EXHIBIT 10.49
[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
January 29, 1999, is made by and between G&I XXXXX LLC, a Delaware
limited liability company ("LESSOR") and EXODUS COMMUNICATIONS, INC., a
Delaware corporation ("LESSEE"), (collectively the "PARTIES," or
individually a "PARTY").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease,
commonly known as 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, located in the County
of Santa Xxxxx, State of California, and generally described as (describe
briefly the nature of the property and, if applicable, the "PROJECT," if
the property is located within a Project) an industrial/commercial
building (the "Building") with an agreed rentable area of 95,700 square
feet ("PREMISES"). (See also Paragraph 2)
1.3 TERM: Four (4) years and 8 months ("ORIGINAL TERM") commencing
June 1, 2004 ("COMMENCEMENT DATE") and ending January 31, 2009
("EXPIRATION DATE"). (See also Paragraph 3)
1.4 EARLY POSSESSION: [Not applicable] ("EARLY POSSESSION DATE").
(See also Paragraphs 3.2 and 3.3)
1.5 BASE RENT: $115,797.00 per month ("BASE RENT"), payable on the
first day of each month commencing June 1, 2004. (See also Paragraph 4)
[X] If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted. See Addendum 1.5
1.6 BASE RENT PAID UPON EXECUTION: $ None as Base Rent for the period
[Not applicable].
1.7 SECURITY DEPOSIT: $ See Addendum 1.7 ("SECURITY DEPOSIT"). (See
also Paragraph 5)
1.8 AGREED USE: Data Center processing and other lawful related uses.
(See also Paragraph 6)
1.9 INSURING PARTY. Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See also Paragraph 8)
1.10 REAL ESTATE BROKERS. (See also Paragraph 15)
(a) REPRESENTATION: The following real estate brokers (collectively,
the "BROKERS") and brokerage relationships exist in this transaction
(check applicable boxes):
[x] Landmark Asset Management Group represents Lessor exclusively
("LESSOR'S BROKER");
[x] The Commercial Property Services Company represents Lessee
exclusively ("LESSEE'S BROKER"); or
[ ] ________________________________________ represents both Lessor and
Lessee ("DUAL AGENCY").
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Broker the fee agreed to in their
separate written agreement.
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to
be guaranteed by [Not applicable] ("GUARANTOR"). (See also Paragraph 37)
1.12 ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of 20 pages and Exhibits A and B, all of which constitute a
part of this Lease.
2. PREMISES
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of
the terms, covenants and conditions set forth in this Lease. Unless
otherwise provided herein, any statement of size set forth in this Lease,
or that may have been used in calculating rental, is an approximation
which the Parties agree is reasonable and the rental based thereon is not
subject to revision whether or not the actual size is more or less.
2.2 See Addendum 2.2
2.3 COMPLIANCE. Lessor makes no representation or warranty as to
whether the improvements on the Premises comply with applicable laws,
covenants or restrictions of record, building codes, regulations and
ordinances ("APPLICABLE REQUIREMENTS"). NOTE: Lessee is responsible for
determining whether or not the zoning is appropriate for Lessee's
intended use, and acknowledges that past uses of the Premises may no
longer be allowed. If the Applicable Requirements are hereafter changed
(as opposed to being in existence at the commencement of the term of the
Prior Sublease (as defined in Addendum 2.2), which is addressed in
Paragraph 6.2(e) below) so as to require during the term of this Lease
the construction of an addition to or an alteration of the Building, the
remediation of any Hazardous Substance, or the reinforcement or other
physical modification of the Building ("CAPITAL EXPENDITURE"), Lessor and
Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises
by Lessee as compared with uses by tenants in general, Lessee shall be
fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last two (2) years of this
Lease and the cost thereof exceeds six (6) months' Base Rent, Lessee may
instead terminate this Lease unless Lessor notifies Lessee, in writing,
within ten (10) days after receipt of Lessee's termination notice that
Lessor has elected to pay the difference between the actual cost thereof
and the amount equal to six (6) months' Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises which
requires such Capital Expenditure and deliver to Lessor written notice
specifying a termination date at least ninety (90) days thereafter. Such
termination date shall, however, in no event be earlier than the last day
that Lessee could legally utilize the Premises without commencing such
Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications), then Lessor and Lessee shall allocate
the obligation to pay for such costs pursuant to the provisions of
Paragraph 7.1(c); provided, however, that if such Capital Expenditure is
required during the last two years of this Lease and the cost thereof
exceeds six (6) months' Base Rent, Lessor shall have the option to
terminate this Lease upon ninety (90) days prior written notice to Lessee
unless Lessee notifies Lessor, in writing, within ten (10) days after
receipt of Lessor's termination notice that Lessee will pay the
difference between the actual cost of such Capital Expenditure and the
amount equal to six (6) months' Base Rent. If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure,
Lessee may advance such funds and deduct same, with interest, from Rent
until Lessor's share of such costs have been fully paid. If Lessee is
unable to finance Lessor's share, or if the balance of the Rent due and
payable for the remainder of this Lease is not sufficient to fully
reimburse Lessee on an offset basis, Lessee shall have the right to
terminate this Lease upon thirty (30) days written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and
new Applicable Requirements. If the Capital Expenditures are instead
triggered by Lessee as a result of an actual or proposed change in use,
change in intensity of use, or modification to the Premises then, and in
that event, Lessee shall be fully responsible for the cost thereof, and
Lessee shall not have any right to terminate this Lease.
2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with Applicable Requirements), and their suitability for
Lessee's intended use, (b) Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility
therefor as the same relate to its occupancy of the Premises, and (c)
neither Lessor, Lessor's agents, nor any broker has made any oral or
written representations or warranties with respect to said matters other
than as set forth in this Lease. In addition, Lessor acknowledges that:
(a) Broker has made no representations, promises or warranties concerning
Lessee's ability to honor the Lease or suitability to occupy the
Premises, and (b) it is Lessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the
Start Date Lessee was the owner or occupant of the Premises. In such
event, Lessee shall be responsible for any necessary corrective work.
3. TERM. See Addendum 3.1
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease.
Lessee shall not, however, be obligated to pay Rent or perform its other
obligations until it receives possession of the Premises. If possession
is not delivered within sixty (60) days after the Commencement Date,
Lessee may, at its option, by notice in writing within ten (10) days
after the end of such sixty (60) day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If
such written notice is not received by Lessor within said ten (10) day
period, Lessee's right to cancel shall terminate. Except as otherwise
provided, if possession is not tendered to Lessee by the Start Date and
Lessee does not terminate this Lease, as aforesaid, any period of rent
abatement that Lessee would otherwise have enjoyed shall run from the
date of delivery of possession and continue for a period equal to what
Lessee would otherwise have enjoyed under the terms hereof, but minus any
days of delay caused by the acts or omissions of Lessee. If possession of
the Premises is not delivered within four (4) months after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing.
3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender
possession of the Premises to Lessee until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending
delivery of such evidence, Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the
payment of Rent, notwithstanding Lessor's election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is
required to perform any other conditions prior to or concurrent with the
Start Date, the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.
4. RENT.
4.1 RENT DEFINED. All monetary obligations of Lessee to Lessor under
the terms of this Lease (except for the Security Deposit) are deemed to
be rent ("RENT").
4.2 PAYMENT. Lessee shall cause payment of rent to be received by
Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease), on or before the day on
which it is due. Rent for any period during the term hereof which is for
less than one (1) full calendar month shall be prorated based upon the
actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other persons or place as
Lessor may from time to time designate in writing. Acceptance of a
payment which is less than the amount then due shall not be a waiver of
Lessor's rights to the balance of such Rent, regardless of Lessor's
endorsement of any check so stating.
5. SECURITY DEPOSIT. See Addendum 1.7.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the
Agreed Use, or any other legal use which is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the use
of the Premises in a manner that is unlawful, creates damage, waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage
to neighboring properties. Lessor shall not unreasonably withhold or
delay its consent to any written request for a modification of the Agreed
Use, so long as the same will not impair the structural integrity of the
improvements on the Premises or the mechanical or electrical systems
therein, is not significantly more burdensome to the Premises. If Lessor
elects to withhold consent, Lessor shall within five (5) business days
after such request give written notification of same, which notice shall
include an explanation of Lessor's objections to the change in use.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance, or
waste whose presence, use, manufacture, disposal, transportation, or
release, either by itself or in combination with other materials expected
to be on the Premises, is either: (i) potentially injurious to the public
health, safety or welfare, the environment or the Premises; (ii)
regulated or monitored by any governmental authority. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, diesel fuel and/or crude oil or any products, by-products or
fractions thereof. Lessee shall not engage in any activity in or on the
Premises which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of Lessor and timely compliance
(at Lessee's expense) with all Applicable Requirements. "REPORTABLE USE"
shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a
permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority,
and/or (iii) the presence at the Premises of a Hazardous Substance with
respect to which any Applicable Requirements requires that a notice be
given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may use any ordinary
and customary materials reasonably required to be used in the normal
course of the Agreed Use, so long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful risk of contamination
or damage or expose Lessor to any liability therefor. In addition, Lessor
may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect
itself, the public, the Premises and/or the environment against damage,
contamination, injury and/or liability, including, but not limited to,
the installation (and removal on or before Lease expiration or
termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit. See Addendum 6.2(a).
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located in,
on, under or about the Premises, other than as previously consented to by
Lessor, Lessee shall immediately give written notice of such fact to
Lessor, and provide Lessor with a copy of any report, notice, claim or
other documentation which it has concerning the presence of such
Hazardous Substance.
(c) LESSEE REMEDIATION. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and
shall promptly, at Lessee's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered
or required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by Lessee, or
pertaining to or involving any Hazardous Substance brought onto the
Premises during the term of this Lease, by or for Lessee, or any party
other than Lessor.
(d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if any,
harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance
brought onto the Premises during the term of this Lease or the Prior
Sublease by or for Lessee, or any party other than Lessor (provided,
however, that Lessee shall have no liability under this Lease with
respect to underground migration of any Hazardous Substance under the
Premises from adjacent properties). Lessee's obligations shall include,
but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Lessee, and
the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.
NO TERMINATION, CANCELLATION OR RELEASE AGREEMENT ENTERED INTO BY LESSOR
AND LESSEE SHALL RELEASE LESSEE FROM ITS OBLIGATIONS UNDER THIS LEASE
WITH RESPECT TO HAZARDOUS SUBSTANCES, UNLESS SPECIFICALLY SO AGREED BY
LESSOR IN WRITING AT THE TIME OF SUCH AGREEMENT.
(e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and
lenders, harmless from and against any and all environmental damages,
including the cost of remediation, which existed as a result of Hazardous
Substances on the Premises prior to the date of commencement of the Prior
Sublease or which are caused by the gross negligence or willful
misconduct of Lessor, its agents or employees. Lessor's obligations, as
and when required by the Applicable Requirements, shall include, but not
be limited to, the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or
termination of this Lease.
(f) INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation measures
required by governmental entities having jurisdiction with respect to the
existence of Hazardous Substances on the Premises prior to the date of
commencement of the Prior Sublease unless such remediation measure is
required as a result of Lessee's use (including "Alterations", as defined
in paragraph 7.3(a) below) of the Premises, in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and
Lessor's agents to have reasonable access in accordance with Section 32
of the Addendum to the Premises at reasonable times in order to carry out
Lessor's investigative and remedial responsibilities.
(g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition
occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation
and remediation thereof required by the Applicable Requirements and this
Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's
option, either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and
effect, or (ii) if the estimated cost to remediate such condition exceeds
twelve (12) times the then monthly Base Rent or $100,000, whichever is
greater, give written notice to Lessee, within thirty (30) days after
receipt by Lessor of knowledge of the occurrence of such Hazardous
Substance Condition, of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the date of such notice. In the event
Lessor elects to give a termination notice, Lessee may, within ten (10)
days thereafter, give written notice to Lessor of Lessee's commitment to
pay the amount by which the cost of the remediation of such Hazardous
Substance Condition exceeds an amount equal to twelve (12) times the then
monthly Base Rent or $100,000, whichever is greater. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty
(30) days following such commitment. In such event, this Lease shall
continue in full force and effect, and Lessor shall proceed to make such
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required
funds or assurance thereof within the time provided, this Lease shall
terminate as of the date specified in Lessor's notice of termination. See
Addendum 6.2(g).
