Exhibit 10.28
INDUSTRIAL REAL ESTATE LEASE
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SINGLE-TENANT NET FORM
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TABLE OF CONTENTS
Article One Basic Terms.......................... 1
Article Two Premises and Property................ 2
Article Three Lease Term........................... 2
Article Four Rent................................. 4
Article Five Property Taxes....................... 4
Article Six Utilities............................ 4
Article Seven Insurance............................ 4
Article Eight Outside Areas........................ 7
Article Nine Use of Premises...................... 7
Article Ten Condition and Maintenance of Premises 9
Article Eleven Damage or Destruction................ 11
Article Twelve Condemnation......................... 12
Article Thirteen Assignment and Subletting............ 13
Article Fourteen Defaults; Remedies................... 14
Article Fifteen Protection of Lenders................ 16
Article Sixteen Legal Costs.......................... 17
Article Seventeen Miscellaneous Provisions............. 18
Exhibit A The Premises......................... A-1
Exhibit B Rules and Regulations................ B-1
ARTICLE ONE - BASIC TERMS
The following terms used in this Lease shall have the meanings set forth below.
1.01 Date Of Lease: August 9, 2000
1.02 Landlord (legal entity): ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ LLC,
a California limited liability company
1.03 Tenant (legal entity): ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC,
a California limited liability company
1.04 Tenant's Guarantor: None
1.05 Address of Property: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1.06 Intentionally Omitted
1.07 Premises Rentable Area: Approximately 39,600 rentable square feet
(including approximately 33,000 rsf of warehouse
space and 6,600 rsf of office space)
1.08 Intentionally Deleted
1.09 Lease Term: The period beginning on the Lease Commencement Date and
expiring on August 8, 2005
1.10 Lease Commencement Date: August 9, 2000
1.11 Permitted Uses: Warehousing, distribution and office uses
1.12 Broker(s): None
1.13 Initial Security Deposit: None
1.14 Intentionally Omitted
1.15 Base Rent: Base Rent shall be $22,110/month ($1.10psf for 6,600 sf of
office space and $.45psf for 33,000 sf of warehouse space) for the first
year of the Lease, and shall be increased in an amount equal to the CPI
Increase or three percent (3%), whichever is greater, for each successive
year of the Lease Term. For purposes of this Lease, "CPI Increase" shall
mean (as a percentage increase): (i) the Cost of Living Index (as defined
below) published for the month 3 months prior to expiration of the then
current Lease year, over (ii) the Cost of Living Index published for the
first month of the commencement of the then current Lease year. The "Cost
of Living Index" means the Consumer Price Index for All Urban Consumers,
U.S. City Average (1982-1984 = 100), published by the Department of Labor.
NNN
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1.16 Other Charges Payable by Tenant:
(i) Real Property Taxes (Article Five);
(ii) Utilities (Article Six);
(iii) Insurance Premiums (Article Seven);
(iv) OAM Expenses (Article Eight);
1.17 Address of Landlord for Notices:
▇▇▇▇▇▇▇-▇▇▇▇ Salinas LLC
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
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1.18 Address of Tenant for Notices:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1.19 Intentionally Omitted
1.20 Exhibits:
Exhibit A: The Premises
Exhibit B: Rules & Regulations
ARTICLE TWO - PREMISES AND PROPERTY
2.01 Premises and Property. The Premises are described in Exhibit A and
consists of all the land, building(s), and all other improvements located on the
land including, without limitation, the landscaping, utility services, signage
and paved areas. The term "Property" shall have the same meaning as Premises
within this lease.
ARTICLE THREE - LEASE TERM
3.01 Lease of Premises for Lease Term. Landlord leases the Premises to
Tenant and Tenant leases the Premises from Landlord for the Lease Term. The
Lease Term shall begin on the Lease Commencement Date. Provided that no "event
of default" (as set forth in Section 14.02), has occurred and is continuing,
then Lessee shall have the right to renew this Lease for one (1) additional five
(5) year renewal term (the "Extended Term"), upon giving written notice to
Lessor of such renewal not less than two (2) months prior to the expiration of
the then current Lease Term. During the Extended Term, all of the terms and
conditions of this Lease shall continue in full force and effect, including
increases in the Base Rent equal to the CPI increase or 3%, whichever is
greater.
3.02 Delay in Commencement. Landlord shall not be liable to Tenant if
Landlord shall not deliver possession of the Premises to Tenant on the Lease
Commencement Date. The Lease Commencement Date shall be postponed to the date
possession of the Premises shall be delivered to Tenant.
3.03 Early Occupancy. If Tenant shall occupy the Premises prior to the
Lease Commencement Date, Tenant's occupancy of the Premises shall be subject to
all of the provisions of this Lease. Early occupancy of the Premises shall not
advance the expiration date of this Lease. Tenant shall pay Base Rent and all
charges specified in this Lease during the early occupancy period.
3.04 Holding Over. Tenant shall vacate the Premises upon the expiration
or earlier termination of this Lease. Tenant shall reimburse Landlord for and
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indemnify Landlord against all damages, costs, liabilities and expenses,
including attorneys' fees, which Landlord shall incur on account of Tenant's
delay in so vacating the Premises. If Tenant shall not vacate the Premises upon
the expiration or earlier termination of this Lease, the Base Rent shall be
increased to 125% of the Base Rent then in effect and Tenant's obligation to pay
Additional Rent shall continue, but nothing herein shall limit any of Landlord's
rights or Tenant's obligations arising from Tenant's failure to vacate the
Premises, including, without limitation, Landlord's right to repossess the
Premises and remove Tenant therefrom at any time after the expiration or earlier
termination of this Lease and Tenant's obligation to reimburse and indemnify
Landlord as provided in the preceding sentence.
ARTICLE FOUR - RENT
4.01 Base Rent. On the first day of each month during the Lease Term,
Tenant shall pay to Landlord the Base Rent in lawful money of the United States,
in advance, without offset, deduction, or prior demand. The Base Rent shall be
payable at Landlord's address or at such other place or to such other person as
Landlord may designate in writing from time to time.
4.02 Additional Rent. All sums payable by Tenant under this Lease other
than Base Rent shall be deemed "Additional Rent;" the term "Rent" shall mean
Base Rent and Additional Rent. Landlord shall estimate in advance and charge to
Tenant the following costs, to be paid with the Base Rent on a monthly basis
throughout the Lease Term: (i) all Real Property Taxes for which Tenant is
liable under Section 5.01 and 5.02 of the Lease, (ii) all utility costs (if
utilities are not separately metered) for which Tenant is liable under Section
6.01 of the Lease, (iii) all insurance premiums for which Tenant is liable under
Sections 7.01 and 7.06 of the Lease and (iv) all OAM Expenses for which Tenant
is liable under Section 8.04 of the Lease. Collectively, the aforementioned
Real Property Tax, insurance, utility, and OAM Expenses (if not paid by Tenant
directly) shall be the "Total Operating Costs." Landlord may adjust its
estimates of Total Operating Costs at any time based upon Landlord's experience
and reasonable anticipation of costs. Such adjustments shall be effective as of
the next Rent payment date after notice to Tenant. Within one hundred twenty
(120) days after the end of each fiscal year during the Lease Term, Landlord
shall deliver to Tenant a statement prepared in accordance with generally
accepted accounting principles setting forth, in reasonable detail, the Total
Operating Costs paid or incurred by Landlord during the preceding fiscal year.
