shall not be obligated to give any notice of default to Tenant.
(c) The failure of Tenant to comply with any of its
obligations under sections 4, 9, 11, 12, 15, 18, 23, 25 and 26 where Tenant
fails to comply with its obligations or fails to cure any earlier breach of
such obligation within fifteen (15) days following written notice from Landlord
to Tenant. In the event Landlord serves Tenant with a notice to quit or any
other notice pursuant to applicable unlawful detainer statutes, said notice
shall also constitute the notice required by this section 16.1(c).
(d) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Tenant (other than those referenced in sections 16.1(a), (b) and (c),
above), where such failure shall continue for a period of twenty (20) days
after written notice thereof from Landlord to Tenant; provided, however, that
if the nature of Tenant's nonperformance is such that more than twenty (20)
days are reasonably required for its cure, then Tenant shall not be deemed to
be in default if Tenant commences such cure within said twenty (20) day period
and thereafter diligently pursues such cure to completion. In the event that
Landlord serves Tenant with a notice to quit or any other notice pursuant to
applicable unlawful detainer statutes, said notice shall also constitute the
notice required by this section 16.1(d).
(e) (i) The making by Tenant or any guarantor of Tenant's
obligations hereunder of any general arrangement or general assignment for the
benefit of creditors; (ii) Tenant or any guarantor becoming a "debtor" as
defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case
of a petition filed against Tenant or guarantor, the same is dismissed within
sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within
thirty (30) days; or (v) the insolvency of Tenant. In the event that any
provision of this section 16.1(e) is unenforceable under applicable law, such
provision shall be of no force or effect.
(f) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, was materially false at the time given. Tenant
acknowledges that Landlord has entered into this Lease in material reliance on
such information.
(g) If Tenant is a corporation, partnership, limited
liability company or similar entity, the dissolution or liquidation of Tenant.
(h) If Tenant's obligations under this Lease are
guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a guarantor's refusal to honor the guaranty, or (v) a
guarantor's breach of its guaranty obligation on an anticipatory breach basis.
16.2 REMEDIES.
(a) In the event of any material default or breach of this
Lease by Tenant, Landlord may, at any time thereafter, with or without notice
or demand, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default:
(i) terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease and the term hereof
shall terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. If Landlord terminates this Lease, Landlord may recover
from Tenant (A) the worth at the time of award of the unpaid rent which had
been earned at the time of termination; (B) the worth at the time of award of
the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; (C) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; and (D) any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under the Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, the
cost of recovering possession of the Premises, expenses of releasing, including
necessary renovation and alteration of the Premises, reasonable attorneys'
fees, any real estate commissions actually paid by Landlord and the unamortized
value of any free rent, reduced rent, tenant improvement allowance or other
economic concessions provided by Landlord. The "worth at time of award" of the
amounts referred to in section 16.2(a)(i)(A) and (B) shall be computed by
allowing interest at the lesser of ten percent (10%) per annum or the maximum
interest rate permitted by applicable law. The worth at the time of award of
the amount referred to in section 16.2(a)(i)(C) shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). For purposes of this
section 16.2(a)(i), "rent" shall be deemed to be all monetary obligations
required to be paid by Tenant pursuant to the terms of this Lease.
(ii) maintain Tenant's right of possession, in
which event Landlord shall have the remedy described in California Civil Code
section 1951.4 which permits Landlord to continue this Lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due. In the
event Landlord elects to continue this Lease in effect, Tenant shall have the
right to sublet the Premises or assign Tenant's interest in the Lease subject
to the reasonable requirements contained in section 15 of this Lease and
provided further that Landlord shall not require compliance with any standard
or condition contained in section 15 that has become unreasonable at the time
Tenant seeks to sublet or assign the Premises pursuant to this section
16.2(a)(ii).
(iii) collect sublease rents (or appoint a receiver
to collect such rent) and otherwise perform Tenant's obligations at the
Premises, it being agreed, however, that the appointment of a receiver for
Tenant shall not constitute an election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in
which the Premises are located.
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(b) No remedy or election hereunder shall be deemed
exclusive, but shall, wherever possible, be cumulative with all other remedies
at law or in equity. The expiration or termination of this Lease and/or the
termination of Tenant's right to possession of the Premises shall not relieve
Tenant of liability under any indemnity provisions of this Lease as to matters
occurring or accruing during the term of the Lease or by reason of Tenant's
occupancy of the Premises.
(c) If Tenant abandons or vacates the Premises, Landlord
may re-enter the Premises, and such re-entry shall not be deemed to constitute
Landlord's election to accept a surrender of the Premises or to otherwise
relieve Tenant from liability for its breach of this Lease. No surrender of the
Premises shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i) accept
a surrender of the Premises and (ii) relieve Tenant of liability under the
Lease. The delivery by Tenant to Landlord of possession of the Premises shall
not constitute the termination of the Lease or the surrender of the Premises.
16.3 DEFAULT BY LANDLORD. Subject to the terms and conditions of
this section 16.3, Landlord's failure to perform its obligations under this
Lease shall constitute a breach of this Lease by Landlord. Landlord shall not
be in default under this Lease unless Landlord fails to perform obligations
required of Landlord within thirty (30) days after written notice by Tenant to
Landlord and to the holder of any mortgage or deed of trust encumbering the
Premises whose name and address shall have theretofore been furnished to Tenant
in writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of Landlord's obligation is such that
more than thirty (30) days are required for its cure, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently pursues the same to completion. Tenant hereby
waives its right to recover consequential damages (including, but not limited
to, lost profits) or punitive damages arising out of a Landlord default. This
Lease and the obligations of Tenant hereunder shall not be affected or impaired
because Landlord is unable to fulfill any of its obligations hereunder or is
delayed in doing so, if such inability or delay is caused by reason of a Force
Majeure Event, and the time for Landlord's performance shall be extended for
the period of any such delay. Any claim, demand, right or defense by Tenant
that arises out of this Lease or the negotiations which preceded this Lease
shall be barred unless Tenant commences an action thereon, or interposes a
defense by reason thereof, within one (1) year after the date of the inaction,
omission, event or action that gave rise to such claim, demand, right or
defense.
16.4 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Base Rent or other sums due hereunder will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the Premises.
Accordingly, if any installment of Base Rent or any other sum due from Tenant
shall not be received by Landlord within three (3) days after the date such
amount shall be due, then, without any requirement for notice or demand to
Tenant, Tenant shall immediately pay to Landlord a late charge equal to ten
percent (10%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder, including the assessment of interest
under section 16.5.
16.5 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of ten percent (10%) per annum or the maximum rate
permitted by applicable law. Payment of such interest shall not excuse or cure
any default by Tenant under this Lease; provided, however, that interest shall
not be payable on late charges incurred by Tenant nor on any amounts upon which
late charges are paid by Tenant.
16.6 PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant
fails to pay Base Rent or any other monetary obligation due hereunder on the
date it is due, after Tenant's third failure to pay any monetary obligation on
the date it is due, at Landlord's option, all monetary obligations of Tenant
hereunder shall thereafter be paid by cashier's check, and Tenant shall, upon
demand, provide Landlord with an additional security deposit equal to three (3)
months' Base Rent. If Landlord has required Tenant to make said payments by
cashier's check or to provide an additional security deposit, Tenant's failure
to make a payment by cashier's check or to provide the additional security
deposit shall be a material default hereunder.
17. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants
and agreements to be kept or performed by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any reduction
of rent. If Tenant shall fail to perform any of its obligations under this
Lease, Landlord may, but shall not be obligated to, after three (3) days' prior
written notice to Tenant, make any such payment or perform any such act on
Tenant's behalf without waiving its rights based upon any default of Tenant and
without releasing Tenant from any obligations hereunder. Tenant shall pay to
Landlord, within ten (10) days after delivery by Landlord to Tenant of
statements therefore, an amount equal to the expenditures reasonably made by
Landlord in connection with the remedying by Landlord of Tenant's defaults
pursuant to the provisions of this section.
18. INDEMNITY. Except to the extent of damage resulting from the gross
negligence or willful misconduct of Landlord or its authorized representatives,
Tenant hereby agrees to indemnify, defend and hold harmless Landlord and its
employees, partners, agents, contractors, lenders and ground lessors (said
persons and entities are hereinafter collectively referred to as the
"INDEMNIFIED PARTIES") from and against any and all liability, loss, cost,
damage, claims, loss of rents, liens, judgments, penalties, fines, settlement
costs, investigation costs, cost of consultants and experts, attorneys fees,
court costs and other legal expenses, effects of environmental contamination,
cost of environmental testing, removal, remediation and/or abatement of
Hazardous Substances (as said term are defined below), insurance policy
deductibles and other expenses (hereinafter collectively referred to as
"DAMAGES") arising out of or related to an Indemnified Matter (as defined
below). For purposes of this section, an "INDEMNIFIED MATTER" shall mean any
matter for which one or more of the Indemnified Parties incurs liability or
Damages to the extent that the liability or Damages directly arise out of or
involve (a) Tenant's or its employees', agents', contractors' or invitees' (all
of said persons or entities are hereinafter collectively referred to as "TENANT
PARTIES") use or occupancy of the Premises, (b) any act, omission or neglect of
a Tenant Party, (c) Tenant's failure to perform any of its obligations under
the Lease, (d) the existence, use or disposal of any Hazardous Substance (as
defined below) brought on to the Premises by a Tenant Party or (e) any other
matters for which Tenant has agreed to indemnify Landlord pursuant to any other
provision of this Lease. Tenant's obligations hereunder shall include, but
shall not be limited to (f) compensating the Indemnified Parties for Damages
arising out of Indemnified Matters within ten (10) days after written demand
from an Indemnified Party and (g) providing a defense, with counsel reasonably
satisfactory to the Indemnified Party, at Tenant's sole expense, within ten
(10) days after written demand from the Indemnified Party, of any claims,
action or proceeding arising out of or relating to an Indemnified Matter
whether or not litigated or reduced to judgment and whether or not well
founded. If Tenant is obligated to compensate an Indemnified Party for Damages
arising out of an Indemnified Matter, Landlord shall have the immediate and
unconditional right, but not the obligation, without notice or demand to
Tenant, to pay the damages, and Tenant shall, upon ten (10) days' advance
written notice from Landlord, reimburse Landlord for the costs incurred by
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Landlord. The Indemnified Parties need not first pay any Damages to be
indemnified hereunder. This indemnity is intended to apply to the fullest
extent permitted by applicable law. Tenant's obligations under this section
shall survive the expiration or termination of this Lease unless specifically
waived in writing by Landlord after said expiration or termination.
19. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for loss of or damage to the merchandise, tenant
improvements, fixtures, furniture, equipment, computers, files, automobiles, or
other property of Tenant, Tenant's employees, agents, contractors or invitees,
or any other person in or about the Premises, nor shall Landlord be liable for
injury to the person of Tenant, Tenant's employees, agents, contractors or
invitees, whether such damage or injury is caused by or results from any cause
whatsoever including, but not limited to, theft, criminal activity at the
Premises, negligent security measures, bombings or bomb scares, Hazardous
Substances, fire, steam, electricity, gas, water or rain, flooding, breakage of
pipes, sprinklers, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said damage or injury results from conditions arising upon
the Premises, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Premises, and regardless
of whether the cause of the damage or injury arises out of Landlord's or its
employees', agents' or contractors' negligent or intentional acts.
Notwithstanding the foregoing, nothing contained in this section shall relieve
Landlord or its manager from liability for gross negligence or willful
misconduct; provided, however, even in the event of gross negligence or willful
misconduct, Landlord and Landlord's manager shall not be liable for lost
profits or punitive damages. Landlord shall not be liable for any damages
arising from any act or neglect of any employees, agents, contractors or
invitees of any other tenant, occupant or user of the Premises. Tenant, as a
material part of the consideration to Landlord hereunder, hereby assumes all
risk of damage to Tenant's property or business or injury to persons in, upon
or about the Premises arising from any cause, including Landlord's negligence
or the negligence of its employees, agents or contractors, and Tenant hereby
waives all claims in respect thereof against Landlord, its employees, agents
and contractors.
20. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Premises and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease if the transferee assumes Landlord's obligations under this Lease; and
Tenant hereby agrees to look solely to Landlord's transferee for the
performance of Landlord's obligations hereunder after the date of the transfer.
Upon such a transfer, Landlord shall, at its option, return Tenant's security
deposit to Tenant or transfer Tenant's security deposit to Landlord's
transferee and, in either event, Landlord shall have no further liability to
Tenant for the return of its security deposit. Subject to the rights of any
lender holding a mortgage or deed of trust encumbering all or part of the
Premises, Tenant agrees to look solely to Landlord's equity interest in the
Premises for the collection of any judgment requiring the payment of money by
Landlord arising out of (a) Landlord's failure to perform its obligations under
this Lease or (b) the negligence or willful misconduct of Landlord, its
partners, employees and agents. No other property or assets of Landlord shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of any judgment or writ obtained by Tenant against Landlord. No
partner, employee or agent of Landlord shall be personally liable for the
performance of Landlord's obligations hereunder or be named as a party in any
lawsuit arising out of or related to, directly or indirectly, this Lease and
the obligations of Landlord hereunder. The obligations under this Lease do not
constitute personal obligations of the individual partners of Landlord, if any,
and Tenant shall not seek recourse against the individual partners of Landlord
or their assets.
21. SIGNS. Except as provided in the addendum to this Lease, Tenant shall
not make any changes to the exterior of the Premises, install any exterior
lights, decorations, balloons, flags, pennants, banners or painting, 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 of the
Premises, without Landlord's prior written consent, which may be given or
withheld in Landlord's sole discretion. Upon vacation of the Premises, Tenant
shall remove all signs and repair, paint and/or replace the building facia
surface to which its signs are attached. Tenant shall obtain all applicable
governmental permits and approvals for signs and exterior treatments. All
signs, decorations, advertising media, blinds, draperies and other window
treatment or bars or other security installations visible from outside the
Premises shall be subject to Landlord's approval and conform in all respects to
Landlord's requirements.
22. BROKER'S FEE. Tenant and Landlord each represent and warrant to the
other that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
section 1.12, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party. The commission payable to Landlord's broker with respect to
this Lease shall be pursuant to the terms of the separate commission agreement
in effect between Landlord and Landlord's broker. Landlord's broker shall pay a
portion of its commission to Tenant's broker, if so provided in any agreement
between Landlord's broker and Tenant's broker. Nothing in this Lease shall
impose any obligation on Landlord to pay a commission or fee to any party other
than Landlord's broker.
