EXHIBIT 10.22
REAL ESTATE LEASE
(MULTIPLE TENANT BUILDING)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease Agreement
between the Landlord and Tenant named below. Other Articles, Sections and
Paragraphs of the Lease referred to in this Article One explain and define the
Basic Terms and are to be read in conjunction with the Basic Terms.
Section 1.01 DATE OF LEASE: September 12, 2000.
Section 1.02 LANDLORD: LM Venture, LLC, a Delaware limited liability
company having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as further described in Section 13.01(a).
Section 1.03 TENANT: Emulex Corporation, a California corporation
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇.
Section 1.04 PREMISES: The Premises consist of approximately 10,000
rentable square feet of space as delineated on the preliminary site plan
attached hereto as Exhibit A (the "Site Plan") in a multi-tenant building (the
"Building") to be known as 1921 Corporate Center Circle in Longmont, Boulder
County, Colorado, located on certain real property more particularly described
on Exhibit B attached hereto (the "Property"). The actual measurement of such
rentable square feet shall be determined exactly by Landlord's architect using
industry standard methods and shall be measured from the outside surface of
outside walls to the center of any demising walls. The Building is the second of
several buildings to be constructed on the Property and certain adjacent
property owned by Landlord (the "Project"), with the first two of such buildings
containing approximately 185,000 square feet in the aggregate.
Section 1.05 LEASE TERM: Five (5) years beginning on the Commencement
Date (as defined in Section 2.03 below), subject to the right of Tenant to
extend the term as set forth in Section 2.01 below.
Section 1.06 PERMITTED USES: General office and administrative
purposes, manufacturing, assembly and distribution of products.
Section 1.07 TENANT'S GUARANTOR: None.
Section 1.08 BROKERS: ▇▇▇▇▇ and ▇▇▇▇▇ Company (▇▇▇▇ ▇▇▇▇), representing
Landlord, and Prudential LTM Realtors (▇▇▇ ▇▇▇▇), representing Tenant.
Section 1.09 COMMISSIONS: Six percent (6%) of the total net rent for
the primary term, which commission shall be split equally between Landlord's
broker and ▇▇▇▇▇▇'s broker.
Section 1.10 INITIAL SECURITY DEPOSIT: None.
Section 1.11 VEHICLE PARKING SPACES ALLOCATED TO TENANT: None assigned.
Section 1.12 RENT AND OTHER CHARGES PAYABLE BY TENANT: Tenant shall pay
to Landlord monthly Base Rent in a variable amount based on the following annual
per-square-foot rental rates for the
Premises: $12.00 for the first year of the Lease Term; $12.36 for the second
year of the Lease Term; $12.73 for the third year of the Lease Term; $13.11 for
the fourth year of the Lease Term; and $13.50 for the fifth year of the Lease
Term. Tenant shall also pay Tenant's Portion of Real Property Taxes (see Section
4.02), Utilities (see Section 4.03), Insurance Premiums (see Section 4.04),
Common Area Expenses (see Section 4.05), Impounds for Insurance Premiums and
Property Taxes (see Section 4.08), and Maintenance, Repairs and Alterations (see
Article Six). Tenant's Portion of any particular item of expense which is
separately attributable to the Premises (such as metered utilities) will be
100%. As used herein, the term "Tenant's Portion" shall mean any item of expense
which relates to the Property payable by Tenant, which shall initially be
calculated based on the ratio obtained by dividing the leasable area of the
Premises by the leasable area of the first two buildings. After completion of
other buildings in the Project from time to time, ▇▇▇▇▇▇'s Portion of any such
expense shall be calculated based on the ratio obtained by dividing the leasable
area of the Premises by the leasable area of all such completed buildings. For
purposes of this calculation, leasable areas shall be determined by Landlord's
architect and shall be measured from the outside surface of outside walls to the
center of any demising walls.
Section 1.13 RIDERS: The following Riders are attached to and made a
part of this Lease: Exhibit A (Preliminary Site Plan, including delineation of
Premises); Exhibit B (Legal Description); Exhibit C (Landlord's Work).
ARTICLE TWO: LEASE TERM; CONSTRUCTION OBLIGATIONS.
Section 2.01 LEASE OF PROPERTY FOR LEASE TERM; OPTION TO EXTEND.
Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the
Premises from Landlord for the Lease Term specified in Section 1.05 above. In
addition, Landlord hereby grants to Tenant the option ("Option") to extend the
term of this Lease for one or two additional terms of five years each (an
"Option Term"). The Option may only be exercised in the event that Tenant is not
currently in default under any of the provisions of this Lease beyond applicable
cure periods. In order to exercise an Option, Tenant must provide written notice
of its exercise of the Option to Landlord (an "Extension Notice") at least six
months prior to the expiration of the initial Lease Term (or previously extended
Lease Term, if applicable). All terms and conditions of this Lease shall remain
in full force and effect during the Option Term (if an Option is exercised by
Tenant in accordance with this Section 2.01) except that Base Rent during the
Option Term shall be increased as set forth in Section 3.02 below. In the event
that Tenant fails to timely provide the Extension Notice, then ▇▇▇▇▇▇'s right to
exercise the Option shall automatically terminate. After exercise of the second
Option as set forth above, Tenant shall have no further right to extend the term
of this Lease.
Section 2.02 CONSTRUCTION OBLIGATIONS. Tenant or its architect, with
the assistance of ▇▇▇▇▇▇▇▇'s architect, shall, within thirty (30) days after
execution of this Lease, provide to Landlord a copy of an initial space plan for
the Premises ("Tenant's Specifications"). Tenant's Specifications shall include
all elements necessary for the design of the Tenant Improvements, as defined
below, and be in sufficient detail to allow for preparation of the Premises
Construction Documents. Landlord shall then instruct its architect to prepare a
full set of documents for construction of the Premises in accordance with
Tenant's Specifications (the "Premises Construction Documents"). Within a
reasonable time after preparation of the Premises Construction Documents,
Landlord shall complete construction of the Building and the Premises
substantially as shown on the Site Plan in accordance with the Premises
Construction Documents and Exhibit C ("Landlord's Work"). Tenant shall be
responsible for payment of all costs relating to the design and construction of
Tenant's interior finish of the Premises ("Tenant Improvements") beyond that set
forth on Exhibit C (subject to the provisions of Section 2.04 below).
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Section 2.03 SUBSTANTIAL COMPLETION; COMMENCEMENT DATE. The term
"Substantial Completion" as used herein shall mean that Landlord's Work is
substantially complete (as confirmed in writing by Landlord or its architect),
Tenant Improvements have been completed, and a temporary certificate of
occupancy has been issued for the Premises by the necessary governmental
authorities. Within ten (10) days after Substantial Completion, Landlord and
Tenant shall agree on a final punchlist of items to be completed or repaired.
Landlord's contractor shall complete or repair the items denoted on the
punchlist within thirty (30) days thereafter. As used in this Lease, the term
"Commencement Date" shall mean the date of Substantial Completion; provided,
however, that to the extent that Substantial Completion is delayed by any
failure of Tenant to meet the timelines for approval set forth in this Article
II, the Commencement Date shall be the date that Substantial Completion would
have been achieved absent such failure.
Section 2.04 CONSTRUCTION ALLOWANCE.