Within thirty (30) days after Tenant's 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) in order that Landlord shall receive the entire
amount of Tenant's share of such costs and expenses for such period. In
addition to its obligation to pay Base Rent and Total Operating Expenses, Tenant
is required hereunder to pay directly to suppliers, vendors, carriers,
contractors, etc. certain insurance premiums, utility costs, personal property
taxes, maintenance and repair and other expenses collectively "Additional
Expenses." If Landlord pays for any Additional Expenses in accordance with the
terms of this Lease, Tenant's obligation to reimburse such costs shall be an
Additional Rent obligation payable in full with the next monthly Rent payment.
Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then
due with the next monthly installment of Base Rent.
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4.03 Late Charge. Tenant hereby acknowledges that late payment by Tenant
to Landlord of Rent and other amounts due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. 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 loan secured by the Building. Accordingly, if any
installment of Rent or any other sums due from Tenant shall not be received by
Landlord within five (5) days following the due date, Tenant shall pay to
Landlord a late charge equal to five (5%) percent 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.
4.04 Interest. Any amount due to Landlord, if not paid when due, shall
bear interest from the date due until paid at the rate of fifteen percent (15%)
per annum or, if a higher rate is legally permissible, at the highest rate
legally permitted, provided that interest shall not be payable on late charges
incurred by Tenant nor on any amounts upon which late charges are paid by Tenant
to the extent such interest would cause the total interest to be in excess of
that legally permitted. Payment of interest shall not excuse or cure any
default hereunder by Tenant.
ARTICLE FIVE - PROPERTY TAXES
5.01 Real Property Taxes. Tenant shall pay Real Property Taxes on the
Property attributable to the Lease Term. Tenant shall make such payments in
accordance with Section 4.02. If Landlord shall receive a refund of any real
property taxes with respect to which Tenant shall have paid to, or on behalf of,
Landlord, Landlord shall pay to Tenant the amount of such refund after deducting
therefrom the costs and expenses incurred in connection therewith.
5.02 Definition of "Real Property Tax". "Real Property Tax" shall mean
taxes, assessments (special, betterment, or otherwise), levies, fees, rent
taxes, impositions, excises, charges, water and sewer rents and charges, and all
other government levies and charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are imposed or levied upon or
assessed against the Property or any Rent or other sums payable by any tenants
or occupants thereof. If at any time during the term the present system of ad
valorem taxation of real property shall be changed so that in lieu of the whole
or any part of the ad valorem tax on real property, or in lieu of increases
therein, there shall be assessed on Landlord a capital levy or other tax on the
gross rents received with respect to the Property or a federal, state, county,
municipal, or other local income, franchise, excise or similar tax, assessment,
levy, or charge (distinct from any now in effect) measured by or based, in whole
or in part, upon gross rents, then all of such taxes, assessments, levies, or
charges, to the extent so measured or based, shall be deemed to be a Real
Property Tax.
5.03 Personal Property Taxes. Tenant shall pay directly all taxes charged
against trade fixtures, furnishings, equipment, inventory, or any other
personal property belonging to Tenant. Tenant shall use its best efforts to
have personal property taxed separately from the Property. If any of Tenant's
personal property shall be taxed with the Property, Tenant shall pay Landlord
the taxes for such personal property within fifteen (15) days after Tenant
receives a written statement from Landlord for such personal property taxes.
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ARTICLE SIX - UTILITIES
6.01 Utilities. Tenant shall promptly pay, directly to the appropriate
supplier, the cost of all natural gas, heat, cooling, energy, light, power,
sewer service, telephone, water, refuse disposal and other utilities and
services supplied to the Premises allocable to the period from the time Tenant
shall first enter the Premises, throughout the Lease Term and thereafter as long
as Tenant shall remain in the Premises (collectively, the "Occupancy Period"),
together with any related installation or connection charges or deposits
(collectively "Utility Costs"). Landlord shall not be liable for damages,
consequential or otherwise, nor shall there be any Rent abatement arising out
of any curtailment or interruption whatsoever in utility services.
ARTICLE SEVEN - INSURANCE
7.01 Liability Insurance. During the Occupancy Period, Tenant shall
maintain in effect commercial general liability insurance insuring Tenant
against liability for bodily injury, property damage (including loss of use of
property) and personal injury at the Premises. Such insurance shall name
Landlord, its property manager, and any mortgagee, as additional insureds. The
initial amount of such insurance shall be Five Million Dollars ($5,000,000) per
occurrence and shall be subject to periodic increases specified by Landlord
based upon inflation, increased liability awards, recommendation of Landlord's
professional insurance advisers, and other relevant factors. The liability
insurance obtained by Tenant under this Section 7.01 shall (i) be primary and
(ii) insure Tenant's obligations to Landlord under Section 7.09. 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 commercial
general liability insurance in an amount and with coverage determined by
Landlord insuring Landlord against liability with respect to the Premises and
the Property. The policy obtained by Landlord shall not be contributory, shall
not provide primary insurance, and shall be excess over any insurance maintained
by Tenant.
7.02 Worker's Compensation Insurance. During the Occupancy Period, Tenant
shall maintain in effect Worker's Compensation Insurance (including Employees'
Liability Insurance) in the statutory amount covering all employees of Tenant
employed or performing services at the Premises, in order to provide the
statutory benefits required by the laws of the state in which the Premises are
located.
7.03 Automobile Liability Insurance. During the Occupancy Period, Tenant
shall maintain in effect Automobile Liability Insurance, including but not
limited to, passenger liability, on all owned, non-owned, and hired vehicles
used in connection with the Premises, with a combined single limit per
occurrence of not less than One Million Dollars ($1,000,000 for injuries or
death of one or more persons or loss or damage to property.
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7.04 Personal Property Insurance. During the Occupancy Period, Tenant
shall maintain in effect Personal Property Insurance covering leasehold
improvements paid for by Tenant and Tenant's personal property and fixtures from
time to time in, on, or at the premises, in an amount not less than 100% of the
full replacement cost, without deduction for depreciation, providing protection
against events protected under "All Risk Coverage," as well as against sprinkler
damage, vandalism, and malicious mischief. Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under an applicable
provision herein. If the premises are not repaired or restored following damage
or destruction in accordance with other provisions herein, Landlord shall
receive any proceeds from the Personal Property Insurance allocable to Tenant's
leasehold improvements.
7.05 Business Interruption Insurance. During the Occupancy Period, Tenant
shall maintain in effect Business Interruption Insurance, providing in the event
of damage or destruction of the Premises an amount sufficient to sustain Tenant
for a period of not less than one (1) year for: (i) the net profit that would
have been realized had Tenant's business continued; and (ii) such fixed charges
and expenses as must necessarily continue during a total or partial suspension
of business to the extent to which they would have been incurred had no business
interruption occurred, including, but not limited to, interest on indebtedness
of Tenant, salaries of executives, foremen, and other employees under contract,
charges under noncancelable contracts, charges for advertising, legal or other
professional services, taxes and rents that may still continue, trade
association dues, insurance premiums, and depreciation.
7.06 Landlord's Property and Rental Income Insurance. During the Lease
Term, Landlord shall maintain in effect all risk insurance covering loss of or
damage to the Property in the amount of its replacement value with such
endorsements and deductibles as Landlord shall determine from time to time.