6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole expense,
fully, diligently and in a timely manner, materially comply with all
Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of
Lessor's engineers and/or consultants which relate in any manner to the
Premises as the same pertain to interpretation of the Applicable
Requirements without regard to whether said requirements are now in
effect or become effective after the Start Date. Lessee shall, within ten
(10) days after receipt of Lessor's written request, provide Lessor with
copies of all permits and other documents, and other information
evidencing Lessee's compliance with any Applicable Requirements specified
by Lessor, and shall immediately upon receipt, notify Lessor in writing
(with copies of any documents involved) or any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or
involving the failure of Lessee or the Premises to comply with any
Applicable Requirements.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's "Lender" (as defined
in Paragraph 30 below) and consultants shall have the right to enter into
Premises at any time, in the case of an emergency, and otherwise at
reasonable times in accordance with Section 32 of the Addendum for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections
shall be paid by Lessor, unless a violation of Applicable Requirements,
or a contamination is found to exist, or the inspection is requested or
ordered by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the reasonable cost of such inspections, so
long as such inspection is reasonably related to the violation or
contamination.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Addendum 2.2, 2.3
(Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
Lessee shall, at Lessee's sole expense, keep the Premises, Utility
Installations, and Alterations in good order, condition and repair
(whether or not the portion of the Premises requiring repairs, or the
means of repairing the same, are reasonably or readily accessible to
Lessee, and whether or not the need for such repairs occurs as a result
of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or
facilities, such as plumbing, heating, ventilating, air-conditioning,
electrical, lighting facilities, boilers, pressure vessels, fire
protection system, fixtures, walls (interior and exterior), foundations,
ceilings, roofs, floors, windows, doors, plate glass, skylights,
landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, or adjacent to the Premises.
Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts
required by Paragraph 7.1(b) below. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order,
condition and state of repair. Lessee shall, during the term of this
Lease, keep the exterior appearance of the Building in a good and
tenantable condition consistent with the exterior appearance of other
similar facilities of comparable age and size in the vicinity, including,
when necessary, the exterior repairing of the Building.
(b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense,
procure and maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and experienced in
the maintenance of the following equipment and improvements ("Basic
Elements"), if any, if and when installed on the Premises: (i) HVAC
equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing
systems, including fire alarm and/or smoke detection, (iv) landscaping
and irrigation systems, (v) roof covering and drains, (vi) driveways and
parking lots, (vii) clarifiers, (viii) basic utility feed to the
perimeter of the Building, and (ix) any other equipment, if reasonably
required by Lessor.
(c) REPLACEMENT. Subject to Lessee's indemnification of Lessor as
set forth in Paragraph 8.7 below, and without relieving Lessee of
liability resulting from Lessee's failure to exercise and perform good
maintenance practices, if the Basic Elements described in Paragraph
7.1(b) cannot be repaired other than at a cost which is in excess of 50%
of the cost of replacing such Basic Elements, then such Basic Elements
shall be replaced by Lessor, and the cost thereof shall be prorated
between the Parties and Lessee shall only be obligated to pay, each month
during the remainder of the term of this Lease, on the date on which Base
Rent is due, an amount equal to the product of multiplying the cost of
such replacement by a fraction, the numerator of which is one, and the
denominator of which is the number of months of the useful life of such
replacement as such useful life is specified pursuant to generally
accepted accounting principles for depreciation thereof (including
interest on the unamortized balance at the Prime Rate (as defined in
Addendum 7.1), with Lessee reserving the right to prepay its obligation
at any time. See Addendum 7.1.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Addendum 2.2,
and Paragraphs 2.3 (Compliance), 9 (Damage or Destruction) and 14
(Condemnation), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the
Premises, or the equipment therein, all of which obligations are intended
to be that of the Lessee. It is the intention of the Parties that the
terms of this Lease govern the respective obligations of the Parties as
to maintenance and repair of the Premises, and they expressly waive the
benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS. See Addendum 7.3.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS"
refers to all floor and window coverings, air lines, power panels,
electrical distribution, security and fire protection systems,
communication systems, lighting fixtures, HVAC equipment, plumbing, and
fencing in or on the Premises. The term "TRADE FIXTURES" shall mean
Lessee's machinery and equipment that can be removed without doing
material damage to the Premises. The term "ALTERATIONS" shall mean any
modification of the improvements, other than Utility Installations or
Trade Fixtures, whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as Alterations
and/or Utility Installations made by Lessee that are not yet owned by
Lessor pursuant to Paragraph 7.4(a) or that Lessee is permitted to
remove. Pursuant to Addendum 7.4, Lessee shall not make any Alterations
or Utility Installations to the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility Installations
to the interior of the Premises without such consent but upon notice to
Lessor, as long as they are not visible from the outside, do not involve
puncturing, relocating or removing existing walls, and the cumulative
cost thereof during this Lease as extended does not exceed $100,000 in
any one year.
(b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be
deemed conditioned upon Lessee's: (i) acquiring all applicable
governmental permits, (ii) furnishing Lessor with copies of both the
permits and the plans and specifications prior to commencement of the
work, and (iii) compliance with all conditions of said permits and other
Applicable Requirements in a prompt and expeditious manner. Any
Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon
completion furnish Lessor with as-built plans and specifications whether
or not such Alterations or Utility Installations require Lessor's
consent. For work which costs more than $1,000,000 excluding the cost of
any Trade Fixtures, Lessor may condition its consent upon Lessee
providing a lien and completion bond in an amount equal to one and one-
half times the estimated costs of such Alteration or Utility Installation
and/or upon Lessee's posting an additional Security Deposit with Lessor.
(c) INDEMNIFICATION. Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured
by any mechanic's or materialmen's lien against the Premises or any
interest therein. Lessee shall give lessor not less than ten (10) days'
notice prior to the commencement of any work in, on or about the
Premises, and Lessor shall have the right to post notices of non-
responsibility. If Lessee shall contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense defend and
protect itself, Lessor and the Premises against the same and shall pay
and satisfy any such adverse judgment that may be rendered thereon before
the enforcement thereof. If Lessor shall require, Lessee shall furnish a
surety bond in an amount equal to one and one-half times the amount of
such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION. See Addendum 7.4.
(a) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility
Installations made by Lessee shall be the property of Lessee, but
considered a part of the Premises. Lessor may, at any time, elect in
writing to be the owner of all or any specified part of the Lessee Owned
Alterations and Utility Installations. Unless otherwise instructed per
Paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease,
become the property of Lessor and be surrendered by Lessee with the
Premises.
(b) REMOVAL. By delivery to Lessee of written notice from Lessor
not earlier than ninety (90) and not later than thirty (30) days prior to
the end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility Installations be removed by the
expiration or termination of this Lease. Lessor may require the removal
at any time of all or any part of any Lessee Owned Alterations or Utility
Installations made without the required consent.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof (except for those which Lessee
is permitted to remove pursuant to Addendum paragraph 7.4 or required to
remove pursuant to subparagraph 7.4(b) above) broom clean and free of
debris, and in good operating order, condition and state of repair,
ordinary wear and tear excepted. "Ordinary wear and tear" shall not
include any damage or deterioration that would have been prevented by
good maintenance practice. Lessee shall repair any damage occasioned by
the installation, maintenance or removal of Trade Fixtures, Lessee Owned
Alterations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee, and
the removal, replacement or remediation of any soil, material or
groundwater contaminated by Lessee. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. The failure by Lessee
to timely vacate the Premises pursuant to this Paragraph 7.4(c) without
the express written consent of Lessor shall constitute a holdover under
the provisions of Paragraph 26 below.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Lessee shall pay for all insurance
required under Paragraph 8 Except to the extent of the cost attributable
to liability insurance carried by Lessor under Paragraph 8.2(b) in excess
of $10,000,000 per occurrence. Premiums for policy periods commencing
prior to or extending beyond the Lease term shall be prorated to
correspond to the Lease term. Payment shall be made by Lessee to lessor
within ten (10) days following receipt of an invoice. See Addendum 8.1
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee and
Lessor against claims for bodily injury, personal injury and property
damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit coverage
in an amount not less than $10,000,000 per occurrence with an "ADDITIONAL
INSURED-MANAGERS OR LESSORS OF PREMISES ENDORSEMENT" and contain the
"AMENDMENT OF THE POLLUTION EXCLUSION ENDORSEMENT" for damage caused by
heat, smoke or fumes from a hostile fire. The Policy shall not contain
any intra-insured exclusions as between insured persons or organizations,
but shall include coverage for liability assumed under this Lease as an
"insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit
the liability of Lessee nor relieve Lessee of any obligation hereunder.
All insurance carried by Lessee shall be primary to and not contributory
with any similar insurance carried by Lessor, whose insurance shall be
considered excess insurance only.
(b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named
as an additional insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force a policy or policies in the name of Lessor, with loss
payable to Lessor, any groundlessor, and to any Lender(s) insuring loss
or damage to the Premises. The amount of such insurance shall be equal to
the full replacement cost of the Premises, as the same shall exist from
time to time, or the amount required by any Lenders, but in no event more
than the commercially reasonable and available insurable value thereof.
If Lessor is the Insuring Party, however, Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee's personal property
shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. If
the coverage is available and commercially appropriate, such policy or
policies shall insure against all risks of direct physical loss or damage
(including the perils of flood and/or earthquake), including coverage for
debris removal and the enforcement of any Applicable Requirements
requiring the upgrading, demolition, reconstruction or replacement of any
portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any
coinsurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor Consumer
Price Index for All Urban Consumers for the city nearest to where the
Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $5,000 per occurrence, and Lessee
shall be liable for such deductible amount in the event of an insured
Loss. See Addendum 8.3
(b) RENTAL VALUE. The Insuring Party shall obtain and keep in force
a policy or policies in the name of Lessor with loss payable to Lessor
and any Lender, insuring the loss of the full Rent for one (1) year. Said
insurance shall provide that in the event the Lease is terminated by
reason of an insured loss, the period of indemnity for such coverage
shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of Rent
from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent
otherwise payable by Lessee, for the next twelve (12) month period.
Lessee shall be liable for any deductible amount in the event of such
loss.
(c) ADJACENT PREMISES. If the Premises are part of a larger
building, or of a group of buildings owned by Lessor which are adjacent
to the Premises, the Lessee shall pay for any increase in the premiums
for the property insurance of such building or buildings if said increase
is caused by Lessee's acts, omissions, use or occupancy of the Premises.
8.4 LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE
(a) PROPERTY DAMAGE. Lessee shall obtain and maintain insurance
coverage on all or Lessee's personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $5,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee
for the replacement of personal property, Trade Fixtures and Lessee Owned
Alterations and Utility Installations, except in the case of a casualty
occurring during the final year of the term of this Lease. Lessee shall
provide Lessor with written evidence that such insurance is in force.
(b) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance
specified herein are adequate to cover Lessee's property, business
operations or obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the state
where the Premises are located, and maintaining during the policy term a
"General Policyholders Rating" of at least B+ IX, as set forth in the
most current issue of "Best's Insurance Guide", or such other rating as
may be required by a Lender. Lessee shall not do or permit to be done
anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies
of such insurance or certificates evidencing the existence and amounts of
the required insurance. No such policy shall be cancelable or subject to
modification except after thirty (30) days prior written notice to
Lessor. Lessee shall, at least thirty (30) days prior to the expiration
of such policies, furnish Lessor with evidence of renewals or "insurance
binders" evidencing renewal thereof, or Lessor may order such insurance
and charge the cost thereof to Lessee, which amount shall be payable by
Lessee to Lessor upon demand. Such policies shall be for a term of at
least one year, or the length of the remaining term of this Lease,
whichever is less. If either Party shall fail to procure and maintain the
insurance required to be carried by it, the other Party may, but shall
not be required to, procure and maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other,
and waive their entire right to recover damages against the other, for
loss of or damage to its property arising out of or incident to the
perils required to be insured against herein. The effect of such releases
and waivers is not limited by the amount of insurance carried or
required, or by any deductibles applicable hereto. The Parties agree to
have their respective property damage insurance carriers waive any right
to subrogation that such companies may have against Lessor or Lessee, as
the case may be, so long as the insurance is not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor,
partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in
connection with, the use and/or occupancy of the Premises by Lessee. If
any action or proceeding is brought against Lessor by reason of any of
the foregoing matters, Lessee shall upon notice defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first
paid any such claim in order to be defended or indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers,
or any other person in or about the Premises, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting
fixtures, or from any other cause, whether the said injury or damage
results from conditions arising upon the Premises or upon other portions
of the Building of which the Premises are a part, or from other sources
or places. Lessor shall not be liable for any damages arising from any
act or neglect of any other tenant or Lessor. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or
profit therefrom.
9. DAMAGE OR DESTRUCTION. Nothing in this Paragraph 8.8 is intended to
relieve Lessor from its obligations, if any, under Paragraph 6.2 of this
Lease (including the Addendum).
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in six (6) months
or less from the date of the damage or destruction.
Initials________ __________
Lessor shall notify Lessee in writing within thirty (30) days from the
date of the damage or destruction as to whether or not the damage is
Partial or Total.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in
six (6) months or less from the date of the damage or destruction. Lessor
shall notify Lessee in writing within thirty (30) days from the date of
the damage or destruction as to whether or not the damage is Partial or
Total.
(c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required
to be covered by the insurance described in Paragraph 8.3(a),
irrespective of any deductible amounts or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition,
debris removal and upgrading by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination
by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or
under the Premises.