(a) Landlord shall contribute an amount equal to $21.00
multiplied by the actual area of the Premises (the "Tenant Allowance")
to cover costs associated with design and construction of Tenant
Improvements in the Premises (including electrical and engineering
costs beyond ▇▇▇▇▇▇▇▇'s Work described in Exhibit C and architectural
costs beyond preparation of the initial space plan). Landlord shall
prepare and submit to Tenant for its review and approval a budget
consistent with local market costs for all Tenant Improvements and
related items before work is commenced. If such budget reasonably
reflects Tenant's Improvements and local market costs, Tenant shall
approve such budget within seven (7) days after submission. If Tenant
reasonably demonstrates deficiencies for either cause, Tenant and
Landlord shall negotiate in good faith to resolve such deficiencies.
Landlord shall use reasonable efforts in consultation with Tenant to
maximize the efficiency and economy of construction of the Premises.
When all Tenant Improvements have been completed and paid for, Landlord
and Tenant shall compare the total expenditures for Tenant Improvements
with the total amount of the Tenant Allowance. If such expenditures are
less than the Tenant Allowance, Base Rent shall be reduced by the
amount of such difference amortized over the initial Lease Term at the
rate of 12% per annum. If such expenditures are in excess of the Tenant
Allowance, Base Rent shall be increased by an amount equal to such
excess costs (not exceeding $7.00 per square foot of the actual
Premises) at the rate of 12% per annum ($.12 per square foot per dollar
of excess costs). For example, if the total cost of Tenant Improvements
is $24.00 per square foot, Base Rent for the first Lease Year shall be
increased by $.36 to $12.36 per square foot, which would be increased
at an annual rate of 3% to determine Base Rent for subsequent Lease
Years.
(b) If, based on the approved budget, the cost of all
Tenant Improvements will exceed $28.00 per square foot, the amount of
the excess shall be divided by the total cost of Tenant Improvements to
determine the portion ("Tenant's Percentage") which shall be the sole
responsibility of Tenant. During the course of construction of the
Tenant Improvements, Tenant shall pay to Landlord, within 10 days after
receipt of a statement of the cost of the Tenant Improvements during
any month, an amount equal to Tenant's Percentage of such monthly
costs. When all Tenant Improvements have been completed and paid for,
Landlord and Tenant shall reconcile the total expenditures for Tenant
Improvements to the total amount of the Tenant Allowance. Tenant shall
be solely responsible for promptly paying (or reimbursing Landlord for)
all expenses for Tenant Improvements in excess of $28.00 per square
foot.
Section 2.05 HOLDING OVER. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all
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damages which Landlord incurs from ▇▇▇▇▇▇'s delay in vacating the Premises. If
Tenant does not vacate the Premises upon the expiration or earlier termination
of the Lease and Landlord thereafter accepts rent from Tenant, ▇▇▇▇▇▇'s
occupancy of the Premises shall be a "month-to-month" tenancy, subject to all of
the terms of this Lease applicable to a month-to-month tenancy, except that the
Base Rent then in effect shall be increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
Section 3.01 TIME AND MANNER OF PAYMENT. Tenant shall pay Base Rent to
Landlord in the amount stated in Paragraph 1.12 (prorated for any partial month
at the beginning or end of the Lease Term) on the Commencement Date and on the
first day of each month thereafter during the Lease Term, in advance, without
offset, deduction or prior demand. Base Rent shall be payable at Landlord's
address or at such other place as Landlord may designate in writing.
Section 3.02 BASE RENT DURING OPTION TERMS. Base Rent for each Option
Term (if exercised) shall be based on the then-prevailing market rental rate for
terms of like duration for space comparable to the Premises in the Longmont
metropolitan area prevailing at the time such Option Term commences. Landlord
shall determine such rate in good faith and advise Tenant in writing of its
proposed Base Rent for an Option Term within thirty (30) days after receipt of
the Extension Notice. In the event that ▇▇▇▇▇▇ disagrees with Landlord's
determination, Tenant shall so notify Landlord in writing and the parties shall
attempt in good faith to resolve the difference. In the event that the parties
do not agree upon Base Rent for an Option Term within sixty (60) days after
▇▇▇▇▇▇▇▇'s receipt of the Extension Notice, the parties shall submit the issue
to mediation by a sole mediator acceptable to both parties. The direct expenses
of the mediation, including the compensation and expenses of the mediator, shall
be borne equally by the parties.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01 ADDITIONAL RENT. All charges payable by Tenant under this
Lease other than Base Rent are called "Additional Rent." Unless this Lease
provides otherwise, Tenant shall pay all Additional Rent then due with the next
monthly installment of Base Rent. The term "Rent" shall mean Base Rent and
Additional Rent.
Section 4.02 PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay Tenant's
Portion of all real property taxes on the Property (including any fees,
taxes or assessments against, or as a result of, any tenant
improvements installed in the Premises by or for the benefit of Tenant)
attributable to the Lease Term, as well as an equitable portion of the
real property taxes assessed against Outlot A, CREEKSIDE BUSINESS PARK
FILING NO. 1, which consists of open space and detention areas for the
Property, as provided in Section 4.08 below. Landlord shall furnish
Tenant with written evidence of annual payment of the real property
taxes on the Property promptly after receipts are available, if
requested by ▇▇▇▇▇▇.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property
tax" means: (i) any fee, license fee, license tax, business license
fee, commercial rental tax, levy, charge, assessment, penalty or tax
imposed by any taxing authority against the Property; (ii) any tax on
Landlord's right to receive rent from the Property or against
Landlord's business of leasing the Property, in lieu of ad valorem
property tax; (iii) any tax or charge for fire protection, streets,
sidewalks, road
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maintenance, refuse or other services provided to the Property by any
governmental agency; (iv) any increase in taxes resulting from any
reassessment of the Property due to a change of ownership, as defined
by applicable law, or other transfer of all or part of Landlord's
interest in the Property; and (v) any charge or fee replacing any tax
previously included within the definition of real property tax. "Real
property tax" does not, however, include Landlord's federal or state
income, franchise, inheritance or estate taxes.
(c) PERSONAL PROPERTY TAXES. Tenant shall pay all taxes
charged against trade fixtures, furnishings, equipment or any other
personal property belonging to ▇▇▇▇▇▇, and shall try to have personal
property taxed separately from the Premises.
Section 4.03 UTILITIES. Tenant shall pay directly to the appropriate
supplier (or to Landlord on the basis of reasonable proration, as to any
utilities not separately metered to the Premises by the supplier) the cost of
all natural gas, heat, light, power, sewer service, telephone, water, refuse
disposal and other utilities and services supplied to the Premises.
Section 4.04 INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant
shall maintain a policy of commercial general liability insurance
(sometimes known as broad form comprehensive general liability
insurance) insuring Tenant against liability for bodily injury,
property damage (including loss of use of property) and personal injury
arising out of the use or occupancy of the Premises, specifically
including ▇▇▇▇▇▇'s use of chemicals at the Premises. Tenant shall name
Landlord as an additional insured under such policy. The initial amount
of such insurance shall be One Million Dollars ($1,000,000) per
occurrence and shall be subject to reasonable periodic increases based
upon inflation, increased liability awards, recommendation of
Landlord's professional insurance advisors and other relevant factors,
provided such periodic increases are not more than those amounts found
in comparable buildings in the immediate area. The liability insurance
obtained by Tenant under this Paragraph 4.04(a) shall (i) be primary
and non-contributing, and (ii) contain cross-liability endorsements.
The amount and coverage of such insurance shall not limit Tenant's
liability nor relieve Tenant of any other obligation under this Lease.