Landlord shall have the right to obtain flood, earthquake, and such other
insurance as Landlord shall determine from time to time or shall be required by
any lender holding a security interest in the Property. Landlord shall not
obtain insurance for Tenant's fixtures or equipment or building improvements
installed by Tenant. During the Lease Term, Landlord shall also maintain a
rental income insurance policy, with loss payable to Landlord, in an amount
equal to one year's Base Rent, plus estimated real property taxes, operating
expenses, and insurance premiums. Tenant shall be liable for the payment of any
deductible amount under Landlord's insurance maintained pursuant to this Article
Seven, in an amount not to exceed Twenty-Five Thousand Dollars ($25,000).
Tenant shall not do or permit anything to be done which shall invalidate any
such insurance. Any increase in the cost of Landlord's insurance due to
Tenant's use or activities at the Premises shall be paid by Tenant to Landlord
as Additional Rent hereunder.
7.07 Payment of Insurance Premiums. Landlord shall pay the premiums of
the insurance policies maintained by Landlord under Section 7.06 and 7.01 (if
applicable), and, Tenant shall reimburse Landlord for such premiums in
accordance with Section 4.02. Tenant shall pay directly the premiums of the
insurance policies maintained by Tenant under Sections 7.01, 7.02, 7.03, 7.04,
and 7.05.
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7.08 General Insurance Provisions.
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7.08(a) Any insurance which Tenant shall be required to maintain
under this Lease shall include a provision which requires the insurance carrier
to give Landlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage.
7.08(b) Prior to the earlier of Tenant's entry into the Premises or
the Commencement Date, Tenant shall deliver to Landlord an insurance company
certificate that Tenant maintains the insurance required by Sections 7.01, 7.02,
7.03, 7.04 and 7.05 and not less than thirty (30) days prior to the expiration
or termination of any such insurance, Tenant shall deliver to Landlord renewal
certificates therefor. Tenant shall provide Landlord with copies of the
policies promptly upon request from time to time. If Tenant shall fail to
deliver any certificate or renewal certificate to Landlord required under this
Lease within the prescribed time period or if any such policy shall be canceled
or modified during the Lease Term without Landlord's consent, Landlord may
obtain such insurance, in which case Tenant shall reimburse Landlord, as
additional Rent, for 110% of the cost of such insurance within ten (10) days
after receipt of a statement of the cost of such insurance.
7.08(c) Tenant shall maintain all insurance required under this Lease
with companies having a "General Policy Rating" of A-;X or better, as set forth
in the most current issue of the Best Key Rating Guide. Landlord and Tenant, on
behalf of themselves and their insurers, each hereby waive any and all rights of
recovery against the other, or against the officers, partners, employees,
agents, or representatives of the other, for loss of or damage to its property
or the property of others under its control, if such loss or damage shall be
covered by any insurance policy in force (whether or not described in this
Lease) at the time of such loss or damage. All property insurance carried by
either party shall contain a waiver of subrogation against the other party to
the extent such right shall have been waived by the insured party prior to the
occurrence of loss or injury.
7.09 Indemnity. To the fullest extent permitted by law, Tenant hereby
waives all claims against Landlord, its agents, advisors, employees, members,
officers, directors, partners, trustees, beneficiaries and shareholders (each a
"Landlord Party"), and the agents, advisors, employees, members, officers,
directors, partners, trustees, beneficiaries and shareholders of each Landlord
Party (collectively "the Indemnitees") for damage to any property or injury to
or death of any person in, upon or about the Premises or the Property arising at
any time and from any cause, except to the extent caused by the negligence or
willful misconduct of Landlord, its agents, employees or contractors, and Tenant
shall hold Indemnitees harmless from and defend Indemnitees from and against all
claims, liabilities, judgements, demands, causes of action, losses, damages,
costs and expenses including reasonable attorney's fees for damage to any
property or injury to or death of any person arising in or from (i) the use or
occupancy of the Premises by Tenant or persons claiming under Tenant, except to
the extent caused by the negligence or willful misconduct of Landlord, its
agents, employees or contractors, or (ii) arising from the negligence or willful
misconduct of Tenant, its employees, agents, contractors, or invitees in, upon
or about the Property, or (iii) arising out of any breach or default by Tenant
under this Lease. The provisions of this Section 7.09 shall survive the
expiration or termination of this Lease with respect to any damage, injury, or
death occurring prior to such time.
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ARTICLE EIGHT - OUTSIDE AREAS
8.01 Outside Areas. As used in this Lease, "Outside Areas" shall mean all
areas within the Property which are outside the building envelope, including,
but not limited to, parking areas, driveways, sidewalks, access roads,
landscaping, and planted areas. So long as any changes do not materially impact
Tenant's access to the Premises or availability of parking spaces to Tenant on
the Premises, Landlord, from time to time, may change the size, location,
nature, and use of any of the Outside Areas, convert Outside Areas into
leaseable areas, construct additional parking facilities (including parking
structures) in the Outside areas, and increase or decrease Outside Area land or
facilities.. Tenant acknowledges that such activities may result in
inconvenience to Tenant. Such activities and changes are permitted if Landlord
provides written notification to Tenant of such activities and changes at least
thirty (30) days prior to the activities and changes, and the activities and
changes do not materially affect Tenant's use of the Premises.
8.02 Use of Outside Areas. Tenant shall have the nonexclusive right to
use the Outside Areas for the purposes intended, subject to such reasonable
rules and regulations ("Rules and Regulations") as Landlord may establish or
modify from time to time and as initially set forth in Exhibit B. Tenant shall
abide by all such Rules and Regulations and shall use its best efforts to cause
others who use the Outside Areas with Tenant's express or implied permission to
abide by Landlord's Rules and Regulations. At any time, Landlord may close any
Outside Areas to perform any acts in the Outside Areas as, in Landlord's
reasonable judgement, are desirable to maintain or improve the Property as long
as such closure or performance of any acts does not materially affect Tenant's
use of the Property. Tenant shall not interfere with the rights of Landlord,
other tenants, or any other person entitled to use the Outside Areas.
8.03 Outside Area Maintenance. Tenant, at its sole cost and expense,
shall maintain the Outside Areas in good order, condition, and repair. Outside
Area Maintenance expenses ("OAM Expenses") are all costs and expenses associated
with the operation and maintenance of the Outside Areas and the repair and
maintenance of the heating, ventilation, air conditioning, plumbing, electrical,
utility, and safety systems, including, but not limited to, the following:
gardening and landscaping; snow removal; utility, water and sewage services for
the Outside Area; maintenance of signs; worker's compensation insurance;
personal property taxes; rental or lease payments for rented or leased personal
property used in the operation or maintenance of the Outside Areas; fees for
required licenses and permits; routine maintenance and repair of roof membrane,
flashings, gutters, downspouts, roof drains, skylights and waterproofing;
maintenance of paving (including sweeping, striping, repairing, resurfacing, and
repaving); general maintenance; painting; lighting; cleaning; refuse removal;
security and similar items; and reserves for roof replacement, exterior painting
and other appropriate reserves. Tenant shall pay all OAM Expenses in accordance
with Section 4.02.
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ARTICLE NINE - USE OF PREMISES
9.01 Permitted Uses. Tenant may use the Premises only for the Permitted
Uses.