9.2 PARTIAL DAMAGE -- INSURED LOSS. If a Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations
and Utility Installations) as soon as reasonably possible and this Lease
shall continue in full force and effect; provided, however, that Lessee
shall, at Lessor's election, make the repair of any damage or destruction
the total cost to repair of which is $10,000 or less, and, in such event.
Lessor shall make any applicable insurance proceeds available to Lessee
on a reasonable basis for that purpose. Notwithstanding the foregoing, if
the required insurance was not in force or the insurance proceeds are not
sufficient to effect such repair, the Insuring Party shall promptly
contribute the shortage in proceeds (except as to the deductible which is
Lessee's responsibility) as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason
of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available, Lessor shall have
no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor
with the funds to cover same, or adequate assurance thereof, within ten
(10) days following receipt of written notice of such shortage and
request therefor. If Lessor receives said funds or adequate assurance
thereof within said ten (10) day period, the party responsible for making
the repairs shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If such funds or assurance
are not received, Lessor may nevertheless elect by written notice to
Lessee within ten (10) days thereafter to: (i) make such restoration and
repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect;
or (ii) have this Lease terminate thirty (30) days thereafter. Lessee
shall not be entitled to reimbursement of any funds contributed by Lessee
to repair any such damage or destruction. Premises Partial Damage due to
flood or earthquake shall be subject to Paragraph 9.3, notwithstanding
that there may be some insurance coverage, but the net proceeds of any
such insurance shall be made available for the repairs if made by either
Party; provided, however, that if Lessor actually receives proceeds
sufficient to cover the full amount of the loss, excluding any
deductible, this Paragraph 9.2 shall govern.
9.3 PARTIAL DAMAGE -- UNINSURED LOSS. If a Premises Partial Damage
that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) terminate this Lease by giving
written notice to Lessee within thirty (30) days after receipt by Lessor
of knowledge of the occurrence of such damage. Such termination shall be
effective sixty (60) days following the date of such notice. In the event
Lessor elects to terminate this Lease, Lessee shall have the right within
ten (10) days after receipt of the termination notice to give written
notice to Lessor of Lessee's commitment to pay for the repair of such
damage without reimbursement from Lessor. Lessee shall provide Lessor
with said funds or satisfactory assurance thereof within thirty (30) days
after making such commitment. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such repairs as
soon as reasonably possible after the required funds are available. If
Lessee does not make the required commitment, this Lease shall terminate
as of the date specified in the termination notice. See Addendum 9.3
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs, this Lease shall terminate sixty
(60) days following such Destruction. If the damage or destruction was
caused by the gross negligence or willful misconduct of Lessee, Lessor
shall have the right to recover Lessor's damages from Lessee, except as
provided in Paragraph 8.6.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of this Lease there is damage for which the cost to repair two (2)
month's Base Rent, whether or not an Insured Loss, Lessor may terminate
this Lease effective sixty (60) days following the date of occurrence of
such damage by giving a written termination notice to Lessee within
thirty (30) days after the date of occurrence of such damage.
Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing
Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs on or before the earlier of (i) the
date which is ten days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date
upon which such option expires. If Lessee duly exercises such option
during such period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at
Lessor's commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option and provide such funds or
assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Lessee's option shall be
extinguished.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is
not responsible under this Lease, the Rent payable by Lessee for the
period required for the repair, remediation or restoration of such damage
shall be abated in proportion to the degree to which Lessee's use of the
Premises is impaired, but not to exceed the proceeds received from the
Rental Value insurance. All other obligations of Lessee hereunder shall
be performed by Lessee, and Lessor shall have no liability for any such
damage, destruction, remediation, repair or restoration except as
provided herein.
(b) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such
repair or restoration within ninety (90) days after such obligation shall
accrue, Lessee may, at any time prior to the commencement of such repair
or restoration, give written notice to Lessor and to any Lenders of which
Lessee has actual notice, of Lessee's election to terminate this Lease on
a date not less than sixty (60) days following the giving of such notice.
If Lessee gives such notice and such repair or restoration is not
commenced within thirty (30) days thereafter, this Lease shall terminate
as of the date specified in said notice. If the repair or restoration is
commenced within said thirty (30) days, this Lease shall continue in full
force and effect. "COMMENCE" shall mean the beginning of the actual work
on the Premises. See Addendum 9.6
9.7 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment
shall be made concerning advance Base Rent and any other advance payments
made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so
much of Lessee's Security Deposit as has not been, or is not then
required to be, used by Lessor.
9.8 WAIVE STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the
Premises with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent
inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term
"REAL PROPERTY TAXES" shall include any form of assessment; real estate,
general, special, ordinary or extraordinary, or rental levy or tax (other
than inheritance, personal income or estate taxes); improvement bond;
and/or license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Premises, Lessor's right to gross revenues
therefrom (but not any tax on Lessor's net income from all sources),
and/or Lessor's business of leasing, by any authority having the direct
or indirect power to tax and where the funds are generated with reference
to the Building address and where the proceeds so generated are to be
applied by the city, county or other local taxing authority of a
jurisdiction within which the Premises are located. The term "REAL
PROPERTY TAXES" shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring
during the term of this Lease, including but not limited to, a change in
the ownership of the Premises.
10.2 See Addendum 10.2.
(a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes
applicable to the Premises during the term of this Lease. Subject to
Paragraph 10.2(b), all such payments shall be made at least ten (10) days
prior to any delinquency date. Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid. If any such taxes
shall cover any period of time prior to or after the expiration or
termination of this Lease, Lessee's share of such taxes shall be prorated
to cover only that portion of the tax xxxx applicable to the period that
this Lease is in effect, and Lessor shall reimburse Lessee for any
overpayment. If Lessee shall fail to pay any required Real Property
Taxes, Lessor shall have the right to pay the same, and Lessee shall
reimburse Lessor therefor upon demand.
(b) ADVANCE PAYMENT. In the event Lessee incurs a late charge on
any Rent payment two (2) times during any twelve (12) month period,
Lessor may, at Lessor's option, estimate the current Real Property Taxes,
and require that such taxes be paid in advance to Lessor by Lessee,
either: (i) in a lump sum amount equal to the installment due, at least
twenty (20) days prior to the applicable delinquency date, or (ii)
monthly in advance with the payment of the Base Rent. If Lessor elects to
require payment monthly in advance, the monthly payment shall be an
amount equal to the amount of the estimated installment of taxes divided
by the number of months remaining before the month in which said
installment becomes delinquent. When the actual amount of the applicable
tax xxxx is known, the amount of such equal monthly advance payments
shall be adjusted as required to provide the funds needed to pay the
applicable taxes. If the amount collected by Lessor is insufficient to
pay such Real Property Taxes when due, Lessee shall pay Lessor, upon
demand, such additional sums as are necessary to pay such obligations.
All moneys paid to Lessor under this Paragraph may be intermingled with
other moneys of Lessor and shall not bear interest. In the event of a
Breach by Lessee in the performance of its obligations under this Lease,
then any balance of funds paid to Lessor under the provisions of this
Paragraph may at the option of Lessor, be treated as an additional
Security Deposit.
10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel
assessed, such proportion to be reasonably determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such
other information as may be reasonably available.
10.4 PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency,
all taxes assessed against and levied upon Lessee Owned Alterations,
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee. When possible, Lessee shall cause such
property to be assessed and billed separately from the real property of
Lessor. If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable to
Lessee's property within ten (10) days after receipt of a written
statement.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are
not separately metered to Lessee, Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered.
12. ASSIGNMENT AND SUBLETTING. See Addendum 12.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or encumber (collectively, "ASSIGN OR ASSIGNMENT") or
sublet all or any part of Lessee's interest in this Lease or in the
Premises without Lessor's prior written consent, which consent shall not
be unreasonably withheld or delayed.
(b) A change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of
twenty-five percent (25%) or more of the voting control of Lessee shall
constitute a change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs,
which results or will result in a reduction of the Net Worth of Lessee by
an amount greater than twenty-five percent (25%) of such Net Worth as it
was represented at the time of the execution of this Lease or at the time
of the most recent assignment to which Lessor has consented, or as it
exists immediately prior to said transaction constituting such reduction,
whichever was or is greater, shall be considered an assignment of this
Lease to which Lessor may withhold its consent. "NET WORTH OF LESSEE"
shall mean the net worth of Lessee (excluding any guarantors) established
under generally accepted accounting principles.
(d) An assignment or subletting without consent shall be a Default
curable after notice per Paragraph 13.1(c). If Lessee fails to cure such
Default within the applicable cure period, Lessor may either: (i)
terminate this Lease, or (ii) upon thirty (30) days written notice,
increase the monthly Base Rent to one hundred ten percent (110%) of the
Base Rent then in effect. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to one hundred ten
percent (110%) of the price previously in effect, and (ii) all fixed and
non-fixed rental adjustments scheduled during the remainder of the Lease
term shall be increased to One Hundred Ten Percent (110%) of the
scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease,
(ii) release Lessee of any obligations hereunder, or (iii) alter the
primary liability of Lessee for the payment of Rent or for the
performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such
assignment nor the acceptance of Rent or performance shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for
Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
(d) In the event of any Default or Breach by Lessee, Lessor may
proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of Lessee's obligations under this Lease,
including any assignee or sublessee, without first exhausting Lessor's
remedies against any other person or entity responsible therefore to
Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the Premises,
if any, together with a fee of $1,000 or three percent (3%) of the
current monthly Base Rent applicable to the portion of the Premises which
is the subject of the proposed assignment or sublease, whichever is
greater, as consideration for Lessor's considering and processing said
request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be
deemed to have assumed and agreed to conform and comply with each and
every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions
of an assignment or sublease to which Lessor has specifically consented
to in writing.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of
all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee's obligations under this Lease;
provided, however, that until a Breach shall occur in the performance of
Lessee's obligations, Lessee may collect said Rent. Lessor shall not, by
reason of the foregoing or any assignment of such sublease, nor by reason
of the collection of Rent, be deemed liable to the sublessee for any
failure of Lessee to perform and comply with any of Lessee's obligations
to such sublessee. Lessee hereby irrevocably authorizes and directs any
such sublessee, upon receipt of a written notice from Lessor stating that
a Breach exists in the performance of Lessee's obligations under this
Lease, to pay to Lessor that portion of the Rent due and to become due
under the sublease demanded in such notice from Lessor, provided that the
amount demanded shall not exceed all amounts then due and payable by
Lessee hereunder, including any past due Rent, as well as current Rent.
Sublessee shall rely upon any such notice from Lessor and shall pay all
Rents demanded by to Lessor without any obligation or right to inquire as
to whether such Breach exists, notwithstanding any claim from Lessee to
the contrary.
(b) In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall
undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to such sublessor or for any
prior Defaults or Breaches of such sublessor.
(c) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach
by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES. See Addendum 13.1
13.1 DEFAULT; BREACH. A "DEFAULT" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions
or rules under this Lease. A "BREACH" is defined as the occurrence of one
or more of the following Defaults, and the failure of Lessee to cure such
Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where
the coverage of the property insurance described in Paragraph 8.3 is
jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.
(b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether to
Lessor or to a third party, when due, to provide reasonable evidence of
insurance or surety bond, or to fulfill any obligation under this Lease
which endangers or threatens life or property, where such failure
continues for a period of three (3) business days following written
notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) a
Estoppel Certificate, (v) a requested Subordination, (vii) any document
requested under Paragraph 42 (easements), or (viii) any other
documentation or information which Lessor may reasonably require of
Lessee under the terms of this Lease, where any such failure continues
for a period of ten (10) days or, in the case of any of the items set
forth in clauses (i), (ii) or (viii), thirty (30) days following written
notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40
hereof, other than those described in subparagraphs 13.1(a), (b) or (c),
above, where such Default continues for a period of thirty (30) days
after written notice; provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required
for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "DEBTOR" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease,
where possession is not restored to Lessee within thirty (30) days; or
(iv) the attachment, execution or other judicial seizure of substantially
all of Lessee's assets located at the Premises or of Lessee's interest in
this Lease, where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no
force or effect, and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of Lessee given to
Lessor was materially false.