23. ESTOPPEL CERTIFICATE.
23.1 DELIVERY OF CERTIFICATE. Tenant shall from time to time, upon
not less than ten (10) days' prior written notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing certifying such
information as Landlord may reasonably request including, but not limited to,
the following: (a) that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect), (b) the date to which
the Base Rent and other charges are paid in advance and the amounts so payable,
(c) that there are not, to Tenant's knowledge, any uncured defaults or
unfulfilled obligations on the part of Landlord, or specifying such defaults or
unfulfilled obligations, if any are claimed, (d) that all tenant improvements
to be constructed by Landlord, if any, have been completed in accordance with
Landlord's obligations, and (e) that Tenant has taken possession of the
Premises. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises.
23.2 FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the
failure of Tenant to deliver such statement within such time shall constitute a
material default of Tenant hereunder, or it shall be conclusive upon Tenant
that (a) this Lease is in full force and effect, without modification except as
may be represented by Landlord, (b) there are no uncured defaults in Landlord's
performance, (c) not more than one month's Base Rent has been paid in advance,
(d) all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord's obligations, and (e) Tenant has taken
possession of the Premises.
24. FINANCIAL INFORMATION. From time to time, at Landlord's request,
Tenant shall cause the following financial information to be delivered to
Landlord, at Tenant's sole cost and expense, upon not less than ten (10) days'
advance written notice from Landlord: (a) a current publicly available
financial statement for Tenant and Tenant's financial statements for the
previous two accounting years, (b) a current publicly available financial
statement for any guarantor(s) of this Lease and the guarantor'(s)
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financial statements for the previous two accounting years and (c) such other
publicly available financial information pertaining to Tenant or any guarantor
as Landlord or any lender or purchaser of Landlord may reasonably request.
25. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS.
25.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE. Prior to
executing this Lease, Tenant has delivered to Landlord Tenant's executed
initial Hazardous Materials Disclosure Certificate (the "INITIAL HAZMAT
CERTIFICATE"), a copy of which is attached hereto as Exhibit C. Tenant
covenants, represents and warrants to Landlord that the information in the
Initial HazMat Certificate is true and correct and accurately describes the
use(s) of Hazardous Materials which will be made and/or used on the Premises by
Tenant. Tenant shall, upon Landlord's written request from time to time,
deliver to Landlord an executed Hazardous Materials Disclosure Certificate (the
"HAZMAT CERTIFICATE") describing Tenant's then-present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents and
information as requested by Landlord. The HazMat Certificates required
hereunder shall be in substantially the form attached hereto as Exhibit C.
25.2 DEFINITION OF HAZARDOUS MATERIALS. As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which
are or become regulated by any Environmental Laws (defined below); (b)
petroleum, petroleum by-products, gasoline, diesel fuel, crude oil or any
fraction thereof; (c) asbestos and asbestos-containing material, in any form,
whether friable or non-friable; (d) polychlorinated biphenyls; (e) radioactive
materials; (f) lead and lead-containing materials; (g) any other material,
waste or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined or become defined by any Environmental Law; or (h) any materials which
cause or threatens to cause a nuisance upon or waste to any portion of the
Premises or any surrounding property; or poses or threatens to pose a hazard to
the health and safety of persons on the Premises, any other surrounding
property. For purposes of this Lease, the term "Hazardous Materials" shall not
include nominal amounts of ordinary household cleaners, office supplies and
janitorial supplies which are not actionable under any Environmental Laws.
25.3 PROHIBITION; ENVIRONMENTAL LAWS. Tenant shall not be entitled
to use or store any Hazardous Materials on, in, or about any portion of the
Premises without, in each instance, obtaining Landlord's prior written consent
thereto. If Landlord, in its sole discretion, consents to any such usage or
storage, then Tenant shall be permitted to use and/or store only those
Hazardous Materials that are necessary for Tenant's business and to the extent
disclosed in the HazMat Certificate and as expressly approved by Landlord in
writing. Any such usage and storage may only be to the extent of the quantities
of Hazardous Materials as specified in the then-applicable HazMat Certificate
as expressly approved by Landlord. In all events such usage and storage must at
all times be in full compliance with any and all local, state and federal
environmental, health and/or safety-related laws, statutes, orders, standards,
courts' decisions, ordinances, rules and regulations (as interpreted by
judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted,
issued or adopted in the future which are or become applicable to Tenant or all
or any portion of the Premises (collectively, the "ENVIRONMENTAL LAWS") and in
compliance with the recommendations of Landlord's consultants Tenant agrees
that any changes to the type and/or quantities of Hazardous Materials specified
in the most recent HazMat Certificate may be implemented only with the prior
written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Tenant shall not be entitled nor permitted to
install any tanks under, on or about the Premises for the storage of Hazardous
Materials without the express written consent of Landlord, which may be given
or withheld in Landlord's sole discretion. Landlord shall have the right, in
Landlord's sole discretion, at all times during the Term of this Lease to (i)
inspect the Premises upon reasonable prior notice and provided that Landlord
shall endeavor to minimize disruption of Tenant's business, (ii) upon
reasonable prior notice and provided that Landlord shall endeavor to minimize
disruption of Tenant's business conduct tests and investigations to determine
whether Tenant is in compliance with the provisions of this section 25 or to
determine if Hazardous Materials are present in, on or about the Premises,
(iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about any portion of the Premises, and (iv) to require
Tenant to complete a survey of its use, storage and handling of Hazardous
Materials in the Premises, using a form and following procedures designated by
Landlord, in Landlord's sole discretion (the "SURVEY"). If as a result of an
inspection, test or Survey Landlord determines, in Landlord's sole discretion,
that Tenant should implement or perform safety, security or compliance
measures, Tenant shall within thirty (30) days after written request by
Landlord perform such measures, at Tenant's sole cost and expense. The
aforementioned rights granted herein to Landlord and its representatives shall
not create (a) a duty on Landlord's part to inspect, test, investigate, monitor
or otherwise observe the Premises or the activities of Tenant and Tenant
Parties with respect to Hazardous Materials, including without limitation,
Tenant's operation, use and any remediation relating thereto, or (b) liability
on the part of Landlord and its representatives for Tenant's use, storage,
disposal or remediation of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith.
25.4 TENANT'S ENVIRONMENTAL OBLIGATIONS. Tenant shall give to
Landlord immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises; provided
that Tenant has actual, implied or constructive knowledge of such event(s).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant
Parties such that the affected portions of the Premises and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Tenant shall be entitled to respond immediately
to an emergency without first obtaining Landlord's prior written consent.
Tenant, at its sole cost and expense, shall conduct and perform, or cause to be
conducted and performed, all closures as required by any Environmental Laws or
any agencies or other governmental authorities having jurisdiction thereof. If
Tenant fails to so promptly investigate, clean up, remove, restore, provide
closure or otherwise so remediate, Landlord may, but without obligation to do
so, take any and all steps necessary to rectify the same, and Tenant shall
promptly reimburse Landlord, upon demand, for all costs and expenses to
Landlord of performing investigation, cleanup, removal, restoration, closure
and remediation work. All such work undertaken by Tenant, as required herein,
shall be performed in such a manner so as to enable Landlord to make full
economic use of the Premises after the satisfactory completion of such work.