9.02 Manner of Use. Tenant shall not cause or permit the Premises to be
used in any way which shall constitute a violation of any law, ordinance, or
governmental regulation, order, or restrictive covenant, or which shall annoy or
interfere with the rights of tenants of the Property, or which shall constitute
a nuisance or waste. Tenant shall obtain and pay for all permits, including a
certificate of occupancy and shall promptly take all actions necessary to comply
with all applicable statutes, ordinances, notes, regulations, orders covenants
and requirements regulating the use by Tenant of the Premises, including the
Occupational Safety and Health Act and the Americans With Disabilities Act.
9.03 Hazardous Materials. As used in this Lease, the term "Hazardous
Material" shall mean any flammable items, explosives, radioactive materials,
oil, 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.
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 in any reportable amount, and all Hazardous Material to be generated,
produced, brought upon, used, stored, treated or disposed of in or about the
Property shall be in compliance with all applicable laws, rules, and
regulations.
If the transportation, storage, use or disposal of Hazardous Materials on
the Premises results in the contamination of the soil or surface or ground water
or loss or damage to person(s) or property, then Tenant agrees to: (a) notify
Landlord immediately of any contamination, claim of contamination, loss or
damage, (b) after consultation with the Landlord, clean up the contamination in
full compliance with all applicable statutes, regulations and standards and (c)
indemnify, defend and hold Landlord harmless from and against any claims, suits,
causes of action, costs and fees, including attorney's fees and costs, arising
from or connected with any such contamination, claim of contamination, loss or
damage. Tenant shall not be responsible for any Hazardous Materials generated,
produced, brought upon, used, stored, treated or disposed of in or about the
Property in any reportable amount prior to Tenant taking possession of the
Premises. Tenant agrees to fully cooperate with Landlord and provide such
documents, affidavits and information as may be requested by Landlord (i) to
comply with any environmental law, (ii) to comply with the request of any
lender, purchaser or tenant, and/or (iii) for any other reason deemed necessary
by Landlord in its sole discretion. Tenant shall notify Landlord promptly in
the event of any spill or other release of any Hazardous Material at, in, on,
under or about the Premises which is required to be reported to a governmental
authority under any environmental law, will promptly forward to Landlord copies
of any notices received by Tenant relating to alleged violations of any
environmental law and will promptly pay when due any fine or assessment against
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Landlord, Tenant or the Premises relating to any violation of an environmental
law during the term of this Lease. If a lien is filed against the Premises by
any governmental authority resulting from the need to expend or the actual
expending of monies arising from an act or omission, whether intentional or
unintentional, of Tenant, its agents, employees or invitees, or for which Tenant
is responsible, resulting in the releasing, spilling, leaking, leaching,
pumping, emitting, pouring, emptying or dumping of any Hazardous Material into
the waters or onto land located within or without the State where the Premises
is located, then Tenant shall, within thirty (30) days from the date that Tenant
is first given notice that such lien has been placed against the Premises (or
within such shorter period of time as may be specified by Landlord if such
governmental authority has commenced steps to cause the Premises to be sold
pursuant to such lien) either (i) pay the claim and remove the lien, or (ii)
furnish a cash deposit, bond, or such other security with respect thereto as is
satisfactory in all respects to Landlord and is sufficient to effect a complete
discharge of such lien on the Premises. Landlord shall have the right, but not
the obligation, without in any way limiting Landlord's other rights and remedies
under this Lease, to enter upon the Premises, or to take such other actions as
it deems necessary or advisable, to investigate, clean up, remove or remediate
any Hazardous Materials or contamination by Hazardous Materials present on, in,
at, under or emanating from the Premises or the Property in violation of
Tenant's obligations under this Lease or under any laws regulating Hazardous
Materials. Notwithstanding any other provision of this Lease, Landlord shall
have the right, at its election, in its own name or as Tenant's agent, to
negotiate, defend, approve and appeal, at Tenant's expense, any action taken or
order issued by any governmental agency or authority with any governmental
agency or authority against Tenant, Landlord or the Premises or Property
relating to any Hazardous Materials or under any related law or the occurrence
of any event or existence of any condition that would cause a breach of any of
the covenants set forth in this Section 9.03. Prior to or promptly after the
expiration or termination of this Lease, Landlord may require an environmental
audit of the Premises by a qualified environmental consultant. If such audit
finds that there has been an occurrence of any event or existence of any
condition that would constitute a breach by Tenant of any of the covenants set
forth in this Section 9.03, then Tenant shall pay the costs of such audit and
shall, at its sole cost and expense, take all actions recommended in such audit
to remediate any environmental conditions.. The provisions of this Section
9.03 shall survive the expiration or earlier termination of this Lease.
9.04 Signs and Auctions. Tenant shall not place any signs on the Property
without Landlord's prior written consent, which shall not be unreasonably
withheld or delayed. Except in the ordinary course of business, Tenant shall
not conduct or permit any auctions or sheriff's sales at the Property.
9.05 Landlord's Access. Landlord or its agents may enter the Premises at
all reasonable times to show the Premises to potential buyers, investors or
tenants or other parties; to do any other act or 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. Landlord shall give Tenant prior notice
(which may be oral) of such entry, except in the case of an emergency, in which
event Landlord shall make reasonable efforts to notify Tenant. Landlord may
place customary "For Sale" or "For Lease" signs on the Premises.
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ARTICLE TEN - CONDITION AND MAINTENANCE OF PREMISES
10.01 Existing Conditions. Tenant shall accept the Property and the
Premises in their As-Is condition as of the execution of the Lease, subject to
all recorded matters, laws, ordinances, and governmental regulations and orders.
Except as provided herein, Tenant 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 Property for Tenant's intended use. Tenant
represents and warrants that Tenant has made its own inspection of and inquiry
regarding the condition of the Property and is not relying on any
representations of Landlord or any Broker with respect thereto.
10.02 Exemption of Landlord from Liability. Tenant shall insure its
personal property under an all risk full replacement cost property insurance
policy as provided in Section 7.04. 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, Tenant's employees, invitees,
customers or any other person or about the Property, whether such damage or
injury is caused by or results from: (a) fire, steam, electricity, water, gas or
rain; (b) the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause; (c) conditions arising in or about the Premises or from
other sources or places; or (d) any act or omission of any other tenant of the
Property. Tenant shall give Landlord prompt notice upon the occurrence of any
accident or casualty at the Premises. 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 10.02
shall not, however, exempt Landlord from liability for Landlord's gross
negligence or willful misconduct.
10.03 Landlord's Obligations. Subject to the provisions of Article Eleven
(Damage or Destruction) and Article Twelve (Condemnation), and except for damage
caused by any act or omission of Tenant, or Tenant's employees, agents,
contractors or invitees, Landlord shall keep the foundation and structural
supports of the improvements on the Property in good order, condition and
repair. Landlord shall not be obligated to maintain or repair windows, doors,
plate glass or the surfaces of walls. Tenant shall promptly report in writing
to Landlord any defective condition known to it which Landlord is required to
repair. Tenant hereby waives the benefit of any present or future law which
provides Tenant the right to repair the Premises or Property at Landlord's
expense or to terminate this Lease because of the condition of the Property or
Premises.