Landlord may also obtain comprehensive public liability insurance in an
amount and with coverage determined by Landlord insuring Landlord
against liability arising out of ownership, operation, use or occupancy
of the Property. The policy obtained by Landlord shall not be
contributory and shall not provide primary insurance.
(b) PROPERTY AND BUSINESS INTERRUPTION INSURANCE. During
the Lease Term, Landlord shall maintain a policy of insurance covering
loss of or damage to the Property in the full amount of its replacement
value and including business interruption insurance in an amount
sufficient to pay one year's rent from the Property plus estimated real
property taxes and insurance premiums. Landlord and ▇▇▇▇▇▇▇▇'s
mortgagee shall be named loss payee under such policy, as their
interests may appear. This policy shall cover the fixtures, equipment
and leasehold improvements in the Premises which are customarily
insured as part of the realty (such as electric wiring and panels,
lighting fixtures and HVAC ducts and equipment), but Tenant shall be
solely responsible at its expense and under its management for
separately insuring Tenant's movable tenant improvements, equipment and
personal property located in the Premises. Such policy shall contain an
Inflation Guard endorsement, shall not provide for any deductible
amount greater than $10,000, and shall provide protection against all
perils included within the classification of fire, extended coverage
(including any perils arising from Tenant's use of chemicals at the
Premises), vandalism, malicious mischief, special extended perils (all
risk),
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sprinkler leakage and any other perils which Landlord deems reasonably
necessary (including flood and earthquake insurance, if required by any
lender holding a security interest in the Property). Tenant shall not
do or permit anything to be done which invalidates any such insurance
policies.
(c) PAYMENT OF PREMIUMS. Tenant shall pay its pro rata
share of all premiums for the insurance policies covering loss or
damage to the Property described in subsection 4.04(b) as provided in
Section 4.08 below. Before the Commencement Date, Tenant shall deliver
to Landlord a copy of each policy of insurance which Tenant is required
to maintain under Section 4.04(a). At least thirty (30) days prior to
the expiration of any such policy, Tenant shall deliver to Landlord a
renewal of such policy. As an alternative to providing a policy of
insurance, Tenant shall have the right to provide Landlord with a
certificate of insurance, executed by an authorized officer of the
insurance company, showing that the insurance which Tenant is required
to maintain under Section 4.04(a) is in full force and effect and
containing such other information which Landlord reasonably requires.
(d) NOTICE OF CANCELLATION. Any insurance which Tenant is
required to maintain under this Lease shall include a provision which
requires the insurance carrier to give Landlord written notice of any
cancellation or modification of coverage not less than ten (10) days
prior to the effective date of change. If any insurance policy is
cancelled on account of the business or activities of Tenant, Tenant
shall immediately cease such activities or secure a replacement policy
acceptable to Landlord.
(e) FAILURE TO OBTAIN OR CONFIRM COVERAGE. If Tenant
fails to deliver any policy, certificate or renewal to Landlord
required under this Lease within the prescribed time period or if any
such policy is cancelled or modified during the Lease Term without
Landlord's consent, Landlord may obtain such insurance, in which case
Tenant shall reimburse Landlord for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the cost
of such insurance.
(f) MINIMUM STANDARDS. Tenant shall maintain all
insurance required under this Lease with companies holding a "General
Policy Rating" of A-12 or better, as set forth in the most current
issue of "Best Key Rating Guide." If at any time during the Lease Term,
Tenant is unable to maintain the insurance required under the Lease,
Tenant shall nevertheless maintain insurance coverage which is
customary and commercially reasonable in the insurance industry for
Tenant's type of business, as that coverage may change from time to
time. ▇▇▇▇▇▇▇▇ makes no representation as to the adequacy of such
insurance to protect ▇▇▇▇▇▇▇▇'s or ▇▇▇▇▇▇'s interests.
(g) WAIVER OF SUBROGATION. Tenant hereby waives any and
all rights of recovery against Landlord, or against the officers,
employees, agents or representatives of Landlord, for loss of or damage
to property, if such loss or damage is covered by any insurance policy
in force (whether or not described in this Lease) at the time of such
loss or damage. Landlord hereby waives any and all rights of recovery
against Tenant, or against the officers, employees, agents,
contractors, invitees, or representatives of Tenant, for loss of or
damage to property, if such loss or damage is covered by any insurance
policy in force (whether or not described in this Lease) at the time of
such loss or damage. Upon obtaining the required policies of insurance,
Landlord and Tenant shall give notice to the insurance carriers of this
mutual waiver of subrogation.
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Section 4.05 COMMON AREAS; USE, MAINTENANCE AND COSTS.
(a) COMMON AREAS. As used in this Lease, "Common Areas"
shall mean Outlot A, CREEKSIDE BUSINESS PARK FILING NO. 1, which
consists of open space and detention areas for the Property, and all
other all areas of Building and the rest of the Project which are
available from time to time for the common use of (or otherwise
benefit) tenants of the Building and which are not leased or held for
the exclusive use of Tenant or other tenants, including without
limitation parking areas, driveways, sidewalks, loading areas, access
roads, corridors, all landscaped or planted areas (including open space
and detention areas) and signs. Landlord may from time to time change
the size, location, nature and use of any of the Common Areas, convert
Common Areas to leasable areas, construct additional parking facilities
(including parking structures) in the Common Areas, and increase or
decrease Common Area land and/or facilities, so long as such activities
and changes do not materially impair Tenant's use of the Premises or
the redefined Common Areas.
(b) USE OF COMMON AREAS. Tenant shall have the
nonexclusive right (in common with other tenants and all others to whom
Landlord has reasonably granted or may reasonably grant such rights) to
use the Common Areas for the purposes intended, subject to such
reasonable rules and regulations as Landlord may establish from time to
time (the "Rules and Regulations"). Tenant shall abide by the Rules and
Regulations and shall use its best effort to cause others who use the
Common Areas with ▇▇▇▇▇▇'s express or implied permission to abide by
the Rules and Regulations. At any time, Landlord may close any Common
Areas to perform any acts in the Common Areas which, in Landlord's
judgment, are desirable to maintain the Property. Tenant shall not
interfere with the rights of Landlord, other tenants or any other
person entitled to use the Common Areas, provided such closures or acts
do not materially impair Tenant's use of the Premises and Common Areas.
(c) VEHICLE PARKING. Tenant's parking in the parking
areas of the Property shall not be reserved, and shall be limited to
vehicles no larger than standard size automobiles or pickup utility
vehicles. There will be unreserved parking spaces available to Tenant
at a ratio of 4:1. Temporary parking of delivery trucks and other large
vehicles on the Property shall only be permitted as contemplated in the
Site Plan and in accordance with the Rules and Regulations. Vehicles
shall be parked only in striped parking spaces and not in driveways,
loading areas or other locations not specifically designated for
parking. Handicapped spaces shall only be used by those legally
permitted to use them.