13.2 REMEDIES. If Lessee fails to perform any of its affirmative
duties or obligations, within ten (10) days after written notice (or in
case of an emergency, without notice), Lessor may, at its option, perform
such duty or obligation on Lessee's behalf, including but not limited to
the obtaining of reasonably required bonds, insurance policies, or
governmental licenses, permits or approvals. The costs and expenses of
any such performance by Lessor shall be due and payable by Lessee upon
receipt of invoice therefor. If any check given to Lessor by Lessee shall
not be honored by the bank upon which it is drawn, Lessor, at its option,
may require all future payments to be made by Lessee to be by cashier's
check. In the event of a Breach, Lessor may, with or without further
notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been
earned at the time of termination; (ii) the worth at the time of award of
the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental
loss that the Lessee proves could have been reasonably avoided; (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such
rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee's failure to perform its obligations
under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of
recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and that portion of any leasing commission paid by
Lessor in connection with this Lease applicable to the unexpired term of
this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the immediately preceding sentence shall be computed
by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of
award plus one percent (1%). Efforts by Lessor to mitigate damages caused
by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is
obtained through the provisional remedy of unlawful detainer, Lessor
shall have the right to recover in such proceeding any unpaid Rent and
damages as are recoverable therein, or Lessor may reserve the right to
recover all or any part thereof in a separate suit. If a notice and grace
period required under Paragraph 13.1 was not previously given, a notice
to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by
Paragraph 13.1. In such case, the applicable grace period required by
Paragraph 13.1 and the unlawful detainer statute shall run concurrently,
and the failure of Lessee to cure the Default within the greater of the
two such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in
this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign,
subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the Lessor's
interests, shall not constitute a termination of the Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises are located.
The expiration or termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability
under any indemnity provisions of this Lease as to matters occurring or
accruing during the term hereof or by reason of Lessee's occupancy of the
Premises.
13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of
any cash or other bonus, inducement or consideration for Lessee's
entering into this Lease, all of which concessions are hereinafter
referred to as "INDUCEMENT PROVISIONS," shall be deemed conditioned upon
Lessee's full and faithful performance of all of the terms, covenants and
conditions of this Lease. Upon Breach of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this
Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by
Lessor under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, notwithstanding any subsequent cure of said
Breach by Lessee. The acceptance by Lessor of rent or the cure of the
Breach which initiated the operation of this paragraph shall not be
deemed a waiver by Lessor of the provisions of this paragraph unless
specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by
any Lender. Accordingly, if any Rent shall not be received by Lessor
within five (5) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a one-time
late charge equal to six percent (6%) of each such overdue amount. The
parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such
overdue amount, nor prevent the exercise of any of the other rights and
remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding any provision of this
Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.
13.5 INTEREST. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due as to scheduled payments
(such as Base Rent) or within thirty (30) days following the date on
which it was due for non-scheduled payment, shall bear interest from the
date when due, as to scheduled payments, or the thirty-first (31st) day
after it was due as to non-scheduled payments. The interest ("INTEREST")
charged shall be equal to the prime rate reported in the Wall Street
Journal as published closest prior to the date when due plus four percent
(4%), but shall not exceed the maximum rate allowed by law. Interest is
payable in addition to the potential late charge provided for in
Paragraph 13.4.
13.6 BREACH BY LESSOR.
(a) NOTICE OF BREACH. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be more than thirty (30)
days after receipt by Lessor, and any Lender whose name and address shall
have been furnished Lessee in writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed,
provided, however, that if the nature of Lessor's obligation is such that
more than thirty (30) days are reasonably required for its performance,
then Lessor shall not be in breach if performance is commenced within
such thirty (30) day period and thereafter diligently pursued to
completion.
(b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor not Lender cures said breach within thirty (30) days after
receipt of said notice, or if having commenced said cure they do not
diligently pursue it to completion, or in the case of an emergency,
without waiting for the 30 day cure period to expire, then Lessee may
elect to cure said breach at Lessee's expense and offset from Rent an
amount equal to two (2) month's Base Rent and to pay an excess of such
expense under protest, reserving Lessee's right to reimbursement from
Lessor. Lessee shall document the cost of said cure and supply said
documentation to Lessor.
14. CONDEMNATION. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of
said power (collectively "CONDEMNATION"), this Lease shall terminate as
to the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of any
building portion of the premises, or more than twenty-five percent (25%)
of the land area portion of the premises not occupied by any building, is
taken by Condemnation. Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of option, to be exercised in
writing within ten (10) days after Lessor shall have given Lessee written
notice of such taking (or in the absence of such notice, within ten (10)
days after Lessee obtains knowledge that the condemning authority shall
have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease
in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the
Base Rent shall be reduced in proportion to the reduction in utility of
the Premises caused by such Condemnation. Condemnation awards and/or
payments shall be the property of Lessor, whether such award shall be
made as compensation for diminution in value of the leasehold, the value
of the part taken, or for severance damages; provided, however, that
Lessee shall be entitled to any compensation for Lessee's relocation
expenses, loss of business goodwill and/or Trade Fixtures, without regard
to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the
Premises by Lessee, for purposes of Condemnation only, shall be
considered the property of the Lessee and Lessee shall be entitled to any
and all compensation which is payable therefor. In the event that this
Lease is not terminated by reason of the Condemnation, Lessor shall
repair any damage to the Premises caused by such Condemnation.
15. BROKERS' FEE,
15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIP. Lessee
and Lessor each represent and warrant to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers,
if any) in connection with this Lease, and that no one other than said
named Brokers is entitled to any commission or finder's fee in connection
herewith. Lessee and Lessor do each hereby agree to indemnify, protect,
defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the
indemnifying Party, including any costs, expenses, attorneys' fees
reasonably incurred with respect thereto.
16. ESTOPPEL CERTIFICATES. See Addendum 16
(a) Each Party (as "RESPONDING PARTY") shall within ten (10) days
after written notice from the other Party (the "REQUESTING PARTY")
execute, acknowledge and deliver to the Requesting Party a statement in
writing in form similar to the then most current "ESTOPPEL CERTIFICATE"
form published by the American Industrial Real Estate Association, plus
such additional information, confirmation and/or statements as may be
reasonably requested by the Requesting Party, or by any prospective
purchaser of the Premises, or by any existing or prospective lender to
Lessor.
(c) If Lessor desires to finance, refinance, or sell the Premises,
or any part thereof, Lessee shall deliver within five (5) business days
after written request by Lessor, to any potential lender or purchaser
designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes herein
set forth.
17. DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean
the owner or owners at the time in question of the fee title to the
Premises, or, if this is a sublease, of the Lessee's interest in the
prior lease. In the event of a transfer of Lessor's title or interest in
the Premises or this Lease, Lessor shall deliver to the transferee or
assignee (in cash or by credit) any unused Security Deposit held by
Lessor. Except as provided in Paragraph 15, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior
Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the
Lessor, and the transferee or assignee shall be responsible for the
performance of the obligations and covenants under this Lease from which
the prior Lessor is relieved. Subject to the foregoing, the obligations
and/or covenants in this Lease to be performed by the Lessor shall be
binding only upon the Lessor as hereinabove defined. Notwithstanding the
above, and subject to the provisions of Paragraph 20 below, the original
Lessor under this Lease, and all subsequent holders of the Lessor's
interest in this Lease shall remain liable and responsible with regard to
the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above.
18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect
the validity of any other provision hereof.
19. DAYS. Unless otherwise specifically indicated to the contrary, the
word "days" as used in this Lease shall mean and refer to calendar days.
20. LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor, the individual partners of Lessor or its
or their individual partners, directors, officers or shareholders, and
Lessee shall look to the Premises, and to no other assets of Lessor, for
the satisfaction of any liability of Lessor with respect to this Lease,
and shall not seek recourse against the individual partners of Lessor, or
its or their individual partners, directors, or officers or shareholders,
or any of their personal assets for such satisfaction.
21. TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties
under this Lease.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains
all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding
shall be effective. Lessor and Lessee each represents and warrants to the
Brokers that it has made, and is relying solely upon, its own
investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the nature,
quality and character of the Premises. Brokers have no responsibility
with respect thereto or with respect to any default or breach hereof by
either Party. The liability (including court costs and Attorneys' fees),
of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment
or modification hereto shall be limited to an amount up to the fee
received by such Broker pursuant to this Lease; provided, however, that
the foregoing limitation on each Broker's liability shall not be
applicable to any gross negligence or willful misconduct of such Broker.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
courier) or may be sent by certified or registered mail or U.S. Postal
Service Express Mail, return receipt requested with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if
served in a manner specified in this Paragraph 23. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's
address for delivery or mailing of notices. Either Party may be written
notice to the other specify a different address for notice, except that
upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice. A copy of all notices to Lessor
shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate in writing.
See Addendum 23.1
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. Notices delivered by United States Express Mail or overnight
courier that guarantee next day delivery shall be deemed given on the
next business day after delivery of the same to the Postal Service or
courier. Notices transmitted by facsimile or similar means shall be
deemed delivered upon completion of legible transmission provided a copy
is also delivered via delivery or mail. If notice is received on a
Saturday, Sunday or legal holiday, it shall be deemed received on the
next business day.
24. WAIVERS. No waiver by Lessor or the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or
Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor's consent to, or approval of, any act shall not be deemed
to render unnecessary the obtaining of Lessor's consent to, or approval
of, any subsequent or similar act by Lessee, or be construed as the basis
of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. The acceptance of Rent by Lessor shall not be a
waiver of any Default or Breach by Lessee. Any payment by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of
no force or effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of
this Lease for recording purposes. The Party requesting recordation shall
be responsible for payment of any fees applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or termination of
this Lease. In the event that Lessee holds over, then the Base Rent shall
be increased to an amount equal to two times the Base Rent applicable
during the month immediately preceding the expiration or termination.
Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
28. COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT. All provisions
of this Lease to be observed or performed by Lessee are both covenants
and conditions. In construing this Lease, all headings and titles are for
the convenience of the parties only and shall not be considered a part of
this Lease. Whenever required by the context, the singular shall include
the plural and vice versa. This Lease shall not be construed as if
prepared by one of the parties, but rather according to its fair meaning
as a whole, as if both parties had prepared it.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "SECURITY DEVICE"),
now or hereafter placed upon the Premises, to any and all advances made
on the security thereof, and to all renewals, modifications, and
extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as "Lender") shall have no
liability or obligation to perform any of the obligations of Lessor under
this Lease. Any Lender may elect to have this Lease and/or any Option
granted hereby superior to the lien of its Security Device by giving
written notice thereof to Lessee, whereupon this Lease and such Options
shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of
Paragraph 30.3, Lease agrees to attorn to a Lender or any other party who
acquires ownership of the Premises by reason of a foreclosure of a
Security Device, and that in the event of such foreclosure, such new
owner shall not: (i) be liable for any act or omission of any prior
lessor or with respect to events occurring prior to acquisition of
ownership; (ii) be subject to any offsets or defenses which Lessee might
have against any prior lessor, or (iii) be bound by prepayment of more
than one (1) month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving a commercially reasonable non-
disturbance agreement (a "NON-DISTURBANCE AGREEMENT") from the Lender
which Non-Disturbance Agreement provides that Lessee's possession of the
Premises, and this Lease, including any options to extend the term
hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises. Further, within sixty
(60) days after the execution of this Lease, Lessor shall use its
commercially reasonable efforts to obtain a Non-Disturbance Agreement
from the holder of any pre-existing Security Device which is secured by
the Premies. In the event that Lessor is unable to provide the Non-
Disturbance Agreement within said sixty (60) days, then Lessee may, at
Lessee's option, directly contact Lessor's lender and attempt to
negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents;
provided, however, that, upon written request from Lessor or a Lender in
connection with a sale, financing or refinancing of the Premises, Lessee
and Lessor shall execute such further writings as may be reasonably
required to separately document any subordination, attornment and/or Non-
Disturbance Agreement provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or
proceeding involving the Premises to enforce the terms hereof or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in
any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term, "PREVAILING PARTY" shall
include, without limitation, a Party who substantially obtains or defeats
the relief sought, as the case may be, whether by compromise, settlement,
judgment, or the abandonment by the other Party of its claim or defense.
The attorneys' fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred. In addition, Lessor shall be
entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's
agents and any Lender and its agents shall have the right to enter the
Premises at any time, in the case of an emergency, and otherwise at
reasonable times for the purpose of showing the same to prospective
purchasers, lenders, or lessees inspecting the Premises, and making such
alterations, repairs, improvements or additions to the Premises as Lessor
may deem necessary. All such activities shall be without abatement of
rent or liability to Lessee. Lessor may at any time place on the Premises
any ordinary "FOR SALE" signs and Lessor may during the last six (6)
months of the term hereof place on the Premises any ordinary "FOR LEASE"
signs. Lessee may at any time place on or about the Premises any ordinary
"FOR SUBLEASE" sign. See Addendum 32.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in
determining whether to permit an auction.
34. SIGNS. Except for ordinary "For Sublease" signs, Lessee shall not
place any sign upon the Premises without Lessor's prior written consent,
which consent shall not be unreasonably withheld or delayed. All signs
must comply with all Applicable Requirements.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by
Lessor for Breach by Lessee, shall automatically terminate any sublease
or lesser estate in the Premises; provided, however, that Lessor may
elect to continue any one or all existing subtenancies. Lessor's failure
within ten (10) days following any such event to elect to the contrary by
written notice to the holder of any such lesser interest, shall
constitute Lessor's election to have such event constitute the
termination of such interest.
36. CONSENTS. Except as otherwise provided herein, wherever in this
Lease the consent of a Party is required to an act by or for the other
Party, such consent shall not be unreasonably withheld or delayed.