10.04 Tenant's Obligations.
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10.04(a) Repair and Maintenance. Except as provided in Section
10.03, Article Eleven (Damage or Destruction) and Article Twelve (Condemnation),
Tenant shall keep all portions of the Premises including the electrical,
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plumbing, fire protection, heating, ventilating and air conditioning systems and
equipment in good order, condition and repair (including repainting and
refinishing, as needed). If any portion of the Premises or any system or
equipment in the Premises which Tenant shall be obligated to repair can not be
fully repaired or restored, Tenant shall promptly replace such portion of the
Premises or system or equipment, regardless of whether the benefit of such
replacement extends beyond the Lease Term; but if the benefit or useful life of
such replacement extends beyond the Lease Term (as such term may be extended by
exercise of any options), the useful life of such replacement shall be prorated
over the remaining portion of the Lease Term (as extended). Tenant shall
maintain a preventive maintenance contract providing for the regular inspection
and maintenance of the heating and air conditioning system by a heating and air
conditioning contractor, such contract and such contractor to be approved by
Landlord. Landlord shall have the right, upon written notice to Tenant, to
undertake the responsibility for maintenance of the heating and air conditioning
system at Tenant's expense. Landlord shall, at Tenant's expense, repair any
damage to the portions of the Property Landlord shall be required to maintain
caused by Tenant's acts or omissions.
10.04(b) Tenant's Expense. Tenant shall fulfill all of Tenant's
obligations under this Section 10.04 at Tenant's sole expense. If Tenant shall
fail to maintain, repair or replace the Premises as required by this Section
10.04, Landlord may, upon ten (10) days' prior 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 costs
reasonably incurred in performing such maintenance, repair or replacement
immediately upon demand.
10.05 Alterations, Additions, and Improvements.
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10.05(a) Tenant's Work. Tenant shall not make any installations,
alterations, additions, or improvements in or to the Premises, including,
without limitation, any apertures in the walls, partitions, ceilings or floors,
without on each occasion obtaining the prior written consent of Landlord. Any
such work so approved by Landlord shall be performed only in accordance with
plans and specifications therefor approved by Landlord. Tenant shall procure at
Tenant's sole expense all necessary permits and licenses before undertaking any
work on the Premises and shall perform all such work in a good and workmanlike
manner employing materials of good quality and so as to conform with all
applicable zoning, building, fire, health and other codes, regulations,
ordinances and laws and with all applicable insurance requirements. If requested
by Landlord, Tenant shall furnish to Landlord prior to commencement of any such
work a bond or other security acceptable to Landlord assuring that any work by
Tenant will be completed in accordance with the approved plans and
specifications and that all subcontractors will be paid. Tenant shall employ
for such work only contractors approved by Landlord and shall require all
contractors employed by Tenant to carry worker's compensation insurance in
accordance with statutory requirements and commercial general liability
insurance covering such contractors on or about the Premises with a combined
single limit not less than $3,000,000 and shall submit certificates evidencing
such coverage to Landlord prior to the commencement of such work. Tenant shall
indemnify and hold harmless Landlord from all injury, loss, claims or damage to
any person or property occasioned by or growing out of such work. Landlord may
inspect the work of Tenant at reasonable times and given notice of observed
defects. Upon completion of any such work, Tenant shall provide Landlord with
"as built" plans, copies of all construction contracts and proof of payment for
all labor and materials.
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10.05(b) No Liens. Tenant shall pay when due all claims for labor
and material furnished to the Premises and shall at all times keep the Property
free from liens for labor and materials. 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 record and post notices of non-responsibility on the Premises.
10.06 Condition upon Termination. Upon the expiration or termination of
this Lease, Tenant shall surrender the Premises to Landlord broom clean and in
the condition which Tenant shall have been required to maintain the Premises
under this Lease, ordinary wear and tear excepted. Tenant shall not be obligated
to repair any damage which Landlord is required to repair under Article Eleven
(Damage or Destruction). Landlord may require Tenant to remove any alterations,
additions or improvements (whether or not made with Landlord's consent) prior to
the expiration of the Lease and to restore the Premises to their prior
condition, all at Tenant's expense. With respect to any alterations, additions
or improvements which require Landlord's approval, at the time of such approval
Landlord shall specify if Tenant shall not be required to remove the same, and
such items shall become 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 machinery or equipment which can be removed without
damage to the Property. Tenant shall repair, at Tenant's expense, any damage to
the Property caused by the removal of any such machinery or equipment. In no
event, however, shall Tenant remove any of the following materials or equipment
(which shall be deemed Landlord's property), without Landlord's prior written
consent; unless the same shall have been installed by Tenant at its expense: any
power wiring or wiring panels; lighting or lighting fixtures; wall coverings;
drapes, blinds or other window coverings; carpets or other floor coverings;
heaters, air conditioners or any other heating or air conditioning equipment;
fencing or security gates; or other similar building operating equipment.
ARTICLE ELEVEN - DAMAGE OR DESTRUCTION
11.01 Damage to Premises.
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11.01(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Premises. If the Premises shall be only
partially damaged (i.e., the restoration shall be estimated by Landlord to
require less than six (6) months from the date of such damage) and if the
proceeds received by Landlord from the insurance policies described in Section
7.06 shall be sufficient to pay for the necessary repairs, this Lease shall
remain in effect and Landlord shall repair the damage as soon as reasonably
possible. Landlord may elect (but shall not be required) to repair any damage
to Tenant's fixtures, equipment, or improvements at Tenant's expense.
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11.01(b) If the insurance proceeds received by Landlord shall not be
sufficient to pay the entire cost of repair, or if the damage shall not be
covered by the insurance policies which Landlord shall maintain under Section
7.06, 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 this
Lease. If Landlord shall elect to repair the damage, Tenant shall pay Landlord
the portion of the "deductible amount" under Landlord's insurance allocable to
the damage to the Premises and, if the damage shall have been due to an act or
omission of Tenant, or Tenant's employees, agents, contractors or invitees, the
difference between the actual cost of repair and any insurance proceeds received
by Landlord.
11.01(c) If the damage to the Premises shall occur during the last
six (6) months of the Lease Term and such damage shall be estimated by Landlord
to require more than thirty (30) days to repair, either Landlord or Tenant may
elect to terminate this Lease as of the date the damage shall have 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 ten (10) days after Tenant's notice to Landlord of the
occurrence of the damage.
11.02 Temporary Reduction of Rent. If the Property shall be destroyed or
damaged and Landlord shall repair or restore the Property pursuant to the
provisions of this Article Eleven, any Rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Tenant's use of the Premises shall be impaired. Except for such
possible reduction in Base Rent, insurance premiums and real property taxes,
Tenant shall not be entitled to any compensation, reduction or reimbursement
from Landlord as a result of any damage, destruction, repair, or restoration of
the Property.
11.03 Waiver. Tenant waives the protection of California Civil Code
Sections 1932 and 1933(4) and any other statute, code or judicial decision which
shall grant a tenant the right to terminate a lease in the event of the damage
or destruction of the leased property and the provisions of this Article 11
shall govern the rights and obligations of Landlord and Tenant in the event of
any damage or destruction of or to the Property.
ARTICLE TWELVE - CONDEMNATION
12.01 Condemnation. If more than twenty percent (20%) of the floor area
of the Premises or more than twenty-five percent (25%) of the parking on the
Property shall be taken by eminent domain either Landlord or Tenant may
terminate this Lease as of the date the condemning authority takes title or
possession, by delivering 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 shall take title or possession). If
neither Landlord nor Tenant shall terminate this Lease, this Lease shall remain
in effect as to the portion of the Premises not taken, except that the Base Rent
shall be reduced in proportion to the reduction in the floor area of the
Premises. If this Lease shall be terminated, any condemnation award or payment
shall be distributed to the Landlord. Tenant shall have no claim against
Landlord for the value of the unexpired lease term or otherwise.