(d) MAINTENANCE OF COMMON AREAS. Landlord shall maintain
the Common Areas in good order, condition and repair, and shall operate
the Property as a first-class office/warehouse/industrial real
property. Tenant shall pay Tenant's Portion of all reasonable and
necessary costs incurred by Landlord for the operation and maintenance
of the Common Areas. Common Area costs include, without limitation,
costs and expenses for the following: gardening and landscaping;
utilities, water and storm sewer charges; maintenance of signs (other
than tenant's signs); premiums for liability, property damage, fire and
other types of casualty insurance on the Common Areas and worker's
compensation insurance; all property taxes and assessments levied on or
attributable to the Common Areas and all Common Area improvements; all
personal property taxes levied on or attributable to personal property
used in connection with the Common Areas; straight-line depreciation on
personal property owned by Landlord which is consumed in the operation
or maintenance of the Common Areas; rental or lease payments paid by
Landlord for rented or leased personal property used in the operation
or maintenance of the Common Areas; fees for required licenses and
permits; repairing, resurfacing, painting, lighting,
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cleaning, refuse removal, security and similar items; reserves for roof
replacement and exterior painting and other appropriate reserves; and a
reasonable allowance to Landlord or Landlord's agent (which may include
Chandelle Development LLC, an affiliate of Landlord) for management and
supervision of the Common Areas (not to exceed market rates for similar
properties in the Longmont, Colorado, metropolitan area). Landlord may
cause any or all of such services to be provided by third parties, and
the cost of such services shall be included in Common Area costs.
Common Area costs shall not include depreciation of real property which
forms part of the Common Areas.
(e) PAYMENT OF COMMON AREA COSTS. Landlord shall estimate
in advance all Common Area costs payable by Tenant hereunder for each
calendar year during the term of this Lease, and shall provide
statements of such estimated costs to Tenant annually (provided,
however, that Landlord may adjust such estimates at any time based upon
▇▇▇▇▇▇▇▇'s experience and reasonable anticipation of costs). Tenant
shall pay Tenant's annual pro rata share of all Common Area costs
(prorated for any fractional month) in monthly installments
concurrently with payment of Base Rent. Within ninety (90) days after
the end of each calendar year of the Lease term, Landlord shall deliver
to Tenant a statement prepared in accordance with generally accepted
accounting principles setting forth, in reasonable detail, the actual
Common Area costs paid or incurred by Landlord during the preceding
calendar year and ▇▇▇▇▇▇'s Portion thereof. Upon receipt of such
statement, there shall be an adjustment between Landlord and Tenant,
with payment to or credit given by Landlord (as the case may be) so
that Landlord shall receive the entire amount of Tenant's Portion of
such costs and expenses for such period.
Section 4.06 LATE CHARGES. ▇▇▇▇▇▇'s failure to pay Rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any Rent payment within ten
(10) days after it becomes due, Tenant shall pay Landlord a late charge equal to
five percent (5%) of the overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.
Section 4.07 INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by
Tenant to Landlord which is not paid when due shall bear interest at the rate of
ten percent (10%) per annum from the due date of such amount. However, interest
shall not be payable on late charges to be paid by Tenant under this Lease. The
payment of interest on such amounts shall not excuse or cure any default by
Tenant under this Lease. If the interest rate specified in this Lease is higher
than the rate permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law.
Section 4.08 IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES.
Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the annual real
property taxes and insurance premiums payable by Tenant under this Lease,
exclusive of those premiums payable by Tenant under Section 4.04(a), together
with each payment of Base Rent.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01 PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
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Section 5.02 MANNER OF USE. Tenant shall not cause or permit the
Premises to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which interferes with the rights
of owners or occupants of adjacent properties, or which constitutes a nuisance
or waste. Tenant shall obtain and pay for all permits, including a Certificate
of Occupancy, required for Tenant's occupancy of the Premises and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Premises, including the Occupational Safety and Health Act and all laws and
regulations regarding the use, storage and disposal of anything used in its
manufacturing or otherwise.
Section 5.03 HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Notwithstanding the foregoing, materials commonly used as
office supplies, including without limitation items such as printer toner, shall
not be considered to be Hazardous Materials. Tenant shall not cause or permit
any Hazardous Material to be generated, produced, brought upon, used, stored,
treated or disposed of in or about the Property by Tenant, its agents,
employees, contractors, sublessees or invitees without the prior written consent
of Landlord. Landlord shall be entitled to take into account such other factors
or facts as Landlord may reasonably determine to be relevant in determining
whether to grant or withhold consent to Tenant's proposed activity with respect
to Hazardous Material. In no event, however, shall Landlord be required to
consent to the installation or use of any storage tanks on the Property. Tenant
shall bear no liability for any Hazardous Materials present or discovered on the
Property prior to the commencement of this Lease.
Section 5.04 SIGNS AND AUCTIONS. Tenant shall be entitled to install
signage conforming to building standard guidelines on the outside of the
Building near the main entrance to the Premises and to be identified on the
Building monument sign, but shall not place any other signs on the Property
without Landlord's prior written consent. Tenant shall not conduct or permit any
auctions or sheriff's sales at the Property.
Section 5.05 INDEMNITY. Tenant shall indemnify Landlord against and
hold Landlord harmless from any and all costs, claims or liability arising from
(i) Tenant's use of the Premises, (ii) the conduct of Tenant's business or
anything else done or permitted by Tenant to be done in or about the Property,
including any contamination of the Property or any adjacent property resulting
from the presence or use of Hazardous Material caused or permitted by Tenant,
(iii) any breach or default in the performance of Tenant's obligations under
this Lease, (iv) any misrepresentation or breach of warranty by Tenant under
this Lease, or (v) other acts or omissions of Tenant in violation of this Lease.
Tenant shall defend Landlord against any such cost, claim or liability at
Tenant's expense with counsel reasonably acceptable to Landlord. As a material
part of the consideration to Landlord, ▇▇▇▇▇▇ hereby assumes all risk of damage
to property or injury in the Premises to Tenant's employees, agents,
contractors, or invitees arising from any cause unrelated to ▇▇▇▇▇▇▇▇'s
responsibilities hereunder, and Tenant hereby waives all claims in respect
thereof against Landlord, except for any claim arising out of Landlord's
negligence, willful misconduct, or breach of this Lease. For purposes of this
Section 5.05, the term "Tenant" shall include Tenant's employees, agents,
assignees, and contractors, except to the extent such definition creates
personal obligations or liabilities for such persons and/or entities.
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Section 5.06 LANDLORD'S ACCESS. Landlord or its agents may enter the
Premises at all reasonable times to show the Premises to potential buyers,
investors, or, during the last six (6) months of the Lease Term, to prospective
lessees, to inspect and conduct tests in order to monitor Tenant's compliance
with all applicable environmental laws and all laws governing the presence and
use of Hazardous Material, or for any other purpose Landlord deems necessary.
Except in the case of an emergency, Landlord shall give Tenant prior notice of
such entry and Tenant shall have the right, if it has reasonable suspicions, to
approve who may tour or inspect the Premises, to designate an agent of Tenant to
accompany Landlord on any inspection, or to devise reasonable procedures to
ensure that no trade secrets or confidential information is being
misappropriated or taken.
Section 5.07 QUIET POSSESSION. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy the Premises for
the full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01 CONDITION OF PREMISES. Tenant understands and agrees that
Tenant shall make its own inspection of and inquiry regarding the condition of
the Premises upon Substantial Completion and shall accept the Premises in its
condition at that time, subject to Landlord's obligation to have completed
▇▇▇▇▇▇▇▇'s Work in good and workmanlike manner and to complete all punch list
items identified at that time. Except as provided herein, ▇▇▇▇▇▇ acknowledges
that neither Landlord nor any agent of Landlord has made any representation as
to the condition of the Property or the suitability of the Premises for Tenant's
intended use.