25.5 ENVIRONMENTAL INDEMNITY. In addition to Tenant's other
indemnity obligations under this Lease, Tenant agrees to, and shall, protect,
indemnify, defend (with counsel reasonably acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless from and against any and all loss,
cost, damage, liability or expense (including, without limitation, diminution
in value of any portion of the Premises, damages for the loss of or restriction
on the use of rentable or usable space, and from any adverse impact of
Landlord's marketing of any space within the Premises) arising at any time
during or after the term of this Lease to the extent related directly to the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about any portion of the
Premises as a result of the
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intentional or negligent acts or omissions of Tenant or Tenant Parties.
Tenant's indemnity shall not apply to, and Tenant shall not be liable for,
Hazardous Materials located at the Premises that was not brought to the
Premises by Tenant or Tenant Parties. Neither the written consent of Landlord
to the presence, use or storage of Hazardous Materials in, on, under or about
any portion of the Premises nor the strict compliance by Tenant with all
Environmental Laws shall excuse Tenant from its obligations of indemnification
pursuant hereto. Tenant shall not be relieved of its indemnification
obligations under the provisions of this section 25.5 due to Landlord's status
as either an "owner" or "operator" under any Environmental Laws.
25.6 SURVIVAL. Tenant's obligations and liabilities pursuant to
the provisions of this section 25 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 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 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 reasonable wear and tear,
including without limitation, the conduct or performance of any closures as
required by any Environmental Laws. For purposes hereof, the term "reasonable
wear and tear" shall not include any deterioration in the condition or
diminution of the value of any portion of the Premises 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
section 29 of this Lease.
26. SUBORDINATION.
26.1 EFFECT OF SUBORDINATION. This Lease, and any Option (as
defined below) granted hereby, upon Landlord's written election, shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Premises and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such
person or entity. If any mortgagee, trustee or ground lessor shall elect to
have this Lease and any Options granted hereby prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Tenant, this Lease and such Options shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease or such Options are dated
prior or subsequent to the date of said mortgage, deed of trust or ground lease
or the date of recording thereof. In the event of the foreclosure of a security
device, the new owner shall not (a) be liable for any act or omission of any
prior landlord or with respect to events occurring prior to its acquisition of
title unless such act or omission constitutes a default by the Landlord under
the Lease, the default continues to exist after the new owner acquires title to
the Premises, the default can be cured by the new owner after it acquires title
to the Premises and the new owner is given the opportunity, after written
notice of default from Tenant, to cure the default in accordance with section
16.3, (b) be liable for the breach of this Lease by any prior landlord, (c) be
subject to any offsets or defenses which Tenant may have against the prior
landlord or (d) be liable to Tenant for the return of its security deposit.
26.2 EXECUTION OF DOCUMENTS. Tenant agrees to execute and
acknowledge any commercially reasonable documents Landlord requests Tenant
execute to effectuate an attornment, a subordination, or to make this Lease or
any Option granted herein prior to the lien of any mortgage, deed of trust or
ground lease, as the case may be. Tenant's failure to execute such documents
within ten (10) days after written demand shall constitute a material default
by Tenant hereunder. 27. OPTIONS.
27.1 DEFINITION. As used in this Lease, the word "OPTION" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease, (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises, (3) the right or
option to terminate this Lease prior to its expiration date or to reduce the
size of the Premises and (4) the option to extend set forth in the addendum to
this Lease. Any Option granted to Tenant by Landlord must be evidenced by a
written option agreement attached to this Lease as a rider or addendum or said
option shall be of no force or effect.
27.2 OPTIONS PERSONAL. Each Option granted to Tenant in this
Lease, if any, is personal to the original Tenant and may be exercised only by
the original Tenant while occupying the entire Premises and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Tenant, including, without limitation, any transferee
approved by Landlord in section 15. The Options, if any, herein granted to
Tenant are not assignable separate and apart from this Lease, nor may any
Option be separated from this Lease in any manner, either by reservation or
otherwise. If at any time an Option is exercisable by Tenant, the Lease has
been assigned or a sublease exists as to any portion of the Premises, the
Option shall be deemed null and void and neither Tenant nor any assignee or
subtenant shall have the right to exercise the Option.
27.3 MULTIPLE OPTIONS. In the event that Tenant has multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Option to extend or renew this Lease has been so exercised.
27.4 EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to
exercise an Option (i) during the time commencing from the date Landlord gives
to Tenant a notice of default pursuant to section 16.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease. The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this section.
27.5 LIMITATIONS ON OPTIONS. Notwithstanding anything to the
contrary contained in any rider or addendum to this Lease, any options, rights
of first refusal or rights of first offer granted hereunder shall be subject
and secondary to Landlord's right to first offer and lease any such space to
any tenant who is then occupying or leasing such space at the time the space
becomes available for leasing and shall be subject and subordinated to any
other options, rights of first refusal or rights of first offer previously
given to any other person or entity.
27.6 GUARANTEES. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, Tenant's right to exercise
and the effectiveness of an Option is conditioned upon Landlord's receipt from
any prior tenant that has not been expressly released from liability under this
Lease, and any guarantor of any obligation of Tenant under this Lease, of a
written agreement reaffirming such person's obligations under this Lease or the
guaranty, as modified by Tenant's exercise of the Option.
28. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change
the name and address of the Building upon not less than ninety (90) days prior
written notice and (b) to place signs, notices or displays upon the roof,
interior, exterior of the
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Building. Landlord reserves the right to use the exterior walls of the
Premises, and the area beneath, adjacent to and above the Premises together
with the right to install, use, maintain and replace equipment, machinery,
pipes, conduits and wiring through the Premises, which serve other real
property provided that Landlord's use does not unreasonably interfere with
Tenant's use of the Premises.
29. HOLDING OVER. If Tenant remains in possession of the Premises or any
part thereof after the expiration or earlier termination of the term hereof
with Landlord's consent, such occupancy shall be a tenancy from month to month
upon all the terms and conditions of this Lease pertaining to the obligations
of Tenant, except that the Base Rent payable shall be the greater of (a) two
hundred percent (200%) of the Base Rent payable immediately preceding the
termination date of this Lease or (b) one hundred twenty-five percent (125%) of
the fair market Base Rent for the Premises as of the date Tenant holds over,
and all Options, if any, shall be deemed terminated and be of no further
effect. If Tenant remains in possession of the Premises or any part thereof,
after the expiration of the term hereof without Landlord's consent, Tenant
shall, at Landlord's option, be treated as a tenant at sufferance or a
trespasser. Nothing contained herein shall be construed to constitute
Landlord's consent to Tenant holding over at the expiration or earlier
termination of the Lease term or to give Tenant the right to hold over after
the expiration or earlier termination of the Lease term. Tenant hereby agrees
to indemnify, hold harmless and defend Landlord from any cost, loss, claim or
liability (including attorneys' fees) Landlord may incur as a result of
Tenant's failure to surrender possession of the Premises to Landlord upon the
termination of this Lease.