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ARTICLE THIRTEEN - ASSIGNMENT AND SUBLETTING
13.01 Landlord's Consent Required. No sale, assignment, mortgage,
sublease, or transfer of of Tenant's interest in this Lease shall be made to
any other person or entity, without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed. Any attempted transfer
without consent shall be void and shall constitute a non curable breach of this
Lease.
13.02 No Release of Tenant. No assignment or transfer shall release
Tenant or change Tenant's primary liability to pay the Rent and to perform all
other obligations of Tenant under this Lease. Landlord's acceptance of Rent
from any other person shall not be a waiver of any provision of this Article
Thirteen. Consent to one transfer shall not be deemed a consent to any
subsequent transfer or a waiver of the obligation to obtain consent on
subsequent occasions. If Tenant's assignee or transferee shall default under
this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the assignee or transferee.
13.03 Landlord's Consent. If Tenant shall assign or sublease, the
following shall apply: Tenant shall pay to Landlord as Additional Rent fifty
percent (50%) of the Proceeds (defined below) on such transaction (such amount
being Landlord's share) as and when received by Tenant, unless Landlord shall
give notice to Tenant and the assignee or subtenant that Landlord's Share shall
be paid by the assignee or subtenant to Landlord directly. Proceeds shall mean
(a) all Rent and all fees and other consideration paid for or in respect of the
assignment or sublease, including fees under any collateral agreements less (b)
the Rent and other sums payable under this Lease (in the case of a sublease of
less than all of the Premises, allocable to the subleased premises) and all
reasonable costs and expenses directly incurred by Tenant in connection with the
execution and performance of such assignment or sublease for reasonable real
estate broker's commissions, costs associated with marketing the Premises for
such assignment or sublease and reasonable costs of renovation or construction
of tenant improvements required under such assignment or sublease. Tenant shall
be entitled to recover such reasonable costs and expenses before Tenant shall be
obligated to pay Landlord's Share to Landlord. Tenant shall provide Landlord a
written statement certifying all amounts to be paid from any assignment or
sublease of the Premises within thirty (30) days after the transaction shall be
signed and from time to time thereafter on Landlord's request, and Landlord may
inspect Tenant's books and records to verify the accuracy of such statement. On
written request, Tenant shall promptly furnish to Landlord copies of all the
transaction documentation, all of which shall be certified by Tenant to be
complete, true and correct. Tenant shall promptly reimburse Landlord for all
legal costs and expenses incurred by Landlord in connection with a request for a
sublease or assignment of this Lease.
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ARTICLE FOURTEEN - DEFAULTS; REMEDIES
14.01 Covenants and Conditions. Tenant's performance of each of Tenant's
obligations under this Lease is a condition as well as a covenant. Tenant's
right to continue in possession of the Premises is conditioned upon such
performance. Time is of the essence in the performance by Tenant of all
covenants and conditions.
14.02 Defaults. Each of the following shall be an event of default under
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this Lease:
14.02(a) Tenant shall abandon or vacate the Premises;
14.02(b) Tenant shall fail to pay Rent or any other sum payable
under this Lease within five (5) days after it is due;
14.02(c) Tenant shall fail to perform any of Tenant's other
obligations under this Lease and such failure shall continue for a period of
thirty (30) days after notice from Landlord; provided that if more than thirty
(30) days shall be required to complete such performance, Tenant shall not be in
default if Tenant shall commence such performance within the thirty (30) day
period and shall thereafter diligently pursue its completion.
14.02(d) (i) Tenant shall make a general assignment or general
arrangement for the benefit of creditors; (ii) a petition for adjudication of
bankruptcy or for reorganization or rearrangement shall be filed by or against
Tenant and shall not be dismissed within sixty (60) days; (iii) a trustee or
receiver shall be appointed to take possession of substantially all of Tenant's
assets located at the Premises or Tenant's interest in this Lease and possession
shall be subjected to attachment, execution or other judicial seizure which
shall not be discharged within sixty (60) days. If a court of competent
jurisdiction shall determine that any of the acts described in this subsection
(d) is not a default under this Lease, and a trustee shall be appointed to take
possession (or if Tenant shall remain a debtor in possession) and such trustee
or Tenant shall assign, sublease, or transfer Tenant's interest hereunder, then
Landlord shall receive, as Additional Rent, the excess, if any, of the Rent (or
any other consideration) paid in connection with such assignment, transfer or
sublease over the Rent payable by Tenant under this Lease.
14.03 Remedies. On the occurrence of an event of default by Tenant,
Landlord may, at any time thereafter, with or without notice or demand (except
as provided in Section 14.02) and without limiting Landlord in the exercise of
any right or remedy which Landlord may have:
14.03(a) Without further notice or demand of any kind to Tenant or
any other person, terminate this Lease and re-enter the Premises and take
possession thereof and remove all persons therefrom, and Tenant shall have no
further claim thereon or hereunder. Any notice given by Landlord pursuant to
Section 14.02 may be the notice required or permitted pursuant to Section 1161
et seq. of the California Code of Civil Procedure or successor statutes, and the
provisions of this Lease shall not require the giving of a notice in addition to
such statutory notice to terminate this Lease and Tenant's right to possession
of the Premises. The periods specified in Section 14.02 within which Tenant is
permitted to cure any default following notice from Landlord shall run
17
concurrently with any cure period provided by applicable laws. Should Landlord
elect to terminate this Lease, Landlord may recover from Tenant, as damages, the
following:
(i) The Worth at the Time of Award of the unpaid Rent which had been
earned at the time of termination; plus
(ii) The Worth at the Time of Award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The Worth at the Time of Award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided; plus
(iv) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely
to result therefrom, including, but not limited to, any cost or expenses
incurred by Landlord in (A) retaking possession of the Premises, including
reasonable attorneys' fees therefor, (B) maintaining or preserving the
Premises after such default, (C) preparing the Premises for reletting to a
new tenant, including repairs or alterations to the Premises for such
reletting, (D) leasing commissions and attorneys' fees incurred in
connection with any re-letting, or (E) any other costs necessary or
appropriate to relet the Premises; plus
(v) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by the laws of
the State in which the Premises is located.
As used in subsections (a)(i) and (ii) above, the "Worth at the Time of Award"
shall be computed by allowing interest at the interest rate specified in Section
4.04. As used in subsection (a)(iii) above, the "Worth at the Time of Award"
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%).
14.03(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant has abandoned the Premises.
Landlord has the remedy described in California Civil Code Section 1951.4. 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.
14.03(c) 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.
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14.04 Repayment of "Free" Rent. If this Lease provides for a postponement
of any Base Rent or Additional Rent, a period of "free" Rent, reduced Rent,
early occupancy, or other Rent concession, such postponed Rent, "free" Rent,
reduced Rent or other Rent concession shall be referred to herein as the "Abated
Rent". Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Tenant has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all Rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Premises in the physical condition required
by this Lease. Tenant acknowledges that its right to receive credit for the
Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual
performance of its obligations under this Lease. If an event of default shall
occur, the Abated Rent shall immediately become due and payable in full and this
Lease shall be enforced as if there were no such Rent abatement or other Rent
concession. In such case Abated Rent shall be calculated based on the full
initial Rent payable under this Lease.