Section 6.02 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not
be liable for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of Tenant, or
Tenant's employees, invitees, or customers in or about the Property, whether
such damage or injury is caused by or results from (i) fire, steam, electricity,
water, gas or rain, (ii) the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures or any other cause, or (iii) conditions arising in or about the
Property, or from other sources or places. Landlord shall not be liable for any
such damage or injury even though the cause of or the means of repairing such
damage or injury are not accessible to Tenant. The provisions of this Section
6.02 shall not, however, exempt Landlord from liability for Landlord's
negligence or willful misconduct, or breaches of its obligations under this
Lease.
Section 6.03 LANDLORD'S OBLIGATIONS. Except as provided in Article
Seven (Damage and Destruction) and Article Eight (Condemnation), Landlord shall
maintain in good condition and repair the foundations, exterior walls and roof
of the Building (including painting the exterior surface of the exterior walls
of the Building not more frequently than once every five years if necessary) and
all components of electrical, mechanical, plumbing, heating and air conditioning
systems and facilities located in the Building which are concealed or used in
common by tenants of the Building. Landlord shall not be obligated to maintain
or repair the windows, doors, plate glass or the interior surfaces of exterior
walls of the Premises, or any HVAC system or other system which serves only the
Premises. Landlord shall make repairs under this Section 6.03 within a
reasonable time after receipt of written notice from Tenant of the need for such
repairs. Tenant shall pay or reimburse Landlord for all reasonable costs
Landlord incurs under this Section 6.03 as Common Area costs as provided in
Section 4.05 above. Tenant waives the benefit of any statute in effect now or in
the future which might give Tenant the right to make repairs at Landlord's
expense.
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Section 6.04 TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven
(Damage and Destruction) and Article Eight (Condemnation), Tenant shall
keep all portions of the Premises in good order, condition and repair
(including interior repainting and refinishing, as needed). If any
portion of the Premises or any system or equipment in the Premises
which Tenant is obligated to repair cannot be fully repaired or
restored, Tenant shall promptly replace such portion of the Premises or
systems or equipment in the Premises, and any capital replacement
required shall be amortized over its useful life. Tenant shall maintain
a preventive maintenance contract providing for the regular inspection
and maintenance of the heating and air conditioning system by a
licensed heating and air conditioning contractor. If any part of the
Property is damaged by any act or omission of Tenant, Tenant shall pay
Landlord the cost of repairing or replacing such damaged property,
whether or not Landlord would otherwise be obligated to pay the cost of
maintaining or repairing such property. It is the intention of Landlord
and Tenant that at all times Tenant shall maintain the portions of the
Premises which Tenant is obligated to maintain in an attractive,
first-class and fully operative condition.
(b) Tenant shall fulfill all of Tenant's obligations
under this Section 6.04 at Tenant's sole expense. If Tenant fails to
maintain, repair or replace the Premises as required by this Section
6.04, Landlord may, upon ten (10) days prior written notice to Tenant
(except that no notice shall be required in the case of an emergency),
enter the Premises and perform such maintenance or repair (including
replacement, as needed) on behalf of Tenant. In such case, Tenant shall
reimburse Landlord for all reasonable costs incurred in performing such
maintenance or repair immediately upon demand.
Section 6.05 ALTERATIONS, ADDITIONS AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions or
improvements to the Premises without Landlord's prior written consent,
except for non-structural alterations which do not exceed Twenty
Thousand Dollars ($20,000) in cost annually and which are not visible
from the outside of the Building. Landlord may require Tenant to
provide lien and completion bonds in form and amount satisfactory to
Landlord. Tenant shall promptly remove any alterations, additions or
improvements constructed in violation of this Paragraph 6.05(a) upon
▇▇▇▇▇▇▇▇'s written request. All alterations, additions and improvements
shall be done in a good and workmanlike manner, in conformity with all
applicable laws and regulations, and by a contractor approved by
Landlord. Upon completion of any such work, Tenant shall provide
Landlord with "as built" plans.
(b) Tenant shall pay when due all valid claims for labor
and material furnished to the Premises. Tenant shall give Landlord at
least twenty (20) days' prior written notice of the commencement of any
work on the Premises, regardless of whether Landlord's consent to such
work is required. Landlord may elect to record and post notices of
non-responsibility on the Premises. In the event that any lien or
notice of lien is recorded against the Property as a result of any work
performed by or at the request of Tenant, Tenant shall, within thirty
(30) days thereafter, cause such lien or notice of lien to be released
of record; provided, however, that Tenant shall have the right to
contest such lien or notice of lien by appropriate proceedings if
Tenant establishes a bond or other customary security in favor of
Landlord within such time.
(c) Upon termination of this Lease, Tenant shall not have
the right to remove any equipment or fixtures installed at the Property
unless, prior to installation of any such equipment
11
or fixtures, ▇▇▇▇▇▇ shall notify Landlord in writing of such
installation and of Tenant's intent to retain ownership of such
equipment or fixtures and ▇▇▇▇▇▇▇▇ agrees in writing that such
equipment may be installed at the Premises and shall remain the
property of Tenant. Any such equipment or fixtures so installed at the
Premises with the written agreement of Landlord shall be considered to
be "Tenant's Equipment" for purposes of Section 6.06 below.
Section 6.06 CONDITION UPON TERMINATION. Upon the termination of the
Lease, ▇▇▇▇▇▇ shall surrender the Premises to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under Article Seven (Damage or Destruction). In addition, Landlord may
require Tenant to remove any alterations, additions or improvements prior to the
expiration of the Lease and to restore the Premises to its prior condition, all
at Tenant's expense, provided that Landlord notifies Tenant at the time of
Landlord's consent to such alterations, additions, or improvements that they
must be removed upon termination of the Lease. All alterations, additions and
improvements which Landlord has not, at the time of approval, required Tenant to
remove shall be Landlord's property and shall be surrendered to Landlord upon
the expiration or earlier termination of the Lease, except that Tenant may
remove any of Tenant's Equipment which can be removed without material damage to
the Premises. Tenant shall repair, at Tenant's expense, any damage to the
Premises caused by the removal of any of Tenant's Equipment. In no event shall
Tenant remove any of the following materials or equipment (which shall be deemed
Landlord's property) without Landlord's prior written consent: any power wiring
or power panels; lighting or lighting fixtures; wall coverings; drapes, blinds
or other window coverings; carpets or other floor coverings; heaters, air
conditioners (except supplemental HVAC equipment not included in the Premises
Construction Documents that has been installed in the Premises and paid for by
Tenant) or any other heating or air conditioning equipment; fencing or security
gates; or other similar building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01 PARTIAL DAMAGE TO PREMISES.
(a) Tenant shall notify Landlord in writing immediately
upon the occurrence of any damage to the Premises. If the Premises is
only partially damaged (that is, less than thirty three percent (33%)
of the Premises is untenantable as a result of such damage or less than
thirty three percent (33%) of Tenant's operations are materially
impaired) and can be repaired within six months, and if insurance
proceeds are sufficient to pay for the necessary repairs, this Lease
shall remain in effect and Landlord shall repair the damage to the
Premises (including Tenant's fixtures, equipment and improvements, to
the extent of available insurance proceeds) as soon as reasonably
possible.