30. LANDLORD'S ACCESS.
30.1 ACCESS. Landlord and Landlord's agents, contractors and
employees shall have the right to enter the Premises at reasonable times upon
advance notice to Tenant (except in the case of an emergency, where no notice
shall be required) for the purpose of inspecting the Premises, performing any
services required of Landlord, showing the Premises to prospective purchasers,
lenders or tenants, undertaking safety measures and making alterations,
repairs, improvements or additions to the Premises. In the event of an
emergency, Landlord may gain access to the Premises by any reasonable means,
and Landlord shall not be liable to Tenant for damage to the Premises or to
Tenant's property resulting from such access. Landlord may at any time place on
or about the Building "for sale" or "for lease" signs and Landlord may at any
time during the last one hundred twenty (120) days of the term hereof place on
or about the Premises "for lease" signs. When Landlord enters the Premises,
Landlord shall endeavor to minimize disruption of Tenant's business operations
caused by Landlord's entry.
31. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have
no obligation whatsoever to provide guard service or other security measures
for the benefit of the Premises, and Landlord shall have no liability to Tenant
due to its failure to provide such services. Tenant assumes all responsibility
for the protection of Tenant, its agents, employees, contractors and invitees
and the property of Tenant and of Tenant's agents, employees, contractors and
invitees from acts of third parties.
32. EASEMENTS. Landlord reserves to itself the right, from time to time,
to grant such easements, rights and dedications that Landlord deems necessary
or desirable, and to cause the recordation of parcel maps and restrictions, so
long as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall
sign any of the aforementioned documents within ten (10) days after Landlord's
request, and Tenant's failure to do so shall constitute a material default by
Tenant. The obstruction of Tenant's view, air or light by any structure erected
in the vicinity of the Premises, whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord.
33. TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole
expense with all present or future programs implemented or required by any
governmental or quasi-governmental entity or Landlord to manage parking,
transportation, air pollution or traffic in and around the Premises or the
metropolitan area in which the Premises is located.
34. SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
35. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.
36. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent and late charges shall be deemed to be rent.
37. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments
listed in section 1.13 contain all agreements of the parties with respect to
the lease of the Premises and any other matter mentioned herein. No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective. Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord nor any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or concerning any other matter addressed by this Lease.
38. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
39. NOTICES. All notices required or permitted by this Lease shall be in
writing and may be delivered (a) in person (by hand, by messenger or by courier
service), (b) by U.S. Postal Service regular mail, (c) by U.S. Postal Service
certified mail, return receipt requested, (d) by U.S. Postal Service Express
Mail, Federal Express or other overnight courier, or (e) by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this section. Any notice permitted or required hereunder, and any
notice to pay rent or quit or similar notice, shall be deemed personally
delivered to Tenant on the date the notice is personally delivered to any
employee of Tenant at the Premises. The addresses set forth in section 1.14 of
this Lease shall be the address of each party for notice purposes. Landlord or
Tenant may by written notice to the other specify a different address for
notice purposes, except that upon Tenant's taking possession of the Premises,
the Premises shall constitute Tenant's address for the purpose of mailing or
delivering notices to Tenant. A copy of all notices required or permitted to be
given to Landlord hereunder shall be concurrently transmitted to such party or
parties at such addresses as Landlord may from time to time hereinafter
designate by written notice to Tenant. A copy of all notices required or
permitted to be given to Tenant hereunder shall be concurrently transmitted to
The Office of the General Counsel, Jabil Circuit, 10560 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as Tenant may from time to
time hereinafter designate by written notice to Landlord. Any notice sent by
regular mail or by certified mail, return receipt requested, shall be deemed
given three (3) days after deposited with the U.S. Postal Service. Notices
delivered by U.S. Express Mail, Federal Express or other courier shall be
deemed given on the date delivered by the carrier to the appropriate party's
address for notice purposes. If any notice is transmitted by facsimile
transmission, the notice shall be deemed
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delivered upon telephone confirmation of receipt of the transmission thereof at
the appropriate party's address for notice purposes. A copy of all notices
delivered to a party by facsimile transmission shall also be mailed to the
party on the date the facsimile transmission is completed. If notice is
received on Saturday, Sunday or a legal holiday, it shall be deemed received on
the next business day. Nothing contained herein shall be construed to limit
Landlord's right to serve any notice to pay rent or quit or similar notice by
any method permitted by applicable law, and any such notice shall be effective
if served in accordance with any method permitted by applicable law whether or
not the requirements of this section have been met.
40. WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be
deemed an accord and satisfaction.
41. COVENANTS. This Lease shall be construed as though Landlord's
covenants contained herein are independent and not dependent and Tenant hereby
waives the benefit of any statute to the contrary. All provisions of this Lease
to be observed or performed by Tenant are both covenants and conditions.
42. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof
restricting assignment or subletting by Tenant, this Lease shall bind the
parties, their heirs, personal representatives, successors and assigns. This
Lease shall be governed by the laws of the state in which the Premises is
located and any litigation concerning this Lease between the parties hereto
shall be initiated in the county in which the Premises is located.
43. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the
same or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled
to reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in
connection with such default. Landlord and Tenant agree that attorneys' fees
incurred with respect to defaults and bankruptcy are actual pecuniary losses
within the meaning of section 365(b)(1)(B) of the Bankruptcy Code or any
successor statute.
44. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction or going-out-of-business sale upon
the Premises.
45. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
46. QUIET POSSESSION. Subject to the other terms and conditions of this
Lease, and provided Tenant is not in default hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.
47. AUTHORITY. If Tenant is a corporation, trust, limited liability
company, limited liability partnership or general or limited partnership,
Tenant, and each individual executing this Lease on behalf of such entity,
represents and warrants that such individual is duly authorized to execute and
deliver this Lease on behalf of said entity, that said entity is duly
authorized to enter into this Lease, and that this Lease is enforceable against
said entity in accordance with its terms. If Tenant is a corporation, trust,
limited liability company, limited liability partnership or other partnership,
Tenant shall deliver to Landlord upon demand evidence of such authority
satisfactory to Landlord.
48. CONFLICT. Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, exhibits, addenda or riders of this
Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.
49. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with section 39 on one Tenant shall be deemed service of notice on
all Tenants.
50. INTERPRETATION. This Lease shall be interpreted as if it was prepared
by both parties, and ambiguities shall not be resolved in favor of Tenant
because all or a portion of this Lease was prepared by Landlord. The captions
contained in this Lease are for convenience only and shall not be deemed to
limit or alter the meaning of this Lease. As used in this Lease, the words
tenant and landlord include the plural as well as the singular. Words used in
the neuter gender include the masculine and feminine gender.
51. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
52. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
53. CONFIDENTIALITY. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute proprietary information of Landlord.
Disclosure of the terms hereof could adversely affect the ability of Landlord
to negotiate other leases. Tenant agrees that it and its partners, officers,
directors, employees, brokers, and attorneys, if any, shall not disclose the
terms and conditions of this Lease to any other person or entity without the
prior written consent of Landlord, which may be given or withheld by Landlord,
in Landlord's sole discretion. It is understood and agreed that damages alone
would be an inadequate remedy for the breach of this provision by Tenant, and
Landlord shall also have the right to seek specific performance of this
provision and to seek injunctive relief to prevent its breach or continued
breach.