Lessor's actual reasonable costs and expenses (including but not limited
to architects', attorneys', engineers' and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for
any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting
documentation therefor. Lessor's consent to any act, assignment or
subletting shall not constitute an acknowledgment that no Default or
Breach by Lessee of this Lease exists, nor shall such consent be deemed a
waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The
failure to specify herein any particular condition to Lessor's consent
shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to
the particular matter for which consent is being given. In the event that
either Party disagrees with any determination made by the other hereunder
and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable
detail within ten (10) business days following such request.
38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on
Lessee's part to be observed and performed under this Lease, Lessee shall
have quiet possession and quiet enjoyment of the Premises during the term
hereof.
39. OPTIONS. See Addendum 39.
39.1 DEFINITION. "OPTION" shall mean: (a) the right to extend the term
of or renew this Lease or to extend or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal or first offer
to lease either the Premises or other property of Lessor; (c) the right
to purchase or the right of first refusal to purchase the Premises or
other property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to
Lessee in this Lease is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and only
while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention
of thereafter assigning or subletting.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Options have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option: (i) during
the period commencing with the giving of any notice of Default and
continuing until said Default is cured, (ii) during the period of time
any Rent is unpaid (without regard to whether notice thereof is given
Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv)
in the event that Lessee has been given three (3) or more notices of
separate Default, whether or not the Defaults are cured, during the
twelve (12) month period immediately preceding the exercise of the
Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after
such exercise and prior to the commencement of the extended term, (i)
Lessee fails to pay Rent for a period of thirty (30) days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or
(ii) Lessor gives to Lessee three (3) or more notices of separate Default
during any twelve (12) month period, whether or not the Defaults are
cured.
40. MULTIPLE BUILDINGS. If the Premises are a part of a group of
buildings controlled by Lessor, Lessee agrees that it will observe all
reasonable rules and regulations which Lessor may make from time to time
for the management, safety, and care of said properties, including the
care and cleanliness of the grounds and including the parking, loading
and unloading of vehicles, and that Lessee will pay its fair share of
common expenses incurred in connection therewith.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental
payable to Lessor hereunder does not include the cost of guard service or
other security measures, and that Lessor shall have no obligation
whatsoever to provide same. Lessee assumes all responsibility for the
protection of the Premises, Lessee, its agents and invitees and their
property from the acts of third parties, except those resulting from
Lessor's willful misconduct or gross negligence.
42. RESERVATIONS. Lessor reserves to itself the right, from time to
time, to grant, without the consent or joinder of Lessee, such easements,
rights and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements,
rights, dedications, maps and restrictions do not unreasonably interfere
with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement
rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money
is asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for
recovery of such sum. If it shall be adjudged that there was no legal
obligation on the part of said Party to pay such sum or any part thereof,
said Party shall be entitled to recover such sum or so much thereof as it
was not legally required to pay.
44. AUTHORITY. If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual
executing this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this Lease on
its behalf. Each party shall, within thirty (30) days after request,
deliver to the other party satisfactory evidence of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
46. OFFER. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to
lease to the other Party. This Lease is not intended to be binding until
executed and delivered by all Parties hereto. See Addendum 46.
47. AMENDMENTS. This Lease may be modified only in writing, signed by
the Parties in interest at the time of the modification.
48. MULTIPLE PARTIES. If more than one person or entity is named herein
as either Lessor or Lessee, such multiple Parties shall have joint and
several responsibility to comply with the terms of this Lease.
49. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties
and/or Brokers arising out of this Lease [ ] IS [x] IS NOT attached to
this Lease.
50. See Addendum 50.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE
SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF
LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE
CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE
LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF
THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.
WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
Executed at: Executed at:
on: on:
By LESSOR: G&I XXXXX LLC, By LESSEE: EXODUS COMMUNICATIONS, INC.
a Delaware limited liability
company
By: C&I Investment Xxxxx LLC, a Delaware corporation
a Delaware limited By: /s/ Xxxxxx X. Xxxxxxx III
liability company, Name Printed: Xxxxxx X. Xxxxxxx III
its managing member Title: VP Operations
By: [SIGNATURE ILLEGIBLE] By: [SIGNATURE ILLEGIBLE]
Name: [ILLEGIBLE] Name Printed: [ILLEGIBLE]
Title: President Title: [ILLEGIBLE]
Address: c/o Landmark Asset Address: 2831 Mission College
Management Xxxxx, Xxxxxxxxx, Xxxxx Xxxxx, XX
00000 00000 Xxxx Xxxxx Xxxxx,
Xxxxx 000, Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Federal ID No. Federal ID No.
ADDENDUM TO STANDARD
INDUSTRIAL/COMMERCIAL SINGLE-LESSEE LEASE - NET
THIS ADDENDUM (this "Addendum") is attached to and made a part
of that certain Standard Industrial/Commercial Single-Lessee
Lease - Net, dated January 29, 1999 (the "Lease"), by and between
G&I XXXXX LLC, a Delaware limited liability company ("Lessor"), and
EXODUS COMMUNICATIONS, INC., a Delaware corporation ("Lessee"). To
the extent any provisions of this Addendum are inconsistent with
the provisions of the Lease, the terms of this Addendum shall
prevail.
1.5 Increases of Base Rent. Effective as of each February 1
during the Term, commencing with February 1, 2005, the monthly Base
Rent payable under the Lease shall be increased as follows:
Increase Date Monthly Base Rent
2/1/2005 $121,539.00
2/1/2006 $128,238.00
2/1/2007 $133,980.00
2/1/2008 $140,679.00
1.7 Letter of Credit for Security Deposit.
(a) Upon execution of this Lease, Lessee shall deliver to
Lessor the Letter of Credit described below as security for
Lessee's performance of all of Lessee's covenants and obligations
under this Lease; provided, however, that neither the Letter of
Credit nor any Letter of Credit Proceeds (as defined below) shall
be deemed an advance rent deposit or an advance payment of any
other kind, or a measure of Lessor's damages upon Lessee's default.
The Letter of Credit shall be maintained in effect from the date
hereof through the date which is one hundred twenty (120) days
after the Expiration Date, as the same may be extended in
accordance with the provisions of this Lease, provided that upon
Lessee's surrender of the Premises at the expiration of the Term,
Lessor and Lessee shall endeavor to determine as soon as
practicable any amounts owing by Lessee on account of its
obligation to restore the Premises, and within five (5) Business
Days after payment of such amount (and any other amounts owing to
Lessor) and Lessee's fulfillment of any other obligations to
Lessor, Lessor shall return to Lessee the Letter of Credit and any
Letter of Credit Proceeds then held by Lessor (other than those
held for application by Lessor as provided below). Lessor shall
not be required to segregate the Letter of Credit Proceeds from its
other funds, and in no event shall Letter of Credit Proceeds or any
portion thereof be deemed to be held in trust for Lessee. No
interest shall accrue or be payable to Lessee with respect Letter
of Credit Proceeds. Lessor may (but shall not be required to) draw
upon the Letter of Credit and use the proceeds therefrom (the
"Letter of Credit Proceeds") or any portion thereof to cure any
Breach under this Lease or to compensate Lessor for any damage
Lessor incurs as a result of Lessee's failure to perform any of its
obligations hereunder, it being understood that any use of the
Letter of Credit Proceeds shall not constitute a bar or defense to
any of Lessor's remedies set forth in Paragraph 13 below. In such
event and upon written notice from Lessor to Lessee specifying the
amount of the Letter of Credit Proceeds so utilized by Lessor and
the particular purpose for which such amount was applied, Lessee
shall immediately deliver to Lessor an amendment Letter of Credit
or a replacement Letter of Credit in an amount equal to one hundred
percent (100%) of the amount specified below. Lessee's failure to
deliver such replacement Letter of Credit to Lessor within five (5)
business days of Lessor's notice shall constitute a Breach
hereunder. If Lessee is not in default at the expiration or
termination of this Lease, within one hundred twenty (120) days
after such expiration or termination, or such earlier date as
provided above, Lessor shall return to Lessee the Letter of Credit
or the balance of the Letter of Credit Proceeds then held by
Lessor; provided, however, that in no event shall any such return
be construed as an admission by Lessor that Lessee has performed
all of its obligations hereunder. No Lender (as defined in
Paragraph 30.1), nor any purchaser at any judicial or private
foreclosure sale of the Premises or any portion thereof, shall be
responsible to Lessee for such Letter of Credit or any Letter of
Credit Proceeds unless such holder or purchaser shall have actually
received the same.
(b) As used herein, Letter of Credit shall mean an
unconditional, irrevocable letter of credit (hereinafter referred
to as the "Letter of Credit") issued by a major "money center"
bank satisfactory to Lessor in its sole and absolute discretion
(the "Bank"), drawings under which may be made at an office of the
Bank located in either New York, New York, or San Francisco,
California, or Los Angeles, California, naming Lessor as
beneficiary, in the amounts set forth below, and otherwise in form
and substance satisfactory to Lessor. The initial amount of the
Letter of Credit shall be Two Hundred Thousand Dollars
($200,000.00) during the period from the execution of this Lease
through May 31, 2003; not later than June 1, 2003, the amount of
the Letter of credit shall be increased to Three Hundred Thousand
Dollars ($300,000.00); and not later than June 1, 2004, the amount
of the Letter of Credit shall be increased to Six Hundred Thousand
Dollars ($600,000.00), and shall be maintained in said amount for
so long as the Letter of Credit is required to be maintained
pursuant to subparagraph (a), above. In addition, should the
Agreed Use be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee,
Lessee shall, upon thirty (30) days' written notice from Lessor,
cause the amount of the Letter of Credit to be increased to an
amount necessary, in Lessor's reasonable judgment, to account for
any increased wear and tear that the Premises may suffer as a
result thereof. Furthermore, if a change in control of Lessee
occurs during the term of this Lease or the Prior Sublease (as
defined in Section 2.2 of this Addendum), and following such change
in control, (1) Lessee is not a publicly traded company, and
(2) the financial condition of Lessee is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall, upon thirty days'
written notice from Lessor, cause the amount of the Letter of
Credit to be increased, effective on the later to occur of the
expiration of thirty (30) days after Lessor gives such notice, or
the thirtieth (30th) day prior to the Commencement Date, to an
amount, which, in Lessor's reasonable judgment, is commercially
reasonable based on such change in financial condition. The Letter
of Credit shall be for an initial term of not less than one year
and shall provide: (i) that Lessor may make partial and multiple
draws thereunder, up to the face amount thereof, (ii) that Lessor
may draw upon the Letter of Credit up to the full amount thereof,
as determined by Lessor, and the Bank will pay to Lessor the amount
of such draw upon receipt by the Bank of a sight draft signed by
Lessor and accompanied by a written certification from Lessor to
the Bank stating either: (A) that a Breach has occurred and is
continuing under this Lease or (B) that Lessor has not received
notice from the Bank that the Letter of Credit will be renewed by
the Bank for at least one (1) year beyond the then applicable
expiration date and Lessee has not furnished Lessor with a
replacement Letter of Credit as hereinafter provided; and (iii)
that, in the event of Lessor's assignment or other transfer of its
interest in this Lease, the Letter of Credit shall be freely
transferable by Lessor, without charge and without recourse, to the
assignee or transferee of such interest and the Bank shall confirm
the same to Lessor and such assignee or transferee. The Letter of
Credit shall further provide that a draw thereon pursuant to clause
(ii)(B) above may only be made during the thirty (30) day period
preceding the then applicable expiration date of the Letter of
Credit. In the event that no later than thirty (30) days prior to
then applicable expiration date of the Letter of Credit, neither
(1) the Bank shall have notified Lessor that the Letter of Credit
will be renewed for at least one (1) year beyond the then
applicable expiration date, nor (2) Lessee shall have delivered to
Lessor a replacement Letter of Credit in the amount required
hereunder and otherwise meeting the requirements set forth above,
then Lessor shall be entitled to draw on the Letter of Credit as
provided above, and shall hold the proceeds of such draw as Letter
of Credit Proceeds pursuant to subparagraph (a) above and
Paragraph 5 of the Lease, provided that such drawing shall not
constitute a waiver of Lessor's right to declare a Breach of the
Lease pursuant to subparagraph 13.1(c) of this Addendum.
(c) At any time during the Term, Lessee may replace any
Letter of Credit provided hereunder with another Letter of Credit
meeting the requirements hereunder, and Lessor shall cooperate in
arranging a simultaneous exchange of such Letters of Credit.