(b) If the insurance proceeds are not sufficient to pay
the entire cost of repair, or if the cause of the damage is not covered
by the insurance policies which Landlord maintains under Paragraph
4.04(b), Landlord may elect either to (i) repair the damage as soon as
reasonably possible, in which case this Lease shall remain in full
force and effect, or (ii) terminate this Lease as of the date the
damage occurred. Landlord shall notify Tenant within thirty (30) days
after receipt of notice of the occurrence of the damage whether
Landlord elects to repair the damage or terminate the Lease. If
Landlord elects to repair the damage, Tenant shall (subject to the
terms of this Lease) pay Landlord the "deductible amount" (if any)
under Tenant's insurance policies and, if the damage was due to an act
or omission of Tenant, or Tenant's employees, agents,
12
contractors or invitees, the difference between the actual cost of
repair and any insurance proceeds received by Landlord.
(c) If the damage to the Premises occurs during the last
six (6) months of the Lease Term or any Option Term and such damage
will require more than sixty (60) days to repair, either Landlord or
Tenant may elect to terminate this Lease as of the date the damage
occurred, regardless of the sufficiency of any insurance proceeds. The
party electing to terminate this Lease shall give written notification
to the other party of such election within thirty (30) days after
▇▇▇▇▇▇'s notice to Landlord of the occurrence of the damage.
Section 7.02 SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever, or if damage to the
Premises is greater than partial damage as described in Section 7.01, this Lease
shall terminate as of the date the destruction occurred, regardless of whether
Landlord receives any insurance proceeds. Notwithstanding the preceding
sentence, if the Property can be rebuilt within six months after the date of
destruction, Landlord may elect to rebuild the Property at no expense to Tenant,
the parties may agree that this Lease shall remain in full force and effect.
Landlord shall notify Tenant of such election within thirty (30) days after the
occurrence of total or substantial destruction. If Landlord so elects, Landlord
shall rebuild the Property at Landlord's sole expense, except that if the
destruction was caused by an unpermitted act or omission of Tenant under this
Lease, or Tenant's employees, agents, contractors or invitees, Tenant shall pay
Landlord the difference between the actual cost of repair and any insurance
proceeds received by Landlord.
Section 7.03 TEMPORARY REDUCTION OF RENT. If the Premises are destroyed
or damaged and Landlord or Tenant repairs or restores the Premises pursuant to
the provisions of this Article Seven, Base Rent and Additional Rent shall be
equitably abated, as of the date of the casualty, based on the extent to which
the Premises are unusable by Tenant. Tenant shall not be entitled to any
compensation, reduction or reimbursement from Landlord as a result of any
damage, destruction, repair or restoration of or to the Premises.
Section 7.04 WAIVER. Tenant waives the protection of any statute, code
or judicial provision which grants a tenant the right to terminate a lease in
the event of a substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction of the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Premises is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the Premises is taken or
such part thereof as shall substantially interfere with Tenant's use and
occupancy of the Premises, either Landlord or Tenant may terminate this Lease as
of the date the condemning authority takes title or possession, by delivering
written notice to the other within ten (10) days after receipt of written notice
of such taking (or, in the absence of such notice, within ten (10) days after
the condemning authority takes title or possession). If neither Landlord nor
Tenant terminates this Lease, this Lease shall remain in effect as to the
portion of the Premises not taken, except that the Rent shall be reduced in
proportion to the reduction (if any) in the floor area of the Premises. Any
Condemnation award or payment shall be distributed in the following order: (a)
first, to any ground lessor, mortgagee or beneficiary under a deed of trust
encumbering the Property, the amount of its interest in the Property; (b)
second, to Tenant, only the amount of any award
13
specifically designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and (c) third, to Landlord, the remainder of such
award, whether as compensation for reduction in the value of the leasehold, the
taking of the fee, or otherwise. If this Lease is not terminated, Landlord shall
repair any damage to the Premises or the remainder of the Property caused by the
Condemnation, except that Landlord shall not be obligated to repair any damage
for which ▇▇▇▇▇▇ has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01 LANDLORD'S CONSENT REQUIRED. No portion of the Premises or
of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without ▇▇▇▇▇▇▇▇'s prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void.
Section 9.02 TENANT AFFILIATE. Tenant may assign this Lease or sublease
the Premises, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all of
Tenant's obligations under this Lease.
Section 9.03 NO RELEASE OF TENANT. No transfer permitted by this
Article Nine, whether with or without Landlord's consent, shall release Tenant
or change Tenant's primary liability to pay the Rent and to perform all other
obligations of Tenant under this Lease. ▇▇▇▇▇▇▇▇'s acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If ▇▇▇▇▇▇'s transferee
defaults under this Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee.
Section 9.04 OFFER TO TERMINATE. If Tenant desires to assign the Lease
or sublease the Premises, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects in
writing to accept the offer to terminate within twenty (20) days after notice of
the offer, the Lease shall terminate as of the date specified and all the terms
and provisions of the Lease governing termination shall apply. If Landlord does
not so elect, the Lease shall continue in effect until terminated and the
provisions of Section 9.05 with respect to any proposed transfer shall continue
to apply.
Section 9.05 LANDLORD'S CONSENT. ▇▇▇▇▇▇'s request for consent to any
transfer described in Section 9.01 shall set forth in writing the details of the
proposed transfer, including the name, business and financial condition of the
prospective transferee, financial details of the proposed transfer (such as the
term of and the rent and security deposit payable under any proposed assignment
or sublease), and any other information Landlord deems relevant. Landlord shall
have the right to withhold consent, if reasonable, or to grant consent, based on
the following factors: (i) the business of the proposed assignee and the
proposed use of the Premises; (ii) the net worth and financial reputation of the
proposed assignee; and (iii) Tenant's compliance with all of its obligations
under the Lease. If Landlord objects to a proposed assignment solely because of
the net worth and/or financial reputation of the proposed assignee, Tenant may
nonetheless sublease (but not assign) all or a portion of the Premises to the
proposed transferee, but only on the other terms of the proposed transfer.
14
Section 9.06 NO MERGER. No merger shall result from ▇▇▇▇▇▇'s sublease
of the Premises under this Article Nine, ▇▇▇▇▇▇'s surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all sub-tenancies or succeed to the interest of Tenant as
sub-landlord under any or all sub-tenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01 COVENANTS AND CONDITIONS. ▇▇▇▇▇▇'s performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
▇▇▇▇▇▇'s right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.
Section 10.02 DEFAULTS. Tenant shall be in material default under this
Lease:
(a) if Tenant fails to pay Base Rent within ten days
after receipt of written notice from Landlord that payment is due
hereunder, or fails to pay any Additional Rent hereunder within ten
(10) days after written notice from Landlord that such payment is due;
(b) if Tenant fails to perform any of Tenant's
non-monetary obligations under this Lease for a period of thirty (30)
days after written notice from Landlord (provided, however, that if
more than thirty (30) days are required to complete such performance,
Tenant shall not be in default if Tenant commences such performance
within the 30-day period and thereafter diligently pursues its
completion); or
(c) if (i) Tenant makes a general assignment or general
arrangement for the benefit of creditors, (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is
filed by or against Tenant and is not dismissed within thirty (30)
days, (iii) a trustee or receiver is appointed to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in the Lease and possession is not restored to Tenant
within thirty (30) days, or (iv) substantially all of Tenant's assets
located at the Premises or of Tenant's interest in the Lease is
subjected to attachment, execution or other judicial seizure which is
not discharged within thirty (30) days.
Any notice required by this Section 10.02 is intended to satisfy any and all
notice requirements imposed by law on Landlord and is not in addition to any
such requirement.