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54. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR
RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM
OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES. THIS LEASE SHALL BECOME BINDING UPON
17
18
LANDLORD ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS
DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD: *TENANT:
The Realty Associates Fund IV, L.P., a Delaware limited Jabil Circuit, Inc., a Delaware corporation
partnership,
By: Realty Associate Fund IV, LLC, a Massachusetts
limited liability company, general partner By:
----------------------------------------
----------------------------------------
By: Realty Associates Advisors LLC, a Delaware (PRINT NAME)
limited liability company, manager
Its:
----------------------------------------
By: Realty Associates Advisors Trust, a Massachusetts (PRINT TITLE)
business trust, sole member
By: By:
---------------------------------------- ----------------------------------------
Officer
----------------------------------------
(PRINT NAME)
By: Realty Associates Fund IV Texas Corporation, a Its:
Texas corporation, general partner ----------------------------------------
(PRINT TITLE)
By:
----------------------------------------
* If Tenant is a corporation, the authorized officers must sign on behalf of
the corporation and indicate the capacity in which they are signing. The
Lease must be executed by the president or vice president and the secretary
or assistant secretary, unless the bylaws or a resolution of the board of
directors shall otherwise provide, in which event, the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.
18
19
EXHIBIT A
PREMISES
[to be attached]
20
EXHIBIT B
VERIFICATION LETTER
Jabil Circuit, Inc., a Delaware corporation ("TENANT") hereby
certifies that it has entered into a lease with The Realty Associates Fund IV,
L.P., a Delaware limited partnership ("LANDLORD") and verifies the following
information as of the day of _______________, 200_:
Address of Premises: ----------------------------------------
----------------------------------------
Leasable Area of Premises: ----------------------------------------
Commencement Date: ----------------------------------------
Lease Termination Date: ----------------------------------------
Initial Base Rent: ----------------------------------------
Billing Address for Tenant: ----------------------------------------
----------------------------------------
Attention: ----------------------------------------
Telephone Number: ----------------------------------------
Federal Tax ID No.: ----------------------------------------
Tenant acknowledges and agrees that all tenant improvements Landlord
is obligated to make to the Premises, if any, have been completed to Tenant's
satisfaction, that Tenant has accepted possession of the Premises, and that as
of the date hereof there exist no offsets or defenses to the obligations of
Tenant under the Lease.
TENANT
Jabil Circuit, Inc., a Delaware corporation
By:
----------------------------------------
----------------------------------------
(PRINT NAME)
Its:
---------------------------------------
(PRINT TITLE)
By:
---------------------------------------
---------------------------------------
(PRINT NAME)
Its:
--------------------------------------
(PRINT TITLE)
21
EXHIBIT C
Form of HazMat Certificate
General Information
Name of Responding Company:
----------------------------------------------------
Mailing Address:
---------------------------------------------------------------
Signature:
---------------------------------------------------------------------
Title: Phone:
--------------------------------- --------------------------------
Date: Age of Facility: Length of Occupancy:
---------- ---------- --------------
Major products manufactured and/or activities conducted on the property:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Type of Business Activity(ies): Hazardous Materials Activities:
------------------------------- -------------------------------
(check all that apply) (check all that apply)
machine shop degreasing
--------- ---------
light assembly chemical/etching/milling
--------- ---------
research and development wastewater treatment
--------- ---------
product service or repair painting
--------- ---------
photo processing striping
--------- ---------
automotive service and repair cleaning
--------- ---------
manufacturing printing
--------- ---------
warehouse analytical lab
--------- ---------
integrated/printed circuit plating
--------- ---------
chemical/pharmaceutical product chemical/missing/synthesis
--------- ---------
silkscreen
---------
lathe/mill machining
---------
deionizer water product
---------
photo masking
---------
wave solder
---------
metal finishing
---------
HAZARDOUS MATERIALS/WASTE HANDLING AND STORAGE
A. Are hazardous materials handled on any of your shipping and receiving
docks in container quantities greater than one gallon? Yes No
---- ----
B. If Hazardous materials or waste are stored on the premises, please
check off the nature of the storage and type(s) of materials below:
Types of Storage Container Type of Hazardous Materials and/or Waste Stored
-------------------------- -----------------------------------------------
(list above-ground storage only)
1 gallon or 3 liter bottles/cans acid
-------- ---------
5 to 30 gallon carboys phenol
-------- ---------
55 gallon drums caustic/alkaline cleaner
-------- ---------
tanks cyanide
-------- ---------
photo resist stripper
---------
paint
---------
flammable solvent
---------
gasoline/diesel fuel
---------
nonflammable/chlorinated solvent
---------
oil/cutting fluid
---------
C. Do you accumulate hazardous waste onsite? Yes No
---- ----
If yes, how is it being handled?
on-site treatment or recovery
--------
discharged to sewer
--------
hauled offsite If hauled offsite, by whom
-------- --------------------------------
incineration
D. Indicate your hazardous waste storage status with Department of Health
Services:
generator
--------
interim status facility
--------
permitted TSDF
--------
none of the above
--------
22
WASTEWATER TREATMENT/DISCHARGE
------------------------------
A. Do you discharge industrial wastewater to:
sewer
--------
storm drain
--------
surface water
--------
no industrial discharge
--------
B. Is your industrial wastewater treated before discharge? Yes No
---- ----
If yes, what type of treatment is being conducted?
neutralization
--------
metal hydroxide formation
--------
closed-loop treatment
--------
cyanide destruct
--------
HF treatment
--------
other
--------
SUBSURFACE CONTAINMENT OF HAZARDOUS MATERIALS/WASTES
----------------------------------------------------
A. Are buried tanks/sumps being used for any of the following:
hazardous waste storage
--------
chemical storage
--------
gasoline/diesel fuel storage
--------
waste treatment
--------
wastewater neutralization
--------
industrial wastewater treatment
--------
none of the above
--------
B. If buried tanks are located onsite, indicate their construction:
steel fiberglass concrete
-------- -------- --------
inside open vault double walled
-------- --------
C. Are hazardous materials or untreated industrial wastewater transported
via buried piping to tanks, process areas or treatment areas? Yes No
---- ----
D. Do you have wet floors in your process areas? Yes No
---- ----
If yes, name processes:
-----------------------------------------------
E. Are abandoned underground tanks or sumps located on the property?
Yes No
---- ----
HAZARDOUS MATERIALS SPILLS
--------------------------
A. Have hazardous materials ever spilled to:
the sewer
--------
the storm drain
--------
onto the property
--------
no spills have occurred
--------
B. Have you experienced any leaking underground tanks or sumps?
Yes No
---- ----
C. If spills have occurred, were they reported? Yes No
---- ----
Check which the government agencies that you contacted regarding the spill(s):
Department of Health Services
--------
Department of Fish and Game
--------
Environmental Protection Agency
--------
Regional Water Quality Control Board
--------
Fire Department
--------
23
D. Have you been contacted by a government agency regarding soil or
groundwater contamination on your site? Yes No
---- ----
Do you have exploratory ▇▇▇▇▇ onsite? Yes No
---- ----
If yes, indicate the following:
Number of ▇▇▇▇▇: Approximate depth of ▇▇▇▇▇: Well diameters:
---------- ---------- ----------
PLEASE ATTACH ENVIRONMENTAL REGULATORY PERMITS, AGENCY REPORTS THAT APPLY TO
YOUR OPERATION AND HAZARDOUS WASTE MANIFESTS.