14.05 Automatic Termination; Damages. Notwithstanding any other term or
provision hereof to the contrary, this Lease shall terminate on the occurrence
of any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 14.03 hereof, including the filing of an unlawful detainer
action against Tenant. On any termination, Landlord's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
shall incur 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 other Rent payable hereunder) shall constitute pecuniary damages which
shall be reimbursed to Landlord prior to assumption of the Lease by Tenant or
any successor to Tenant in any bankruptcy or other proceedings.
14.06 Cumulative Remedies. Except as otherwise expressly provided herein,
any and all rights and remedies which Landlord may have under this Lease and at
law and equity shall be cumulative and shall not be deemed inconsistent with
each other, and any two or more of all such rights and remedies may be exercised
at the same time to the greatest extent permitted by law.
ARTICLE FIFTEEN - PROTECTION OF LENDERS
15.01 Subordination. At Landlord's election this Lease shall be
automatically subordinated 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, provided that Tenant obtain a non-disturbance and
attornment agreement on reasonable market terms and provisions reasonably
acceptable to the lender. Tenant shall cooperate with Landlord and any lender
which shall acquire 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. If
any ground lessor, beneficiary or mortgagee elects to have this Lease prior to
the lien of its 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 or subsequent to the date
of said ground lease, deed of trust or mortgage or the date of recording
thereof.
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15.02 Attornment. If Landlord'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
Landlord'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 shall give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.
15.03 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.
15.04 Estoppel Certificates. Within ten (10) days after Landlord's
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 canceled or terminated; (iii) the
last date of payment of the Base Rent and other charges 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, setting forth such default in
reasonable detail); and (v) such other information with respect to Tenant or
this Lease as Landlord may reasonably request or which any prospective purchaser
or encumbrancer of the Property may require. Landlord may deliver any such
statement by Tenant to any prospective purchaser or encumbrancer of the
Property, and such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct. If Tenant shall not deliver such statement to
Landlord within such ten (10) day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon the following
facts: (i) that the terms and provisions of this Lease have not been changed
except as otherwise represented by Landlord; (ii) that this Lease has not been
canceled or terminated except as otherwise represented by Landlord; (iii) that
not more than one month's Base Rent or other charges 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.
15.05 Tenant's Financial Condition. Within ten (10) days after request
from Landlord from time to time, Tenant shall deliver to Landlord Tenant's
audited financial statements (which shall be for the latest available year and
in any event for a year ended not more than fifteen (15) months prior to
Landlord's request). Such financial statements shall be delivered to Landlord's
mortgagees and lenders and prospective mortgagees, lenders and purchasers.
Tenant represents and warrants to Landlord that each such financial statement
shall be true and accurate as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes set
forth in this Lease.
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ARTICLE SIXTEEN - LEGAL COSTS
16.01 Legal Proceedings. If Tenant be in breach or default under this
Lease, Tenant shall reimburse Landlord upon demand for any reasonable costs or
expenses that Landlord shall incur in connection with any breach or default of
Tenant, as provided in this Section. Such costs shall include reasonable legal
fees and costs incurred for the negotiation of a settlement, enforcement of
rights or otherwise. Tenant shall also indemnify Landlord against and hold
Landlord harmless from all costs, expenses, demands and liability, including
without limitation, legal fees and costs, Landlord shall incur if Landlord shall
become or be made a party to any claim or action (a) instituted by Tenant
against any third party, or by any third party against Tenant, or by or against
any person holding any interest under or using the Premises by license of or
agreement with Tenant; (b) for foreclosure of any lien for labor or material
furnished to or for Tenant or such other person; (c) otherwise arising out of or
resulting from any act or transaction of Tenant or such other person; or (d)
necessary to protect Landlord's interest under this Lease in a bankruptcy of
Tenant or similar proceeding. Tenant shall defend Landlord against any such
claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord shall incur in any such claim or action.
ARTICLE SEVENTEEN - MISCELLANEOUS PROVISIONS
17.01 Non-Discrimination. Tenant agrees that it will not permit any
discrimination against, or segregation of, any person or group of persons on the
basis of race, color, sex, creed, disability, sexual preference, national origin
or ancestry in the leasing, subleasing, transferring, occupancy, tenure or use
of the Premises or any portion thereof.
17.02 Landlord's Liability; Certain Duties.
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17.02(a) Bind and Inure; Limitation of Landlord's Liability.
The obligations of this Lease shall run with the land, and this Lease shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No owner of the Property shall be liable under this
Lease except for breaches of Landlord's obligations occurring while owner of the
Property. The obligations of Landlord shall be binding upon the assets of
Landlord which comprise the Property but not upon other assets of Landlord. No
individual partner, trustee, stockholder, officer, member, director, employee,
or beneficiary of Landlord, or any partner, trustee, stockholder, officer,
member, director, employee, advisor or beneficiary of any of the foregoing,
shall be personally liable under this Lease and Tenant shall look solely to
Landlord's interest in the Property in pursuit of its remedies upon an event of
default hereunder, and the general assets of Landlord, its partners, trustees,
stockholders, members, officers, employees, advisors or beneficiaries of any of
the foregoing shall not be subject to levy, execution or other enforcement
procedure for the satisfaction of the remedies of Tenant.
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17.02(b) Notice. 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 shall have been furnished
to Tenant. Landlord shall not be in default under this Lease unless Landlord
(or such ground lessor, mortgagee or beneficiary) shall fail to cure such non-
performance within thirty (30) days after receipt of Tenant's notice. However,
if such non-performance shall reasonably require more than thirty (30) days to
cure, Landlord shall not be in default if such cure shall be commenced within
such thirty (30) day period and thereafter diligently pursued to completion.
17.03 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 of this Lease,
which shall remain in full force and effect.
17.04 Interpretation. The captions of the Articles or Sections of this
Lease 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 other, in any provision relating to the conduct,
acts or omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Premises with
Tenant's expressed or implied permission. This Lease shall not, and nothing
contained herein, shall create a partnership or other joint venture between
Landlord and Tenant.
17.05 Incorporation of Prior Agreements; Modifications. This Lease is the
only agreement between the parties pertaining to the lease of the Premises and
no other agreements shall be effective. All amendments to this Lease shall be
in writing and signed by all parties. Any other attempted amendment shall be
void.
17.06 Notices. All notices, requests and other communications 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 or by a
national overnight delivery service which maintains delivery records. Notices
to Tenant shall be delivered to Tenant's Address for Notices. Notices to
Landlord shall be delivered to Landlord's Address for Notices. All notices
shall be effective upon delivery (or refusal to accept delivery). Either party
may change its notice address upon notice to the other party.
17.07 Waivers. All waivers shall be in writing and signed by the waiving
party. Landlord's failure to enforce any provision of this Lease or its
acceptance of Rent shall not be a waiver and shall not prevent Landlord 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 by to the conditions of such
statement.
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17.08 No Recordation. Tenant shall not record this Lease. Either Landlord
or Tenant may require that a notice, short form or memorandum of this Lease
executed by both parties be recorded. The party requiring such recording shall
pay all transfer taxes and recording fees.
17.09 Binding Effect; Choice of Law. This Lease shall bind any party who
shall legally acquire any rights or interest in this Lease from Landlord or
Tenant, provided that Landlord shall have no obligation to Tenant's successor
unless the rights or interests of Tenant's successor are acquired in accordance
with the terms of this Lease. The laws of the state in which the Property is
located shall govern this Lease.