Section 10.03 REMEDIES. On the occurrence of any material uncured
default by Tenant, Landlord may take any of the following actions at any time
thereafter, with notice and without limiting Landlord in the exercise of any
right or remedy which Landlord may have.
(a) Landlord may terminate ▇▇▇▇▇▇'s right to possession
of the Premises by any lawful means, in which case this Lease, at
Landlord's option and election, shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such
event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default, including (i) the
worth at the time of the award of the unpaid Base Rent and all
Additional Rent and other charges which ▇▇▇▇▇▇▇▇ has earned at the time
of the termination, (ii) the worth at the time of the award of the
amount by which the unpaid Base Rent and all Additional Rent and other
charges which ▇▇▇▇▇▇▇▇ would have earned after termination until the
15
time of the award exceed the amount of such rental loss that Landlord
could have reasonably avoided; (iii) the worth at the time of the award
of the amount by which the unpaid Base Rent and all Additional Rent and
other charges which Tenant would have paid for the balance of the Lease
Term after the time of the award exceeds the amount of such rental loss
that Landlord could have reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately
caused by ▇▇▇▇▇▇'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, any costs or expenses
Landlord incurs in maintaining or preserving the Premises after such
default, the cost of recovering possession of the Premises, expenses of
reletting, including necessary renovation or alteration of the
Premises, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commission paid or payable. As used in
subparts (i) and (ii) above, the "worth at the time of the award" is
computed by allowing interest on unpaid amounts at the rate of ten
percent (10%) per annum, or such lesser amount as may then be the
maximum lawful rate. As used in subpart (iii) above, the "worth at the
time of the award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time
of the award plus one percent (1%).
(b) Landlord may maintain Tenant's right to possession,
in which case this Lease shall continue in effect whether or not Tenant
has abandoned the Premises. In such event, Landlord shall be entitled
to enforce all of Landlord's rights and remedies under this Lease,
including the right to recover the rent as it becomes due.
(c) Landlord may pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state
in which the Property is located.
If Tenant has performed a material default beyond any cure periods and has
abandoned the Premises, Landlord shall have the option of retaking possession of
the Premises and recovering from Tenant the amount specified in subparagraph (a)
above, or proceeding under subparagraph (b) above. All rights and remedies
provided to Landlord hereunder are cumulative with all other rights and remedies
provided hereunder or otherwise available at law or in equity, and ▇▇▇▇▇▇▇▇'s
exercise of any right or remedy shall not prevent it from exercising any other
right or remedy.
Section 10.04 AUTOMATIC TERMINATION. At Landlord's election, this Lease
shall terminate on the occurrence of any act to terminate the Lease as provided
in Section 10.03 hereof, including the filing of an unlawful detainer action
against Tenant. On such termination, ▇▇▇▇▇▇▇▇'s damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing, commencement, pursuing and/or defending of
any action in any bankruptcy court or other court with respect to the Lease; the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Premises. All such damages suffered (apart from Base Rent and
Additional Rent payable hereunder) shall constitute pecuniary damages which must
be reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to ▇▇▇▇▇▇ in any bankruptcy or other proceeding.
Section 10.05 CUMULATIVE REMEDIES. ▇▇▇▇▇▇▇▇'s exercise of any right or
remedy hereunder shall not preclude it from exercising any other available right
or remedy.
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ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01 SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease. Tenant
shall execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
▇▇▇▇▇▇'s right to quiet possession of the Premises during the Lease Term shall
not be disturbed if Tenant pays the Rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
such ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior to subsequent to the date of such
ground lease, deed of trust or mortgage or the date of recording thereof.
Section 11.02 ATTORNMENT. If ▇▇▇▇▇▇▇▇'s interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to ▇▇▇▇▇▇▇▇'s interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Premises upon the transfer
of Landlord's interest, provided that ▇▇▇▇▇▇'s right to quiet possession of the
Premises during the Lease Term shall not be disturbed if Tenant pays the Rent
and performs all of Tenant's obligations under this Lease and is not otherwise
in default.
Section 11.03 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten (10)
business days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
Section 11.04 ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall
execute, acknowledge and deliver to Landlord a written statement
certifying: (i) that none of the terms or provisions of this Lease have
been changed (or if they have been changed, stating how they have been
changed); (ii) that this Lease has not been cancelled or terminated;
(iii) the last date of payment of the Base Rent and Additional Rent and
the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default,
stating why); and (v) such other representations or information with
respect to Tenant or the Lease as Landlord may reasonably request or
which any prospective purchaser or encumbrancer of the Property may
require. Tenant shall deliver such statement to Landlord within ten
(10) business days after ▇▇▇▇▇▇▇▇'s request. Landlord may give any such
statement by Tenant to any prospective purchaser or encumbrancer of the
Property, who may rely conclusively upon such statement as true and
correct.
(b) If Tenant does not deliver such statement to Landlord
within such ten business day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon the
following facts: (i) that the terms or provisions of this Lease have
not been changed except as otherwise represented by Landlord; (ii) that
this Lease has not been cancelled or terminated except as otherwise
represented by Landlord; (iii) that not more than one
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month's Base Rent or Additional Rent have been paid in advance; and
(iv) that Landlord is not in default under this Lease. In such event,
Tenant shall be estopped from denying the truth of such facts.
Section 11.05 TENANT'S FINANCIAL CONDITION. Tenant hereby warrants,
represents, and agrees that it has the financial ability to perform all
obligations and covenants hereunder. Tenant shall, if requested by ▇▇▇▇▇▇▇▇,
provide reasonable current financial statements to be provided to prospective
lenders or purchasers to facilitate the financing, refinancing or sale of the
Property. Tenant represents and warrants to Landlord that each such financial
statement will be a true and accurate statement as of the date thereof.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01 LEGAL PROCEEDINGS. If Tenant or Landlord shall be
adjudged to be in breach or default under this Lease, and, if in any action for
breach of or to enforce the provisions of this Lease, the court in such action
awards to the party in whose favor a judgment is entered a reasonable sum as
attorneys' fees and costs, the losing party in such action shall pay such
reasonable attorneys' fees and costs. Tenant shall also indemnify Landlord
against and hold Landlord harmless from all costs, expenses, demands and
liability that Landlord may incur if Landlord becomes or is made a party to any
claim or action which is: (a) instituted by Tenant against any third party, or
by any third party against Tenant for matters unrelated to the Property, or by
or against any person, other than Landlord, holding any interest under or using
the Property by license of or agreement with Tenant; (b) for foreclosure of any
lien for labor or material furnished to or for Tenant; (c) otherwise arising out
of or resulting from any act or transaction of Tenant; or (d) necessary to
protect Landlord's interest under this Lease in a bankruptcy proceeding, or
other proceeding under Title 11 of the United States Code, as amended. Tenant
shall defend Landlord against any such claim or action at ▇▇▇▇▇▇'s expense with
counsel reasonably acceptable to Landlord.
Section 12.02 LANDLORD'S CONSENT. Tenant shall pay Landlord's
reasonable attorneys' fees incurred in connection with ▇▇▇▇▇▇'s request for
▇▇▇▇▇▇▇▇'s consent under Article Nine (Assignment and Subletting), or in
connection with any other act which ▇▇▇▇▇▇ proposes to do and which requires
▇▇▇▇▇▇▇▇'s consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01 LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only
the current owner or owners of the fee title to the Property or the
leasehold estate under a ground lease of the Property at the time in
question. Tenant shall be notified within 30 days of any change in
Landlord. Each Landlord is obligated to perform the obligations of
Landlord under the Lease only during the time such Landlord owns such
interest or title. Any Landlord who transfers its title or interest is
relieved of all liability with respect to the obligations of Landlord
under this Lease to be performed on or after the date of transfer.