Check off those enclosed:
Hazardous Materials Inventory Statement, HMIS
--------
Hazardous Materials Management Plan, HMMP
--------
Department of Health Services, Generatory Inspection Report
--------
Underground Tank Registrations
--------
Industrial Wastewater Discharge Permit
--------
Hazardous Waste Manifest
--------
24
EXHIBIT D
ADDENDUM TO STANDARD INDUSTRIAL LEASE (THE "LEASE")
DATED THE 16TH DAY OF MAY, 2000 BETWEEN
THE REALTY ASSOCIATES FUND IV, L.P. ("LANDLORD") AND
JABIL CIRCUIT, INC. ("TENANT")
It is hereby agreed by Landlord and Tenant that the provisions of this
Addendum are a part of the Lease. If there is a conflict between the terms and
conditions of this Addendum and the terms and conditions of the Lease, the
terms and conditions of this Addendum shall control. Capitalized terms in this
Addendum shall have the same meaning as capitalized terms in the Lease.
1. Termination Agreement. The Premises is presently occupied by a third
party tenant (the "EXISTING TENANT"). Landlord and the Existing Tenant have
entered into negotiations for the early termination of the lease of the
Existing Tenant. The terms and conditions of the agreement terminating the
Existing Tenant's lease must be satisfactory to Landlord, in Landlord's sole
and absolute discretion (the "TERMINATION AGREEMENT"). Landlord makes no
representation or warranty to Tenant that it will enter into a Termination
Agreement with the Existing Tenant, and Landlord shall have no liability to
Tenant if an agreement is not reached concerning the termination of the
Existing Tenant's lease. If the Existing Tenant refuses to enter into the
Termination Agreement on or before June 15, 2000, Landlord or Tenant shall have
the right, in Landlord's and Tenant's sole discretion, to elect upon written
notice to the other party to terminate this Lease. In the event of such a
termination, Landlord shall return to Tenant all advance Base Rent and any
security deposit it has previously received from Tenant, and Landlord and
Tenant shall have no further obligations to each other under this Lease. Tenant
shall have no right to use, occupy or possess any portion of the Premises
unless and until Landlord delivers possession of the Premises to Tenant.
2. Option to Extend. Landlord hereby grants to Tenant the option to
extend the term of the Lease for one (1) five (5)-year period (the "EXTENSION
OPTION") commencing when the initial lease term expires upon each and all of
the following terms and conditions:
(a) Tenant shall give to Landlord on a date which is prior
to the date that the option period would commence (if exercised) by at least
one hundred eighty (180) days and not more than two hundred seventy (270) days,
a written notice of the exercise of the option to extend the Lease for said
additional term, time being of the essence. If said notification of the
exercise of said option is not so given and received, this option shall
automatically expire.
(b) The provisions of section 27 of the Lease apply to this
option.
(c) All of the terms and conditions of the Lease except
where specifically modified by this Addendum section shall apply.
(d) The Base Rent payable during the option term shall be
the greater of the (i) Market Rate on the date the option term commences or
(ii) the Base Rent payable immediately prior to the commencement of the option
term.
(e) The term "MARKET RATE" shall mean the annual amount per
rentable square foot that a willing, comparable renewal tenant would pay and a
willing, comparable landlord of a similar building would accept at arm's length
for similar space, giving appropriate consideration to the following matters:
(i) annual rental rates per rentable square foot; (ii) the type of escalation
clauses (including, but without limitation, operating expense, real estate
taxes, and CPI) and the extent of liability under the escalation clauses (i.e.,
whether determined on a "net lease" basis or by increases over a particular
base year or base dollar amount); (iii) rent abatement provisions reflecting
free rent and/or no rent during the lease term; (iv) length of lease term; (v)
size and location of premises being leased; and (vi) other generally applicable
terms and conditions of tenancy for similar space; provided, however, Tenant
shall not be entitled to any tenant improvement or refurbishment allowance. The
Market Rate may also designate periodic rental increases, a new Base Year and
similar economic adjustments. The Market Rate shall be the Market Rate in
effect as of the beginning of the option period, even though the determination
may be made in advance of that date, and the parties may use recent trends in
rental rates in determining the proper Market Rate as of the beginning of the
option period.
(f) If Tenant exercises the Extension Option, Landlord
shall determine the Market Rate by using its good faith judgment. Landlord
shall provide Tenant with written notice of such amount within fifteen (15)
days after Tenant exercises its Extension Option. Tenant shall have fifteen
(15) days ("TENANT'S REVIEW PERIOD") after receipt of Landlord's notice of the
new rental within which to accept such rental. In the event Tenant fails to
accept in writing such rental proposal by Landlord, then such proposal shall be
deemed rejected, and Landlord and Tenant shall attempt to agree upon such
Market Rate, using their best good faith efforts. If Landlord and Tenant fail
to reach agreement within fifteen (15) days following Tenant's Review Period
("OUTSIDE AGREEMENT DATE"), then each party shall place in a separate sealed
envelope their final proposal as to the Market Rate, and such determination
shall be submitted to arbitration in accordance with subsections (i) through
(v) below. In the event that Landlord fails to timely generate the initial
notice of Landlord's opinion of the Market Rate, then Tenant may commence such
negotiations by providing the initial notice, in which event Landlord shall
have fifteen (15) days ("LANDLORD'S REVIEW PERIOD") after receipt of Tenant's
notice of the new rental within which to accept such rental. In the event
Landlord fails to accept in writing such rental proposed by Tenant, then such
proposal shall be deemed rejected, and Landlord and Tenant shall attempt in
good faith to agree upon such Market Rate, using their best good faith efforts.
If Landlord and Tenant fail to reach agreement within fifteen (15) days
following Landlord's Review Period (which shall be, in such event, the "Outside
Agreement Date" in lieu of the above definition of such date), then each party
shall place in a separate sealed envelope their final proposal as to Market
Rate, and such determination shall be submitted to arbitration in accordance
with subsections (i) through (v) below.
ARBITRATION OF DISPUTES
-----------------------
(i) LANDLORD AND TENANT SHALL MEET WITH EACH OTHER
WITHIN FIVE (5) BUSINESS DAYS AFTER THE OUTSIDE AGREEMENT DATE AND EXCHANGE
THEIR SEALED ENVELOPES AND THEN OPEN SUCH ENVELOPES IN EACH OTHER'S PRESENCE.
IF LANDLORD AND TENANT DO NOT MUTUALLY AGREE UPON THE MARKET RATE WITHIN ONE
(1) BUSINESS DAY OF THE EXCHANGE AND OPENING OF ENVELOPES, THEN, WITHIN TEN
(10) BUSINESS DAYS OF THE EXCHANGE AND OPENING OF ENVELOPES, LANDLORD AND
TENANT SHALL AGREE UPON AND JOINTLY APPOINT A SINGLE ARBITRATOR WHO SHALL BY
PROFESSION BE A REAL ESTATE BROKER OR AGENT WHO SHALL HAVE BEEN ACTIVE OVER THE
FIVE (5) YEAR PERIOD ENDING ON THE DATE OF SUCH APPOINTMENT IN THE LEASING OF
BUILDINGS SIMILAR TO THE PREMISES IN THE GEOGRAPHICAL AREA OF THE PREMISES.