17.10 Corporate Authority; Partnership Authority. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents and
warrants that (s)he has full authority to do so and that this Lease binds the
corporation. If Tenant is a partnership or limited liability company, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general partner of the partnership or a manager or managing member of
the company, that he or it has full authority to sign for the partnership or
company and that this Lease binds the partnership and all general partners of
the partnership or the company and its members. Within thirty (30) days after
this Lease is signed, Tenant shall deliver to Landlord a copy of Tenant's
recorded statement of partnership or certificate of limited partnership or
certificate of formation or organization.
17.11 Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
17.12 Force Majeure. If Landlord can not perform any of its obligations
due to events beyond Landlord's reasonable 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 Landlord's reasonable 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.
17.13 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. Landlord'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.
17.14 Survival. All representations and warranties of Landlord and Tenant,
and all obligation of Tenant to pay Additional Rent hereunder, shall survive the
termination of this Lease.
17.15 Examination of Lease. Submission of this Lease to Tenant shall not
constitute an option to lease, and this Lease shall not be effective until
execution and delivery by both Landlord and Tenant.
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17.16 Security Deposit. Upon the execution of this Lease, Tenant shall
deposit with Landlord the Security Deposit. Landlord may, at its option, apply
all or part of the Security Deposit to any unpaid Rent or other charges due from
Tenant, cure any other defaults of Tenant, or compensate Landlord for any loss
or damage which Landlord may suffer due to Tenant's default. If Landlord shall
so use any part of the Security Deposit, Tenant shall restore the Security
Deposit to its full amount within ten (10) days after Landlord's request. No
interest shall be paid on the Security Deposit, no trust relationship is created
herein between Landlord and Tenant with respect to the Security Deposit, and the
Security Deposit may be commingled with other funds of Landlord. Upon
expiration or termination of this Lease not resulting from Tenant's default and
after Tenant shall have vacated the Premises in the manner required by this
Lease, Landlord shall pay to Tenant any balance of the Security Deposit not
applied pursuant to this Section 17.16.
17.17 Limitation of Warranties. Landlord and Tenant expressly agree that
there are and shall be no implied warranties of merchantability, habitability,
suitability, fitness for a particular purpose or of any other kind arising out
of this Lease, and there are no warranties which extend beyond those expressly
set forth in this Lease. Without limiting the generality of the foregoing,
Tenant expressly acknowledges that Landlord has made no warranties or
representations concerning any hazardous materials or other environmental
matters affecting any part of the Property and Landlord hereby expressly
disclaims and Tenant waives any express or implied warranties with respect to
any such matters.
17.18 Termination of Existing Lease. The existing lease agreement dated
July 10, 1995 by and between ▇▇▇▇▇▇▇-▇▇▇▇, LLC as landlord and QTL Corporation
as tenant is hereby terminated as of 11:59 p.m. on the day immediately preceding
the Lease Commencement Date.
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17.19 No Other Brokers. Tenant represents and warrants to Landlord that
the Brokers are the only agents, brokers, finders or other parties with whom
Tenant has dealt who may be entitled to any commission or fee with respect to
this Lease or the Premises or the Property. Tenant agrees to indemnify and hold
Landlord harmless from any claim, demand, cost or liability, including, without
limitation, attorneys' fees and expenses, asserted by any party other than the
Brokers based upon dealings of that party with Tenant.
LANDLORD:
▇▇▇▇▇▇▇-▇▇▇▇ SALINAS LLC, a California
limited liability company
By: _________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Manager
Dated: August 9, 2000
TENANT:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC, a
California limited liability company
__________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Management Committee member
Dated: August 9, 2000
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EXHIBIT A - THE PREMISES
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EXHIBIT B - RULES AND REGULATIONS
1. No advertisements, pictures or signs of any sort shall be displayed on or
outside the Premises without the prior written consent of Landlord. This
prohibition shall include any portable signs or vehicles placed within the
parking lot, common areas or on streets adjacent thereto for the purpose of
advertising or display. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not park or store motor vehicles, trailers or containers
outside the Premises after the conclusion of normal daily business activity
except in approved areas specifically designated by Landlord, acting reasonably.
3. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord without the prior written consent of Landlord.
4. All window coverings and window films or coatings installed by Tenant and
visible from outside of the building require the prior written approval of
Landlord. Except for dock shelters and seals as may be expressly permitted by
Landlord, no awnings or other projections shall be attached to the outside walls
of the building.
5. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance on, in or around the Premises unless approved by Landlord.
Tenant shall not use, keep or permit to be used or kept any flammable or
combustible materials without proper governmental permits and approvals.
6. Tenant shall not use, keep or permit to be used or kept food or other edible
materials in or around the Premises in such a manner as to attract rodents,
vermin or other pests. Tenant shall not permit cooking in or about the Premises
other than in microwave ovens.
7. Tenant shall not use or permit the use of the Premises for lodging or
sleeping, for public assembly, or for any illegal or immoral purpose.
8. Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior written consent of Landlord. Tenant
agrees not to make any duplicate keys without the prior consent of Landlord.
9. Tenant shall park motor vehicles only in those general parking areas as
designated by Landlord except for active loading and unloading. During loading
and unloading of vehicles or containers, Tenant shall not unreasonably interfere
with traffic flow within the parking lot or the loading and unloading areas of
other tenants, if any.
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10. Storage of propane tanks, whether interior or exterior, shall be in secure
and protected storage enclosures approved by the local fire department and, if
exterior, shall be located in areas specifically designated by Landlord. Safety
equipment, including eye wash stations and approved neutralizing agents, shall
be provided in areas used for the maintenance and charging of lead-acid
batteries. Tenant shall protect electrical panels and building mechanical
equipment from damage from forklift trucks.
11. Tenant shall not disturb, solicit or canvas any occupant of the Building
and shall cooperate to prevent same.
12. No person shall go on the roof without Landlord's permission except to
perform obligations under its lease.
13. No animals (other than seeing eye dogs) or birds of any kind may be brought
into or kept in or about the Premises.
14. Machinery, equipment and apparatus belonging to Tenant which cause noise or
vibration that may be transmitted to the structure of the Building to such a
degree as to be objectionable to Landlord or other tenants or to cause harm to
the Building shall be placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or other devices sufficient to eliminate the transmission
of such noise and vibration. Tenant shall cease using any such machinery which
causes objectionable noise and vibration which can not be sufficiently
mitigated.
15. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or exterior loading areas overnight.
16. Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks of sufficient
size to prevent damage to the asphalt paving surfaces. No parking or storing of
such trailers will be permitted in the auto parking areas of the Property or on
streets adjacent thereto.
17. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall use only tires that do not damage the asphalt.
18. Tenant shall be responsible for the safe storage and removal of all
pallets. Pallets shall be stored behind screened enclosures at locations
approved by the Landlord.
19. Tenant shall be responsible for the safe storage and removal of all trash
and refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by Landlord.
Landlord reserves the right to remove, at Tenant's expense and without further
notice, any trash or refuse left elsewhere outside of the Premises or on the
Property.
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20. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.
21. Tenant shall appoint an Emergency Coordinator who shall be responsible for
assuring notification of the local fire department in the event of an emergency,
assuring that sprinkler valves are kept open and implementing the Factory Mutual
"Red Tag Alert" system including weekly visual inspection of all sprinkler
system valves on or within the Premises.
_________ Landlord
_________ Tenant
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