2.2 Lessee in Possession Under Sublease; Premises Leased "As-
Is." The parties acknowledge that immediately prior to the
Commencement Date of the Term of this Lease (also referred to
sometimes in this Lease as the "Start Date"), Lessee shall have
been in possession of a portion of the Premises consisting of an
agreed rentable area of 85,200 square feet, since February 1, 1999,
pursuant to a sublease agreement between Talus Corporation, a
California corporation, formerly known as Scientific Custom Metal
Products International, Inc. ("Prior Lessee"), as sublessor, and
Lessee, as sublessee, made with the consent of Lessor (the "Prior
Sublease"). In addition, except in the event of Early Commencement
(as defined in Addendum Paragraph 3.1) of the Term which occurs
prior to the termination of the ACC Sublease (as defined in
Addendum Paragraph 3.1), Lessee shall also have been in possession
of the remaining portion of the Premises (consisting of the ACC
Space, as defined in Addendum Paragraph 3.1) immediately prior to
the Commencement Date, pursuant to the Prior Sublease. The lease
pursuant to which Prior Lessee currently leases the Premises from
Lessor, as the same may be amended from time to time, is referred
to herein as the "Prior Master Lease." Accordingly, the lease of
the Premises to Lessee pursuant to this Lease shall be on an "AS-
IS, WITH ALL FAULTS" basis. Lessor makes no representation or
warranty of any nature to Lessee with respect to the Premises or
any part, element or component thereof, including, but not limited
to, electrical, plumbing, fire sprinkler, life safety, lighting, or
heating ventilating and air conditioning ("HVAC") systems, loading
doors, roof, exterior walls, foundations or other structural
elements.
3.1 Condition to Commencement.
A. It shall be a condition to the commencement of the Term
of this Lease that Lessee shall not have defaulted under the Prior
Sublease beyond the expiration of any applicable cure period, and
that the Prior Sublease shall not have terminated for any reason
prior to the scheduled expiration date of May 31, 2004, except as
provided below in this Addendum Paragraph 3.1.
B. Notwithstanding the provisions of subparagraph A of this
Addendum Paragraph 3.1, in the event that the Prior Sublease is
terminated solely as a result of the termination of the Prior
Master Lease by Lessor due to a default of the Prior Lessee under
the Prior Master Lease, then so long as Lessee is not then in
default under the terms of the Prior Sublease, and no event shall
have occurred and be continuing which, under the terms of the Prior
Sublease would constitute a default of Lessee thereunder after the
giving of notice or passage of time, or both, then the Original
Term of this Lease shall commence immediately upon the termination
of the Prior Master Lease and Prior Sublease ("Early
Commencement"). In the event of Early Commencement, the
Commencement Date hereunder shall be adjusted accordingly, but the
Expiration Date shall not be changed, and the Monthly Base Rent for
any period of the Original Term occurring prior to the originally
scheduled Commencement Date (i.e., June 1, 2004) due to Early
Commencement shall be determined for the applicable period in
accordance with the following schedule, subject to subparagraph C
of this Addendum Paragraph 3.1:
Starting Date Ending Date Monthly Base Rent
2/1/1999 1/31/2000 $90,915.00
2/1/2000 1/31/2001 $95,700.00
2/1/2001 1/31/2002 $100,485.00
2/1/2002 1/31/2003 $105,270.00
2/1/2003 1/31/2004 $110,055.00
2/1/2004 5/31/2004 $115,797.00
C. The parties acknowledge that upon the commencement of
the Prior Sublease, and for a term continuing through April 30,
2002, a portion of the Premises consisting of an agreed rentable
area of 10,500 square feet (the "ACC Space") is being subleased by
Prior Lessee to ACC Microelectronics Corporation ("ACC"), pursuant
to a Standard Office Lease-Gross, between Prior Lessee and ACC,
dated April 25, 1997 (the "ACC Sublease"). If Early Commencement
of this Lease occurs prior to April 30, 2002, then unless Lessee
notifies Lessor within five (5) business days after Lessee's
receipt of notice of Early Commencement of this Lease from Lessor,
that Lessee desires to leave ACC in possession of the ACC Space,
(1) Lessor shall commence commercially reasonable efforts to evict
ACC from the ACC Space, at Lessor's sole cost and expense,
(2) Lessor shall be entitled to all rent or other compensation from
ACC with respect to ACC's occupancy from and after the Commencement
Date (as determined based on Early Commencement) until the date
Lessor delivers the ACC Space to Lessee, and (3) Lessee shall be
entitled to a credit against Monthly Base Rent payable under the
Lease for the period of time from and after the Commencement Date
(as determined based on Early Commencement) until the date Lessor
delivers the ACC Space to Lessee determined in accordance with the
following schedule (with the amounts shown below prorated for any
partial month):
[The remainder of this page is intentionally left blank]
Amount of
Monthly Credit
Against Monthly
Base Rent
Attributable to
Starting Date Ending Date ACC Space
2/1/1999 2/28/1999 $8,640.00
3/1/1999 2/29/2000 $9,072.00
3/1/2000 2/28/2001 $9,526.00
3/1/2001 2/28/2002 $10,002.00
3/1/2002 4/30/2002 $10,502.00
In the alternative, if Lessee notifies Lessor within five (5)
business days after Lessee's receipt of notice of Early
Commencement of this Lease from Lessor, that Lessee desires to
leave ACC in possession of the ACC Space, then (1) Lessee shall be
liable for the full amount of Monthly Base Rent determined pursuant
to subparagraph B of this Addendum Paragraph 3.1 from the
Commencement Date (as determined based on Early Commencement), and
(2) Lessee shall enter into a sublease with ACC for ACC to remain
in possession of the ACC Space, subject to Paragraph 12 of the
Lease provided, that Addendum Paragraph 12.C shall not be
applicable to any portion of the term of any sublease of the ACC
Space to ACC occurring prior to May 1, 2002, and provided, further,
that if requested to do so by Lessee, Lessor shall assign to
Lessee, without any representation or warranty of any nature, its
rights, if any, under the ACC Sublease.
D. In addition, in the event of Early Commencement,
notwithstanding the provisions of subparagraph 1.7(b) of this
Addendum, above, Lessee shall cause the amount of the Letter of
Credit to be increased to Six Hundred Thousand Dollars
($600,000.00), within thirty (30) days after the Commencement Date
(as determined pursuant to this Addendum Paragraph 3.1 based on
Early Commencement), and the Letter of Credit shall be maintained
in said amount for so long as the Letter of Credit is required to
be maintained pursuant to subparagraph 1.7(a) of this Addendum 1.7.
6.2(a) Consent to Diesel Fuel Tank(s). Lessor hereby consents
to the installation by Lessee of one or more above-ground diesel
fuel tanks at the Premises, provided that such installation shall
be in compliance with all Applicable Requirements, and Lessee shall
obtain Lessor's prior approval of the precise location thereof, and
of the protective enclosures or encasements thereof, which approval
shall not be unreasonably withheld or delayed.
6.2(g) Limitations on Lessor's Termination Option Under
Paragraph 6.2(g); Lessee's Termination Option. Notwithstanding any
provision of subparagraph 6.2(g), Lessor shall not be permitted to
exercise the termination option under clause (ii) of
subparagraph 6.2(g), (1) if Lessor is subject to an order of a
governmental agency with jurisdiction over the Hazardous Substance
Condition requiring Lessor to remediate the same, unless such
remediation cannot practicably be accomplished with Lessee
remaining in possession of the Premises, or (2) unless in Lessor's
reasonable judgment, continued occupancy of the Premises by Lessee
without remediation of the Hazardous Substance Condition poses a
risk of potential liability to Lessor. Furthermore, and
notwithstanding any provision of subparagraph 6.2(g), Lessor shall
be under no duty to remediate any Hazardous Substance Condition
except to the extent Lessor is subject to an order of a
governmental agency with jurisdiction over the Hazardous Substance
Condition requiring Lessor to remediate the same. To the extent
Lessor is subject to an order of a governmental agency with
jurisdiction over the Hazardous Substance Condition requiring
Lessor to remediate the same, Lessor shall diligently proceed with
such remediation, in accordance with any remedial action plan
approved by the appropriate governmental agency(ies). In the event
that in the opinion of the environmental consultant hired by Lessor
to oversee the remediation, the remediation cannot practicably be
completed without Lessee vacating the Premises for a period which
will exceed six (6) months, Lessee shall have the option to
terminate this Lease by giving notice to Lessor within thirty (30)
days after Lessee is notified by Lessor that the remediation cannot
practicably be completed without Lessee vacating the Premises for a
period which will exceed six (6) months (which notification shall
include notice of the date Lessor requires Lessee to vacate the
Premises for such remediation, which date shall not be earlier than
six(6) months after the date of such notification, except to the
extent it is reasonably necessary for Lessor to commence such
remediation on an earlier date in order to comply with any order of
a governmental agency requiring Lessor to remediate the same,
including any remedial action plan approved by the appropriate
governmental agency(ies)), such termination to be effective upon
the date set forth in Lessor's notice that Lessor requires Lessee
to vacate the Premises.
7.1 Additional Provisions Applicable to Paragraph 7.1. As used
in the Lease, the term "Prime Rate" means the prime rate of
interest published in the Wall Street Journal on the first day of
the month in which the applicable replacement Basic Element is
installed at the property (or the first day of such month on which
the Wall Street Journal is published), provided that if a range of
interest rates is published for the prime rate on such day, the
highest rate in such range shall be used. In the event that the
generally accepted accounting principles specifies a range of time
for the useful life of any Basic Element which is replaced, the
shortest time allowed under generally accepted accounting
principles shall be used for the amortization period under
Paragraph 7.1 of the Lease.
7.3 Additional Provisions Applicable to Paragraph 7.3(a). The
following sentences are added to the end of Paragraph 7.3(a) of the
Lease: "In addition, Lessee may install satellite dishes, not to
exceed two (2) feet in diameter, on the roof of the Building only,
without Lessor's consent, but upon notice to Lessor, provided that
such satellite dishes are installed behind a roof screen, are not
visible from the street, and are installed in compliance with
Applicable Law. If Lessee wishes to use other satellite dishes
and/or install satellite dishes in any other manner or location,
such installation shall be in compliance with Applicable Law, and
shall not be made without Lessor's prior written approval of such
installation, which approval shall not be unreasonably withheld or
delayed." Lessor hereby consents to Lessee making and/or
installing upon commencement of the term of the Prior Sublease, the
Alterations, Utility Installations and Trade Fixtures shown on the
plans and specifications set forth on Exhibit A to this Lease. In
addition, Lessor shall not unreasonably withhold or delay the
granting of its consent to future Alterations, Utility
Installations or Trade Fixtures which are consistent with the
Alterations, Utility Installations or Trade Fixtures shown on said
plans and specifications. Lessor shall not unreasonably withhold
or delay the granting of its consent to the installation by Lessee
of security fencing which will in part enclose the Building,
provided that such installation shall be in compliance with
Applicable Requirements, and Lessee shall obtain Lessor's prior
written approval of the precise location, height and type thereof.
Lessee agrees that reasonable considerations in determining such
approval shall include, but not be limited to, whether such
security fencing unreasonably interferes with the use or occupancy
(including parking, ingress and egress) of 0000 Xxxxx Xxxxxx or its
marketability to prospective tenants or subtenants.
7.4 Additional Provisions Applicable to Paragraph 7.4. To the
extent any item installed at, or any alteration or modification
made to, the Premises by Lessee during the term of the Prior
Sublease would fall within the definitions of any of "Utility
Installations," Trade Fixtures," "Alterations" or "Lessee Owned
Alterations and/or Utility Installations" if the same were
installed or made during the term of this Lease, then for all
purposes of this Lease, including but not limited to,
Paragraph 7.4, the same shall be deemed to constitute "Utility
Installations," Trade Fixtures," "Alterations" or "Lessee Owned
Alterations and/or Utility Installations," as applicable, under
this Lease, except that if Lessor's consent to the same was either
obtained or not required under the terms of the Prior Sublease,
then no further consent to the same shall be required under
Paragraph 7.3 of this Lease. The following provisions are added at
the end of Paragraph 7.4(c): "Without limiting the generality of
the foregoing, prior to the last day of the Lease term or any
earlier termination date, and subsequent to the removal of all
satellite dishes and other equipment which Lessee is entitled or
required to remove from the roof upon the termination of this
Lease, Lessee shall replace the roof of the Premises, and the
replacement roof shall comply with the specifications set forth on
Exhibit B to this Lease." Notwithstanding any provisions of
subparagraph 7.4(a) to the contrary, but subject to the final
sentence of this Addendum Paragraph 7.4, Lessor acknowledges that
the following items installed at the Premises shall at all times
during the term of this Lease be and remain the Property of Lessee,
and Lessee shall have the right to remove the same upon the
expiration of the term of the Lease, subject to Lessee's
obligations under subparagraph 7.4(c):
(a) Permanent and temporary generator systems including
enclosures and fuel tanks with the associated
electronic and manual switch gear.
(b) Independent, stand-alone air-conditioning units,
provided that following the removal of such units
the Building has a fully functioning HVAC system
adequate in Lessor's sole judgment for general
office purposes.
(c) Raised Flooring, Racking, Cage materials, cabinets
and patch panels.
(d) UPS Battery Systems including electrical switch
gear.
(e) FM200 fire suppression canisters, piping and
nozzles.