However, each Landlord shall deliver to its transferee all funds that
Tenant previously paid if such funds have not yet been applied under
the terms of this Lease.
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(b) Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Lease to Landlord
and to any ground lessor, mortgagee or beneficiary under any deed of
trust encumbering the Property whose name and address has been
furnished to Tenant in writing. Notwithstanding the preceding sentence,
▇▇▇▇▇▇'s notice to Landlord shall be sufficient, and ▇▇▇▇▇▇'s failure
to give notice to all parties listed in the preceding sentence due to
unavailability of such names and addresses to Tenant shall not impair
or invalidate such notice. Landlord shall not be in default under this
Lease unless Landlord (or such ground lessor, mortgagee or beneficiary)
fails to cure such non-performance within thirty (30) days after
receipt of Tenant's notice. However, if such non-performance reasonably
requires more than thirty (30) days to cure, Landlord shall not be in
default if such cure is commenced within such 30-day period and
thereafter diligently pursued to completion.
(c) Notwithstanding any term of provision herein to the
contrary, the liability of Landlord for the performance of its duties
and obligations under this Lease is limited to Landlord's interest in
the Property, and neither the Landlord nor its partners, shareholders,
officers, members, managers or other principals shall have any personal
liability under this Lease.
Section 13.02 SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
Section 13.03 INTERPRETATION. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall include
the singular. The masculine, feminine and neuter genders shall each include the
others.
Section 13.04 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the final agreement between the parties pertaining to the lease of the
Premises and supersedes all prior negotiations and agreements relating thereto.
All amendments to this Lease shall be in writing and signed by all parties. Any
other attempted amendment shall be void.
Section 13.05 NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
▇▇▇▇▇▇'s taking possession of the Premises, the Premises shall be Tenant's
address for notice purposes, with a copy of all such notices to be sent
simultaneously to the following address: Emulex Corporation, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Contracts Administration. Notices to
Landlord shall be delivered to the address specified in Section 1.02 above. All
notices shall be effective upon delivery. Either party may change its notice
address upon written notice to the other party.
Section 13.06 WAIVERS. All waivers must be in writing and signed by the
waiving party. Either party's failure to enforce any provision of this Lease, or
▇▇▇▇▇▇▇▇'s acceptance of Rent, shall not be a waiver and shall not prevent such
party from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter accompanying
a payment check shall be binding on Landlord. Landlord may, with or without
notice to Tenant, negotiate such check without being bound to the conditions of
such statement.
Section 13.07 NO RECORDATION. Tenant shall not record this Lease
without prior written consent from Landlord. However, either Landlord or Tenant
may require that a "Short Form"
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memorandum of this Lease executed by both parties be recorded. The party
requesting such recording shall pay all transfer taxes and recording fees.
Section 13.08 BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to ▇▇▇▇▇▇'s successor unless
the rights or interests of ▇▇▇▇▇▇'s successor are acquired in accordance with
the terms of this Lease. The laws of Colorado shall govern this Lease, and the
exclusive venue for any action relating to this Lease shall be in Colorado.
Section 13.09 CORPORATE, COMPANY OR PARTNERSHIP AUTHORITY. If Tenant is
an entity, each person signing this Lease on behalf of ▇▇▇▇▇▇ represents and
warrants that he has full authority to do so and that this Lease binds the
corporation, company or partnership, as the case may be. If Landlord so
requests, Tenant shall promptly deliver to Landlord written evidence of such
authority, in form and substance reasonably acceptable to Landlord.
Section 13.11 FORCE MAJEURE. If either party cannot perform any of its
obligations due to events beyond its control, the time provided for performing
such obligations shall be extended by a period of time equal to the duration of
such events. Events beyond a party's control include, but are not limited to,
acts of God, war, civil commotion, labor disputes, strikes, fire, flood or other
casualty, shortages of labor or material, government regulation or restriction
and weather conditions.
Section 13.12 EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. ▇▇▇▇▇▇▇▇'s delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
ARTICLE FOURTEEN: RIGHT OF REFUSAL.
If, at any time during the Lease Term, Landlord receives a bona fide
acceptable offer from any third party to lease space adjacent to the Premises in
the Building, Landlord shall promptly provide to Tenant a written summary of the
terms of such offer (including all Landlord concessions). Subject to any prior
rights of other tenants in the Project, Tenant shall have the right, exercisable
by written notice to that effect delivered to Landlord within five business days
after receipt of the summary of terms, to elect to lease all (but not less than
all) of the space which is the subject of the offer on the terms set forth in
the summary. If Tenant declines to lease such space, or does not respond to such
notice within the five business day period, Landlord may proceed to lease such
space to such third party substantially on the terms set forth in such summary,
free of any rights of Tenant. The right of refusal granted to Tenant in this
Article Fourteen shall continue if Landlord does not lease the affected space to
a third party, and shall be reinstated during the Lease Term from time to time
as any lease of the affected space expires.
ARTICLE FIFTEEN: BROKERS
Tenant warrants that ▇▇▇▇▇▇ has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease other than the
brokers identified in Section 1.08 above, and that it knows of no other real
estate broker or agent who is entitled to a commission in connection with this
Lease.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have executed this Lease as of
the date set forth in Section 1.01 above.
LANDLORD:
LM VENTURE, LLC,
a Delaware limited liability company
By WWG LONGMONT DEVELOPMENT, LLC,
a Colorado limited liability company
Manager
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
TENANT:
EMULEX CORPORATION,
a California corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
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EXHIBIT A
PRELIMINARY SITE PLAN
Depiction of preliminary site plan
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EXHIBIT B
LEGAL DESCRIPTION
Lots 1 - 3, Block 1
CREEKSIDE BUSINESS PART FILING NO. 1
County of Boulder,
State of Colorado
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EXHIBIT C
▇▇▇▇▇▇▇▇'S WORK
▇▇▇▇▇▇▇▇'s work shall include construction of a shell building together
with on-site landscaping and parking, including the following:
1. Masonry insulated exterior walls, grey tinted
insulated store front system, steel bar joist metal deck roof framing
with ballasted 45 ml. EPDM roof over R-19 roof insulation. Slab on
grade is 5" reinforced concrete.
2. Six-inch (6") sanitary sewer line within Tenant's
Premises ready for Tenant connection.
3. Domestic water service to the Building is 1" meter
with 1-1/2" line run to bar joists within the Premises.
4. Electrical service to the Building is a 4,000 amp
bussed gutter system, of which 400 amps is available for distribution
to the Premises.
5. Fire alarm control panel for Tenant connection.
6. Fire protection sprinkler system designed to meet
ordinary hazard coverage. Any alterations to the base system shall be
the responsibility of Tenant.
7. Base exterior building lighting (includes no interior
lighting for the Building).
8. One ton HVAC per 350 square feet of the Premises
mounted on roof and stubbed through the roof structure but not
distributed.
9. All exterior site work required by the development
plan approved by applicable governmental authorities, including
landscaping, parking lot and sidewalks.
10. One single storefront door
11. Demising wall for Premises.
All additional work on the Premises, including distribution of electrical and
HVAC, shall be at Tenant's expense (except to the extent covered by the Tenant
Allowance).