NEITHER LANDLORD NOR TENANT SHALL CONSULT WITH SUCH
25
BROKER OR AGENT AS TO HIS OR HER OPINION AS TO THE MARKET RATE PRIOR TO THE
APPOINTMENT. THE DETERMINATION OF THE ARBITRATOR SHALL BE LIMITED SOLELY TO THE
ISSUE OF WHETHER LANDLORD'S OR TENANT'S SUBMITTED MARKET RATE FOR THE PREMISES
IS THE CLOSEST TO THE ACTUAL MARKET RATE FOR THE PREMISES AS DETERMINED BY THE
ARBITRATOR, TAKING INTO ACCOUNT THE REQUIREMENTS FOR DETERMINING MARKET RATE
SET FORTH HEREIN. SUCH ARBITRATOR MAY HOLD SUCH HEARINGS AND REQUIRE SUCH
BRIEFS AS THE ARBITRATOR, IN HIS OR HER SOLE DISCRETION, DETERMINES IS
NECESSARY. IN ADDITION, LANDLORD OR TENANT MAY SUBMIT TO THE ARBITRATOR WITH A
COPY TO THE OTHER PARTY WITHIN FIVE (5) BUSINESS DAYS AFTER THE APPOINTMENT OF
THE ARBITRATOR ANY MARKET DATA AND ADDITIONAL INFORMATION SUCH PARTY DEEMS
RELEVANT TO THE DETERMINATION OF THE MARKET RATE ("RR DATA"), AND THE OTHER
PARTY MAY SUBMIT A REPLY IN WRITING WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT
OF SUCH RR DATA.
(ii) THE ARBITRATOR SHALL, WITHIN THIRTY (30) DAYS
OF HIS OR HER APPOINTMENT, REACH A DECISION AS TO WHETHER THE PARTIES SHALL USE
LANDLORD'S OR TENANT'S SUBMITTED MARKET RATE AND SHALL NOTIFY LANDLORD AND
TENANT OF SUCH DETERMINATION.
(iii) THE DECISION OF THE ARBITRATOR SHALL BE FINAL
AND BINDING UPON LANDLORD AND TENANT.
(iv) IF LANDLORD AND TENANT FAIL TO AGREE UPON AND
APPOINT AN ARBITRATOR, THEN THE APPOINTMENT OF THE ARBITRATOR SHALL BE MADE BY
THE PRESIDING JUDGE OF THE SUPERIOR COURT IN THE COUNTY IN WHICH THE PREMISES
IS LOCATED, OR, IF HE OR SHE REFUSES TO ACT, BY ANY JUDGE HAVING JURISDICTION
OVER THE PARTIES.
(v) THE COST OF THE ARBITRATION SHALL BE PAID BY
LANDLORD AND TENANT EQUALLY.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT
TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
------------------- -----------------
(Landlord initials) (Tenant initials)
3. Tenant Improvements. Tenant accepts the Premises in its "as is"
condition, subject to Landlord (a) delivering the Premises to Tenant with the
plumbing in working order and (b) completing the following improvements, at
Landlord's sole cost and expense, using materials, equipment and procedures
acceptable to Landlord, in Landlord's sole discretion:
(a) replace the existing roof membrane over the Premises;
and
(b) replace each of the existing HVAC units on the roof of
the Premises.
The work described in sections 3(a) and (b) above is hereinafter referred to as
the "IMPROVEMENTS." Landlord shall use commercially reasonable efforts to
substantially complete the Improvements within sixty (60) days after the
Commencement Date (the "COMPLETION DATE"). If Landlord fails to substantially
complete the Improvements on or before the Completion Date, Tenant shall
receive one (1) day of abated Base Rent for each day after the Completion Date
that the Improvements are not substantially completed, and Landlord shall have
no other liability to Tenant for its failure to substantially complete the
Improvements on or before the Completion Date. The initial term of this Lease
shall be extended for one (1) day for each day Tenant receives abated Base Rent
pursuant to the previous sentence. The Base Rent payable for the extended Lease
term shall be prorated on a daily basis using the Base Rent due for the 86th
month of the initial Lease Term. Tenant acknowledges and agrees that the
construction of the Improvements (the "CONSTRUCTION ACTIVITIES") may be
completed by Landlord, from time to time, while Tenant is completing its tenant
improvements and/or is occupying the Premises and that such activities may
disrupt the completion by Tenant of its tenant improvements and Tenant's
business operations. Tenant shall not complete its tenant improvements in a
manner that will hinder, delay or increase the cost of the Improvements.
Landlord shall use reasonable efforts to keep Tenant informed of Landlord's
construction schedule. Landlord's contractors shall have the right to enter the
Premises from time to time to facilitate the completion of the Improvements.
4. Signage. Notwithstanding anything to the contrary contained in the
Lease, Tenant shall have the right to place one exterior sign containing
Tenant's name on the exterior of the Premises (the "SIGN") subject to the
following terms and conditions: (a) the size, design, color, graphics and
location of the Sign shall be subject to Landlord's reasonable approval and (b)
the City of San ▇▇▇▇ shall approve the Sign. Landlord makes no representation
or warranty to Tenant that the City of San ▇▇▇▇ will approve any sign. All
costs and expenses associated with the purchase, installation and maintenance
of the Sign shall be paid by Tenant, at Tenant's sole cost and expense, and
Tenant shall remove the Sign and repair any damages to the Premises caused by
such removal at the end of the term of the Lease.
5. Abatement of Rent Due to Loss of Use of Premises . In the event that
Tenant is prevented from using, and does not use, the Premises or any portion
thereof, for five (5) consecutive business days or ten (10) days in any twelve
(12) month period (the "ELIGIBILITY PERIOD") as a result of any damage or
destruction to the Premises or any repair, maintenance or alteration performed
by Landlord to the Premises after the Commencement Date and required to be
performed by Landlord by the Lease, which substantially interferes with
Tenant's use of the Premises, or any failure to provide services or access to
the Premises due to Landlord's negligence or default, then Tenant's Base Rent
shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use, the Premises or a portion thereof, in the proportion
that the leasable area of the portion of the Premises that Tenant is prevented
from using, and does not use, bears to the total leasable area of the Premises.
However, in the event that Tenant is prevented from conducting, and does not
conduct, its business in any portion of the Premises for a period of time in
excess of the Eligibility Period, and the remaining portion of the Premises in
not sufficient to allow Tenant to effectively conduct its
26
business therein, and if Tenant does not conduct its business from such
remaining portion, then for such time after expiration of the Eligibility
Period during which Tenant in so prevented from effectively conducting its
business therein, the Base Rent for the entire Premises shall be abated;
provided, however, if Tenant reoccupies and conducts its business from any
portion of the Premises during such period, the Base Rent allocable to such
reoccupied portion, based on the proportion that the leasable area of such
reoccupied portion of the Premises bears to the total leasable area of the
Premises, shall be payable by Tenant from the date such business operations
commence.
IN WITNESS WHEREOF, the parties hereto have respectively executed this
Addendum.
LANDLORD: *TENANT:
The Realty Associates Fund IV, L.P., a Delaware limited Jabil Circuit, Inc., a Delaware corporation
partnership,
By: Realty Associate Fund IV, LLC, a Massachusetts
limited liability company, general partner By:
----------------------------------------
----------------------------------------
By: Realty Associates Advisors LLC, a Delaware (PRINT NAME)
limited liability company, manager
Its:
---------------------------------------
By: Realty Associates Advisors Trust, a Massachusetts (PRINT TITLE)
business trust, sole member
By: By:
---------------------------------------- ----------------------------------------
---------------------------------------- ----------------------------------------
Officer (PRINT NAME)
By: Realty Associates Fund IV Texas Corporation, a Its:
Texas corporation, general partner ---------------------------------------
(PRINT TITLE)
By:
----------------------------------------