(f) VESDA or smoke sensor stations in ceiling or floor
area.
(g) Inside or outside security cameras, access card
reader stations, VCR, multiplexer, monitors and
computers.
(h) Partition and conference room furniture systems and
freestanding, cabinets, storage units.
(i) Telephone and voice mail system with desk stations
and receptionist, computers, servers, printers,
phone sets.
(j) Fiber Muxes or other Telco equipment installed in
MPOE rooms.
(k) Emergency distribution board and telephone
backboard with connectors.
(l) Maintenance bypass electronic and manual switch
gear.
(m) Kitchen appliances like microwaves, refrigerators
and vending machines.
(n) Console monitors, screen projection and screens in
command center.
(o) Bulletproof/resistant glass, provided that removal
of the same shall be conditioned upon replacement
of the openings with other glazing suitable in
Lessor's reasonable judgment.
(p) Satellite dishes or other communications equipment.
(q) Electrical distribution equipment consisting of an
automatic transfer switch, parallel switch and
bypass unit, parallel UPS Units and several power
distribution units installed inside the Building by
Lessee, inward from the most inward point(s) of
connection to all transformers, switches, meters
and other electrical distribution equipment
installed by the public utility providing power to
the Building. The parties acknowledge that Lessee
intends to request that the City of Santa Xxxxx
Power and Electric Company to add two new 3000 AMP
services to the Building, including two
transformers placed on the exterior of the Building
(one for each 3000 AMP service), and one or more
power switches and metering boxes inside the
Building, which are not part of the electrical
distribution equipment that Lessee is entitled to
remove pursuant to this Addendum Paragraph 7.4.
(r) Customer and vendor equipment and related materials
of the type listed above in this Addendum
Paragraph 7.4.
(s) Lessee, Lessee Customer and Lessee Vendor personal
property which is not attached to the Premises.
(t) Any Trade Fixtures similar or related to the
foregoing items that was installed by or for Lessee
pursuant to the terms of the Lease.
Notwithstanding the foregoing, if the Lease terminates
prior to the scheduled Expiration Date (as the same may be
extended in accordance with Addendum Paragraph 39) as a
result of a Breach by Lessee under the Lease, then Lessee
shall have no right to remove any of items listed in
subparagraphs (a), (b) or (q), above; provided that Lessor
may require Lessee to remove any of such items (or Lessor
may remove such items at Lessee's sole cost and expense),
and any such items which Lessor does not require Lessee to
remove shall become the sole property of Lessor upon
termination of the Lease.
8.1 Additional Provisions Applicable to Paragraph 8.1.
Notwithstanding the provisions of Paragraph 8.1, Lessor, and not
Lessee shall pay any increase in the premiums for the property
insurance covering the Premises carried by Lessor pursuant to
Paragraph 8.3 to the extent such increase results from any acts or
omissions occurring on, or the use or occupancy of, any building(s)
owned by Lessor which are adjacent to the Building, and which are
not occupied by Lessee, either as a direct tenant of Lessor, or as
a subtenant.
8.3 Additional Provisions Applicable to Paragraph 8.3.
Notwithstanding the provisions of subparagraph 8.3(a), the
deductible for earthquake insurance may exceed $5,000, but shall
not exceed the greater of $100,000 or 20% of the replacement cost
of the Building, as determined by the insurer issuing the
earthquake insurance policy.
9.3 Additional Provisions Applicable to Paragraph 9.3. In the
event Lessor elects to complete the repairs pursuant to clause (i)
of Paragraph 9.3, and fails to actually complete the same within
six (6) months after the date of damage or destruction, subject to
extension for Force Majeure (as defined below), Lessee shall have
the right at any time after the expiration of such six (6) month
period, as the same may be extended for Force Majeure, but prior to
Lessor actually completing such repairs, to terminate this Lease by
giving written notice to Lessor. As used in this Lease, "Force
Majeure" shall mean strikes, lockouts, labor disputes, shortages of
material or labor, fire, flood or other casualty, acts of God, any
delays caused by Lessee or any other cause beyond the control of
Lessor.
9.6 Additional Provisions Applicable to Paragraph 9.6. If
Lessor shall be obligated to repair or restore the Premises
pursuant to any provision of Article 9, and it is possible, at
additional cost, to commence such repair or restoration earlier
than ninety (90) days after such obligation shall accrue and/or to
accelerate the work so that the same shall be completed prior to
the deadline for Lessor to complete the same pursuant to the
applicable provision of Article 9, then upon Lessee's written
request, and subject to the conditions set forth below, Lessor
shall use its best efforts to commence such repair or restoration
as soon as is possible, subject to availability of labor and
materials; provided that (1) prior to incurring any additional
costs to commence such repair or restoration earlier than Lessor is
obligated to do so or to accelerate the work, Lessee shall have
agreed, in writing, to pay all such additional costs, and shall
have deposited with Lessor, funds equal to the amount reasonably
estimated by Lessor as the total amount of such additional costs to
be incurred (provided that the amount of such deposit shall not
limit Lessee's liability to pay such additional costs, and Lessor
shall refund to Lessee upon completion of the repair and
restoration, the amount of such deposit, if any, in excess of the
additional costs incurred); and (2) in no event will Lessor be
obligated to commence any repair or restoration prior to obtaining
all necessary governmental permits and approvals therefor.
10.2 Contest of Real Property Taxes. Lessee may contest the
amount of Real Property Taxes assessed against the Premises, at its
sole cost and expense, including, but not limited to, any penalties
or fees associated with an unsuccessful contest. In the event
Lessee elects to contest the amount of Real Property Taxes, Lessee
must pay the contested Real Property Taxes under protest, and apply
for a refund, or provide such security as Lessor may require to
prevent such taxes from becoming a delinquent lien upon the
Premises. Any refund of Real Property Taxes paid by Lessee with
respect to the term of this Lease shall belong to Lessee, whether
received as a result of a contest by Lessee or otherwise, and
regardless of when received. Lessee shall have no right to any
refund of Property Taxes applicable to any period of time other
than the term of this Lease, even if such refund is received during
the term of this Lease.
12. Additional Provisions Applicable to Assignment and
Subletting.
A. The provisions of Paragraph 12 shall be fully operative
immediately upon execution of this Lease, and shall apply to the
occurrence of any transaction or event occurring after the
execution of the Lease, but prior to the commencement of the Term
thereof, as well as any transaction or event occurring during the
Term thereof.
B. Notwithstanding any provision of Paragraph 12 of the
Lease or this Addendum, in the event of any change in the control
of Lessee, such change in control shall not constitute an
assignment of the Lease so long as Lessee is a publicly traded
company immediately following such change in control.
C. Notwithstanding any provision of Paragraph 12, Lessor,
as a condition to giving its consent to any assignment or
subletting, may require that Lessee pay to Lessor, as additional
Rent under the Lease,
(i) in the case of an assignment where the Lease is the
only asset assigned by Lessee to the assignee, promptly
after receipt by Lessee (or any affiliate thereof or other
person or entity designated by Lessee) seventy-five percent
(75%) of the amount, if any, by which (A) any consideration
(including, without limitation, payment for leasehold
improvements) paid by the assignee to Lessee or such
affiliate or other designated person or entity for the
assignment or otherwise attributable to the value of
Lessee's interest in the Lease exceeds (B) the Assignment or
Subletting Costs (as defined below);
(ii) in the case of an assignment where the Lease is
not the only asset assigned by Lessee to the assignee (e.g.,
an assignment in connection with a sale of Lessee's
operations at the Premises or an assignment resulting from a
change in control of Lessee where Lessee is not a publicly
traded company immediately following such change in
control), on a monthly basis, seventy-five percent (75%) of
the amount, if any, by which (A) the Prevailing Market Rent
(as defined below) for the Premises for each month of the
term of the Lease after the date of the assignment exceeds
(B) the total amount of Rent payable hereunder for each such
month; as used herein, the term "Prevailing Market Rent"
for the Premises shall mean the total monthly Rent that
Lessor could obtain for each month of term of the Lease
remaining after the date of the assignment from a third
party desiring to lease the Premises for the remaining term
of the Lease after the date of the assignment, taking into
account the age of the Building, the size of the Premises,
the quality of construction of the Building, the other terms
of this Lease, the rental and any other consideration then
being obtained for new leases of space comparable to the
Premises in the locality of the Building and all other
factors that would be relevant to a third party desiring to
lease the Premises for such term in determining the rental
such party would be willing to pay therefor, but excluding
any rental value attributable to any items Lessee is
permitted to remove from the Premises upon expiration of the
term of this Lease pursuant to Paragraph 7.4 of this
Addendum; provided that if Lessee and Lessor are unable to
agree upon the Prevailing Market Rent within thirty (30)
days after the date of the assignment, then the Prevailing
Market Rent for the remaining term of this Lease shall be
determined by appraisal following the same procedures as set
forth in Paragraph 39(c) of this Addendum for the
determination of "Fair Market Rent" for the first year of
a Renewal Option Term; and
(iii) in the case of a sublease, on a monthly basis,
seventy-five percent (75%) of the amount, if any, by which
(A) the rent paid to Lessee (or any affiliate thereof or
other person or entity designed by Lessee) for the sublet
space by the sublessee (such rent to include all
consideration paid for the sublet space) for each month
exceeds (B) the total amount of Rent payable under the Lease
attributable to the sublet space for such month; provided,
however, that in the case of a sublease, prior to paying any
amounts to Lessor pursuant to this Paragraph 12.C(iii),
Lessee may recover out of the rent or other consideration
payable by the sublessee to Lessee (or any affiliate thereof
or other person or entity designated by Lessee), and use
such recovery to reimburse itself for, a pro rata share of
the Assignment or Subletting Costs incurred in connection
with such sublease, such pro rata share to be determined by
allocating an equal portion of the total amount of
Assignment or Subletting Costs incurred in connection with
such sublease to each month of the term of such sublease; if
there is more than one sublease under this Lease, the
amounts (if any) to be paid by Lessee to Lessor pursuant to
this subparagraph (iii) shall be separately calculated for
each sublease and amounts due Lessor with regard to any one
sublease may not be offset against rental and other
consideration pertaining to or due under any other sublease.
As used herein, the term "Assignment or Subletting Costs" means
the total amount of any brokerage commissions paid by Lessee in
connection with a specific subletting or assignment (not to exceed
commissions typically paid in the market at the time of such
subletting or assignment), Lessee's reasonable costs of advertising
the space for sublease or assignment, Lessee's reasonable legal
fees and expenses in connection with such assignment or sublease,
and any improvement allowance or other inducement (such as moving
expenses and lease takeover obligations), paid by Lessee to the
sublessee or assignee; provided that, as a condition to Lessee
recovering Assignment or Subletting Costs pursuant to subparagraph
(i) or (iii) of this Paragraph 12.C, Lessee shall provide to
Lessor, within sixty (60) days of Lessor's execution of Lessor's
consent to the assignment or subletting, a detailed accounting of
the Assignment or Subletting Costs and supporting documents, such
as receipts and invoices, except that if any Assignment or
Subletting Costs are not determinable by such date, Lessee shall so
state in its accounting, identifying with reasonable specificity
the costs not determinable, and promptly after such costs are
determinable, but in no event later than thirty (30) days after
effective date of the assignment or ninety (90) days after the
commencement of the term of such sublease, as applicable, a
supplemental accounting shall be delivered to Lessor setting forth
all Assignment or Subletting Costs and supporting documents (if not
previously delivered).
D. Notwithstanding any provision of Paragraph 12, the
granting of a security interest in the Lease by Lessee in
connection with a senior secured credit facility provided by
Xxxxxxx, Xxxxx & Co. ("GS"), shall not constitute an assignment of
the Lease, and shall not require Lessor's consent under the Lease;
provided that GS shall not be entitled to foreclose such security
interest or otherwise take any possessory interest in the Premises
or any portion thereof, unless GS assumes all of Exodus'
obligations under the Lease and the Exodus Sublease (if the term
thereof shall not have expired), and cures all then uncured
defaults (if any) under the Lease and the Exodus Sublease (if the
term thereof shall not have expired).
13.1 Additional Breaches. In addition to the events set forth
in Paragraph 13.1, the occurrence of any of the following events
shall constitute a Breach under this Lease, and Lessor shall have
all rights and remedies available under the Lease in the event of a
Breach as result thereof:
(a) The termination of the Prior Sublease for any reason
prior to May 31, 2004, except under circumstances which, pursuant
to Paragraph 3.1 of this Addendum result in Early Commencement of
this Lease.
(b) The failure of Lessee to cause the amount of the Letter
of Credit to be increased as and when required in accordance with
the requirements of subparagraph 1.7(b) of this Addendum, or
Paragraph 3.1 of this Addendum, if applicable, where such failure
continues for a period of three (3) business days following written
notice to Lessee.
(c) Upon the election of Lessor, in the event that no later
than thirty (30) days prior to then applicable expiration date of
the Letter of Credit, neither (1) the Bank shall have notified
Lessor that the Letter of Credit will be renewed for at least one
(1) year beyond the then applicable expiration date, nor (2) Lessee
shall have delivered to Lessor a replacement Letter of Credit in
the amount required hereunder and otherwise meeting the
requirements set forth in Paragraph 1.7 of this Addendum.
16. Replacement of Paragraph 16(b). The following is
substituted for Paragraph 16(b): "(b) If the Responding Party
shall fail to execute or deliver a proposed Estoppel Certificate
which is submitted to the Responding Party by the Requesting Party
within the ten day period set forth in Paragraph 16(a) of the
Lease, then the Responding Party shall be deemed to have agreed
that all matters set forth in such proposed Estoppel Certificate
are true and correct and shall be estopped from denying the truth
of any of the matters set forth in said proposed Estoppel
Certificate."
23.1 Notices. Any notice given to Lessee at the address set
forth on the signature page of the Lease shall be marked
"Attention: Chief Financial Officer." A duplicate of any notice
given to Lessee under this Lease shall be sent, in the manner
required under Paragraph 23.1 of this Lease, to Exodus
Communications, Inc., Attention: Xxxx Xxxxxxxx, IDC Manager, 0000
Xxxxx Xxxxxx, Xxxxx Xxxxx, XX 00000, Telephone: (000) 000-0000,
Facsimile: (000) 000-0000. A duplicate of any notice given to
Lessor under this Lease shall be sent, in the manner required under
Paragraph 23.1 of this Lease, to Lessor in care of DRA Advisors,
Inc., 1180 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Telephone: (000) 000-0000, Facsimile: (000) 000-0000.
32. Lessor's Access to the Premises. Lessor acknowledges that
Lessee intends to operate a secure internet data center facility at
the Premises. Accordingly, except in the case of an emergency,
Lessor, its agents, any Lender or its agents shall give Lessee
twenty-four (24) hours' advance notice prior to entering the
Premises, and Lessee shall have the right to require that a
representative of Lessee accompany any parties entering the
Premises. In the case of an emergency, Lessor or its agents shall
make such effort as is deemed appropriate by Lessor or its agents
under the circumstances to contact an on-site representative of
Lessee, if one is present at the Premises, prior to entering the
Premises; provided, however, that if an on-site representative
cannot be located after such effort is made, or if immediate entry
to the Premises without attempting to locate an on-site
representative of Lessee is deemed appropriate by Lessor or its
agents due to the nature of the emergency, Lessor or its agents may
enter the Premises unaccompanied by a representative of Lessee.
39. Option to Renew.
(a) Lessor hereby grants to Lessee two options (each, a
"Renewal Option") to renew the term of this Lease, each for an
additional term of five (5) years (each, a "Renewal Option Term"),
upon and subject to the terms and conditions set forth in this
Paragraph 39 of this Addendum and Paragraph 39 of the Lease. The
first Renewal Option Term will commence immediately following the
Expiration Date of the initial term of this Lease (the "Initial
Term") and will terminate on the fifth anniversary of the
Expiration Date of the Initial Term. The first Renewal Option
shall be exercised, if at all, by written notice to Lessor on or
before the date that is twelve (12) months prior to the Expiration
Date of the Initial Term. The second Renewal Option Term will
commence immediately following the expiration date of the first
Renewal Option Term and will terminate on the fifth anniversary of
the expiration date of the first Renewal Option Term. The second
Renewal Option shall be exercised, if at all, by written notice to
Lessor on or before the date that is twelve (12) months prior to
the expiration date of the first Renewal Option Term. If Lessee
exercises a Renewal Option, each of the terms, covenants and
conditions of this Lease shall apply during the applicable Renewal
Option Term as though the expiration date of the applicable Renewal
Option Term was the date originally set forth herein as the
Expiration Date of this Lease, provided that: (1) during the first
Renewal Option Term, there shall only be one more Renewal Option
under this Paragraph 39, and during the Second Renewal Option Term,
there shall be no further Renewal Options under this Lease, (2) the
monthly Base Rent to be paid during the first year of the Renewal
Option Term shall be the greater of (i) one hundred five percent
(105%) of the monthly Base Rent payable for the month immediately
prior to the commencement of the applicable Renewal Option Term, or
(ii) the Fair Market Rent, as hereinafter defined, for the Premises
for the Renewal Option Term, and (3) the monthly Base Rent to be
paid during each year after the first year of the Renewal Option
Term shall be equal to one hundred five percent (105%) of the
monthly Base Rent payable for the preceding year. As used herein,
the term "Fair Market Rent" for the Premises shall mean the
monthly Base Rent that Lessor could obtain for each month of the
first year of the applicable Renewal Option Term from a third party
desiring to lease the Premises for a five (5)-year term commencing
at the commencement of the applicable Renewal Option Term, taking
into account the increases in rent provided under clause (3),
above, the age of the Building, the size of the Premises, the
quality of construction of the Building, the other terms of this
Lease, the rental and any other consideration then being obtained
for new leases of space comparable to the Premises in the locality
of the Building and all other factors that would be relevant to a
third party desiring to lease the Premises for a five (5)-year term
commencing at the commencement of the applicable Renewal Option
Term in determining the rental such party would be willing to pay
therefor, but excluding any rental value attributable to any items
Lessee is permitted to remove from the Premises upon expiration of
the term of this Lease pursuant to Paragraph 7.4 of this Addendum.
(b) If Lessee exercises a Renewal Option, Lessor shall send
to Lessee, on or before the date that is one hundred twenty (120)
days prior to the Expiration Date of the Initial Term, in the case
of the first Renewal Option, or one hundred fifty (150) days prior
to the expiration date of the first Renewal Option Term, in the
case of the second Renewal Option, a notice setting forth the Fair
Market Rent for the Premises for the first year of the applicable
Renewal Option Term. If Lessee disputes Lessor's determination of
the Fair Market Rent for the first year of a Renewal Option Term,
Lessee shall, within thirty (30) days after the date of Lessor's
notice setting forth Lessor's determination thereof, send to Lessor
a notice stating that Lessee disagrees with Lessor's determination
of Fair Market Rent for the first year of the Renewal Option Term
and elects to resolve the disagreement as provided in
subparagraph 39(c) below. If Lessee does not send to Lessor a
notice as provided in the previous sentence, Lessor's determination
of the Fair Market Rent shall be the basis for determining the
monthly Base Rent to be paid by Lessee hereunder during the first
year of the applicable Renewal Option Term. If Lessee elects to
resolve the disagreement as provided in subparagraph 39(c) below
and such procedures shall not have been concluded prior to the
commencement of the applicable Renewal Option Term, Lessee shall
pay monthly Base Rent in an amount equal to the greater of (i) one
hundred five percent (105%) of the monthly Base Rent payable for
the month immediately prior to the commencement of the applicable
Renewal Option Term or (ii) the Fair Market Rent (on a monthly
basis) as determined by Lessor in the manner provided above. If
the amount of Fair Market Rent for the first year of the applicable
Renewal Option Term as finally determined pursuant to
subparagraph 39(c) is greater than Lessor's determination, Lessee
shall pay to Lessor the difference between the amount paid by
Lessee and the Fair Market Rent as so determined pursuant to
subparagraph 39(c) within thirty (30) days after the determination.
If the Fair Market Rent for the first year of the applicable
Renewal Option Term as finally determined pursuant to
subparagraph 39(c) is less than Lessor's determination, the
difference between the amount paid by Lessee and the Fair Market
Rent as so determined pursuant to subparagraph 39(c) shall be
credited against the next installment(s) of monthly Base Rent due
from Lessee to Lessor hereunder.
(c) Any disagreement regarding the Fair Market Rent for the
first year of the applicable Renewal Option Term shall be resolved
as follows:
(i) If, within thirty (30) days after Lessee's response
to Lessor's notice to Lessee of the Fair Market Rent, Lessor and
Lessee shall not have reached agreement as to the Fair Market Rent
for the first year of the applicable Renewal Option Term, they
shall each select one appraiser to determine the Fair Market Rent
for the first year of the applicable Renewal Option Term. Each
such appraiser shall arrive at a determination of the Fair Market
Rent for the first year of the applicable Renewal Option Term and
submit their conclusions to Lessor and Lessee within forty-five
(45) days after the expiration of the thirty (30) day period
described in this subparagraph (i).
(ii) If only one appraisal is submitted within the
requisite time period, it shall be deemed to be the Fair Market
Rent for the first year of the applicable Renewal Option Term. If
both appraisals are submitted within such time period, and if the
two appraisals so submitted differ by less than five percent (5%)
of the lower of the two, the average of the two shall be the Fair
Market Rent for the first year of the applicable Renewal Option
Term. If the two appraisals differ by more than five percent (5%)
of the lower of the two, then the two appraisers shall immediately
select a third appraiser who shall within thirty (30) days after
his or her selection make his or her own determination of the Fair
Market Rent for the first year of the applicable Renewal Option
Term and submit such determination to Lessor and Lessee
simultaneously. Neither Lessor nor Lessee shall advise the third
appraiser of the Fair Market Rent determinations delivered by the
first two appraisers, and Lessor and Lessee shall instruct the
first two appraisers not to advise the third appraiser of such
determinations. If the Fair Market Rent determined by the third
appraiser is the average of the determinations of the Fair Market
Rent determined by the first two appraisers, the third appraiser's
determination of Fair Market Rent shall be the Fair Market Rent.
If such is not the case, Fair Market Rent shall be the Fair Market
Rent as determined by Lessor's appraiser or Lessee's appraiser
which is closest to the determination of Fair Market Rent by the
third appraiser.
(iii) All appraisers appointed pursuant to this Lease
shall be members of the American Institute of Real Estate
Appraisers with not less than ten (10) years' experience appraising
commercial and industrial properties in Santa Xxxxx county. Each
party shall pay the cost of the appraiser selected by such party
and one-half of the cost of the third appraiser, if necessary plus
one-half of any other costs incurred in resolving the disagreement
pursuant to this subparagraph 39(c).
46. Counterparts; Facsimile Signatures. The Lease and this
Addendum may be signed in counterparts, and delivered by facsimile,
and such facsimile counterparts shall be valid and binding on
Lessor and Lessee with the same effect as if original signatures
had been exchanged.
50. Parking. Subject to the rules and regulations promulgated
from time to time by Lessor, Lessee shall be entitled to use 50.3%
of the parking spaces for the 0000/0000 Xxxxx Xxxxxx complex for
use by its agents, servants, employees and invitees (individually
and collectively referred to as "Lessee's Invitees") for parking
of passenger vehicles with a capacity of 8 persons or less only.
If Lessor in its sole discretion agrees in writing to permit Lessee
to use any parking spaces or areas which could be used for parking
spaces for any other purpose (e.g., temporary storage of materials,
satellite dish installation, etc.), Lessee's then current number of
parking spaces will automatically be reduced by the number of
spaces utilized for such purpose plus any spaces which cannot be
reasonably used for normal parking as a result thereof. Lessee
agrees that overnight parking is prohibited. Lessee also agrees
that under no circumstances shall Lessee's Invitees in any manner
interfere with occupancy and/or access to the property known as
0000 Xxxxx Xxxxxx, including, without limitation, interference with
the ingress or egress to the building, parking lot or shipping and
receiving areas. If Lessee commits, permits or allows any of the
prohibited activities described herein or in the rules and
regulations then in effect, then Lessor shall have the right,
without notice, in addition to such other rights and remedies that
it may have, to remove or tow away the vehicle(s) involved and
charge the cost to Lessee, which cost shall be immediately payable
upon demand by Lessor. Lessee agrees that Lessor may re-stripe the
existing parking lots so as to reconfigure the same, so long as
such re-striping or reconfiguration does not reduce the number of
parking spaces that Lessee is otherwise entitled to use under the
Lease. Subject to the prior written approval of Lessor, which
approval shall not be unreasonably withheld or delayed, Lessee may
re-stripe the existing parking lots so as to reconfigure the same,
so long as such re-striping or reconfiguration does not reduce the
number of total parking spaces for the 0000/0000 Xxxxx Xxxxxx
complex or unreasonably interfere with the use or occupancy of
0000 Xxxxx Xxxxxx or its marketability to prospective tenants and
subtenants. Provided that Lessee shall have obtained Lessor's
approval of such restriping as required under this Paragraph 29,
then notwithstanding anything contained in the Lease, Lessee shall
not have any obligation to change the striping or configuration of
the parking lots back to the original configuration at the
termination of the Lease.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum
as of the date of the Lease.
Lessee:
EXODUS COMMUNICATIONS, INC.,
a Delaware corporation,
By:
Print Name:
Title:
Lessor:
G&I XXXXX LLC,
a Delaware limited liability company
By: G&I Investment Xxxxx LLC,
a Delaware limited liability
company,
its managing member
By: G&I Investment Xxxxx Corp.,
a Delaware corporation,
its managing member
By:
Name:
Title:
